<PAGE>

                                                                     EXHIBIT 4.9

                                                                  CONFORMED COPY


                             Dated 20 December 2001


                               SCOTTISH POWER plc
                              SCOTTISH POWER UK plc
                                   as Issuers
                                       and
                   THE LAW DEBENTURE TRUST CORPORATION p.l.c.


                         AMENDED AND RESTATED TRUST DEED

                                   relating to
                               SCOTTISH POWER plc
                              SCOTTISH POWER UK plc
                   U.S.$7,000,000,000 Debt Issuance Programme
                     Arranged by J.P. Morgan Securities Ltd.


                                   LINKLATERS
                                   & ALLIANCE

                                   LINKLATERS

                               Ref: JALB/EXM/ALIK

<PAGE>

                                    CONTENTS
<TABLE>

<S>                                                                                     <C>
1        Interpretation ..............................................................  1

2        Issue of Notes and Covenant to pay ..........................................  7

3        Form of the Notes ...........................................................  9

4        Stamp Duties and Taxes ......................................................  9

5        Application of moneys received by the Trustee ............................... 10

6        Covenants ................................................................... 10

7        Remuneration and Indemnification of the Trustee ............................. 15

8        Provisions supplemental to the Trustee Act 1925 and the Trustee Act 2000 .... 16

9        Trustee liable for negligence ............................................... 18

10       Waiver and proof of default ................................................. 19

11       Trustee not precluded from entering into contracts .......................... 19

12       Modification and Substitution ............................................... 19

13       Appointment, Retirement and Removal of the Trustee .......................... 21

14       Notes held in Clearing Systems and Couponholders ............................ 21

15       Currency Indemnity .......................................................... 22

16       Communications .............................................................. 22

17       Governing Law and Jurisdiction .............................................. 23

SCHEDULE 1 Part A Form of Temporary Global Note ...................................... 24

SCHEDULE 1 Part B Form of Permanent Global Note ...................................... 30

SCHEDULE 1 Part C Form of Global Certificate ......................................... 39

SCHEDULE 2 Part A Form of Bearer Note ................................................ 43

SCHEDULE 2 Part B Form of Certificate ................................................ 46

SCHEDULE 2 Part C Terms and Conditions of the Notes .................................. 49
</TABLE>

                                      -i-

<PAGE>

<TABLE>

<S>                                                                                    <C>
SCHEDULE 2 Part D Form of Coupon ..................................................... 68

SCHEDULE 2 Part E Form of Talon ...................................................... 70

SCHEDULE 2 Part F Form of Receipt .................................................... 72

SCHEDULE 3 Provisions for Meetings of Noteholders .................................... 73
</TABLE>

                                     -iii-

<PAGE>

This Amended and Restated Trust Deed is made on 20 December 2001 between:

(1)      SCOTTISH POWER plc and SCOTTISH POWER UK plc (each an "Issuer" and
         together the "Issuers") and

(2)      THE LAW DEBENTURE TRUST CORPORATION p.l.c. (the "Trustee", which
         expression, where the context so admits, includes any other trustee for
         the time being of this Trust Deed).

         Whereas:

(A)      The Issuers propose to issue from time to time euro medium term notes
         in an aggregate principal amount outstanding at any one time not
         exceeding the Programme Limit in accordance with the Programme
         Agreement (the "Programme") and to be constituted under this Trust
         Deed.

(B)      The Trustee has agreed to act as trustee of this Trust Deed on the
         following terms and conditions.

(C)      The parties hereto have agreed to amend and restate the amended and
         restated trust deed dated 1 December 2000 as it may have been amended
         from time to time (the "Original Trust Deed"). This Trust Deed amends
         and restates the Original Trust Deed. Any Notes issued on or after the
         date hereof shall be issued pursuant to this Trust Deed. This does not
         affect any Notes issued prior to the date of this Trust Deed.

This deed witnesses and it is declared as follows:

1        Interpretation

1.1      Definitions:

         In these presents unless there is anything in the subject or context
         inconsistent therewith all words and expressions defined in the
         Conditions shall have the same meaning in the rest of this Trust Deed
         and the following expressions shall have the following meanings:

         "Agency Agreement" means the Amended and Restated Agency Agreement
         relating to the Programme of even date herewith between the Issuers,
         The Law Debenture Trust Corporation p.l.c. as Trustee, Citibank, N.A.,
         London as Agent and the other Agents mentioned in it as it may be
         amended, supplemental or restated from time to time;

         "Agents" means the Issuing and Paying Agent, the other Paying Agents,
         the Calculation Agent, the Registrar, the other Transfer Agents or any
         of them;

         "Auditors" means the auditors for the time being of the Relevant Issuer
         or, if they are unable or unwilling to carry out any action requested
         of them under this Trust Deed, such other firm of accountants as may be
         nominated or approved in writing by the Trustee for the purpose;

         "Bearer Note" means a Note that is in bearer form, and includes any
         replacement Bearer Note issued pursuant to the Conditions and any
         temporary Global Note or permanent Global Note;

         "Calculation Agent" means any person named as such in the Conditions or
         any Successor Calculation Agent;

         "Capital and Reserves" shall have the meaning set out in Condition
         6(f);

                                      -1-

<PAGE>

         "Certificate" means a registered certificate representing one or more
         Registered Notes of the same Series and, save as provided in the
         Conditions, comprising the entire holding by a Noteholder of his
         Registered Notes of that Series and, save in the case of Global
         Certificates, being substantially in the form set out in Schedule 2;

         "Clearstream, Luxembourg" means Clearstream Banking, societe anonyme;

         "Conditions" means in respect of the Notes of each Series the terms and
         conditions applicable thereto which shall be substantially in the form
         set out in Schedule 2 as modified, with respect to any Notes
         represented by a Global Certificate or a Global Note, by the provisions
         of such Global Certificate or Global Note, and which shall incorporate
         any additional provisions forming part of such terms and conditions set
         out in the Pricing Supplement(s) relating to the Notes of that Series
         and shall be endorsed on the Definitive Notes subject to amendment and
         completion as referred to in the first paragraph of Schedule 2 Part C
         and any reference to a particularly numbered Condition shall be
         construed accordingly;

         "Contractual Currency" means, in relation to any payment obligation of
         any Note, the currency in which that payment obligation is expressed
         and, in relation to Clause 7, pounds sterling or such other currency as
         may be agreed between the Relevant Issuer and the Trustee from time to
         time;

         "Coupons" means the bearer coupons relating to interest bearing Bearer
         Notes or, as the context may require, a specific number of them and
         includes any replacement Coupons issued pursuant to the Conditions;

         "Definitive Note" means a Bearer Note in definitive form having, where
         appropriate, Coupons, Receipt(s) and/or a Talon attached on issue and,
         unless the context requires otherwise, means a Certificate (other than
         a Global Certificate) and includes any replacement Note or Certificate
         issued pursuant to the Conditions;

         "Euroclear" means Euroclear Bank S.A./N.V. as operator of the Euroclear
         System;

         "Event of Default" means an event described in Condition 10 that, if so
         required by that Condition, has been certified by the Trustee to be, in
         its opinion, materially prejudicial to the interests of the
         Noteholders;

         "Exchangeable Bearer Note" means a Bearer Note that is exchangeable in
         accordance with its terms for a Registered Note;

         "Excluded Subsidiary" has the meaning specified in Condition 6;

         "Extraordinary Resolution" has the meaning set out in Schedule 3;

         "Global Certificate" means a Certificate substantially in the form set
         out in Schedule 1 Part C representing Registered Notes of one or more
         Tranches of the same Series that are registered in the name of a
         nominee for Euroclear, Clearstream, Luxembourg and/or any other
         clearing system;

         "Global Note" means a temporary Global Note and/or, as the context may
         require, a permanent Global Note;

         "holder" in relation to a Note, Receipt, Coupon or Talon, and
         "Couponholder" and "Noteholder" have the meanings given to them in the
         Conditions;

                                      -2-

<PAGE>

         "Issuing and Paying Agent" means the person named as such in the
         Conditions or any Successor Issuing and Paying Agent in each case at
         its specified office;

         "Notes" means the euro medium term notes to be issued by either of the
         Issuers pursuant to the Programme Agreement, constituted by this Trust
         Deed and for the time being outstanding or, as the context may require,
         a specific number of them;

         "outstanding" means, in relation to the Notes, all the Notes issued
         except (a) those that have been redeemed in accordance with the
         Conditions, (b) those in respect of which the date for redemption has
         occurred and the redemption moneys (including all interest accrued on
         such Notes to the date for such redemption and any interest payable
         after such date) have been duly paid to the Trustee or to the Issuing
         and Paying Agent as provided in Clause 2 and remain available for
         payment against presentation and surrender of Notes, Certificates,
         Receipts and/or Coupons, as the case may be, (c) those that have become
         void or in respect of which claims have become prescribed, (d) those
         that have been purchased and cancelled as provided in the Conditions,
         (e) those mutilated or defaced Bearer Notes that have been surrendered
         in exchange for replacement Bearer Notes, (f) (for the purpose only of
         determining how many Notes are outstanding and without prejudice to
         their status for any other purpose) those Bearer Notes alleged to have
         been lost, stolen or destroyed and in respect of which replacement
         Notes have been issued, (g) those Exchangeable Bearer Notes that have
         been exchanged for Registered Notes, and (h) any temporary Global Note
         to the extent that it shall have been exchanged for a permanent Global
         Note and any Global Note to the extent that it shall have been
         exchanged for one or more Definitive Notes, in either case pursuant to
         its provisions provided that for the purposes of (1) ascertaining the
         right to attend and vote at any meeting of the Noteholders, (2) the
         determination of how many Notes are outstanding for the purposes of
         Conditions 10 and 11 and Schedule 3, (3) the exercise of any
         discretion, power or authority that the Trustee is required, expressly
         or impliedly, to exercise in or by reference to the interests of the
         Noteholders and (4) the certification (where relevant) by the Trustee
         as to whether a Potential Event of Default is in its opinion materially
         prejudicial to the interests of the Noteholders, those Notes that are
         beneficially held by or on behalf of the Relevant Issuer or any of its
         subsidiaries and not yet cancelled shall (unless no longer so held) be
         deemed not to remain outstanding;

         "Paying Agents" means the persons (including the Issuing and Paying
         Agent) referred to as such in the Conditions or any Successor Paying
         Agents in each case at their respective specified offices;

         "permanent Global Note" means a Global Note representing Bearer Notes
         of one or more Tranches of the same Series, either on issue or upon
         exchange of a temporary Global Note, or part of it, and which shall be
         substantially in the form set out in Schedule 1 Part B;

         "Potential Event of Default" means an event or circumstance that could
         with the giving of notice, lapse of time, issue of a certificate and/or
         fulfilment of any other requirement provided for in Condition 10 become
         an Event of Default;

         "Pricing Supplement" means, in relation to a Tranche, a pricing
         supplement, supplemental to the offering circular relating to the
         Programme, issued specifying the relevant issue details of such
         Tranche, substantially in the form contained in Annex B to the
         Procedures Memorandum;

         "Principal Subsidiary" shall mean, in relation to Scottish Power plc:

                                      -3-

<PAGE>

         (a)   any Relevant Subsidiary; or

         (b)   any Subsidiary of Scottish Power plc (not being an Excluded
               Subsidiary or any other Subsidiary of Scottish Power plc 90 per
               cent. in principal amount of whose indebtedness for borrowed
               money is Project Finance Indebtedness):

               (i)   whose (a) profits on ordinary activities before tax or (b)
                     net assets represent 20 per cent. or more of the
                     consolidated profits on ordinary activities before tax of
                     the Group or consolidated net assets of the Group
                     respectively, in each case as calculated by reference to
                     the then latest audited financial statements of such
                     Subsidiary and the then latest audited consolidated
                     financial statements of the Group; provided that in the
                     case of a Subsidiary acquired after the end of the
                     financial period to which the then latest audited
                     consolidated financial statements of the Group relate, the
                     reference to the then latest audited consolidated financial
                     statements of the Group for the purposes of the calculation
                     above shall, until consolidated financial statements for
                     the financial period in which the acquisition is made have
                     been prepared and audited as aforesaid, be deemed to be a
                     reference to such first-mentioned financial statements as
                     if such Subsidiary had been shown in such financial
                     statements by reference to its then latest relevant audited
                     financial statements, adjusted as deemed appropriate by the
                     Auditors after consultation with Scottish Power plc; or

               (ii)  to which is transferred all or substantially all of the
                     business, undertaking and assets of a Subsidiary of
                     Scottish Power plc which immediately prior to such transfer
                     is a Principal Subsidiary, whereupon the transferor
                     Subsidiary shall immediately cease to be a Principal
                     Subsidiary and the transferee Subsidiary shall cease to be
                     a Principal Subsidiary under this sub-paragraph (ii) upon
                     publication of its next audited financial statements but so
                     that such transferor Subsidiary or such transferee
                     Subsidiary may be a Principal Subsidiary of Scottish Power
                     plc on or at any time after the date on which such audited
                     financial statements have been published by virtue of the
                     provisions of sub-paragraph (i) above or before, on or at
                     any time after such date by virtue of the provisions of
                     this sub-paragraph (ii).

         A report by the Directors of Scottish Power plc that, in their opinion,
         a Subsidiary of Scottish Power plc is or is not or was or was not at
         any particular time or throughout any specified period a Principal
         Subsidiary of Scottish Power plc accompanied by a report by the
         Auditors addressed to the Directors of Scottish Power plc and the
         Trustee as to proper extraction of the figures used by the Directors in
         determining the Principal Subsidiaries of Scottish Power plc and
         mathematical accuracy of the calculations shall, in the absence of
         manifest error, be conclusive and binding on the Trustee and the
         Noteholders; and

         in relation to Scottish Power UK plc, "Principal Subsidiary" shall mean
         any one of:

         (a)   SP Distribution Limited (SC189125);

         (b)   SP Transmission Limited (SC189126); or

         (c)   SP Manweb plc (2366937);

         "Procedures Memorandum" means the memorandum (as may be amended from
         time to time) detailing the administrative procedures and guidelines
         relating to the settlement of issues of Notes (other than Syndicated
         Issues);

                                       -4-

<PAGE>

         "Programme Agreement" means the Amended and Restated Programme
         Agreement relating to the Programme dated the date hereof between the
         Issuers, J.P. Morgan Securities Ltd. and the other dealers named in it
         as it may be amended, supplemented or restated from time to time;

         "Programme Limit" means the maximum aggregate principal amount of Notes
         that may be issued and outstanding at any time under the Programme, as
         such limit may be increased pursuant to the Programme Agreement;

         "Receipts" means the receipts for the payment of instalments of
         principal in respect of Bearer Notes of which the principal is
         repayable in instalments or, as the context may require, a specific
         number of them and includes any replacement Receipts issued pursuant to
         the Conditions;

         "Redemption Amount" has the meaning given to it in the Conditions;

         "Register" means the register maintained by the Registrar;

         "Registered Note" means a Note in registered form;

         "Registrar" means the person named as such in the Conditions or any
         Successor Registrar in each case at its specified office;

         "Relevant Issuer" means, in relation to any Tranche, the Issuer which
         has concluded, or is negotiating, an agreement with the Relevant
         Dealer(s) to issue, or which has issued, the Notes of that Tranche;

         "Relevant Subsidiary" has the meaning specified in Condition 6;

         "Restructuring Event" has the meaning specified in Condition 6;

         "Series" means a series of Notes comprising one or more Tranches issued
         by the same Issuer, whether or not issued on the same date, that
         (except in respect of the first payment of interest and their issue
         price) have identical terms on issue and are expressed to have the same
         series number;

         "specified office" means, in relation to a Paying Agent, the Registrar
         or a Transfer Agent the office identified with its name at the end of
         the Conditions or any other office approved by the Trustee and notified
         to Noteholders pursuant to Clause 6.13;

         "Subsidiary" has the meaning specified in Condition 6;

         "Successor" means, in relation to an Agent such other or further person
         as may from time to time be appointed by the Issuers as such Agent with
         the written approval of, and on terms approved in writing by, the
         Trustee and notice of whose appointment is given to Noteholders
         pursuant to Clause 6.13;

         "Talons" mean talons for further Coupons or, as the context may
         require, a specific number of them and includes any replacement Talons
         issued pursuant to the Conditions;

         "TARGET System" means the Trans-European Automated Real-Time Gross
         Settlement Express Transfer (TARGET) System or any successor thereto;

         "temporary Global Note" means a Global Note representing Bearer Notes
         of one or more Tranches of the same Series on issue and which shall be
         substantially in the form set out in Schedule 1 Part A;

                                      -5-

<PAGE>

         "Tranche" means, in relation to a Series, those Notes of that Series
         that are issued on the same date at the same issue price and in respect
         of which the first payment of interest is identical;

         "Transfer Agents" means the persons (including the Registrar) referred
         to as such in the Conditions or any Successor Transfer Agents in each
         case at their specified offices;

         this "Trust Deed" means this amended and restated Trust Deed; and

         "trust corporation" means a trust corporation (as defined in the Law of
         Property Act 1925) or a corporation entitled to act as a trustee
         pursuant to applicable foreign legislation relating to trustees.

1.2      Construction of Certain References: References to:

         1.2.1 costs, charges, remuneration or expenses include any value added,
               turnover or similar tax charged in respect thereof;

         1.2.2 an action, remedy or method of judicial proceedings for the
               enforcement of creditors' rights include references to the
               action, remedy or method of judicial proceedings in jurisdictions
               other than England as shall most nearly approximate thereto;

         1.2.3 words and expressions defined in the Agency Agreement or the
               Programme Agreement or used in the applicable Pricing Supplement
               shall have the same meaning where used herein unless the context
               otherwise requires or unless otherwise stated and provided that,
               in the event of inconsistency between the Agency Agreement or the
               Programme Agreement and this Trust Deed then this Trust Deed
               shall prevail and, in the event of inconsistency between the
               Agency Agreement or the Programme Agreement or this Trust Deed
               and the applicable Pricing Supplement, the applicable Pricing
               Supplement shall prevail; and

         1.2.4 for the purposes of the definition of and references to
               "outstanding" in Clause 2 and Schedule 3 and for the purpose of
               Clause 8.9 and Conditions 9, 10 and 14 receipts issued pursuant
               to Condition 6(f) shall be treated as if they were Notes and for
               the purposes of Schedule 3 the principal amount of the Notes
               represented by each receipt will determine voting entitlement
               thereunder.

1.3      Headings: Headings shall be ignored in construing this Trust Deed.

1.4      Contracts: References in this Trust Deed to this Trust Deed or any
         other document are to this Amended and Restated Trust Deed or those
         documents as amended, supplemented or replaced from time to time in
         relation to the Programme and include any document that amends,
         supplements or replaces them.

1.5      Schedules: The Schedules are part of this Trust Deed and have effect
         accordingly and terms defined there and not in the main body of this
         Trust Deed shall have the meaning given to them there.

1.6      Alternative Clearing System: References in this Trust Deed to Euroclear
         and/or Clearstream, Luxembourg shall, wherever the context so permits,
         be deemed to include reference to any additional or alternative
         clearing system approved by the Relevant Issuer, the Trustee and the
         Issuing and Paying Agent.

                                      -6-

<PAGE>

1.7      Contracts (Rights of Third Parties) Act 1999: A person who is not a
         party to this Trust Deed has no right by virtue of the Contracts
         (Rights of Third Parties) Act 1999 to enforce any term of this Trust
         Deed.

1.8      Issuers' Obligations: The obligations of the Issuers under this Trust
         Deed are several and not joint.

1.9      Amendment and Restatement of Trust Deed: In exercise of its powers of
         modification and being of the opinion that to do so is not materially
         prejudicial to the interests of the Noteholders the Trustee has agreed
         that the Original Trust Deed, as it may have been amended from time to
         time prior to the date hereof, shall for the purposes only of Notes
         issued after the date hereof be amended and restated as set out herein
         and any Notes issued after the date hereof shall be issued subject to
         and with the benefit of this Trust Deed.

2        Issue of Notes and Covenant to pay

2.1      Issue of Notes: Each of the Issuers may from time to time issue Notes
         in Tranches of one or more Series on a continuous basis with no minimum
         issue size in accordance with the Programme Agreement. By not later
         than 3.00 pm (London time) on the second business day in London (which
         for this purpose shall be a day on which commercial banks are open for
         business in London) preceding each proposed issue date, the Relevant
         Issuer shall give written notice or procure that it is given to the
         Trustee of the proposed issue of such Tranche, specifying the details
         to be included in the relevant Pricing Supplement. Upon the issue by
         the Relevant Issuer of any Notes expressed to be constituted by this
         Trust Deed, such Notes shall forthwith be constituted by this Trust
         Deed without any further formality and irrespective of whether or not
         the issue of such debt securities contravenes any covenant or other
         restriction in this Trust Deed or the Programme Limit.

2.2      Separate Series: The provisions of sub-Clauses 2.3, 2.4, 2.5 and 2.6
         and of Clauses 3 to 15 and Schedule 3 (all inclusive) shall apply
         mutatis mutandis separately and independently to the Notes of each
         Series and in such Clauses and Schedule the expressions "Noteholders",
         "Certificates", "Receipts", "Coupons", "Couponholders" and "Talons",
         together with all other terms that relate to Notes or their Conditions,
         shall be construed as referring to those of the particular Series in
         question and not of all Series unless expressly so provided, so that
         each Series shall be constituted by a separate trust pursuant to
         sub-Clause 2.3 and that, unless expressly provided, events affecting
         one Series shall not affect any other.

2.3      Covenant to Pay: The Relevant Issuer shall on any date when any Notes
         become due to be redeemed, in whole or in part, unconditionally pay to
         or to the order of the Trustee in the Contractual Currency, in the case
         of any Contractual Currency other than euro, in the principal financial
         centre for the Contractual Currency and in the case of euro, in a city
         in which banks have access to the TARGET System in same day funds the
         Redemption Amount of the Notes becoming due for redemption on that date
         together with any applicable premium and shall (subject to the
         Conditions) until such payment (both before and after judgment)
         unconditionally so pay to or to the order of the Trustee interest on
         the principal amount of the Notes outstanding as set out in the
         Conditions (subject to sub-Clause 2.6) provided that (1) payment of any
         sum due in respect of the Notes made to the Issuing and Paying Agent as
         provided in the Agency Agreement shall, to that extent, satisfy such
         obligation except to the extent that there is failure in its subsequent
         payment to the relevant Noteholders or Couponholders under the
         Conditions and (2) a payment made

                                      -7-

<PAGE>

         after the due date or as a result of the Note becoming repayable
         following an Event of Default shall be deemed to have been made when
         the full amount due has been received by the Issuing and Paying Agent
         or the Trustee and notice to that effect has been given to the
         Noteholders (if required under Clause 6.11), except to the extent that
         there is failure in its subsequent payment to the relevant Noteholders
         or Couponholders under the Conditions. This covenant shall only have
         effect each time Notes are issued and outstanding, when the Trustee
         shall hold the benefit of this covenant on trust for the Noteholders
         and Couponholders of the relevant Series.

2.4      Discharge: Subject to sub-Clause 2.5, any payment to be made in respect
         of the Notes, Receipts or the Coupons by the Relevant Issuer or the
         Trustee may be made as provided in the Conditions and any payment so
         made shall (subject to sub-Clause 2.5) to that extent be a good
         discharge to the Relevant Issuer or the Trustee, as the case may be.

2.5      Payment after a Default: At any time after an Event of Default or a
         Potential Event of Default has occurred the Trustee may:

         2.5.1    by notice in writing to the Relevant Issuer, the Paying Agents
                  and the Transfer Agents, require the Paying Agents and the
                  Transfer Agents, until notified by the Trustee to the
                  contrary, so far as permitted by applicable law:

                  (i)      to act as Paying Agents and Transfer Agents of the
                           Trustee under this Trust Deed and the Notes on the
                           terms of the Agency Agreement (with consequential
                           amendments as necessary and except that the Trustee's
                           liability for the indemnification, remuneration and
                           expenses of the Paying Agents and the Transfer Agents
                           shall be limited to the amounts for the time being
                           held by the Trustee in respect of the Notes on the
                           terms of this Trust Deed) and thereafter to hold all
                           Notes, Certificates, Receipts, Coupons and Talons and
                           all moneys, documents and records held by them in
                           respect of Notes, Certificates, Receipts, Coupons and
                           Talons to the order of the Trustee; or

                  (ii)     to deliver all Notes, Certificates, Receipts, Coupons
                           and Talons and all moneys, documents and records held
                           by them in respect of the Notes, Certificates,
                           Receipts, Coupons and Talons to the Trustee or as the
                           Trustee directs in such notice save for documents
                           required to be retained by the Agents by law or
                           regulation; and

         2.5.2    by notice in writing to the Relevant Issuer require it to make
                  all subsequent payments in respect of the Notes, Receipts,
                  Coupons and Talons to or to the order of the Trustee and not
                  to the Issuing and Paying Agent.

2.6      Rate of Interest After a Default: If the Notes bear interest at a
         floating or other variable rate and they become immediately payable
         under the Conditions, the rate of interest payable in respect of them
         shall continue to be calculated by the Calculation Agent in accordance
         with the Conditions (with consequential amendments as necessary) except
         that the rates of interest need not be published unless the Trustee
         otherwise requires. The first period in respect of which interest shall
         be so calculable shall commence on the expiry of the Interest Period
         during which the Notes become so repayable.

                                      -8-

<PAGE>

3        Form of the Notes

3.1      The Global Notes: The Notes shall initially be represented by a
         temporary Global Note, a permanent Global Note or one or more
         Certificates in the principal amount of the Tranche being issued.
         Interests in temporary Global Notes shall be exchangeable for
         Definitive Notes, Registered Notes or interests in permanent Global
         Notes as set out in each temporary Global Note. Interests in permanent
         Global Notes shall be exchangeable for Definitive Notes and/or
         Registered Notes as set out in each permanent Global Note.

3.2      The Definitive Notes: The Definitive Notes, Receipts, Coupons and
         Talons shall be security printed and the Certificates shall be printed,
         in each case in accordance with applicable legal and stock exchange
         requirements substantially in the forms set out in Schedule 2. The
         Notes and Certificates (other than Global Certificates) shall be
         endorsed with the Conditions.

3.3      Signature: The Notes, Certificates, Receipts, Coupons and Talons shall
         be signed manually or in facsimile by a Director or an authorised
         signatory of the Relevant Issuer, the Notes shall be authenticated by
         or on behalf of the Issuing and Paying Agent and the Certificates shall
         be authenticated by or on behalf of the Registrar. The Relevant Issuer
         may use the facsimile signature of a person who at the date of this
         Trust Deed is such a Director or an authorised signatory even if at the
         time of issue of any Notes, Certificates, Receipts, Coupons or Talons
         he no longer holds that office. Notes, Certificates, Receipts, Coupons
         and Talons so executed and authenticated shall be or, in the case of
         Certificates, represent binding and valid obligations of the Relevant
         Issuer.

4        Stamp Duties and Taxes

4.1      Stamp Duties: The Relevant Issuer shall pay any stamp, issue,
         documentary or other taxes and duties, including interest and
         penalties, payable in Belgium, Luxembourg, the United Kingdom and the
         country of each Contractual Currency in respect of the creation, issue
         and offering of the Notes, Certificates, Receipts, Coupons and Talons
         and the execution or delivery of this Trust Deed. The Relevant Issuer
         shall also indemnify the Trustee, the Noteholders and the Couponholders
         from and against all stamp, issue, documentary or other taxes paid by
         any of them in any jurisdiction in connection with any action taken by
         or on behalf of the Trustee or, as the case may be, the Noteholders or
         the Couponholders to enforce the Relevant Issuer's obligations under
         this Trust Deed or the Notes, Certificates, Receipts, Coupons or
         Talons.

4.2      Change of Taxing Jurisdiction: If the Relevant Issuer becomes subject
         generally to the taxing jurisdiction of a territory or a taxing
         authority of or in that territory with power to tax other than or in
         addition to the United Kingdom or any such authority of or in such
         territory then the Relevant Issuer shall (unless the Trustee otherwise
         agrees) give the Trustee an undertaking satisfactory to the Trustee in
         terms corresponding to the terms of Condition 8 with the substitution
         for, or (as the case may require) the addition to, the references in
         that Condition to the United Kingdom of references to that other or
         additional territory or authority to whose taxing jurisdiction the
         Relevant Issuer has become so subject. In such event this Trust Deed
         and the Notes, Certificates, Receipts, Coupons and Talons shall be read
         accordingly.

                                      -9-

<PAGE>

5        Application of moneys received by the Trustee

5.1      Declaration of Trust: All moneys received by the Trustee in respect of
         the Notes or amounts payable under this Trust Deed shall, despite any
         appropriation of all or part of them by the Relevant Issuer, be held by
         the Trustee on trust to apply them (subject to Clause 5.2):

                  first, in payment of all costs, charges, expenses and
                  liabilities properly incurred by the Trustee (including
                  remuneration payable to it) in carrying out its functions
                  under this Trust Deed;

                  secondly, in payment of any amounts owing in respect of the
                  Notes, Receipts or Coupons pari passu and rateably; and

                  thirdly, in payment of any balance to the Relevant Issuer for
                  itself.

         If the Trustee holds any moneys in respect of Notes, Receipts or
         Coupons that have become void or in respect of which claims have become
         prescribed, the Trustee shall hold them on these trusts.

5.2      Accumulation: If the amount of the moneys at any time available for
         payment in respect of the Notes under sub-Clause 5.1 is less than 10
         per cent of the principal amount of the Notes then outstanding, the
         Trustee may, at its discretion, invest such moneys. The Trustee may
         retain such investments and accumulate the resulting income until the
         investments and the accumulations, together with any other funds for
         the time being under its control and available for such payment, amount
         to at least 10 per cent of the principal amount of the Notes then
         outstanding and then such investments, accumulations and funds (after
         deduction of, or provision for, any applicable taxes) shall be applied
         as specified in sub-Clause 5.1.

5.3      Investment: Moneys held by the Trustee may be invested in its name or
         under its control in any investments or other assets anywhere whether
         or not they produce income or deposited in its name or under its
         control at such bank or other financial institution in such currency as
         the Trustee may, in its absolute discretion, think fit. If that bank or
         institution is the Trustee or a subsidiary, holding or associated
         company of the Trustee, it need only account for an amount of interest
         equal to the largest amount of interest payable by it on such a deposit
         to an independent customer. The Trustee may at any time vary or
         transpose any such investments or assets or convert any moneys so
         deposited into any other currency, and shall not be responsible for any
         resulting loss, whether by depreciation in value, change in exchange
         rates or otherwise.

6        Covenants

         So long as any of the Notes remains outstanding, the Relevant Issuer
         covenants that it shall:

6.1      at all times carry on and conduct its affairs in a proper manner;

6.2      so far as permitted by applicable law, give to the Trustee such
         information as it shall require and in such form as it shall require
         (including without limitation the procurement by the Relevant Issuer of
         all such certificates called for by the Trustee pursuant to Clause 8.3)
         for the purpose of the discharge or exercise of the duties, trusts,
         powers, authorities and discretions vested in it under these presents
         or by operation of law;

                                      -10-

<PAGE>

6.3      cause to be prepared and certified by the Auditors in respect of each
         financial accounting period accounts in such form as will comply with
         all relevant legal and accounting requirements and all requirements for
         the time being of the UK Listing Authority;

6.4      at all times keep and procure its Principal Subsidiaries to keep proper
         books of account and, at any time after the occurrence of an Event of
         Default or a Potential Event of Default or if the Trustee certifies in
         writing to the Relevant Issuer that it has reasonable grounds to
         believe that an Event of Default or a Potential Event of Default has or
         may have occurred and so far as permitted by applicable law allow and
         procure its Principal Subsidiaries to allow the Trustee and any person
         appointed by the Trustee to whom the Relevant Issuer or the relevant
         Principal Subsidiary (as the case may be) shall have no reasonable
         objection, upon reasonable notice, free access to such books of account
         at all reasonable times during normal business hours for the purpose of
         the discharge or exercise of the duties, trusts, powers, authorities
         and discretions vested in it under these presents or by operation of
         law;

6.5      send to the Trustee (in addition to any copies to which it may be
         entitled as a holder of any securities of the Relevant Issuer) four
         copies in English of every balance sheet, profit and loss account,
         report, circular and notice of general meeting and every other document
         issued or sent to its shareholders together with any of the foregoing,
         and every document issued or sent to its creditors (or any class
         thereof) generally concerning the financial condition of the Relevant
         Issuer and its Subsidiaries, in each case in their capacities as such,
         as soon as practicable after the issue or publication thereof;

6.6      give notice in writing to the Trustee of the occurrence of any Event of
         Default or any Potential Event of Default immediately upon becoming
         aware of the same;

6.7      send to the Trustee (a) within 14 days after demand by the Trustee
         therefor and (b) (without the necessity for any such demand) promptly
         after the publication of its audited accounts in respect of each
         financial period commencing with the financial period ending 31 March
         2002 and in any event not later than 180 days after the end of each
         such financial period a certificate of the Relevant Issuer signed by
         two Directors of such Relevant Issuer to the effect that, to the best
         of the knowledge, information and belief of the Relevant Issuer, as at
         a date not more than seven days before delivering such certificate (the
         "relevant date") there did not exist and had not existed since the
         relevant date of the previous certificate (or in the case of the first
         such certificate the date hereof) any Event of Default or any Potential
         Event of Default (or if such exists or existed specifying the same) and
         that during the period from and including the relevant date of the last
         such certificate (or in the case of the first such certificate the date
         hereof) to and including the relevant date of such certificate the
         Relevant Issuer has complied with all its obligations contained in
         these presents or (if such is not the case) specifying the respects in
         which it has not complied;

6.8      so far as permitted by applicable law, at all times execute and do all
         such further documents, acts and things as may be necessary at any time
         or times in the reasonable opinion of the Trustee to give effect to
         these presents;

6.9      at all times maintain a Principal Paying Agent, a Registrar and a
         Transfer Agent in accordance with the Conditions and, in the case of a
         Principal Paying Agent and a Registrar, so long as any of the Notes or
         Coupons remains liable to prescription;

6.10     use all reasonable endeavours to procure the Principal Paying Agent to
         notify the Trustee forthwith in the event that it does not, on or
         before the due date for any payment in respect

                                      -11-

<PAGE>

         of the Notes or any of them or any of the Coupons, receive
         unconditionally pursuant to the Agency Agreement payment of the full
         amount in the requisite currency of the moneys payable on such due date
         on all such Notes or Coupons as the case may be;

6.11     in the event of the unconditional payment to the Principal Paying Agent
         of any sum due in respect of the Notes or any of them or any of the
         Coupons being made after the due date for payment thereof forthwith
         give or procure to be given notice to the relevant Noteholders in
         accordance with Condition 16 that such payment has been made;

6.12     use all reasonable endeavours to maintain the listing of the Notes on
         the official list maintained by the Financial Services Authority in its
         capacity as UK Listing Authority and the trading of such Notes on the
         market for listed securities of the London Stock Exchange plc or, if it
         is unable to do so having used all reasonable endeavours or if the
         maintenance of such listing or trading is in the reasonable opinion of
         the Relevant Issuer unduly onerous, use all reasonable endeavours to
         obtain and maintain a quotation or listing of the Notes on such other
         stock exchange or exchanges or securities market or markets as the
         Relevant Issuer may (with the prior approval of the Trustee, such
         approval not to be unreasonably withheld or delayed) decide and shall
         also upon obtaining a quotation or listing of the Notes on such other
         stock exchange or exchanges or securities market or markets enter into
         a deed supplemental to this Trust Deed to effect such consequential
         amendments to these presents as the Trustee may require to comply with
         the requirements of any such stock exchange or securities market;

6.13     give notice to the Noteholders in accordance with Condition 16 of any
         appointment, resignation or removal of any Agent after having obtained
         the approval of the Trustee thereto or any change of any Agent's
         specified office and (except as provided by the Agency Agreement) at
         least 30 days prior to such event taking effect; provided always that
         so long as any of the Notes remains outstanding in the case of the
         termination of the appointment of the Registrar or a Transfer Agent or
         so long as any of the Notes or Coupons remains liable to prescription
         in the case of the termination of the appointment of the Principal
         Paying Agent no such termination shall take effect until a new
         Registrar, Transfer Agent or Principal Paying Agent has been appointed
         on terms approved by the Trustee;

6.14     obtain the prior written approval of the Trustee to, and promptly give
         to the Trustee four copies of, the form of every notice given to the
         Noteholders in accordance with Condition 16 (such approval, unless so
         expressed, not to constitute approval for the purposes of Section 21 of
         the Financial Services and Markets Act 2000 of the United Kingdom of
         any such notice which is an invitation or inducement to engage in
         investment activity);

6.15     if the Relevant Issuer shall become subject generally to the taxing
         jurisdiction of any territory or any political sub-division thereof or
         any authority therein or thereof having power to tax other than or in
         addition to the United Kingdom or any such political sub-division
         thereof or any such authority therein or thereof, immediately upon
         becoming aware thereof notify the Trustee of such event and (unless the
         Trustee otherwise agrees) enter forthwith into a Trust Deed
         supplemental to this Trust Deed, giving to the Trustee an undertaking
         or covenant in form and manner satisfactory to the Trustee in terms
         corresponding to the terms of Condition 8 with the substitution for
         (or, as the case may be, the addition to) the references therein to the
         United Kingdom or any political sub-division thereof or any authority
         therein or thereof having power to tax of references to that other or
         additional territory or any political sub-division thereof or any
         authority therein or thereof having power to tax to whose taxing
         jurisdiction the Relevant Issuer shall have become

                                      -12-

<PAGE>

         subject as aforesaid, such Trust Deed also (where applicable) to modify
         Condition 6(c) so that such Condition shall make reference to the other
         or additional territory, any political sub-division thereof and any
         authority therein or thereof having power to tax;

6.16     comply with and perform all its obligations under the Agency Agreement
         and use all reasonable endeavours to procure that the Agents comply
         with and perform all their respective obligations thereunder and not
         make any amendment or modification to the Agency Agreement without the
         prior written approval of the Trustee;

6.17     in order to enable the Trustee to ascertain the principal amount of
         Notes of each Series for the time being outstanding for any of the
         purposes referred to in the proviso to the definition of "outstanding"
         in Clause 1, deliver to the Trustee as soon as reasonably practicable
         after being so requested in writing by the Trustee a certificate in
         writing signed by two Directors, or two authorised signatories, of the
         Relevant Issuer setting out the total number and aggregate principal
         amount of Notes of each series which:

         6.17.1   up to and including the date of such certificate have been
                  purchased by the Relevant Issuer or any other Subsidiary of
                  the Relevant Issuer and cancelled and

         6.17.2   are at the date of such certificate held for the benefit of,
                  or on behalf of, the Relevant Issuer or any other Subsidiary
                  of the Relevant Issuer

6.18     procure its Subsidiaries to comply with all (if any) applicable
         provisions concerning the purchase of Notes of Condition 6(g);

6.19     use all reasonable endeavours to procure that each of the Paying Agents
         makes available for inspection by Noteholders and Couponholders at its
         specified office copies of these presents, the Agency Agreement and, as
         soon as practicable after the date of publication thereof, the then
         latest audited balance sheet and profit and loss account (consolidated
         if applicable) of the Relevant Issuer;

6.20     if, in accordance with the provisions of the Conditions, interest in
         respect of Bearer Securities denominated in U.S. dollars becomes
         payable at the specified office of any Paying Agent in the United
         States of America promptly give notice thereof to the Noteholders in
         accordance with Condition 16;

6.21     give written notice to the Trustee (i) of any designation of any of its
         Subsidiaries as an Excluded Subsidiary and (ii) forthwith upon any such
         Excluded Subsidiary ceasing to be an Excluded Subsidiary for the
         purpose of Condition 6;

6.22     give to the Trustee at the same time as sending to it the certificates
         referred to in Clause 6.7 above and in any event not later than 180
         days after the last day of each financial period of the Relevant
         Issuer, a report by two Directors of the Relevant Issuer listing those
         Subsidiaries of the Relevant Issuer which as at such last day were
         Principal Subsidiaries for the purposes of Condition 10, accompanied by
         a report by the Auditors addressed to the Directors of the Relevant
         Issuer and the Trustee as to the proper extraction of the figures and
         the mathematical accuracy of the calculations based thereon, as used by
         the Directors of the Relevant Issuer in determining those Principal
         Subsidiaries;

6.23     give to the Trustee, as soon as reasonably practicable after the
         acquisition or disposal of any company which thereby becomes or ceases
         to be a Principal Subsidiary of the Relevant Issuer or after any
         transfer is made to any Subsidiary of the Relevant Issuer which thereby
         becomes a Principal Subsidiary, a report by two Directors of the
         Relevant Issuer to such effect, accompanied by a report by the Auditors
         addressed to the Directors

                                      -13-

<PAGE>

         of the Relevant Issuer and the Trustee as to the proper extraction of
         the unaudited or audited (as appropriate) figures and the mathematical
         accuracy of the calculations based thereon as used by the Directors of
         the Relevant Issuer in determining the Principal Subsidiary;

6.24     give to the Trustee as soon as reasonably practicable and, in any
         event, within 14 days of of any request by the Trustee, a report by two
         Directors of the Relevant Issuer as to the amount of Capital and
         Reserves, at any time accompanied by a report by the Auditors addressed
         to the Directors of the Relevant Issuer and the Trustee as to the
         proper extraction of the unaudited or audited (as appropriate) figures
         and the mathematical accuracy of the calculations based thereon used by
         the Directors of the Relevant Issuer;

6.25     upon due surrender in accordance with the Conditions, pay the face
         value of all Coupons (including Coupons issued in exchange for Talons)
         appertaining to all Notes purchased by the Relevant Issuer or any
         Subsidiary of the Relevant Issuer;

6.26     forthwith give notice in writing to the Trustee of:

         6.26.1   the occurrence of any Restructuring Event or of any event (a
                  "Potential Restructuring Event") which, depending on any
                  certification as provided in the definition of "Restructuring
                  Event", may be a Restructuring Event;

         6.26.2   (if at the time any Restructuring Event occurs there are Rated
                  Securities) the occurrence of any Rating Downgrade in respect
                  of that Restructuring Event within the Restructuring Period;
                  and

         6.26.3   (if at the time any Restructuring Event occurs there are no
                  Rated Securities) the obtaining of a rating in accordance with
                  the definition of "Negative Rating Event" or the occurrence of
                  a Negative Rating Event;

6.27     send to the Trustee within fourteen days of any request by the Trustee
         (such request only to be made after consultation with the Relevant
         Issuer or after the Relevant Issuer has failed or refused to be
         consulted) a certificate signed by any two Directors of the Relevant
         Issuer giving their opinion on any matter relating to or on any aspect
         of a Potential Restructuring Event (as defined in Clause 6.25.1 above)
         requested by the Trustee and in forming an opinion on whether the
         Potential Restructuring Event is a Restructuring Event the Trustee
         shall be entitled, but not bound, to rely solely on such certificate
         and if it does so rely, such certificate, and the determination of the
         Trustee (in reliance on such certificate) as to whether or not a
         Restructuring Event has occurred, shall be binding on the Relevant
         Issuer, the Noteholders and the Couponholders and the Trustee shall
         incur no liability to any person for so relying on such certificate;
         and

6.28     procure the delivery of legal opinions addressed to the Trustee dated
         the date of such delivery, in form and content acceptable to the
         Trustee:

         6.28.1   from Linklaters or such other firm of legal advisers as may be
                  agreed between the Issuers and the Trustee as to the laws of
                  England, on each anniversary of this Trust Deed and on the
                  date of any amendment to this Trust Deed;

         6.28.2   from legal advisers, reasonably acceptable to the Trustee as
                  to such law as may reasonably be requested by the Trustee, on
                  the issue date for the Notes in the event of a proposed issue
                  of Notes of such a nature and having such features as might
                  lead the Trustee to conclude that it would be prudent, having
                  regard to such nature and features, to obtain such legal
                  opinion(s) or in the event that the Trustee

                                      -14-

<PAGE>

                  considers it prudent in view of a change (or proposed change)
                  in (or in the interpretation or application of) any applicable
                  law, regulation or circumstance affecting the Relevant Issuer,
                  the Trustee, the Notes, the Certificates, the Receipts, the
                  Coupons, the Talons, this Trust Deed or the Agency Agreement;
                  and

         6.28.3   on each occasion on which a legal opinion is given to any
                  Dealer in relation to any Notes pursuant to the Programme
                  Agreement from the legal adviser giving such opinion.

7        Remuneration and Indemnification of the Trustee

7.1      Normal Remuneration: So long as any Note is outstanding the Relevant
         Issuer shall pay the Trustee as remuneration for its services as
         Trustee such sum on such dates in each case as the Relevant Issuer and
         the Trustee may from time to time agree. Such remuneration shall accrue
         from day to day from the date of this Trust Deed. However, if any
         payment to a Noteholder or Couponholder of moneys due in respect of any
         Note, Receipts or Coupon is improperly withheld or refused, such
         remuneration shall again accrue as from the date of such withholding or
         refusal until payment to such Noteholder or Couponholder is duly made.

7.2      Extra Remuneration: If an Event of Default shall have occurred or if
         the Trustee finds it expedient or necessary or is requested by the
         Relevant Issuer to undertake duties that they both agree to be of an
         exceptional nature or otherwise outside the scope of the Trustee's
         normal duties under this Trust Deed, the Relevant Issuer shall pay such
         additional remuneration as they may agree or, failing agreement as to
         any of the matters in this sub-Clause (or as to such sums referred to
         in sub-Clause 7.1), as determined by an investment bank (acting as an
         expert) selected by the Trustee and approved by the Relevant Issuer or,
         failing such approval, nominated by the President for the time being of
         The Law Society of England and Wales. The expenses involved in such
         nomination and such investment bank's fee shall be shared equally
         between the Trustee and the Relevant Issuer. The determination of such
         investment bank shall be conclusive and binding on the Relevant Issuer,
         the Trustee, the Noteholders and the Couponholders.

7.3      Expenses: Each of the Issuers severally undertakes on demand by the
         Trustee to pay or discharge the full amount of all costs, charges,
         liabilities and expenses properly incurred by the Trustee in the
         preparation and execution of this Trust Deed including, but not limited
         to, legal and travelling expenses. The Relevant Issuer undertakes on
         demand by the Trustee to pay or discharge all reasonable costs,
         charges, liabilities and expenses properly incurred by the Trustee in
         the performance of its functions under this Trust Deed including, but
         not limited to, legal and travelling expenses. For the avoidance of
         doubt, the foregoing costs, charges, liabilities and expenses shall
         only be paid or discharged once in aggregate amount. The Relevant
         Issuer shall also on demand by the Trustee pay or discharge any stamp,
         documentary or other taxes or duties paid by the Trustee in connection
         with any legal proceedings properly brought or contemplated by the
         Trustee against the relevant Issuer to enforce any provision of this
         Trust Deed, the Notes, the Receipts, the Coupons or the Talons. Such
         costs, charges, liabilities and expenses shall:

         7.3.1    in the case of payments made by the Trustee before such
                  demand, carry interest from the date of the demand at the rate
                  of 2 per cent per annum over the base rate of National
                  Westminster Bank PLC on the date on which the Trustee made
                  such payments until reimbursement is received by the Trustee;
                  and

                                      -15-

<PAGE>

         7.3.2    in other cases, carry interest at such rate from 30 days after
                  the date of the demand or (where the demand specifies that
                  payment is to be made on an earlier date) from such earlier
                  date until reimbursement is received by the Trustee.

7.4      Indemnity: Subject to Clause 9, the Relevant Issuer shall indemnify the
         Trustee in respect of all liabilities and expenses properly incurred by
         it or by anyone appointed by it or to whom any of its functions may be
         delegated by it in the carrying out of its functions under this deed
         and against any loss, liability, proper cost, claim, action, demand or
         expense (including, but not limited to, all proper costs, charges and
         expenses paid or incurred in disputing or defending any of the
         foregoing) that any of them may incur or that may be made against any
         of them arising out of or in relation to or in connection with, its
         appointment or the exercise of its functions under this deed.

7.5      Continuing Effect: Sub-clauses 7.3 and 7.4 shall continue in full force
         and effect as regards the Trustee even if it no longer is Trustee.

7.6      Cost Allocation: The Trustee shall be entitled in its absolute
         discretion to determine in respect of which Series of Notes any costs,
         charges, liabilities and expenses incurred under this Trust Deed have
         been incurred or to allocate any such costs, charges, liabilities and
         expenses between the Notes of any two or more Series.

7.7      Auditors' Reports: The Trustee may rely on reports from the Auditors in
         accordance with the Conditions or this Trust Deed whether or not any
         such report or engagement letter or other document entered into by the
         Trustee and the Auditors in connection therewith contains any limit on
         the liability of the Auditors.

8        Provisions supplemental to the Trustee Act 1925 and the Trustee Act
         2000

8.1      Advice: The Trustee may act on the opinion or advice of, or information
         obtained from, any expert and shall not be responsible to anyone for
         any loss occasioned by so acting provided it shall have exercised
         proper care in the selection of such person. Any such opinion, advice
         or information may be sent or obtained by letter, telex or fax and the
         Trustee shall not be liable to anyone for acting in good faith on any
         opinion, advice or information purporting to be conveyed by such means
         even if it contains some error or is not authentic.

8.2      Resolutions of Noteholders: The Trustee shall not be responsible for
         having acted in good faith on a resolution purporting to have been
         passed at a meeting of Noteholders in respect of which minutes have
         been made and signed even if it is later found that there was a defect
         in the constitution of the meeting or the passing of the resolution or
         that the resolution was not valid or binding on the Noteholders or
         Couponholders.

8.3      Certificate Signed by Directors: If the Trustee, in the exercise of its
         functions, requires to be satisfied or to have information as to any
         fact or the expediency of any act, it may call for and accept as
         sufficient evidence of that fact or the expediency of that act a
         certificate signed by any two Directors of the Relevant Issuer as to
         that fact or to the effect that, in their opinion, that act is
         expedient and the Trustee need not call for further evidence and shall
         not be responsible for any loss occasioned by acting on such a
         certificate.

8.4      Deposit of Documents: The Trustee may appoint as custodian, on any
         terms, any bank or entity whose business includes the safe custody of
         documents or any lawyer or firm of lawyers believed by it to be of good
         repute and may deposit this Trust Deed and any other

                                      -16-

<PAGE>

         documents with such custodian and pay all sums due in respect thereof.
         The Trustee is not obliged to appoint a custodian if the Trustee
         invests in securities payable to bearer.

8.5      Discretion: The Trustee shall have absolute and uncontrolled discretion
         as to the exercise of its functions and subject to Clause 9 shall not
         be responsible for any loss, liability, cost, claim, action, demand,
         expense or inconvenience that may result from their exercise or
         non-exercise.

8.6      Agents: Whenever it considers it expedient in the interests of the
         Noteholders, the Trustee may, in the conduct of its trust business,
         instead of acting personally, employ and pay an agent selected by it,
         whether or not a lawyer or other professional person, to transact or
         conduct, or concur in transacting or conducting, any business and to do
         or concur in doing all acts required to be done by the Trustee
         (including the receipt and payment of money).

8.7      Delegation: Whenever it considers it expedient in the interests of the
         Noteholders, the Trustee may delegate to any person on any terms
         (including power to sub-delegate) all or any of its functions.

8.8      Nominees: In relation to any asset held by it under this Trust Deed,
         the Trustee may appoint any person to act as its nominee on any terms.

8.9      Forged Notes: The Trustee shall not be liable to the Relevant Issuer or
         any Noteholder or Couponholder by reason of having accepted as valid or
         not having rejected any Note, Certificate, Receipt, Coupon or Talon
         purporting to be such and later found to be forged or not authentic.

8.10     Confidentiality: Unless ordered to do so by a court of competent
         jurisdiction, the Trustee shall not be required to disclose to any
         Noteholder or Couponholder any confidential financial or other
         information made available to the Trustee by any Issuer and no
         Noteholder or Couponholder shall be entitled to take any action to
         obtain such information from the Trustee.

8.11     Determinations Conclusive: As between itself and the Noteholders and
         Couponholders, the Trustee may determine all questions and doubts
         arising in relation to any of the provisions of this Trust Deed. Such
         determinations, whether made upon such a question actually raised or
         implied in the acts or proceedings of the Trustee, shall be conclusive
         and shall bind the Trustee, the Noteholders and the Couponholders.

8.12     Currency Conversion: Where it is necessary or desirable to convert any
         sum from one currency to another, it shall (unless otherwise provided
         hereby or required by law) be converted at such rate or rates, in
         accordance with such method and as at such date as may reasonably be
         specified by the Trustee having consulted the Relevant Issuer (if the
         Trustee reasonably believes such consultation to be in the interests of
         the Noteholders) but having regard to current rates of exchange, if
         available. Any rate, method and date so specified shall be binding on
         the Relevant Issuer, the Noteholders and the Couponholders.

8.13     Events of Default: The Trustee may determine whether or not an Event of
         Default or Potential Event of Default is in its opinion capable of
         remedy and/or materially prejudicial to the interests of the
         Noteholders. Any such determination shall be conclusive and binding on
         the Relevant Issuer, the Noteholders and the Couponholders.

8.14     Payment for and Delivery of Notes: The Trustee shall not be responsible
         for the receipt or application by the Relevant Issuer of the proceeds
         of the issue of the Notes, any exchange of Notes or the delivery of
         Notes to the persons entitled to them.

                                      -17-

<PAGE>

8.15     Legal Opinions: The Trustee shall not be responsible to any person for
         failing to request, require or receive any legal opinion relating to
         any Notes or for checking or commenting upon the content of any such
         legal opinion.

8.16     Notes Held by the Issuer etc.: In the absence of knowledge or express
         notice to the contrary, the Trustee may assume without enquiry (other
         than requesting a certificate under Clause 6.17) that no Notes are for
         the time being held by or on behalf of the Relevant Issuer or any of
         its Subsidiaries.

8.17     Programme Limit: The Trustee shall not be concerned, and need not
         enquire, as to whether or not any Notes are issued in breach of the
         Programme Limit.

8.18     Consent or Approval: Any consent or approval given by the Trustee for
         the purposes of this Trust Deed may be given on such terms and subject
         to such conditions (if any) as the Trustee thinks fit.

8.19     Recitals: With the exception of Recital (B), the Trustee assumes no
         responsibility for the correctness of the recitals to this Trust Deed,
         which shall be taken as statements of each of the Issuers, and shall
         not by the execution of this Trust Deed or any Supplemental Trust Deed
         be deemed to make any representation as to, the adequacy, sufficiency,
         validity or enforceability of this Trust Deed or any Supplemental Trust
         Deed.

8.20     Apportionment: The Trustee may apportion amounts due to it under Clause
         5.1 of this Trust Deed between Notes of different Series as it thinks
         fit.

8.21     Trustee to assume Performance: The Trustee shall not be bound to give
         notice to any person of the execution of any documents comprised in
         these presents or to take any steps to ascertain whether any Event of
         Default, Potential Event of Default, Restructuring Event, Potential
         Restructuring Event (as defined in Clause 6.25) or Negative Rating
         Event has happened and, until it shall have actual knowledge or express
         notice to the contrary, the Trustee shall be entitled to assume that no
         Event of Default, Potential Event of Default, Restructuring Event,
         Potential Restructuring Event (as defined in Clause 6.25) or Negative
         Rating Event has happened and that the Relevant Issuer is observing and
         performing all its obligations under this Trust Deed, the Notes, the
         Receipts, the Coupons and the Talons.

8.22     Responsibility for agents etc.: If the Trustee exercises proper care in
         selecting any custodian, agent, delegate or nominee appointed under
         this clause (an "Appointee"), it will not have any obligation to
         supervise the Appointee or be responsible for any loss, liability,
         cost, claim, action, demand or expense incurred by reason of the
         Appointee's misconduct or default or, where sub-delegation is
         permissible in terms of this Trust Deed, the misconduct or default of
         any sub-delegate. The Trustee shall, as soon as possible after the
         appointment or the removal of any Appointee or the extension or
         termination of any such appointment give written notice thereof to each
         of the Issuers.

8.23     Trustee Act 2000: To the extent that its application can be excluded,
         Section 1 of the Trustee Act 2000 shall not apply to the trust
         constituted by this Trust Deed or any deed supplemental to it.

9        Trustee liable for negligence

         If the Trustee fails to show the degree of care and diligence required
         of it as trustee having regard to the provisions of the Trust Deed
         conferring on it powers, duties and discretions, nothing in this Trust
         Deed shall relieve or indemnify it from or against any liability that

                                      -18-

<PAGE>

         would otherwise attach to it in respect of any negligence, default,
         breach of duty or breach of trust of which it may be guilty.

10       Waiver and proof of default

10.1     Waiver: The Trustee may, without the consent of the Noteholders or
         Couponholders and without prejudice to its rights in respect of any
         subsequent breach, from time to time and at any time, if in its opinion
         the interests of the Noteholders will not be materially prejudiced
         thereby, waive or authorise, on such terms as seem expedient to it, any
         breach or proposed breach by the any of the Issuers of this Trust Deed
         or the Conditions or determine that an Event of Default or Potential
         Event of Default shall not be treated as such provided that the Trustee
         shall not do so in contravention of an express direction given by an
         Extraordinary Resolution or a request made pursuant to Condition 10. No
         such direction or request shall affect a previous waiver, authorisation
         or determination. Any such waiver, authorisation or determination shall
         be binding on the Noteholders and the Couponholders and, if the Trustee
         so requires, shall be notified to the Noteholders as soon as
         practicable.

10.2     Proof of Default: Proof that the Relevant Issuer has failed to pay a
         sum due to the holder of any one Note, Receipt or Coupon shall (unless
         the contrary be proved) be sufficient evidence that it has made the
         same default as regards all other Notes, Receipts or Coupons that are
         then payable.

11       Trustee not precluded from entering into contracts

         The Trustee and any other person, whether or not acting for itself, may
         acquire, hold or dispose of any Note, Receipt, Coupon, Talon or other
         security (or any interest therein) of any Issuer or any other person,
         may enter into or be interested in any contract or transaction with any
         such person and may act on, or as depositary or agent for, any
         committee or body of holders of any securities of any such person in
         each case with the same rights as it would have had if the Trustee were
         not acting as Trustee and need not account for any profit.

12       Modification and Substitution

12.1     Modification: The Trustee may agree without the consent of the
         Noteholders or Couponholders to any modification to this Trust Deed
         which is of a formal, minor or technical nature or to correct a
         manifest error. The Trustee may also so agree to any modification to
         this Trust Deed that is in its opinion not materially prejudicial to
         the interests of the Noteholders, but subject to the provisions of
         Clause 12.2 such power does not extend to any such modification as is
         mentioned in paragraphs 2.2 and 2.8 of Schedule 3.

12.2     Substitution:

         12.2.1   The Trustee may, without the consent of the Noteholders or
                  Couponholders, agree to the substitution of any company (the
                  "Substituted Obligor") in place of the Relevant Issuer (or of
                  any previous substitute under this sub-Clause) as the
                  principal debtor under this Trust Deed, the Notes, the
                  Receipts, the Coupons and the Talons provided that:

                  (i)  a deed is executed or undertaking given by the
                       Substituted Obligor to the Trustee, in form and manner
                       satisfactory to the Trustee, agreeing to be

                                      -19-

<PAGE>

                  bound by this Trust Deed, the Notes, the Receipts, the Coupons
                  and the Talons (with consequential amendments as the Trustee
                  may deem appropriate) as if the Substituted Obligor had been
                  named in this Trust Deed, the Notes, the Certificates, the
                  Receipts, the Coupons and the Talons as the principal debtor
                  in place of the Relevant Issuer;

            (ii)  if the Substituted Obligor is subject generally to the taxing
                  jurisdiction of a territory or any authority of or in that
                  territory with power to tax (the "Substituted Territory")
                  other than the territory to the taxing jurisdiction of which
                  (or to any such authority of or in which) the Relevant Issuer
                  is subject generally (the "Issuer's Territory"), the
                  Substituted Obligor shall (unless the Trustee otherwise
                  agrees) give to the Trustee an undertaking satisfactory to the
                  Trustee in terms corresponding to Condition 8 with the
                  substitution for the references in that Condition to the
                  Issuer's Territory of references to the Substituted Territory,
                  such deed or undertaking also (where applicable) to modify
                  Condition 6(c) so that such Condition shall make reference to
                  the other or additional territory or any political
                  sub-division thereof and any authority therein or thereof
                  having power to tax whereupon the Trust Deed, the Notes, the
                  Certificates, the Receipts, the Coupons and the Talons shall
                  be read accordingly;

            (iii) if any two Directors of the Substituted Obligor certify that
                  it will be solvent immediately after such substitution, the
                  Trustee need not have regard to the Substituted Obligor's
                  financial condition, profits or prospects or compare them with
                  those of the Relevant Issuer;

            (iv)  the Relevant Issuer and the Substituted Obligor comply with
                  such other requirements as the Trustee may direct in the
                  interests of the Noteholders; and

            (v)   (unless the Relevant Issuer's successor in business is the
                  Substituted Obligor) the obligations of the Substituted
                  Obligor as the principal debtor under this Trust Deed, the
                  Notes and the Coupons are guaranteed by the Relevant Issuer to
                  the Trustee's satisfaction.

    12.2.2  Release of Substituted Issuer: An agreement by the Trustee
            pursuant to sub-Clause 12.2 shall, if so expressed, release the
            Relevant Issuer (or a previous substitute) from any or all of its
            obligations under this Trust Deed, the Notes, the Receipts, the
            Coupons and the Talons. Notice of the substitution shall be given to
            the Noteholders within 14 days of the execution of such documents
            and compliance with such requirements.

    12.2.3  Completion of Substitution: On completion of the formalities set
            out in sub-Clause 12.2, the Substituted Obligor shall be deemed to
            be named in this Trust Deed, the Notes, the Certificates, the
            Receipts, the Coupons and the Talons as the principal debtor in
            place of the Relevant Issuer (or of any previous substitute) and
            this Trust Deed, the Notes, the Certificates, the Receipts, the
            Coupons and the Talons shall be deemed to be amended as necessary to
            give effect to the substitution.

                                      -20-

<PAGE>

13       Appointment, Retirement and Removal of the Trustee

13.1     Appointment: The Relevant Issuer has the power of appointing new
         trustees but no-one may be so appointed unless previously approved by
         an Extraordinary Resolution. A trust corporation shall at all times be
         a Trustee and may be the sole Trustee. Any appointment of a new Trustee
         shall be notified by the Relevant Issuer to the Noteholders as soon as
         practicable.

13.2     Retirement and Removal: Any Trustee may retire at any time on giving at
         least 3 months' written notice to the Relevant Issuer without giving
         any reason or being responsible for any costs occasioned by such
         retirement and the Noteholders may by Extraordinary Resolution remove
         any Trustee provided that the retirement or removal of a sole trust
         corporation shall not be effective until a trust corporation is
         appointed as successor Trustee. If a sole trust corporation gives
         notice of retirement or an Extraordinary Resolution is passed for its
         removal, it shall use all reasonable endeavours to procure that another
         trust corporation be appointed as Trustee.

13.3     Co-Trustees: The Trustee may, despite sub-Clause 13.1, by written
         notice to each of the Issuers appoint anyone to act as an additional
         Trustee jointly with the Trustee:

         13.3.1  if the Trustee considers the appointment to be in the interests
                 of the Noteholders and/or the Couponholders;

         13.3.2  to conform with a legal requirement, restriction or condition
                 in a jurisdiction in which a particular act is to be performed;
                 or

         13.3.3  to obtain a judgment or to enforce a judgment or any provision
                 of this Trust Deed in any jurisdiction.

         Subject to the provisions of this Trust Deed the Trustee may confer on
         any person so appointed such functions as it thinks fit. The Trustee
         may by written notice to the Relevant Issuer and that person so remove
         that person. At the Trustee's request, the Relevant Issuer shall
         forthwith do all things as may be required to perfect such appointment
         or removal and it irrevocably appoints the Trustee as its attorney in
         its name and on its behalf to do so.

13.4     Competence of a Majority of Trustees: If there are more than two
         Trustees the majority of them shall be competent to perform the
         Trustee's functions provided the majority includes a trust corporation.

14       Notes held in Clearing Systems and Couponholders

14.1     Notes Held in Clearing Systems: So long as any Global Note is, or any
         Notes represented by a Global Certificate are, held on behalf of a
         clearing system, in considering the interests of Noteholders, the
         Trustee may have regard to any information provided to it by such
         clearing system or its operator as to the identity (either individually
         or by category) of its accountholders or participants with entitlements
         to any such Global Note or the Registered Notes and may consider such
         interests on the basis that such accountholders or participants were
         the holder(s) thereof.

14.2     Couponholders: No notices need be given to Couponholders. They shall be
         deemed to have notice of the contents of any notice given to
         Noteholders. Even if it has express notice to the contrary, in
         exercising any of its functions by reference to the interests of the

                                      -21-

<PAGE>

         Noteholders, the Trustee shall assume that the holder of each Note is
         the holder of all Receipts, Coupons and Talons relating to it.

15       Currency Indemnity

15.1     Currency of Account and Payment: The Contractual Currency is the sole
         currency of account and payment for all sums payable by the Relevant
         Issuer under or in connection with this Trust Deed, the Notes, the
         Receipts and the Coupons, including damages.

15.2     Extent of Discharge: An amount received or recovered in a currency
         other than the Contractual Currency (whether as a result of, or of the
         enforcement of, a judgment or order of a court of any jurisdiction, in
         the winding-up or dissolution of the Relevant Issuer or otherwise), by
         the Trustee or any Noteholder or Couponholder in respect of any sum
         expressed to be due to it from the Relevant Issuer shall only discharge
         the Relevant Issuer to the extent of the Contractual Currency amount
         that the recipient is able to purchase with the amount so received or
         recovered in that other currency on the date of that receipt or
         recovery (or, if it is not practicable to make that purchase on that
         date, on the first date on which it is practicable to do so).

15.3     Indemnity: If that Contractual Currency amount is less than the
         Contractual Currency amount expressed to be due to the recipient under
         this Trust Deed, the Notes, the Receipts or the Coupons, the Relevant
         Issuer shall indemnify it against any loss sustained by it as a result.
         In any event, the Relevant Issuer shall indemnify the recipient against
         the cost of making any such purchase.

15.4     Indemnity Separate: The indemnities in this Clause 15 and in sub-Clause
         7.4 constitute separate and independent obligations from the other
         obligations in this Trust Deed, shall give rise to a separate and
         independent cause of action, shall apply irrespective of any indulgence
         granted by the Trustee and/or any Noteholder or Couponholder and shall
         continue in full force and effect despite any judgment, order, claim or
         proof for a liquidated amount in respect of any sum due under this
         Trust Deed, the Notes, the Receipts and/or the Coupons or any other
         judgment or order.

16       Communications

16.1     Method: Each communication under this Trust Deed shall be made by
         telex, fax or otherwise in writing. Each communication or document to
         be delivered to any party under this Trust Deed shall be sent to that
         party at the telex, fax number or address, and marked for the attention
         of the person (if any), from time to time designated by that party to
         the other party for the purpose of this Trust Deed. The initial
         telephone number, telex number, fax number, address and person so
         designated by the parties under this Trust Deed are set out in the
         Procedures Memorandum.

16.2     Deemed Receipt: Any communication from any party to the other under
         this Trust Deed shall be effective, (if by telex) when a confirmed
         answerback is received at the end of the transmission, (if by fax) when
         good receipt is confirmed by the recipient following enquiry by the
         sender and (if in writing) when delivered, except that a communication
         received outside normal business hours shall be deemed to be received
         on the next business day in the city in which the recipient is located.

                                      -22-

<PAGE>

17       Governing Law and Jurisdiction

17.1     Governing Law: This Trust Deed shall be governed by and construed in
         accordance with English law.

17.2     Jurisdiction: The courts of England are to have jurisdiction to settle
         any disputes that may arise out of or in connection with this Trust
         Deed, the Notes, the Receipts, the Coupons or the Talons and
         accordingly any legal action or proceedings arising out of or in
         connection with this Trust Deed, the Notes, the Receipts, the Coupons
         or the Talons ("Proceedings") may be brought in such courts. Each of
         the Issuers irrevocably submits to the jurisdiction of such courts and
         waives any objections to Proceedings in such courts on the ground of
         venue or on the ground that the Proceedings have been brought in an
         inconvenient forum. This submission is for the benefit of each of the
         Trustee, the Noteholders and the Couponholders and shall not limit the
         right of any of them to take Proceedings in any other court of
         competent jurisdiction nor shall the taking of Proceedings in any one
         or more jurisdictions preclude the taking of Proceedings in any other
         jurisdiction (whether concurrently or not).

17.3     Service of Process: Scottish Power plc shall procure that its London
         office, whose address is at 5th Floor, 30 Cannon Street, London EC4M
         6XH, will act as its agent for service of process in any Proceedings in
         England. Scottish Power UK plc shall procure that Scottish Power plc's
         London office will act as its agent for service of process in any
         Proceedings in England. Such service shall be deemed completed on
         delivery to such process agent (whether or not it is forwarded to and
         received by the relevant Issuer). If for any reason such process agent
         ceases to be able to act as such or no longer has an address in England
         each Issuer irrevocably agrees to appoint a substitute process agent
         acceptable to the Trustee and shall immediately notify the Trustee of
         such appointment. Nothing shall affect the right to serve process in
         any other manner permitted by law.

                                      -23-

<PAGE>

                                   SCHEDULE 1
                                     Part A
                          Form of Temporary Global Note

                               SCOTTISH POWER plc

             (incorporated in Scotland with limited liability under
                            registered number 193794)

                              SCOTTISH POWER UK plc
             (incorporated in Scotland with limited liability under
                            registered number 117120)

                             DEBT ISSUANCE PROGRAMME

                              TEMPORARY GLOBAL NOTE

                          Temporary Global Note No. [.]

This temporary Global Note is issued in respect of the Notes (the "Notes") of
the Tranche and Series specified in the Second Schedule hereto of [Scottish
Power plc/Scottish Power UK plc] (the "Issuer").

Interpretation and Definitions

References in this temporary Global Note to the "Conditions" are to the Terms
and Conditions applicable to the Notes (which are in the form set out in
Schedule 2 Part C to the Trust Deed (as amended or supplemented as at the Issue
Date, the "Trust Deed") dated 20 December 2001 between the Issuer, the other
issuer named therein and The Law Debenture Trust Corporation p.l.c. as trustee,
as such form is supplemented and/or modified and/or superseded by the provisions
of this temporary Global Note (including the supplemental definitions and any
modifications or additions set out in the Second Schedule hereto), which in the
event of any conflict shall prevail). Other capitalised terms used in this
temporary Global Note shall have the meanings given to them in the Conditions or
the Trust Deed. If the Second Schedule hereto specifies that the applicable
TEFRA exemption is either "C Rules" or "not applicable", this temporary Global
Note is a "C Rules Note", otherwise this temporary Global Note is a "D Rules
Note".

Aggregate Principal Amount

The aggregate principal amount from time to time of this temporary Global Note
shall be an amount equal to the aggregate principal amount of the Notes as shall
be shown by the latest entry in the fourth column of the First Schedule hereto,
which shall be completed by or on behalf of the Issuing and Paying Agent upon
(i) the issue of Notes represented hereby, (ii) the exchange of the whole or a
part of this temporary Global Note for a corresponding interest in a permanent
Global Note or, as the case may be, for Definitive Notes or Registered Notes,
(iii) the redemption or purchase and cancellation of Notes represented hereby
and/or (iv) in the case of Partly-paid Notes, the forfeiture of Notes
represented hereby in accordance with the Conditions relating to such
Partly-paid Notes, all as described below.

Promise to Pay

Subject as provided herein, the Issuer, for value received, promises to pay to
the bearer of this temporary Global Note, upon presentation and (when no further
payment is due in respect of this temporary Global Note) surrender of this
temporary Global Note, on the Maturity Date (or on such

                                      -24-

<PAGE>

earlier date as the Redemption Amount may become repayable in accordance with
the Conditions) the Redemption Amount in respect of the aggregate principal
amount of Notes represented by this temporary Global Note and (unless this
temporary Global Note does not bear interest) to pay interest in respect of such
aggregate principal amount of Notes from the Interest Commencement Date in
arrear at the rates, in the amounts and on the dates for payment provided for in
the Conditions together with such other sums and additional amounts (if any) as
may be payable under the Conditions, in accordance with the Conditions.

Exchange

If this temporary Global Note is an Exchangeable Bearer Note, this temporary
Global Note may be exchanged in whole or from time to time in part for one or
more Registered Notes in accordance with the Conditions on or after the Issue
Date but before the Exchange Date referred to below by its presentation to the
Issuing and Paying Agent. On or after the Exchange Date, the outstanding
principal amount of this temporary Global Note may be exchanged for Definitive
Notes and Registered Notes in accordance with the next paragraph.

Subject as provided in the Conditions applicable to Partly-paid Notes, on or
after the first day following the expiry of 40 days after the Issue Date (the
"Exchange Date"), this temporary Global Note may be exchanged (free of charge to
the holder) in whole or from time to time in part by its presentation and, on
exchange in full, surrender to or to the order of the Issuing and Paying Agent
for interests in a permanent Global Note or, if so specified in the Second
Schedule hereto, for Definitive Notes and (if this temporary Global Note is an
Exchangeable Bearer Note), in each case, for Registered Notes in an aggregate
principal amount equal to the principal amount of this temporary Global Note
submitted for exchange provided that, in the case of any part of this temporary
Global Note submitted for exchange for a permanent Global Note or Definitive
Notes, there shall have been Certification with respect to such principal amount
submitted for such exchange dated no earlier than the Exchange Date.

"Certification" means the presentation to the Issuing and Paying Agent of a
certificate or certificates with respect to one or more interests in this
temporary Global Note, signed by Euroclear or Clearstream, Luxembourg,
substantially to the effect set out in Schedule 4 to the Agency Agreement to the
effect that it has received a certificate or certificates substantially to the
effect set out in Schedule 3 to the Agency Agreement with respect thereto and
that no contrary advice as to the contents thereof has been received by
Euroclear or Clearstream, Luxembourg, as the case may be.

Upon the whole or a part of this temporary Global Note being exchanged for a
permanent Global Note, such permanent Global Note shall be exchangeable in
accordance with its terms for Definitive Notes or Registered Notes.

The Definitive Notes or the Certificates representing the Registered Notes for
which this temporary Global Note or a permanent Global Note may be exchangeable
shall be duly executed and authenticated, shall, in the case of Definitive
Notes, have attached to them all Coupons (and, where appropriate, Talons) in
respect of interest, and all Receipts in respect of Instalment Amounts, that
have not already been paid on this temporary Global Note or the permanent Global
Note, as the case may be, shall be security printed or, in the case of
Certificates, printed in accordance with applicable legal and stock exchange
requirements and shall be substantially in the form set out in the Schedules to
the Trust Deed as supplemented and/or modified and/or superseded by the terms of
the Second Schedule hereto. Certificates issued upon exchange for Registered
Notes shall not be Global Certificates unless the holder so requests and
certifies to the

                                      -25-

<PAGE>

Issuing and Paying Agent that it is, or is acting as a nominee for, Clearstream,
Luxembourg, Euroclear and/or any other clearing system.

On any exchange of a part of this temporary Global Note for an equivalent
interest in a permanent Global Note, for Definitive Notes or for Registered
Notes, as the case may be, the portion of the principal amount hereof so
exchanged shall be endorsed by or on behalf of the Issuing and Paying Agent in
Part I of the First Schedule hereto, whereupon the principal amount hereof shall
be reduced for all purposes by the amount so exchanged and endorsed.

Benefit of Conditions

Except as otherwise specified herein, this temporary Global Note is subject to
the Conditions and the Trust Deed and, until the whole of this temporary Global
Note is exchanged for equivalent interests in a permanent Global Note, for
Definitive Notes or for Registered Notes, as the case may be, the holder of this
temporary Global Note shall in all respects be entitled to the same benefits as
if it were the holder of the permanent Global Note (or the relevant part of it)
or the Definitive Notes, as the case may be, for which it may be exchanged as if
such permanent Global Note or Definitive Notes had been issued on the Issue
Date.

Payments

No person shall be entitled to receive any payment in respect of the Notes
represented by this temporary Global Note that falls due on or after the
Exchange Date unless, upon due presentation of this temporary Global Note for
exchange, delivery of (or, in the case of a subsequent exchange, due endorsement
of) a permanent Global Note or delivery of Definitive Notes or Certificates, as
the case may be, is improperly withheld or refused by or on behalf of the
Issuer.

Payments due before the Exchange Date shall only be made in relation to such
principal amount of this temporary Global Note with respect to which there shall
have been Certification dated no earlier than such due date for payment.

Any payments that are made in respect of this temporary Global Note shall be
made to its holder against presentation and (if no further payment falls to be
made on it) surrender of it at the specified office of the Issuing and Paying
Agent or of any other Paying Agent provided for in the Conditions. If any
payment in full of principal is made in respect of any Note represented by this
temporary Global Note, the portion of this temporary Global Note representing
such Note shall be cancelled and the amount so cancelled shall be endorsed by or
on behalf of the Issuing and Paying Agent in the First Schedule hereto (such
endorsement being prima facie evidence that the payment in question has been
made) whereupon the principal amount hereof shall be reduced for all purposes by
the amount so cancelled and endorsed. If any other payments are made in respect
of the Notes represented by this temporary Global Note, a record of each such
payment shall be endorsed by or on behalf of the Issuing and Paying Agent on an
additional schedule hereto (such endorsement being prima facie evidence that the
payment in question has been made).

Cancellation

Cancellation of any Note represented by this temporary Global Note that is
required by the Conditions to be cancelled (other than upon its redemption)
shall be effected by reduction in the principal amount of this temporary Global
Note representing such Note on its presentation to or to the order of the
Issuing and Paying Agent for endorsement in the First Schedule hereto, whereupon
the principal amount hereof shall be reduced for all purposes by the amount so
cancelled and endorsed.

                                      -26-

<PAGE>

Notices

Notices required to be given in respect of the Notes represented by this
temporary Global Note may be given by their being delivered (so long as this
temporary Global Note is held on behalf of Euroclear and Clearstream, Luxembourg
or any other clearing system) to Euroclear, Clearstream, Luxembourg or such
other clearing system, as the case may be, or otherwise to the holder of this
temporary Global Note, rather than by publication as required by the Conditions.

No provision of this temporary Global Note shall alter or impair the obligation
of the Issuer to pay the principal and premium of and interest on the Notes when
due in accordance with the Conditions.

This temporary Global Note shall not be valid or become obligatory for any
purpose until authenticated by or on behalf of the Issuing and Paying Agent.

This temporary Global Note shall be governed by and construed in accordance with
English law.

                                      -27-

<PAGE>

In witness whereof the Issuer has caused this temporary Global Note to be duly
signed on its behalf.

Dated as of the Issue Date.

[SCOTTISH POWER plc/SCOTTISH POWER UK plc]

By:


CERTIFICATE OF AUTHENTICATION

This temporary Global Note is authenticated
by or on behalf of the Issuing and Paying Agent.

CITIBANK, N.A.
as Issuing and Paying Agent

By:


Authorised Signatory
For the purposes of authentication only.
Without recourse, warranty or liability.

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

                                      -28-

<PAGE>

                               THE FIRST SCHEDULE

       Principal amount of Notes represented by this temporary Global Note

The following (i) issue of Notes initially represented by this temporary Global
Note, (ii) exchanges of the whole or a part of this temporary Global Note for
interests in a permanent Global Note, for Definitive Notes or for Registered
Notes and/or (iii) cancellations or forfeitures of interests in this temporary
Global Note have been made, resulting in the principal amount of this temporary
Global Note specified in the latest entry in the fourth column below:

<TABLE>
<CAPTION>
Date                     Amount of              Reason for            Principal amount     Notation made
                         decrease in            decrease in           of this temporary    by or on behalf
                         principal amount       principal amount      Global Note on       of the Issuing
                         of this temporary      of this temporary     issue or             and Paying
                         Global Note            Global Note           following such       Agent
                                                (exchange,            decrease
                                                cancellation or
                                                forfeiture)
<S>                      <C>                    <C>                    <C>                 <C>
Issue Date               not applicable         not applicable
</TABLE>


[Insert the provisions of the relevant Pricing Supplement that relate to the
Conditions or the Global Notes as the Second Schedule]

                                      -29-

<PAGE>

                                   SCHEDULE 1
                                     Part B
                          Form of Permanent Global Note

                               SCOTTISH POWER plc

             (incorporated in Scotland with limited liability under
                            registered number 193794)

                              SCOTTISH POWER UK plc

             (incorporated in Scotland with limited liability under
                            registered number 117120)

                             DEBT ISSUANCE PROGRAMME

                          Permanent Global Note No. [.]

This permanent Global Note is issued in respect of the Notes (the "Notes") of
the Tranche(s) and Series specified in the Third Schedule hereto of [Scottish
Power plc/Scottish Power UK plc] (the "Issuer").

Interpretation and Definitions

References in this permanent Global Note to the "Conditions" are to the Terms
and Conditions applicable to the Notes (which are in the form set out in
Schedule 2 Part C to the Trust Deed (as amended or supplemented as at the Issue
Date, the "Trust Deed") dated 20 December 2001 between the Issuer, the other
issuer named therein and The Law Debenture Trust Corporation p.l.c. as trustee,
as such form is supplemented and/or modified and/or superseded by the provisions
of this permanent Global Note (including the supplemental definitions and any
modifications or additions set out in the Third Schedule hereto), which in the
event of any conflict shall prevail). Other capitalised terms used in this
permanent Global Note shall have the meanings given to them in the Conditions or
the Trust Deed.

Aggregate Principal Amount

The aggregate principal amount from time to time of this permanent Global Note
shall be an amount equal to the aggregate principal amount of the Notes as shall
be shown by the latest entry in the fourth column of the First Schedule hereto,
which shall be completed by or on behalf of the Issuing and Paying Agent upon
(i) the exchange of the whole or a part of the temporary Global Note initially
representing the Notes for a corresponding interest herein (in the case of Notes
represented by a temporary Global Note upon issue), (ii) the issue of the Notes
represented hereby (in the case of Notes represented by this permanent Global
Note upon issue), (iii) the exchange of the whole or, where the limited
circumstances so permit, a part of this permanent Global Note for Definitive
Notes or Registered Notes, (iv) the redemption or purchase and cancellation of
Notes represented hereby and/or (v) in the case of Partly-paid Notes, the
forfeiture of Notes represented hereby in accordance with the Conditions
relating to such Partly-paid Notes, all as described below.

Promise to Pay

Subject as provided herein, the Issuer, for value received, hereby promises to
pay to the bearer of this permanent Global Note, upon presentation and (when no
further payment is due in respect of this permanent Global Note) surrender of
this permanent Global Note, on the Maturity Date (or on such earlier date as the
Redemption Amount may become repayable in accordance with the

                                      -30-

<PAGE>

Conditions) the Redemption Amount in respect of the aggregate principal amount
of Notes represented by this permanent Global Note and (unless this permanent
Global Note does not bear interest) to pay interest in respect of such aggregate
principal amount of Notes from the Interest Commencement Date in arrear at the
rates, in the amounts and on the dates for payment provided for in the
Conditions together with such other sums and additional amounts (if any) as may
be payable under the Conditions, in accordance with the Conditions.

Exchange

This permanent Global Note is exchangeable (free of charge to the holder) on or
after the Exchange Date in whole but not, except as provided in the next
paragraph, in part for the Definitive Notes or (if this permanent Global Note is
an Exchangeable Bearer Note) Registered Notes represented by the Certificates
described below:

     (i)   by the Issuer giving notice to the Issuing and Paying Agent and the
           Noteholders of its intention to effect such exchange

     (ii)  if the Third Schedule hereto provides that this permanent Global Note
           is exchangeable for Definitive Notes at the request of the holder, by
           such holder giving notice to the Issuing and Paying Agent of its
           election for such exchange

     (iii) if this permanent Global Note is an Exchangeable Bearer Note, by the
           holder hereof giving notice to the Issuing and Paying Agent of its
           election to exchange the whole or a part of this permanent Global
           Note for Registered Notes or

     (iv)  otherwise, if this permanent Global Note is held on behalf of
           Euroclear or Clearstream, Luxembourg or any other clearing system (an
           "Alternative Clearing System") and any such clearing system is closed
           for business for a continuous period of 14 days (other than by reason
           of holidays, statutory or otherwise) or announces an intention
           permanently to cease business or does in fact do so.

This permanent Global Note is exchangeable in part (provided, however, that if
this permanent Global Note is held by or on behalf of Euroclear and/or
Clearstream, Luxembourg, the rules of Euroclear and/or Clearstream, Luxembourg,
as the case may be, so permit) (i) if this permanent Global Note is an
Exchangeable Bearer Note and the part hereof submitted for exchange is to be
exchanged for Registered Notes or (ii) if so provided, and in accordance with,
the Conditions relating to Partly-paid Notes.

"Exchange Date" means a day falling not less than 60 days, or in the case of an
exchange for Registered Notes 5 days, after that on which the notice requiring
exchange is given and on which banks are open for business in the city in which
the specified office of the Issuing and Paying Agent is located and, except in
the case of exchange pursuant to (iv) above, in the cities in which Euroclear
and Clearstream, Luxembourg or, if relevant, the Alternative Clearing System,
are located.

Subject as provided in the Conditions applicable to Partly-paid Notes, any such
exchange may be effected on or after an Exchange Date by the holder of this
permanent Global Note surrendering this permanent Global Note or, in the case of
a partial exchange, presenting it for endorsement to or to the order of the
Issuing and Paying Agent. In exchange for this permanent Global Note, or part
thereof to be exchanged, the Issuer shall deliver, or procure the delivery of,
duly executed and authenticated Definitive Notes and/or (if this permanent
Global Note is an Exchangeable Bearer

                                      -31-

<PAGE>

Note) Certificates in an aggregate principal amount equal to the principal
amount of this permanent Global Note submitted for exchange (if appropriate,
having attached to them all Coupons (and, where appropriate, Talons) in respect
of interest, and all Receipts in respect of Instalment Amounts, that have not
already been paid on this permanent Global Note), security printed or, in the
case of Certificates, printed in accordance with any applicable legal and stock
exchange requirements and substantially in the form set out in Schedule 2 to the
Trust Deed as supplemented and/or modified and/or superseded by the terms of the
Third Schedule hereto. Certificates issued upon exchange for Registered Notes
shall not be Global Certificates unless the holder so requests and certifies to
the Issuing and Paying Agent that it is, or is acting as a nominee for,
Clearstream, Luxembourg, Euroclear and/or an Alternative Clearing System.

On any exchange of a part of this permanent Global Note the portion of the
principal amount hereof so exchanged shall be endorsed by or on behalf of the
Issuing and Paying Agent in the First Schedule hereto, whereupon the principal
amount hereof shall be reduced for all purposes by the amount so exchanged and
endorsed.

Benefit of Conditions

Except as otherwise specified herein, this permanent Global Note is subject to
the Conditions and the Trust Deed and, until the whole of this permanent Global
Note is exchanged for Definitive Notes or Registered Notes, the holder of this
permanent Global Note shall in all respects be entitled to the same benefits as
if it were the holder of the Definitive Notes for which it may be exchanged and
as if such Definitive Notes had been issued on the Issue Date.

Payments

No person shall be entitled to receive any payment in respect of the Notes
represented by this permanent Global Note that falls due after an Exchange Date
for such Notes, unless upon due presentation of this permanent Global Note for
exchange, delivery of Definitive Notes or Certificates is improperly withheld or
refused by or on behalf of the Issuer or the Issuer does not perform or comply
with any one or more of what are expressed to be its obligations under any
Definitive Notes.

Payments in respect of this permanent Global Note shall be made to its holder
against presentation and (if no further payment falls to be made on it)
surrender of it at the specified office of the Issuing and Paying Agent or of
any other Paying Agent provided for in the Conditions. A record of each such
payment shall be endorsed on the First or Second Schedule hereto, as
appropriate, by the Issuing and Paying Agent or by the relevant Paying Agent,
for and on behalf of the Issuing and Paying Agent, which endorsement shall
(until the contrary is proved) be prima facie evidence that the payment in
question has been made.

Prescription

Claims in respect of principal and interest (as each is defined in the
Conditions) in respect of this permanent Global Note shall become void unless it
is presented for payment within a period of 10 years (in the case of principal)
and 5 years (in the case of interest) from the appropriate Relevant Date.

Meetings

The holder of this permanent Global Note shall be treated at any meeting of
Noteholders, as having one vote in respect of each principal amount of Notes
equal to the minimum Denomination of the Notes for which this permanent Global
Note may be exchanged.

                                      -32-

<PAGE>

Cancellation

Cancellation of any Note represented by this permanent Global Note that is
required by the Conditions to be cancelled (other than upon its redemption)
shall be effected by reduction in the principal amount of this permanent Global
Note representing such Note on its presentation to or to the order of the
Issuing and Paying Agent for endorsement in the First Schedule hereto, whereupon
the principal amount hereof shall be reduced for all purposes by the amount so
cancelled and endorsed.

Purchase

Notes may only be purchased by the Issuer or any of its subsidiaries if they are
purchased together with the right to receive all future payments of interest and
Instalment Amounts (if any) thereon.

Issuer's Options

Any option of the Issuer provided for in the Conditions shall be exercised by
the Issuer giving notice to the Noteholders within the time limits set out in
and containing the information required by the Conditions, except that the
notice shall not be required to contain the serial numbers of Notes drawn in the
case of a partial exercise of an option and accordingly no drawing of Notes
shall be required.

Noteholders' Options

Any option of the Noteholders provided for in the Conditions may be exercised by
the holder of this permanent Global Note giving notice to the Issuing and Paying
Agent within the time limits relating to the deposit of Notes with a Paying
Agent set out in the Conditions substantially in the form of the notice
available from any Paying Agent, except that the notice shall not be required to
contain the certificate numbers of the Notes in respect of which the option has
been exercised, and stating the principal amount of Notes in respect of which
the option is exercised and at the same time presenting this permanent Global
Note to the Issuing and Paying Agent, or to a Paying Agent acting on behalf of
the Issuing and Paying Agent, for notation accordingly in the Fourth Schedule
hereto.

Notices

Notices required to be given in respect of the Notes represented by this
permanent Global Note may be given by their being delivered (so long as this
permanent Global Note is held on behalf of Euroclear, Clearstream, Luxembourg or
any other clearing system) to Euroclear, Clearstream, Luxembourg or such other
clearing system, as the case may be, or otherwise to the holder of this
permanent Global Note, rather than by publication as required by the Conditions.

Negotiability

This permanent Global Note is a bearer document and negotiable and accordingly:

          (i)  is freely transferable by delivery and such transfer shall
               operate to confer upon the transferee all rights and benefits
               appertaining hereto and to bind the transferee with all
               obligations appertaining hereto pursuant to the Conditions

          (ii) the holder of this permanent Global Note is and shall be
               absolutely entitled as against all previous holders to receive
               all amounts by way of Redemption Amount interest or otherwise
               payable in respect of this permanent Global Note and the Issuer
               has waived against such holder and

                                      -33-

<PAGE>

           any previous holder of this permanent Global Note all rights of
           set-off or counterclaim that would or might otherwise be available to
           it in respect of the obligations evidenced by this Global Note and

     (iii) payment upon due presentation of this permanent Global Note as
           provided herein shall operate as a good discharge against such holder
           and all previous holders of this permanent Global Note.

No provision of this permanent Global Note shall alter or impair the obligation
of the Issuer to pay the principal and premium of and interest on the Notes when
due in accordance with the Conditions.

This permanent Global Note shall not be valid or become obligatory for any
purpose until authenticated by or on behalf of the Issuing and Paying Agent.

This permanent Global Note shall be governed by and construed in accordance with
English law.

                                      -34-

<PAGE>

In witness whereof the Issuer has caused this permanent Global Note to be duly
signed on its behalf.

Dated as of the Issue Date.

[SCOTTISH POWER plc/SCOTTISH POWER UK plc]

By:


CERTIFICATE OF AUTHENTICATION

This permanent Global Note is authenticated
by or on behalf of the Issuing and Paying Agent.

CITIBANK, N.A.

as Issuing and Paying Agent

By:

Authorised Signatory
For the purposes of authentication only.
Without recourse, warranty or liability.

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

                                      -35-

<PAGE>

                               THE FIRST SCHEDULE

       Principal amount of Notes represented by this permanent Global Note

The following (i) issues of Notes initially represented by this permanent Global
Note, (ii) exchanges of interests in a temporary Global Note for interests in
this permanent Global Note, (iii) exchanges of the whole or a part of this
permanent Global Note for Definitive Notes or for Registered Notes, (iv)
cancellations or forfeitures of interests in this permanent Global Note and/or
(v) payments of Redemption Amount in respect of this permanent Global Note have
been made, resulting in the principal amount of this permanent Global Note
specified in the latest entry in the fourth column:

<TABLE>
<CAPTION>
Date                  Amount of                Reason for              Principal amount     Notation made
                      increase/decrease        increase/decrease       of this permanent    by or on behalf
                      in principal             in principal            Global Note          of the Issuing
                      amount of this           amount of this          following such       and Paying
                      permanent Global         permanent Global        increase/decrease    Agent
                      Note                     Note (initial issue,
                                               exchange,
                                               cancellation,
                                               forfeiture or
                                               payment, stating
                                               amount of
                                               payment made)
<S>                   <C>                      <C>                      <C>                 <C>
</TABLE>

                                      -36-

<PAGE>

                               THE SECOND SCHEDULE

                              Payments of Interest

The following payments of interest or Interest Amount in respect of this
Permanent Global Note have been made:

<TABLE>
<CAPTION>
Due date of payment      Date of payment        Amount of interest       Notation made by or on
                                                                         behalf of the Issuing and
                                                                         Paying Agent
<S>                      <C>                    <C>                      <C>
</TABLE>


[Insert the provisions of the relevant Pricing Supplement that relate to the
Conditions or the Global Notes as the Third Schedule.]

                                      -37-

<PAGE>

                               THE FOURTH SCHEDULE

                         Exercise of Noteholders' Option

The following exercises of the option of the Noteholders provided for in the
Conditions have been made in respect of the stated principal amount of this
permanent Global Note:

<TABLE>
<CAPTION>
Date of exercise               Principal amount of       Date of which         Notation made by or
                               this permanent Global     exercise of such      on behalf of the
                               Note in respect of        option is effective   Issuing and Paying
                               which exercise is made                          Agent

<S>                            <C>                       <C>                   <C>
</TABLE>

                                      -38-

<PAGE>

                                   SCHEDULE 1
                                     Part C
                           Form of Global Certificate

                               SCOTTISH POWER plc

             (incorporated in Scotland with limited liability under
                            registered number 193794)

                              SCOTTISH POWER UK plc

             (incorporated in Scotland with limited liability under
                            registered number 117120)

                             DEBT ISSUANCE PROGRAMME

                               GLOBAL CERTIFICATE

                           Global Certificate No. [.]

Registered Holder:

Address of Registered Holder:

Principal amount of Notes
represented by this Global
Certificate:

This Global Certificate is issued in respect of the principal amount specified
above of the Notes (the "Notes") of the Tranche and Series specified in the
Schedule hereto of [Scottish Power plc/Scottish Power UK plc] (the "Issuer").
This Global Certificate certifies that the Registered Holder (as defined above)
is registered as the holder of such principal amount of the Notes at the date
hereof.

Interpretation and Definitions

References in this Global Certificate to the "Conditions" are to the Terms and
Conditions applicable to the Notes (which are in the form set out in Schedule 2
Part C to the Trust Deed (as amended or supplemented as at the Issue Date, the
"Trust Deed") dated 20 December 2001 between the Issuer, the other issuer named
therein and The Law Debenture Trust Corporation p.l.c. as trustee, as such form
is supplemented and/or modified and/or superseded by the provisions of this
Global Certificate (including the supplemental definitions and any modifications
or additions set out in the Schedule hereto), which in the event of any conflict
shall prevail). Other capitalised terms used in this Global Certificate shall
have the meanings given to them in the Conditions or the Trust Deed.

Promise to Pay

The Issuer, for value received, promises to pay to the holder of the Notes
represented by this Global Certificate upon presentation and (when no further
payment is due in respect of the Notes represented by this Global Certificate)
surrender of this Global Certificate on the Maturity Date (or on such earlier
date as the Redemption Amount may become repayable in accordance with the
Conditions) the Redemption Amount in respect of the Notes represented by this
Global Certificate and (unless the Notes represented by this Certificate do not
bear interest) to pay interest in respect of such Notes from the Interest
Commencement Date in arrear at the rates, in the amounts and on the dates for
payment provided for in the Conditions together with such other sums and

                                      -39-

<PAGE>

additional amounts (if any) as may be payable under the Conditions, in
accordance with the Conditions.

For the purposes of this Global Certificate, (a) the holder of the Notes
represented by this Global Certificate is bound by the provisions of the Agency
Agreement, (b) the Issuer certifies that the Registered Holder is, at the date
hereof, entered in the Register as the holder of the Notes represented by this
Global Certificate, (c) this Global Certificate is evidence of entitlement only,
(d) title to the Notes represented by this Global Certificate passes only on due
registration in the Register, and (e) only the holder of the Notes represented
by this Global Certificate is entitled to payments in respect of the Notes
represented by this Global Certificate.

Transfer of Notes represented by permanent Global Certificates

If the Schedule hereto states that the Notes are to be represented by a
permanent Global Certificate on issue, transfers of the holding of Notes
represented by this Global Certificate pursuant to Condition 2(b) may only be
made in part:

          (i)  if the Notes represented by this Global Certificate are held on
               behalf of Euroclear or Clearstream, Luxembourg or any other
               clearing system (an "Alternative Clearing System") and any such
               clearing system is closed for business for a continuous period of
               14 days (other than by reason of holidays, statutory or
               otherwise) or announces an intention permanently to cease
               business or does in fact do so or

          (ii) with the consent of the Issuer

provided that, in the case of the first transfer of part of a holding pursuant
to (i) above, the holder of the Notes represented by this Global Certificate has
given the Registrar not less than 30 days' notice at its specified office of
such holder's intention to effect such transfer. Where the holding of Notes
represented by this Global Certificate is only transferable in its entirety, the
Certificate issued to the transferee upon transfer of such holding shall be a
Global Certificate. Where transfers are permitted in part, Certificates issued
to transferees shall not be Global Certificates unless the transferee so
requests and certifies to the Registrar that it is, or is acting as a nominee
for, Clearstream, Luxembourg, Euroclear and/or an Alternative Clearing System.

Meetings

The holder of the Notes represented by this Global Certificate shall (unless
this Global Certificate represents only one Note) be treated as two persons for
the purposes of any quorum requirements of a meeting of Noteholders.

This Global Certificate shall not become valid for any purpose until
authenticated by or on behalf of the Registrar.

                                      -40-

<PAGE>

In witness whereof the Issuer has caused this Global Certificate to be signed on
its behalf.

Dated as of the Issue Date.

[SCOTTISH POWER plc/SCOTTISH POWER UK plc]

By:


CERTIFICATE OF AUTHENTICATION

This Global Certificate is authenticated
by or on behalf of the Registrar.

CITIBANK, N.A.

as Registrar

By:


Authorised Signatory
For the purposes of authentication only.
Without recourse, warranty or liability.

                                      -41-

<PAGE>

                                Form of Transfer

For value received the undersigned transfers to

                          ___________________________

                          ___________________________

           (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE)

[.] principal amount of the Notes represented by this Global Certificate, and
all rights under them.

Dated                     ___________________________

Signed _____________________  Certifying Signature

Notes:

          (i)  The signature of the person effecting a transfer shall conform to
               a list of duly authorised specimen signatures supplied by the
               holder of the Notes represented by this Global Certificate or (if
               such signature corresponds with the name as it appears on the
               face of this Global Certificate) be certified by a notary public
               or a recognised bank or be supported by such other evidence as a
               Transfer Agent or the Registrar may reasonably require.

          (ii) A representative of the Noteholder should state the capacity in
               which he signs e.g. executor.


[Insert the provisions of the relevant Pricing Supplement that relate to the
Conditions or the Global Certificate as the Schedule.]

                                      -42-

<PAGE>

                                   SCHEDULE 2
                                     Part A
                               Form of Bearer Note

On the front:



[Denomination]         [ISIN]      [Series]       [Certif. No.]




[Currency and denomination]

                               SCOTTISH POWER plc

             (incorporated in Scotland with limited liability under
                            registered number 193794)

                              SCOTTISH POWER UK plc

             (incorporated in Scotland with limited liability under
                            registered number 117120)

                             DEBT ISSUANCE PROGRAMME

                                 Series No. [.]

                                [Title of issue]

This Note forms one of the Series of Notes referred to above (the "Notes") of
[Scottish Power plc/Scottish Power UK plc] (the "Issuer") designated as
specified in the title hereof. The Notes are subject to the Terms and Conditions
(the "Conditions") endorsed hereon and are issued subject to, and with the
benefit of, the Trust Deed referred to in the Conditions. Expressions defined in
the Conditions have the same meanings in this Note.

The Issuer for value received promises to pay to the bearer of this Note, on
presentation and (when no further payment is due in respect of this Note)
surrender of this Note on the Maturity Date (or on such earlier date as the
Redemption Amount may become repayable in accordance with the Conditions) the
Redemption Amount and (unless this Note does not bear interest) to pay interest
from the Interest Commencement Date in arrear at the rates, in the amounts and
on the dates for payment provided for in the Conditions together with such other
sums and additional amounts (if any) as may be payable under the Conditions, in
accordance with the Conditions.

This Note shall not become valid or obligatory for any purpose until
authenticated by or on behalf of the Issuing and Paying Agent.

                                      -43-

<PAGE>

In witness whereof the Issuer has caused this Note to be signed on its behalf.

Dated as of the Issue Date.

[SCOTTISH POWER plc/SCOTTISH POWER UK plc]

By:





CERTIFICATE OF AUTHENTICATION

This Note is authenticated
by or on behalf of the Issuing and Paying Agent.

CITIBANK, N.A.

as Issuing and Paying Agent

By:





Authorised Signatory
For the purposes of authentication only.
Without recourse, warranty or liability.

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

                                      -44-

<PAGE>

On the back:

                        Terms and Conditions of the Notes

[The Terms and Conditions that are set out in Schedule 2 Part C to the Trust
Deed as amended by and incorporating any additional provisions forming part of
such Terms and Conditions and set out in the relevant Pricing Supplement shall
be set out here.]

                            ISSUING AND PAYING AGENT

                                 CITIBANK, N.A.
                               5 Carmelite Street
                                     London
                                    EC4Y 0PA

                                  PAYING AGENT

                             CITIBANK AG, FRANKFURT
                             Neue Mainzer Strasse 75
                             60311 Frankfurt am Main

                                      -45-

<PAGE>

                                   SCHEDULE 2
                                     Part B
                               Form of Certificate

On the front:


                               SCOTTISH POWER plc

             (incorporated in Scotland with limited liability under
                            registered number 193794)

                              SCOTTISH POWER UK plc

             (incorporated in Scotland with limited liability under
                            registered number 117120)

                             DEBT ISSUANCE PROGRAMME

                                 Series No. [.]

                                [Title of issue]

This Certificate certifies that [.] of [.] (the "Registered Holder") is, as at
the date hereof, registered as the holder of [principal amount] of Notes of the
Series of Notes referred to above (the "Notes") of [Scottish Power plc/Scottish
Power UK plc] (the "Issuer"), designated as specified in the title hereof. The
Notes are subject to the Terms and Conditions (the "Conditions") endorsed hereon
and are issued subject to, and with the benefit of, the Trust Deed referred to
in the Conditions. Expressions defined in the Conditions have the same meanings
in this Certificate.

The Issuer, for value received, promises to pay to the holder of the Note(s)
represented by this Certificate upon presentation and (when no further payment
is due in respect of the Note(s) represented by this Certificate) surrender of
this Certificate on the Maturity Date (or on such earlier date as the Redemption
Amount may become repayable in accordance with the Conditions) the Redemption
Amount in respect of the Notes represented by this Certificate and (unless the
Note(s) represented by this Certificate do not bear interest) to pay interest in
respect of such Notes from the Interest Commencement Date in arrear at the
rates, in the amounts and on the dates for payment provided for in the
Conditions together with such other sums and additional amounts (if any) as may
be payable under the Conditions, in accordance with the Conditions.

For the purposes of this Certificate, (a) the holder of the Note(s) represented
by this Certificate is bound by the provisions of the Agency Agreement, (b) the
Issuer certifies that the Registered Holder is, at the date hereof, entered in
the Register as the holder of the Note(s) represented by this Certificate, (c)
this Certificate is evidence of entitlement only, (d) title to the Note(s)
represented by this Certificate passes only on due registration in the Register,
and (e) only the holder of the Note(s) represented by this Certificate is
entitled to payments in respect of the Note(s) represented by this Certificate.

This Certificate shall not become valid for any purpose until authenticated by
or on behalf of the Registrar.

                                      -46-

<PAGE>

In witness whereof the Issuer has caused this Certificate to be signed on its
behalf.

Dated as of the Issue Date.

[SCOTTISH POWER plc/SCOTTISH POWER UK plc]

By:


CERTIFICATE OF AUTHENTICATION

This Certificate is authenticated
by or on behalf of the Registrar.

CITIBANK, N.A.

as Registrar

By:


Authorised Signatory
For the purposes of authentication only.
Without recourse, warranty or liability.

                                      -47-

<PAGE>

On the back:

                        Terms and Conditions of the Notes

[The Terms and Conditions that are set out in Schedule 2 Part C to the Trust
Deed as amended by and incorporating any additional provisions forming part of
such Terms and Conditions and set out in the relevant Pricing Supplement shall
be set out here.]

                                Form of Transfer

For value received the undersigned transfers to

                          _____________________________

                          _____________________________

           (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE)

[.]  principal amount of the Notes represented by this Certificate, and all
     rights under them.


Dated                     ______________________________

Signed ______________________ Certifying Signature

Notes:

          (i)  The signature of the person effecting a transfer shall conform to
               a list of duly authorised specimen signatures supplied by the
               holder of the Notes represented by this Certificate or (if such
               signature corresponds with the name as it appears on the face of
               this Certificate) be certified by a notary public or a recognised
               bank or be supported by such other evidence as a Transfer Agent
               or the Registrar may reasonably require.

          (ii) A representative of the Noteholder should state the capacity in
               which he signs.

             ISSUING AND PAYING AGENT, TRANSFER AGENT AND REGISTRAR

                                 CITIBANK, N.A.
                               5 Carmelite Street
                                     London
                                    EC4Y 0PA

                         PAYING AGENT AND TRANSFER AGENT

                             CITIBANK AG, FRANKFURT
                             Neue Mainzer Strasse 75
                             60311 Frankfurt am Main

                                      -48-

<PAGE>

                                   SCHEDULE 2
                                     Part C
                       Terms and Conditions of the Notes

The Notes are constituted by an Amended and Restated Trust Deed (as amended or
supplemented as at the date of issue of the Notes (the "Issue Date"), the "Trust
Deed") dated 20th December 2001 between Scottish Power plc, Scottish Power UK
plc and The Law Debenture Trust Corporation p.l.c. (the "Trustee", which
expression shall include all persons for the time being the trustee or trustees
under the Trust Deed) as trustee for the Noteholders (as defined below). These
terms and conditions include summaries of, and are subject to, the detailed
provisions of the Trust Deed, which includes the form of the Bearer Notes,
Certificates, Receipts, Coupons and Talons referred to below. An Amended and
Restated Agency Agreement (as amended or supplemented as at the Issue Date, the
"Agency Agreement") dated 20th December 2001 has been entered into in relation
to the Notes between Scottish Power plc. Scottish Power UK plc. the Trustee,
Citibank, N.A., London as initial issuing and paying agent and the other agents
named in it. The issuing and paying agent, the paying agents, the registrar, the
transfer agents and the calculation agent(s) for the time being (if any) are
referred to below respectively as the "Issuing and Paying Agent", the "Paying
Agents" (which expression shall include the Issuing and Paying Agent), the
"Registrar", the "Transfer Agents" (which expression shall include the
Registrar) and the "Calculation Agent(s)". Copies of the relevant pricing
Supplement, Trust Deed and the Agency Agreement are available for inspection
during usual business hours at the registered office of the Trustee (presently
at Fifth Floor, 100 Wood Street, London EC2V 7EX) and at the specified offices
of the Paying Agents and the Transfer Agents.

The Noteholders, the holders of the interest coupons (the "Coupons")
appertaining to interest bearing Notes in bearer form and, where applicable in
the case of such Notes, talons for further Coupons (the "Talons") (the
"Couponholders") and the holders of the receipts for the payment of instalments
of principal (the "Receipts") relating to Notes in bearer form of which the
principal is payable in instalments are entitled to the benefit of, are bound
by, and are deemed to have notice of, all the provisions of the Trust Deed and
the relevant Pricing Supplement and are deemed to have notice of those
provisions applicable to them of the Agency Agreement.

Provisions in square brackets are only applicable to Notes issued by Scottish
Power plc. Provisions in square brackets preceded by an asterisk are only
applicable to Notes issued by Scottish Power UK plc.

1.  Form, Denomination and Title

The Notes are issued in bearer form ("Bearer Notes". which expression includes
Notes that are specified to be Exchangeable Bearer Notes), in registered form
("Registered Notes") or in bearer form exchangeable for Registered Notes
("Exchangeable Bearer Notes") in each case in the Denomination(s) shown thereon

All Registered Notes shall have the same Denomination. Where Exchangeable Bearer
Notes are issued, the Registered Notes for which they are exchangeable shall
have the same Denomination as the lowest denomination of Exchangeable Bearer
Note.

Bearer Notes are serially numbered and are issued with Coupons (and where
appropriate, a Talon) attached, save in the case of Notes that do not bear
interest in which case references to interest (other than in relation to
interest due after the Maturity Date), Coupons and Talons in these Conditions
are not applicable. Any Bearer Note the principal amount of which is redeemable
in instalments is issued with one or more Receipts attached.

Registered Notes are represented by registered ("Certificates") and save as
provided in Condition 2(c), each Certificate shall represent the entire holding
of Registered Notes by the same holder.

Title to the Bearer Notes and the Receipts, Coupons and Talons shall pass by
delivery. Title to the Registered Notes shall pass by registration in the
register that the Issuer shall procure to be kept by the Registrar in accordance
with the provisions of the Agency Agreement (the "Register"). Except as ordered
by a court of competent jurisdiction or as required by law, the holder (as
defined below) of any Note, Receipt, Coupon or Talon shall be deemed to be and
may be treated as its absolute owner for all purposes whether or not it is
overdue and regardless of any notice of ownership, trust or an interest in it,
any writing on it (or on the Certificate representing it) or its theft or loss
(or that of the related Certificate) and no person shall be liable for so
treating the holder.

In these Conditions, "Noteholder" means the bearer of any Bearer Note and the
Receipts relating to it or the person in whose name a Registered Note is
registered (as the case may be), "holder" (in relation to a Note, Receipt,
Coupon or Talon) means the bearer of any Bearer Note, Receipt, Coupon or Talon
or the person in whose name a Registered Note is registered (as the case may be)
and capitalised terms have the meanings given to them hereon, the absence of any
such meaning indicating that such term is not applicable to the Notes.

2.  Exchanges of Exchangeable Bearer Notes and Transfers of Registered Notes

(a) Exchanges of Exchangeable Bearer Notes

Subject as provided in Condition 2(f). Exchangeable Bearer Notes may be
exchanged for the same aggregate Principal amount of Registered Notes at the
request in writing of the relevant Noteholder and upon surrender of each
Exchangeable Bearer Note to be exchanged, together with all unmatured Receipts,
Coupons and Talons relating to it, at the Specified office of any Transfer
Agent; provided, however, that where an Exchangeable Bearer Note is surrendered
for exchange after, the Record Date (as defined in Condition 7(b)) for any
payment of interest, the Coupon in respect of that Payment of interest need not
be surrendered with it. Registered Notes may not be exchanged for Bearer Notes.
Bearer Notes of one Denomination may not be

                                      -49-

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exchanged for Bearer Notes of another Denomination. Bearer Notes that are not
Exchangeable Bearer Notes may not be exchanged for Registered Notes.

(b) Transfer of Registered Notes

One or more Registered Notes may be transferred upon the surrender (at the
specified office of the Registrar or any Transfer Agent) of the Certificate
representing such Registered Notes to be transferred, together with the form of
transfer endorsed on such Certificate duly completed and executed and any other
evidence as the Registrar or Transfer Agent may reasonably require. In the case
of a transfer of part only of a holding of Registered Notes represented by one
Certificate, a new Certificate shall be issued to the transferee in respect of
the part transferred and a further new Certificate in respect of the balance of
the holding not transferred shall be issued to the transferor.

(c) Exercise of Options or Partial Redemption in Respect of Registered Notes

In the case of an exercise of the Issuer's or Noteholders' option in respect of,
or a partial redemption of, a holding of Registered Notes represented by a
single Certificate, a new Certificate shall be issued to the holder to reflect
the exercise of such option or in respect of the balance of the holding not
redeemed. In the case of a partial exercise of an option resulting in Registered
Notes of the same holding having different terms, separate Certificates shall be
issued in respect of those Notes of that holding that have the same terms. New
Certificates shall only be issued against surrender of the existing Certificates
to the Registrar or any Transfer Agent. In the case of a transfer of Registered
Notes to a person who is already a holder of Registered Notes, a new Certificate
representing the enlarged holding shall only be issued against surrender of the
Certificate representing the existing holding.

(d) Delivery of New Certificates

Each new Certificate to be issued pursuant to Conditions 2(a), (b) or (c) shall
be available for delivery within five business days of receipt of the request
for exchange, form of transfer or Exercise Notice or surrender of the
Certificate for exchange. Delivery of the new Certificate(s) shall be made at
the specified office of the Transfer Agent or of the Registrar (as the case may
be) to whom delivery or surrender of such request for exchange, form of
transfer. Exercise Notice or Certificate shall have been made or, at the option
of the holder making such delivery or surrender as aforesaid and as specified in
the relevant request for exchange, form of transfer, Exercise Notice or
otherwise in writing, be mailed by uninsured post at the risk of the holder
entitled to the new Certificate to such address as may be so specified, unless
such holder requests otherwise and pays in advance to the relevant Agent the
costs of such other method of delivery and/or such insurance as it may specify.
In this Condition 2(d), "business day" means a day, other than a Saturday or
Sunday, on which banks are open for business in the place of the specified
office of the relevant Transfer Agent or the Registrar.

(e) Exchange Free of Charge

Exchange and transfer of Notes and Certificates on registration, transfer,
exercise of an option or partial redemption shall be effected without charge by
or on behalf of the Issuer, the Registrar or the Transfer Agents, but upon
payment by a Noteholder of any tax or other governmental charges that may be
imposed in relation to it (or the giving by a Noteholder of such indemnity as
the Registrar or the relevant Transfer Agent may reasonably require).

(f) Closed Periods

No Noteholder may require the transfer of a Registered Note to be registered or
an Exchangeable Bearer Note to be exchanged for one or more Registered Note(s)
(i) during the period of 15 days ending on the due date for redemption of, or
payment of any Instalment Amount in respect of, that Note, (ii) during the
period of 15 days prior to any date on which Notes may be called for redemption
by the Issuer at its option pursuant to Condition 6(d), (iii) after any such
Note has been called for redemption or (iv) during the period of seven days
ending on (and including) any Record Date. An Exchangeable Bearer Note called
for redemption may, however, be exchanged for one or more Registered Note(s) in
respect of which the Certificate is simultaneously surrendered not later than
the relevant Record Date.

3.  Status

The Notes and the Receipts and Coupons constitute (subject to Condition 4)
unsecured obligations of the Issuer and shall at all times rank pari passu and
without any preference among themselves. The payment obligations of the Issuer
under the Notes and the Receipts and Coupons shall, save for such exceptions as
may be provided by applicable legislation and subject to Condition 4, at all
times rank at least equally with all other unsecured and unsubordinated
indebtedness and monetary obligations of the Issuer, present and future.

4. Negative Pledge

So long as any of the Notes remains outstanding (as defined in the Trust Deed)
the Issuer will ensure that no Relevant Indebtedness of the Issuer or any
Negative Pledge Company (as defined in Condition 6) or of any other person and
no guarantee by the Issuer or any Negative Pledge Company of any Relevant
Indebtedness (as defined in Condition 6) of any person will be secured by a
mortgage, charge, lien, pledge or other security interest (each a "Security
Interest") upon, or with respect to, any of the present or future business,
undertaking, assets or revenues (including any uncalled capital) of the Issuer

                                      -50-

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or any Negative Pledge Company unless the Issuer shall, before or at the same
time as the creation of the Security Interest, take any and all action necessary
to ensure that.

(i) all amounts payable by it under the Notes, the Receipts, the Coupons and the
Trust Deed are secured equally and rateably with the Relevant Indebtedness or
guarantee, as the case may be, by the Security Interest to the satisfaction of
the Trustee; or

(ii) such other Security Interest or guarantee or other arrangement (whether or
not including the giving of a Security Interest) is provided in respect of all
amounts payable by the Issuer under the Notes, the Receipts, the Coupons and the
Trust Deed either (i) as the Trustee shall in its absolute discretion deem not
materially less beneficial to the interests of the Noteholders or (ii) as shall
be approved by an Extraordinary Resolution (as defined in the Trust Deed) of the
Noteholders,

save that the Issuer or any Negative Pledge Company may create or have
outstanding a Security Interest in respect of any Relevant Indebtedness and/or
any guarantees given by the Issuer or any Negative Pledge Company in respect of
any Relevant Indebtedness of any person (without the obligation to provide a
Security Interest or guarantee or other arrangement in respect of the Notes, the
Receipts, the Coupons and the Trust Deed as aforesaid) where (1) such Relevant
Indebtedness has an initial maturity of not less than twenty years and is of a
maximum aggregate amount outstanding at any time not exceeding the greater of
(Pounds)250,000,000 or 20% of the Capital and Reserves (as defined in Condition
6) or (2) such Security Interest is provided in respect of a company becoming a
Subsidiary of the Issuer after the date of the relevant Pricing Supplement and
where such Security Interest existed at the time that company becomes a
Subsidiary of the Issuer (provided that such Security Interest was not created
in contemplation of that company becoming a Subsidiary of the Issuer and the
principal amount secured at the time of that company becoming a Subsidiary of
the Issuer is not subsequently increased).

5.   Interest and Other Calculations

(a)  Interest Rate and Accrual

Each Note bears interest on its outstanding principal amount from the Interest
Commencement Date at the rate per annum (expressed as a percentage) equal to the
Interest Rate, such interest being payable in arrear on each Interest Payment
Date.

Interest shall cease to accrue on each Note on the due date for redemption
unless, upon due presentation, payment of principal is improperly withheld or
refused, in which event interest shall continue to accrue (as well after as
before judgment) at the Interest Rate in the manner provided in this Condition 5
to the Relevant Date (as defined in Condition 8).

(b)  Business Day Convention

If any date referred to in these Conditions that is specified to be subject to
adjustment in accordance with a Business Day Convention would otherwise fall on
a day that is not a Business Day, then, if the Business Day Convention specified
is (i) the Floating Rate Business Day Convention, such date shall be postponed
to the next day that is a Business Day unless it would thereby fall into the
next calendar month, in which event (A) such date shall be brought forward to
the immediately preceding Business Day and (B) each subsequent such date shall
be the last Business Day of the month in which such date would have fallen had
it not been subject to adjustment, (ii) the Following Business Day Convention,
such date shall be postponed to the next day that is a Business Day, (iii) the
Modified Following Business Day Convention, such date shall be postponed to the
next day that is a Business Day unless it would thereby fall into the next
calendar month, in which event such date shall be brought forward to the
immediately preceding Business Day or (iv) the Preceding Business Day
Convention, such date shall be brought forward to the immediately preceding
Business Day.

(c)  Interest Rate on Floating Rate Notes

If the Interest Rate is specified in the Pricing Supplement as being Floating
Rate, the Interest Rate for each Interest Accrual Period shall be determined by
the Calculation Agent at or about the Relevant Time on the Interest
Determination Date in respect of each Interest Accrual Period in accordance with
the following:

(i) if the Primary Source for the Floating Rate is a Page, subject as provided
below, the Interest Rate shall be:

(x) the Relevant Rate (where such Relevant Rate on such Page is a composite
quotation or is customarily supplied by one entity); or

(y) the arithmetic mean of the Relevant Rates of the persons whose Relevant
Rates appear on that Page,

in each case appearing on such Page at the Relevant Time on the Interest
Determination Date

(ii) if the Page specified in the Pricing Supplement as a Primary Source
permanently ceases to quote the Relevant Rate(s) but such quotation(s) is/are
available from another page, section or other part of such information service
selected by the Calculation Agent (the "Replacement Page"), the Replacement Page
shall be substituted as the Primary Source for Interest Rate Quotations and if
no Replacement Page exists but such quotation(s) is/are available from a page,
section or other part of a different information service selected by the
Calculation Agent and approved by the Issuer (the "Secondary Replacement Page"),
the Secondary Replacement Page shall be substituted as the Primary Source for
Interest Rate Quotations

(iii) if the Primary Source for the Floating Rate is Reference Banks (as defined
below) or if sub-paragraph (i)(x) applies and no Relevant Rate appears on the
Page at the Relevant Time on the Interest Determination Date or if sub-paragraph
(i)(y) above applies and fewer than two Relevant Rates appear on the Page at the
Relevant Time on the Interest Determination Date, subject

                                      -51-

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as provided below, the Interest Rate shall be the arithmetic mean of the
Relevant Rates that each of the Reference Banks is quoting to leading banks in
the Relevant Financial Centre at the Relevant Time on the Interest Determination
Date, as determined by the Calculation Agent and

(iv) if paragraph (iii) above applies, and the Calculation Agent determines that
fewer than two Reference Banks are so quoting Relevant Rates, subject as
provided below, the Interest Rate shall be the arithmetic mean of the rates per
annum (expressed as a percentage) that the Calculation Agent determines to be
the rate (being the nearest equivalent to the Benchmark) in respect of a
Representative Amount of the Relevant Currency that at least two out of five
leading banks selected by the Calculation Agent in the principal financial
centre of the country of the Relevant Currency or, if the Relevant Currency is
euro, in the Euro-zone as selected by the Calculation Agent (the "Principal
Financial Centre") are quoting at or about the Relevant Time on the date on
which such banks would customarily quote such rates for a period commencing on
the Effective Date for a period equivalent to the Specified Duration (x) to
leading banks carrying on business in Europe, or (if the Calculation Agent
determines that fewer than two of such banks are so quoting to leading banks in
Europe) (y) to leading banks carrying on business in the Principal Financial
Centre; except that, if fewer than two of such banks are so quoting to leading
banks in the Principal Financial Centre, the Interest Rate shall be the Interest
Rate determined on the previous Interest Determination Date (after readjustment
for any difference between any Margin Rate Multiplier or Maximum or Minimum
Interest Rate applicable to the preceding Interest Accrual Period and to the
relevant Interest Accrual Period).


(d) Interest Rate on Zero Coupon Notes

Where a Note the Interest Rate of which is specified in the Pricing Supplement
to be Zero Coupon is repayable prior to the Maturity Date and is not paid when
due, the amount due and payable prior to the Maturity Date shall be the
Redemption Amount of such Note. As from the Maturity Date, the Interest Rate for
any overdue principal of such a Note shall be a rate per annum (expressed as a
percentage) equal to the Amortisation Yield (as defined in Condition 6(b)).

(e) Margin, Maximum/Minimum Interest Rates, Instalment Amounts and Redemption
Amounts, Rate Multipliers and Rounding

(i) If any Margin or Rate Multiplier is specified in the Pricing Supplement
(either (x) generally, or (y) in relation to one or more Interest Accrual
Periods), an adjustment shall be made to all Interest Rates, in the case of (x),
or the Interest Rates for the specified Interest Accrual Periods, in the case of
(y), calculated in accordance with Condition 5(c) above by adding (if a positive
number) or subtracting the absolute value (if a negative number) of such Margin
or multiplying by such Rate Multiplier, subject always to the next paragraph.

(ii) If any Maximum or Minimum Interest Rate, Instalment Amount or Redemption
Amount is specified in the Pricing Supplement, then any Interest Rate,
Instalment Amount or Redemption Amount shall be subject to such maximum or
minimum, as the case may be.

(iii) For the purposes of any calculations required pursuant to these Conditions
(unless otherwise specified in the Pricing Supplement), (x) all percentages
resulting from such calculations shall be rounded, if necessary, to the nearest
one hundred-thousandth of a percentage point (with halves being rounded up). (y)
all figures shall be rounded to seven significant figures (with halves being
rounded up) and (z) all currency amounts that fall due and payable shall be
rounded to the nearest unit of such currency (with halves being rounded up),
save in the case of yen, which shall be rounded down to the nearest yen. For
these purposes "unit" means the lowest amount of such currency that is available
as legal tender in the country(ies) of such currency and, with respect to euro,
means 0.01 euro.

(f) Calculations

The amount of interest payable in respect of my Note for any period shall be
calculated by multiplying the product of the Interest Rate and the outstanding
principal amount of such Note by the Day Count Fraction, unless an Interest
Amount (or a formula for its calculation) is specified in respect of such
period, in which case the amount of interest payable in respect of such Note for
such period shall equal such Interest Amount (or be calculated in accordance
with such formula). Where any Interest Period comprises two or more Interest
Accrual Periods, the amount of interest payable in respect of such Interest
Period shall be the sum of the amounts of interest payable in respect of each of
those Interest Accrual Periods.

(g) Determination and Publication of Interest Rates, Interest Amounts,
Redemption Amounts and Instalment Amounts

As soon as practicable after the Relevant Time on each Interest Determination
Date or such other time on such date as the Calculation Agent may be required to
calculate any Redemption Amount or Instalment Amount, obtain any quote or make
any determination or calculation, it shall determine the interest Rate and
calculate the amount of interest payable (the "Interest Amounts") in respect of
each Denomination of the Notes for the relevant Interest Accrual Period,
calculate the Redemption Amount or Instalment Amount, obtain such quote or make
such determination or calculation, as the case may be, and cause the Interest
Rate and the Interest Amounts for each Interest Period and the relevant Interest
Payment Date and, if required to be calculated, the Redemption Amount or any
Instalment Amount to be notified to the Trustee, the Issuer, each of the Paying
Agents, the Noteholders, any other Calculation Agent appointed in respect of the
Notes that is to make a further calculation upon receipt of such information
and, if the Notes are listed on a stock exchange and the rules of such exchange
or other relevant authority so require, such exchange or other relevant
authority as soon as possible after their determination but in no

                                       -52-

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event later than (i) the commencement of the relevant Interest Period, if
determined prior to such time, in the case of notification to such exchange of
an Interest Rate and Interest Amount, or (ii) in all other cases, the fourth
Business Day after such determination. Where any Interest Payment Date or
Interest Period Date is subject to adjustment pursuant to Condition 5(b), the
Interest Amounts and the Interest Payment Date so published may subsequently be
amended (or appropriate alternative arrangements made with the consent of the
Trustee by way of adjustment) without notice in the event of an extension or
shortening of the Interest Period. If the Notes become due and payable under
Condition 10, the accrued interest and the Interest Rate payable in respect of
the Notes shall nevertheless continue to be calculated as previously in
accordance with this Condition but no publication of the Interest Rate or the
Interest Amount so calculated need be made unless the Trustee otherwise
requires. The determination of each Interest Rate, Interest Amount, Redemption
Amount and Instalment Amount, the obtaining of each quote and the making of each
determination or calculation by the Calculation Agent(s) shall (in the absence
of manifest error) be final and binding upon all parties.

(h)   Determination or Calculation by Trustee

If the Calculation Agent does not at any time for any reason determine or
calculate the Interest Rate for an Interest Period or any Interest Amount,
Instalment Amount or Redemption Amount, the Trustee shall do so (or shall
appoint an agent on its behalf to do so) and such determination or calculation
shall be deemed to have been made by the Calculation Agent. In doing so, the
Trustee shall apply the foregoing provisions of this Condition, with any
necessary consequential amendments, to the extent that in its opinion, it can do
so, and, in all other respects it shall do so in such manner as it shall deem
fair and reasonable in all the circumstances.

(i)   Definitions

In these Conditions, unless the context otherwise requires, the following
defined terms shall have the meanings set out below:

"Business Day" means:

(i)   in the case of a specified currency other than euro, a day (other than a
Saturday or Sunday) on which commercial banks and foreign exchange markets
settle payments in the principal financial centre for that currency; and/or

(ii)  in the case of euro, a day on which the TARGET system is operating (a
"TARGET Business Day"); and/or

(iii) in the case of a specified currency with one or more financial centres, a
day (other than a Saturday or Sunday) on which commercial banks and foreign
exchange markets settle payments in the specified currency in the specified
financial center or, if no financial centre is specified, generally in each of
such financial centres.

"Day Count Fraction" means, in respect of the calculation of an amount of
interest on any Note for any period of time (from and including the first day of
such period to but excluding the last) (whether or not constituting an Interest
Period, the "Calculation Period"):

(i)   if "Actual/365" or "Actual/Actual-ISDA" is specified in the Pricing
Supplement, the actual number of days in the Calculation Period divided by 365
(or, if any portion of that Calculation Period falls in a leap year, the sum of
(A) the actual number of days in that portion of the Calculation Period falling
in a leap year divided by 366 and (B) the actual number of days in that portion
of the Calculation Period falling in a non-leap year divided by 365);

(ii)  if "Actual/365 (Fixed)" is specified in the Pricing Supplement, the actual
number of days in the Calculation Period divided by 365;

(iii) if "Actual/360" is specified in the Pricing Supplement, the actual number
of days in the Calculation Period divided by 360;

(iv)  if "30/360", "360/360" or "Bond Basis" is specified in the Pricing
Supplement, the number of days in the Calculation Period divided by 360 (the
number of days to be calculated on the basis of a year of 360 days with
12 30-day months (unless (a) the last day of the Calculation Period is the 31st
day of a month but the first day of the Calculation Period is a day other than
the 30th or 31st day of a month, in which case the month that includes that last
day shall not be considered to be shortened to a 30-day month, or (b) the last
day of the Calculation Period is the last day of the month of February, in which
case the month of February shall not be considered to be lengthened to a 30-day
month)); and

(v)   if "30F/360" or "Eurobond Basis" is specified in the Pricing Supplement,
the number of days in the Calculation Period divided by 360 (the number of days
to be calculated on the basis of a year of 360 days with 12 30-day months,
without regard to the date of the first day or last day of the Calculation
Period unless, in the case of a Calculation Period ending on the Maturity Date,
the Maturity Date is the last day of the month of February in which case the
month of February shall not be considered to be lengthened to a 30-day month);
and

(vi)  if "Actual/Actual-ISMA" is specified hereon:

(a)   if the Calculation Period is equal to or shorter than the Determination
Period during which it falls, the number of days in the Calculation Period
divided by the product of (x) the number of days in such Determination Period
and (y) the number of Determination Periods normally ending in any year; and

(b)   if the Calculation Period is longer than one Determination Period, the sum
of:

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(x) the number of days in such Calculation Period falling in the Determination
Period in which it begins divided by the product of (1) the number of days in
such Determination Period and (2) the number of Determination Periods normally
ending in any year; and

(y) the number of days in such Calculation Period falling in the next
Determination Period divided by the product of (1) the number of days in such
Determination Period and (2) the number of Determination Periods normally ending
in any year

where:

"Determination Period" means the period from and including a Determination Date
in any year to but excluding the next Determination Date.

"Effective Date" means, with respect to any Floating Rate to be determined on an
Interest Determination Date, the date specified as such in the Pricing
Supplement or, if none is so specified, the first day of the Interest Accrual
Period to which such Interest Determination Date relates.

"Euro-zone" means the region comprised of member states of the European Union
that adopt the single currency in accordance with the Treaty establishing the
European Community, as amended.

"Interest Accrual Period" means the period beginning on (and including) the
Interest Commencement Date and ending on (but excluding) the first Interest
Period Date and each successive period beginning on (and including) an Interest
Period Date and ending on (but excluding) the next succeeding Interest Period
Date.

"Interest Commencement Date" means the Issue Date or such other date as may be
specified in the Pricing Supplement.

"Interest Determination Date" means, with respect to an Interest Rate and
Interest Accrual Period, the date specified as such in the Pricing Supplement
or, if none is so specified and the Relevant Currency is not euro, (i) the first
day of such Interest Accrual Period if the Relevant Currency is Sterling or (ii)
the day falling two Business Days in London for the Relevant Currency prior to
the first day of such Interest Accrual Period if the Relevant Currency is
neither Sterling nor euro or (iii) the day falling two TARGET Business Days
prior to the first day of such Interest Accrual Period if the Relevant Currency
is euro.

"Interest Period" means the period beginning on (and including) the Interest
Commencement Date and ending on (but excluding) the first Interest Payment Date
and each successive period beginning on (and including) an Interest Payment Date
and ending on (but excluding) the next succeeding Interest Payment Date.

"Interest Period Date" means each Interest Payment Date unless otherwise
specified in the Pricing Supplement.

"Interest Rate" means the rate of interest payable from time to time in respect
of this Note and that is either specified or calculated in accordance with the
provisions in the Pricing Supplement.

"Page" means such page, section, caption, column or other part of a particular
information service (including, but not limited to, Reuters Markets 3000
("Reuters") and Bridge/Telerate ("Telerate")) as may be specified for the
purpose of providing a Relevant Rate, or such other page, section, caption,
column or other part as may replace it on that information service or on such
other information service, in each case as may be nominated by the person or
organisation providing or sponsoring the information appearing there for the
purpose of displaying rates or prices comparable to that Relevant Rate.

"Reference Banks" means the institutions specified as such in the Pricing
Supplement or, if none, four (or, if the Relevant Financial Centre is Helsinki,
five) major banks selected by the Calculation Agent in the interbank market (or,
if appropriate, money, swap or over-the-counter index options market) that is
most closely connected with the Benchmark which, if EURIBOR is the relevant
Benchmark, shall be the Euro-zone.

"Relevant Currency" means the currency specified in the Pricing Supplement or,
if none is specified, the currency in which the Notes are denominated.

"Relevant Financial Centre" means, with respect to any Floating Rate to be
determined on an Interest Determination Date, the financial centre as may be
specified as such in the Pricing Supplement or, if none is so specified, the
financial centre with which the relevant Benchmark is most closely connected
(which, in the case of EURIBOR, shall be the Euro-zone) or, if none is so
connected, London.

"Relevant Rate" means the Benchmark for a Representative Amount of the Relevant
Currency for a period (if applicable or appropriate to the Benchmark) equal to
the Specified Duration commencing on the Effective Date.

"Relevant Rate" means the Benchmark for a Representative Amount of the Relevant
Currency for a period (if applicable or appropriate to the Benchmark) equal to
the Specified Duration commencing on the Effective Date.

"Relevant Time" means, with respect to any Interest Determination Date, if the
Relevant Currency is not euro, the local time in the Relevant Financial Centre
specified in the Pricing Supplement or, if none is specified, the local time in
the Relevant Financial Centre at which it is customary to determine bid and
offered rates in respect of deposits in the Relevant Currency in the interbank
market in the Relevant Financial Centre and for this purpose "local time" means,
with respect to the Euro-zone as a Relevant Financial Centre, Central European
Time.

"Representative Amount" means, with respect to any Floating Rate to be
determined on an Interest Determination Date the amount specified as such in the
Pricing Supplement or, if none is specified, an amount that is representative
for a single transaction in the relevant market at the time.

                                      -54-

<PAGE>

"Specified Duration" means, with respect to any Floating Rate to be determined
on an Interest Determination Date, the duration specified in the Pricing
Supplement or, if none is specified, a period of time equal to the relative
Interest Accrual Period, ignoring any adjustment pursuant to Condition 5(b).

"TARGET System" means the Trans-European Automated Real-Time Gross Settlement
Express Transfer (TARGET) system or any successor thereto.

(j)   Calculation Agent and Reference Banks

The Issuer shall procure that there shall at all times be four Reference Banks
(or such other number as may be required) with offices in the Relevant Financial
Centre and one or more Calculation Agents if provision is made for them in the
Pricing Supplement and for so long as any Note is outstanding (as defined in the
Trust Deed). If any Reference Bank (acting through its relevant office) is
unable or unwilling to continue to act as a Reference Bank, then the Issuer
shall (with the prior approval of the Trustee) appoint another Reference Bank
with an office in the Relevant Financial Centre to act as such in its place.
Where more than one Calculation Agent is appointed in respect of the Notes,
references in these Conditions to the Calculation Agent shall be construed as
each Calculation Agent performing its respective duties under the Conditions. If
the Calculation Agent is unable or unwilling to act as such or if the
Calculation Agent fails duly to establish the Interest Rate for an Interest
Period or Interest Accrual Period or to calculate any Interest Amount,
Instalment Amount or the Redemption Amount or to comply with any other
requirement, the Issuer shall (with the prior approval of the Trustee) appoint a
leading bank or investment banking firm engaged in the interbank market (or, if
appropriate, money, swap or over-the-counter index options market) that is most
closely connected with the calculation or determination to be made by the
Calculation Agent (acting through its principal London office or any other
office actively involved in such market) to act as such in its place. The
Calculation Agent may not resign its duties without a successor having been
appointed as aforesaid.

(k)   Certificates to be Final

All certificates, communications, opinions, determinations, calculations,
quotations and decisions given, expressed, made or obtained for the purposes of
the provisions of this Condition 5, whether by the Calculation Agent or the
Trustee, shall (in the absence of wilful default, bad faith or manifest error)
be binding on the Issuer, the Calculation Agent, the Trustee, the other Paying
Agents and all Noteholders, Receiptholders and Couponholders and (in the absence
as aforesaid) no liability to the Issuer, the Noteholders, the Receiptholders or
the Couponholders shall attach to the Calculation Agent or the Trustee in
connection with the exercise or non-exercise by them of their powers, duties and
discretions pursuant to such provisions.

6.    Redemption, Purchase and Options

(a)   Redemption by Instalments and Final Redemption

(i)   Unless previously redeemed, purchased and cancelled as provided in this
Condition 6 or the relevant Instalment Date (being one of the dates so specified
hereon) is extended pursuant to the Issuer's or any Noteholder's option in
accordance with Condition 6(d) or 6(e), each Note that provides for Instalment
Dates and Instalment Amounts shall be partially redeemed on each Instalment Date
at the related Instalment Amount specified in the Pricing Supplement. The
outstanding principal amount of each such Note shall be reduced by the
Instalment Amount [or, if such Instalment Amount is calculated by reference to a
proportion of the principal amount of such Note, such proportion) for all
purposes with effect from the related Instalment Date, unless payment of the
Instalment Amount is improperly withheld or refused on presentation of the
related Receipt, in which case, such amount shall remain outstanding until the
Relevant Date relating to such Instalment Amount.

(ii)  Unless previously redeemed, purchased and cancelled as provided below or
its maturity is extended pursuant to the Issuer's or any Noteholder's option in
accordance with Condition 6(d) or 6(e), each Note shall be finally redeemed on
the Maturity Date specified in the Pricing Supplement at its Redemption Amount
(which, unless otherwise provided in the Pricing Supplement, is its principal
amount) or, in the case of a Note falling within paragraph (i) above, its final
Instalment Amount.

(b)   Early Redemption of Zero Coupon Notes:

(i)   The Redemption Amount payable in respect of any Note that does not bear
interest prior to the Maturity Date, the Redemption Amount of which is not
linked to an index and/or a formula, upon redemption of such Note pursuant to
Condition 6(c) or 6(f) or upon it becoming due and payable as provided in
Condition 10 shall be the Amortised Face Amount (calculated as provided below)
of such Note.

(ii)  Subject to the provisions of sub-paragraph (iii) below, the
Amortised Face Amount of any such Note shall be the scheduled Redemption Amount
of such Note on the Maturity Date discounted at a rate per annum (expressed as a
percentage) equal to the Amortisation Yield (which, if none is shown in the
Pricing Supplement, shall be such rate as would produce an Amortised Face
Amount equal to the issue price of the Notes if they were discounted back to
their issue price on the Issue Date) compounded annually. Where such calculation
is to be made for a period of less than one year, it shall be made on the basis
of the Day Count Fraction shown hereon.

(iii) If the Redemption Amount payable in respect of any such Note upon its
redemption pursuant to Condition 6(c) or 6(f) or upon it becoming due and
payable as provided in Condition 10 is not paid when due, the Redemption Amount
due and payable in respect of such Note shall be the Amortised Fact Amount of
such Note as defined in sub-paragraph (ii) above, except that such sub-paragraph
shall have effect as though the reference therein to the date on which the Note
becomes due and payable

                                       -55-

<PAGE>

were replaced by a reference to the Relevant Date. The calculation of the
Amortised Face Amount in accordance with this sub-paragraph shall continue to be
made (as well after as before judgment) until the Relevant Date, unless the
Relevant Date falls on or after the Maturity Date, in which case the amount due
and payable shall be the scheduled Redemption Amount of such Note on the
Maturity Date together with any interest that may accrue in accordance with
Condition 5(d).

(c) Redemption for Taxation Reasons

If, as a result of any amendment to or change in the laws or regulations of the
United Kingdom or of any political subdivision thereof or any authority therein
or thereof having power to tax or any change in the official or generally
accepted interpretation or application of such laws or regulations which becomes
effective on or after the date of the agreement to issue the first Tranche of
the Notes, the Issuer has or will become obliged to pay any additional amounts
as described in Condition 8 (and such amendment or change has been evidenced by
the delivery by the Issuer to the Trustee (who shall accept such certificate and
opinion as sufficient evidence thereof) of (i) a certificate signed by two
directors of the Issuer on behalf of the Issuer stating that such amendment or
change has occurred (irrespective of whether such amendment or change is then
effective), describing the facts leading thereto and stating that such
requirement cannot be avoided by the Issuer, taking reasonable measures
available to it and (ii) an opinion of independent legal advisers of recognised
standing to the effect that such amendment or change has occurred (irrespective
of whether such amendment or change is then effective)), the Issuer may (having
given not less than 30 nor more than 90 days notice to the Trustee and to the
holders in accordance with Condition 16) redeem all, but not some only, of the
Notes (other than Notes in respect of which the Issuer shall have given a notice
of redemption pursuant to Condition 6(d) or in respect of which a Noteholder
shall have given a Put Event Notice in accordance with Condition 6(f), in each
case prior to any notice being given under this Condition 6(c)) at their
Redemption Amount, together with accrued interest to the date fixed for such
redemption, provided that no such notice of redemption shall be given earlier
than 90 days prior to the earliest date on which the Issuer would be required to
pay such additional amounts were a payment in respect of the Notes then due.

(d) Redemption at the Option of the Issuer and Exercise of Issuer's Options

If so provided in the Pricing Supplement, the Issuer may, on giving irrevocable
notice to the Noteholders falling within the Issuer's Option Period, redeem, or
exercise the Issuer's option in relation to, all or, if so provided, some of the
Notes (other than Notes in respect of which the Issuer shall have given a notice
of redemption pursuant to Condition 6(c) or in respect of which a Noteholder
shall have given a Put Event Notice in accordance with Condition 6(f), in each
case prior to any notice being given under this Condition 6(d)) in the principal
amount or integral multiples thereof and on the date or dates so provided. Any
such redemption of Notes shall be at their Redemption Amount together with
interest accrued to the date fixed for redemption.

All Notes in respect of which any such notice is given shall be redeemed, or the
Issuer's option shall be exercised, on the date specified in such notice in
accordance with this Condition.

In the case of a partial redemption or a partial exercise of the Issuer's
option, the notice to Noteholders shall also contain the certificate numbers of
the Notes to be redeemed or in respect of which such option has been exercised,
which shall have been drawn in such place as the Trustee may approve and in such
manner as it deems appropriate, subject to compliance with any applicable laws
and stock exchange or other relevant authority requirements. So long as the
Notes are listed on the Official List and are admitted to trading on the London
Stock Exchange's market for listed securities or any other stock exchange and
the rules of the relevant stock exchange or other relevant authority so require,
the Issuer shall, once in each year in which there has been a partial redemption
of the Notes, cause to be published in a leading newspaper of general
circulation in the United Kingdom or as specified by such other stock exchange
or other relevant authority, a notice specifying the aggregate principal amount
of Notes outstanding and a list of the Notes drawn for redemption but not
surrendered.

(e) Redemption at the Option of Noteholders and Exercise of Noteholders' Options

If so provided in the Pricing Supplement, the Issue shall, at the option of the
holder of any such Note, redeem such Note on the date or dates so provided at
its Redemption Amount together with interest accrued to the date fixed for
redemption.

To exercise such option or any other Noteholders option that may be set out
hereon the holder must deposit (in the case of Bearer Notes) such Note (together
with all unmatured Receipts and Coupons and unexchanged Talons) with any Paying
Agent or (in the case of Registered Notes) the Certificate representing such
Note(s) with the Registrar or any Transfer Agent at its specified office,
together with a duly completed option exercise notice ("Exercise Notice" which
expression shall include any Put Notice (as defined below)) in the form
obtainable from any Paying Agent, the Registrar or any Transfer Agent (as
applicable) within the Noteholder's Option Period (which expression shall, in
the case of the exercise of the option referred to in Condition 6(f) below, mean
the Put Period (as defined below)). No Note or Certificate so deposited and
option may be withdrawn without the prior consent of the Issuer, except that
such Note or Certificate will be returned to the relevant Noteholder by the
Paying Agent, the Registrar or Transfer Agent with which it has been deposited
if, prior to the due date for its redemption or the exercise of the option, the
Note becomes immediately due and payable or if upon due presentation payment of
the redemption moneys is not made or exercise of the option is denied.

(f) Redemption at the Option of the Noteholders' on a Put Event

If this Condition 6(f) is specified in the Pricing Supplement as being
applicable, then if, at any time while any of the Notes remains outstanding, a
Restructuring Event occurs and prior to the commencement of or during the
Restructuring Period an

                                      -56-

<PAGE>

Independent Financial Adviser shall have certified in writing to the Trustee
that such Restructuring Event will not be or is not, in its opinion, materially
prejudicial to the interests of the Noteholders, the following provisions of
this Condition 6(f) shall cease to have any further effect in relation to such
Restructuring Event.

If, at any time while any of the Notes remains outstanding, a Restructuring
Event occurs and (subject to this Condition 6(f)) within the Restructuring
Period, either:

(i) if at the time such Restructuring Event occurs there are Rated Securities, a
Rating Downgrade in respect of such Restructuring Event also occurs; or

(ii) if at such time there are no Rated Securities, a Negative Rating Event also
occurs; and

an Independent Financial Adviser shall have certified in writing to the Trustee
that such Restructuring Event is, in its opinion, materially prejudicial to the
interests of the Noteholders (a "Negative Certification"), then, unless at any
time the Issuer shall have given a notice under Condition 6(c) or 6(d), the
holder of each Note will, upon the giving of a Put Event Notice (as defined
below), have the option (the "Put Option") to require the Issuer to redeem or,
at the option of the Issuer, purchase (or procure the purchase of) that Note on
the Put Date (as defined below), at its principal amount together with (or,
where purchased, together with an amount equal to) interest (if any) accrued to
(but excluding) the Put Date.

An event shall be deemed not to be a Restructuring Event if, notwithstanding the
occurrence of a Rating Downgrade or a Negative Rating Event, the rating assigned
to the Rated Securities by any Rating Agency is subsequently increased to, or,
as the case may be, there is assigned to the Notes or other unsecured and
unsubordinated debt of the Issuer or a Relevant Subsidiary (or of any Subsidiary
of the Issuer which is guaranteed on an unsecured and unsubordinated basis by
the Issuer or a Relevant Subsidiary) having an initial maturity of five years or
more by any Rating Agency, an investment grade rating (BBB-/Baa3 or their
respective equivalents for the time being) or better prior to any Negative
Certification being issued.

Any certification by an Independent Financial Adviser as aforesaid as to whether
or not, in its opinion any Restructuring Event is materially prejudicial to the
interests of the Noteholders shall, in the absence of manifest error, be
conclusive and binding on the Trustee, the Issuer and the Noteholders.

Promptly upon, and in any event within 14 days after, the Issuer becoming aware
that a Put Event has occurred, the Issuer shall, and at any time upon the
Trustee becoming similarly so aware the Trustee may, and if so requested by the
holders of at least one-quarter in principal amount of the Notes then
outstanding shall, give notice (a "Put Event Notice") to the Noteholders in
accordance with Condition 16 specifying the nature of the Put Event and the
procedure for exercising the Put Option.

To exercise the Put Option, the holder of a Note must deposit (in the case of a
Bearer Note) such Note with any Paying Agent or (in the case of Registered
Notes) the Certificate representing such Note(s) with the Registrar or any
Transfer Agent at its specified office, on a day which is a Business Day in the
City of London and in the place of such specified office falling within the
period (the "Put Period") of 45 days after that on which a Put Event Notice is
given, accompanied by a duly completed and signed notice of exercise in the form
(for the time being current) obtainable from any specified office of any Paying
Agent, the Registrar or any Transfer Agent (as applicable) (a "Put Notice") and
in which the holder may specify a bank account to which payment is to be made
under this Condition 6. Where any Bearer Note is delivered without all Coupons
relating to it which mature after the day (the "Put Date") being the fifteenth
day after the date of expiry of the Put Period, the exercise of the Put Option
in respect of such Note shall be subject to the provision of such indemnity as
the Issuer may reasonably require. The Paying Agent to which such Note and Put
Notice or, as the case may be, the Registrar or Transfer Agent to which the
Certificate and Put Notice are delivered shall issue to the Noteholder concerned
a non-transferable receipt in respect of the Note so delivered. Payment in
respect of any Note so delivered shall be made, if the holder duly specifies in
the Put Notice an account with a bank to which payment is to be made, on the Put
Date by transfer to that bank account and, in every other case, on or after the
Put Date in each case against presentation and surrender or (as the case may be)
endorsement of such receipt at any specified office of any Paying Agent. A Put
Notice, once given, shall be irrevocable. For the purposes of Conditions 9, 10,
11, 12, 14, 16 and 17 and for certain other purposes specified in the Trust
Deed, receipts issued pursuant to this Condition 6(f), shall be treated as if
they were Notes. The Issuer shall redeem or, at the option of the Issuer.
purchase (or procure the purchase of) the relevant Note on the applicable Put
Date unless previously redeemed or purchased.

A Rating Downgrade or a Negative Rating Event or a non-investment grade rating
shall be deemed not to have occurred as a result or in respect of a
Restructuring Event if the Rating Agency making the relevant reduction in rating
or, where applicable, declining to assign a rating of at least investment grade
as provided in this Condition 6(f) does not announce or publicly confirm or
inform the Trustee in writing at its request that the reduction or, where
applicable, declining to assign a rating of at least investment grade was the
result, in whole or in part, of any event or circumstance comprised in or
arising as a result of the applicable Restructuring Event.

The Trust Deed provides that the Trustee is under no obligation to ascertain
whether a Restructuring Event, a Negative Rating Event or any event which could
lead to the occurrence of, or could constitute a, Restructuring Event has
occurred and until it shall have actual knowledge or express notice pursuant to
the Trust Deed to the contrary the Trustee may assume that no Restructuring
Event, Negative Rating Event or such other event has occurred. The Trust Deed
also provides that in determining whether or not a Restructuring Event has
occurred, the Trustee may rely solely on an opinion given in a certificate
signed by two directors of the Issuer.

                                       -57-

<PAGE>

In these Conditions:

"Balancing and Settlement Code" means the BSC, as provided for in the NGC
Transmission Licence; and references to the Balancing and Settlement Code
include the Balancing and Settlement Code as given contractual force and effect
by the Framework Agreement;

"Business Day" means, in relation to any place, a day on which commercial banks
and foreign exchange markets generally settle payments in that place;

"Capital and Reserves" means the aggregate of:

(i) the amount paid up or credited as paid up on the share capital of the
Issuer; and

(ii) the total of the reserves of the Group, including any share premium
account, revaluation reserve, capital redemption reserve, merger reserve and the
balance on the profit and loss account, but excluding amounts attributable to
minority interests, all as shown in the then latest audited consolidated balance
sheet of the Group prepared in accordance with generally accepted accounting
principles in the United Kingdom, but adjusted as may be necessary in respect of
any variation in the paid up share capital or share premium account of the
Issuer since the date of that balance sheet and further adjusted as may be
necessary to reflect any change since the date of that balance sheet in the
Subsidiary Undertakings comprising the Group and/or as the Directors of the
Issuer may consider appropriate. A report by the Directors of the Issuer as to
the amount of Capital and Reserves at any given time accompanied by a report by
the Auditors (as defined in the Trust Deed) addressed to the Directors of the
Issuer and the Trustee as to proper extraction of the figures used by the
Directors of the Issuer in determining Capital and Reserves at any given time
and mathematical accuracy of the calculations shall, in the absence of manifest
error, be conclusive and binding on the Trustee and the Noteholders. For the
avoidance of doubt, the Auditors in their report will not comment on, and will
have no responsibility to consider whether the adjustments made by the Directors
of the Issuer are appropriate or complete;

"Distribution Licence" means the electricity distribution licence granted or
treated as granted to SP Distribution Limited (SC189125) under Section 6(l)(c)
of the Electricity Act as modified and in force from time to time;

"Electricity Act" means the Electricity Act 1989 as amended or re-enacted from
time to time and all subordinate legislation made pursuant thereto;

"Excluded Subsidiary" means:

(i) Southern Water plc;

(ii) any Subsidiary of Southern Water plc;

(iii) Thus plc; and

(iv) any Subsidiary of the Issuer:

(a) which is a single purpose company whose principal assets and business are
constituted by the ownership, acquisition, development and/or operation of an
asset;

(b) none of whose indebtedness for borrowed money in respect of the financing of
such ownership, acquisition, development and/or operation of an asset is subject
to any recourse whatsoever to any member of the Group (other than such
Subsidiary or another Excluded Subsidiary) in respect of the repayment thereof,
except as expressly referred to in sub-paragraph (ii) of the definition of
Project Finance Indebtedness; and

(c) which has been designated as such by the Issuer by written notice to the
Trustee, provided that the Issuer may give written notice to the Trustee at any
time that any Excluded Subsidiary is no longer an Excluded Subsidiary, whereupon
it shall cease to be an Excluded Subsidiary;

"Framework Agreement" shall have the meaning ascribed to BSC Framework Agreement
in the NGC Transmission Licence;

"Gas and Electricity Markets Authority" means the authority so named and
established under Section 1 of the Utilities Act 2000;

"Generation Licence" means the electricity generation licence granted or treated
as granted to Scottish Power Generation Limited (SC189124) under Section 6(1)(a)
of the Electricity Act as modified and in force from time to time;

["Group" means Scottish Power plc and its Subsidiary Undertakings and "member of
the Group" shall be construed accordingly;]

*["Group" means Scottish Power UK plc and its Subsidiary Undertakings and
"member of the Group" shall be construed accordingly;]

"indebtedbness for borrowed money" means any present or future indebtedness
(whether being principal, premium interest or other amounts) for or in respect
of (i) money borrowed, (ii) liabilities under or in respect of any acceptance or
acceptance credit, or (iii) any notes, bonds, debentures, debenture stock, loan
stock or other securities offered, issued or distributed

                                      -58-

<PAGE>

whether by way of public offer, private placing, acquisition consideration or
otherwise and whether issued for cash or in whole or in part or for a
consideration other than cash;

"Independent Financial Adviser" means a financial adviser appointed by the
Issuer and approved by the Trustee (such approval not to be unreasonably
withheld or delayed) or, if the Issuer shall not have appointed such an adviser
within 21 days after becoming aware of the occurrence of a Restructuring Event
and the Trustee is indemnified to its satisfaction against the costs of such
adviser, appointed by the Trustee following consultation with the Issuer;

"Manweb Licence" means the electricity distribution licence granted or treated
as granted to SP Manweb plc (2366937) under Section 6(l)(c) of the Electricity
Act as modified and in force from time to time;

"Negative Pledge Company" means each of SP Distribution Limited (SC189125), SP
Transmission Limited (SCl89126) and Scottish Power Generation Limited
(SCl89124);

A "Negative Rating Event" shall be deemed to have occurred if (A) the Issuer
does not, either prior to or not later than 14 days after the date of a Negative
Certification in respect of the revelant Restructuring Event, seek, and
thereupon use all reasonable endeavours to obtain, a rating of the Notes or any
other unsecured and unsubordinated debt of the Issuer or a Relevant Subsidiary
(or of any Subsidiary of the Issuer which is guaranteed on an unsecured and
unsubordinated basis by the Issuer or a Relevant Subsidiary) having an initial
maturity of five years or more from a Rating Agency or (B) if it does so seek
and use such endeavours, it is unable, as a result of such Restructuring Event,
to obtain such a rating of at least investment grade (BBB-/Baa3, or their
respective equivalents for the time being);

"NGC Transmission Licence" means the licence granted to The National Grid
Company plc under Section 6(l)(b) of the Electricity Act;

["Principal Subsidiary" at any time shall mean:

(A) any Relevant Subsidiary; or

(B) any Subsidiary of the Issuer (not being an Excluded Subsidiary or any other
Subsidiary of the Issuer 90% in principal amount of whose indebtedness for
borrowed money is Project Finance Indebtedness):

(i) whose (a) profits on ordinary activities before tax or (b) net assets
represent 20% or more of the consolidated profits on ordinary activities before
tax of the Group or consolidated net assets of the Group respectively, in each
case as calculated by reference to the then latest audited financial statements
of such Subsidiary and the then latest audited consolidated financial statements
of the Group; or

(ii) to which is transferred all or substantially all of the business,
undertaking and assets of a Subsidiary of the Issuer which immediately prior to
such transfer is a Principal Subsidiary, whereupon the transferor Subsidiary
shall immediately cease to be a Principal Subsidiary and the transferee
Subsidiary shall cease to be a Principal Subsidiary under the provisions of
this sub-paragraph (ii) (but without prejudice to the provisions of
sub-paragraph (i) above), upon publication of its next audited financial
statements,

all as more fully defined in the Trust Deed.

A report by the Directors of the Issuer that, in their opinion, a Subsidiary of
the Issuer is or is not or was or was not at any particular time or throughout
any specified period a Principal Subsidiary, accompanied by a report by the
Auditors addressed to the Directors of the Issuer and the Trustee as to proper
extraction of the figures used by the Directors of the issuer in determining the
Principal Subsidiaries of the Issuer and mathematical accuracy of the
calculations shall, in the absence of manifest error, be conclusive and binding
on the Trustee and the Noteholders;]

*["Principal Subsidiary" means any one of SP Distribution Limited (SCl89125), SP
Transmission Limited (SC189126) or SP Manweb plc (2366937);]

"Project Finance Indebtedness" means any present or future indebtedness incurred
to finance the ownership, acquisition, development and/or operation of an asset,
whether or not an asset of a member or the Group

(i) which is incurred by an Excluded Subsidiary; or

(ii) in respect of which the person or persons to whom any such indebtedness is
or may be owned by the relevant borrower (whether or not a member of the Group)
has or have no recourse whatsoever to any member of the Group (other than an
Excluded Subsidiary) for the repayment thereof other than:

(A) recourse for amounts limited to the cash flow or net cash flow (other than
historic cash flow or historic net cash flow) from such asset; and/or

(B) recourse for the purpose only of enabling amounts to be claimmed in respect
of such indebtedness in an enforcement of any encumbrance given by such borrower
over such asset or the income, cash flow or other proceeds, deriving therefrom
(or given by any shareholder or the like in the borrower over its shares or the
like in the capital of the borrower) to secure such indebtedness, provided that
(aa) the extent of such recourse is limited solely to the amount of any
recoveries made on any such enforcement, and (bb) such person or persons is/are
not entitled, by virtue of any right or claim arising out of or in connection
with such indebtedness, to commence proceedings for the winding up or
dissolution of any member of the Group (other than

                                       -59-

<PAGE>

an Excluded Subsidiary) or to appoint or procure the appointment of any
receiver, trustee or similar person or officer in respect of any member of the
Group (other than an Excluded Subsidiary) or any of its assets (save for the
assets the subject of such encumbrance); and/or

(C) recourse under any form of assurance, undertaking or support, which recourse
is limited to a claim for damages (other than liquidated damages and damages
required to be calculated in a specified way) for breach of an obligation (not
being a payment obligation or on obligation to procure payment by another or an
indemnity in respect thereof or any obligation to comply or to procure
compliance by another with any financial ratios or other tests of financial
condition) by any member of the Group (other than an Excluded Subsidiary);

A "Put Event" occurs on the date of the last to occur of (aa) a Restructuring
Event, (bb) either a Rating Downgrade or, as the case may be, a Negative Rating
Event and (cc) the relevant Negative Certification;

"Rated Securities" means the Notes, if at any time and for so long as they have
a rating from a Rating Agency, and otherwise any other unsecured and
unsubordinated debt of the Issuer or a Relevant Subsidiary (or of any Subsidiary
of the Issuer which is guaranteed on an unsecured and unsubordinated basis by
the Issuer or a Relevant Subsidiary) having an initial maturity of five years or
more which is rated by a Rating Agency;

"Rating Agency" means Standard & Poor's Rating Services, a division of the
McGraw-Hill Companies, Inc. or any of its Subsidiary Undertakings and their
successors or Moody's Investors Service, Inc. or any of its Subsidiary
Undertakings and their successors or Fitch Ratings Ltd. or any of its Subsidiary
Undertakings and their successors or any rating agency substituted for any of
them (or any permitted substitute of them) by the Issuer from time to time with
the prior written approval of the Trustee (such approval not to be unreasonably
withheld or delayed);

A "Rating Downgrade" shall be deemed to have occurred in respect of a
Restructuring Event if the then current rating assigned to the Rated Securities
by any Rating Agency (whether provided by a Rating Agency at the invitation of
the Issuer or by its own volition) is withdrawn or reduced from an investment
grade rating (BBB-/Baa3, or their respective equivalents for the time being, or
better) to a non-investment grade rating (BB+/Ba1, or their respective
equivalents for the time being, or worse) or, if the Rating Agency shall then
have already rated the Rated Securities below investment grade (as described
above), the rating is lowered one full rating category (from BB+/Ba1 to BB/Ba2
or such similar lowering);

"Relevant Indebtedness" means any present or future indebtedness (whether being
principal, premium, interest or other amounts) in the form of or represented by
notes, bonds, debentures, debenture stock, loan stock or other securities,
whether issued for cash or in whole or in part for a consideration other than
cash, and which, with the agreement of the person issuing the same, are quoted,
listed or ordinarily dealt in on any stock exchange or recognised
over-the-counter or other securities market, but shall in any event not include
Project Finance Indebtedness;

["Relevant Licence" means the Generation Licence, the Transmission Licence, the
Distribution Licence, the Manweb Licence or the Supply Licence or, in any such
case, and from time to time, any other licence or licences relating to the
transmission, distribution or supply of electricity in the United Kingdom
granted to the Issuer and/or my Relevant Subsidiary as contemplated pursuant to
paragraph (A) of "Restructuring Event" below and "Relevant Licence" shall be
construed accordingly;]

*["Relevant Licence" means the Distribution Licence, the Transmission Licence or
the Manweb Licence or, in any such case, and from time to time, any other
licence or licences relating to the distribution or transmission of electricity
in the United Kingdom granted to the Issuer and/or any Relevant Subsidiary as
contemplated pursuant to paragraph (A) of "Restructuring Event" below and
"Relevant Licence" shall be construed accordingly;]

["Relevant Subsidiary" means a member of the Group that holds a Relevant
Licence;]

*["Relevant Subsidiary" means any one of SP Distribution Limited
(SC189125), SP Transmission Limited (SC189126) or SP Manweb plc (2366937) or
such other Subsidiary Undertaking of Scottish Power UK plc as may be agreed
between Scottish Power UK plc and the Trustee from time to time;]

"Restructuring Event" means the occurrence of any one or more of the following
events:

(A) (aa) the Secretary of State gives the Issuer or any Relevant Subsidiary
written notice of revocation of any Relevant Licence and provided that the
giving of notice pursuant to paragraph 3 of Part I of any Relevant Licence shall
not be deemed to constitute the revocation of the Relevant Licence; or

(bb) the Issuer or any Relevant Subsidiary agrees in writing with the Secretary
of State to any revocation or surrender of any Relevant Licence; or

(cc) any legislation (whether primary or subordinate) is enacted terminating or
revoking any Relevant Licence,

except in any such case in circumstances where a licence or licences on
substantially not less favourable terms is or are granted to the Issuer or one
or more Relevant Subsidiaries or Subsidiary Undertakings (not being an Excluded
Subsidiary) of the Issuer;

(B) any modification (other than a modification which is of a formal, minor or
technical nature) is made to the terms and conditions of any Relevant Licence on
or after the date of the relevant Pricing Supplement, unless two directors of
the Issuer

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have certified in good faith to the Trustee that the modified terms and
conditions are not materially less favourable to the business of the Group and
to the business of the member of the Group holding the Relevant Licence; or

(C) (aa) the Balancing and Settlement Code is terminated and not replaced by one
or more agreements, commercial arrangements or open market mechanisms or
frameworks, in each case on terms which two directors of the Issuer certify in
good faith to the Trustee to be not materially less favourable to the business
of the Group or to the business of the Relevant Subsidiary or Relevant
Subsidiaries party to the Balancing and Settlement Code; or

(bb) any Relevant Subsidiary is given an Expulsion Notice (as defined in the
Balancing and Settlement Code) pursuant to Section A.5.2.4 ("Expulsion") of the
Balancing and Settlement Code requiring it to cease to be a party thereto; or

(cc) where there shall have occurred a Default (as defined in the Balancing and
Settlement Code) under Section H.3.1.1 ("Default") Of the Balancing and
Settlement Code in relation to any Relevant Subsidiary and such default remains
unremedied or unwaived; or

(dd) any Relevant Subsidiary ceases to be a party to the Balancing and
Settlement Code for any reason (other than pursuant to (bb) and (cc) above)
except where a licence or licences is or are granted to one or more Subsidiaries
as contemplated by sub-paragraph (A) above and at or about the same time all
rights and obligations of the Relevant Subsidiary pursuant to the Balancing and
Settlement Code which are attributable to such licence(s) are assigned and
transferred to such Subsidiary and/or Subsidiaries in such manner as the Trustee
may approve (such approval not to be unreasonably withheld or delayed) or such
Subsidiary or Subsidiaries enters or enter into one or more agreements,
commercial arrangements or open market mechanisms or frameworks in relation to
such licence(s) which the directors of the Issuer certify to be not materially
less favourable to the business of the Group; or

(D) any legislation (whether primary or subordinate) is enacted which removes,
qualifies or amends (other than an amendment which is of a formal, minor or
technical nature) the functions or duties of the Secretary of State and/or the
Gas and Electricity Markets Authority under the Electricity Act unless two
directors of the Issuer have certified in good faith to the Trustee that such
removal, qualification or amendment is unlikely to have materially adverse
effect on the financial condition of the Group or any Relevant Subsidiary;

"Restructuring Period" means:

(A) if at any time a Restructuring Event occurs there are Rated Securities, the
period of 90 days starting from and including the day on which that
Restructuring Event occurs; or

(B) if at the time a Restructuring Event occurs there are no Rated Securities,
the period starting from and including the day on which that Restructuring Event
occurs and ending on the day 90 days following the later of (aa) the date on
which the Issuer shall seek to obtain a rating as contemplated in the definition
of Negative Rating prior to the expiry of the 14 days referred to in that
definition and (bb) the date on which a Negative Certification shall have been
given to the Issuer in respect of that Restructuring Event;

"Secretary of State" means the Secretary of State for Trade and Industry (or any
successor) or, as the case may be, the Secretary of State for Scotland (or any
successor);

"Subsidiary" means a subsidiary within the meaning of Section 736 of the
Companies Act 1985;

"Subsidiary Undertaking" shall have the meaning given to it by Section 258 of
the Companies Act 1985 (but, in relation to the Issuer, shall exclude any
undertaking (as defined in the Companies Act 1985) whose accounts are not
included in the then latest published audited consolidated accounts of the
Issuer, or (in the case of an undertaking which has first become a subsidiary
undertaking of a member of the Group since the date as at which any such audited
accounts were prepared) would not have been so included or consolidated if it
had become so on or before that date);

"Supply Licence" means the electricity supply licence granted or treated as
granted to ScottishPower Energy Retail Limited (SC190287) under Section 6(1)(d)
of the Electricity Act as modified and in force from time to time; and

"Transmission Licence" means the electricity transmission licence granted or
treated as granted to SP Transmission Limited (SC189126) under Section 6(1)(b)
of the Electricity Act as modified and in force from time to time.

Any reference to an obligation being guaranteed shall include a reference to an
indemnity being given in respect of the obligation.

(g) Purchases

The Issuer and any of its Subsidiaries may to the extent permitted by applicable
law, at any time purchase Notes (provided that all unmatured Receipts and
Coupons and unexchanged Talons relating thereto are attached thereto or
surrendered therewith) in the open market or otherwise at any price.

(h) Cancellation

All Notes purchased by or on behalf of the Issuer or any of its Subsidiaries
shall be surrendered for cancellation, in the case of Bearer Notes, by
surrendering each such Note together with all unmatured Receipts and Coupons and
all unexchanged Talons to the Issuing and Paying Agent and, in the case of
Registered Notes, by surrendering the Certificate representing such Notes

                                      -61-

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to the Registrar and, in each case if so surrendered, shall, together with all
Notes redeemed by the Issuer, be cancelled forthwith (together with all
unmatured Receipts and Coupons and unexchanged Talons attached thereto or
surrendered therewith). Any Notes so surrendered for cancellation may not be
reissued or resold.

7.  Payments and Talons

(a) Bearer Notes

Payments of principal and interest in respect of Bearer Notes shall, subject as
mentioned below, be made against presentation and surrender of the relevant
Receipts (in the case of payments of Instalment Amounts other than on the due
date for redemption and provided that the Receipt is presented for payment
together with its relative Note), Notes (in the case of all other payments of
principal and, in the case of interest, as specified in Condition 7(f)(vi)) or
Coupons (in the case of interest, save as specified in Condition 7 (f)(ii)), as
the case may be, at the specified office of any Paying Agent outside the United
States by a cheque payable in the currency in which such payment is due drawn
on, or at the option of the holder, by transfer to an account denominated in
that currency with, a bank in the principal financial centre for that currency
or, in the case of payment in euro, at the option of the holder by transfer to,
or cheque drawn on, a euro account (or any other account to which euro may be
transferred) specified by the holder.

(b) Registered Notes

(i) Payments of principal (which for the purposes of this Condition 7(be shall
include final Instalment Amounts but not other Instalment Amounts) in respect of
Registered Notes shall be made against presentation and surrender of the
relevant Certificates at the specified office of any of the Transfer Agents or
of the Registrar and in the manner provided in paragraph (ii) below.

(ii) Interest (which for the purpose of this Condition 7(b) shall include all
Instalment Amounts other than final Instalment Amounts) on Registered Notes
shall be paid to the person shown on the Register at the close of business on
the fifteenth day before the due date for payment thereof (the "Record Date").
Payments of interest on each Registered Note shall be made in the currency in
which such payments are due by cheque drawn on a bank in the principal financial
centre of the country of the currency concerned and mailed to the holder (or to
the first named of joint holders) of such Note at its address appearing in the
Register. Upon application by the holder to the specified office of the
Registrar or any Transfer Agent before the Record Date and subject as provided
in Condition 7(a) above, such payment of interest may be made by transfer to an
account in the relevant currency maintained by the payee with a bank in the
principal financial centre of the country of that currency or, in the case of
payment in euro, by transfer to a euro account (or any other account to which
euro may be transferred) specified by the holder.

(c) Payments in the United States

Notwithstanding the foregoing, if any Bearer Notes are denominated in US
dollars, payments in respect thereof may be made at the specified office of any
Paying Agent in New York City in the same manner as aforesaid if (i) the Issuer
shall have appointed Paying Agents with specified offices outside the United
States with the reasonable expectation that such Paying Agents would be able to
make payment of the amounts on the Notes in the manner provided above when due,
(ii) payment in full of such amounts at all such offices is illegal or
effectively precluded by exchange controls or other similar restrictions on
payment or receipt of such amounts and (iii) such payment is then permitted by
United States law, without involving, in the opinion of the Issuer, any adverse
tax consequence to the Issuer.

(d) Payments Subject to Fiscal Laws

Al1 payments are subject in all cases to any applicable fiscal or other laws,
regulations and directives, but without prejudice to the provisions of Condition
8. No commission or expenses shall be charged to the Noteholders or
Couponholders in respect of such payments.

(e) Appointment of Agents

The Issuing and Paying Agent, the Paying Agents, the Registrar and the Transfer
Agents annually appointed by the Issuer and their respective specified offices
are listed below. The Issuing and Paying Agent, the Paying Agents, the
Registrar, the Transfer Agents and the Calculation Agent act solely as agents of
the Issuer and do not assume any obligation or relationship of agency or trust
for or with any Noteholder or Couponholder. The Issuer reserves the right at any
time with the approval of the Trustee to vary or terminate the appointment of
the Issuing and Paying Agent, any other Paying Agent, the Registrar, any
Transfer Agent or the Calculation Agent and to appoint additional or other
Paying Agents or Transfer Agents, provided that the Issuer shall at all times
maintain (i) an Issuing and Paying Agent, (ii) a Registrar in relation to
Registered Notes, (iii) a Transfer Agent in relation to Registered Notes, (iv)
one or more Calculation Agent(s) where the Conditions so require, (v) Paying
Agents having specified offices in at least two major European Cities (including
London, so long as the Notes are listed on the Official List and admitted to
trading on the London Stock Exchange's market for listed securities), (vi) such
other agents as may be required by any other stock exchange on which the Notes
may be listed, in each case, as approved by the Trustee and (vii) if any
European Union Directive on the taxation of savings implementing the conclusions
of the ECOFIN Council meeting of 26th-27th November 2000 or any law
implementing or complying with, or introduced in order to conform to such
Directive is introduced, a Paying Agent and a Transfer Agent with a specified
office in a European Union member state that

                                       -62-

<PAGE>

will not be obliged to withhold or deduct tax pursuant to such Directive or law
if there is any such European Union member state.

In addition, the Issuer shall forthwith appoint a Paying Agent in New York City
in respect of any Bearer Notes denominated in US dollars in the circumstances
described in paragraph (c) above.

Notice of any such change or any change of any specified office shall promptly
be given to the Noteholders.

(f)   Unmatured Coupons and Receipts and Unexchanged Talons

(i)   Unless the Pricing Supplement provides that the relative Coupons are to
become void upon the due date for redemption of those Notes, Bearer Notes should
be surrendered for payment together with all unmatured Coupons (if any)
appertaining thereto, failing which an amount equal to the face value of each
missing unmatured Coupon (or, in the case of payment not being made in full,
that proportion of the amount of such missing unmatured Coupon that the sum of
principal so paid bears to the total principal due) shall be deducted from the
Redemption Amount due for payment. Any amount so deducted shall be paid in the
manner mentioned above against surrender of such missing Coupon within a period
of 10 years from the Relevant Date for the payment of such principal (whether or
not such Coupon has become void pursuant to Condition 9).

(ii)  If the Pricing Supplement so provides, upon the due date for redemption of
any Bearer Note, unmatured Coupons relating to such Note (whether or not
attached) shall become void and no payment shall be made in respect of them.

(iii) Upon the due date for redemption of any Bearer Note, any unexchanged Talon
relating to such Note (whether or not attached) shall become void and no Coupon
shall be delivered in respect of such Talon.

(iv)  Upon the due date for redemption of any Bearer Note that is redeemable in
instalments, all Receipts relating to such Note having an Instalment Date
falling on or after such due date (whether or not attached) shall become void
and no payment shall be made in respect of them.

(v)   Where any Bearer Note that provides that the relative unmatured Coupons
are to become void upon the due date for redemption of those Notes is presented
for redemption without all unmatured Coupons and any unexchanged Talon relating
to it, and where any Bearer Note is presented for redemption without all
unmatured Coupons and any unexchanged Talon relating to it, redemption shall be
made only against the provision of such indemnity as the Issuer may require.

(vi)  If the due date for redemption of any Note is not a due date for payment
of interest, interest accrued from the preceding due date for payment of
interest or the Interest Commencement Date, as the case may be, shall only be
payable against presentation (and surrender if appropriate) of the relevant
Bearer Note or Certificate representing it, as the case may be. Interest accrued
on a Note that only bears interest after its Maturity Date shall be payable on
redemption of such Note against presentation of the relevant Note or Certificate
representing it, as the case may be.

(g)   Talons

On or after the Interest Payment Date for the final Coupon forming part of a
Coupon sheet issued in respect of any Bearer Note, the Talon forming part of
such Coupon sheet may be surrendered at the specified office of the Issuing and
Paying Agent in exchange for a further Coupon sheet (and if necessary another
Talon for a further Coupon sheet)(but excluding any Coupons that may have become
void pursuant to Condition 9).

(h)   Non-Business Days

If any date for payment in respect of any Note, Receipt or Coupon is not a
business day, the holder shall not be entitled to payment until the next
following business day nor to any interest or other sum in respect of such
postponed payment. In this paragaph, "business day" means a day (other than a
Saturday or a Sunday) on which banks and foreign exchange markets are open for
business in the relevant place of presentation, in such jurisdictions as shall
be specified as "Business Day Jurisdictions" hereon and:

(i)  (in the case of a payment in a currency other than euro) where payment is
to be made by transfer to an account maintained with a bank in the relevant
currency, on which foreign exchange transactions may be carried on in the
relevant currency in the principal financial centre of the country of such
currency or

(ii) (in the case of a payment in euro) which is a TARGET Business Day.

8.    Taxation

All payments of principal and interest by or on behalf of the Issuer in respect
of the Notes, the Receipts and the Coupons shall be made free and clear of, and
without withholding or deduction for, any taxes, duties, assessments or
governmental charges of whatever nature imposed, levied, collected, withheld or
assessed by or within the United Kingdom or any authority therein or thereof
having power to tax, unless such withholding or deduction is required by law. In
the event of such a withholding or deduction required by law, the Issuer shall
pay such additional amounts as shall result in receipt by the Noteholders and
Couponholders of such amounts as would have been received by them had no such
withholding or deduction been required, except that no such additional amounts
shall be payable with respect to any Note, Receipt or Coupon:

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<PAGE>


a)   to, or to a third party on behalf of, a holder who is liable to such taxes,
duties, assessments or governmental charges in respect of such Note. Receipt or
Coupon by reason of his having some connection with the United Kingdom other
than the mere holding of the Note, Receipt or Coupon; or

(b)  presented (or in respect of which the Cetificate representing it is
presented) for payment more than 30 days after the Relevant Date except to the
extent that the holder of it would have been entitled to such additional amounts
on presenting it for payment on the thirtieth day; or

(c)  where such withholding or deduction is imposed on a payment to an
individual and is required to be made pursuant to any European Union Directive
on the taxation of savings implementing the conclusions of the ECOFIN Council
meeting of 26th-27th November 2000 or any law implementing or complying with, or
introduced in order to conform to, such Directive; or

(d)  presented for payment by or on behalf of a Noteholder or a Couponholder who
would have been able to avoid such withholding or deduction by presenting the
relevant Note, Receipt or Coupon to another Paying Agent in a Member State of
the European Union.

As used in these Conditions, "Relevant Date" in respect of any Note, Receipt or
Coupon means the date on which payment in respect of it first becomes due or (if
any amount of the money payable is improperly withheld or refused) the date on
which payment in full of the amount outstanding is made or (if earlier) the date
seven days after that on which notice is duly given to the Noteholders that,
upon further presentation of the Note (or relative Certificate), Receipt or
Coupon being made in accordance with the Conditions, such payment will be made,
provided that payment is in fact made upon such presentation. References in
these Conditions to (i) "principal" shall be deemed to include any premium
payable in respect of the Notes, all Instalment Amounts, Redemption Amounts,
Amortised Face Amounts and all other amounts in the nature of principal payable
pursuant to Condition 6 or any amendment or supplement to it, (ii) "interest"
shall be deemed to include all Interest Amounts and all other amounts payable
pursuant to Condition 5 or any amendment or supplement to it and (iii)
"principal" and/or "interest" shall be deemed to include any additional amounts
that may be payable under this Condition or any undertaking given in addition to
or in substitution for it under the Trust Deed.

9.   Prescription

Claims against the Issuer for payment in respect of the Notes, Receipts and
Coupons (which, for this purpose, shall not include Talons) shall be prescribed
and become void unless made within 10 years (in the case of principal) or five
years (in the case of interest) from the appropriate Relevant Date in respect of
them.

10.  Events of Default

The Trustee at its discretion may, and if so requested in writing by the holders
of at least one- quarter in principal amount of the Notes then outstanding or if
so directed by an Extraordinary Resolution of the Noteholders shall, subject to
being indemnified to its satisfaction, (but, in the case of the happening of any
of the events mentioned in sub-paragraphs (b), (c), (e), (f), (g) and (h) below,
only if the Trustee shall have certified in writing to the Issuer that such
event is, in its opinion, materially prejudicial to the interests of the
Noteholders), give notice to the Issuer that the Notes are, and they shall
accordingly thereby forthwith become, immediately due and repayable at their
principal amount together with accrued interest (as provided in the Trust Deed)
if any of the following events (each an "Event of Default") shall have occurred
(unless such Event of Default has been remedied to the satisfaction of the
Trustee):

(a)  if default is made for a period of 14 days or more in the payment of any
principal or the purchase price due in respect of the Notes or any of them
pursuant to Condition 6 or 21 days or more in the payment of any interest due in
respect of the Notes or any of them; or

(b)  if the Issuer fails to perform or observe any of its other obligations
under the Notes or the Trust Deed and (except where the Trustee shall have
certified to the Issuer in writing that it considers such failure to be
incapable of remedy in which case no such notice or continuation as is
hereinafter mentioned will be required) such failure continues for the period of
60 days (or such longer period as the Trustee may in its absolute discretion
permit) next following the service by the Trustee of notice on the Issuer
requiring the same to be remedied; or

(c)  if (i) any other indebtedness for borrowed money of the Issuer or any
Principal Subsidiary becomes due and repayable prior to its stated maturity by
reason of an event of default or (ii) any such indebtedness for borrowed money
is not paid when due or, as the case may be, within any applicable grace period
(as originally provided) or (iii) the Issuer or any Principal Subsidiary fails
to pay when due (or, as the case may be, within any originally applicable grace
period) any amount payable by it under any present or future guarantee for, or
indemnity in respect of, any indebtedness for borrowed money of any person or
(iv) any security given by the Issuer or any Principal Subsidiary for any
indebtedness for borrowed money of any person or for any guarantee or indemnity
of indebtedness for borrowed money of any person becomes enforceable by reason
of default in relation thereto and steps are taken to enforce such security,
save in any such case where there is a bona fide dispute as to whether the
relevant indebtedness for borrowed money or any such guarantee or indemnity as
aforesaid shall be due and payable, provided that the aggregate amount of the
relevant indebtedness for borrowed money in respect of which any one or more of
the events mentioned above in this sub-paragraph (c) has or have occurred equals
or exceeds whichever is the greater of (Pounds)20,000,000 or its equivalent in
other currencies (as determined by the Trustee) or 2% of Capital and Reserves,
and for the purposes of this sub-paragraph (c), "indebtedness for borrowed
money" shall exclude Project Finance Indebtedness; or

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<PAGE>

(d)  if any order shall be made by any competent court or any resolution shall
be passed for the winding up or dissolutian of the Issuer, save for the purpose
of amalgamation, merger, consolidation, reorganisation, reconstruction or other
similar arrangement on terms previously approved in writing by the Trustee (such
approval not to be unreasonably withheld or delayed having regard to the
interests of the Noteholders) or by an Extraordinary Resolution of the
Noteholders; or

(e)  if any order shall be made by any competent court or any resolution shall
be passed for the winding up or dissolution of a Principal Subsidiary, save for
the purposes of amalgamation, merger, consolidation, reorganisation,
reconstruction or other similar arrangement (A) not involving or arising out of
the insolvency of such Principal Subsidiary and under which all the surplus
assets of such Principal Subsidiary are transferred to the Issuer or any of its
other Subsidiaries (other than an Excluded Subsidiary) or (B) the terms of which
have previously been approved in writing by the Trustee (such approval not to be
unreasonably withheld or delayed having regard to the interests of Noteholders)
or by an Extraordinary Resolution of the Noteholders; or

(f)  if the Issuer or any Principal Subsidiary shall cease to carry on the whole
or substantially the whole of its business (which, for the avoidance of doubt,
is, in the case of the Issuer, its operation as a holding company), save:

(i)  in each case for the purpose of amalgamation, merger, consolidation,
reorganisation, reconstruction or other similar arrangement (A) not involving or
arising out of the insolvency of the Issuer or such Principal Subsidiary and
under which all or substantially all of its assets are transferred to another
member or members of the Group (other than an Excluded Subsidiary) or to a
transferee or transferees which is or are, or immediately upon such transfer
become(s), a member or members of the Group (other than an Excluded Subsidiary),
or (B) the terms of which have previously been approved in writing by the
Trustee or by an Extraordinary Resolution of the Noteholders; or

[(ii)in each case where there is a disposal of Scottish Power UK plc or a
Principal Subsidiary or the business of any Principal Subsidiary under which all
or substantially all of its assets are transferred to a third party or parties
(whether associates or not) for full consideration, by the Issuer or a member or
members of the Group (other than an Excluded Subsidiary) on an arm's length
basis.]

*[(ii) in each case where there is a disposal of a Principal Subsidiary or the
business of any Pincipal Subsidiary under which all or substantially all of its
assets are transferred to a third party or parties (whether associates or not)
for full consideration, by the Issuer or a member or members of the Group (other
than an Excluded Subsidiary) on an arm's length basis,]

provided that if neither the Issuer nor any Subsidiary Undertaking holds a
Relevant Licence, the Issuer shall be deemed to have ceased to carry on the
whole or substantially the whole of its business (and neither of exceptions
(i)(A) or (ii) shall apply); or

(g)  if the Issuer or any Principal Subsidiary shal1 suspend or announce its
intention to suspend payment of its debts generally or shall be declared or
adjudicated by a competent court to be unable, or shall adimt in writing its
inability, to pay its debts generally (within the meaning of Section 123(l) or
(2) of the Insolvency Act 1986) as they fall due, or shall be adjudicated or
found insolvent by a competent court or shall enter into any composition or
other similar arrangement with its creditors generally under Section 1 of the
Insolvency Act 1986; or

(h)  if a receiver, administrative receiver, administrator or other similar
official shall be appointed in relation to the Issuer or any Principal
Subsidiary or in relation to the whole or a substantial part of the undertaking
or assets of any of them or a distress, execution or other process shall be
levied or enforced upon or sued out against, or any encumbrancer shall take
possession of, the whole or a substantial part of the assets of any of them and
in any of the foregoing cases it or he shall not be paid out or discharged
within 90 days (or such longer period as the Trustee may in its absolute
discretion permit).

For the purposes of sub-paragraph (g) above, Section 123(1)(a) of the Insolvency
Act 1986 shall have effect as if for "(Pounds)750" there was substituted
"(Pounds)500,000". Neither the Issuer nor any Principal Subsidiary shall be
deemed to be unable to pay its debts for the purposes of sub-paragraph (g) above
if any such demand as is mentioned in Section 123(l)(a) of the Insolvency Act
1986 is being contested in good faith by the Issuer or the relevant Principal
Subsidiary with recourse to all appropriate measures and procedures or if any
such demand is satisfied before the expiration of such period as may be stated
in any notice given by the Trustee under this Condition.

11.  Meetings of Noteholders, Modification, Waiver and Substitution

(a)  Meetings of Noteholders

The Trust Deed contains provisions for convening meetings of Noteholders to
consider matters affecting their interests, including the modification of any of
the terms and conditions of the Notes or any provisions of the Trust Deed. Any
such modification may be made if sanctioned by an Extraordinary Resolution
(which as provided in the Trust Deed may be passed by written resolution by or
on behalf of the holders of not less than 75 percent in principal amount of the
Notes, as well as at a meeting of Noteholders). The quorum for any meeting
convened to consider an Extraordinary Resolution will be one or more persons
holding or representing a clear majority in principal amount of the Notes for
the time being outstanding, or at any adjourned meeting, one or more persons
being or representing Noteholders whatever the principal amount of the Notes
held or represented, unless the business of such meeting includes consideration
of proposals, inter alia (i) to postpone the maturity or redemption of the
Notes, any Instalment Date or any date for payment of any interest or Interest
Amount on the Notes, (ii) to reduce or cancel the principal amount of, or any
Instalment Amount of, or any premium payable on redemption of, the Notes, (iii)
to reduce the rate or rates of interest in respect of the Notes or to vary the
method or basis of calculating the rate or rates or

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<PAGE>

amount of interest or the basis for calculating any Interest Amount in respect
of the Notes, (iv) If a Minimum and/or a Maximum Interest Rate. Instalment
Amount or Redemption Amount is shown hereon, to reduce any such Minimum and/or
Maximum, (v) to vary any method of, or basis for, calculating the Redemption
Amount, including the method of calculating the Amortised Face Amount, (vi) to
vary the currency or currencies of payment or denomination of the Notes, (vii)
to take any steps that as specified hereon may only be taken following approval
by an Extraordinary Resolution to which the special quorum provisions apply, or
(viii) to modify the provisions concerning the quorum required at any meeting of
Noteholders or the majority required to pass the Extraordinary Resolution, in
which case the neccessary quorum shall be one or more persons holding or
representing not less than two-thirds, or at any adjourned meeting not less than
one-third, in principal amount of the Notes for the time being outstanding. Any
Extraordinary Resolution duly passed shall be binding on Noteholders (whether or
not they were present at the meeting at which such resolution was passed) and on
all Couponholders.

These Conditions may be amended, modified or varied in relation to any Series of
Notes by the terms of the relevant Pricing Supplement in relation to such
Series.

(b) Modification of the Trust Deed

The Trustee may agree, without the consent of the Noteholders or Couponholders,
to (i) any modification of any of the provisions of the Trust Deed, the Notes or
the Coupons that is of a formal, minor or technical nature or is made to correct
a manifest error, and (ii) any other modification (except as mentioned in the
Trust Deed), and any waiver or authorisation of any breach or proposed breach,
of any of the provisions of the Trust Deed that is in the opinion of the Trustee
not materially prejudicial to the interests of the Noteholders. Any such
modification, authorisation or waiver shall be binding on the Noteholders and
the Couponholders and, if the Trustee so requires, such modification shall be
notified to the Noteholders as soon as practicable.

(c) Substitution

The Trust Deed contains provisions permitting the Trustee to agree, subject to
such amendment of the Trust Deed and such other conditions as the Trustee may
require, but without the consent of the Noteholders or the Couponholders, to the
substitution of any other company in place of the Issuer, or of any previous
substituted company, as principal debtor under the Trust Deed and the Notes. In
the case of such a substitution the Trustee may agree, without the consent of
the Noteholders or the Couponholders, to a change of the law governing the
Notes, the Receipts, the Coupons, the Talons and/or the Trust Deed provided that
such change would not in the opinion of the Trustee be materially prejudicial to
the interests of the Noteholders.

(d) Entitlement of the Trustee

In connection with the exercise of its functions (including but not limited to
those referred to in this Condition) the Trustee shall have regard to the
interests of the Noteholders as a class and shall not have regard to the
consequences of such exercise for individual Noteholders or Couponholders and
the Trustee shall not be entitled to require, nor shall any Noteholder or
Couponholder be entitled to claim, from the Issuer any indemnification or
payment in respect of any tax consequence of any such exercise upon individual
Noteholders or Couponholders.

12. Replacement of Notes, Certificates, Receipts, Coupons and Talons

If a Note, Certificate, Receipt, Coupon or Talon is lost, stolen, mutilated,
defaced or destroyed, it may be replaced, subject to applicable laws,
regulations and stock exchange or other applicable authority regulations, at the
specified office of the Issuing and Paying Agent (in the case of Bearer Notes,
Receipts, Coupons or Talons) and of the Registrar (in the case of Certificates)
or such other Paying Agent or Transfer Agent, as the case may be, as may from
time to time be designated by the Issuer for the purpose and notice of whose
designation is given to Noteholders, in each case on payment by the claimant of
the fees and costs incurred in connection therewith and on such terms as to
evidence, security and indemnity (which may provide, inter alia, that if the
allegedly lost, stolen or destroyed Note, Certificate, Receipt, Coupon or Talon
is subsequently presented for payment or, as the case may be, for exchange for
further Coupons, there shall be paid to the Issuer on demand the amount payable
by the Issuer in respect of such Notes, Certificates, Receipts, Coupons or
further Coupons) and otherwise as the Issuer may reasonably require. Mutilated
or defaced Notes, Certificates, Receipts, Coupons or Talons must be surrendered
before replacements will be issued.

13. Further Issues

The Issuer may from time to time without the consent of the Noteholders or
Couponholders create and issue further securities either having the same terms
and conditions as the Notes in all respects (or in all respects except for the
first payment of interest on them) and so that such further issue shall be
consolidated and form a single series with the outstanding securities of any
series (including the Notes) or upon such terms as the Issuer may determine at
the time of their issue. References in these Conditions to the Notes include
(unless the context requires otherwise) any other securities issued pursuant to
this Condition and forming a single series with the Notes. Any further
securities forming a single series with the outstanding securities of any series
(including the Notes) constituted by the Trust Deed or any deed supplemental to
it shall, and any other securities may (with the consent of the Trustee), be
constituted by the Trust Deed. The Trust Deed contains provisions for convening
a single meeting of the Noteholders and the holders of securities of other
series where the Trustee so decides.

                                      -66-

<PAGE>

14. Enforcement

At any time after the Notes become due and payable, the Trustee may, at its
discretion and without further notice, institute such proceedings against the
Issuer as it may think fit to enforce the terms of the Trust Deed, but it need
not take any such proceedings unless (a) it shall have been so directed by an
Extraordinary Resolution or so requested in writing by holders of at least
one-fifth in principal amount of the Notes outstanding, and (b) it shall have
been indemnified to its satisfaction. No Noteholder, Receiptholder or
Couponholder may proceed directly against the Issuer unless the Trustee, having
become bound so to proceed fails to do so within a reasonable time and such
failure is continuing.

15. Indemnification of the Trustee

The Trust Deed contains provisions for the indemnification of the Trustee and
for its relief from responsibility. The Trustee is entitled to enter into
business transactions with the Issuer and any entity related to the Issuer
without accounting for any profit. The Trustee shall be entitled to rely on any
report of the Auditors notwithstanding that the liability of the Auditors in
relation thereto may, by the terms of the same or by any engagement letter (or
any other document), be limited and whether by reference to a monetary cap or
otherwise.

16. Notices

Notices to the holders of Registered Notes shall be mailed to them at their
respective addresses in the Register and deemed to have been given on the fourth
weekday (being a day other than a Saturday or a Sunday) after the date of
mailing. Notices to the holders of Bearer Notes shall be valid if published in
a daily newspaper of general circulation in the United Kingdom (which is
expected to be the Financial Times). The Issuer shall also ensure that notices
are duly published in a manner which complies with the rules and regulations of
any other stock exchange on which the Notes are, for the time being, listed or
other applicable authority to which it is subject. Any such notice shall be
deemed to have been given on the date of such publication or, if published more
than once or on different dates, on the first date on which publication is
made, as provided above.

Couponholders shall be deemed for all purposes to have notice of the contents of
any notice given to the holders of Bearer Notes in accordance with this
Condition.

17. Contracts (Rights of Third Parties) Act 1999

No person shall have any right to enforce any term or condition of the Notes,
the Receipts, the Coupons or the Talons under the Contracts (Rights of Third
Parties) Act 1999.

18. Governing Law and Jurisdiction

(a) Governing Law

The Trust Deed, the Notes, the Receipts, the Coupons and the Talons are governed
by, and shall be construed in accordance with, English law.

(b) Jurisdiction

The courts of England are to have jurisdiction to settle any disputes that may
arise out of or in connection with any Notes, Receipts, Coupons or Talons and
accordingly any legal action or proceedings arising out of or in connection with
any Notes, Receipts, Coupons or Talons ("Proceedings") may be brought in such
courts. The Issuer has in the Trust Deed irrevocably submitted to the
jurisdiction of such courts.

(c) Service of Process

[The Issuer, in accordance with the Trust Deed, will appoint its London office,
whose address is 5th Floor, 30 Cannon Street, London EC4M 6XH to act as its
agent in England to receive, for it and on its behalf, service of process in any
Proceedings in England.]

* [The Issuer, in accordance with the Trust Deed, will procure the appointment
of Scottish Power plc's London office, whose address is 5th Floor, 30 Cannon
Street, London EC4M 6XH to act as its agent in England to receive, for it and on
its behalf, service of process in any Proceedings in England.]

                                      -67-

<PAGE>

                                   SCHEDULE 2
                                     Part D
                                 Form of Coupon

On the front:

SCOTTISH POWER plc

SCOTTISH POWER UK plc

DEBT ISSUANCE PROGRAMME

Series No. [.]

[Title of issue]

Coupon for [[set out amount due, if known]/the amount] due on [the Interest
Payment Date falling in]* [.], [.].

[Coupon relating to Note in the principal amount of [.]]**

This Coupon is payable to bearer (subject to the Conditions endorsed on the Note
to which this Coupon relates, which shall be binding upon the holder of this
Coupon whether or not it is for the time being attached to such Note) at the
specified offices of the Issuing and Paying Agent and the Paying Agents set out
on the reverse hereof (or any other Issuing and Paying Agent or further or other
Paying Agents or specified offices duly appointed or nominated and notified to
the Noteholders).

[If the Note to which this Coupon relates shall have become due and payable
before the maturity date of this Coupon, this Coupon shall become void and no
payment shall be made in respect of it.]***

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

[SCOTTISH POWER plc/SCOTTISH POWER UK plc]

By:





[Cp. No.]     [Denomination]       [ISIN]        [Series]      [Certif. No.]

                                      -68-

<PAGE>

On the back:

CITIBANK, N.A.
5 Carmelite Street
London
EC4Y 0PA

PAYING AGENT
CITIBANK AG, FRANKFURT
Neue Mainzer Strasse 75
60311 Frankfurt am Main

[*Only necessary where Interest Payment Dates are subject to adjustment in
accordance with a Business Day Convention otherwise the particular Interest
Payment Date should be specified.]

[**Only required for Coupons relating to Floating Rate or Variable Coupon Amount
Notes that are issued in more than one denomination.]

[***Delete if Coupons are not to become void upon early redemption of Note.]

                                      -69-

<PAGE>

                                   SCHEDULE 2
                                     Part E
                                  Form of Talon

On the front:

SCOTTISH POWER plc

SCOTTISH POWER UK plc

DEBT ISSUANCE PROGRAMME

Series No. [.]

[Title of issue]

Talon for further Coupons falling due on [the Interest Payment Dates falling
in]*[.] [.].

[Talon relating to Note in the principal amount of [.]]**

After all the Coupons relating to the Note to which this Talon relates have
matured, further Coupons (including if appropriate a Talon for further Coupons)
shall be issued at the specified office of the Issuing and Paying Agent set out
on the reverse hereof (or any other Issuing and Paying Agent or specified office
duly appointed or nominated and notified to the Noteholders) upon production and
surrender of this Talon.

If the Note to which this Talon relates shall have become due and payable before
the original due date for exchange of this Talon, this Talon shall become void
and no exchange shall be made in respect of it.

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

[SCOTTISH POWER plc/SCOTTISH POWER UK plc]

By:



[Talon No.]          [ISIN]        [Series]             [Certif. No.]





On the back:

ISSUING AND PAYING AGENT
CITIBANK, N.A.
5 Carmelite Street
London
EC4Y 0PA

                                      -70-

<PAGE>

PAYING AGENT
CITIBANK AG, FRANKFURT
Neue Mainzer Strasse 75
60311 Frankfurt am Main

[* The maturity dates of the relevant Coupons should be set out if known,
otherwise reference should be made to the months and years in which the Interest
Payment Dates fall due.]

[** Only required where the Series comprises Notes of more than one
denomination.]

                                      -71-

<PAGE>

                                   SCHEDULE 2
                                     Part F
                                 Form of Receipt

SCOTTISH POWER plc

SCOTTISH POWER UK plc

DEBT ISSUANCE PROGRAMME

Series No. [.]

Receipt for the sum of [.] being the instalment of principal payable in
accordance with the Terms and Conditions endorsed on the Note to which this
Receipt relates (the "Conditions") on [.].

This Receipt is issued subject to and in accordance with the Conditions which
shall be binding upon the holder of this Receipt (whether or not it is for the
time being attached to such Note) and is payable at the specified office of any
of the Paying Agents set out on the reverse of the Note to which this Receipt
relates (and/or any other or further Paying Agents and/or specified offices as
may from time to time be duly appointed and notified to the Noteholders).

This Receipt must be presented for payment together with the Note to which it
relates. If the Note to which this Receipt appertains shall have become due and
payable on or before the maturity date of this Receipt, this Receipt shall
become void and no payment shall be made in respect of it. The Issuer shall have
no obligation in respect of this Receipt if it is presented without the Note to
which it relates.

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.

[SCOTTISH POWER plc/SCOTTISH POWER UK plc]

By:

                                      -72-

<PAGE>

                                   SCHEDULE 3
                     Provisions for Meetings of Noteholders

     Interpretation

1    In this Schedule:

1.1  references to a meeting are to a meeting of Noteholders of a single series
     of Notes and include, unless the context otherwise requires, any
     adjournment

1.2  references to "Notes" and "Noteholders" are only to the Notes of the Series
     in respect of which a meeting has been, or is to be, called, and to the
     holders of these Notes, respectively

1.3  "agent" means a holder of a voting certificate or a proxy for, or
     representative of, a Noteholder

1.4  "block voting instruction" means an instruction issued in accordance with
     paragraphs 8 to 14

1.5  "Extraordinary Resolution" means a resolution passed at a meeting duly
     convened and held in accordance with this Trust Deed by a majority of at
     least 75 per cent. of the votes cast. A resolution in writing signed by or
     (to the satisfaction of the Trustee) on behalf of the holders of not less
     than 75 per cent. in principal amount of the Notes who for the time being
     are entitled to receive notice of a meeting in accordance with the
     provisions herein contained shall for all purposes be as valid and
     effectual as, and shall take effect as, an Extraordinary Resolution passed
     at a meeting of such Noteholders duly convened and held in accordance with
     the provisions herein contained. Such resolution in writing may be
     contained in one document or in several documents in like form each signed
     by or on behalf of one or more of the relevant Noteholders

1.6  "voting certificate" means a certificate issued in accordance with
     paragraphs 5, 6, 7 and 14 and

1.7  references to persons representing a proportion of the Notes are to
     Noteholders or agents holding or representing in the aggregate at least
     that proportion in principal amount of the Notes for the time being
     outstanding.

     Powers of meetings

2    A meeting shall, subject to the Conditions and without prejudice to any
     powers conferred on other persons by this Trust Deed, have power by
     Extraordinary Resolution:

2.1  to sanction any proposal by the Relevant Issuer or the Trustee for any
     modification, abrogation, variation or compromise of, or arrangement in
     respect of, the rights of the Noteholders and/or the Couponholders against
     the Relevant Issuer, whether or not those rights arise under this Trust
     Deed

2.2  to sanction the exchange or substitution for the Notes of, or the
     conversion of the Notes into, shares, bonds or other obligations or
     securities of the Relevant Issuer or any other entity

2.3  to assent to any modification of this Trust Deed, the Notes, the Receipts,
     the Talons or the Coupons proposed by the Relevant Issuer or the Trustee

                                      -73-

<PAGE>

2.4  to authorise anyone to concur in and do anything necessary to carry out and
     give effect to an Extraordinary Resolution

2.5  to give any authority, direction or sanction required to be given by
     Extraordinary Resolution

2.6  to appoint any persons (whether Noteholders or not) as a committee or
     committees to represent the Noteholders' interests and to confer on them
     any powers or discretions which the Noteholders could themselves exercise
     by Extraordinary Resolution

2.7  to approve a proposed new Trustee and to remove a Trustee

2.8  to approve the substitution of any entity for the Relevant Issuer (or any
     previous substitute) as principal debtor or guarantor under this Trust Deed
     and

2.9  to discharge or exonerate the Trustee from any liability in respect of any
     act or omission for which it may become responsible under this Trust Deed,
     the Notes, the Receipts, the Talons or the Coupons

provided that the special quorum provisions in paragraph 19 shall apply to any
Extraordinary Resolution (a "special quorum resolution") for the purpose of
sub-paragraph 2.2 or 2.8, any of the proposals listed in Condition 11(a) or any
amendment to this proviso save where such Extraordinary Resolution is passed as
a resolution in writing.

     Convening a meeting

3    The Relevant Issuer or the Trustee may at any time convene a meeting. If it
     receives a written request by Noteholders holding at least 10 per cent in
     principal amount of the Notes of any Series for the time being outstanding
     and is indemnified to its satisfaction against all costs and expenses, the
     Trustee shall convene a meeting of the Noteholders of that Series. Every
     meeting shall be held at a time and place approved by the Trustee.

4    At least 21 days' notice (exclusive of the day on which the notice is given
     and of the day of the meeting) shall be given to the Noteholders. A copy of
     the notice shall be given by the party convening the meeting to the other
     parties. The notice shall specify the day, time and place of meeting and,
     unless the Trustee otherwise agrees, the nature of the resolutions to be
     proposed and shall explain how Noteholders may appoint proxies or
     representatives, obtain voting certificates and use block voting
     instructions and the details of the time limits applicable.

     Arrangements for voting

5    If a holder of a Bearer Note wishes to obtain a voting certificate in
     respect of it for a meeting, he must deposit such Bearer Note for that
     purpose at least 48 hours before the time fixed for the meeting with a
     Paying Agent or to the order of a Paying Agent with a bank or other
     depositary nominated by the Paying Agent for the purpose. The Paying Agent
     shall then issue a voting certificate in respect of it.

6    A voting certificate shall:

6.1  be a document in the English language

6.2  be dated

6.3  specify the meeting concerned and the serial numbers of the Notes deposited
     and

                                      -74-

<PAGE>

6.4  entitle, and state that it entitles, its bearer to attend and vote at that
     meeting in respect of those Notes.

7    Once a Paying Agent has issued a voting certificate for a meeting in
     respect of a Note, it shall not release the Note until either:

7.1  the meeting has been concluded or

7.2  the voting certificate has been surrendered to the Paying Agent.

8    If a holder of a Bearer Note wishes the votes attributable to it to be
     included in a block voting instruction for a meeting, then, at least 48
     hours before the time fixed for the meeting, (i) he must deposit the Note
     for that purpose with a Paying Agent or to the order of a Paying Agent with
     a bank or other depositary nominated by the Paying Agent for the purpose
     and (ii) he or a duly authorised person on his behalf must direct the
     Paying Agent how those votes are to be cast. The Paying Agent shall issue a
     block voting instruction in respect of the votes attributable to all Notes
     so deposited.

9    A block voting instruction shall:

9.1  be a document in the English language

9.2  be dated

9.3  specify the meeting concerned

9.4  list the total number and serial numbers of the Notes deposited,
     distinguishing with regard to each resolution between those voting for and
     those voting against it

9.5  certify that such list is in accordance with Notes deposited and directions
     received as provided in paragraphs 8, 11 and 14 and

9.6  appoint a named person (a "proxy") to vote at that meeting in respect of
     those Notes and in accordance with that list.

     A proxy need not be a Noteholder.

10   Once a Paying Agent has issued a block voting instruction for a meeting in
     respect of the votes attributable to any Notes:

10.1 it shall not release the Notes, except as provided in paragraph 11, until
     the meeting has been concluded and

10.2 the directions to which it gives effect may not be revoked or altered
     during the 48 hours before the time fixed for the meeting.

11   If the receipt for a Note deposited with a Paying Agent in accordance with
     paragraph 8 is surrendered to the Paying Agent at least 48 hours before the
     time fixed for the meeting, the Paying Agent shall release the Note and
     exclude the votes attributable to it from the block voting instruction.

12   Each block voting instruction shall be deposited at least 24 hours before
     the time fixed for the meeting at such place as the Trustee shall designate
     or approve, and in default it shall not be valid unless the chairman of the
     meeting decides otherwise before the meeting proceeds to business. If the
     Trustee requires, a notarially certified copy of each block voting
     instruction shall be produced by the proxy at the meeting but the Trustee
     need not investigate or be concerned with the validity of the proxy's
     appointment.

                                      -75-

<PAGE>

13   A vote cast in accordance with a block voting instruction shall be valid
     even if it or any of the Noteholders' instructions pursuant to which it was
     executed has previously been revoked or amended, unless written intimation
     of such revocation or amendment is received from the relevant Paying Agent
     by the Relevant Issuer or the Trustee at its registered office or by the
     chairman of the meeting in each case at least 24 hours before the time
     fixed for the meeting.

14   No Note may be deposited with or to the order of a Paying Agent at the same
     time for the purposes of both paragraph 5 and paragraph 8 for the same
     meeting.

15.1 A holder of a Registered Note may, by an instrument in writing in the form
     available from the specified office of a Transfer Agent in the English
     language executed by or on behalf of the holder and delivered to the
     Transfer Agent at least 24 hours before the time fixed for a meeting,
     appoint any person (a "proxy") to act on his behalf in connection with that
     meeting. A proxy need not be a Noteholder.

15.2 A corporation which holds a Registered Note may by delivering to a Transfer
     Agent at least 24 hours before the time fixed for a meeting a certified
     copy of a resolution of its directors or other governing body (with, if it
     is not in English, a certified translation into English) authorise any
     person to act as its representative (a "representative") in connection with
     that meeting.

     Chairman

16   The chairman of a meeting shall be such person as the Trustee may nominate
     in writing, but if no such nomination is made or if the person nominated is
     not present within 15 minutes after the time fixed for the meeting the
     Noteholders or agents present shall choose one of their number to be
     chairman, failing which the Relevant Issuer may appoint a chairman. The
     chairman need not be a Noteholder or agent. The chairman of an adjourned
     meeting need not be the same person as the chairman of the original
     meeting.

     Attendance

17   The following may attend and speak at a meeting:

17.1 Noteholders and agents

17.2 the chairman

17.3 the Relevant Issuer and the Trustee (through their respective
     representatives) and their respective financial and legal advisers

17.4 the Dealers and their advisers.

     No-one else may attend or speak.

     Quorum and Adjournment

18   No business (except choosing a chairman) shall be transacted at a meeting
     unless a quorum is present at the commencement of business. If a quorum is
     not present within 15 minutes from the time initially fixed for the
     meeting, it shall, if convened on the requisition of Noteholders or if the
     Relevant Issuer and the Trustee agree, be dissolved. In any other case it
     shall be adjourned until such date, not less than 14 nor more than 42 days
     later,

                                      -76-

<PAGE>

     and time and place as the chairman may decide. If a quorum is not present
     within 15 minutes from the time fixed for a meeting so adjourned, the
     meeting shall be dissolved.

19   One or more Noteholders or agents present in person shall be a quorum:

19.1 in the cases marked "No minimum proportion" in the table below, whatever
     the proportion of the Notes which they represent

19.2 in any other case, only if they represent the proportion of the Notes shown
     by the table below.

<TABLE>
<CAPTION>
     -------------------------------------------------------------------------------------------------
      COLUMN 1                           COLUMN 2                         COLUMN 3
     -------------------------------------------------------------------------------------------------
     <S>                                 <C>                              <C>
      Purpose of meeting                 Any meeting except one           Meeting previously
                                         referred to in column 3          adjourned through want of a
                                         _______________________          quorum

                                         Required proportion              ____________________________

                                                                          Required proportion
     -------------------------------------------------------------------------------------------------
     To pass a special quorum            2/3                              1/3
     resolution
     ------------------------------------------------------------------------------------------------
     To pass any other                   A clear majority                 No minimum proportion
     Extraordinary Resolution
     -------------------------------------------------------------------------------------------------
     Any other purpose                   10 per cent                      No minimum proportion
     ------------------------------------------------------------------------------------------------
</TABLE>

20   The chairman may with the consent of (and shall if directed by) a meeting
     adjourn the meeting from time to time and from place to place. Only
     business which could have been transacted at the original meeting may be
     transacted at a meeting adjourned in accordance with this paragraph or
     paragraph 18.

21   At least 10 days' notice of a meeting adjourned through want of a quorum
     shall be given in the same manner as for an original meeting and that
     notice shall state the quorum required at the adjourned meeting. No notice
     need, however, otherwise be given of an adjourned meeting.

     Voting

22   Each question submitted to a meeting shall be decided by a show of hands
     unless a poll is (before, or on the declaration of the result of, the show
     of hands) demanded by the chairman, the Relevant Issuer, the Trustee or one
     or more persons representing 2 per cent of the Notes.

23   Unless a poll is demanded a declaration by the chairman that a resolution
     has or has not been passed shall be conclusive evidence of the fact without
     proof of the number or proportion of the votes cast in favour of or against
     it.

24   If a poll is demanded, it shall be taken in such manner and (subject as
     provided below) either at once or after such adjournment as the chairman
     directs. The result of the poll shall be deemed to be the resolution of the
     meeting at which it was demanded as at the date it

                                      -77-

<PAGE>

     was taken. A demand for a poll shall not prevent the meeting continuing for
     the transaction of business other than the question on which it has been
     demanded.

25   A poll demanded on the election of a chairman or on a question of
     adjournment shall be taken at once.

26   On a show of hands every person who is present in person and who produces a
     Bearer Note, a Certificate of which he is the registered holder or a voting
     certificate or is a proxy or representative has one vote. On a poll every
     such person has one vote in respect of each principal amount equal to the
     minimum denomination of such Series of Notes so produced or represented by
     the voting certificate so produced or for which he is a proxy or
     representative. Without prejudice to the obligations of proxies, a person
     entitled to more than one vote need not use them all or cast them all in
     the same way.

27   In case of equality of votes the chairman shall both on a show of hands and
     on a poll have a casting vote in addition to any other votes which he may
     have.

     Effect and Publication of an Extraordinary Resolution

28   An Extraordinary Resolution shall be binding on all the Noteholders,
     whether or not present at the meeting, and on all the Couponholders and
     each of them shall be bound to give effect to it accordingly. The passing
     of such a resolution shall be conclusive evidence that the circumstances
     justify its being passed. The Relevant Issuer shall give notice of the
     passing of an Extraordinary Resolution to Noteholders within 14 days but
     failure to do so shall not invalidate the resolution.

     Minutes

29   Minutes shall be made of all resolutions and proceedings at every meeting
     and, if purporting to be signed by the chairman of that meeting or of the
     next succeeding meeting, shall be conclusive evidence of the matters in
     them. Until the contrary is proved every meeting for which minutes have
     been so made and signed shall be deemed to have been duly convened and held
     and all resolutions passed or proceedings transacted at it to have been
     duly passed and transacted.

     Trustee's Power to Prescribe Regulations

30   Subject to all other provisions in this Trust Deed the Trustee may without
     the consent of the Noteholders prescribe such further regulations regarding
     the holding of meetings and attendance and voting at them as it in its sole
     discretion determines including (without limitation) such requirements as
     the Trustee thinks reasonable to satisfy itself that the persons who
     purport to make any requisition in accordance with this Trust Deed are
     entitled to do so and as to the form of voting certificates or block voting
     instructions so as to satisfy itself that persons who purport to attend or
     vote at a meeting are entitled to do so.

31   The holder of a Global Note or Global Certificate shall (unless such Global
     Note or Global Certificate represents only one Note) be treated as 2
     persons for the purposes of any quorum requirements of a meeting of
     Noteholders.

32   The foregoing provisions of this Schedule shall have effect subject to the
     following provisions:

                                      -78-

<PAGE>

32.1 Meetings of Noteholders of separate Series will normally be held
     separately. However, the Trustee may from time to time determine that
     meetings of Noteholders of separate Series shall be held together

32.2 A resolution that in the opinion of the Trustee affects one Series alone
     shall be deemed to have been duly passed if passed at a separate meeting of
     the Noteholders of the Series concerned

32.3 A resolution that in the opinion of the Trustee affects the Noteholders of
     more than one Series but does not give rise to a conflict of interest
     between the Noteholders of the different Series concerned shall be deemed
     to have been duly passed if passed at a single meeting of the Noteholders
     of the relevant Series provided that for the purposes of determining the
     votes a Noteholder is entitled to cast pursuant to paragraph 26, each
     Noteholder shall have one vote in respect of each U.S.$1,000 principal
     amount of Notes held, converted, if such Notes are not denominated in U.S.
     dollars, in accordance with sub-Clause 8.12

32.4 A resolution that in the opinion of the Trustee affects the Noteholders of
     more than one Series and gives or may give rise to a conflict of interest
     between the Noteholders of the different Series concerned shall be deemed
     to have been duly passed only if it shall be duly passed at separate
     meetings of the Noteholders of the relevant Series

32.5 To all such meetings as aforesaid all the preceding provisions of this
     Schedule shall mutatis mutandis apply as though references therein to Notes
     and to Noteholders were references to the Notes and Noteholders of the
     Series concerned.

                                      -79-

<PAGE>

In witness whereof this Trust Deed has been executed as a deed on the date
stated at the beginning.

SCOTTISH POWER plc

By:  ADRIAN COATES                      By: DONALD WRIGHT


SCOTTISH POWER UK plc

By:  ADRIAN COATES                      By: DONALD WRIGHT


THE COMMON SEAL OF THE LAW DEBENTURE TRUST CORPORATION p.l.c. was affixed in the
presence of:


CLIVE RAKESTROW                                       TRUDI ELKINGTON-POOLE

Authorised Signatory                                  Authorised Signatory

                                      -80-