[GRAPHIC OMITTED][GRAPHIC OMITTED]

                        Department of Trade and Industry


                        ELECTRICITY DISTRIBUTION LICENCE:
                               STANDARD CONDITIONS



                               Utilities Act 2000


                Determination of Standard Licence Conditions for

                        Electricity Distribution Licences




The Secretary of State, in exercise of the powers conferred on her by section
33(1) and (2) of the Utilities Act 2000 ("the Act") hereby determines that the
attached conditions shall be standard conditions for the purpose of electricity
distribution licences.

The standard conditions shall be incorporated into distribution licences as
standard conditions with effect from the commencement of section 33(3) of the
Act.




.................................
Nigel Peace
An official of the Department of Trade and Industry authorised
to act on behalf of the Secretary of State

27 September 2001
(updated with amends up to April 2002)




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TABLE OF CONTENTS
-----------------
                                                                                                           Page



<S>                                                                                                           <C>
PART II.  THE STANDARD CONDITIONS                                                                             1

SECTION A. INTERPRETATION, APPLICATION AND PAYMENTS                                                           1

Condition 1.         Definitions and Interpretation                                                           1

Condition 2.         Application of Section C (Distribution Services Obligations)                            27

Condition 3.         Payments by Licensee to the Authority                                                   30



SECTION B.  GENERAL                                                                                          34

Condition 4.         Basis of Charges for Use of System and Connection to System:
                     Requirements for Transparency                                                           34

Condition 4A.        Non-Discrimination in the Provision of Use of System and Connection
                     to System                                                                               40

Condition 4B.        Requirement to Offer Terms for Use of System and Connection                             41

Condition 4C.        Functions of the Authority                                                              47

Condition 5.         Distribution System Planning Standard and Quality of Service                            49

Condition 6.         Safety and Security of Supplies Enquiry Service                                         50

Condition 7.         Provision of Information about Theft or Abstraction of Electricity,
                     Damage and Meter Interference                                                           52

Condition 8.         Provisions Relating to the Connection of Metering Equipment                             53

Condition 9.         Distribution Code                                                                       55

Condition 9A.        Compliance with other Distribution Codes                                                58

Condition 10.        Balancing and Settlement Code and NETA Implementation                                   59
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Condition 11.        Change Co-ordination for NETA                                                           63

Condition 12.        Settlement Agreement for Scotland                                                       64

Condition 12A.       Compliance with Trading Code in Scotland                                                65

Condition 13.        Change Co-ordination for the Utilities Act 2000                                         66

Condition 14.        The Master Registration Agreement                                                       68

Condition 15.        Compliance with the Grid Codes                                                          69

Condition 16.        Security Arrangements                                                                   70

Condition 17.        Provision of Services for Persons who are of Pensionable Age or
                     Disabled or Chronically Sick                                                            71

Condition 18.        Provision of Services for Persons who are Blind or Deaf                                 73

Condition 19.        Code of Practice on Procedures with Respect to Site Access                              74

Condition 20.        Payments in Relation to Standards of Performance                                        75

Condition 21.        Complaint Handling Procedure                                                            76

Condition 22.        Preparation, Review of and Compliance with Customer Service Codes                       77

Condition 23.        Record of and Report on Performance                                                     79

Condition 24.        Provision of Information to the Authority                                               81

Condition 25.        Long Term Development Statement                                                         73

Condition 26.        Compliance with CUSC                                                                    84

Condition 27.        Not Used                                                                                91

Condition 28.        Not Used                                                                                91

Condition 29.        Disposal of Relevant Assets                                                             92

Condition 30.        Not Used                                                                                95

Condition 31.        Not Used                                                                                95

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SECTION C.  DISTRIBUTION SERVICES OBLIGATIONS                                                                96

Condition 32.        Interpretation of Section C (Distribution Services Obligations)                         96

Condition 32A.       Convenience Customers                                                                   99

Condition 33.        Not used                                                                                100

Condition 34.        Compulsory Acquisition of Land etc.                                                     101

Condition 35.        Other Powers etc.                                                                       102

Condition 36.        Basis of Charges for Distributor Metering and Data Services:
                     Requirements for Transparency                                                           103

Condition 36A.       Non-Discrimination in the Provision of Distributor Metering and
                     Data Services                                                                           105

Condition 36B.       Requirement to Offer Terms for the Provision of
                     Distributor Metering and Data Services                                                  106

Condition 36C.       Functions of the Authority                                                              110

Condition 37.        The Metering Point Administration Service and the Master
                     Registration Agreement                                                                  112

Condition 38.        Establishment of a Data Transfer Service                                                116

Condition 39.        Restriction on Use of Certain Information and Independence of the
                     Distribution Business                                                                   119

Condition 40.        Appointment of Compliance Officer                                                       126

Condition 41.        Prohibition of Cross-Subsidies                                                          130

Condition 42.        Regulatory Accounts                                                                     131

Condition 42A.       Change of Financial Year                                                                137
<PAGE>


Condition 43.        Restriction on Activity and Financial Ring Fencing                                      139

Condition 44.        Availability of Resources                                                               142

Condition 45.        Undertaking from Ultimate Controller                                                    145

Condition 46.        Credit Rating of Licensee                                                               147

Condition 47.        Indebtedness                                                                            148

Condition 48.        Last Resort Supply: Payment Claims                                                      152

Condition 49.        Incentive Scheme and Associated Information                                             156


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PART II. THE STANDARD CONDITIONS
--------------------------------

SECTION A. INTERPRETATION, APPLICATION AND PAYMENTS
---------------------------------------------------

Condition 1. Definitions and Interpretation
-------------------------------------------

1.     In these standard conditions, unless the context otherwise requires:

       the "Act"                                 means the Electricity Act 1989.


      "affiliate"                                in relation to the licensee
                                                 means any holding company of
                                                 the licensee, any subsidiary of
                                                 the licensee or any subsidiary
                                                 of a holding company of the
                                                 licensee in each case within
                                                 the meaning of section 736,
                                                 736A and 736B of the Companies
                                                 Act 1985.


      "alternative accounting rules"             for the purposes of standard
                                                 condition 42 (Regulatory
                                                 Accounts) only, has the
                                                 meaning given in that
                                                 condition.


      "amendment"                                for the purposes of standard
                                                 condition 49 (Incentive Scheme
                                                 and Associated Information)
                                                 only, has the meaning given in
                                                 that condition.


      "Application Regulations"                  means the Electricity
                                                 (Applications for Licences and
                                                 Extensions and Restrictions of
                                                 Licences) Regulations 2001.
                                       1
<PAGE>


      "appropriate time"                         for the purposes of standard
                                                 condition 39 (Restriction on
                                                 Use of Certain Information and
                                                 Independence of the
                                                 Distribution Business) only,
                                                 has the meaning given in that
                                                 condition.


      "auditors"                                 means the licensee's auditors
                                                 for the time being holding
                                                 office in accordance with the
                                                 requirements of the Companies
                                                 Act 1985.


      "authorised"                               in relation to any business or
                                                 activity means authorised by
                                                 licence granted or treated as
                                                 granted under section 6 or by
                                                 exemption granted under
                                                 section 5 of the Act.


      "authorised electricity operator"          means any person (other than
                                                 the licensee) who is authorised
                                                 to generate, transmit,
                                                 distribute, or supply
                                                 electricity and shall include
                                                 any person who has made an
                                                 application to be so authorised
                                                 which application has not been
                                                 refused and any person
                                                 transferring electricity to or
                                                 from or across an
                                                 interconnector or Scottish
                                                 interconnection or who has made
                                                 an application for use of an
                                                 interconnector or Scottish
                                                 interconnection which has not
                                                 been refused.
                                       2
<PAGE>


       the "Authority"                           means the Gas and Electricity
                                                 Markets Authority established
                                                 under section 1 of the
                                                 Utilities Act 2000.


       "BSC"                                     for the purposes of Section B
                                                 only, has the meaning given in
                                                 standard condition 10
                                                 (Balancing and Settlement Code
                                                 and NETA Implementation).


       "BSC Framework Agreement"                 for the purposes of standard
                                                 condition 10 (Balancing and
                                                 Settlement Code and NETA
                                                 Implementation) only, has
                                                 the meaning given in that
                                                 condition.


      "bilateral agreement"                      for the purposes of standard
                                                 condition 26 (Compliance with
                                                 CUSC) only, has the meaning
                                                 given in that condition.

      "charge restriction conditions"            for the purposes of standard
                                                 condition 49 (Incentive Scheme
                                                 and Associated Information)
                                                 only, has the meaning given in
                                                 that condition.


      "charging review date"                    for the purposes of standard
                                                condition 49 (Incentive Scheme
                                                and Associated Information)
                                                only, has the meaning given in
                                                that condition.


      "competent authority"                     for the purposes of standard
                                                condition 39 (Restriction on
                                                Use of Certain Information and
                                                Independence of the
                                                Distribution Business) only,
                                                has the meaning given in that
                                                condition.
                                       3
<PAGE>


      "confidential information"                for the purposes of standard
                                                condition 39 (Restriction
                                                on Use of Certain Information
                                                and Independence of the
                                                Distribution Business) only,
                                                has the meaning given in that
                                                condition.


      "consolidated distribution business"     for the purposes of standard
                                               condition 42 (Regulatory
                                               Accounts) only, has the
                                               meaning given in that
                                               condition.


      "construction agreement"                 for the purposes of standard
                                               condition 26 (Compliance
                                               with CUSC) only, has the
                                               meaning given in that
                                               condition.


      "Consumer Council"                       means the Gas and Electricity
                                               Consumer Council as established
                                               under section 2 of the
                                               Utilities Act 2000.


      "convenience customers"                  means customers supplied or
                                               requiring to be supplied at any
                                               premises which are (i)
                                               connected to the licensee's
                                               distribution system; and (ii)
                                               situated within the
                                               distribution services area of a
                                               distribution services
                                               provider other than the
                                               licensee.


      "core industry documents"                for the purposes of standard
                                               conditions 10 (Balancing and
                                               Settlement Code and NETA
                                               Implementation) and 11 (Change
                                               Co-ordination for NETA) only,
                                               has the meaning given in
                                               standard condition 10; and for
                                               the purposes of standard
                                               condition 26 (Compliance with
                                               CUSC) only, has the meaning
                                               given in that condition.
                                       4
<PAGE>



      "cross-default obligation"                 for the purposes of standard
                                                 condition 47 (Indebtedness)
                                                 only, has the meaning given in
                                                 that condition.


      "current cost assets"                      for the purposes of standard
                                                 condition 42 (Regulatory
                                                 Accounts) only, has the
                                                 meaning given in that
                                                 condition.


      "CUSC"                                     for the purposes of standard
                                                 condition 26 (Compliance with
                                                 CUSC)only, has the meaning
                                                 given in that condition.


      "CUSC Framework agreement"                 for the purposes of standard
                                                 condition 26 (Compliance
                                                 with CUSC) only, has the
                                                 meaning given in that
                                                 condition.


      "customer"                                 means any person supplied
                                                 or requiring to be supplied
                                                 with electricity at any
                                                 premises in Great Britain, but
                                                 shall not include any
                                                 authorised electricity
                                                 operator
                                                 in its capacity as such.


      "data aggregation"                         has the meaning given in
                                                 standard condition 36B
                                                 (Requirement to Offer Terms for
                                                 the Provision of Distributor
                                                 Metering and Data Services).
                                       5
<PAGE>


      "data processing"                          has the meaning given in
                                                 standard condition 36B
                                                 (Requirement to Offer Terms for
                                                 the Provision of Distributor
                                                 Metering and Data Services).


      "data retrieval"                           has the meaning given in
                                                 standard condition 36B
                                                 (Requirement to Offer Terms
                                                 for the Provision of
                                                 Distributor Metering and Data
                                                 Services).

      "data transfer service"                    for the purposes of Section C
                                                 only, has the meaning given in
                                                 standard condition 32
                                                 (Interpretation of Section
                                                 C (Distribution Services
                                                 Obligations)).


      "declared net capacity"                    means, in relation to
                                                 generation
                                                 plant, the highest
                                                 generation of electricity
                                                 at the main alternator
                                                 terminals which can be
                                                 maintained for an indefinite
                                                 period of time without causing
                                                 damage to the plant, less so
                                                 much of that capacity as is
                                                 consumed by the plant.


      "disposal"                                 for the purposes of
                                                 standard condition 29
                                                 (Disposal of Relevant
                                                 Assets) only, has the
                                                 meaning given in that
                                                 condition.


      "distribution arrangements"                has the meaning given in
                                                 standard condition 25 (Long
                                                 Term Development Statement).
                                       6
<PAGE>


      "distribution business"                    means a business of the
                                                 licensee, or in relation to
                                                 sub-paragraphs (a) and (b)
                                                 below, and except to the extent
                                                 otherwise specified by the
                                                 authority in a direction to
                                                 the licensee, any business of
                                                 any affiliate or related
                                                 undertaking of the licensee
                                                 comprising:

                                                 (a)   the distribution of
                                                       electricity through the
                                                       licensee's distribution
                                                       system, including any
                                                       business in providing
                                                       connections to such
                                                       system;

                                                 (b)   the provision of the
                                                       services specified
                                                       in sub-paragraphs
                                                       (c) and (d) of paragraph
                                                       1 of standard condition
                                                       36B (Requirement to
                                                       Offer Terms for the
                                                       Provision of Distributor
                                                       Metering
                                                       and Data Services); and

                                                 (c)   the provision of the
                                                       services specified
                                                       in sub-paragraphs
                                                       (a) and (b) of paragraph
                                                       1 of standard condition
                                                       36B (Requirement to
                                                       Offer Terms for the
                                                       Provision of Distributor
                                                       Metering and Data
                                                       Services),

                                                 or any business ancillary
                                                 thereto.


      "Distribution Code"                        means a distribution code
                                                 required to be prepared by a
                                                 licensed distributor pursuant
                                                 to standard condition 9
                                                 (Distribution Code) and
                                                 approved by the Authority
                                                 as revised from time to time
                                                 with the approval of the
                                                 Authority.


      "distribution licence"                     means a distribution licence
                                                 granted or treated as granted
                                                 under section 6(1)(c) of the
                                                 Act.
                                       7
<PAGE>

      "distribution services area"               has the meaning given at
                                                 sub-paragraph 5(b) of
                                                 standard condition 2
                                                 (Application of Section C
                                                 (Distribution Services
                                                 Obligations)).


      "Distribution Services Direction"          has the meaning given in
                                                 standard condition 2
                                                 (Application of Section C
                                                 (Distribution Services
                                                 Obligations)).


      "distribution services provider"           means a licensed distributor in
                                                 whose licence Section C has
                                                 effect.


      "distribution system"                      means the system consisting
                                                 (wholly or mainly) of electric
                                                 lines owned or operated by an
                                                 authorised distributor and
                                                 used for the distribution of
                                                 electricity from grid supply
                                                 points or generation sets or
                                                 other entry points (and bulk
                                                 supply points in Scotland) to
                                                 the points of delivery to
                                                 customers or authorised
                                                 electricity operators or any
                                                 transmission company within
                                                 Great Britain in its capacity
                                                 as operator of a transmission
                                                 system and includes any remote
                                                 transmission assets (owned by a
                                                 transmission licensee within
                                                 England and Wales) operated by
                                                 such distributor and any
                                                 electrical plant, meters and
                                                 metering equipment owned or
                                                 operated by such distributor in
                                                 connection with the
                                                 distribution of electricity,
                                                 but shall not include any part
                                                 of a transmission system.
                                       8
<PAGE>

      "distributor metering and data services"   for the purposes of Section C
                                                 only, has the meaning given in
                                                 paragraph 9 of standard
                                                 condition 36B (Requirement to
                                                 Offer Terms for the Provision
                                                 of Distributor Metering and
                                                 Data Services).


      "domestic                                  customer" means a customer
                                                 supplied or requiring to
                                                 be supplied with
                                                 electricity at domestic
                                                 premises (but excluding
                                                 such customer in so far as
                                                 he is supplied or requires
                                                 to be supplied at premises
                                                 other than domestic
                                                 premises).


      "domestic premises"                        means premises at which a
                                                 supply is taken wholly or
                                                 mainly for domestic purposes.


      "Electricity Arbitration Association"      for the purposes of standard
                                                 condition 39 (Restriction on
                                                 Use of Certain Information and
                                                 Independence of the
                                                 Distribution Business) only,
                                                 has the meaning given in that
                                                 condition.


      "electricity supplier"                     means any person authorised to
                                                 supply electricity.


      "estimated costs"                          for the purposes of standard
                                                 condition 3 (Payments by the
                                                 Licensee to the Authority)
                                                 only, has the meaning given in
                                                 that condition.
                                        9
<PAGE>

      "existing connection"                      means, in relation to any
                                                 premises, an existing
                                                 connection to the licensee's
                                                 distribution system which does
                                                 not require modification, or a
                                                 new or modified connection to
                                                 such system in respect of which
                                                 all works have been completed,
                                                 such that in either case
                                                 electricity is able to be
                                                 supplied to the premises in
                                                 accordance with the terms of
                                                 the relevant supply agreement.


      "external distribution activities"
                                                 for the purposes of standard
                                                 condition 39 (Restriction on
                                                 Use of Certain Information and
                                                 Independence of the
                                                 Distribution Business) only,
                                                 has the meaning given in that
                                                 condition.


      "financial year"                           subject to standard
                                                 condition 42A (Change of
                                                 Financial Year) (where
                                                 applicable), means a period of
                                                 12 months beginning on 1 April
                                                 of each year and ending on 31
                                                 March of the following
                                                 calendar year.


      "Fuel Security Code"                       for the purposes of Section B
                                                 only, has the meaning given in
                                                 standard condition 16 (Security
                                                 Arrangements).


      "generation set"                           means any plant or apparatus
                                                 for the production of
                                                 electricity and shall where
                                                 appropriate include a
                                                 generating station comprising
                                                 more than one generation set.
                                       10
<PAGE>

      "Grid Code"                                means the Grid Code which each
                                                 transmission company is
                                                 required to prepare and have
                                                 approved by the Authority as
                                                 from time to time revised with
                                                 the approval of the Authority.


      "grid supply point"                        means any point at which
                                                 electricity is delivered from a
                                                 transmission system to any
                                                 distribution system.


      "the handbook"                             for the purposes of standard
                                                 condition 42 (Regulatory
                                                 Accounts)only, has the meaning
                                                 given in that condition.


      "holding company"                          means a company within the
                                                 meaning of sections 736, 736A
                                                 and 736B of the Companies Act
                                                 1985.


      "indebtedness"                             for the purposes of standard
                                                 condition 47 (Indebtedness)
                                                 only, has the meaning given in
                                                 that condition.


      "information"                              includes any documents,
                                                 accounts, estimates, returns,
                                                 records or reports and data in
                                                 written, verbal or electronic
                                                 form and information in any
                                                 form or medium whatsoever
                                                 (whether or not prepared
                                                 specifically at the request of
                                                 the Authority or the Consumer
                                                 Council)of any description
                                                 specified by the Authority.
                                       11
<PAGE>

      "interconnection"                          means:

                                                 the 275 kV and 400 kV circuits
                                                 between and including the
                                                 associated switchgear at Harker
                                                 sub-station in Cumbria and
                                                 the associated switchgear at
                                                 Strathaven sub-station in
                                                 Lanarkshire;


                                                 the 275 kV transmission circuit
                                                 between and including the
                                                 associated switchgear at
                                                 Cockenzie in East Lothian and
                                                 the associated switchgear at
                                                 Stella in Tyne and Wear; and


                                                 the 400 kV transmission circuit
                                                 between and ncluding the
                                                 associated switchgear at
                                                 Torness in East Lothian and the
                                                 associated switchgear at Stella
                                                 in Tyne and Wear


                                                 all as existing at the date on
                                                 which the transmission licence
                                                 comes into force as from time
                                                 to time maintained, repaired
                                                 or renewed, together with any
                                                 alteration, modification or
                                                 addition other than
                                                 maintenance, repair or renewal)
                                                 which Is primarily designed to
                                                 effect a permanent increase in
                                                 one or more particular
                                                 interconnection capacities as
                                                 they exist immediately prior to
                                                 such alteration, modification
                                                 or addition and as from time to
                                                 time maintained, repaired or
                                                 renewed; and
                                       12
<PAGE>

                                                 the 132 kV transmission circuit
                                                 between and including (and
                                                 directly connecting) the
                                                 associated switchgear at
                                                 Chapelcross and the associated
                                                 switchgear at Harker
                                                 sub-station in Cumbria; and


                                                 the 132 kV transmission circuit
                                                 between and including (and
                                                 connecting, via Junction V) the
                                                 associated switchgear at
                                                 Chapelcross and the associated
                                                 switchgear at Harker
                                                 sub-station in Cumbria


                                                 all as existing at the date on
                                                 which the transmission license
                                                 comes into force and as from
                                                 time to time maintained,
                                                 repaired or renewed.



      "interconnector(s)"                        means the electric lines and
                                                 electrical plant and meters
                                                 owned or operated by a
                                                 transmission company solely for
                                                 the transfer of electricity to
                                                 or from a transmission system
                                                 into or out of England and
                                                 Wales.


      "investment"                               for the purposes of Section C
                                                 only, has the meaning given in
                                                 standard condition 43
                                                 (Restriction on Activity and
                                                 Financial Ring Fencing).


      "investment grade issuer credit rating"    for the purposes of Section C
                                                 only, has the meaning given in
                                                 standard condition 46 (Credit
                                                 Rating of Licensee).
                                       13
<PAGE>

      "licensed distributor"                     means any holder of a
                                                 distribution licence.


      "licensee's                                Distribution Code" means the
                                                 distribution code required to
                                                 be prepared by the licensee
                                                 pursuant to standard condition
                                                 9 (Distribution Code) and
                                                 approved by the Authority as
                                                 revised from time to time with
                                                 the approval of the Authority.


      "licensee's distribution system"           means the distribution system
                                                 owned or operated by the
                                                 licensee.


      "Master Registration Agreement"            means the agreement of that
                                                 title referred to and
                                                 comprising such matters as are
                                                 set out in standard condition
                                                 37 (The Metering Point
                                                 Administration Service and the
                                                 Master Registration Agreement).


      "metering equipment"                       includes any electricity meter
                                                 and any associated equipment
                                                 which materially affects the
                                                 operation of that meter.


      "Metering Point Administration Service"    for the purposes of Section C
                                                 only, has the meaning given in
                                                 standard condition 32
                                                (Interpretation of Section
                                                 C (Distribution Services
                                                 Obligations)).


      "metering point administration services"   for the purposes of Section C
                                                 only, has the meaning given in
                                                 standard condition 32
                                                 (Interpretation of Section
                                                 C (Distribution Services
                                                 Obligations)).


      "Metering Point Administration Service     has the meaning given in
      operator"                                  standard condition 38
                                                 (Establishment of a Data
                                                 Transfer Service).
                                       14
<PAGE>

      "non-domestic customer"                    means a customer who is not a
                                                 domestic customer.


      "other Distribution Codes"                 means the distribution codes
                                                 which the holder(s) of a
                                                 distribution licence (other
                                                 than the licensee) are required
                                                 to draw up and have
                                                 approved by the Authority
                                                 pursuant to standard condition
                                                 9 (Distribution Code) of their
                                                 distribution licence, as from
                                                 time to time revised with the
                                                 approval of the Authority.

      "owned"                                    in relation to an electricity
                                                 meter or other property
                                                 includes leased and cognate
                                                 expressions shall be construed
                                                 accordingly.

      "participating interest"                   has the meaning given by
                                                 section 260 of the Companies
                                                 Act 1985 as amended by section
                                                 22 of the Companies Act 1989.


      "permitted purpose"                        for the purposes of Section C
                                                 only, has the meaning given in
                                                 standard condition 32
                                                 (Interpretation of Section
                                                 C (Distribution Services
                                                 Obligations)).


      "Pooling and Settlement Agreement"         means the agreement of that

                                       15
<PAGE>

                                                 title approved by the Secretary
                                                 of State as from time to time
                                                 amended.


      "regulatory instructions and guidance"     for the purposes of standard
                                                 condition 49 (Incentive Scheme
                                                 and Associated Information)
                                                 only, has the meaning given in
                                                 that condition.


      "related undertaking"                      in relation to the licensee
                                                 means any undertaking in which
                                                 the licensee has a
                                                 participating interest.


      "relevant asset"                           means any asset for the time
                                                 being forming part of the
                                                 licensee's distribution system,
                                                 any control centre for use in
                                                 conjunction therewith, and any
                                                 legal or beneficial interest in
                                                 land upon which any of the
                                                 foregoing is situate (which for
                                                 the purposes of property
                                                 located in Scotland means any
                                                 estate, interest, servitude or
                                                 other heritable or leasehold
                                                 right in or over land including
                                                 any leasehold interests or
                                                 other rights to occupy or use
                                                 and any contractual or personal
                                                 rights relating to such
                                                 property or the acquisition
                                                 thereof).


      "relevant duties"                          for the purposes of standard
                                                 condition 40 (Appointment of a
                                                 Compliance Officer) only,
                                                 has the meaning given in that
                                                 condition.



      "relevant proportion"                      for the purposes of standard
                                                 condition 3 (Payments by the

                                       16
<PAGE>

                                                 Licensee to the Authority)
                                                 only,  has the meaning given
                                                 in that condition.



      "relevant year"                            for the purposes of standard
                                                 condition 3 (Payments by the
                                                 Licensee to the Authority)
                                                 only, has the meaning given in
                                                 that condition; and for the
                                                 purposes of standard condition
                                                 48 (Last Resort Supply: Payment
                                                 Claims) only, has the meaning
                                                 given in that condition.


      "relinquishment of operational             for the purposes of standard
       control"                                  condition 29 (Disposal of
                                                 Relevant Assets) only, has the
                                                 meaning given in that
                                                 condition.


      "remote transmission assets"               means any electric lines,
                                                 electrical plant or meters in
                                                 England and Wales owned by a
                                                 transmission company ("the
                                                 owner transmission company")
                                                 which:

                                                      (a) are embedded in the
                                                          licensee's
                                                          distribution system
                                                          or the distribution
                                                          system of any
                                                          authorised distributor
                                                          and not directly
                                                          connected by lines
                                                          or plant owned by
                                                          the owner transmission
                                                          company to a
                                                          sub-station owned
                                                          by the owner
                                                          transmission company;
                                                          and

                                                      (b) are by agreement
                                                          between the owner
                                                          transmission company
                                                          and the licensee or

                                       17
<PAGE>

                                                          such authorised
                                                          distributor operated
                                                          under the direction
                                                          and control of the
                                                          licensee or such
                                                          authorised
                                                          distributor.


      "Scottish interconnection"                 means such part of the
                                                 interconnection as is
                                                 situated in Scotland.


      "Secretary of State's costs"               for the purposes of standard
                                                 condition 3 (Payments by
                                                 Licensee to the Authority)
                                                 only, has the meaning given in
                                                 that condition.

      "separate business"                        for the  purposes of standard
                                                 condition 39 (Restriction
                                                 on Use of Certain Information
                                                 and Independence of the
                                                 Distribution Business)only, has
                                                 the meaning given in that
                                                 condition.


      "the scheme"                               for the purposes of standard
                                                 condition 49 (Incentive Scheme
                                                 and Associated Information)
                                                 only, has the meaning given in
                                                 that condition.

      "Settlement Agreement for Scotland"        has the meaning given in
                                                 standard condition 12
                                                 (Settlement Agreement for
                                                 Scotland).



      "settlement purposes"                      means for the purposes of
                                                 settlement as set out in the
                                                 Balancing and Settlement Code
                                                 or the Settlement Agreement
                                                 for Scotland.


      "specified information"                    for the purposes of standard
                                                 condition 49 (Incentive Scheme
                                                 and Associated Information)
                                                 only, has the meaning given in
                                                 that condition.


      "standby"                                  means the periodic or

                                       18
<PAGE>

                                                 intermittent supply or sale of
                                                 electricity:


                                                      (a)  to an authorised
                                                           electricity operator
                                                           to make good any
                                                           shortfall in the
                                                           availability of
                                                           electricity to that
                                                           operator for the
                                                           purposes of its
                                                           supply of electricity
                                                           to persons seeking
                                                           such supply; or


                                                      (b)  to a customer of the
                                                           licensee to make good
                                                           any shortfall between
                                                           the customer's total
                                                           supply requirements
                                                           and that met either
                                                           by its own generation
                                                           or by electricity
                                                           supplied by an
                                                           electricity supplier
                                                           other than the
                                                           licensee.



      "statutory accounts"                       means the accounts that the
                                                 licensee prepares under the
                                                 Companies Act 1985 (as
                                                 amended by the Companies Act
                                                 1989).


      "subsidiary"                               means a subsidiary within the
                                                 meanings of sections 736, 736A
                                                 and 736B of the Companies Act
                                                 1985.


      "supply licence"`                          means a supply licence granted
                                                 or treated as granted under
                                                 section 6(1)(d) of the Act.


      "top-up"                                   means the supply or sale of
                                                 electricity on a continuing or
                                                 regular basis:

                                       19
<PAGE>

                                                      (a)  to an authorised
                                                           electricity operator
                                                           to make good any
                                                           shortfall in the
                                                           availability of
                                                           electricity to that
                                                           operator for the
                                                           purposes of its
                                                           supply of electricity
                                                           to persons seeking
                                                           such supply; or


                                                      (b)  to a customer of the
                                                           licensee to make good
                                                           any shortfall between
                                                           the customer's total
                                                           supply requirements
                                                           and that met Either
                                                           by its own generation
                                                           or by electricity
                                                           supplied by an
                                                           electricity supplier
                                                           other than the
                                                           licensee.


      "trading code"                             for the purposes of
                                                 Section B only, has the
                                                 meaning given in standard
                                                 condition 12A (Compliance
                                                 with Trading Code in
                                                 Scotland).


      "transmission company"                     means the holder for the time
                                                 being of a transmission
                                                 licence.


      "transmission licence"                     means a transmission licence
                                                 granted or treated as granted
                                                 under section 6(1)(b) of the
                                                 Act.


      "transmission system"                      means a system consisting (
                                                 wholly or mainly) of high
                                                 voltage electric lines owned or
                                                 operated by a transmission
                                                 company and used for the
                                                 transmission of electricity
                                                 from one generating station to
                                                 a sub-station or to another
                                                 generating station, or between

                                       20
<PAGE>

                                                 sub-stations or to or from any
                                                 interconnector or Scottish
                                                 interconnection in question and
                                                 in relation to Scotland
                                                 including any interconnector
                                                 and Scottish interconnection,
                                                 and includes any electrical
                                                 plant and meters owned or
                                                 operated by the transmission
                                                 company in connection with the
                                                 transmission of electricity but
                                                 shall not include any remote
                                                 transmission assets.


      "ultimate controller"                      means:

                                                 (a)  a holding company of
                                                      the licensee which is not
                                                      itself a  subsidiary of
                                                      another company;  and

                                                 (b)  any person who whether
                                                      alone or  with a person or
                                                      persons connected with
                                                      him) is in a position to
                                                      control, or to exercise
                                                      significant influence
                                                      over, the policy of the
                                                      licensee or any holding
                                                      company of the licensee
                                                      by virtue of:

                                                      (i)  rights under
                                                           contractual
                                                           arrangements to which
                                                           he is a party or of
                                                           which he is a
                                                           beneficiary; or

                                                      (ii) rights of ownership
                                                           (including rights
                                                           attached to or
                                                           deriving from
                                                           securities or rights
                                                           under a trust) which
                                                           are held by him or of
                                                           which he is a
                                                           beneficiary;
                                       21
<PAGE>

                                                 but excluding any director or
                                                 employee of a corporate body
                                                 in his capacity as such;
                                                 and

                                                  (c) for the purposes of
                                                      sub-paragraph (b), a
                                                      person is connected with
                                                      another person if they are
                                                      party to any arrangement
                                                      regarding the exercise of
                                                      any such rights as are
                                                      described in that
                                                      paragraph.


      "undertaking"                              has the meaning given by
                                                 section 259 of the Companies
                                                 Act 1985.


      "unmetered                                 supply" means a supply of
                                                 electricity to premises
                                                 which is not, for the purpose
                                                 of calculating the charges for
                                                 electricity supplied to the
                                                 customer at such premises,
                                                 measured by metering
                                                 equipment.


      "use of system"                            means use of the licensee's
                                                 distribution system for the
                                                 distribution of electricity by
                                                 the licensee for any person.


      "use of system charges"                    means charges made or levied or
                                                 to be made or levied by the
                                                 licensee for the provision of
                                                 services as part of the
                                                 distribution business to any
                                                 person as more fully described
                                                 in standard condition 4 (Basis
                                                 of Charges for Use of System
                                                 and Connection to System:
                                                 Requirements for Transparency)
                                                 but shall not include
                                                 connection charges.

                                       22
<PAGE>

2.   Any words or  expressions  used in the  Utilities Act 2000 or Part I of the
     Act shall,  unless the contrary intention  appears,  have the same meanings
     when used in the standard conditions.

3.   Except where the context  otherwise  requires,  any reference to a numbered
     standard condition (with or without a letter) or Schedule is a reference to
     the standard  condition (with or without a letter) or Schedule bearing that
     number in this licence,  and any reference to a numbered paragraph (with or
     without a letter) is a reference  to the  paragraph  bearing that number in
     the  standard  condition  or Schedule in which the  reference  occurs,  and
     reference  to a Section is a reference  to that  Section in these  standard
     conditions.

4.   These standard conditions shall have effect as if, in relation to a licence
     holder who is a natural person, for the words "it", "its" and "which" there
     were  substituted  the words "he",  "him",  "his",  "who" and  "whom",  and
     cognate expressions shall be construed accordingly.

5.   Except  where the context  otherwise  requires,  a reference  in a standard
     condition to a paragraph  is a reference  to a paragraph  of that  standard
     condition and a reference in a paragraph to a sub-paragraph  is a reference
     to a sub-paragraph of that paragraph.

6.   Any reference in these standard conditions to -
     (a)  a provision thereof;
     (b)  a provision of the standard conditions of electricity supply licences,
          or
     (c)  a provision  of the  standard  conditions  of  electricity  generation
          licences,
     (d)  a provision of the standard  conditions  of  electricity  transmission
          licences,


         shall, if these standard conditions or the standard conditions in
         question come to be modified, be construed, so far as the context
         permits, as a reference to the corresponding provision of these
         standard conditions or the other standard conditions in question as
         modified.

                                       23
<PAGE>

7.   In  construing  these  standard  conditions,  the  heading  or title of any
     standard condition or paragraph shall be disregarded.

8.   Any reference in a standard condition to the purposes of that condition
     generally is a reference to the purposes of that standard condition as
     incorporated in this licence and as incorporated in each other licence
     under section 6(1)(c) of the Act (whenever granted) which incorporates
     it.

9.   Where any obligation of the licence is required to be performed by a
     specified date or time, or within a specified period, and where the
     licensee has failed so to perform, such obligation shall continue to be
     binding and enforceable after the specified date or time, or after the
     expiry of the specified period (but without prejudice to all the rights
     and remedies available against the licensee by reason of the licensee's
     failure to perform by that date or time, or within that period).

10.  Anything required by or under these standard conditions to be done in
     writing may be done by facsimile transmission of the instrument in question
     or by other electronic means and, in such case -

     (a)  the original instrument or other confirmation in writing shall be
          delivered or sent by pre-paid first-class post as soon as is
          reasonably practicable, and

     (b)  where the means of transmission had been agreed in advance between the
          parties concerned, in the absence of and pending such confirmation,
          there shall be a rebuttable presumption that what was received duly
          represented the original instrument.

11.  The definitions referred to in this condition may include some definitions
     which are not used or not used exclusively in Sections A and B (which
     Sections are incorporated in all distribution licences).  Where:

                                       24
<PAGE>

     (a)  any definition is not used in Sections A and B, that definition shall,
          for the purposes of this licence, be treated:

          (i)  as part of the standard condition or conditions (and the Section)
               in which it is used;

          (ii) as not having effect in the licence until such time as the
               standard condition in which the definition is used has effect
               within the licence in pursuance of standard condition 2
               (Application of Section C (Distribution Services Obligations);

     (b)  any definition which is used in Sections A and B is also used in one
          or more other Sections:

          (i)  that definition shall only be modifiable in accordance with the
               modification process applicable to each of the standard
               conditions in which it is used; and

          (ii) if any such standard condition is modified so as to  omit that
               definition, then the reference to that definition in this
               condition shall automatically cease to have effect.





                                       25
<PAGE>


Condition 2.  Application of Section C (Distribution Services Obligations)
--------------------------------------------------------------------------

1.   Where the Secretary of State provides, by a scheme made under Schedule 7
     to the Utilities Act 2000, for Section C (in whole or in part) to have
     effect within this licence:

     (a)  paragraphs 4 to 8 shall cease to be suspended and shall have effect
          in the licensee's licence; and

     (b)  the licensee shall be obliged to comply with the requirements of
          Section C (in whole or, as the case may be, in part) of this licence,

     from the date the said scheme takes effect. Such provision made by the
     Secretary of State in the said scheme shall be treated, for the purposes
     of paragraphs 5, 6, and 7 of this condition, as if it were a Distribution
     Services Direction made by the Authority.


2.   Until -


     (a)  the Secretary of State provides, by a scheme made under Schedule 7
           to the Utilities Act 2000, for Section C (in whole or in part) to
           have effect within this licence; or


     (b)  the Authority has issued to the licensee a direction pursuant to
           paragraph 4,


      the standard conditions in Section C (in whole or, as the case may be, in
      part) shall not have effect within this licence; and the licensee shall
      not be obliged to comply with any of the requirements of Section C (in
      whole or, as the case may be, in part) of this licence.

                                       26
<PAGE>


3.    Except where paragraph 1 applies to the licensee, paragraphs 4 to 8 of
      this standard condition shall be suspended and shall have no effect in
      this licence until such time as the Authority, with the consent of the
      licensee, issues to the licensee a notice ending the suspension and
      providing for those paragraphs to have effect in this licence with effect
      from the date specified in the notice.

4.    The Authority may, with the consent of the licensee, issue a direction (a
      "Distribution Services Direction"). Where the Authority has issued to the
      licensee a Distribution Services Direction the standard conditions in
      Section C (in whole or, as the case may be, in part) shall have effect
      within this licence from the date specified in the direction; and the
      licensee shall be obliged to comply with the requirements of Section C
      (in whole or, as the case may be, in part) to the extent and subject to
      the terms specified in such direction.


5.    A Distribution Services Direction:


      (a)  may specify that the standard  conditions  in Section C (in whole
             or in part) are to have effect in this licence;

      (b)  shall  specify or  describe an area (the  "distribution  services
             area") within which the licensee shall be obliged to comply with
             any of the  requirements of Section C (in whole or, as the case
             may be, in part); and

      (c)  shall specify  whether or not the requirements of Section C (in
           whole or, as the case may be, in part) apply to convenience
           customers.


6.    The Authority may, with the consent of the licensee:

       (a) vary the terms (as set out in the  Distribution  Services Direction
           or elsewhere) under which Section C (or parts thereof)

                                       27
<PAGE>

           has effect in this licence; or

       (b) provide for Section C (or parts thereof) to cease to have effect in
           this licence.


7.    The variation or cessation provided for in paragraph 6 shall take
      effect from the date specified in the variation or cessation notice
      given to the licensee by the Authority.

8.    With effect from the date of cessation referred to in paragraph 7,
      paragraphs 4 to 7 of this condition shall be suspended and shall cease
      to have effect in this licence, but the Authority may at any time
      thereafter, with the consent of the licensee, give to the licensee a
      notice ending the suspension and providing for those paragraphs to have
      effect again in this licence with effect from the date specified in the
      notice.


                                       28
<PAGE>



Condition 3. Payments by Licensee to the Authority
--------------------------------------------------

1.    The licensee shall, at the times stated, pay to the authority such
      amounts as are determined by or under this condition.

2.    In respect of each relevant year at the beginning of which the licensee
      holds this licence, the licensee shall pay to the Authority the
      aggregate of:

       (a) an amount which is the relevant proportion of the estimated costs of
           the Authority during the year in question;

       (b) an amount which is the relevant  proportion of the estimated costs
           of the Consumer Council during the year in question;

       (c) an amount which is the relevant proportion of the estimated
          costs incurred in the previous relevant year by the
           Competition Commission in connection with references made to
           it with respect to the licence or any other electricity
           distribution licence;

       (d) an amount which is the relevant proportion of the Secretary of
           State's costs during the year in question;

       (e) an amount which is the relevant proportion of the difference (being
           a positive or negative amount), if any, between:

          (aa) any costs estimated by the Authority or, in the case of
               sub-paragraph 2(d), the Secretary of State in the previous
               relevant year under sub-paragraphs 2(a), (b), (c), and (d); and

                                       29
<PAGE>

          (bb) the actual costs of the Authority, the Consumer Council, the
               Competition Commission (in connection with that reference)
               and the Secretary of State for the previous relevant year or,
               in the case of the Competition Commission, for the relevant
               year prior to the previous relevant year; and

       (f) in respect of the  relevant  year ending on 31 March  2002,  an
           amount which is the relevant  proportion of the actual  unrecovered
           costs of the Director General of Electricity Supply and the
           Relevant Consumers' Committees.

3.    The amounts determined in accordance with paragraph 2 shall be paid by
      the licensee to the Authority in two instalments, with:

       (a) the first instalment being due for payment by 30 June in each year;
           and

       (b) the second instalment being due for payment by 31 January in each
           year

      provided that, in each case, if the Authority has not given notice of
      the amount of the instalment due at least 30 days before the payment
      date stated above, the licensee shall pay the amount due within 30 days
      from the actual giving of notice by the Authority to the licensee
      (whenever notice is given).

4.    Where the licensee fails to pay the amount determined in accordance
      with paragraph 2 within 30 days of the due date set out in paragraph 3,
      it shall pay simple interest on the amount at the rate which is from
      time to time equivalent to the base rate of NatWest Bank plc or, if
      there is no such base rate, such base rate as the Authority may
      designate for the purposes hereof.

5.    In relation to any data or information specified by the Authority in a
      direction given for the purposes of this condition generally, the
      licensee shall submit a certificate to the Authority, approved by a
      resolution of the board of directors of the licensee and signed by a

                                       30
<PAGE>

      director of the licensee pursuant to that resolution. Such certificate
      shall be submitted to the Authority each year on the date specified by
      the Authority. Each certificate shall be in the following form -

      "In the opinion of the directors of [the licensee], all data and
      information provided to the Authority on [date provided to the
      Authority] for the purposes of enabling the Authority to calculate the
      licence fee payable by [the licensee] pursuant to standard condition 3
      (Payments by the Licensee to the Authority) is accurate."

6.    In this condition:

      "estimated  costs"                means costs  estimated by the  Authority
                                        as likely to be: (a) the costs of the
                                        Authority  and the  consumer  Council;
                                        and (b) the costs incurred by the
                                        Competition Commission,  such estimate
                                        having regard to the views of the
                                        Competition Commission.

      "relevant proportion"             means the proportion of the costs
                                        attributable to the licensee in
                                        accordance with  principles  determined
                                        by the Authority  for the  purposes  of
                                        this  condition  generally and
                                        notified to the licensee.

      "relevant year"                   means a year beginning on 1 April of
                                        each calendar year and ending on 31
                                        March of the following calendar year.

      "Secretary of State's costs"      means costs estimated by the Secretary
                                        of State as likely to be his costs in
                                        relation to:

                                        (a)      the establishment of the
                                                 Authority and the Consumer
                                                 Council; and

                                       31
<PAGE>

                                        (b)      Schedule 7 to the Utilities Act
                                                 2000.
5.    In sub-paragraph 2(f) of this condition:


      "Director General of              means the office previously established
       Electricity Supply"              under section 1 of the Act;

      "Relevant Consumers'              means the committees previously
       Committees"                      appointed by the Director General of
                                        Electricity Supply under section 2 of
                                        that Act



                                       32
<PAGE>




SECTION B. GENERAL
------------------

Condition 4. Basis of Charges for Use of System and Connection to System:
-------------------------------------------------------------------------
Requirements for Transparency
-----------------------------

1.    The licensee shall as soon as practicable prepare statements in a form
      approved by the Authority setting out the basis upon which charges will
      be made for the provision of:

      (a)    use of system; and

      (b)    connections to the licensee's distribution system,

      in each case in such form and with such detail as shall be necessary to
      enable any person to make a reasonable estimate of the charges which
      the person would become liable to pay for the provision of such services,
      and (without prejudice to the foregoing) including the information set out
      in paragraphs 2 and 3 respectively.



2.    The statement referred to at sub-paragraph 1(a) shall include:

      (a)  a schedule of charges for the distribution of electricity under use
           of system;

      (b)  a schedule of adjustment factors to be made in respect of
           distribution losses, in the form of additional supplies required to
           cover those distribution losses;

      (c)  the methods by which and the principles on which the charges (if any)
           for availability of distribution capacity on the
           licensee's distribution system will be made;

      (d)  a schedule of charges in respect of accounting and administrative
           services; and

      (e)  a schedule of the charges (if any) which may be made for the
           provision and installation of any electrical plant at entry or exit
           points, the provision and installation of which are ancillary to
           the grant of use of system, and for the maintenance of such
           electrical plant.

                                       33
<PAGE>


3.    The statement referred to at sub-paragraph 1(b) shall include:

      (a)    a schedule listing those items (including the carrying out of
      works and the provision and installation of electric lines or
      electrical plant) of significant cost liable to be required
      for the purpose of connection (at entry or exit points) to the
      licensee's distribution system for which connection charges
      may be made or levied and including (where practicable)
      indicative charges for each such item and (in other cases) an
      explanation of the methods by which and the principles on
      which such charges will be calculated;

      (b)   the methods by which and the principles on which any charges
      will be made in respect of extension or reinforcement of the
      licensee's distribution system rendered (in the licensee's
      discretion) necessary or appropriate by virtue of providing
      connection to or use of system to any person seeking
      connection;

      (c)   the methods by which and the principles on which connection
      charges will be made in circumstances where the electric lines
      or electrical plant to be installed are (at the licensee's
      discretion) of greater size or capacity than that required for
      use of system by the person seeking connection;

      (d)   the methods by which and the principles on which any charges
            (including any capitalised charge) will be made for
            maintenance, repair and replacement required of electric lines
            or electrical plant provided and installed for making a
            connection to the licensee's distribution system;

      (e)   (save to the extent that such matters are included in any
            agreement offered in accordance with standard condition 36B
            (Requirement to Offer Terms for the Provision of Distributor
            Metering and Data Services) the methods by which and principles
            on which any charges will be made for the provision of special
            metering or telemetry or data processing equipment by the licensee
            for the purposes of enabling any person who is party to the

                                       34
<PAGE>


            Pooling and Settlement Agreement and/or the Balancing and Settlement
            Code to comply with its obligations in respect of metering
            thereunder,or for the performance by the licensee of any service in
            relation to such metering thereto; and


      (f)   the methods by which and principles on which any charges will be
            made for disconnection from the licensee's distribution system and
            the removal of electrical plant and electric lines following
            disconnection.



4.    Connection charges for those items referred to in paragraph 3 shall be set
      at a level which will enable the licensee to recover:

      (a)  the appropriate proportion to be determined having regard to
           the factors set out in paragraph 4 of standard condition 4B
           (Requirement to Offer Terms for Use of System and Connection)
           of the costs directly or indirectly incurred in carrying out
           any works, the extension or reinforcement of the licensee's
           distribution system or the provision and installation,
           maintenance, repair, and replacement or (as the case may be)
           removal following disconnection of any electric lines or
           electrical plant; and

      (b)  a reasonable rate of return on the capital represented by such costs.



5.    If so requested and subject to paragraphs 6 and 10, the licensee shall,
      as soon as practicable and in any event within 28 days (or where the
      Authority so approves such longer period as the licensee may reasonably
      require having regard to the nature and complexity of the request)
      after the date referred to in paragraph 12 give or send to any person
      making such request a statement showing present and future circuit
      capacity, forecast power flows and loading on the part or parts of the
      licensee's distribution system specified in the request and fault
      levels for each distribution node covered by the request and
      containing:


                                       35
<PAGE>


      (a)  such further information as shall be reasonably necessary to
           enable such person to identify and evaluate the opportunities
           available when connecting to and making use of the part or
           parts of the licensee's distribution system specified in the
           request; and

      (b)  if so requested, a commentary prepared by the licensee
           indicating the licensee's views as to the suitability of the
           part or parts of the licensee's distribution system specified
           in the request for new connections and the distribution of
           further quantities of electricity.



6.    The licensee shall include in every statement given or sent under
      paragraph 5 the information required by that paragraph
      except that the licensee may:

      (a) with the prior consent of the Authority omit from any such
          statement any details as to circuit capacity, power flows,
          loading or other information, disclosure of which would, in
          the view of the Authority, seriously and prejudicially affect
          the commercial interests of the licensee or any third party;
          and

      (b) omit information the disclosure of which would place the
          licensee in breach of standard condition 39 (Restriction on
          Use of Certain Information and Independence of the
          Distribution Business) (if applicable).



7.     The licensee:

       (a)  shall, at least once in every year, review the information set
            out in the statements prepared in accordance with paragraph 1
            in order that the information set out in such statements shall
            continue to be accurate in all material respects; and

       (b)  may, with the approval of the Authority, from time to time alter the
            form of such statements.

                                       36
<PAGE>

8.    The licensee shall send a copy of the statements prepared in accordance
      with  paragraph 1 and of any revision of such statements, to the
      Authority.



9.    The licensee shall give or send a copy of the statements prepared in
      accordance with paragraph 1, or (as the case may be) of the latest
      revision of such statements, to any person who requests a copy of such
      statement or statements.



10.   The licensee may make a charge for any statement given or sent pursuant
      to paragraph 9 of an amount which shall not exceed the amount specified
      in directions issued by the Authority for the purposes of this condition
      based on the Authority's estimate of the licensee's reasonable costs of
      providing such a statement.



11.   The licensee may within 10 days after receipt of the request provide an
      estimate of its reasonable costs in the preparation of any statement
      referred to in paragraph 5, and its obligation to provide such statement
      shall be conditional on the person requesting such statement agreeing to
      pay the amount estimated or such other amount as the Authority may, upon
      application of the licensee or the person requesting such statement,
      direct.



12.   For the purposes of paragraph 5, the date referred to shall be the later
      of:

      (a)  the date of receipt of the request referred to in paragraph 5; or

      (b)  the date on which the licensee receives agreement from the person
           making the request to pay the amount estimated or such other amount
           as is determined by the Authority (as the case may be) under
           paragraph 11.



13.  The licensee shall, not less than 5 months prior to the date on which
     it proposes to amend its use of system charges in respect of any
     agreement for use of system, send to the Authority a notice setting out
     the licensee's proposals in relation to such amendment together with an
     explanation of the proposed amendment (including a statement of any
     assumptions on which such proposals are based), and the licensee shall

                                       37
<PAGE>


     send a copy of such notice to any person who has entered into an
     agreement for use of system under standard condition 4B (Requirement to
     Offer Terms for Use of System and Connection).



14.  Except with the prior consent of the Authority, the licensee shall not
     amend its use of system charges in respect of any agreement for use of
     system save to the extent that it has given prior notice of the
     amendment in accordance with paragraph 13 and such amendment reflects
     the proposals made in the notice (subject only to revisions consequent
     upon material changes in the matters which were expressed, in the
     statement which accompanied the notice, to be assumptions on which the
     proposals were based).



                                       38
<PAGE>



Condition 4A. Non-Discrimination in the Provision of Use of System and
----------------------------------------------------------------------
Connection to System
--------------------

1.    In the carrying out of works for the purpose of connection to the
      licensee's distribution system, or in providing for the modification to
      or retention of an existing connection to its distribution system, the
      licensee shall not discriminate between any persons or class or classes
      of persons.



2.    In the provision of use of system the licensee shall not discriminate
      between any persons or class or classes of persons.



3.    Without prejudice to paragraphs 1 and 2, and subject to the provisions
      of standard condition 4 (Basis of Charges for Use of System and
      Connection to System), the licensee shall not make charges for the
      provision of use of system to any person or class or classes of persons
      which differ from the charges for such provision to any other person or
      to any class or classes of persons, except in so far as such differences
      reasonably reflect differences in the costs associated with such
      provision.



4.    The licensee shall not in setting its charges for connection or use of
      system restrict, distort or prevent competition in the generation,
      transmission, distribution or supply of electricity.



                                       39
<PAGE>



Condition 4B. Requirement to Offer Terms for Use of System and Connection
-------------------------------------------------------------------------

1.    On application made by any person the licensee shall (subject to
      paragraph 4) offer to enter into an agreement for use of system:

      (a)  to accept into the licensee's distribution system at such
           entry point or points and in such quantities as may be specified in
           the application, electricity to be provided by or on behalf of such
           person; and/or

      (b)  to distribute such quantities of electricity as are referred to in
           sub-paragraph (a) (less any distribution losses) at such exit point
           or points on the licensee's distribution system and to such person or
           persons as the applicant for use of system may specify.


2.    On application made by any person for a connection, the licensee shall
      offer terms for making the connection pursuant to section 16 and section
      16A of the Act. Such offer of a connection shall comply with the
      provisions of this condition.


3.    Where the licensee:


      (i)  makes an offer to enter into a connection agreement pursuant to
           section 22 of the Act; or

      (ii) replies to a request for a conection made to it under section 16A of
           the Act


      the licensee shall, in making the offer or replying to the applicant,
      make detailed provision regarding:


      (a)   the carrying out of the works (if any) required to connect the
            licensee's distribution system to any other system for the
            transmission or distribution of electricity, and for the obtaining
            of any consents necessary for such purpose;

                                       40
<PAGE>
      (b)   the carrying out of the works (if any) in connection with the
            extension or reinforcement of the licensee's distribution system
            rendered (in the licensee's discretion) appropriate or necessary
            by reason of making the connection or modification to an existing
            connection and for the obtaining of any consents necessary for
            such purpose;


      (c)   (save to the extent that such matters are included in any
            agreement offered in accordance with standard condition 36B
            (Requirement to Offer Terms for the Provision of Distributor
            Metering and Data Services)) the installation of appropriate
            meters (if any) required to enable the licensee to measure
            electricity being accepted into the licensee's distribution
            system at the specified entry point or points or leaving such
            system at the specified exit point or points;


      (d)   the installation of such switchgear or other apparatus (if any)
            as may be required for the interruption of supply where the
            person seeking connection or modification of an existing connection
            does not require the provision of top-up or standby; and


      (e)   (save to the extent that such matters are included in any agreement
            offered in accordance with standard condition 36B (Requirement to
            Offer Terms for the Provision of Distributor Metering and Data
            Services) the installation of special metering,  telemetry or data
            processing equipment (if any) for the purpose
            of enabling any person who is party to the Pooling and Settlement
            Agreement and/or the Balancing and Settlement Code whilst such
            agreement is still in existence to comply with its obligations in
            respect to metering or the performance by the licensee of any
            service in relation to such metering thereunder.

                                       41
<PAGE>

4.    In making an offer pursuant to this condition to enter into any
      connection agreement or in replying to a request for connection under
      section 16A of the Act, the licensee shall set out:


      (a)  the date by which in the case of an agreement under paragraph
           2, any works required to permit access to the licensee's
           distribution system (including for this purpose any works to
           reinforce or extend the licensee's distribution system) shall be
           completed, time being of the essence unless, in the case of
           connection agreements only, otherwise agreed between the parties;



      (b)  the charges to be paid in respect of the services required, such
           charges(unless manifestly inappropriate):


           (i)   to be presented in such a way as to be referable to the
                 statements prepared in accordance with paragraph 1 of standard
                 condition 4 (Basis of Charges for Use of System and Connection
                 to System: Requirements for Transparency) or any revision
                 thereof; and


           (ii)  to be set in conformity with the requirements of standard
                 condition 4 (Basis of Charges for Use of System and Connection
                 to System: Requirements for Transparency); and


           (iii) in the case of a connection agreement under paragraph 2,
                 additionally to be set in conformity with the requirements of
                 paragraph 5.


      (c)  such other detailed terms in respect of each of the services
           required as are or may be appropriate for the purpose of the
           agreement.

                                       42
<PAGE>

5.    For the purpose of determining an appropriate proportion of
      the costs directly or indirectly incurred in carrying out
      works under an agreement for providing a connection or
      modification to or retention of an existing connection, the
      licensee shall have regard to:


      (a)  the benefit (if any) to be obtained or likely in the future to be
           obtained by the licensee or any other person as a result of the
           carrying out of such works whether by reason of the reinforcement
           or extension of the licensee's distribution system or the provision
           of additional entry or exit points on such system or otherwise;



       (b) the ability or likely future ability of the licensee to recoup a
           proportion of such costs from third parties; and


       (c) the principles that:


           (i)      no charge will normally be made for reinforcement of
                    the existing distribution system if the new or increased
                    load requirement does not exceed 25 percent of the
                    existing effective capacity at the relevant points on the
                    system; and


           (ii)     charges will not generally take into account system
                    reinforcement carried out at more than one voltage level
                    above the voltage of connection.


6.    The licensee shall offer terms for agreements in accordance with
      paragraphs 2 and 4 as soon as practicable and (save where the Authority
      consents to a longer period) in any event not more than the period
      specified in paragraph 7 after receipt by the licensee (or its agent)
      from any person of an application containing all such information as the
      licensee may reasonably require for the purpose of formulating the  terms
      of the offer.

                                       43
<PAGE>

7.    For the purposes of paragraph 6, the period specified shall be:


      (a) in the case of persons seeking the provision of use of system only,
          28 days;


      (b) in the case of persons seeking connection or a modification to an
          existing connection, 3 months; and


      (c) in the case of persons seeking use of system in conjunction with
          connection or a modification to an existing connection, 3 months.


8.    The licensee shall not be obliged pursuant to this condition to offer to
      enter or to enter into any agreement:


      (a) under paragraphs 2 and 4 if to do so would be likely to involve the
          licensee being:


          (i)  in breach of its duties under section 9 of the Act;


          (ii)  in breach of any regulations made under section 29 of
                the Act or of any other enactment relating to safety
                or standards applicable in respect to the
                distribution business;


          (iii) in breach of the Grid Codes or the licensee's Distribution Code;
                or


          (iv)  in breach of the conditions; or


      (b)  under paragraph 2 or 4, if the person making the application
           does not undertake to be bound, in so far as applicable, by
           the terms of the licensee's Distribution Code or the
           applicable Grid Code from time to time in force; or

                                       44
<PAGE>

      (c)  under paragraphs 2 and 4, if to do so would be likely to
           involve the licensee doing something which, without the
           consent of another person, would require the exercise of a
           power conferred by any provision of Schedules 3 or 4 to the
           Act; where the licence does not provide for that provision to
           have effect in relation to it; and any necessary consent has
           not, at the time the request is made, been given.


9.    The licensee shall within 28 days following receipt of a request from
      any person, give or send to such person such information in the
      possession of the licensee as may be reasonably required by such person
      for the purpose of completing an application under the Application
      Regulations or such provisions to like effect contained in any further
      regulations then in force made pursuant to sections 6(3), 60 and 64(1)
      of the Act.






                                       45
<PAGE>



Condition 4C. Functions of the Authority
----------------------------------------


1.    If, after a period which appears to the Authority to be reasonable for
      the purpose, the licensee has failed to enter into an agreement with
      any person entitled or claiming to be entitled thereto pursuant to a
      request under standard condition 4B (Requirement to Offer Terms for Use
      of System and Connection) for use of system, or an agreement for
      connection, the Authority may, on the application of such person or the
      licensee, settle any terms of the agreement in dispute between the
      licensee and that person in such manner as appears to the Authority to
      be reasonable having (in so far as relevant) regard in particular to
      the following considerations:

      a)  that such a person should pay to the licensee, in the case of
          provision of use of system, the use of system charges
          determined in accordance with standard condition 4 (Basis of
          Charges for Use of System and Connection to System:
          Requirements for Transparency); and

          in the case of provision of a connection or modification to an
          existing connection to the system, the whole or an appropriate
          proportion (as determined in accordance with paragraph 4 of
          standard condition 4B (Requirement to Offer Terms for Use of
          System and Connection)) of the costs referred to in paragraph
          4 of standard condition 4 (Basis of Charges for Use of System
          and Connection to System: Requirements for Transparency),
          together with a reasonable rate of return on the capital
          represented by such costs;

      (b) that the performance by the licensee of its obligations under
          the agreement should not cause it to be in breach of those
          provisions referred to at sub-paragraph 8(a) of standard
          condition 4B (Requirement to Offer Terms for Use of System and
          Connection);

      (c) that any methods by which the licensee's distribution system
          is connected to any other system for the transmission or

                                       46
<PAGE>


          distribution of electricity accord (in so far as applicable to
          the licensee) with the applicable Distribution Codes and Grid
          Codes; and

      (d) that the terms and conditions of the agreement so settled by
          the Authority and of any other agreements entered into by the
          licensee pursuant to a request under standard condition 4B
          (Requirement to Offer Terms for Use of System and Connection)
          should be in as similar a form as is practicable.

2.    In so far as any person entitled or claiming to be entitled to an offer
      under standard condition 4B (Requirement to Offer Terms for Use of
      System and Connection) wishes to proceed on the basis of an agreement
      as settled by the Authority pursuant to paragraph 1, the licensee shall
      forthwith enter into and implement such agreement in accordance with
      its terms.

3.    If either party to such agreement proposes to vary the contractual
      terms of any agreement for use of system, for the provision of a
      connection or for the modification to an existing connection to the
      licensee's distribution system, entered into pursuant to standard
      condition 4B (Requirement to Offer Terms for Use of System and
      Connection) or under this condition in any manner provided for under
      such agreement, the Authority may, at the request of that party, settle
      any dispute relating to such variation in such manner as appears to the
      Authority to be reasonable.


                                       47
<PAGE>



Condition 5. Distribution System Planning Standard and Quality of Service
-------------------------------------------------------------------------

1.    The licensee shall plan and develop the licensee's distribution system
      in accordance with a standard not less than that set out in Engineering
      Recommendation P.2/5 (October 1978 revision) of the Electricity Council
      Chief Engineers' Conference in so far as applicable to it or such other
      standard of planning as the licensee may, following consultation (where
      appropriate) with the transmission company and any other authorised
      electricity operator liable to be materially affected thereby and with
      the approval of the Authority, adopt from time to time.

2.    The licensee shall within 3 months after this condition comes into
      force draw up and submit to the Authority for its approval a statement
      setting out criteria by which the quality of performance of the
      licensee in maintaining the licensee's distribution system's security
      and availability and quality of service may be measured.

3.    The licensee shall within 2 months after the end of each financial year
      submit to the Authority a report providing details of the performance
      of the licensee during the previous financial year against the criteria
      referred to in paragraphs 1 and 2.

4.    The Authority may (following consultation with the licensee and, where
      appropriate, with the transmission company and any other authorised
      electricity operator liable to be materially affected thereby) issue
      directions relieving the licensee of its obligation under paragraph 1
      in respect of such parts of the licensee's distribution system and to
      such extent as may be specified in the directions.

5.    Paragraph 2 shall not apply to the licensee in respect of any period
      during which standard condition 49 has effect.

6.    Paragraph 3 shall not apply in repect of a prevous financial year during
      the whole or part of which standard condition 49 had effect.


                                       48
<PAGE>

                                       49
<PAGE>


Condition 6. Safety and Security of Supplies Enquiry Service
------------------------------------------------------------

1.    The licensee shall establish, or procure the establishment of, and
      subsequently operate and maintain, or procure the subsequent operation
      and maintenance of, an enquiry service for use by any person for the
      purposes of receiving reports and offering information, guidance or
      advice about any matter or incident which:

      (a)  affects or is likely to affect the maintenance of the security,
           availability and quality of service of the licensee's
                  distribution system; or

      (b)  arises from or in connection with the operation of, or otherwise
           relates to, the licensee's distribution system and which causes
           danger or requires urgent attention or is likely to cause danger
           or require urgent attention.

2.    The service established, operated and maintained in accordance with
      paragraph 1 shall:

      (a)   be provided without charge by the licensee to the user at the point
            of use;

      (b)   ensure that all reports and enquiries are processed in a prompt and
            efficient manner whether made by telephone, in writing or in person;
            and

      (c)   be available to receive and process telephone reports and enquiries
            at all times on every day of each year.

3.    In the establishment and operation and maintenance of the enquiry
      service in accordance with paragraph 1 the licensee shall not
      discriminate between any persons or class or classes of persons.

4.    In the establishment, operation and maintenance of the enquiry service
      in accordance with paragraph 1 the licensee shall not restrict, distort
      or prevent competition in the supply of electricity.

                                       50
<PAGE>

5.    The licensee shall have in force at all times a statement approved by
      the Authority setting out details of the service to be provided in
      accordance with paragraph 1, and the licensee shall give or send a copy
      of such statement to any person requesting it.


6.    The licensee shall give to the Authority notice of any amendments it
      proposes to make to the statement prepared under paragraph 5, and shall
      not make such amendments until either:

      (a) a period of one month from the date of the notice has expired; or

      (b) prior to the expiry of such period, the licensee has obtained the
          written approval of the Authority to such amendments.

7.    The licensee shall take steps to inform each authorised electricity
      operator which uses the service of any change to the address or
      telephone number of such service established, operated and maintained
      in accordance with paragraph 1, as soon as is practicable but in any
      event prior to such change becoming effective.

                                       51
<PAGE>


Condition 7. Provision of Information about Theft or Abstraction of Electricity,
-------------------------------------------------------------------------------
Damage and Meter Interference
-----------------------------

1.    Where a person other than the licensee is the owner of any electrical
      plant, electric lines or meter the licensee shall, as soon as is
      reasonably practicable, inform that person of any incident where the
      licensee has reason to believe:

      (a)  that there has been damage to such electrical plant, electric line or
           metering equipment; or

      (b)  that there has been interference with the metering equipment to alter
           its register or prevent it from duly registering the quantity of
           electricity supplied;

      provided that the licensee shall not be obliged to inform the owner of
      any electrical plant, electrical line or meter of any such incident where
      it has reason to believe that the damage or interference referred to above
      was caused by such owner.

2.    Where the licensee, in the course of providing services to any person
      supplying electricity to premises directly connected to the licensee's
      distribution system, has reason to believe that:


      (a)  there has been damage to any electrical plant, electric line or
           metering equipment through which such premises are supplied with
           electricity; or

      (b)  there has been interference with the metering equipment through which
           such premises are supplied to alter its register or prevent it from
           duly registering the quantity of electricity supplied,


      the licensee shall, as soon as reasonably practicable, inform that person
      (the person supplying electricity to the premises in question) of the
      incident in question.




                                       52
<PAGE>



Condition 8. Provisions Relating to the Connection of Metering Equipment
------------------------------------------------------------------------

1.    On application made by any person the licensee shall, subject to
      paragraph 5, offer to enter into an agreement authorising that person
      to connect metering equipment to the licensee's distribution system.

2.    In making an offer to enter into an agreement specified in paragraph 1,
      the licensee shall set out:

      (a)   the date from which the applicant is authorised to undertake
            connections;

      (b)    the procedures to be adopted by the applicant when making
             connections, with particular regard to those relating to safety;
             and

      (c)    such other detailed terms as are or may be appropriate for the
             purposes of the agreement.

3.    The licensee shall offer terms for an agreement in accordance with
      paragraph 1 as soon as practicable and (save where the Authority
      consents to a longer period) in any event not more than 28 days after
      receipt by the licensee from any person of an application containing
      all such information as the licensee may reasonably require for the
      purpose of formulating the terms of the offer.


4.    In the offering of the terms in accordance with paragraph 1, the
      licensee shall not show undue preference to or exercise undue
      discrimination against any person or class or classes of persons and
      shall not offer terms or operate in such a way as to restrict, distort
      or prevent competition.

5.    The licensee shall not be obliged pursuant to this condition to offer
      to enter or to enter into any agreement where to do so would be likely
      to cause the licensee to be in breach of those provisions referred to
      at paragraph 7(a) of standard condition 4B (Requirement to Offer Terms
      for Use of System and Connection).

                                       53
<PAGE>


6.    If, after a period which appears to the Authority to be reasonable for
      the purpose, the licensee has failed to enter into an agreement with
      any person entitled or claiming to be entitled thereto pursuant to a
      request under this condition, the Authority may, on the application of
      such person or the licensee, settle any terms of the agreement in
      dispute between the licensee and that person in such manner as appears
      to the Authority to be reasonable.

7.    If the licensee or other party to such agreement proposes to vary the
      terms of any agreement entered into pursuant to this condition in any
      manner provided for under such agreement, the Authority may, at the
      request of the licensee or other party to such agreement, settle any
      dispute relating to such variation in such manner as appears to the
      Authority to be reasonable.

8.    In so far as any person entitled or claiming to be entitled to an offer
      under this condition wishes to proceed on the basis of an agreement or
      a variation to it as settled by the Authority pursuant to paragraphs 6
      and 7, the licensee shall forthwith enter into and implement such
      agreement or variation in accordance with its terms.




                                       54
<PAGE>



Condition 9. Distribution Code
------------------------------

1.    The licensee shall in consultation with authorised electricity operators
      liable to be materially affected thereby prepare and at all times have
      in force and shall implement and (subject to paragraph 10 ofthis
      condition) comply with a Distribution Code:

      (a)  covering all material technical aspects relating to
           connections to and the operation and use of the licensee's
           distribution system or (in so far as relevant to the operation
           and use of the licensee's distribution system) the operation
           of electric lines and electrical plant connected to the
           licensee's distribution system and (without prejudice to the
           foregoing) making express provision as to the matters referred
           to in paragraph 5 below; and

      (b)  which is designed so as:

           (i)  to permit the development, maintenance and operation of an
                efficient, co-ordinated and economical system for the
                distribution of electricity; and

           (ii) to facilitate competition in the generation and supply of
                electricity.

2.    The Distribution Code in force at the date this condition comes into
      force shall be sent to the Authority for its approval. Thereafter the
      licensee shall (in consultation with authorised electricity operators
      liable to be materially affected thereby) periodically review
      (including upon the request of the Authority) the Distribution Code and
      its implementation. Following any such review, the licensee shall send
      to the Authority:

      (a)  a report on the outcome of such review; and

      (b)  any proposed revisions to the Distribution Code from time to time as
           the licensee (having regard to the outcome of such review) reasonably
           thinks fit for the achievement of the objectives referred to in
           sub-paragraph 1(b); and

                                       55
<PAGE>


       c)  any written representations or objections from authorised
           electricity operators (including any proposals by such operators
           for revisions to the Distribution Code not accepted by the licensee
           in the course of the review) arising during the consultation process
           and subsequently maintained.

3.    Revisions to the Distribution Code proposed by the licensee and sent to
      the Authority pursuant to paragraph 2 must receive the prior approval
      of the Authority before being implemented.

4.    Having regard to any written representations or objections referred to
      in sub-paragraph 2(c), and following such further consultation (if any)
      as the Authority may consider appropriate, the Authority may issue
      directions requiring the licensee to revise the Distribution Code in
      such manner as may be specified in the directions, and the licensee
      shall forthwith comply with any such directions.

5.    The Distribution Code shall include:

      (a)  a distribution planning and connection code containing:

           (i)  connection conditions specifying the technical, design and
                operational criteria to be complied with by any person connected
                or seeking connection to the licensee's distribution system; and

           (ii) planning conditions specifying the technical and design criteria
                and procedures to be applied by the licensee in the planning
                and development of the licensee's distribution system and to be
                taken into account by persons connected or seeking connection
                with the licensee's distribution system in the planning and
                development of their own plant and systems; and

       (b)  distribution operating code specifying the conditions under
            which the licensee shall operate the licensee's distribution
            system and under which persons shall operate their plant and/or
            distribution systems in relation to the licensee's distribution
            system, in so far as necessary to protect the security and quality
            of supply and safe operation of the licensee's distribution system
            under both normal and abnormal operating conditions.

                                       56
<PAGE>


6.    The licensee shall give or send a copy of the Distribution Code (as from
      time to time revised) to the Authority.

7.    The licensee shall (subject to paragraph 8) give or send a copy of the
      Distribution Code (as from time to time revised) to any person requesting
      the same.

8.    The licensee may make a charge for any copy of the Distribution Code
      (as from time to time revised) given or sent pursuant to paragraph 7 of
      an amount which will not exceed any amount specified for the time being
      for the purposes of this condition in directions issued by the
      Authority.

9.    In preparing, implementing and complying with the Distribution Code
      (including in respect of the scheduling of maintenance of the
      licensee's distribution system), the licensee shall not unduly
      discriminate between or unduly prefer any person or class or classes of
      persons.

10.   The Authority may (following consultation with the licensee) issue
      directions relieving the licensee of its obligations under the
      Distribution Code in respect of such parts of the licensee's
      distribution system and to such extent as may be specified in the
      directions.





                                       57
<PAGE>


Condition 9A. Compliance with other Distribution Codes
------------------------------------------------------


1.    The licensee shall comply with the provisions of the other Distribution
      Codes insofar as applicable to the licensee or the
      licensee's distribution business.

2.    The Authority may, following consultation with the licensed distributor(s)
      responsible for any other Distribution Code(s) and any authorised
      electricity operators directly affected thereby, issue directions
      relieving the licensee of its obligation in paragraph 1 in respect of such
      parts of the other Distribution Code(s) and to such extent and subject
      to such conditions as may be specified in those directions.



                                       58
<PAGE>



Condition 10.  Balancing and Settlement Code and NETA Implementation
--------------------------------------------------------------------

1.    Insofar as the licensee shall distribute or offer to distribute
      electricity within any area of England and Wales, the licensee shall be
      a party to the BSC Framework Agreement and shall comply with the BSC.

2.    The licensee shall comply with the programme implementation scheme
      established in accordance with paragraph 3 as modified from time to time
      in accordance with paragraph 5.

3.    The programme implementation scheme is a scheme designated by the
      Secretary of State setting out the steps, including without limitation
      steps as to the matters referred to in paragraph 4, to be taken (or
      procured) by the licensee (and/or by authorised electricity operators)
      which are, in the Secretary of State's opinion, appropriate in order to
      give full and timely effect to:

      (a)  any modifications made to this licence and to the licences of
           authorised electricity operators by the Secretary of State pursuant
           to the power vested in him under section 15A of the Act;

      (b)  any conditions imposed by any exemption from the requirement to
           hold any such licence; and

      (c)  the matters envisaged by such modifications and conditions.

4.    The programme implementation scheme may include provisions, inter alia,

      (a)  to secure or facilitate the amendment of any of the core industry
           documents;

      (b)  to secure that any systems, persons or other resources employed in
           the implementation of the Pooling and Settlement Agreement may be
           employed in the implementation of the BSC;

                                       59
<PAGE>


      (c)  for the giving of the indemnities against liabilities to which
           parties to the Pooling and Settlement Agreement may be exposed;

      (d)  for securing the co-ordinated and effective commencement of
           implementation of and operations under the BSC, including the
           testing, trialling and start-up of the systems, processes and
           procedures employed in such implementation and employed by
           authorised electricity operators and others in connection with
           such operations;

      (e)  for co-ordinating the administration and implementation of the BSC
           and the administration of the Pooling and Settlement Agreement;

      (f)  for the licensee to refer to the Authority for determination,
           whether of its own motion or as provided in the programme
           implementation scheme, disputes, as to matters covered by the
           scheme, between persons who are required (by conditions of their
           licences or exemptions) or who have agreed to comply with the scheme
           or any part of it; and

      (g)  for the Authority, in the circumstances set out in the scheme,
           to require that consideration be given to the making of a proposal
           to modify the BSC and, if so, to require the making of such proposal
           in the manner set out in the scheme, such power to be exercisable
           at any time within the period of 12 months after the start of the
           first period for trading under the BSC as determined by the
           Secretary of State.


5.    (a) The Secretary of State may at any time direct, in
          accordance with the provisions of the programme implementation
          scheme, that the programme implementation scheme be modified
          in the manner set out in such direction, in order to give (or
          continue to give) full and timely effect to the matters
          described in paragraph 3.

      (b) The Secretary of State shall serve a copy of any such direction on
          the licensee, and thereupon the licensee shall comply with the scheme
          as modified by the direction.

                                       60
<PAGE>

6.    If there is any conflict between the requirements contained in the
      programme implementation scheme pursuant to paragraph 4(a) and/or
      imposed on the licensee by paragraphs 2 and 5 of this condition, and
      those imposed on the licensee by any other condition, the provisions of
      paragraph(s) 4(a), 2 and/or 5 (as appropriate) shall prevail.

7.    Without prejudice to paragraph 2, the licensee shall use all reasonable
      endeavours to do such things as may be requisite and necessary in order
      to give full and timely effect to the modifications made to this licence
      as determined by the Secretary of State pursuant to the power  vested in
      him under section 15A of the Act (and to give full and timely effect to
      the matters envisaged by such modifications).

8.    In this condition:

      "BSC"                                      means the balancing and
                                                 settlement code required to be
                                                 in place, pursuant to the
                                                 transmission licence granted to
                                                 the transmission company in
                                                 England and Wales, as from time
                                                 to time modified.

      "BSC                                       Framework Agreement" means the
                                                 agreement of that title, in the
                                                 form approved by the Secretary
                                                 of State, by which the BSC is
                                                 made contractually binding
                                                 between the parties to that
                                                 agreement, as from time to time
                                                 amended, with the consent of
                                                 the Secretary of State.

      "core industry documents"                  mean those documents which:
                                                 (a)  in the Secretary of
                                                      State's opinion are
                                                      central industry

                                       61
<PAGE>

                                                      documents associated
                                                      with the activities of
                                                      the licensee and
                                                      authorised electricity
                                                      operators, the subject
                                                      matter of which relates
                                                      to or is connected with
                                                      the BSC or the balancing
                                                      and settlement
                                                      arrangements, and

                                                 (b)  have been so designated
                                                      by the Secretary of
                                                      State.



                                       62
<PAGE>


Condition 11. Change Co-ordination for NETA
-------------------------------------------


1.    Insofar as the licensee shall distribute or offer to distribute
      electricity within any area of England and Wales, the licensee shall
      take all reasonable measures to secure and implement (consistently with
      the procedures applicable under or in relation to the core industry
      documents to which it is party (or in relation to which it holds rights
      in respect of amendment) as modified or replaced from time to time),
      and shall not take any steps to prevent or unduly delay, changes to those
      documents , such changes being changes which are appropriate in order to
      give full and timely effect to and/or in consequence of any modification
      which has been made to the BSC.

2.    For the purposes of paragraph 1, core industry documents has the meaning
      given in paragraph 8 of standard condition 10 (Balancing and Settlement
      Code and NETA Implementation).


                                       63
<PAGE>


Condition 12. Settlement Agreement for Scotland
-----------------------------------------------


1.    In so far as the licensee shall distribute or offer to distribute
      electricity within any area of Scotland or to the extent that the
      Settlement Agreement for Scotland may apply in respect of the
      activities of the distribution business, the licensee shall comply with
      the relevant provisions of the Settlement Agreement for Scotland.

2.    In this condition:
      "Settlement Agreement for Scotland" means the agreement of that title,
      as nominated by the Authority for the purposes of this condition, to be
      prepared in accordance with and comprise such matters as are set out in
      special condition I (The Settlement Agreement for Scotland) of each of
      the electricity distribution licences of SP Distribution Limited, and
      Scottish Hydro-Electric Power Distribution Limited (and any other name
      by which any of these companies come to be known), as from time to time
      revised with the approval of the Authority.


                                       64
<PAGE>


Condition 12A. Compliance with the Trading Code in Scotland
-----------------------------------------------------------


1.    (a) Insofar as the licensee shall distribute or offer to
      distribute electricity within any area of Scotland, the
      licensee shall comply with the provisions of the Trading Code
      during any period that the licensee is a member of the trading
      system established by the Trading Code, including any
      requirements thereunder for the Authority's approval or
      consent, for compliance with directions issued by the
      Authority or relating to determinations made by the Authority.

      (b)The Authority may (following consultation with such other
      members of such trading system as the Authority shall consider
      appropriate) issue directions relieving the licensee of its
      obligation under sub-paragraph (a) in respect of such parts of
      the Trading Code and to such extent as may be specified in
      those directions.

2.    In this condition:

      "Trading Code"                 means the trading code required to be
                                     adopted pursuant to standard condition D2
                                     (Trading Code for Scotland) of the standard
                                     conditions of transmission licences and
                                     approved by the Authority as from time to
                                     time revised with the approval of the
                                     Authority.


                                       65
<PAGE>


 Condition 13. Change Co-ordination for the Utilities Act 2000
 --------------------------------------------------------------


1.    The licensee shall take all reasonable measures to secure and
      implement, and shall not take any steps to prevent or unduly delay,
      such changes to the industry framework documents as are necessary or
      expedient to give full and timely effect to the provisions of the
      Utilities Act 2000.

2.    In complying with paragraph 1, the licensee shall act in the case of
      each industry framework document consistently with the change
      procedures currently applicable to that document, except where to do so
      would be inconsistent with any provision of the Utilities Act 2000, in
      which event that provision shall take precedence.

3.    For the purposes of this condition, "industry framework document"
      means, subject to paragraph 4, any of the following documents to which
      the licensee is a party, or in relation to which it holds rights in
      respect of amendment or termination, together with any documents which
      are supplemental or ancillary thereto:

      (a)    the Pooling and Settlement Agreement;
      (b)    the Balancing and Settlement Code;
      (c)    Master Connection and Use of System Agreement or the Connection
             and Use of System Code;
      (d)    the Settlement Agreement for Scotland;
      (e)    the Master Registration Agreement;
      (f)    the Data Transfer services Agreement;
      (g)    the Radio Teleswitch Agreement;
      (h)    any Grid Code or Scottish Grid Code;
      (i)    any Distribution Code;
      (j)    the Trading Code;
      (k)    the Fuel Security Code;

                                       66
<PAGE>

      (l)    any agreement for use of an interconnector or Scottish
             interconnection; and
      (m)    any agreement for the provision of distribution use of system,
             meter provision services, meter maintenance services, data
             retrieval services, data processing services, data aggregation
             services, or prepayment meter services.

4.     Where the Authority considers that the list of industry framework
       documents set out in paragraph 3 should be modified for the purposes of
       this condition generally, the licensee shall discuss any proposed
       modification (including addition) to the list in good faith and use all
       reasonable endeavours to agree such modification with the Authority.

5.     This condition shall cease to have effect on 30 June 2002 or such
       earlier date as the Authority may specify in a direction given for the
       purposes of this condition generally.




                                       67
<PAGE>



Condition 14. The Master Registration Agreement
-----------------------------------------------


1.    The licensee shall be a party to and shall comply with the provisions of
      the Master Registration Agreement.


                                       68
<PAGE>



Condition 15. Compliance with the Grid Codes
--------------------------------------------

1.    The licensee shall comply with the provisions of every Grid Code in so far
      as applicable to it.

2.    The Authority may (following consultation with the transmission company
      responsible for the relevant Grid Code) issue directions relieving the
      licensee of its obligation under paragraph 1 in respect of such parts
      of such Grid Code and to such extent and subject to such conditions as
      may be specified in those directions.


                                       69
<PAGE>



Condition 16. Security Arrangements
-----------------------------------

1.   Insofar as the licensee shall distribute or offer to distribute
     electricity within any area of England and Wales, the licensee shall
     comply with the provisions of the Fuel Security Code and such
     provisions shall have effect as if they were set out in this licence.

2.   Insofar as the licensee shall distribute or offer to distribute electricity
     within any area of Scotland:

     (a)  if so directed in directions issued by the Authority for the
          purposes of this condition, the licensee shall, not later than
          such date as may be specified in such directions, enter into
          an agreement designated by the Secretary of State for the
          purposes of this condition relating to compliance with
          directions issued by the Secretary of State under section 34
          and/or section 35 of the Act; and

     (b)  the licensee shall comply with and perform its obligations under any
          agreement which it enters into pursuant to
                  sub-paragraph (a) above.

3.     In this condition:

      "Fuel Security Code"                       means the document of that
                                                 title designated as such by the
                                                 Secretary of State as from time
                                                 to time amended.



                                       70
<PAGE>



Condition 17. Provision of Services for Persons who are of Pensionable Age or
-----------------------------------------------------------------------------
Disabled or Chronically Sick
----------------------------


1.    The licensee shall, no later than 1 November 2001, prepare and submit to
      the Authority for its approval a code of practice detailing the special
      services the licensee will make available for domestic customers who are
      of pensionable age or disabled or chronically sick.

2.    The code of practice shall include arrangements whereby the licensee will:


      (a)   maintain a register of customers who have special communication
            needs or depend on electricity for medical reasons by virtue of
            being of pensionable age or disabled or chronically sick, and
            who require advance notice of planned interruptions to the supply
            of electricity, comprising the relevant details of each customer
            who requests or whose supplier requests his inclusion on it;


      (b)   give to all customers so registered, either via the relevant
            supplier or, where appropriate, directly, in respect of
            interruptions to the supply of electricity, such information
            and advice as may be appropriate and is of such nature as shall be
            set out in the code of practice, provided that where the licensee
            is providing the supplier with any such information, the licensee
            shall provide such information as soon as is practicable; and


      (c)   in the case where the request for the inclusion in the register is
            made directly to the licensee, provide the relevant supplier with
            the relevant details in such form and at such intervals as is
            relevant to the supplier's licence obligations.


3.    This condition is subject to the provisions of standard condition 22
      (Preparation, Review of and Compliance with Customer Service Codes).





                                       71
<PAGE>


                                       72
<PAGE>


Condition 18. Provision of Services for Persons who are Blind or Deaf
---------------------------------------------------------------------

1.    The licensee shall, no later than 1 November 2001, prepare and submit
      to the Authority for its approval a code of practice detailing the
      special services the licensee will make available for domestic customers
      who are disabled by virtue of being blind or partially sighted, or deaf
      or hearing impaired.


2.    The code of practice shall include arrangements by which the licensee
      will, on request, in each case free of charge:


     (a)  make available to blind and partially sighted domestic customers a
          facility for enquiring or complaining about any service provided
          by the licensee, by telephone or other appropriate means; and



     (b)  make available to deaf and hearing impaired domestic customers, being
          in possession of appropriate equipment, facilities to assist them in
          enquiring or complaining about any service provided by the licensee.


 3.   This condition is subject to the provisions of standard condition 22
      (Preparation, Review of and Compliance with Customer Service Codes).













                                       73



<PAGE>



Condition 19. Code of Practice on Procedures with Respect to Site Access
-------------------------------------------------------------------------

1.    The licensee shall, no later than 1 November 2001, prepare and submit
      to the Authority for its approval a code of practice setting out the
      principles and procedures the licensee will follow in respect of any
      person acting on its behalf who requires access to customers' premises.

2.    The code of practice shall include procedures calculated to ensure that
      persons visiting customers' premises on behalf of the licensee:

      (a)  possess the skills necessary to perform the required duties;

      (b)  are readily identifiable to members of the public;

      (c)  use passwords provided for vulnerable customers;

      (d)  are appropriate persons to visit and enter customers' premises;

      (e)  are able to inform customers, on request, of a contact point for
           help and advice they may require in relation to the safety and
           security of the supply of the electricity; and

      (f)  comply with the provisions of the Rights of Entry (Gas and
           Electricity Boards) Act 1954.

3.    This condition is subject to the provisions of standard condition 22
      (Preparation, Review of and Compliance with Customer Service Codes).


                                       74
<PAGE>


Condition 20.  Payments in Relation to Standards of Performance
---------------------------------------------------------------


1.    The licensee shall not enter into a use of system agreement with any
      electricity supplier that does not provide for the licensee to make
      payments in respect of the performance of the distribution business of
      the licensee to the electricity supplier for the benefit of any customer
      of that electricity supplier equivalent to such sums as would have been
      paid pursuant to any provision of Regulations made under section 39A of
      the Act.

                                       75
<PAGE>


Condition 21. Complaint Handling Procedure
------------------------------------------


1.    The licensee shall, no later than 1 November 2001, prepare and submit
      to the Authority for its approval a code of practice detailing the
      procedure for handling complaints from domestic customers about the
      manner in which the licensee conducts its distribution business.

2.    Any procedure established in accordance with this condition shall
      specify the periods within which it is intended that different
      descriptions of complaint should be processed and resolved.

3.    This condition is subject to the provisions of standard condition 22
      (Preparation, Review of and Compliance with Customer Service Codes).


                                       76
<PAGE>



Condition 22. Preparation, Review of and Compliance with Customer Service Codes
-------------------------------------------------------------------------------

1.    This condition applies to any code of practice required to be prepared
      by the licensee pursuant to standard condition 17 (Provision of
      Services for Persons who are of Pensionable Age or Disabled or
      Chronically Sick), standard condition 18 (Provision of Services for
      Persons who are Blind or Deaf), standard condition 19 (Code of Practice
      on Procedures in Respect of Site Access) and standard condition 21
      (Complaint Handling Procedure) of this licence.

2.    In first preparing such a code the licensee shall, prior to submitting
      that code to the Authority, consult the Consumer Council and shall have
      regard to any representations made by the Consumer Council about such
      code or the manner in which it is likely to be operated.

3.    Where before the expiry of 30 days of the licensee first submitting such
      code to the Authority for its approval the Authority notifies the
      licensee that the Authority considers the code is not sufficient for
      the purposes of meeting the requirements of this licence, the licensee
      shall forthwith make such changes as the Authority may require.

4.    The licensee shall, whenever requested to do so by the Authority, review
      such code and the manner in which it has been operated, with a view to
      determining whether any modification should be made to it or to the manner
      of its operation.

5.    In carrying out any such review the licensee shall consult the Consumer
      Council and shall have regard to any representations made by the
      Consumer Council about such code or the manner in which it is likely to
      be or (as the case may be) has been operated.

                                       77
<PAGE>


6.    The licensee shall submit any revision of such code which, after
      consulting the Consumer Council in accordance with paragraph 5, the
      licensee wishes to make, to the Authority for its approval and following
      its approval in writing shall then revise the code accordingly.


7.    The licensee shall:

      (a)  as soon as practicable following the preparation of any code
           or any revision made to it send to the Authority and the
           Consumer Council a copy of such code or such revision (in each
           case in the form approved by the Authority);

      (b)  at least once in each year, draw the attention of those
           customers to whom such code applies, to the existence of the
           code and of each substantive revision of it and to the means
           by which a copy of such code may be inspected in its latest
           form, in such manner as in the reasonable opinion of the
           licensee will give adequate publicity to it; and

      (c)  give or send free of charge a copy of such code (as from time to time
           revised) to any person who requests it.

8.    No changes may be made to any code otherwise than in accordance with the
      foregoing procedures.

9.    The licensee shall ensure, so far as reasonably practicable, that it
      complies with such arrangements or procedures (as the case may be) as
      are contained in or described by any code to which this condition applies
      and approved by the Authority or any revision to such code approved by
      the Authority.


                                       78
<PAGE>


Condition 23. Record of and Report on Performance
-------------------------------------------------

1.    The licensee shall keep a record of its general operation of the
      arrangements mentioned in standard conditions 17 to 22 and if the
      Authority so directs in writing, of its operation of any particular
      cases specified, or of a description specified, by the Authority.

2.    The licensee shall keep a statistical record of its performance in
      relation to the provision of services to domestic customers.

3.    The licensee shall, from time to time as required by the Authority,
      provide to the Authority and to the Consumer Council such of the
      information contained in the records prepared in accordance with
      paragraphs 1 and 2 as the Authority may request in writing.

4.    As soon as is reasonably practicable after the end of each calendar
      year, the licensee shall submit to the Authority and the Consumer
      Council a report dealing with the matters mentioned in paragraphs 1 and
      2 in relation to that year and shall:

      (a)    publish the report so submitted in such manner as will in the
             reasonable opinion of the licensee secure adequate publicity for
             it; and

      (b)    send a copy of it free of charge to any person requesting one,

      except that, in performing its obligations under sub-paragraphs (a) and
      (b), the licensee shall exclude from the report such information as
      appears to it to be necessary or expedient to ensure that, save where
      they consent, individual domestic customers referred to therein cannot
      readily be identified.

5.    The report shall be presented, so far as is reasonably practicable, in
      a standard form designated by the Authority for the purposes of this
      condition.

                                       79
<PAGE>


Condition 24. Provision of Information to the Authority
-------------------------------------------------------

1.    Subject to paragraphs 5 and 7, the licensee shall furnish to the
      Authority, in such manner and at such times as the Authority may
      reasonably require, such information and shall procure and furnish to
      it such reports, as the Authority may reasonably require or as may be
      necessary for the purpose of performing:

      (a)    the functions conferred  on it by or under the Act; and

      (b)    any functions transferred to or conferred on it by or under the
             Utilities Act 2000.



2.    The licensee shall procure from each company or other person which the
      licensee knows or reasonably should know is at any time an ultimate
      controller of the licensee a legally enforceable undertaking in favour of
      the licensee in a form  specified by the Authority that that ultimate
      controller ("the information covenantor") will give to the licensee, and
      will procure that any person (including, without limitation, a corporate
      body) which is a subsidiary of, or is controlled by, the information
      covenantor (other than the licensee and its subsidiaries) will give to the
      licensee, all such information as may be necessary to enable the licensee
      to comply fully with the obligation imposed on it in paragraph 1. Such
      undertaking shall be obtained within 7 days of such corporate body or
      other person in question becoming an ultimate controller of the licensee
      and shall remain in force for so long as the licensee remains the holder
      of this licence and the information covenantor remains an ultimate
      controller of the licensee.



3.    The licensee shall deliver to the Authority evidence (including a copy
      of each such undertaking) that the licensee has complied with the
      obligation to procure undertakings pursuant to paragraph 2, and shall
      comply with any direction from the Authority to enforce any undertaking
      so procured.

                                       80
<PAGE>



4.    The licensee shall not, save with the consent in writing of the Authority,
      enter (directly or indirectly) into any agreement or arrangement with any
      ultimate controller of the licensee or, where the ultimate controller is a
      corporate body, any of the subsidiaries of such a corporate ultimate
      controller (other than the subsidiaries of the licensee) at a time when:

      (a)    an undertaking complying with paragraph 2 is not in place in
             relation to that ultimate controller; or

      (b)    there is an unremedied breach of such undertaking; or

      (c)    the licensee is in breach of the terms of any direction issued by
             the Authority under paragraph 3 of this condition.

5.    The licensee shall not be required by the Authority to furnish it under
      this condition with information for the purpose of the exercise of its
      functions under section 47 of the Act.

6.    The licensee shall, if so requested by the Authority, give reasoned
      comments on the accuracy and text of any information or advice (so far
      as relating to its activities as holder of an electricity distribution
      licence) which the Authority proposes to publish pursuant to section 48
      of the Act.

7.    This condition shall not require the licensee to produce any documents
      or give any information which it could not be compelled to produce or
      give in evidence in civil proceedings before a court.

8.    The power of the Authority to call for information under this condition
      is in addition to the power of the Authority to call for information
      under or pursuant to any other condition. There shall be a presumption
      that the provision of information in accordance with any other condition
      is sufficient for the purposes of that condition, but that presumption
      shall be rebutted, if the Authority states in writing that in its opinion
      such further information is, or is likely to be, necessary to enable it to
      exercise functions under the condition in question.



                                       81
<PAGE>


                                       82
<PAGE>


Condition 25. Long Term Development Statement
---------------------------------------------



1.    The purposes of this condition are:
      (a)  to secure the provision by the licensee of information which  will
           assist any person who contemplates entering into distribution
           arrangements with the licensee to identify and evaluate the
           opportunities for doing so; and
      (b)  to ensure the general availability of such information in the public
           domain.

2.    Where the Authority gives the licensee a direction to do so, the licensee
      shall prepare and maintain a statement in such form as may be specified
      in the direction for the purposes of this condition generally, containing,
      with respect to each of the 5 succeeding years on a rolling basis
      beginning with 1st April in any year, such information as it is reasonably
      practicable for the licensee to provide which identifies or relates to
      the matters specified in paragraph 4.

3.    The direction specified in paragraph 2 may be given by the Authority at
      any time during a year. Any statement to be prepared by the licensee
      pursuant to paragraph 2 shall be prepared within 3 months of the giving
      of the direction. The licensee shall be obliged to include in the first
      such statement prepared the information referred to in paragraph 2 with
      respect to each year of the 5 succeeding years on a rolling basis
      beginning with 1st April of the year in which the direction is given.

4.    The matters referred to at paragraph 2 are:

      (a)  the use likely to be made of the licensee's distribution system;

      (b)  the likely development of the licensee's distribution system;

      (c)  the likely development of those facilities which the licensee
           expects to be taken into account from time to time in determining
           charges for making connections to its distribution system and for
           use of system;


                                       83
<PAGE>


      (d)  the licensee's plans for modifying its distribution system,
           including works which it expects to be carried out for that purpose
           within the forthcoming 2 years (from the date of the statement);

      (e)  the identification of those parts of the licensee's distribution
           system which are likely to reach the limit of their capability
           during the succeeding 5 year period, including those parts which may
           experience thermal overloading, voltage problems or excess fault
           levels;

      (f)  the licensee's plans to alleviate or rectify any predicted
           shortcomings in the operation and/or capability of its distribution
           system;  and

      (g)  (where applicable) how the actual developments in the recent past
           compared with the licensee's plans contained in previous statements.

5.    Any statement to be prepared by the licensee pursuant to paragraph 2 shall
      be prepared within 3 months of the giving of the relevant direction.

6.    Except in so far as the Authority otherwise consents, the licensee shall
      on an annual basis prepare a revision of any statement prepared under
      paragraph 2 so as to ensure that, so far as is reasonably practicable,
      the information in the revised statement is up to date.

7.    The licensee shall, subject to any requirement to comply with the listing
      rules (within the meaning of Part IV of the Financial Services Act 1986)
      of The Stock Exchange and with paragraph 8 -


      (a)  furnish the Authority with a copy of the statement prepared under
           paragraph 2 and of each revision of the statement prepared under
           paragraph 6;

      (b)  in such form and manner as the Authority may direct, publish such a
           summary of the statement or, as the case may be, of a revision of
           the statement as will assist a person in deciding whether to ask for
           a copy of the statement;

                                       84
<PAGE>



      (c)  prepare a version of the statement or revision which excludes,
           so far as is practicable, any such matter as is mentioned in
           paragraph 8 and send a copy thereof to any person who asks for one
           and makes such payment to the licensee in respect of the cost thereof
           as it may require not exceeding such amount as the Authority may from
           time to time approve for the purposes hereof.


8.    In complying with the requirements of paragraph 7(b), the licensee
      shall have regard to the need for excluding, so far as is practicable,
      any matter which relates to the affairs of a person where the publication
      of that matter would or might seriously and prejudicially affect his
      interests.

9.    Any question arising under paragraph 8 as to whether the publication of
      some matter which relates to the affairs of a person would or might
      seriously and prejudicially affect his interests shall be determined by
      the Authority.

10.   A direction given under paragraph 2 is only effective where the Authority
      has informed the licensee of its intention to do so in a notice which:

      (a)  states the date on which it is proposed that the direction should
           take effect;

      (b)  sets out the proposed contents of the direction with respect to the
           form in which the statement is to be prepared and maintained for
           the purposes of this condition;
      (c)  specifies the time (not being less than 28 days from the date of the
           notice) within which representations with respect to the proposed
           direction may be made, and has considered any representations which
           are duly made by the licensee and are not withdrawn.

11.   Any consultation undertaken by the Authority with the holder of a licence
      granted under section 6(1)(c) of the Act before the determination of this


                                       85
<PAGE>



      standard condition by the Secretary of State pursuant to section 33(1) of
      the Utilities Act 2000 shall be effective for the purposes of paragraph
      10.


12.   In this condition, "distribution arrangements" includes distribution
      arrangements which relate to -

      (a)  the utilisation of the licensee's distribution system; and

      (b)  connections to the licensee's distribution system.



                                       86
<PAGE>


Condition 26. Compliance with CUSC
----------------------------------


1.    Insofar as the licensee distributes or offers to distribute to any
      premises situated in England and Wales, the licensee shall be a party
      to the CUSC Framework Agreement and shall comply with the CUSC and, if
      it is party to the agreement known as the Master Connection and Use of
      System Agreement ("MCUSA"), execute such other documents as shall be
      stated as required to be made in any direction issued by the Authority
      to enable the MCUSA and its supplemental agreements and ancillary
      service agreements (as defined or referred to in MCUSA) and any
      associated agreements derived from MCUSA to be amended appropriately
      into the CUSC Framework Agreement, CUSC, bilateral agreements,
      construction agreements and, so far as is appropriate, associated
      agreements derived from CUSC so as to maintain continuity of
      contractual relationships.

2.    The licensee shall take all reasonable steps to secure and implement
      (consistently with the procedures applicable under or in relation to
      the core industry documents to which it is a party (or in relation to
      which it holds rights in respect of amendment)as modified or replaced
      from time to time), and shall not take any steps to prevent or unduly
      delay, changes to those documents, such changes being changes which are
      appropriate in order to give full and timely effect to and/or in
      consequence of any modification which has been made to the CUSC.

3.    For the avoidance of doubt, paragraph 2 is without prejudice to any
      rights of approval, veto or direction in respect of proposed changes to
      the core industry documents which the Authority may have.

4.    In this condition:

      "bilateral agreement"                      means an agreement between the
                                                 holder of a transmission
                                                 licence in England and Wales

                                       87
<PAGE>

                                                 and a CUSC user supplemental to
                                                 the CUSC relating to a direct
                                                 connection to that transmission
                                                 system identifying the relevant
                                                 connection site and setting out
                                                 other site specific details in
                                                 relation to that connection to
                                                 the transmission system,
                                                 including provisions relating
                                                 to payment of connection
                                                 charges.



      "construction agreement"                   means an agreement between the
                                                 holder of a transmission
                                                 licence in England and
                                                 Wales and a CUSC user in
                                                 respect of construction  works
                                                 required on  that transmission
                                                 system and the associated
                                                 construction works of the CUSC
                                                 user in relation to a
                                                 connection to the transmission
                                                 system or in relation to a
                                                 generating station connected to
                                                 a distribution system in
                                                 England and Wales, whether for
                                                 the initial connection or a
                                                 modification of the connection.

     "core industry documents"                   means those documents which
                                                 have been designated by the
                                                 Secretary of State as such.

     "CUSC"                                      means the Connection and Use
                                                 of System Code required to be
                                                 in place pursuant to the
                                                 transmission licence granted
                                                 to the transmission company in
                                                 England and Wales, as from time
                                                 to time modified.

     "CUSC Framework Agreement"                  means the agreement of that
                                                 title, in the form approved by

                                       88
<PAGE>


                                                 the Secretary of State, by
                                                 which the CUSC is made
                                                 contractually binding between
                                                 the parties to that agreement,
                                                 as amended from time to time
                                                 with the approval of the
                                                 Secretary of State.


                                       89
<PAGE>




Condition 27.  Not used
-----------------------


Condition 28.  Not used
-----------------------





                                       90
<PAGE>


Condition 29. Disposal of Relevant Assets
-----------------------------------------

1.    The licensee shall not dispose of or relinquish operational control
      over any relevant asset otherwise than in accordance with the following
      paragraphs of this condition.

2.    Save as provided in paragraph 3, the licensee shall give to the
      Authority not less than two months' prior written notice of its
      intention to dispose of or relinquish operational control over any
      relevant asset, together with such further information as the Authority
      may request relating to such asset or the circumstances of such
      intended disposal or relinquishment of control or to the intentions in
      regard thereto of the person proposing to acquire such asset or
      operational control over such asset.

3.    Notwithstanding paragraphs 1 and 2, the licensee may dispose of or
      relinquish operational control over any relevant asset:

      (a)  where:
           (i)  the Authority has issued directions for the purposes of this
                condition containing a general consent (whether or not subject
                to conditions) to:
                (aa)   transactions of a specified description; or
                (bb) the disposal of or relinquishment of operational control
                     over relevant assets of a specified description; and
           (ii) the transaction or the relevant assets are of a description to
                which such directions apply and the disposal or relinquishment
                is in accordance with any conditions to which the consent is
                subject; or

      (b)  where the disposal or relinquishment of operational control in
           question is required by or under any enactment or subordinate
           legislation.

4.    Notwithstanding paragraph 1, the licensee may dispose of or relinquish
      operational control over any relevant asset as is specified in any
      notice given under paragraph 2 in circumstances where:

      (a)  the Authority confirms in writing that it consents to such
           disposal or relinquishment (which consent may be made subject

                                       91
<PAGE>



           to the acceptance by the licensee or any third party in favour
           of whom the relevant asset is proposed to be disposed or
           operational control is proposed to be relinquished to) of such
           conditions as the Authority may specify; or

      (b)  the Authority does not inform the licensee in writing of any
           objection to such disposal or relinquishment of control within
           the notice period referred to in paragraph 2.



5.    In this condition:

      "disposal"                                 means:

                                                 (a) in relation to disposal
                                                     of a relevant asset
                                                     situated in England and
                                                     Wales includes any sale,
                                                     gift, exchange, assignment,
                                                     lease, licence, loan,
                                                     mortgage, charge, or grant
                                                     of any other encumbrance
                                                     or the permitting of any
                                                     encumbrance to subsist or
                                                     any other disposition;

                                                 (b) in relation to disposal
                                                     of a relevant asset
                                                     situated in Scotland
                                                     includes the grant of any
                                                     disposition, conveyance,
                                                     contract of excambion, any
                                                     lease, assignation,
                                                     licence, the grant of any
                                                     right of possession, loan,
                                                     standard security, floating
                                                     charge to a third party,
                                                     or the grant of any
                                                     servitude right, wayleave
                                                     or any other transaction or
                                                     event which is capable
                                                     under any enactment or rule
                                                     of law of affecting the
                                                     title to a registered
                                                     interest in land


                                       92
<PAGE>


                                                     and "dispose" and cognate
                                                     expressions shall be
                                                     construed accordingly;
                                                     includes, without
                                                     limitation, entering into
                                                     any agreement or
                                                     arrangement whereby
                                                     operational controlof a
                                                     relevant asset orrelevant
                                                     assets is not orceases to
                                                     be under the solemanagement
                                                     of the licensee.

      "relinquishment of operational control"




                                       93
<PAGE>


Condition 30.  Not used
-----------------------


Condition 31.  Not used
-----------------------



                                       94
<PAGE>



SECTION C.  DISTRIBUTION SERVICES OBLIGATIONS
---------------------------------------------



Condition 32.  Interpretation of Section C (Distribution Services Obligations)
------------------------------------------------------------------------------

1.    In this Section of the standard conditions, unless the context otherwise
      requires:

      "data transfer catalogue"                  has the meaning given at
                                                 paragraph 5(c) of standard
                                                 condition 37 (The Metering
                                                 Point Administration Service
                                                 and the Master Registration
                                                 Agreement).



      "data transfer service"                    means the data transfer service
                                                 and service facility to be
                                                 established,  operated and
                                                 maintained by the licensee, in
                                                 conjunction and  co-operation
                                                 with  all  other  distribution
                                                 services  providers,  in
                                                 accordance  with and comprising
                                                 the elements set out in
                                                 standard  condition 38
                                                 (Establishment of a Data
                                                 Transfer Service).




      "Metering Point Administration Service"    means the service to be
                                                 established, operated and
                                                 maintained by the licensee in
                                                 accordance with standard
                                                 condition 37 (The Metering
                                                 Point Administration Service
                                                 and the Master Registration
                                                 Agreement).

                                       95
<PAGE>



      "metering point administration             means the services of the
       services"                                 Metering Point Administration
                                                 Service established in
                                                 accordance with standard
                                                 condition 37 (The Metering
                                                 Point Administration Service
                                                 and the Master Registration
                                                 Agreement) or, where the
                                                 context requires, means the
                                                 equivalent services provided by
                                                 any other distribut on
                                                 services provider in accordance
                                                 with the provisions of its
                                                 distribution licence.



      "permitted purpose"                        means the purpose of all or any
                                                 of the following:

                                                 (a)  the distribution  business
                                                      or any other business or
                                                      activity within the limits
                                                      of paragraph 4 of standard
                                                      condition 43 (Restriction
                                                      on Activity and Financial
                                                      Ring Fencing);

                                                 (b)  any business or activity
                                                      to which the Authority has
                                                      given its consent in
                                                      writing in accordance with
                                                      paragraph 3 (d) of
                                                      condition 43;and

                                                 (c)  without  prejudice to the
                                                      generality of
                                                      sub-paragraph  (a), any
                                                      payment or  transaction
                                                      lawfully  made or
                                                      undertaken by the licensee
                                                      for a purpose within
                                                      sub-paragraphs   1(b)(i)
                                                      to  (vii)  of  standard
                                                      condition 47
                                                      (Indebtedness);



                                       96
<PAGE>




Condition 32A.  Convenience Customers
-------------------------------------

1.    The licensee shall establish and maintain an accurate list of any
      convenience customers.

2.    The licensee shall update the list referred to in paragraph 1 at least
      once in every period of 12 months.





                                       97
<PAGE>


Condition 33.  Not used
-----------------------



                                       98
<PAGE>



Condition 34. Compulsory Acquisition of Land etc.
-------------------------------------------------

1.    The powers and rights conferred by or under the provisions of Schedule
      3 to the Act (Compulsory Acquisition of Land etc. by Licence Holders)
      shall have effect in relation to the licensee to enable the licensee to
      carry on the activities authorised by this licence and which:

      (a)  are comprised within its distribution business; and

      (b)  are carried on within the distribution services area or necessitate
           the use of the licensee's distribution system,including any extension
           of or addition to the licensee'sdistribution system, whether or not
           connected to such system.





                                       99
<PAGE>



Condition 35.  Other Powers etc.
--------------------------------

1.    The powers and rights conferred by or under the provisions of Schedule
      4 to the Act (Other Powers etc. of Licence Holders) shall have effect
      in relation to the licensee to enable the licensee to carry on the
      activities authorised by this licence and which:

      (a)  are comprised within its distribution business; and

      (b)  are carried on within the distribution services area or necessitate
           the use of the licensee's distribution system, including any
           extension of or addition to the licensee's distribution system,
           whether or not connected to such system.


                                      100
<PAGE>





Condition 36. Basis of Charges for Distributor Metering and Data Services:
--------------------------------------------------------------------------
Requirements for Transparency
-----------------------------


1.    The licensee shall as soon as practicable prepare statements in a form
      approved by the Authority setting out the basis upon which charges will
      be made for the provision of each of the distributor metering and data
      services, in each case in such form and with such detail as shall be
      necessary to enable any person to make a reasonable estimate of the
      charges to which the person would become liable to pay for the
      of such services and of the other terms, likely to have a provision
      material impact on the conduct of the person's business, upon which the
      service would be provided and (without prejudice to the foregoing)
      including the information set out in paragraph 2.

2.    The statements referred to at paragraph 1 shall include a schedule of
      charges for each of the distributor metering and data services, together
      with an explanation of the methods by which and the principles on which
      such charges will be calculated.

3.    The Authority may, upon the written request of the licensee, issue a
      direction relieving the licensee of its obligations under paragraph 1
      to such extent and subject to such terms and conditions as the Authority
      may specify in that direction.

4.    The licensee shall not in setting its charges for, or in setting the
      other terms that will apply to the provision of any of the distributor
      metering and data services, restrict, distort or prevent competition in
      the generation, distribution or supply of electricity or in the provision
      of meter maintenance or data retrieval services.


5.    The licensee:

                                      101
<PAGE>



      (a)  shall, at least once in every year, review the information set
           out in the statements prepared in accordance with paragraph 1 in
           order that the information set out in such statements shall continue
           to be accurate in all material respects; and

      (b)  may, with the approval of the Authority, from time to time alter the
           form of such statements.

6.    The licensee shall send a copy of the statement prepared in accordance
      with paragraph 1, and of each revision of such statement, to the
      Authority.

7.    The licensee shall give or send a copy of the statement prepared in
      accordance with paragraph 1, or (as the case may be) of the latest
      revision of such statement, to any person who requests a copy of such
      statement or statements.

8.    The licensee may make a charge for any statement given or sent pursuant
      to paragraph 7 of an amount which shall not exceed the amount specified
      in directions issued by the Authority for the purposes of this
      condition based on the Authority's estimate of the licensee's
      reasonable costs of providing such a statement.


                                      102
<PAGE>



Condition 36A. Non-Discrimination in the Provision of Distributor Metering and
------------------------------------------------------------------------------
Data Services
-------------


1.    In the provision of any of the distributor metering and data services, the
      licensee shall not discriminate between any persons or class or classes of
      persons.

2.    Without prejudice to paragraph 1, and subject to the provisions of
      standard condition 36 (Basis of Charges for Distributor Metering and Data
      Services: Requirements for Transparency), the licensee shall not make
      charges for the provision of any of the distributor metering and data
      services to any person or class or classes of persons which differ from
      the charges for such provision to any other person or class or classes of
      person except in so far as such differences reasonably reflect
      differences in the costs associated with such provision.


                                      103
<PAGE>



Condition 36B. Requirement to offer Terms for the Provision of Distributor
--------------------------------------------------------------------------
Metering and Data Services
--------------------------


1.    This condition sets out the obligations relating to the following
      services:

      (a)  the provision of metering equipment which, at the discretion of the
           licensee, may be metering equipment which is owned by him or by any
           person other than the person making such application;


      (b)  the installation, commissioning, testing, repair, maintenance,
           removal and replacement of metering equipment;

      (c)    metering point administration services pursuant to and in
             accordance with the Master Registration Agreement; and

      (d)    data transfer services.

2.    On application made by any person, the licensee shall (subject to
      paragraph 6) offer to enter into an agreement for the provision within
      its distribution services area of such of the services described in
      sub-paragraphs 1(a), (b) and (c) as may be required.

3.    On application made by any person the licensee shall (subject to paragraph
      6) offer to enter into an agreement for the provision of data transfer
      services.

4.    In making an offer pursuant to this condition to enter into any agreement,
      the licensee shall set out:
      (a) the date by which the services required shall be provided (time being
          of the essence, unless otherwise agreed between parties);

      (b) the charges to be paid in respect of the services required, such
          charges (unless manifestly inappropriate):

          (i)  to be presented in such a way as to be referable to the
               statements prepared in accordance with paragraph 1 of standard

                                      104
<PAGE>


               condition 36 (Basis of Charges for Distributor Metering and Data
               Services: Requirements for Transparency) or any revision thereof;

          (ii) to be set in conformity with the requirements of standard
               condition 36 (Basis of Charges for Distributor Metering and Data
               Services: Requirements for Transparency); and

      (c)  such other detailed terms in respect of each of the services
           required as are or may be appropriate for the purpose of the
           agreement.

5.    The licensee shall offer terms for agreements in accordance with
      paragraphs 2 and 3 as soon as practicable and (save where the Authority
      consents to a longer period) in any event not more than 28 days after
      receipt by the licensee (or its agent) from any person of an application
      containing all such information as the licensee may reasonably require for
      the purpose of formulating the terms of the offer.

6.    The licensee shall not be obliged pursuant to this condition to offer to
      enter or to enter into any agreement if to do so would be likely to
      involve the licensee being:

      (a)  in breach of its duties under section 9 of the Act;

      (b)  in breach of any regulations made under section 29 of the Act or of
           any other enactment relating to safety or standards applicable in
           respect of the distribution business;

      (c)  in breach of any Grid Code or Distribution Code; or

      (d)    in breach of the conditions.

7.    The licensee shall undertake each of the services referred to in paragraph
      1 in the most efficient and economic manner practicable having regard to
      the alternatives available and the other requirements of the licence and
      of the Act in so far as they relate to the provision of those services.

                                      105
<PAGE>


8.    In the provision of any of the services referred to in paragraph 1  the
      licensee shall not restrict, distort or prevent competition in the supply
      of electricity.

9.    The services referred to in paragraph 1 shall collectively be referred
      to as the distributor metering and data services. For the avoidance of
      doubt distributor metering and data services as referred to in this
      licence excludes data retrieval, data processing and data aggregation.

10.   In this condition:

      "data retrieval"                           means services comprising any
                                                 or all of the following:

                                                 the retrieval and verification
                                                 of meter reading data from
                                                 electricity meters and the
                                                 delivery of such data to any
                                                 person for the purpose of
                                                 data processing.



       "data processing"                         means services comprising any
                                                 or all of the following:

                                                 the processing, validation and
                                                 estimation of meter reading
                                                 data, and the creation,
                                                 processing andvalidation of
                                                 data in respect of the
                                                 consumption of electricity at
                                                 premises which receive an
                                                 unmetered supply, and the
                                                 delivery of such data to any
                                                 person for the purpose of data
                                                 aggregation.

       "data aggregation"                        means services comprising any
                                                 or all of the following:

                                                 the collation and summation of
                                                 meter reading data (whether
                                                 actual or estimated) and of
                                                 data in respect of the
                                                 consumption of electricity at
                                                 premises which receive an
                                                 unmetered supply, and the
                                                 delivery of such data to any
                                                 person for settlement purposes.




                                      106
<PAGE>



Condition 36C. Functions of the Authority
-----------------------------------------

1.    If, after a period which appears to the Authority to be reasonable for
      the purpose, the licensee has failed to enter into an agreement with
      any person entitled or claiming to be entitled thereto pursuant to a
      request under standard condition 36B (Requirement to Offer Terms for
      the Provision of Distributor Metering and Data Services), the Authority
      may, on the application of such person or the licensee, settle any
      terms of the agreement in dispute between the licensee and that person
      in such manner as appears to the Authority to be reasonable having (in
      so far as relevant) regard in particular to the following
      considerations:

      (a)  that the performance by the licensee of its obligations under
           the agreement should not cause it to be in breach of those provisions
           referred to at paragraph 6 of standard condition 36B (Requirement to
           Offer Terms for the Provision of Distributor Metering and Data
           Services); and

      (b)  that the terms and conditions of the agreement so settled by the
           Authority and of any other agreements entered into by the licensee
           pursuant to a request under standard condition 36B (Requirement to
           Offer Terms for the Provision of Distributor Metering and Data
           Services) should be in as similar a form as is practicable.

2.    In so far as any person entitled or claiming to be entitled to an offer
      under standard condition 36B (Requirement to Offer Terms for the
      Provision of Distributor Metering and Data Services) wishes to proceed
      on the basis of the agreement as settled by the Authority pursuant to
      paragraph 1, the licensee shall forthwith enter into and implement such
      agreement in accordance with its terms.

3.    If either party to such agreement proposes to vary the contractual terms
      of any agreement for the provision of any of the distributor metering
      and data services entered into pursuant to standard condition 36B
      (Requirement to Offer Terms for the Provision of Distributor Metering

                                      107
<PAGE>


      and Data Services) or this condition in any manner provided for under such
      agreement, the Authority may, at the request of that party, settle any
      dispute relating to such variation in such manner as appears to the
      Authority to be reasonable.


4.    The Authority may (following consultation with the licensee) issue
      directions relieving the licensee of its obligations under standard
      condition 36B (Requirement to Offer Terms for the Provision of
      Distributor Metering and Data Services) relating to distributor metering
      and data services in respect of such parts of that condition and to such
      extent as may be specified in the directions.



                                      108
<PAGE>



Condition 37. The Metering Point Administration Service and the Master
----------------------------------------------------------------------
Registration Agreement
----------------------

1.    The licensee shall establish, or procure the establishment of, and
      subsequently operate and maintain, or procure the subsequent operation
      and maintenance of, a service to be known as the "Metering Point
      Administration Service."

2.    The Metering Point Administration Service shall, within the distribution
      services area, fulfil the following functions:


      (a)  the maintenance of such a register of technical and other data as is
           necessary to facilitate supply by any electricity supplier to all
           premises connected to the licensee's distribution system within the
           distribution services area or, where so requested, connected to
           another distribution system within the distribution services area and
           to meet the reasonable requirements of electricity suppliers in
           respect of such premises for information for settlement purposes,
           including (where so required):

           (i)   the identity of the electricity supplier responsible under the
                 Balancing and Settlement Code (where the distribution services
                 area is within England and Wales) and/or the Settlement
                 Agreement for Scotland (where the distribution services area is
                 within Scotland) for the metering point at such premises;

           (ii)  the type of metering equipment installed at each such premises;
                 and

           (iii) a unique and accurate address of each such premises so far as
                 is reasonably practicable having regard to the nature and
                 source of the information provided to the licensee;

      (b)  the amendment of the register maintained in accordance with
           sub-paragraph (a) to reflect changes of electricity supplier in
           respect of any premises;

      (c)  the provision, in a timely and efficient manner, of such data
           contained in the register as is reasonably required and requested to:

                                      109
<PAGE>

           (i)   any electricity supplier or agent thereof;

           (ii)  any person identified in the Balancing and Settlement Code
                 (where the distribution services area is within England and
                 Wales) and/or the Settlement Agreement for Scotland (where the
                 distribution services area is within Scotland) as an
                 appropriate person for the receipt of data for settlement
                 purposes; and

           (iii) any person identified in the Master Registration Agreement as
                 entitled to such data for the purpose of facilitating changes
                 of electricity supplier in respect of any premises; and

      (d)   the maintenance of an enquiry service for the provision to any
            customer or an electricity supplier, on request and free of charge
            to that customer, of such data contained in the register as is
            relevant to the supply of electricity to premises which are (or are
            to be) owned or occupied by the customer, and the taking of such
            steps as will in the opinion of the licensee secure adequate -

3.    The licensee shall use its best endeavours, in conjunction and
      co-operation with all other distribution services providers, to prepare
      and maintain a form of agreement to be known as the Master Registration
      Agreement.

4.    The Master Registration Agreement shall be an agreement made between:

      (a)  on the one part, the licensee and all other distribution services
           providers in their capacity as providers of metering point
           administration services; and

      (b)  on the other part:

           (i)  all electricity suppliers (or their agents) which require the
                provision of metering point administration services from at
                least one distribution services provider; and

           (ii) such other persons as are, for settlement purposes, appropriate
                parties to the agreement.

                                      110
<PAGE>


5.    The Master Registration Agreement shall comprise:

      (a)  terms for the provision of metering point administration services
           in accordance with the requirements of paragraph 2 and the
           equivalent requirements in the distribution licences of all other
           distribution services providers;

      (b)  provisions to facilitate, and procedures and practices to be
           followed by electricity suppliers in relation to changes of
           electricity supplier in respect of any premises;

      (c)  a catalogue of definitions, flows and forms of such data as may
           require to be transferred by or to parties to the Master
           Registration Agreement, or as between any persons for settlement
           purposes or for any related purposes (the "data transfer
           catalogue");


      (d)  arrangements for the variation of the Master Registration Agreement
           following consultation with the parties, or representatives of the
           parties, to that agreement;

      (e)  provisions (which shall require to be approved in advance by
           the Authority) by virtue of which the whole or specified parts of
           the Master Registration Agreement shall not be capable of variation
           without the prior approval of the Authority; and

      (f)  such other matters as are or may be appropriate for the
           development, maintenance and operation of an efficient,
           co-ordinated and economical system for the supply of electricity and
           for the purpose of facilitating competition in electricity supply.


                                      111
<PAGE>



Condition 38. Establishment of a Data Transfer Service
------------------------------------------------------

1.    The licensee shall use its best endeavours, in conjunction and
      co-operation with all other distribution services providers:

      (a)  to establish, or to procure the establishment of, a service to be
           known as the data transfer service; and

      (b)  subsequently to operate and maintain, or to procure the subsequent
           operation and maintenance of, such data transfer service in
           accordance with the provisions of this condition.

2.    The data transfer service shall:

      (a)  provide a network over which may be made all of the electronic data
           transfers specified at paragraph 3;

      (b)  operate and maintain that network; and

      (c)  provide a connection to that network, on request, to any person who
           is or will be a party to any of the electronic data transfers
           specified at paragraph 3.

3.    The electronic data transfers specified at this paragraph are those
      which are reasonably required for any of the purposes set out at
      paragraph 4 and which are made between:

      (a)  a Metering Point Administration Service operator and an electricity
           supplier or any agent thereof;

      (b)  a Metering Point Administration Service operator and any person
           identified in the Balancing and Settlement Code or the Settlement
           Agreement for Scotland as an appropriate person for the receipt of
           data from the Metering Point Administration Service operator for
           settlement purposes;

                                      112
<PAGE>


      (c)  any transmission company (or any agent thereof) or Scottish
           Electricity Settlements Limited or its successor in title (or any
           agent thereof) and an electricity supplier (or any agent thereof);

      (d)  an electricity supplier (or any agent thereof) and another
           electricity supplier (or any agent thereof);

      (e)  an electricity supplier and any of its agents;

      (f)  different agents of the same electricity supplier;

      (g)  electricity suppliers (or their agents) and generators (or their
           agents) which are parties to the Settlement Agreement for Scotland;
           and

      (h)  Scottish Electricity Settlements Limited or its successor in title
           (or any agent thereof) and any person (or any agent thereof) who is a
           party to or complies with the Settlement Agreement for Scotland.

4.    The purposes of this paragraph are to:

      (a)  meet obligations with respect to the transfer of data for settlement
           purposes;

      (b)  communicate meter reading and meter standing data;

      (c)  facilitate the provision of metering point administration services;

      (d)  communicate distribution use of system information; and

      (e)  fulfil such other requirements relating to the transfer of data as
           may be requisite for the supply of electricity to customers and
           compliance by electricity suppliers with the Master Registration
           Agreement.

5.    The data transfer service shall, where relevant, transmit data in a
      form which complies with the provisions of the data transfer catalogue.

6.    In fulfilling its obligations under paragraph 1 the licensee shall not,
      or (if appropriate) shall ensure that any third party acting on the
      licensee's instruction or behalf shall not, restrict, distort or prevent
      competition in the provision of meters, meter maintenance, data retrieval,

                                      113
<PAGE>


      data processing, data aggregation or prepayment meter services and markets
      for any of the distributor metering and data services.

7.    Any obligation placed on the licensee under standard conditions 36A to
      36C in respect of the provision of the data transfer service shall (for
      the purposes of those conditions) be treated as a requirement on the
      licensee to use its best endeavours, in conjunction and co-operation
      with all other distribution services providers, to fulfil that
      obligation or to procure the fulfilment of that obligation by a third
      party, and standard conditions 36A to 36C shall apply mutatis mutandis
      to the provision of data transfer services by the distribution services
      providers acting co-operatively and by means of procurement of third
      party services.

8.    Further, in relation to the provision of data transfer services the
      reference at paragraph 1 of standard condition 36C (Functions of the
      Authority) to the licensee failing to enter into an agreement shall be
      a reference to the licensee, in conjunction with all other distribution
      services providers, failing to enter into, or failing to procure that a
      third party enters into, an agreement for the provision of those services.

9.     In this condition:


      "Metering Point Administration Service     means the licensee or any other
       operator"                                 distribution services provider
                                                 in its capacity as a provider
                                                 of metering point
                                                 administration services.


                                      114
<PAGE>



Condition 39. Restriction on Use of Certain Information and Independence of the
-------------------------------------------------------------------------------
Distribution Business (Condition switched off for WPD)
------------------------------------------------------


1.    In this Condition and in Condition 40:

      `Confidential information' means information relating to, or derived from,
      the distribution business which is not published or otherwise legitimately
      in the public domain; and

      `Relevant supplier or shipper' means the holder of an electricity or gas
      supply licence or a gas shipper's licence, which is an affiliate or
      related undertaking of the licensee.

2.    The Licensee shall put in place and at all times maintain managerial and
      operational systems which prevent any relevant supplier or shipper from
      having access to confidential information except and to the extent that
      such information:

      a)  is made available on an equal basis to any gas or electricity supplier
          or gas shipper or

      b)  appertains to a customer who at the time to which the information
          relates was a customer of the relevant supplier or

      c)  is of a type that has been confirmed by the Authority in writing as
          corporate.

3.    The Licensee shall at all times manage and operate the Distribution
      Business in a way calculated to ensure that it does not restrict, prevent
      or distort competition in the supply of electricity or gas or the shipping
      of gas or the generation of electricity.


4.    Unless otherwise directed by the Authority, the Licensee shall no later
      than 31 May 2002 have in place a statement (in this Condition "the
      statement"), approved by the Authority, describing the practices,
      procedures and systems which the licensee has adopted (or intends to
      adopt) to secure compliance with paragraphs 2 and 3.

                                      115
<PAGE>


5.    Where the Authority does not indicate otherwise within 60 days of
      receipt of the statement, the statement shall be deemed to be approved by
      the Authority.


6.    The statement shall in particular (but without prejudice to the
      generality of paragraphs 2 and 3) set out how the Licensee shall:


      a)  maintain the full managerial and operational independence of the
           Distribution Business from any relevant supplier or shipper;


      b)  maintain the  branding of the  distribution  business so that it is
           fully  independent  from the  branding  used by any relevant
           supplier or shipper;


      c)  secure that any arrangements for the use of or access to:


          i)   premises or parts of premises occupied by persons engaged in, or
               in respect  of,  the  management or operation of the
               Distribution Business;


          ii)  systems for the recording, processing or storage of data to which
               persons engaged in, or in respect of, the management or operation
               of the Distribution Business also have access;


          iii) equipment, facilities or property employed for the management or
               operation of the Distribution Business; or


           iv) the services of persons who are (whether or not as their
               principal occupation) engaged in, or in respect of, the
               management or operation of the Distribution Business;

                                      116
<PAGE>

           by any relevant supplier or shipper or by any person engaged in or in
           respect of the activities of such a relevant supplier or shipper
           shall be such as to prevent any breach of the requirements of those
           paragraphs; and


      d)  manage the transfer of employees from the Distribution Business to
          any relevant supplier or shipper.


7.    The Licensee may, with the approval of the Authority, revise the statement
      prepared in accordance with paragraph 4.


8.    The Licensee shall take all reasonable measures to ensure compliance with
      the terms of the statement as from time to time revised by the Licensee
      and approved by the Authority.


9.    The licensee shall publish a copy of the approved statement prepared in
      accordance with paragraph 4 ( or the latest approved revision) on its
      company's website within fifteen working days of its approval by the
      Authority.




                                      117
<PAGE>



Condition 40.  Appointment of Compliance Officer (Condition switched off for
----------------------------------------------------------------------------
WPD)
----


1.    The Licensee shall ensure, following consultation with the Authority
      that a competent person (who shall be known as the "compliance officer")
      shall be appointed for the purpose of facilitating compliance by the
      Licensee with standard condition 39, and, insofar as they relate to
      relationships with relevant suppliers and shippers, standard condition 41
      and Paragraph 1 of standard conditions 4A and 36A (together, "the relevant
      duties").


2.    The Licensee shall at all times ensure that the compliance officer is
      engaged for the performance of such duties and tasks as the Licensee
      considers it appropriate to assign to him for the purposes specified at
      paragraph 1, which duties and tasks shall include those set out at
      paragraph 5.


3.    The Licensee shall procure that the compliance officer:


      (a)  is provided with such staff, premises, equipment, facilities and
           other resources; and


      (b)  has such access to the licensee's premises, systems, information and
           documentation


       as, in each case, he might reasonably expect to require for the
       fulfilment of the duties and tasks assigned to him.


4.    The Licensee shall make available to the compliance officer a copy of
      any complaint or representation received by it from any person in
      respect of a matter arising under or by virtue of those standard
      conditions and parts of standard conditions specified in paragraph 1.

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<PAGE>

5.    The duties and tasks assigned to the compliance officer shall include:


      (a)  providing relevant advice and information to the Licensee for the
           purpose of  facilitating  its compliance  with the relevant duties;


      (b)  monitoring the effectiveness of the practices, procedures and systems
           adopted by the Licensee in accordance with the statement referred to
           at paragraph 4 of standard condition 39;


      (c)  advising whether, to the extent that the implementation of such
           practices, procedures and systems requires the co-operation of any
           other person, they are designed so as reasonably to admit of the
           required co-operation;


      (d)  investigating any complaint or representation made available to him
           in accordance with paragraph 4;


      (e)  recommending and advising upon the remedial action which any such
           investigation has demonstrated to be necessary or desirable;


      (f)   providing relevant advice and information to the Licensee for the
            purpose of ensuring its effective implementation of:


            (i)   the practices, procedures and systems adopted in accordance
                  with the statement referred to at paragraph 4 of standard
                  condition 39; and

            (ii)  any remedial action recommended in accordance with
                  sub-paragraph (e); and


      (g)  reporting annually to the directors of the Licensee - in respect of
           each year after this standard condition comes into force - as to his

                                      119
<PAGE>


            activities during the period covered by the report, including the
            fulfilment of the other duties and tasks assigned to him by the
            Licensee.


6.    As soon as is reasonably  practicable following each annual report of the
      compliance officer, the Licensee shall produce a report:


      (a)  as to its compliance during the relevant year with the relevant
           duties; and


      (b)  as to its implementation of the practices, procedures and systems
           adopted in accordance with the statement referred to at paragraph 4
           of standard condition 39.


7.    The report produced in accordance with paragraph 6 shall in particular:


      (a)  detail the activities of the compliance officer during the relevant
           year;


      (b)  refer to such other matters as are or may be appropriate in relation
           to the implementation of the practices, procedures and systems
           adopted in accordance with the statement referred to at paragraph 4
           of standard condition 39; and


      (c)  set out the details of any investigations conducted by the compliance
           officer, including:


           (i)   the number, type and source of the complaints or
                 representations on which such investigations were based;


           (ii)  the outcome of such investigations; and


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<PAGE>


           (iii) any remedial action taken by the Licensee following such
                 investigations.


8.    The Licensee shall submit to the Authority a copy of the report produced
      in accordance with paragraph 6, and shall publish the report on its
      website.



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Condition 41. Prohibition of Cross-Subsidies
--------------------------------------------

1.    The licensee shall procure that the distribution business shall not give
      any cross-subsidy to, or receive any cross-subsidy from, any other
      business of the licensee or of an affiliate or related undertaking of the
      licensee.


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Condition 42. Regulatory Accounts
---------------------------------

1.    The following paragraphs of this condition apply for the purpose of
      ensuring that the licensee (and any affiliate or related undertaking)
      maintains accounting and reporting arrangements which enable regulatory
      accounts to be prepared for the consolidated distribution business and
      showing the financial affairs of the consolidated distribution business.

2.    Unless the Authority otherwise consents (such consent may be given in
      relation to some or all of the obligations in this condition and may be
      given subject to such conditions as the Authority considers appropriate),
      the licensee shall:

      (a)   keep or cause to be kept for the period referred to in section
            222(5)(b) of the Companies Act 1985 and in the manner referred
            to in that section such accounting records in respect of the
            consolidated distribution business so that the revenues, costs,
            assets, liabilities, reserves and provisions of, or reasonably
            attributable to, the consolidated distribution business are
            separately identifiable in the accounting records of the licensee
            (and any affiliate or related undertaking) from those of any other
            business of the licensee;

      (b)   prepare on a consistent basis from such accounting records in
            respect of:

            (i)    each financial year, accounting statements comprising a
                   profit and loss account, a statement of total recognised
                   gains andlosses, a balance sheet, and a cash flow statement,
                   together with notes thereto, and showing separately in
                   respect of the consolidated  distribution business and in
                   appropriate detail the amounts of any revenue, cost, asset,
                   liability, reserve or provision which has been either:

                   (aa)  charged from or to any other business together with a
                         description of the basis of that charge; or

                   (bb)  determined by apportionment or allocation between the
                         consolidated distribution business and any other

                                      123
<PAGE>

                         together with a description of the basis of the
                         business apportionment or allocation; and

             (ii)  the first six months of each financial year, an interim
                   profit and loss account; and

             (iii) each financial year, sufficient accounting  information in
                   respect of the consolidated  distribution business to allow
                   the preparation of consolidated accounting statements of the
                   licensee or, where applicable, the ultimate controller. Such
                   information shall include a profit and loss account, a
                   statement of total recognised gains and losses, a balance
                   sheet, and a cash flow statement together with notes thereto;

      (c)  procure, in respect of the accounting statements prepared in
           accordance with this condition in respect of each financial
           year, a report by the auditors and addressed to the Authority
           stating whether in their opinion those statements have been
           properly prepared in accordance with this condition and give a
           true and fair view of the revenues, costs, assets,
           liabilities, reserves and provisions of, or reasonably
           attributable to, the consolidated distribution business to
           which the statements relate; and

      (d)  deliver to the Authority a copy of the account referred to in
           sub-paragraph (b)(ii), the auditors' report referred to in
           sub-paragraph  (c), the accounting statements  referred to in
           sub-paragraph  (b)(i) and the accounting information referred to
           in sub-paragraph (b)(iii), as soon as reasonably practicable, and
           in any event not later  than three  months  after the end of the
           period to which it relates in the case of the account referred to
           in sub-paragraph  (b)(ii) and six months after the end of the
           financial  year to which they relate in the case of the accounting
           statements, auditors' report and accounting information referred
           to in sub-paragraphs (b)(i), (b)(iii) and (c).

3.    Unless the Authority so specifies in directions issued for the purposes
      of this condition, or with the Authority's prior written approval, the

                                      124
<PAGE>


      licensee shall not in relation to the accounting statements in respect
      of a financial year change the bases of charge or apportionment or
      allocation referred to in sub-paragraph 2(b)(i) from those applied in
      respect of the previous financial year.

4.    Where, in relation to the accounting statements in respect of a
      financial year, the licensee has changed such bases of charge or
      apportionment or allocation from those adopted for the immediately
      preceding financial year, the licensee shall, if so directed in
      directions issued by the Authority, in addition to preparing accounting
      statements on those bases which it has adopted, prepare such accounting
      statements on the bases which applied in respect of the immediately
      preceding financial year.

5.    Accounting statements and information in respect of a financial year
      prepared under sub-paragraph 2(b)(i) and (b)(iii) shall, so far as
      reasonably practicable and unless otherwise approved by the Authority
      having regard to the purposes of this condition:

      (a)  have the same content and format as the statutory accounts of the
           licensee prepared  under  section 226 and, where appropriate,
           section 227 of the Companies Act 1985 and conform to the best
           commercial accounting practices including all relevant accounting
           standards issued or adopted by the Accounting Standards Board
           currently in force;

      (b)  state the accounting policies adopted; and

      (c)  with the exception of the part of such statements and information
           which shows  separately  the  amounts  charged, apportioned or
           allocated and describes the bases of charge or apportionment or
           allocation  respectively, be published with the statutory accounts
           of the licensee.

6.    Unless the accounting statements and information prepared under
      sub-paragraph 2(b)(i) and (b)(iii) are prepared on the current cost
      basis as provided by the alternative accounting rules, the licensee
      shall, unless otherwise agreed by the Authority, in addition to

                                      125
<PAGE>


      preparing those accounting statements under that paragraph, prepare
      accounting statements for the consolidated distribution business
      covering the same period, which shall comprise and show separately:

      (a)  a profit and loss account, a statement of total recognised gains
           and losses, a balance sheet, and a cash flow statement, together
           with notes thereto, which shall:

           (i)  include in respect of current cost assets amounts determined
                on the current cost basis as provided by the alternative
                accounting rules; and

           (ii) show or disclose the information and other matters required
                by the alternative accounting rules to be shown or disclosed
                in accounts where the amounts  included in respect of assets
                covered by any items shown in those accounts have been
                determined on any basis mentioned in paragraph 31 of
                section C of Part II of Schedule 4 to the Companies Act 1985;

      (b)  in respect of the consolidated  distribution business the adjusted
           amount of any such  provision  for  depreciation  as is referred
           to in paragraph 32(2) of section C of Part II of Schedule 4 to the
           Companies Act 1985 and the items shown in the profit and loss
           account of the consolidated distribution business for the
           relevant  period  which are affected by the determination of
           amounts on the current cost basis as provided by the alternative
           accounting rules, including the profit (or loss) before taxation;
           and

      (c)  such other current cost information as is referred to in the
           handbook as the Authority may reasonably require;

      and shall deliver the same, together with an auditors' report prepared
      in relation to the current cost basis accounting statements in the form
      referred to in sub-paragraph 2(c), to the Authority within the time
      limit referred to in sub-paragraph 2(d), and shall (with the exception
      of the part of such statements and information which shows separately
      the amounts charged, apportioned or allocated and describes the bases
      of charge or apportionment or allocation respectively) publish the same
      with the statutory accounts of the licensee.

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<PAGE>


7.    References in this condition to costs or liabilities of, or reasonably
      attributable to, the consolidated distribution business shall be
      construed as excluding taxation and capital liabilities which do not
      relate principally to the consolidated distribution business, and
      interest thereon; and references to any profit and loss account shall
      be construed accordingly.

8.    Without prejudice to paragraph 5 of the terms of this licence,
      references in this condition to sections of the Companies Act 1985 are
      references to those provisions as amended, substituted or inserted by
      the relevant provisions of the Companies Act 1989 and if such
      provisions of the Companies Act 1989 are not in force at the date of
      grant of this licence shall be construed as if such provisions were in
      force at such date.



9.    For the purposes of paragraph 6:



      "alternative                               accounting rules" Meansmeans
                                                 the rules set out in section
                                                 C of Part II of Schedule 4
                                                 to the Companies Act 1985.


      "current                                   cost assets" Meansmeans
                                                 assets of any description
                                                 mentioned in paragraph 31 of
                                                 section C of Part II of
                                                 Schedule 4 to the Companies
                                                 Act 1985.


      "the handbook"                             means the handbook issued by
                                                 the Accounting Standards
                                                 Committee of the Consultative
                                                 Committee of Accounting Bodies
                                                 (CCAB Limited) or any successor
                                                 body entitled "Accounting for
                                                 the effects of changing prices:

                                      127
<PAGE>


                                                 a handbook" in its current
                                                 edition for the time being or
                                                 in the event that no such
                                                 handbook shall be in issue
                                                 such guidance or publication
                                                 as may be issued in
                                                 replacement
                                                 or substitution therefor.


10.   For the purposes of this condition:



      "consolidated distribution business"       means the consolidation, for
                                                 regulatory accounting purposes,
                                                 of the businesses referred to
                                                 in the definition of

      "distribution business"                    as defined in standard
                                                 condition 1 (Definitions and
                                                 Interpretation).


      "regulatory accounts"                      means the accounts required to
                                                 be prepared by the licensee
                                                 pursuant to this condition.



                                      128
<PAGE>




Condition 42A. Change of Financial Year
---------------------------------------

1.    The definition of "financial year" in standard condition 1 (Definitions
      and Interpretation) shall, for the purpose only of the statutory
      accounts of the licensee, cease to apply to the licensee from the date
      the licensee sends a notice to the Authority for that purpose.


2.    Such notice:


      (a)  shall specify the date from which, for the purpose set out at
           paragraph 1, the current and subsequent financial years of the
           licensee shall run; and


      (b)  shall continue in effect until revoked by the licensee issuing a
           further notice.


3.    While the notice continues in effect the licensee shall procure the
      preparation of and shall deliver to the Authority audited group accounts
      for its group of companies for each financial year.


4.    Audited group accounts produced in accordance with paragraph 3:


      (a)  shall comprise consolidated group accounts in respect of the group of
           companies;


      (b)  shall, save insofar as is necessary to reflect a different
           financial year, have the same form and content as the
           statutory accounts of the licensee;


      (c)  shall be accompanied by a report by the auditors and addressed to the
           Authority stating whether in their opinion the audited group accounts
           have been properly prepared in accordance with this condition and
           give a true and fair view of the state of affairs of the group of

                                      129
<PAGE>


           companies and of its profits or losses, total recognised gains or
           losses and cash flows during the financial year;


      (d)  may, with the prior written consent of the Authority, omit or
           provide in a different form, specified in the consent, such
           information as may be specified in the consent; and


      (e)  shall clearly disclose any differences between the accounting
           policies underlying the preparation of the statutory accounts of the
           licensee and the accounting policies underlying the preparation of
           the audited group accounts.


5.    The licensee may, for the purpose only of its statutory accounts, change
      its financial year from that previously notified by sending to the
      Authority a new notice pursuant to paragraph 1. Where the licensee sends
      the Authority a new notice the previous notice shall be revoked, as
      provided by sub-paragraph 2(b). The licensee's financial year-end will
      change with effect from the date specified in the new notice. The new
      notice shall specify the licensee's new financial year-end.


6.    No provisions of this condition shall apply to the financial year of the
      licensee as defined in standard condition 1 (Definitions and
      Interpretation) for the purpose of accounts produced in compliance with
      standard condition 42 (Regulatory Accounts). No provisions of this
      condition shall affect the licensee's obligations in respect of payment
      of licence fees under standard condition 3 (Payments by the Licensee to
      the Authority).




                                      130
<PAGE>



Condition 43. Restriction on Activity and Financial Ring Fencing
----------------------------------------------------------------

1.    Save as provided by  paragraphs 3 and 4, the licensee  shall not conduct
      any business or carry on any activity other than the distribution
      business.

2.    The  licensee  shall  not  without  the  prior  written  consent  of the
      Authority hold or acquire  shares or other  investments of any kind
      except:

      (a)  shares or other  investments  in a body  corporate the sole activity
           of which is to carry on business for a permitted purpose; or

      (b)  shares or other investments in a body corporate which is a
           subsidiary of the licensee and incorporated by it solely for the
           purpose of raising finance for the distribution business; or

      (c)  investments acquired in the usual and ordinary course of the
           licensee's treasury management operations, subject to the licensee
           maintaining in force, in relation to those operations, a system of
           internal controls which complies with best corporate governance
           practice as required (or in the absence of any such requirement
           recommended) from time to time for listed companies in the United
           Kingdom.

3.    Subject to the provisions of paragraph 2 nothing in this condition shall
      prevent:

      (a)  any affiliate in which the licensee does not hold shares or other
           investments  from conducting any business or carrying on any
           activity;

      (b)  the licensee from holding shares as, or performing the supervisory or
           management functions of, an investor in respect of any body corporate
           in which it holds an interest consistent with the provisions of this
           licence;

      (c)  the licensee from performing the supervisory or management functions
           of a holding company in respect of any subsidiary; or

      (d)  the licensee from carrying on any business or conducting any activity
           to which the Authority has given its consent in writing;

                                      131
<PAGE>


4.    Nothing in this condition shall prevent the licensee or an affiliate or
      related undertaking of the licensee in which the licensee holds shares
      or other investments (a `relevant associate') conducting de-minimis
      business as defined in this paragraph so long as the limitations
      specified in this paragraph are complied with.

      (a)  For the purpose of this paragraph " de-minimis business" means any
           business or activity carried on by the licensee or a relevant
           associate or relevant associates other than:

           (i)  the distribution business; and

           (ii) any other business activity to which the Authority has given its
                consent in writing in accordance with paragraph 3(d).

      (b)  The licensee or a relevant associate may carry on de-minimis
           business provided that the relevant associate carries on no
           other business except activities of the distribution business
           and business activities authorised by the Authority under
           paragraph 3(d), and neither of the following limitations is
           exceeded, namely:

           (i)  the aggregate turnover of all the de-minimis business carried on
                by the licensee and all its relevant associates does not in any
                period of twelve months commencing on 1 April of any year exceed
                2 1/2% of the aggregate turnover of the distribution business
                as shown by the most recent audited accounting statements of the
                licensee produced under paragraphs 2(b)(i) and (c) of standard
                condition 42 (Regulatory Accounts); and

           (ii) the aggregate amount (determined in accordance with
                sub-paragraph (d) below) of all investments made by
                the licensee and all its relevant associates in their
                de-minimis business or de-minimis businesses does not
                at any time after the date this condition takes
                effect in this licence exceed 2 1/2% of the sum of
                share capital in issue, share premium and
                consolidated reserves of the licensee as shown by its
                most recent audited historical cost financial
                statements then available.

                                      132
<PAGE>


      (c)  For the purpose of sub-paragraph (b) of this paragraph,
           "investment" means any form of financial support or assistance
           given by or on behalf of the licensee or a relevant associate
           for the de-minimis business whether on a temporary or
           permanent basis including (without limiting the generality of
           the foregoing) any commitment to provide any such support or
           assistance in the future.

      (d)  At any relevant time, the amount of an investment shall be the sum
           of:

           (i)   the value at which such investment was included in the audited
                 historical cost balance sheet of the licensee or a relevant
                 associate as at its latest accounting reference date to have
                 occurred prior to the date this condition takes effect in this
                 licence (or, where the investment was not so included, zero);

           (ii)  the aggregate gross amount of all expenditure (whether of a
                 capital or revenue nature) howsoever incurred by the licensee
                 or a relevant associate in respect of such investment in all
                 completed accounting reference periods since such accounting
                 reference date; and

           (iii) all commitments and liabilities (whether actual or contingent)
                 of the licensee or a relevant associate relating to such
                 investment outstanding at the end of the most recently
                 completed accounting reference period.




                                      133
<PAGE>



Condition 44.  Availability of Resources
----------------------------------------

1.    The licensee shall at all times act in a manner calculated to secure
      that it has available to it all such resources, including (without
      limitation) management and financial resources, personnel, fixed and
      moveable assets, rights, licences, consents and facilities on such
      terms and with all such rights as shall ensure that it is at all times
      able:

      (a)  to properly and efficiently to carry on the distribution business;
           and

      (b)  to comply in all respects with its obligations under this
           licence and such obligations under the Act as apply to the
           distribution business including, without limitation, its duty
           to develop and maintain an efficient, co-ordinated and
           economical system of electricity distribution.

2.    The licensee shall submit a certificate to the Authority, approved by a
      resolution of the board of directors of the licensee and signed by a
      director of the licensee pursuant to that resolution. Such certificate
      shall be submitted in June of each year. Each certificate shall be in
      one of the following forms:

      (a)  "After making enquiries, the directors of the licensee have a
           reasonable expectation that the licensee will have available
           to it, after taking into account in particular (but without
           limitation) any dividend or other distribution which might
           reasonably be expected to be declared or paid, sufficient
           financial resources and financial facilities to enable the
           licensee to carry on the distribution business for a period of
           12 months from the date of this certificate."

      (b)  "After making enquiries, the directors of the licensee have a
           reasonable expectation, subject to what is said below, that
           the licensee will have available to it, after taking into
           account in particular (but without limitation) any dividend or
           other distribution which might reasonably be expected to be
           declared or paid, sufficient financial resources and financial
           facilities to enable the licensee to carry on the distribution
           business for a period of 12 months from the date of this

                                      134
<PAGE>


           certificate. However, they would like to draw attention to the
           following factors which may cast doubt on the ability of the
           licensee to carry on the distribution business."

      (c)  "In the opinion of the directors of the licensee, the licensee
           will not have available to it sufficient financial resources and
           financial facilities to enable the licensee to carry on the
           distribution business for a period of 12 months from the date of this
           certificate."


3.    The licensee shall submit to the Authority with that certificate a
      statement of the main factors which the directors of the licensee have
      taken into account in giving that certificate.

4.    The licensee shall inform the Authority in writing immediately if the
      directors of the licensee become aware of any circumstance which causes
      them no longer to have the reasonable expectation expressed in the then
      most recent certificate given under paragraph 2.

5.    The licensee shall use its best endeavours to obtain and submit to the
      Authority with each certificate provided for in paragraph 2 a report
      prepared by its auditors and addressed to the Authority stating whether
      or not the auditors are aware of any inconsistencies between, on the
      one hand, that certificate and the statement submitted with it and, on
      the other hand, any information which they obtained during their audit
      work.

6.    The directors of the licensee shall not declare or recommend a
      dividend, nor shall the licensee make any other form of distribution
      within the meaning of section 263 of the Companies Act 1985, unless
      prior to the declaration, recommendation or making of the distribution
      (as the case may be) the licensee shall have issued to the Authority a
      certificate complying with the following requirements of this
      paragraph.

      (a)  The certificate shall be in the following form:

           "After making enquiries, the directors of the licensee are satisfied:

                                      135
<PAGE>


           (i)  that the licensee is in compliance in all material respects with
                all obligations imposed on it by standard condition 24
                (Provision of Information to the Authority), standard condition
                43 (Restriction on Activity and Financial Ring-fencing),
                standard condition 44 (Availability of Resources), standard
                condition 45 (Undertaking from Ultimate Controller), standard
                condition 46 (Credit Rating) and paragraph 1 of standard
                condition 47 ( Indebtedness) of the licence; and

           (ii) that the making of a distribution of [ ] on [ ] will not, either
                alone or when taken together with other circumstances reasonably
                foreseeable at the date of this certificate, cause the licensee
                to be in breach to a material extent of any of these obligations
                in the future.

      (b)    The certificate shall be signed by a director of the licensee
             and approved by a resolution of the board of directors of the
             licensee passed not more than 14 days before the date on which
             the declaration, recommendation or payment will be made.

      (c)    Where the certificate has been issued in respect of the declaration
             or recommendation of a dividend, the licensee shall be under no
             obligation to issue a further certificate prior to payment of that
             dividend provided such payment is made within six months of that
             certificate.




                                      136
<PAGE>



Condition 45.  Undertaking from Ultimate Controller
---------------------------------------------------

1.    The licensee  shall  procure from each company or other person which the
      licensee knows or reasonably should know is at any time an ultimate
      controller of the licensee a legally enforceable undertaking in favour of
      the licensee in the form specified by the Authority that that ultimate
      controller ("the  covenantor") will refrain from any action, and will
      procure that any person (including, without limitation, a corporate body)
      which is a subsidiary of, or is controlled by, the covenantor (other than
      the licensee and its subsidiaries) will refrain from any action, which
      would then be likely to cause the licensee to breach any of its
      obligations under the Act or this licence. Such undertaking shall be
      obtained within 7 days of the company or other person in question becoming
      an ultimate controller and shall remain in force for as long as the
      licensee remains the holder of this licence and the covenantor remains an
      ultimate controller of the licensee.

2.    The licensee shall:

      (a)  deliver to the Authority evidence (including a copy of each such
           undertaking) that the licensee has complied with its obligation to
           procure undertakings pursuant to paragraph 1;

      (b)  inform the Authority immediately in writing if the directors of the
           licensee become aware that any such undertaking has ceased to be
           legally enforceable or that its terms have been breached; and

      (c)  comply with any direction from the Authority to enforce any such
           undertaking;

      and shall not, save with the consent in writing of the Authority, enter
      (directly or indirectly) into any agreement or arrangement with any
      ultimate controller of the licensee or of any of the subsidiaries of any
      such corporate ultimate controller (other than the subsidiaries of the
      licensee) at a time when,


      (i)   an undertaking complying with paragraph 1 is not in place in
            relation to that ultimate controller; or

                                      137
<PAGE>


      (ii)  there is an unremedied breach of such undertaking; or

      (iii) the licensee is in breach of the terms of any  direction issued by
            the Authority under  paragraph 2 of this condition.




                                      138
<PAGE>





Condition 46.  Credit Rating of Licensee
----------------------------------------

1.    The licensee shall use all reasonable endeavours to ensure that the
      licensee maintains at all times an investment grade issuer credit rating.

2.    In this condition:

      "investment grade issuer credit rating" means:

      (a)  an issuer rating of not less than BBB- by Standard & Poor's Ratings
           Group or any of its subsidiaries or a corporate rating of not less
           than Baa3 by Moody's Investors Service, Inc. or any of its
           subsidiaries or such higher rating as shall be specified by either of
           them from time to time as the lowest investment grade credit rating,
           or

      (b)  an equivalent rating from any other reputable credit rating agency
           which, in the opinion of the Authority, notified in writing to the
           licensee, has comparable standing in the United Kingdom and the
           United States of America.



                                      139
<PAGE>


Condition 47. Indebtedness
--------------------------


1.    In addition to the requirements of standard condition 29 (Disposal of
      Relevant Assets), the licensee shall not without the prior written
      consent of the Authority (following the disclosure by the licensee of
      all material facts):

      (a)  create or continue or permit to remain in effect any mortgage,
           charge, pledge, lien or other form of security or encumbrance
           whatsoever, undertake any indebtedness to any other person or
           enter into any guarantee or any obligation otherwise than:

           (i)   on an arm's length basis;

           (ii)  on normal commercial terms;

           (iii) for a permitted purpose; and

           (iv)  (if the transaction is within the ambit of standard condition
                 29 (Disposal of Relevant Assets)) in accordance with that
                 condition;

      (b)  transfer, lease, license or lend any sum or sums, asset, right or
           benefit to any affiliate or related undertaking of the licensee
           otherwise than by way of:

           (i)   a dividend or other distribution out of distributable reserves;

           (ii)  repayment of capital;

           (iii) payment properly due for any goods, services or assets provided
                 on an arm's length basis and on normal commercial terms;

           (iv)   a transfer, lease, licence or loan of any sum or sums, asset,
                  right or benefit on an arm's length basis, on normal
                  commercial terms and made in compliance with the payment
                  condition;

           (v)    repayment of or payment of interest on a loan not prohibited
                  by sub-paragraph (a);

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           (vi)   payments for group corporation tax relief or for the surrender
                  of Advance Corporation Tax calculated on a basis not exceeding
                  the value of the benefit received ; or

           (vii)  an acquisition of shares or other investments in conformity
                  with paragraph 2 of standard condition 43 (Restriction on
                  Activity and Financial Ring Fencing) made on an arm's length
                  basis and on normal commercial terms;

      (c)  enter into an agreement or incur a commitment incorporating a
           cross-default obligation; or

      (d)  continue or permit to remain in effect any agreement or commitment
           incorporating a cross-default obligation subsisting at the date this
           condition takes effect in this licence, save that the licensee may
           permit any cross-default obligation in existence at that date to
           remain in effect for a period not exceeding twelve months from that
           date, provided that the cross-default obligation is solely referable
           to an instrument relating to the provision of a loan or other
           financial facilities granted prior to that date and the terms on
           which those facilities have been made available as subsisting on
           that date are not varied or otherwise made more onerous.

      (e)  the provisions of sub-paragraphs (c)and (d)of this paragraph shall
           not prevent the licensee from giving any guarantee permitted by and
           compliant with the requirements of sub-paragraph (a).

      (f)  The payment condition referred to in sub-paragraph (b)(iv) is that
           the consideration due in respect of the transaction in question
           is paid in full when the transaction is entered into unless either:


           (i)  the counter-party to the transaction has and maintains until
                payment is made in full an investment grade issuer credit
                rating, or

           (ii) the obligations of the counter-party to the transaction are
                fully and unconditionally guaranteed throughout the period
                during which any part of the consideration remains outstanding
                by a guarantor which has and maintains an investment grade
                issuer credit rating.

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<PAGE>


2.    In this condition:

      "cross-default obligation"                 means a term of any agreement
                                                 or arrangement whereby the
                                                 licensee's liability to pay or
                                                 repay any debt or other sum
                                                 arises or is increased or
                                                 accelerated or is capable of
                                                 arising, increasing or of
                                                 acceleration by reason of a
                                                 default (howsoever such default
                                                 may be described or defined)
                                                 by any person other than the
                                                 licensee, unless:

                                                 (i)    that liability can arise
                                                        only as the result of a
                                                        default by a subsidiary
                                                        of the licensee,

                                                 (ii)   the licensee holds a
                                                        majority of the voting
                                                        rights in that
                                                        subsidiary and has the
                                                        right to appoint or
                                                        remove a majority of
                                                        its board of directors,
                                                        and

                                                  (iii) that subsidiary carries
                                                        on business only for a
                                                        purpose within paragraph
                                                        (a) of the definition of
                                                        permitted purpose.


         "indebtedness"                          means all liabilities now or
                                                 hereafter due, owing or
                                                 incurred, whether actual or
                                                 contingent, whether solely or
                                                 jointly with any other person
                                                 and whether as principal or
                                                 surety, together with any
                                                 interest accruing thereon and
                                                 all costs, charges, penalties
                                                 and expenses incurred in
                                                 connection therewith.



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                                      143
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Condition 48.  Last Resort Supply: Payment Claims
-------------------------------------------------

1.    This condition sets out the circumstances in which the licensee shall
      increase its use of system charges in order to compensate any
      electricity supplier (a "claimant") which claims for losses that it has
      incurred in complying with a last resort supply direction.

2.    The following provisions apply where the licensee receives from a claimant
      a valid claim for a last resort supply payment.

3.    Where the licensee receives a valid claim it shall, during the relevant
      year, make a consequential increase to its use of system charges in
      respect of that year which relate to the distribution of electricity to
      premises to such an extent as it reasonably estimates to be appropriate
      to secure that such consequential increase in its revenue equals the
      specified amount.

3.    The licensee shall, during, or as soon as practicable after the end of,
      the relevant year, pay to the claimant, by quarterly or monthly
      instalments (as specified in the claim), the amount of that consequential
      increase in revenue mentioned in paragraph 3 to the extent that it does
      not exceed the specified amount.

4.    If the amount paid to the claimant under paragraph 4 is less than the s
      pecified amount, the licensee shall in the following year -

      (a)  pay to the claimant (in accordance with any directions given by the
           Authority) the shortfall together with 12 months' interest
           thereon; and

      (b)  increase the charges which relate to the distribution of
           electricity to premises during the year following the relevant
           year to such extent as it reasonably estimates to be appropriate
           to secure that the consequential increase in its  revenue equals the
           amount of that shortfall together with 12 months' interest thereon.

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<PAGE>


5.    If the amount of the consequential increase mentioned in paragraph 3
      exceeds the specified amount, the licensee shall, during the year
      following the relevant year, decrease the charges which relate to the
      distribution of electricity to premises to the extent that it reasonably
      estimates to be necessary in order to reduce its use of system revenue
      for that year by an amount equal to the excess together with 12 months'
      interest thereon.

6.    Any question whether any estimate for the purposes of paragraph 3, 5 or
      6 is a reasonable one shall be determined by the Authority.

7.    The licensee shall not enter into any use of system agreement with an
      electricity supplier which does not permit variation of its use of
      system charges in pursuance of this condition.

8.    The provisions of this condition shall have effect notwithstanding that
      the licensee has not provided the notice required by paragraph 13 of
      standard condition 4 (Basis of Charges for Use of System and Connection
      to System: Requirements for Transparency).

9.    In calculating the licensee's use of system revenue during any period
      for the purposes of a price control condition any increase or decrease
      in revenue attributable to the licensee's compliance with this condition
      shall be treated as if it had not occurred.

11.   The licensee shall prepare, in respect of each year in which it increases
      or decreases charges in pursuance of paragraph 3, 5 or 6, a statement
      showing -

      (a)  the aggregate amount of its revenue derived from increases in
           charges in pursuance of paragraph 3;

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<PAGE>


      (b)  the aggregate amount of its revenue derived from increases in
           charges in pursuance of paragraph 5;

      (c)  the aggregate amount of the decrease in its revenue resulting from
           decreases in charges in pursuance of paragraph 6; and

      (d)  in the case of each last resort supply payment, the aggregate
           payments to the claimant made in respect of the year in question
           (whenever those payments were made).


12.   The licensee shall give the statements referred to in paragraph 11 to the
      Authority within the first 4 months of the year following that to which
      they relate.

13.   On giving the statement mentioned in paragraph 11(d) to the Authority,
      the licensee shall publish it in such manner as, in the reasonable
      opinion of the licensee, will secure adequate publicity for it.

14.   Where the licensee receives more than one claim for a last resort
      payment, this condition (other than sub-paragraphs 11(a), (b) and (c))
      shall apply separately as respects each separate claim but in so far as
      it results in changes to the licensee's use of system charges it shall
      have the cumulative effect of such separate applications.

15.   (a) For the purposes of this condition -

      "last resort supply direction" and "last resort supply payment" have,
      respectively the meanings given to them in standard conditions 29
      (Supplier of Last Resort) and 29A (Supplier of Last Resort Supply
      Payments) of the standard conditions of the electricity supply licence;

      "price control condition" means any condition of the licence which
      places a monetary limitation on the use of system charges which may be

                                      146
<PAGE>


      levied or the use of system revenue which may be recovered by the
      licensee during a given period;

      "relevant year" means, in relation to any valid claim  -

      (a)  where the claim was received by the licensee at least 60 days before
           the beginning of a year, that year; or (b) where the claim was
           received by the licensee less than 60 days before the beginning of a
           year, the next year;

      "specified amount" means the amount specified on a valid claim together
      with interest calculated in accordance with sub-paragraph (b);

      "valid claim" means a claim for which a claimant has been give a
      consent by the Authority pursuant to standard condition 29A (Supplier
      of Last Resort Supply Payments) of the standard conditions of the
      electricity supply licence; and

      "year" means a period of 12 months beginning with 1st April.


      (b)  The interest referred to in sub-paragraph (a) is simple interest for
           the period commencing with the date on which the valid claim was
           received by the licensee and ending with the date which is 61 days
           before the start of the relevant year, except where that period is of
           30 days or less, in which case no interest shall be payable.




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Condition 49.  Incentive Scheme and Associated Information
----------------------------------------------------------


1.    The principal purpose of this condition is to secure the collection of
      information on a common basis, and to an appropriate degree of accuracy,
      by each distribution services provider so as:

      (a)  to facilitate the establishment and operation of an incentive scheme
           ("the scheme") to improve the operation and delivery of appropriate
           outputs of the licensee; and

      (b)  to monitor any perverse incentives arising from the collection and
           publication of such information and from the operation of teh scheme
           and the charge restriction conditions.

2.    The licensee shall establish appropriate systems, processes and
      procedures to measure and record specified information from the dates
      specified in paragraph 4 and in accordance with Regulatory Instructions
      and Guidance (including any associated information specified therein).

3.    For the purposes of this condition:

      "charge restriction conditions" shall have the same meaning as in
      special condition A (Definitions) for licensed distributors in England
      and Wales or special condition B for licensed distributors in Scotland;

      "charging review date" means the date from which modifications to the
      charge restriction conditions relating to all distribution services
      providers have effect:

      (a)  whether before or after the date upon which the modifications are
           made;

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<PAGE>


      (b)  whether or not the same modifications are made in respect of each
           distribution services provider; and

      (c)  where such modifications have been proposed by the Authority
           following a review by the Authority of the charge restriction
           conditions (or that part to which the modifications relate) in
           relation to all distribution services providers;

      "Regulatory Instructions and Guidance" means any instructions and
      guidance issued by the Authority for the purposes of this condition as
      modified from time to time by notice under paragraph 9 and may include:

      (a)  instructions and guidance as to the establishment of different
           systems, processes, procedures and manners for providing and
           recording information and of standards for different classes of
           information;

      (b)  a timetable for the development of the systems, processes and
           procedures required to achieve the appropriate standards of
           accuracy and reliability with which specified information shall be
           recorded;

      (c)  the meaning of words and phrases used in defining specified
           information;

      (d)  requirements for the recording of information associated with
           specified information which are reasonably necessary to enable an
           examiner to determine the accuracy and reliability of specified
           information;

      (e)  requirements as to the form and manner in which specified information
           shall be provided to the Authority;

      (f)  requirements as to the manner in which specified information shall
           be recorded and as to the standards of accuracy and reliability with
           which it shall be recorded; and

                                      149
<PAGE>


      (g)  a statement as to whether and to what extent each category of
           specified information is required for the purposes of the scheme;

      "specified information" means:

      (a)  the number of interruptions in the supply of electricity through the
           licensee's distribution system which occur in each period of 12
           months commencing on 1 April in each calendar year and have a
           duration of -

           (i)  less than three minutes, together (in respect of each
                interruption) with the number of customers whose supply was
                interrupted and the cause of that interruption; and

           (ii) three minutes or more, together (in respect of each
                interruption) with -

                (aa)  the number of customers whose supply of electricity was
                      interrupted and the duration of the interruption;

                (bb)  the source, voltage level and HV circuit; and

                (cc)   the aggregate number of re-interruptions;

      (b)  in relation to telephone calls made to the enquiry service operated
           under paragraph 1 of standard condition 6 (Safety and Security of
           Supplies Enquiry Service) -

           (i)  the speed of response for answering each call; and

           (ii) in the case of each call answered by a human operator -

                (aa) the telephone number of the caller;

                (bb) the time of the call; and

                (cc) if known, the name of the caller and whether the caller is
                     or is not a domestic customer;

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<PAGE>



      (c)  (i)   the aggregate number and cause of faults occurring in specified
                 classes or types of electrical plant or electric lines:

           (ii)  a statement setting out the asset management strategy of the
                 licensee in respect of the licensee's distribution system; and

           (iii) a statement of the reasons for any material increase or
                 decrease in the number and cause of faults referred to in
                 sub-paragraph (i) having regard to equivalent data held in
                 respect of previous years; and

      (d)  such other information as may from time to time be specified by the
           Authority, by notice to the licensee in accordance with paragraph 9.

4.    The licensee shall collect specified information in respect of:

      (a)  the matters specified in sub-paragraphs (a), (b) and (c) of the
           definition of specified information from and including 1 April 2001
           and

      (b)  any matter specified under sub-paragraph (d) of that definition from
           the date specified in a notice given in accordance with paragraph 9.

5.    The licensee shall provide to the Authority:

      (a)  the information referred to in sub-paragraph (b)(ii) of the
           definition of specified  information for each week within 4 days of
           the end of that week;

      (b)  the information referred to in sub-paragraphs (a),(b)(i) and (c) of
           that definition on or before 31 May 2002 and 30 April in each
           succeeding year (or such later date as the Authority may by notice
           specify) in respect of the period of 12 months expiring on the
           preceding 31 March; and

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<PAGE>


      (c)  the information referred to in sub-paragraph (d) of that definition
           in respect of such period and by such date as shall be specified in
           the relevant notice given under that sub-paragraph.

6.    The licensee shall permit a person or persons nominated by the Authority
      (in each case "an examiner") to examine the systems, processes and
      procedures referred to in paragraph 2 and their operation, the specified
      information and the extent to which each complies, and is in accordance,
      with Regulatory Instructions and Guidance.

7.    The licensee shall (and shall procure, insofar as it is able to do so,
      that any affiliate of the licensee, any person by whom it procures the
      performance of the obligation in paragraph 2 and any auditor of such
      person or of the licensee shall) co-operate fully with an examiner so
      as to enable him to carry out, complete and report to the Authority on
      any examination carried out in accordance with paragraph 6.

8.    The licensee's obligation under paragraph 7 to co-operate or procure
      co-operation with an examiner shall include, without limitation and
      insofar as necessary or expedient for such purpose, in each case
      subject to reasonable prior notice to the licensee:

      (a)  providing access to management, employees, agents or independent
           contractors of the licensee sufficient to enable the examiner to make
           any enquiries and to discuss any matters which he reasonably
           considers to be relevant to the carrying out of the examination;

      (b)  giving to the examiner access at reasonable hours to any premises
           occupied by the licensee or any other person in performing the
           obligations set out in this condition; and

      (c)  allowing the examiner at reasonable hours:

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<PAGE>


           (i)    to inspect and make copies of, and take extracts from, any
                  documents and records of the licensee maintained in relation
                  to specified information (other than information which is
                  subject to legal privilege);

           (ii)   to carry out inspections, measurements and tests on or in
                  relation to any systems maintained and operated for or in
                  relation to the requirements of this condition; and

           (iii)  to take onto such premises or onto or into any assets used for
                  the purpose of the licensee such other persons and such
                  equipment as may be necessary or expedient for the purpose of
                  carrying out the examination.

9.    A notice published by the Authority which adds to the categories of
      specified information or which modifies Regulatory Instructions and
      Guidance (in each case, an "amendment") shall have effect where the
      Authority has:

      (a)  given prior notice to all distribution services providers:

           (i)   stating that it proposes to make the amendment and setting out
                 its effect, the date it is proposed it should take effect and
                 (where relevant) whether the additional category of specified
                 information is required for the purposes of the scheme;

           (ii)  stating the reasons why it proposes to make the amendment; and

           (iii) specifying the time (not being less than 28 days from the date
                 of publication of the notice) within which representations or
                 objections with respect to the proposed amendment may be made;
                 and

      (b)  considered any representations or objections which are duly made and
           not withdrawn.

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<PAGE>


10.    A notice under paragraph 9 may not, where the amendment relates to a
       requirement in Regulatory Instructions and Guidance to provide any
       specified information to a greater level of accuracy or the introduction
       of an additional category of specified information which is or is
       intended to be required for the purposes of the scheme, specify a date
       for the purpose of paragraph 9(a)(i) other than a charging review date
       nor be given less than 12 months prior to that date unless all
       distribution services providers have agreed an alternative date or period
       of notice.

11.    The reasons for proposing an amendment which relates to any change in
       Regulatory Instructions and Guidance (other than that referred to in
       paragraph 10) in respect of specified information which is or is
       intended to be required for the purposes of the scheme may have regard
       in particular to the desirability of:

       (i)   removing or reducing inconsistencies between distribution services
             providers in the application of the Regulatory Instructions and
             Guidance or its interpretation;

       (ii)  improving the presentation or style of the Regulatory Instructions
             and Guidance or of the form and manner in which the specified
             information is to be provided;

       (iii) summarising the terms of reference and instructions from time to
             time given to an examiner; or

       (iv)  setting out any of the matters referred to in paragraphs (a) to (f)
             of the definition of Regulatory  Instructions  and Guidance in
             respect of any additional category of specified information

        so as  more effectively to achieve the purposes of this condition.


--------------------------------------------------------------------------------

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<PAGE>

Department of Trade and Industry

September 2001




                                      155