Exhibit 10(a)
                                                                  CONFORMED COPY

                                23RD AUGUST, 2000



                               TXU EUROPE LIMITED






                       AMENDMENT AND RESTATEMENT AGREEMENT

                                  RELATING TO A

         FACILITIES AGREEMENT FOR (POUND)1,075,000,000 CREDIT FACILITIES






                                 FACILITY AGENT
                      CHASE MANHATTAN INTERNATIONAL LIMITED






ALLEN & OVERY                                             NORTON ROSE
for the Finance Parties                                   for TXU Europe Limited


<PAGE>


                                    CONTENTS

CLAUSE                                                                      PAGE

1     Purpose and Definitions..................................................1

2     Amendments to the Principal Agreement....................................2

3     Representations and warranties...........................................2

4     Fees and Expenses........................................................3

5     Effective Date...........................................................4

6     Miscellaneous............................................................4

7     Governing Law............................................................5

Schedule 1 Documents and Evidence required as Conditions Precedent.............6

Schedule 2 Form of Amended and Restated Facilities Agreement...................7


<PAGE>


THIS AGREEMENT is made as of the 23rd day of August, 2000 BETWEEN:

(1)  TXU EUROPE LIMITED (a company registered in England and Wales with company
     number 3505836) (the "PRIMARY BORROWER");

(2)  TXU FINANCE (NO.2) LIMITED, a company registered in England and Wales with
     company number 3514100 ("FINCO 2") and TXU ACQUISITIONS LIMITED, a company
     registered in England and Wales with company number 3455523 ("BIDCO");

(3)  CHASE MANHATTAN PLC, LEHMAN BROTHERS INTERNATIONAL (EUROPE) and MERRILL
     LYNCH CAPITAL CORPORATION as joint lead arrangers;

(4)  THE FINANCIAL INSTITUTIONS named in the execution pages as the Banks;

(5)  THE CHASE MANHATTAN BANK as the Issuing Bank;

(6)  CHASE MANHATTAN INTERNATIONAL LIMITED as the Facility Agent.

IT IS AGREED as follows:

1    PURPOSE AND DEFINITIONS

1.1  PURPOSE

(a)  This Agreement is supplemental to an agreement dated 24th March, 1999 made
     between the parties hereto (as amended by letters dated 4th January, 2000
     and 26th January, 2000) whereby the Banks agreed to make available to the
     Borrowers facilities of up to (pound)1,275,000,000 upon the terms and
     subject to the conditions therein contained (the "PRINCIPAL AGREEMENT").

(b)  The Obligors have requested the Finance Parties to amend and restate the
     Principal Agreement and the Majority Banks have agreed to the amendment and
     restatement of the Principal Agreement as contemplated by this Agreement.

1.2  DEFINITIONS IN PRINCIPAL AGREEMENT

     Unless the context otherwise requires and save as mentioned below, words
     and expressions defined in the Principal Agreement shall have the same
     meanings when used in this Agreement. In this Agreement:

     "EFFECTIVE DATE" shall have the meaning given to it in clause 5.1.


                                       1
<PAGE>


1.3  INCORPORATION OF CERTAIN REFERENCES

     Clauses 1.3 and 1.4 of the Principal Agreement shall be deemed to be
     incorporated in this Agreement in full, mutatis mutandis.

2    AMENDMENTS TO THE PRINCIPAL AGREEMENT

     The Principal Agreement shall be amended, with effect from the Effective
     Date, to read as set out in Schedule 2 to this Agreement.

3    REPRESENTATIONS AND WARRANTIES

The Primary Borrower represents and warrants to each of the Finance Parties
that:

(a)  the principal amount of the Excess Equity Funding has been repaid in full
     (it being acknowledged that such repayment shall constitute the discharge
     of the Excess Equity Funding for all purposes of the Principal Agreement);

(b)  it has power and is able lawfully to execute and deliver this Agreement and
     to exercise its rights and perform its obligations under this Agreement and
     the transactions contemplated hereby and all corporate or other action
     required to be taken by it in order to authorise the execution and delivery
     by it of this Agreement and the performance by it of its obligations has
     been duly taken;

(c)  this Agreement constitutes its legal, valid and binding obligations;

(d)  the execution and delivery by it of this Agreement and the performance by
     it of its obligations under this Agreement will not:

     (i)  contravene any provision of any law, statute (including the
          Electricity Act), decree, rule, regulation or code of practice to
          which it or any of its assets or revenues is subject, or of any order,
          judgement, injunction, decree, resolution, determination or award of
          any court or any judicial, administrative or Governmental Entity or
          organisation having applicability to it or any of its assets or
          revenues; or

     (ii) result in any breach of any of the terms, covenants, conditions or
          provisions of, or constitute a default under, any indenture, mortgage,
          deed of trust, bond, agreement or other instrument or obligation to
          which it is a party or by which it or any of its assets or revenues
          may be bound or affected; or

     (iii) violate any provision of its constitutive documents;


                                       2
<PAGE>


(e)  all consents, approvals, authorisations, exemptions, registrations and
     filings and all acts, conditions and things required to be obtained, done,
     fulfilled and performed in order to:

     (i)  enable it to enter into and exercise its rights and perform its
          obligations under this Agreement; and

     (ii) make this Agreement legal, valid and binding and admissible in
          evidence in England and Wales,

     have been obtained and are in full force and effect or have been done,
     fulfilled or performed (as the case may be); and

(f)  each of the repeating representations and warranties referred to in clause
     9.22(b) of the Principal Agreement are true and correct as if made at the
     date of this Agreement and on the Effective Date with reference to the
     facts and circumstances existing at such dates and as if referring to the
     Principal Agreement as varied by this Agreement.

4    FEES AND EXPENSES

4.1  FEES

The Primary Borrower shall pay to the Facility Agent (for the account of such
Parties as are entitled thereto), such fees as are set out in the fees letter
dated 26th July, 2000 from Chase Manhattan plc to the Primary Borrower (the "NEW
FEE LETTER").

4.2  EXPENSES

The Primary Borrower shall pay to the Facility Agent on demand all reasonable
expenses (including legal fees) incurred by the Facility Agent in connection
with the negotiation, preparation and execution of this Agreement.

4.3  STAMP AND OTHER DUTIES

The Primary Borrower shall pay all stamp, documentary, registration or other
similar duties or Taxes (including any duties or Taxes payable by, or assessed
on, the Banks or the Facility Agent) imposed on or in connection with this
Agreement or the Principal Agreement and shall indemnify the Facility Agent and
the Banks against any liability arising by reason of any delay or omission by
the Primary Borrower to pay such duties or Taxes.


                                       3
<PAGE>


5    EFFECTIVE DATE

5.1  CONDITIONS PRECEDENT DOCUMENTATION

The amendments to be made to the Principal Agreement by this Agreement shall
take effect on and from the date (the "EFFECTIVE DATE") on which the Facility
Agent notifies the Primary Borrower and the Banks that the Facility Agent has
received the documents set out in Schedule 1 in form and substance satisfactory
to it.

5.2  FURTHER CONDITIONS PRECEDENT

The Agent shall give the notice referred to in clause 5.1 unless, on the date on
which it would otherwise have done so, the Facility Agent has received actual
knowledge (i) that an Event of Default has occurred and is continuing or (ii)
that any of the representations and warranties in Clause 3 (Representations and
Warranties) are untrue or incorrect as at such date as if made on such date with
respect to the facts and circumstances existing at such date (unless expressly
instructed in writing by the Majority Banks to do so).

6    MISCELLANEOUS

6.1  CONTINUATION OF PRINCIPAL AGREEMENT

Save as amended by this Agreement, the provisions of the Principal Agreement
shall continue in full force and effect and the Principal Agreement and this
Agreement shall be read and construed as one instrument.

6.2  TRANSITIONAL ARRANGEMENTS

(a)  On the Effective Date, each Advance or Letter of Credit outstanding under
     the Principal Agreement shall be deemed to be an Advance drawn down or a
     Letter of Credit Issued under the terms of the Principal Agreement as
     amended and restated by this Agreement.

(b)  Each outstanding Advance and Letter of Credit shall have the same Sterling
     Amount and be denominated in the same currency as the Advance or Letter of
     Credit immediately before the Effective Date, but each outstanding
     Revolving Advance shall be repayable on the last day of the then current
     Interest Period for that Advance.

6.3  COUNTERPARTS

This Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when so executed and


                                       4
<PAGE>


delivered shall be an original but all counterparts shall together constitute
one and the same instrument.

6.4  THIRD PARTIES

(a)  The terms of this Agreement may be enforced only by a party to it and the
     operation of the Contracts (Rights of Third Parties) Act 1999 is excluded.

(b)  Notwithstanding any provision of this Agreement, the parties to this
     Agreement do not require the consent of any third party to rescind or vary
     this Agreement at any time.

7    GOVERNING LAW

This Agreement shall be governed by English law.

IN WITNESS whereof the parties hereto have caused this Agreement to be duly
executed the day and year first above written.


                                       5
<PAGE>


                                   SCHEDULE 1
             DOCUMENTS AND EVIDENCE REQUIRED AS CONDITIONS PRECEDENT

1    Certified copies of the Memorandum and Articles of Association and the
     Certificate of Incorporation and any change of name certificates of the
     Primary Borrower, Finco 2 and Bidco, in the agreed form.

2    Certified copies of resolutions of the board of directors of the Primary
     Borrower, Finco 2 and Bidco in the agreed form approving the execution and
     delivery of and the performance of their respective obligations under this
     Agreement and authorising a person or persons (specified by name or office)
     on behalf of each of them to sign this Agreement and any other documents to
     be delivered by them under this Agreement or the Principal Agreement as
     varied by this Agreement.

3    A certificate of a duly authorised signatory of the Primary Borrower, Finco
     2 and Bidco setting out the names and specimen signatures of the persons
     authorised to sign on behalf of such person the documents referred to in
     clause 2 above and any other documents to be delivered by such company
     pursuant to them, and confirming that the resolutions referred to in clause
     2 above are still in effect and have not been varied or rescinded.

4    The opinion of Allen & Overy, English solicitors for the Facility Agent.

5    The New Fee Letter, duly executed and countersigned, and the fees and
     expenses payable under the New Fee Letter having been paid.

6    Evidence that the maximum outstanding amount of the (pound)250,000,000
     multicurrency facility dated 21st May, 1998 between (among others) Eastern
     Electricity plc and Chase Manhattan International Limited as facility agent
     has been permanently reduced to an amount not exceeding (pound)150,000,000.

7.   Evidence that all amounts of principal under the Excess Equity Funding have
     been repaid in full and confirmation of the amounts of interest outstanding
     under the Excess Equity Funding.


                                       6
<PAGE>


                                   SCHEDULE 2
                FORM OF AMENDED AND RESTATED FACILITIES AGREEMENT




                              AMENDED AND RESTATED

                              FACILITIES AGREEMENT

                       dated 24th March 1999 (and amended
                          and restated by an agreement
                 dated 23rd August, 2000 on the Effective Date)


                                       for
                     (pound)1,075,000,000 Credit Facilities

                             TXU Europe limited (1)
                               as Primary Borrower

                             CHASE MANHATTAN PLC (2)
                     LEHMAN BROTHERS INTERNATIONAL (EUROPE)
                        MERRILL LYNCH CAPITAL CORPORATION
                             as Joint Lead Arrangers

               THE FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1 (3)
                                    as Banks

                          THE CHASE MANHATTAN BANK (4)
                                 as Issuing Bank

                    CHASE MANHATTAN INTERNATIONAL LIMITED (5)
                                as Facility Agent

ALLEN & OVERY                                             Norton Rose
for the Finance Parties                                   for TXU Europe Limited


                                       7
<PAGE>


                                    CONTENTS

CLAUSE                                                                      PAGE

1.    Purpose and Definitions.................................................10

2.    The Commitments.........................................................39

3.    The Conditions..........................................................40

4.    Advances and Letters of Credit..........................................40

5.    Interest and Interest Periods...........................................47

6.    Repayment, Prepayment, Cancellation and Reductions......................50

7.    Fees and Expenses.......................................................53

8.    Payments and Taxes; Accounts and Calculations...........................55

9.    Representations and Warranties..........................................64

10.   Information Undertakings................................................68

11.   General Undertakings....................................................70

12.   Events of Default.......................................................80

13.   Indemnities.............................................................85

14.   Unlawfulness, Increased Costs, Alternative Interest Rates...............87

15.   Set-Off and Pro-Rata Payments...........................................91

16.   Assignment, Substitution and Lending Offices............................93

17.   Facility Agent..........................................................96

18.   Powers..................................................................98

19.   Duties.................................................................101

20.   Exoneration............................................................102

21.   Guarantee..............................................................106

22.   Determination of Matters...............................................107

23.   Basis of Decisions.....................................................109

24.   Matters concerning the Obligors........................................111

25.   Notices and Other Matters..............................................112

26.   Governing Law and Jursidiction.........................................115


                                       8
<PAGE>


                                  THE SCHEDULES

SCHEDULE                                                                    PAGE

SCHEDULE 1 The Banks and their Commitments...................................116

SCHEDULE 2 Forms of Drawdown Notice

Part A Revolving Credit Facility.............................................119

Part B Letters of Credit.....................................................120

SCHEDULE 3 Documents and Evidence Required as Conditions Precedent to the
Accession of Guarantors......................................................121

SCHEDULE 4 Calculation of Mandatory Cost Rate................................122

SCHEDULE 5 Form of Substitution Certificate (referred to in clause 16.5
(Substitution Certificate))..................................................124


                                       9
<PAGE>


THIS AGREEMENT is dated as of the 24th day of March 1999, was amended and
restated on the Effective Date (as defined below) and is made BETWEEN:

(1)  TXU EUROPE LIMITED (a company registered in England and Wales with company
     number 3505836) (the "PRIMARY BORROWER"); (2) CHASE MANHATTAN PLC, LEHMAN
     BROTHERS INTERNATIONAL (EUROPE) and MERRILL LYNCH CAPITAL CORPORATION as
     joint lead arrangers; (3) THE FINANCIAL INSTITUTIONS listed in Schedule 1
     as the initial Banks; (4) THE CHASE MANHATTAN BANK as the initial Issuing
     Bank; and (5) CHASE MANHATTAN INTERNATIONAL LIMITED as the initial Facility
     Agent.

IT IS AGREED as follows:

2.   PURPOSE AND DEFINITIONS

2.1  PURPOSE

     This Agreement sets out the terms and conditions upon and subject to which
     the Banks agree, according to their several obligations, to make available:

     (a)  TERM FACILITY to the Primary Borrower, a term facility in Sterling of
          up to(pound)750,000,000 which shall be available for the financing or
          refinancing of the Acquisition;

     (b)  REVOLVING CREDIT FACILITY to the Primary Borrower, a four year
          multicurrency revolving credit facility of up to a Sterling Amount of
          (pound)325,000,000 to be used for the Group's general corporate
          purposes.

     For the avoidance of doubt, no Revolving Advance may be used to finance or
     refinance the Acquisition save as envisaged by clause 4.3 (Utilisations
     generally).

     No amounts borrowed under any of the Facilities may be used, directly or
     indirectly, to repay or refinance the minimum equity contribution of
     (pound)1,678,082,000 required to be made under the terms of the Original
     Facilities Agreement.

     This Agreement is being entered into for the purpose, in effect, of
     amending and restating the Original Facilities Agreement.

2.2  DEFINITIONS

     In this Agreement, unless the context otherwise requires:

     "ACCESSION CERTIFICATE" means an accession certificate (by way of deed)
     substantially in the form of Schedule 6 (Form of Accession Certificate) and
     entered into or to be entered into by an acceding Obligor and the Facility
     Agent;

     "ACQUISITION" means the acquisition by Bidco of the Target Shares;

     "ACT" means the Companies Act 1985;


                                       10
<PAGE>


     "ACTING IN CONCERT" has the meaning given to that term in the City Code on
     Takeovers and Mergers;

     "ADDITIONAL GUARANTOR" means any member of the Group which accedes to this
     Agreement as a Guarantor pursuant to clause 11.20 and in accordance with
     clause 24 (Matters Concerning the Obligors) for so long as it remains a
     Guarantor;

     "ADJUSTED SHARE CAPITAL AND RESERVES" means the aggregate of the following
     items namely:

     (a)  the nominal amount of the share capital of Finco 2 for the time being
          issued and paid up or credited as paid up excluding any Qualifying
          Preference Shares issued by Finco 2;

     (b)  the amounts standing to the credit of the consolidated reserves of the
          Group (including any share premium account and capital redemption
          reserve),

     but adjusted, to the extent that the following items have not already been
     added, deducted or excluded in arriving at the figures referred to in (a)
     or (b) above:

          (i)  by deducting the amounts standing to the debit of the
               consolidated reserves of the Group;

          (ii) by deducting any amounts attributable to interests of non-Group
               members in Subsidiaries of Finco 2;

          (iii) by deducting any reserves set aside for deferred taxation;

          (iv) by deducting the amount by which the net book value of any fixed
               asset has been written up after the date of this Agreement (or,
               in the case of a person which has become or becomes a member of
               the Group after that date, the date on which it became or becomes
               a member of the Group) by way of revaluation or on its transfer
               from one member of the Group to another (but no such deduction
               shall be made if the amount of this write up is supported by and
               does not exceed the amount shown by an independent written
               valuation);

          (v)  by adding back (aa) to capital reserves, goodwill written off by
               reason of the Acquisition and (bb) to cumulative revenue
               reserves, any goodwill arising on the Acquisition and
               subsequently amortised through the profit and loss account;

          (vi) by adding back (aa) to capital reserves, goodwill written off by
               reason of any other acquisition after the date of this Agreement
               of all or a majority of the equity share capital or business of
               another person and (bb) to cumulative revenue reserves, any
               goodwill, arising on any other such acquisition and subsequently
               amortised through the profit and loss account; and

          (vii) by adding back proceeds (up to a maximum aggregate amount of
               US$500,000,000) from any issue of Equity-Credit Preferred
               Securities


                                       11
<PAGE>


     but so that no amount to be added, deducted or excluded as a result of any
     of the foregoing shall be added, deducted or excluded more than once in the
     same calculation and, where the calculation is being made as at the end of
     a Test Period or in the context of paragraph (d) of the definition of
     Permitted Security Interest or in the context of clauses 11.1 (Financial
     ratios) or 11.17 (Project Finance Subsidiaries), each such amount shall be
     determined by reference to the most recent financial statements and
     compliance certificates delivered hereunder as adjusted pursuant to the
     provisions of clause 11.2 (Change of Accounting policies) and the terms of
     this definition or any relevant clause of this Agreement;

     "ADVANCE" means any Term Advance or Revolving Advance and, as the context
     requires, includes the full amount of such Advance when made or the amount
     of an Advance which is outstanding at any relevant time;

     "AFFECTED BANK" has the meaning given to it in clause 14.4 (Mitigation)
     (except that the definition of "Affected Bank" and "Affected Banks" in
     clause 4.14 (Unavailability of Optional Currency) shall have that meaning
     in that clause only);

     "AFFILIATE" means, in relation to any person, any Subsidiary of that
     person, any holding company of that person and any other Subsidiary of that
     holding company;

     "APPLICABLE FEES RATE" means at any time 50% of the Applicable Margin;

     "APPLICABLE MARGIN" means, at any time, 0.875% per annum or if at the date
     hereof or subsequently the most recent determination of the Leverage Ratio
     under clause 11.1 (Financial Ratios) shows that the Leverage Ratio is less
     than 65%, the rate per annum determined as follows:

     LEVERAGE RATIO           AND NOT LESS THAN:       APPLICABLE MARGIN IS:
     IS LESS THAN:

     65%                      60%                      0.75%

     60%                      55%                      0.625%

     55%                      -                        0.5%
     provided that:

     (a)  any reduction or increase in the Applicable Margin shall have effect 5
          Banking Days following the date of delivery of any set of audited or
          management accounts for a Quarter under clause 10.3(a) (Annual audited
          financial statements) and 10.3(b) (Unaudited management accounts),
          together with the financial covenant compliance certificate by the
          Primary Borrower referred to in clause 10.3(c) (Compliance with
          financial undertakings), until (but excluding) the effective date for
          any subsequent change in the Applicable Margin in accordance with this
          definition;

     (b)  during the continuance of any Default, any margin reduction under this
          definition will not apply, and the Applicable Margin shall be 0.875%;


                                       12
<PAGE>


     "APPROPRIATE ACCOUNTING PRINCIPLES" means:

     (c)  the accounting principles, policies, standards, practices and bases
          (being generally accepted in the United Kingdom), as adopted in the
          Original Group Accounts; or

     (d)  where any change has occurred and (if required) has been agreed under
          clause 11.2 (Change of Accounting policies), such accounting
          principles, standards, practices and bases as have so occurred and (if
          required) have been so agreed;

     "ARRANGERS" means Chase Manhattan plc, Lehman Brothers International
     (Europe) and Merrill Lynch Capital Corporation;

     "AUDITORS" means Deloitte & Touche or such other internationally recognised
     firm of chartered accountants as may be auditors to the Group for the time
     being;

     "AVAILABLE AMOUNT" means, at any time and in respect of any Facility, the
     aggregate of the Available Commitments of all the Banks in respect of such
     Facility at such time;

     "AVAILABLE COMMITMENT" means, in relation to a Bank and save as otherwise
     provided in this Agreement in respect of the Revolving Credit Facility at
     any time, its Commitment in respect of such Facility at such time less:

          (i)  its Contribution to the Sterling Amount of all outstanding
               Revolving Advances at such time;

          (ii) its Proportion of the Sterling Amount at that time of the
               Outstanding Contingent Liabilities under all Letters of Credit
               then outstanding under the Revolving Credit Facility; and

          (iii) its proportion of the Sterling Amount of any amount paid out by
               the Issuing Bank under a Letter of Credit issued under the
               Revolving Credit Facility and not yet reimbursed;

     "AVAILABLE COMMITMENT TERMINATION DATE" means save as otherwise provided
     herein in relation to the Revolving Credit Facility, one month before the
     Final Repayment Date.

     "BANKING DAY" means a day (other than a Saturday or a Sunday) on which
     banks are open for general business in London and New York City; and:

     (e)  in relation to a transaction involving an Optional Currency (other
          than Euros, Euro Units or national currency units), the principal
          financial centre of the country of that Optional Currency; and

     (f)  in relation to a transaction involving Euros, Euro Units or national
          currency units, in Frankfurt am Main, Germany (or such other principal
          financial centre(s) of any Participating Member State(s) as the
          Facility Agent may from time to time reasonably nominate for this
          purpose) and, being a day on which payments in Euros are settled in
          the Trans-European Automated Real-time Gross settlement Express
          Transfer (TARGET) system;


                                       13
<PAGE>


     "BANKS" means the original banks listed in Schedule 1 (The Banks and their
     Commitments) and includes their successors in title, assignees and
     Substitutes;

     "BIDCO" means TXU Acquisitions Limited (company no.3455523);

     "BORROWED MONEY" means any present or future Indebtedness (whether by way
     of principal or premium) for or in respect of:

     (g)  money borrowed or raised;

     (h)  any recourse arising from the discounting of receivables save for
          recourse for disputed or ineligible debts or similar rights of
          recourse typical in a securitisation transaction;

     (i)  liabilities under or in respect of any acceptance or acceptance credit
          or documentary credit facility or standby credit facility, other than
          (i) any such credit facility relating to the acquisition cost of
          assets or services to the extent that the same involves deferral of
          payment of any sum for one year or less and (ii) exposure under any
          such credit issued to back completion or performance obligations
          (including any obligation to lodge cash margin payments in case of a
          specified decline in a Group Company's rating), except to the extent
          that:

          (aa) such obligations are for the payment of Borrowed Monies, or for
               the payment of liquidated damages the payment of which is
               triggered by an event or circumstance which has (as of the
               relevant date on which any calculation is made) already occurred,
               and, in the case of a decline in rating, if the rating agency
               concerned has reduced the relevant rating, the amount taken into
               account will be the amount which has, or will, become payable by
               reason of such decline; or

          (bb) provision has been made in the accounts of the relevant Group
               Company for an amount due under the underlying obligation or,
               were the relevant Group Company to prepare accounts as of the
               date on which a compliance certificate is issued to the Facility
               Agent under clause 10.3 (Delivery of financial statements), such
               a provision should be made in accordance with Appropriate
               Accounting Principles;

     (j)  any notes, bonds, debentures, debenture stock, loan stock or other
          debt security offered, issued or distributed whether by way of public
          offer, private placing, acquisition consideration or otherwise and
          whether issued for cash or in whole or in part for a consideration
          other than cash, other than any bond, note, debenture or other debt
          security referred to in (f) below;

     (k)  any outstanding Qualifying Preference Shares in issue;

     (l)  any outstanding balance of the acquisition cost of assets or services
          to the extent payable on deferred payment terms after the time of
          acquisition or possession thereof by the person liable (but only to
          the extent that the same:

          (i)  involves deferral of payment of any sum for more than one year;


                                       14
<PAGE>


          (ii) is not a cost in respect of the expansion, development or renewal
               of all or part of the "licensee's distribution system" (as
               defined in the PES Licence); and

          (iii) exceeds(pound)25,000,000 in respect of any transaction or series
               of related transactions)

          whether or not any instalments for payment are evidenced by a bond,
          note, debenture or other debt security issued by the obligor;

     (m)  any Finance Lease;

     (n)  any guarantee, indemnity or other legally binding assurance against
          (or other legally binding arrangement intended to prevent or limit)
          loss arising under any Borrowed Money of any person who is not a Group
          member;

     (o)  for the purpose of clause 12.1(d) (Cross-default) only, any
          Derivatives Transaction (calculated at the mark-to-market value for
          close-out);

     (p)  any liability which has arisen under any transaction by virtue of
          which:

          (i)  a capital sum is received by a person as consideration for the
               sale or disposal (whether by outright alienation or the grant of
               a lease or other interest or otherwise) of any assets; and

          (ii) a third party making or funding the payment receives a guarantee,
               indemnity or other legally binding assurance from a member of the
               Group against (or other legally binding arrangement intended to
               prevent or limit) loss as a result of the assets not generating
               or being realised for a specific amount or an amount calculated
               in an agreed manner;

     (q)  any amount raised under any other transaction having the commercial
          effect of a borrowing and entered into primarily as a means of raising
          finance;

     (r)  such part (if any) of the amounts made available to any person as a
          result of any securitisation as, in accordance with the Appropriate
          Accounting Principles, is or is to be treated as a creditor rather
          than as a deduction from or reduction in debtors or other assets;

          Provided that:

          (i)  Subordinated Debt shall be excluded;

          (ii) Indebtedness of a member of the Group to another member of the
               Group shall be excluded except that indebtedness of any member of
               the Group to the Primary Borrower shall (to the extent that any
               such indebtedness would have fallen within the definition of
               Borrowed Money if owed to a third party) be treated as Borrowed
               Money. Where Borrowed Money is incurred by an SPV and on-lent
               indirectly to Finco 2 by the Borrowed Money in question being
               on-lent by such SPV to the Primary Borrower and then being
               on-lent by the Primary Borrower to Finco 2, such Borrowed Money


                                       15
<PAGE>


               shall be counted only once in any calculation of the Leverage
               Ratio or of any other Financial Covenant;

          (iii) Indebtedness of a member of the Group to a Relevant Person shall
               (to the extent that any such Indebtedness would have fallen
               within the definition of Borrowed Money if owed to a third party)
               be treated as Borrowed Money;

          (iv) any interest, dividends, commissions, fees or other like
               financing charges shall be included to the extent that they have
               been capitalised and remain payable but have not been discharged;

          (v)  in respect of paragraph (d) (where the item concerned is a bond,
               note, debenture, debenture stock, loan stock or other debt
               security issued at a discount) and in respect of paragraph (e),
               only the issue price of any such debt security or Qualifying
               Preference Share falling thereunder, together with any applicable
               discount required under the Appropriate Accounting Principles to
               be recognised in the relevant person's most recently published
               financial statements, shall be included;

          (vi) in respect of paragraph (g), only the capitalised value
               established in accordance with the Statement of Standard
               Accounting Practice 21 (as supplemented, varied or replaced from
               time to time) of a Finance Lease as shown in the relevant
               person's most recently published financial statements (or as
               would be shown in the next following financial statements, if
               such Finance Lease was entered into in a period for which there
               are not yet statements available) shall be included;

          (vii) Indebtedness for or in respect of Project Finance Borrowings
               shall be excluded; and

          (viii) adjustments shall be made to the exchange rate at which such
               Borrowed Monies are converted into Sterling in order to take
               account of the effect of any relevant currency swap;

          (ix) Indebtedness for or in relation to Equity-Credit Preferred
               Securities up to US$500,000,000 shall be excluded from Borrowed
               Money;

     (and so that no amount shall be included or excluded more than once);

     "BORROWER" means the Primary Borrower;

     "CAPITALISATION" means at any time the aggregate of Adjusted Share Capital
     and Reserves and Consolidated Net Borrowings;

     "CHANGE IN CONTROL" shall be deemed to have occurred if:

     (s)  any person or group of related persons (other than the Parent, any
          Subsidiary of the Parent, or any pension, savings or other employee
          benefit plan for the benefit of employees of the Parent and/or any
          Subsidiary of the Parent) shall have acquired beneficial ownership of
          more than 30% of the outstanding Voting Shares of the Parent (within
          the meaning of section 13(d) or 14(d) of the Securities Exchange Act


                                       16
<PAGE>


          of 1934 of the United States of America, as amended, and the
          applicable rules and regulations thereunder); provided that a Change
          in Control shall not be deemed to have occurred if such acquisition
          has been approved, prior to the Parent Acquisition Date and the date
          on which any tender offer for Voting Shares of the Parent was
          commenced, by a majority of the Disinterested Directors of the Parent;
          or

     (t)  during any period of 12 consecutive months, commencing on or after 2
          March 1998, individuals who on the first day of such period were
          directors of the Parent (together with any replacement or additional
          directors who were nominated or elected by a majority of directors
          then in office) cease to constitute a majority of the board of
          directors of the Parent;

     "COMMITMENT" means, in relation to a Bank and in respect of any Facility at
     any relevant time, the amount set opposite its name in relation to the
     relevant Facility in Schedule 1 (The Banks and their Commitments) and/or,
     in the case of a Substitute, the amount novated in relation to the relevant
     Facility as specified in the relevant Substitution Certificate, as reduced,
     in each case, by any relevant term of this Agreement;

     "CONSOLIDATED NET BORROWINGS" means, at any time, in respect of the Group,
     the aggregate of the Borrowed Money of the Group, as shown in the then
     latest compliance certificate most recently delivered to the Facility Agent
     pursuant to clause 10.3(c) (Compliance with Financial Undertakings) (the
     "RELEVANT BALANCE SHEET"), less the aggregate book value of:

     (u)  all Liquid Assets which are in, or are freely transferable to, the
          United Kingdom and which are owned by Finco 2 or a wholly-owned member
          of the Group or (in the case of the Liquid Assets of a member of the
          Group which is a partly-owned member of the Group) the proportion of
          the total amount for the time being of Liquid Assets held by such
          member which corresponds to the proportion of the total nominal amount
          of the issued equity share capital of such member which is
          beneficially owned directly or indirectly by Finco 2 (exclusive of
          Liquid Assets constituting or representing obligations of any member
          or members of the Group); and

     (v)  in the case of a partly-owned member of the Group, the proportion of
          total amounts for the time being outstanding of Borrowed Money owing
          by such partly owned member of the Group otherwise than to another
          member of the Group which corresponds to the proportion of the total
          nominal amount of the issued equity share capital of such partly owned
          member of the Group not beneficially owned directly or indirectly by
          Finco 2 (the "MINORITY PROPORTION");

     but adding the aggregate book value (as included in the relevant balance
     sheet) of the Minority Proportion of the total amount, if any, for the time
     being outstanding of Borrowed Money owing to a partly-owned member of the
     Group by any other member of the Group;


                                       17
<PAGE>


     "CONTRIBUTION" means, in relation to a Bank, the principal amount of any or
     all (as the context requires) of the Term Advances and/or the Revolving
     Advances and its Proportion of the Outstanding Contingent Liabilities owing
     to such Bank at any relevant time;

     "CONTRACTUAL CURRENCY" has the meaning ascribed to it in clause 13.2(a);

     "DEFAULT" means any Event of Default or any event which with the giving of
     notice, lapse of time, determination of materiality or fulfilment of any
     other applicable condition (or any combination of the foregoing) would, if
     unremedied, constitute an Event of Default;

     "DERIVATIVES TRANSACTION" means a contract, agreement or transaction which
     is:

     (w)  a rate swap, basis swap, forward rate transaction, equity (or equity
          or other index) swap or option, bond option, interest rate option,
          foreign exchange transaction, cap, collar or floor, currency swap,
          currency option or any other similar transaction; and/or

     (x)  any combination of such transactions;

     in each case, whether on-exchange or otherwise;

     "DIRECTOR GENERAL" means the person appointed from time to time by the
     Secretary of State to hold office as the Director General of Electricity
     Supply (or any successor to his functions) for the purposes of the
     Electricity Act;

     "DISINTERESTED DIRECTOR" shall mean any member of the Board of Directors of
     the Parent who:

     (y)  is not affiliated, directly or indirectly, with, or appointed by, a
          person or group of related persons (other than the Parent, any
          Subsidiary of the Parent, or any pension, savings or other employee
          benefit plan for the benefit of employees of the Parent and/or any
          Subsidiary of the Parent) acquiring the beneficial ownership of more
          than 30% of the outstanding Voting Shares of the Parent (within the
          meaning of section 13(d) or 14(d) of the Securities Exchange Act of
          1934 of the United States of America, as amended, and the applicable
          rules and regulations thereunder); and

     (z)  either was a member of the board of directors of the Parent prior to
          the Parent Acquisition Date or was recommended for election by a
          majority of the Disinterested Directors in office prior to the Parent
          Acquisition Date;

     "DISTRIBUTION BUSINESS" means the business of REC, or any successor
     undertaking to that business within the Group, in or ancillary to the
     distribution (whether for its own account or that of any other party) of
     electricity through the Group's distribution system and includes any
     business of providing connections to the Group's distribution system;

     "DOUBLE TAXATION TREATY" means any convention or agreement between the
     government of the United Kingdom and any other government for the avoidance
     of double taxation and the prevention of fiscal evasion with respect to
     taxes on income and capital gains;

     "DRAWDOWN DATE" means the date on which an Advance is, or is to be, made;


                                       18
<PAGE>


     "DRAWDOWN NOTICE" means, in respect of a Facility, a notice substantially
     in the terms of the relevant Part of Schedule 2 (Forms of Drawdown Notice);

     "EBITDA" means, in respect of any Test Period, the total operating profit
     of the Group for continuing operations, acquisitions (as a component of
     continuing operations) and discontinued operations (excluding any share of
     consolidated profits or losses which is attributable to Project Finance
     Subsidiaries or to a business the assets or cash flow of which constitute
     security for Project Finance Borrowings as contemplated in paragraphs
     (c)(i) and (c)(ii) of the definition of Project Finance Borrowings) and
     including dividends received in cash by members of the Group from Project
     Finance Subsidiaries (or any other company not being a member of the
     Group), in each case before taking into account:

     (aa) interest payable and interest receivable;

     (bb) amounts provided for depreciation and amortisation of goodwill;

     (cc) exceptional items;

     (dd) Taxes (other than VAT);

     (ee) the deduction of any costs relating to the Acquisition; and

     (ff) the deduction of costs (not exceeding an aggregate amount of
          (pound)25,000,000) related to any other acquisition after the
          Effective Dateof all or a majority of the equity share capital or
          business of another person;

     for that Test Period (calculated on a consolidated basis disregarding any
     portion of any item taken into account in that calculation which is
     attributable to any minority interests in Subsidiaries, but for this
     purpose treating Finco 2 as a wholly-owned Subsidiary of the Primary
     Borrower) all as determined by reference to the most recent financial
     statements and compliance certificates delivered under clause 10.3
     (Delivery of Financial Statements), as adjusted pursuant to clause 11.2
     (Change of Accounting policies);

     "EFFECTIVE DATE" has the meaning given to it in the Restatement Agreement;

     "ELECTRICITY ACT" means the Electricity Act 1989 and, unless the context
     otherwise requires, all subordinate legislation made pursuant to that Act
     and all other laws, regulations or requirements of any relevant authority
     (in so far as such regulations have the force of law) relating to the
     transmission, distribution or supply of electricity in force in the United
     Kingdom;

     "EMU" means Economic and Monetary Union as contemplated in the Treaty
     establishing the European Community;

     "EMU LEGISLATION" means legislative measures of the European Council for
     the introduction of, changeover to or operation of a single or unified
     European currency (whether known as the Euro or otherwise), being in part
     the implementation of the third stage of Economic and Monetary Union as
     contemplated in the Treaty on European Union;

     "ENFORCEMENT DATE" means the date of the first declaration made by the
     Facility Agent pursuant to clause 12.2 (Acceleration);


                                       19
<PAGE>


     "EQUITY-CREDIT PREFERRED SECURITIES" shall mean securities, however
     denominated:

     (i)  issued by the Primary Borrower or any of the Primary Borrower's
          Subsidiaries;

     (ii) that are not subject to mandatory redemption or the underlying
          securities, if any, of which are not subject to mandatory redemption
          (save upon acceleration after the occurrence of an event of default
          thereunder);

     (iii) that are perpetual or mature no less than 30 years from the date of
          issuance;

     (iv) the indebtedness incurred by any member of the Group in connection
          with which, including any guarantee, is subordinate in right of
          payment to the unsecured and unsubordinated indebtedness of the issuer
          of such indebtedness or guarantee; and

     (v)  the terms of which permit the deferral of the payment of interest or
          distributions thereon to a date occurring after the Final Repayment
          Date;

     and where the proceeds of such securities are on-lent or on-invested into
     the Group or otherwise represented or underlain by one or a series of
     underlying inter-company loans, debentures or other securites, references
     to Equity Credit-Preferred Securities shall where the context admits
     include such loans, debentures or other securities;

     "EQUITY-FINANCED LOAN" means the aggregate of any loans by the Primary
     Borrower (other than to a member of the Group) to the extent that at any
     time they do not exceed an amount equal to the excess (if any) of dividends
     received by the Primary Borrower over and above the amount of dividends
     paid out or declared by the Primary Borrower;

     "EURO" means the single currency of Participating Member States;

     "EURIBOR" means, in relation to any Advance or unpaid sum denominated in
     Euros, the percentage rate per annum determined by the Facility Agent to be
     equal to:

     (gg) the rate which appears on the page of the Telerate Screen which
          displays for spot value the EURIBOR rate sponsored by the Banking
          Federation of the European Union for deposits in Euros (currently page
          "248") for the specified period; or

     (hh) if such page or such service shall cease to be available or relevant,
          such other page or such other service for the purpose of displaying
          the EURIBOR rate for Euros as the Facility Agent, after consultation
          with the Banks and the Primary Borrower, shall select; or

     (ii) if no rate can be determined under (b) above, the arithmetic mean
          (rounded upwards, if not already such a multiple, to four decimal
          places) of the rates (as notified to the Facility Agent) at which each
          of the Reference Banks was offering to prime banks in the European
          inter-bank market deposits in euro for the specified period,

     "EURO UNIT" means the currency unit of the Euro;

     "EVENT OF DEFAULT" means any of the events or circumstances described in
     clause 12.1 (Events of Default);


                                       20
<PAGE>


     "EXCESS EQUITY FUNDING" means the amount owing by Bidco to the Parent
     pursuant to the note issued by Bidco to the Parent in consideration of the
     issue of the Parent's shares, which shares constituted a portion of the
     consideration for the Target Shares acquired by Bidco in connection with
     the Acquisition.

     "EXPIRY DATE" means the date stated in a Letter of Credit to be its expiry
     date or (if later) the latest date on which demand may be made under it;

     "FACILITIES" means both or either (as the context requires) of the Term
     Facility and the Revolving Credit Facility and (as the context requires)
     "FACILITY" means either of them;

     "FACILITY AGENT" means Chase Manhattan International Limited of 125 London
     Wall, London EC2Y 5AJ or such other person as may be appointed Facility
     Agent for the Banks pursuant to clause 17 (Facility Agent);

     "FACILITY OFFICE" means, in relation to the Facility Agent or any Bank, the
     office identified in Schedule 1 (or, in the case of a Substitute, at the
     end of the Substitution Certificate to which it is a party as a Substitute)
     or such other office as it may from time to time select provided written
     notice thereof has been given by the Facility Agent or such Bank to the
     Primary Borrower;

     "FEE LETTERS" means the fee letters referred to in clause 7.1 (Arrangement,
     underwriting, participation and agency fees), in the agreed form, and "FEE
     LETTER" shall mean any one of them;

     "FEE PAYMENT DATE" means each of the dates falling at three monthly
     intervals after the date of this Agreement;

     "FINAL REPAYMENT DATE" means 2 March 2003;

     "FINANCE DOCUMENTS" means this Agreement, the Restatement Agreement, any
     L/C-Related Document, each Drawdown Notice, each Accession Certificate and
     the Fee Letters (including the fee letter referred to in clause 4.1 of the
     Restatement Agreement);

     "FINANCE LEASE" means any lease under which a member of the Group is the
     lessee which is or should be treated as a finance or capital lease under
     the Appropriate Accounting Principles (and includes any hire purchase
     contract or other arrangement which is or should be similarly treated);

     "FINANCE PARTIES" means the Facility Agent, the Issuing Bank, the Arrangers
     and the Banks and (as the context requires) "FINANCE PARTY" means any one
     of them;

     "FINANCE PERIOD" means the period from the date of this Agreement until the
     date on which the Facility Agent acting reasonably confirms that none of
     the Finance Parties and none of the Obligors has any actual or contingent
     liabilities or obligations under any of the Finance Documents;

     "FINANCIAL COVENANTS" means the financial undertakings in clause 11.1
     (Financial ratios);


                                       21
<PAGE>


     "FINANCIAL DEFINITIONS" means the definitions of Adjusted Share Capital and
     Reserves, Capitalisation, Consolidated Net Borrowings, EBITDA, Leverage
     Ratio, Net Interest Costs and Test Period;

     "FINCO 2" means TXU Finance (No.2) Limited (company number 3514100);

     "GAS FRAMEWORK AGREEMENT" means the agreement dated 1 March 1996 between
     British Gas Transco and Eastern Natural Gas (Retail) Limited;

     "GENERATION BUSINESS" means the business of the Group in or ancillary to
     the generation of electricity (whether for its own account or that of any
     other party);

     "GENERATION LICENCE" means each of those licences granted by the Secretary
     of State under section 6(1) of the Electricity Act authorising the relevant
     licensee to carry on Generation Business and any activities ancillary
     thereto, or any replacement licence or licences granted from time to time
     to any member of the Group (or, if more than one, the most recent such
     replacement);

     "GOVERNMENT ENTITY" means and includes (whether having a distinct legal
     personality or not) any supra-national, national or local government
     authority, regulatory body, central bank, board, commission, department,
     division, organ, instrumentality, court or agency and any association,
     organisation or institution of which any of the foregoing is a member or to
     whose jurisdiction any of the foregoing is subject or in whose activities
     any of the foregoing is a participant;

     "GROUP" means the Primary Borrower and all its Subsidiaries for the time
     being (except Project Finance Subsidiaries) save that, where the reference
     to the Group is used in respect of the Financial Definitions used in
     calculating the Leverage Ratio, Group shall mean the Primary Borrower's
     Subsidiaries (except Project Finance Subsidiaries) and shall not include
     the Primary Borrower itself, and in either case "MEMBER OF THE GROUP" or
     "GROUP COMPANY" means any one of them;

     "GUARANTEE" means the guarantee set out in Schedule 9 (Terms of Guarantee)
     given by the Primary Borrower and any Additional Guarantor;

     "GUARANTOR" means the Primary Borrower in its capacity as the person
     obligated under the Guarantee and any Additional Guarantor;

     "INDEBTEDNESS" means any obligation of a person for the payment or
     repayment of money, whether as principal or as surety and whether present
     or future, actual or contingent;

     "INTEREST PAYMENT DATE" means the last day of an Interest Period;

     "INTEREST PERIOD" means in relation to any Term Advance, each period for
     the calculation of interest in respect of such Advance ascertained in
     accordance with clause 5.2 (Interest Period for the Term Advances) (or
     otherwise in this Agreement);

     "ISSUE" means with respect to any Letter of Credit, to issue or extend the
     expiry of, or to renew or increase the amount of, such Letter of Credit;
     and the terms "ISSUED", "ISSUING" and "ISSUANCE" have corresponding
     meanings;


                                       22
<PAGE>


     "ISSUE DATE" means in relation to a Letter of Credit, the date on which
     that Letter of Credit was Issued, or, as the context requires, is to be
     Issued under clause 4.5 (Issue of Letters of Credit);

     "ISSUING BANK" means The Chase Manhattan Bank or any alternative Bank which
     has been notified by the Primary Borrower to the Facility Agent as the
     issuer of any Letter of Credit in accordance with the terms of this
     Agreement;

     "L/C-RELATED DOCUMENTS" means each Letter of Credit, any Drawdown Notice or
     other application for a Letter of Credit and any other document relating to
     any Letter of Credit;

     "LETTER OF CREDIT" means a letter of credit or a bank guarantee (as the
     case may be) Issued or to be Issued by the Issuing Bank on the terms of
     this Agreement;

     "LEVERAGE RATIO" means, at any relevant date, the percentage which
     Consolidated Net Borrowings is of Capitalisation of the Group;

     "LIBOR" means, in relation to any Advance or unpaid sum, the rate per annum
     determined by the Facility Agent to be equal to:

     (jj) in the case of Euros, EURIBOR; or

     (kk) in the case of any other currency, the offered rate (if any) appearing
          on the relevant page of the Telerate screen, or such other pages as
          may replace such page of the Telerate screen, which displays "BBA
          LIBOR" for deposits in the relevant currency and for the specified
          period (where "SPECIFIED PERIOD" means the Interest Period or Maturity
          Period of such Advance or, as the case may be, the period for which
          LIBOR falls to be determined in relation to such unpaid sum); or

     (ll) if no rate can be determined under (b) above, the arithmetic mean
          (rounded upwards, if not already such a multiple, to four decimal
          places) of the rates (as notified to the Facility Agent) at which each
          of the Reference Banks was offering to, in the case of Euros, prime
          banks in the European inter-bank market and, in the case of any other
          currency, leading banks in the London inter-bank market, deposits in
          the relevant currency and for the specified period,

     in each case at or about 11.00 am (London time or, in the case of Euros,
     Central European Time) on the Quotation Date for such period;

     "LICENCE UNDERTAKING" means any and each undertaking or assurance by any
     one or more of the Parent, the Primary Borrower, Finco 2, Bidco, the Target
     or The Energy Group Limited (company number 3613919) or any Affiliate of
     any of them to the Director General, the Director General of Gas Supply or
     the Secretary of State concerning the management and/or ownership of and/or
     other matters concerning any Licensee;

     "LICENCES" means those licences granted by the Secretary of State:

     (mm) under the Electricity Act to the REC or any other Principal Subsidiary
          authorising each relevant licensee to carry on the Distribution
          Business, the Supply Business, a Second-Tier Supply Business or (or
          part of) the Generation Business and any activities ancillary thereto;


                                       23
<PAGE>


     (nn) under section 7 of the Gas Act 1986 to a Principal Subsidiary ; or

     (oo) being a replacement licence or licences, from time to time to REC or
          any other Principal Subsidiary (or, if more than one, the most recent
          such replacement);

     as amended and/or extended from time to time;

     "LICENSEES" means REC and any such other Principal Subsidiary as, at any
     time, is the licensee under a Licence and "LICENSEE" means any one of them;

     "LIQUID ASSETS" means as at any date, the aggregate (calculated on a
     consolidated basis) of:

     (pp) cash at bank and in hand in a jurisdiction where (if not the United
          Kingdom) such amounts are freely transferable out of that jurisdiction
          and convertible into currencies dealt in on the London foreign
          exchange market;

     (qq) short term deposits (the term of which has twelve months or less
          remaining maturity) and money at call, with a recognised financial
          institution;

     (rr) certificates of deposit, from a recognised financial institution,
          which are negotiable or, if not, the term of which has twelve months
          or less remaining to maturity;

     (ss) gilts or Treasuries or similar securities issued by or guaranteed by
          the Government of any of the United Kingdom, The United States or any
          Participating Member States;

     (tt) deposits made with the Commissioners of Inland Revenue in respect of
          which certificates of tax deposit have been issued by Her Majesty's
          Treasury;

     (uu) Sterling bills of exchange eligible for rediscount at the Bank of
          England;

     (vv) any other negotiable money market instrument with a maximum remaining
          maturity of 12 months or less excluding commercial paper issued by any
          person other than a state entity or a person with a credit rating of
          AAA from Standard & Poor's or equivalent or a short term credit rating
          of A1 or equivalent;

     (ww) any obligation owing to a Group Company in respect of a securities
          repurchase agreement by a counterparty which is rated AAA or
          equivalent or has a short term credit rating of A1 or equivalent, or
          in the absence of such a rating, where such obligation is backed by a
          margin deposit substantially sufficient to make up for any shortfall
          as between the mark-to-market price of the underlying securities and
          the amount owing;

          provided that:

          (i)  where Liquid Assets are deposited subject to restrictions in
               order that they are held as security for a liability or can be
               offset against a liability, such Liquid Assets shall be taken
               into account only to the extent that such liability is taken into
               account under Consolidated Net Borrowings; and

          (ii) when the aggregate amount of Liquid Assets required to be taken
               into account for the purposes of this definition on any
               particular day is being ascertained, any such Liquid Assets


                                       24
<PAGE>


               denominated or repayable or in respect of which monies are
               payable in a currency other than Sterling shall be converted for
               the purposes of calculating the Sterling equivalent at the rate
               of exchange prevailing on that day in London by taking the Spot
               Rate as of 11.00 am on such date for the purchase of such
               currency with Sterling;

     "MAJORITY BANKS" means subject to clause 23.2 (Notice to Majority Banks) at
     any relevant time, Banks:

     (xx) the aggregate of whose Contributions to all the Facilities exceeds
          66(2)/3 per cent. of the Total Contributions in respect of all the
          Facilities; or

     (yy) (if no principal amounts are outstanding under this Agreement) the
          aggregate of whose Commitments in respect of all the Facilities
          exceeds 66(2)/3 per cent. of the Total Commitments in respect of all
          the Facilities but so that if at such time the Total Commitments in
          respect of any Facility have been reduced to zero references to a
          Bank's Commitment in relation to such Facility shall be construed as
          amongst the Finance Parties (and not so as to give any rights to any
          other person) as a reference to that Bank's Commitment in relation to
          such Facility immediately prior to such reduction to zero;

     "MANDATORY COST RATE" means, in relation to any period, a percentage
     calculated for such period at an annual rate determined in accordance with
     Schedule 4 (Calculation of Mandatory Cost Rate);

     "MATERIAL ADVERSE EFFECT" is a reference to:

     (zz) something having a material adverse effect on the ability of any
          Obligor to perform its payment or Financial Covenant obligations under
          any of the Finance Documents; or

     (aaa) something (other than the Reservations) which results in any of the
          Finance Documents not being legal, valid and binding on, or
          enforceable in accordance with their terms against, any of the
          Obligors in a manner and to an extent reasonably considered by the
          Majority Banks to be materially adverse to the interests of the Banks;

     "MATURITY DATE" means, in relation to any Revolving Advance, the last day
     of the period for which that Revolving Advance is drawn down;

     "MATURITY PERIOD" means, in relation to any Revolving Advance, the period
     beginning on its Drawdown Date and ending on its Maturity Date;

     "MONTH" or "MONTHS" means a period beginning in one calendar month and
     ending in the relevant later calendar month on the day numerically
     corresponding to the day of the calendar month in which it started,
     provided that (a) if the period started on the last Banking Day in a
     calendar month or if there is no such numerically corresponding day, it
     shall end on the last Banking Day in such later calendar month and (b) if
     such numerically corresponding day is not a Banking Day, the period shall
     end on the next following Banking Day in such later calendar month but if


                                       25
<PAGE>


     there is no such Banking Day it shall end on the preceding Banking Day and
     "MONTHLY" shall be construed accordingly;

     "NATIONAL CURRENCY UNIT" means the currency unit (other than a Euro Unit)
     of a Participating Member State;

     "NET INTEREST COSTS" means, in respect of any period, the aggregate of

     (i)  the amounts accruing during such period (whether or not paid or
          payable within such period) in respect of interest, guarantee and
          other ancillary facility fees, letter of credit commission and
          fronting fees and commitment fees incurred by the Group (disregarding
          any portion attributable to any minority interests in Subsidiaries,
          other than the minority interest in Finco 2) charged and amortised
          under FRS4, including the interest equivalent element of Finance
          Leases (but excluding any of the foregoing that are attributable to
          Equity-Credit Preferred Securities); and

     (ii) the amounts actually paid by any member of the Group (disregarding any
          portion attributable to any minority interests in Subsidiaries, other
          than the minority interest in Finco 2) during such period by way of

          (A)  interest or distributions in respect of Equity-Credit Preferred
               Securities and

          (B)  dividends or other distributions in respect of any shares of any
               member of the Group (other than equity share capital)
               beneficially owned by any person other than a member of the Group
               (to the extent paid in respect of that period)

     adjusted in each case by:

     (bbb) excluding interest, fees or commission or the interest equivalent
          element of Finance Leases accrued by or to members of the Group from
          or to other members of the Group;

     (ccc) deducting credit interest accrued during such period which would be
          shown as interest receivable in the relevant accounts delivered under
          clause 10.3 (Delivery of Financial Statements), as adjusted pursuant
          to clause 11.2 (Change of Accounting Policies);

     (ddd) excluding any nominal imputed interest charge that arises only as a
          result of an accounting procedure;

     (eee) adding amounts payable, and deducting amounts receivable, under
          interest rate hedging transactions entered into by the Group from time
          to time; and

     (fff) deducting the amount of income accrued to any member of the Group in
          respect of the actual or prospective repurchase by the counterparty of
          securities under any such securities repurchase agreement as is
          referred to in paragraph (h) of the definition of Liquid Assets
          established by reference to the increase in price as between the
          original sale and the repurchase;

     "OBLIGOR" means the Borrower and any Guarantor;

     "OPTIONAL CURRENCY" means any currency (other than Sterling) which is
     freely transferable and freely convertible into Sterling;


                                       26
<PAGE>


     "ORIGINAL FACILITIES AGREEMENT" means the agreement dated 2 March 1998 (as
     subsequently re-stated) made between the Joint Lead Arrangers, the Facility
     Agent, the Issuing Bank, the Primary Borrower and others providing for
     facilities of (pound)3,625,000,000 for the purposes of the Acquisition;

     "ORIGINAL GROUP ACCOUNTS" means the audited consolidated accounts of the
     Target for the year ended 31 March 1998;

     "OUTSTANDING CONTINGENT LIABILITIES" at any time under a Letter of Credit
     means the face value of that Letter of Credit at that time in accordance
     with its express provisions less:

     (ggg) the aggregate amount of any cash cover (not including any cash cover
          lodged by any Bank) held in relation to that Letter of Credit at that
          time; and

     (hhh) (save to the extent that this is taken into account in the express
          provisions of that Letter of Credit or unless the context otherwise
          requires) the aggregate of all payments made by the Issuing Bank,
          pursuant to demands made under that Letter of Credit on or prior to
          such time, for which it has been reimbursed by the relevant Borrower;

     or such lesser amount as the Facility Agent and the Issuing Bank may agree
     in good faith represents the maximum liability of the Issuing Bank in
     respect thereof:

     "PARENT" means TXU Corp. whose principal place of business is at 1601 Bryan
     Street, Dallas, Texas, 75201;

     "PARENT ACQUISITION DATE" shall mean the date as of which a person or group
     of related persons first acquires more than 30% of the outstanding Voting
     Shares of the Parent (within the meaning of section 13(d) or 14(d) of the
     Securities Exchange Act of 1934 of the United States of America, as
     amended, and the applicable rules and regulations thereunder);

     "PARTICIPATING MEMBER STATE" means each state so described in any EMU
     legislation;

     "PERMITTED SECURITY INTEREST" means any of the following, namely a Security
     Interest;

     (iii) subsisting at the date of this Agreement and notified in writing to
          the Facility Agent on or prior to that date or securing the amounts
          outstanding under the Original Facilities Agreement, or arising
          whether before, on or after the date of this Agreement by operation of
          law in the ordinary course of business;

     (jjj) over goods and/or documents of title thereto arising in the ordinary
          course of letter of credit transactions;

     (kkk) arising by way of retention of title to goods by the supplier of
          those goods arising in the ordinary course of business;

     (lll) created after the date hereof provided that the Indebtedness secured
          thereby, when aggregated with any other Indebtedness secured by any
          subsisting Security Interest permitted by (and only by) this paragraph
          (d) whether or not such Indebtedness is in respect of any member of


                                       27
<PAGE>


          the Group, does not at any time exceed an amount equal to 15 per cent.
          of Adjusted Share Capital and Reserves;

     (mmm) created after the date hereof securing Borrowed Money which is
          refinanced by a Project Finance Borrowing within 6 months of the date
          of such Security Interest's creation, provided that:

          (i)  at any one time Borrowed Money permitted to be secured under this
               clause (e) shall not exceed(pound)200,000,000, or its equivalent
               in any other currency; and

          (ii) the Primary Borrower shall have notified the Facility Agent on or
               before the creation of such Security Interest that the related
               Borrowed Money is intended to be temporary bridging finance
               pending refinancing by a Project Finance Borrowing;

     (nnn) existing on or created after the date hereof (i) to secure a Project
          Finance Borrowing and/or (ii) over an asset and/or the shares of a
          Project Finance Subsidiary;

     (ooo) over or affecting any asset acquired by a member of the Group after
          the date hereof and subject to which such asset is acquired, provided
          that:

          (i)  such Security Interest was not created at the request of any
               member of the Group in contemplation of the acquisition of such
               asset by a member of the Group; and

          (ii) the amount thereby secured (or the amount of the facility,
               drawings under which are or would be thereby secured) has not
               been increased at the request of any member of the Group in
               contemplation of, or since the date of, the acquisition of such
               asset by a member of the Group; or

     (ppp) over or affecting any assets of any company which became or becomes a
          member of the Group after the date hereof, where such Security
          Interest is created prior to the date on which such company became or
          becomes a member of the Group provided that:

          (i)  such Security Interest was not created at the request of any
               member of the Group in contemplation of such company becoming a
               member of the Group; and

          (ii) the amount thereby secured (or the amount of the facility,
               drawings under which are or would be thereby secured) has not
               been increased at the request of any member of the Group in
               contemplation of, or since the date of, such company becoming a
               member of the Group; or

     (qqq) created after the date hereof with the prior written consent of the
          Facility Agent (acting in accordance with the instructions of the
          Majority Banks) provided that the amount thereby secured (or the


                                       28
<PAGE>


          amount of the facility, drawings under which are or would be thereby
          secured) has not been increased beyond the amount so consented to; or

     (rrr) any order of a court affecting any asset or assets of a member of the
          Group to the extent that such order is discharged within 28 days after
          it is made and the consequences thereof would not constitute an Event
          of Default; or

     (sss) created or arising to secure any Indebtedness incurred and applied in
          or towards the refinancing of any Indebtedness secured by a Permitted
          Security Interest as permitted by paragraphs (a), (g), (h), (i) or (m)
          of this definition but only to the extent that:

          (i)  the amount of the Indebtedness secured by such Security Interest
               (or, if higher, the amount of the facility, drawings under which
               are or would be thereby secured) does not exceed the amount
               secured by such Permitted Security Interest at the date of the
               refinancing; and

          (ii) the amount secured by such Permitted Security Interest is thereby
               reduced by an amount equal to the amount secured by such Security
               Interest; and

          (iii) the assets on which the Indebtedness secured by the Security
               Interest referred to in sub-paragraph (i) of this paragraph (k)
               are substantially the same as (or only some of) the assets on
               which the refinanced Indebtedness was secured by the Permitted
               Security Interest referred to in sub-paragraph (ii);

     (ttt) consisting of a contractual right (in personam and not in rem)
          restricting the payment of:

          (i)  cash deposits made by way of support of counter-indemnity
               obligations of a member of the Group in respect of guarantees
               given or analogous contingent liabilities incurred by the holder
               of such cash deposits for the account of a member of the Group;
               and/or

          (ii) credit balances on bank accounts as part of general Group banking
               arrangements having as their intention or effect the netting of
               exposure of the bank to members of the Group; or

     (uuu) over any asset acquired by a member of the Group after the date of
          this Agreement as security for Indebtedness incurred to finance or
          refinance (within 6 months of the acquisition) all or part of the
          consideration for the acquisition of that asset, provided that the
          Indebtedness secured by Security Interests under this paragraph (m)
          and, to the extent it refinances Indebtedness secured under this
          paragraph (m), paragraph (k), shall not exceed (pound)1,000,000 in
          aggregate at any time; or

     (vvv) arising under the terms of Derivatives Transactions or as a result of
          trading of shares or other securities where such Security Interest
          arises under the rules of the relevant exchange or clearing system;


                                       29
<PAGE>


     (www) arising as a result of the Primary Borrower or any of its
          Subsidiaries, or Subsidiary Undertakings acting as a paying agent in
          respect of any Equity-Credit Preferred Securities;

     "PES LICENCE" means the licence granted to REC by the Secretary of State
     under Section 6 of the Electricity Act authorising REC to distribute and/or
     supply electricity within an authorised area to the public, or any
     additional or replacement licence(s) for the supply and/or distribution of
     electricity granted from time to time to any member of the Group (or, if
     more than one replacement, the most recent such replacement), each as
     amended or modified from time to time;

     "POOLING AND SETTLEMENT AGREEMENT" means the pooling and settlement
     agreement dated 30 March 1990 made between REC and the National Grid
     Company Plc and others setting out the rules and procedures for the
     operation of an electricity trading pool and of a settlement system in
     England and Wales and any agreement replacing such pooling and settlement
     agreement from time to time;

     "PRINCIPAL SUBSIDIARY" means:

     (xxx) any member of the Group whose unconsolidated net assets or pre-tax
          profit at the date of, or for, any period ending after the date of
          this Agreement, equals or exceeds 10 per cent of the net assets or
          pre-tax profit of the Group at that time or for that period, and,
          during any financial year, such other members of the Group as may be
          named in the notification provided to the Agent by the Primary
          Borrower pursuant to clause 10.3(b)(i) (Unaudited management
          accounts), and for the purpose of the above:

          (i)  the net assets or pre-tax profit of the Group shall be
               ascertained by reference to the latest audited consolidated
               accounts of the Group; and

          (ii) the net assets or pre-tax profit of any such member shall be
               ascertained by reference to the latest audited accounts of that
               Subsidiary;

          for the purposes of the above, "NET ASSETS" in respect of the Group or
          any such member means the fixed assets and current assets of the Group
          or that member (as the case may be) but excluding investments in any
          Subsidiary and any loan to another member of the Group; or

     (yyy) a member of the Group to which has been transferred (whether by one
          transaction or a series of transactions, related or not) the whole or
          a material part of the business, undertaking or assets of a Subsidiary
          which immediately prior to those transactions was a Principal
          Subsidiary provided that it shall not continue by operation of this
          paragraph (b) to be a Principal Subsidiary after the delivery to the
          Facility Agent of the accounts referred to in (a) above covering the
          period in which the transfer occurred, if:

          (i)  the transferor was and continues to be a Principal Subsidiary by
               virtue of paragraph (a) above or was a Principal Subsidiary only
               by virtue of paragraph (c) below; and


                                       30
<PAGE>


          (ii) where the transferor was a Licensee, it continues to be a
               Licensee; or

     any member of the Group which is a holding company, directly or indirectly,
     of a Principal Subsidiary;

     "PROJECT" means any project or investment (these terms being treated as
     including a series of related projects or investments and any modifications
     thereto or developments or expansions of such projects or investments);

     "PROJECT FINANCE BORROWINGS" means, at any date, any Indebtedness to
     finance or refinance, or in respect of the financing or refinancing of, a
     Project:

     (zzz) which is or has been incurred by a single purpose company (whether or
          not a Subsidiary of the Primary Borrower) whose principal assets and
          business are, at such date, constituted by such Project and whose
          liabilities in respect of such Indebtedness are, at such date, not
          directly or indirectly the subject of a guarantee, indemnity or other
          form of assurance, undertaking or support (having substantially
          similar effect to a guarantee or indemnity) from any member of the
          Group except as expressly referred to in paragraph (c) below (a
          "PROJECT FINANCE SUBSIDIARY"); or

     (aaaa) which is or has been incurred by a Subsidiary of the Primary
          Borrower in its capacity as a partner in, and whose only material
          asset is its interest in, a single purpose partnership where the
          partnership's principal assets and business are, at that date,
          constituted by such Project and where the liabilities of such
          Subsidiary in respect of such Indebtedness are not, at that date,
          directly or indirectly the subject of a guarantee, indemnity or other
          form of assurance, undertaking or support (having substantially
          similar effect to a guarantee or indemnity) from any member of the
          Group except as expressly referred to in paragraph (c) below (also a
          "PROJECT FINANCE SUBSIDIARY"); or

     (bbbb) inrespect of which the person or persons to whom such Indebtedness
          is or may be owed by the obligor in respect of such Indebtedness
          (whether or not a Subsidiary of the Primary Borrower) have no recourse
          whatsoever to any member of the Group (whether or not the obligor) for
          the repayment of or payment of any sum relating to such Indebtedness
          other than:

          (i)  recourse to such obligor for amounts limited to the aggregate
               cash flow or net cash flow received or receivable by it (other
               than historic cash flow or historic net cash flow) from such
               Project; and/or

          (ii) recourse to such obligor for the purpose only of enabling amounts
               to be claimed in respect of such Indebtedness in an enforcement
               of any Security Interest given by such obligor over the assets
               comprised in such Project (or, where such obligor is a single
               purpose company or a Subsidiary of the Primary Borrower as
               described in sub-clause (b), given by any shareholder or the like
               in the obligor over its shares or the like in the capital of the
               obligor) to secure such Indebtedness or any recourse referred to


                                       31
<PAGE>


               in (iii) below, Provided that (A) the extent of such recourse to
               such obligor (or its shareholder or the like) is limited solely
               to the amount of any recoveries made on such enforcement, and (B)
               such person or persons 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 the
               obligor (or its shareholder or the like) or to appoint or procure
               the appointment of any administrator, receiver, administrative
               receiver, trustee or similar person or official in respect of the
               obligor (or its shareholder or the like) or any of its assets
               (save for the assets the subject of such Security Interest);
               and/or

          (iii) recourse to such obligor generally, or directly or indirectly to
               a member of the Group, 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 an obligation to procure payment by
               another or an obligation to comply or procure compliance by
               another with any financial ratios or other tests of financial
               condition) by the person against whom such recourse is available.

     For the purpose of each of paragraphs (a), (b) and (c) of this definition:

     (aa) an off-take agreement entered into between a Group Company and a
          Project Finance Subsidiary, or an obligor in respect of Project
          Finance Borrowing described in paragraph (c), which is on arms length
          terms shall not of itself be deemed to be a guarantee, indemnity or
          other form of assurance, undertaking or support or to involve
          liability or recourse; and

     (bb) any right of recourse against a member of the Group as a result of its
          shareholding in an unlimited company, partnership or similar entity
          will be deemed to be a guarantee, indemnity or other form of
          assurance, undertaking or support (having substantially similar effect
          to a guarantee or indemnity);

     "PROJECT FINANCE SUBSIDIARY" has the meaning set out in paragraph (a) or
     (b) of the definition of Project Finance Borrowing and also means any
     Subsidiary of any such person;

     "PROPORTION" means, in relation to a Bank, the proportion borne by its
     Commitment to the Total Commitments (or, if the Total Commitments are then
     zero, by its Commitment to the Total Commitments immediately prior to their
     reduction to zero);

     "QUALIFYING BANK" means:

     (cccc) a person which:

          (i)  is a bank within the meaning of Section 840A of the Income and
               Corporation Taxes Act 1988; and

          (ii) is or will (on becoming a Bank) be beneficially entitled to any
               interest paid and to be paid to it (as a Bank) under this
               Agreement; and


                                       32
<PAGE>


          (iii) is within the charge to United Kingdom corporation tax as
               respects such interest,


          except that, if Section 349 or Section 840A of the Income and
          Corporation Taxes Act 1988 is repealed, modified, extended or
          re-enacted, the Facility Agent may at any time and from time to time
          (after consultation with the Primary Borrower and the Banks) amend
          this paragraph (a) in such manner as it may determine acting
          reasonably to be appropriate by giving notice of the amended paragraph
          (a) to the Primary Borrower and the Banks so as, so far as
          practicable, to put the Banks in the same position as they would
          otherwise have been in; or

     (dddd) a Treaty Lender;

     "QUALIFYING PREFERENCE SHARES" means on any date preference shares of any
     member of the Group expressed (whether by law, agreement or otherwise) to
     be redeemable at the option of the issuer, any other person or otherwise on
     or before the Final Repayment Date;

     "QUARTER" means each three-month period ending on the last day in March,
     June, September and December in each year;

     "QUARTER DATE" means the final day of each Quarter;

     "QUOTATION DATE" means, in relation to an Interest Period, Maturity Period
     or other period for which LIBOR is to be determined:

     (eeee) the first day of such period if the Advance is in Sterling;

     (ffff) the second Banking Day before the first day of such period (or such
          other date on which quotations would customarily be provided by
          leading banks in the London interbank market for deposits in the
          relevant currency for delivery on the first day of such period), if
          the Advance is in an Optional Currency;

     "REC" means Eastern Electricity plc (company no. 2366906 or any successor
     as the Licensee in respect of the Distribution Business);

     "RECOVERING BANK" has the meaning given to that term in clause 15.2
     (Pro-rata payments);

     "REFERENCE BANKS" means The Chase Manhattan Bank and any two other banks
     selected by the Facility Agent with the consent of the Primary Borrower
     (which is not to be unreasonably withheld), or if any of them ceases to so
     act, such other bank or banks as shall be selected by the Facility Agent in
     accordance with clause 23.7 (Change of Reference Banks);

     "RELATED PERSONS" each of the Facility Agent, the Issuing Bank, any
     successor Facility Agent or Issuing Bank arising under clause 17 (Facility
     Agent) and the Arrangers, together with their respective Affiliates and the
     officers, directors, employees, agents, trustees and attorneys-in-fact of
     such persons and Affiliates;

     "RELEVANT COMPANY" means any of the Obligors, Finco 2, Bidco, The Energy
     Group Limited (company no. 3613919) and the Principal Subsidiaries;


                                       33
<PAGE>


     "RELEVANT PERSON" means the Parent and any Affiliate or Associated Company
     of the Parent which is neither the Primary Borrower nor a member of the
     Group nor a Project Finance Subsidiary;

     "RESERVATIONS" means (a) the principle that equitable remedies may be
     granted or refused at the discretion of the court, (b) the limitation on
     enforcement by laws of general application relating to insolvency,
     liquidation, reorganisation, court schemes or administration, and (c) the
     time barring of claims under the Limitation Act 1980;

     "RESTATEMENT AGREEMENT" means the amendment and restatement agreement dated
     23rd August, 2000 between, among others, the parties to this Agreement,
     under which this Agreement was amended and restated;

     "REVOLVING ADVANCE" means each borrowing made or to be made by way of an
     advance under the Revolving Credit Facility or (as the context requires)
     the principal amount of that borrowing outstanding at any relevant time;

     "REVOLVING CREDIT FACILITY" means the facility granted by the Banks to the
     Borrower in accordance with clause 2.1(b) (The Facilities);

     "SECOND-TIER SUPPLY BUSINESS" has the same meaning as in the PES Licence;

     "SECRETARY OF STATE" means the Secretary of State for Trade and Industry
     from time to time or his/her successor or such other person as may for the
     time being be fulfilling the functions of the Secretary of State under the
     Electricity Act or the Gas Acts;

     "SECURITY INTEREST" means any mortgage, pledge, lien, charge, assignment by
     way of security, deposit of cash subject to contractual restrictions on
     re-drawing, arrangement for retention of title, hypothecation or security
     interest, or any other agreement or arrangement having the effect of
     conferring security or a security interest;

     "SPOT RATE" means, in respect of any sum denominated in any currency other
     than Sterling, the Facility Agent's spot rate of exchange for purchase of
     that sum in that currency in the London foreign exchange market with
     Sterling at or about 11.00 am on a particular day;

     "SPV" means any company or other entity directly or indirectly wholly-owned
     by the Primary Borrower, incorporated or otherwise established, and used,
     solely for the purpose of issuing one or more capital market instruments or
     other securities for the purpose of raising finance on behalf of the Group,
     and, if applicable, carrying out all functions falling to be carried out by
     it under a securitisation or other financing arrangement for which it was
     established;

     "STERLING" and "(POUND)" mean the lawful currency for the time being of the
     United Kingdom and in respect of all payments to be made under this
     Agreement in Sterling mean immediately available, freely transferable
     cleared funds;

     "STERLING AMOUNT" means:

     (gggg) inrespect of Outstanding Contingent Liabilities, the sum of the
          amount in Sterling of the Outstanding Contingent Liabilities under
          Letters of Credit denominated in Sterling and the amount of Sterling


                                       34
<PAGE>


          required to purchase the currency amount of the Outstanding Contingent
          Liabilities under Letters of Credit denominated in each other currency
          at the Spot Rate at the relevant time and so that such Sterling Amount
          shall be recalculated by the Facility Agent:

          (i)  in any event, on every Quarter Date; and

          (ii) on each date on which the Majority Banks request the Facility
               Agent to do so in accordance with the provisions of clause 4.11
               (Currency Fluctuations),

          and the recalculated amount shall thereupon and until the next
          recalculation required by this Agreement constitute the Sterling
          Amount of Outstanding Contingent Liabilities under any Letters of
          Credit for all purposes of this Agreement;

     (hhhh) inrespect of each Advance, if such Advance is denominated in
          Sterling, the amount of the Advance requested in the Drawdown Notice
          relating to the Advance, or, in the case of an Advance denominated in
          an Optional Currency the amount of Sterling required to purchase such
          amount calculated at the Spot Rate on the Quotation Date in each case
          as reduced by the amount (if any) of such Advance which has been
          repaid;

     "SUBORDINATED DEBT" means Indebtedness incurred on terms which to the
     reasonable satisfaction of the Facility Agent:

     (iiii) prohibit repayment or prepayment of any principal amounts (including
          capitalised interest) during the Finance Period;

     (jjjj) prohibit the holder of that Indebtedness from exercising any rights
          or remedies which it might otherwise have to recover such Indebtedness
          during the Finance Period; and

     (kkkk) provide that in the event of insolvency, dissolution, liquidation or
          other insolvency proceedings such Indebtedness shall be effectively
          subordinated in right of payment to all liabilities of the Obligors
          under the Finance Documents;

     "SUBSIDIARY" means:

     (llll) a subsidiary within the meaning of section 736 of the Act; and

     (mmmm) where the context requires or admits, and without limitation for the
          purposes of the definitions of "AFFILIATE", "EQUITY CREDIT PREFERRED
          SECURITIES" and "GROUP" and clauses 10.2 (Preparation of Financial
          Statements), 11.1 (Financial Ratios), 11.2 (Change of Accounting
          policies), 20.7 (Pre-contractual effect of exoneration) and Schedule 6
          (Form of Accession Certificate), a subsidiary undertaking within the
          meaning of section 258 of the Act (a "SUBSIDIARY UNDERTAKING");

     "SUBSTITUTE" has the meaning given to that term in clause 16.3
     (Substitution);

     "SUBSTITUTION CERTIFICATE" means a certificate substantially in the terms
     of Schedule 5 (Form of Substitution Certificate);


                                       35
<PAGE>


     "SUPPLY BUSINESS" means, in the case of a Licensee under the PES Licence,
     its authorised business as a public electricity supplier in the authorised
     area as such terms are used in its PES Licence from time to time;

     "TARGET" means the company formerly known as The Energy Group PLC (company
     no. 3257256) and subsequently re-named as Energy Holdings (No.3) Limited;

     "TARGET SHARES" means the issued and to be issued shares in the capital of
     the Target;

     "TAXES" includes all present and future taxes, levies, imposts, duties,
     fees or charges of whatever nature including without limitation any
     interest or penalties payable in connection with any failure or delay in
     paying any of the same and "TAXATION" shall be construed accordingly;

     "TERM ADVANCE" means each borrowing under the Term Facility or (as the
     context requires) the principal amount of that borrowing outstanding at any
     relevant time;

     "TERM FACILITY" means the facility granted by the Banks under clause 2.1(a)
     (The Facilities);

     "TEST PERIOD" means:

     (nnnn) each twelve-month period ending on the last day of each Quarter; and

     (oooo) each accounting reference period (as defined in Part VIII of the
          Companies Act 1985) of the Primary Borrower or, where it applies to
          the Leverage Ratio, Finco 2, ending on 31 December in each year;

     "TOTAL COMMITMENTS" means, in respect of a Facility or (as the context
     requires) the Facilities at any relevant time, and save as otherwise
     provided herein, the total of the Commitments of all the Banks in respect
     of such Facility or Facilities (as appropriate) at such time;

     "TOTAL CONTRIBUTIONS" means, in respect of any Facility or (as the context
     requires) the Facilities at any relevant time, the total of the
     Contributions of all the Banks in respect of such Facility or Facilities
     (as appropriate) at such time;

     "TREATY LENDER" means a person which (a) is resident (as such term is
     defined in the appropriate double taxation treaty) in a country with which
     the United Kingdom has a double taxation treaty giving residents of that
     country complete exemption from the imposition of any withholding or
     deduction for or on account of United Kingdom Taxes on interest; and (b)
     does not carry on business in the United Kingdom through a permanent
     establishment with which the Indebtedness under this Agreement in respect
     of which the interest is paid is effectively connected;

     "TREATY ON EUROPEAN UNION" means the Treaty of Rome of 25 March 1957, as
     amended by the Single European Act 1986 and the Maastricht Treaty (which
     was signed at Maastricht on 1 February 1992 and came into force on 1
     November 1993), as amended from time to time;

     "UTILISATION" means the making of an Advance or the Issue of a Letter of
     Credit; and


                                       36
<PAGE>


     "VOTING SHARES" means outstanding shares of capital stock of any class of
     the Parent entitled to vote in the election of directors, excluding shares
     entitled so to vote only upon the happening of some contingency.

2.3  HEADINGS

     Clause headings and the table of contents are inserted for convenience of
     reference only and shall be ignored in the interpretation of this
     Agreement.

2.4  CONSTRUCTION OF CERTAIN TERMS

     In this Agreement, unless the context otherwise requires:

     (a)  references to clauses and schedules are to be construed as references
          to the clauses of, and schedules to, this Agreement and references to
          this Agreement include its schedules;

     (b)  references to (or to any specified provision of) this Agreement or any
          other document shall be construed as references to this Agreement
          (including any Accession Certificate and Substitution Certificate),
          that provision or that document as in force for the time being and as
          from time to time amended, novated or supplemented in accordance with
          its terms, or, as the case may be, with the agreement of the relevant
          parties and (where such consent is, by the terms of this Agreement or
          the relevant document, required to be obtained as a condition to such
          amendment being permitted) the prior written consent of the Facility
          Agent;

     (c)  references to a "REGULATION" include any present or future regulation,
          rule, directive, requirement, request or guideline (whether or not
          having the force of law) of any Government Entity;

     (d)  references to an "AUTHORISATION" mean and include any consent,
          authorisation, licence, approval and permit;

     (e)  words importing the plural shall include the singular and vice versa;

     (f)  references to a time of day are to London time;

     (g)  references to a "PERSON" includes any individual, firm, company,
          corporation, government, state or agency of a state or any
          unincorporated body of persons, undertaking (within the meaning of
          Section 259(1) of the Act) or other joint venture, organisation or
          association (whether or not having separate legal personality) or any
          two or more of the foregoing;

     (h)  references to "ASSETS" include all or part of any business,
          undertaking, real property, personal property, shareholdings, assets,
          revenues, uncalled capital and any rights (whether actual or
          contingent, present or future) to receive, or require delivery of, any
          of the foregoing;

     (i)  references to the "EQUIVALENT" of an amount specified in a particular
          currency (the "SPECIFIED CURRENCY AMOUNT") shall be construed as a
          reference to the amount of the other relevant currency which can be
          purchased with the specified currency amount at the Spot Rate on the


                                       37
<PAGE>


          day on which the calculation falls to be made for spot delivery, as
          conclusively determined by the Facility Agent;

     (j)  references to any enactment shall be deemed to include references to
          such enactment as re-enacted, amended or extended;

     (k)  references to documents being in the "AGREED FORM" mean documents
          initialled on behalf of the Facility Agent and the Arrangers and on
          behalf of the Obligors, or if there is no such document, the form
          reasonably required by the Facility Agent;

     (l)  references to "VAT" are to be construed as including references to any
          similar Tax;

     (m)  "INCLUDING" and "IN PARTICULAR" shall not be construed restrictively
          but shall mean "including, without prejudice to the generality of the
          foregoing" and "in particular, but without prejudice to the generality
          of the foregoing" respectively;

     (n)  references to documents being "CERTIFIED COPIES" mean copies certified
          as being true, complete and up-to-date copies as of a date no earlier
          than the date of this Agreement by an officer of the Primary Borrower
          who is at such time duly authorised to execute or certify such
          documents on behalf of the Primary Borrower;

     (o)  "ARMS LENGTH TERMS" means on terms which are no more or less
          favourable to the other party to the relevant transaction than could
          reasonably be expected to be obtained in a comparable transaction with
          a person unconnected with the Group;

     (p)  references to "HOLDING COMPANY", save as otherwise defined, shall bear
          the same meaning as in section 736 of the Act, as if extended to
          bodies corporate wherever incorporated;

     (q)  a Letter of Credit being "REPAID" or "PREPAID" is effected by:

          (i)  providing the Issuing Bank with cash cover in the currency in
               which that Letter of Credit is denominated;

          (ii) reducing (in accordance with the terms of this Agreement and the
               relevant Letter of Credit) the amount that may be demanded under
               that Letter of Credit (or by such amount automatically reducing
               in accordance with the terms of the relevant Letter of Credit);
               or

          (iii) cancelling that Letter of Credit by returning the original to
               the Issuing Bank together with written confirmation (in form and
               substance satisfactory to the Issuing Bank) from the beneficiary
               that the Issuing Bank has no further liability under that Letter
               of Credit;

     (r)  any provision of this Agreement stated to have effect on, after, or as
          from, 1 January 1999 will, to the extent that the provision relates to
          any currency of a state which is not a Participating Member State on 1
          January 1999, have effect in relation to that currency on the date on
          which it becomes a Participating Member State;


                                       38
<PAGE>


     (s)  unless the context requires otherwise, expressions defined in the Act
          shall have the same meanings in this Agreement, except that the
          expression "COMPANY" shall include a body corporate established
          outside Great Britain;

     (t)  "ASSOCIATED COMPANY" shall have the meaning given to it in the
          Appropriate Accounting Principles;

     (u)  references to a "WHOLLY-OWNED" or "PARTLY-OWNED" member of the Group
          or Subsidiary of the Primary Borrower shall be construed: (i) to refer
          to Subsidiaries whether directly or indirectly owned by the Primary
          Borrower; and (ii) on the assumption that the Primary Borrower owns
          100% of Finco 2; and

     (v)  for the avoidance of doubt, neither a lease nor a Finance Lease
          entered into on arm's length terms shall be regarded as an agreement
          or arrangement having the effect of conferring security or a security
          interest.

3.   THE COMMITMENTS

3.1  THE FACILITIES

     The Banks, relying upon each of the representations and warranties in
     clause 9 (Representations and Warranties) and upon and subject to the
     conditions hereof, agree to make available:

     (a)  to the Primary Borrower, the Term Facility in the principal sum
          of(pound)750,000,000;

     (b)  to the Primary Borrower the Revolving Credit Facility in the principal
          sum of(pound)325,000,000.

     The obligations of each Bank under this Agreement shall be to participate
     in each Advance in the proportion which its Commitment in respect of the
     Term Facility or the Revolving Credit Facility, as the case may be, bears
     to the Total Commitments in respect of the Term Facility or the Revolving
     Credit Facility but so that no Bank shall be under any obligation to
     participate in an Advance if and to the extent its Commitment in respect of
     the Term Facility or the Revolving Credit Facility would thereby be
     exceeded.

3.2  FINANCE PARTIES' OBLIGATIONS SEVERAL

     The obligations of each Finance Party under this Agreement are several; the
     failure of any Finance Party to perform such obligations shall not relieve
     any other Finance Party or any Obligor of any of their respective
     obligations or liabilities under this Agreement nor shall any Finance Party
     be responsible for the obligations of any other Finance Party under this
     Agreement.

3.3  FINANCE PARTIES' INTERESTS SEVERAL

     Notwithstanding any other term of this Agreement (but without prejudice to
     the provisions of this Agreement relating to or requiring action by the
     Majority Banks) the interests of the Finance Parties are several and the
     amount due to each of the Finance Parties (for its own account) is a
     separate and independent debt. Without prejudice to any other provision of


                                       39
<PAGE>


     this Agreement (including any requirement for action to be approved or
     instigated by, or with the consent or approval of, the Majority Banks) each
     of the Finance Parties shall have the right to protect and enforce its
     rights in respect of amounts which have become due and payable to it under
     this Agreement and it shall not be necessary for any other Finance Party to
     be joined as an additional party in any proceedings for this purpose.

4.   THE CONDITIONS

3.1  GENERAL CONDITIONS PRECEDENT

     Subject to clause 3.2 (Waiver of conditions precedent), in respect of each
     Facility, the obligation of each Bank to contribute to a Utilisation is
     subject to the further conditions that at the date of each Drawdown Notice
     and on each Drawdown Date:

     (a)  the applicable representations and warranties set out in clause 9
          (Representations and Warranties) are true and correct on and as of
          each such date as if each such representation and warranty were made
          with respect to the facts and circumstances existing at such date; and

     (b)  no Default shall have occurred and be continuing (which has not been
          waived) or would result from the making of such Utilisation, but this
          clause 3.1(b) shall not prevent the rollover of an existing Revolving
          Credit Advance (without increasing the amount thereof) for a Maturity
          Period of no more than one month at any time when no Event of Default
          has occurred and is continuing (which has not been waived).

3.2  WAIVER OF CONDITIONS PRECEDENT

     The conditions specified in this clause 3 (The Conditions) are inserted
     solely for the benefit of the Banks and may be waived on their behalf in
     whole or in part and with or without conditions by the Facility Agent
     acting on the instructions of the Majority Banks in respect of any Advance.

5.   ADVANCES AND LETTERS OF CREDIT

5.1  TERM FACILITY

     The Borrower acknowledges that, as at the Effective Date, Term Advances
     with an aggregate Sterling Amount of (pound)750,000,000 are outstanding
     under this Agreement.

5.2  REVOLVING CREDIT FACILITY

     (a)  DRAWDOWN

          Subject to the terms and conditions of this Agreement, Revolving
          Advances shall be made to any Borrower following receipt by the
          Facility Agent from such Borrower of an appropriately completed
          Drawdown Notice relating to the Revolving Credit Facility and in the
          form set out in Part A of Schedule 2 (Revolving Credit Facility)
          signed on behalf of that Borrower not later than 11 a.m. two Banking


                                       40
<PAGE>


          Days, or, in the case of non-sterling Advances, 3 p.m. three Banking
          Days before the proposed Drawdown Date.

     (b)  AMOUNT

          Each Drawdown Notice delivered to the Facility Agent pursuant to
          clause 4.2(a) (Drawdown) shall be irrevocable and shall specify:

          (i)  the proposed Drawdown Date, which shall be a Banking Day falling
               prior to the Available Commitment Termination Date of the
               Revolving Credit Facility;

          (ii) the currency of denomination of the Advance (being Sterling or an
               Optional Currency);

          (iii) the amount of the Revolving Advance, which shall be of
               (pound)10,000,000 or any larger sum which is an integral multiple
               of (pound)5,000,000 (or if such Advance is to be denominated in
               an Optional Currency, an integral multiple of 1,000,000 of the
               largest currency unit of that Optional Currency but in an amount
               at least the equivalent of (pound)5,000,000) or, if less, the
               Available Amount on the relevant Drawdown Date;

          (iv) the Maturity Period which shall be of 1, 2, 3 or 6 months (or
               such other period as the Facility Agent, acting on the
               instructions of the Majority Banks, shall agree) ending not later
               than the Final Repayment Date;

          (v)  the account to which the proceeds of the proposed Advance are to
               be paid.

     (c)  NUMBER OF ADVANCES

          There shall be no more than 15 Revolving Advances outstanding at any
          time, and not more than one Revolving Advance may be made under the
          Revolving Credit Facility in any period of 5 consecutive Banking Days.

     (d)  CALCULATION OF AVAILABLE COMMITMENT

          For the purpose of calculating the Available Commitment, the
          Outstanding Contingent Liabilities under a Letter of Credit will
          initially be its Sterling Amount on the Issue Date, subject to
          recalculation by the Facility Agent in accordance with the definition
          of "Sterling Amount" and clause 4.11 (Currency fluctuations).

     (e)  CANCELLATION ON THE AVAILABLE COMMITMENT TERMINATION DATE

          Without prejudice to any other provision of this Agreement, the Total
          Commitments under the Revolving Credit Facility shall in any event be
          reduced to zero on the Available Commitment Termination Date of the
          Revolving Credit Facility and no Advance may be drawn by any Borrower
          under that Facility thereafter.

     (f)  NETTING

          if, on any Maturity Date, a Bank is required to provide another
          Revolving Credit Advance to the same Borrower in the same currency,
          the Facility Agent shall apply the amount which that Bank is required
          to make available in respect of the new Revolving Credit Advance in or
          towards the repayment (or, if it is a different currency, the purchase
          of the relevant currency required for the repayment) for the account


                                       41
<PAGE>


          of the relevant Borrower of the amount of the Revolving Credit Advance
          (in its currency of denomination) which is then due to be repaid to
          that Bank. Any difference between the amount which is due to that Bank
          and the amount which that Bank is required to make available on that
          Maturity Date shall remain payable by the relevant Borrower or that
          Bank, as the case may be.

5.3  UTILISATIONS GENERALLY

     (a)  A Drawdown Notice (or notice purporting to be such) shall only be
          effective if it complies with this Agreement and only upon actual
          receipt by the Facility Agent and, once given, shall be irrevocable.

     (b)  As soon as practicable after receipt of each Drawdown Notice complying
          with this Agreement the Facility Agent shall notify each Bank of such
          receipt and of the date on which the proposed Advance is to be made
          and of the relevant Interest Period or, as the case may be, the
          relevant Maturity Period and each Bank shall on such Drawdown Date or,
          the case may be, on the first day of the relevant Interest Period
          participate in such Advance by making available to the Facility Agent
          its portion of such Advance in accordance with clause 8.2 (Payments by
          the Banks or by Obligors).

     (c)  For the purpose of calculating the Available Amount, the amount of any
          Advance outstanding in an Optional Currency shall be its Sterling
          Amount. Where an Advance denominated in an Optional Currency is to be
          repaid and a new Advance denominated in the same Optional Currency is
          to be drawn down on the same day, the currency amounts to be repaid
          and re-drawn may be netted off, and the Sterling Amount of the new
          Advance and the Available Amount which can be drawn on that day will
          be recalculated accordingly.

     (d)  The Primary Borrower shall not be entitled to utilise the Revolving
          Credit Facility except that:

          (i)  subject to paragraph 4.3(d)(ii), the Primary Borrower may draw
               down Revolving Advances (including Revolving Advances to finance
               payment to the holders of loan notes issued pursuant to the
               Acquisition if and when such holders require redemption of those
               loan notes) if and to the extent that it shall immediately
               on-lend the amount thereof to other members of the Group by means
               of the Primary Borrower first lending the relevant amount to
               Finco 2; and

          (ii) the Primary Borrower may draw down Revolving Advances otherwise
               than in compliance with clause 4.3(d)(i) above only up to an
               aggregate amount outstanding at any time of (pound)30,000,000.

5.4  APPLICATION OF PROCEEDS

     None of the Finance Parties shall have any responsibility for the
     application of the proceeds of any Advance by any Borrower.


                                       42
<PAGE>


5.5  ISSUE OF LETTERS OF CREDIT

     Subject to the provisions of this Agreement, the Issuing Bank will Issue a
     Letter of Credit specified in a Drawdown Notice at the request of any
     Borrower, if the Facility Agent has received the Drawdown Notice for a
     Letter of Credit in the form set out in Part B of Schedule 2 (Letters of
     Credit) signed on behalf of that Borrower not later than 11.00 am five
     Banking Days prior to the proposed Issue Date and:

     (a)  the proposed Issue Date is a Banking Day on or before the Final
          Repayment Date of the Revolving Credit Facility;

     (b)  the face value of each Letter of Credit is or is equivalent to a
          minimum Sterling Amount of(pound)1,000,000;

     (c)  the Expiry Date falls on or before the earlier of (i) 12 months from
          the Issue Date or (ii) the Final Repayment Date of the Revolving
          Credit Facility;

     (d)  the Issuing Bank and (if different) the Facility Agent have agreed its
          terms;

     (e)  the Sterling Amount of the Letter of Credit requested does not exceed
          the Available Amount in respect of the Revolving Credit Facility;

     (f)  after such Issue, there will be no more than ten Letters of Credit
          outstanding;

     (g)  no order, judgment or decree of any Government Entity or arbitrator
          shall be outstanding which by its terms purports to enjoin or restrain
          the Issuing Bank from Issuing such Letter of Credit, nor shall any
          requirement of law applicable to the Issuing Bank or any request or
          directive (whether or not having the force of law) from any
          Governmental Entity with jurisdiction over the Issuing Bank prohibit,
          or request that the Issuing Bank refrain from, the Issuance of Letters
          of Credit generally or such Letter of Credit in particular or shall
          impose upon the Issuing Bank with respect to such Letter of Credit any
          restriction, reserve or capital requirement (for which the Issuing
          Bank is not otherwise compensated hereunder and which is not in effect
          on the date of this Agreement), or shall impose upon the Issuing Bank
          any unreimbursed loss, cost or expense which was not applicable on the
          date of this Agreement and which the Issuing Bank in good faith deems
          material to it;

     (h)  the currency in which the relevant Letter of Credit is to be
          denominated is, in the opinion of the Issuing Bank, not likely to be
          subject to undue fluctuation against Sterling and is likely to be
          freely convertible and available in sufficient amounts to enable the
          Issuing Bank to discharge its obligations as they fall due;

     (i)  the Issuing Bank has approved (and been approved by) the relevant
          beneficiary; and

     (j)  the total Sterling Amount of all Outstanding Contingent Liabilities
          under all Letters of Credit then outstanding would not exceed
          (pound)400,000,000.


                                       43
<PAGE>


5.6  LETTERS OF CREDIT

     (a)  ISSUING BANK AS PRINCIPAL: the Issuing Bank will act as principal of
          each Letter of Credit Issued by it and each Bank will
          counter-indemnify the Issuing Bank in respect of the Outstanding
          Contingent Liabilities thereunder in the relevant Proportion;

     (b)  OBLIGORS' AUTHORISATION AND INDEMNITY: each Obligor unconditionally
          and irrevocably:

          (i)  authorises the Issuing Bank to comply with any demand which
               appears to be duly made by a third party in respect of a Letter
               of Credit without any further reference to the relevant Borrower
               on the terms set out in Schedule 7 (Terms of Borrowers'
               Indemnity);

          (ii) agrees that its authorisation under clause 4.6(b)(i) and its
               indemnity referred to in clauses 4.6(b)(iii) and 4.6(b)(iv) shall
               remain in full force and effect and shall not be discharged until
               such date as the Facility Agent (acting on the instructions of
               the Issuing Bank) shall notify the relevant Borrower that it is
               satisfied (acting reasonably) that the Issuing Bank remains under
               no liability (actual or contingent) in respect of any Letter of
               Credit;

          (iii) agrees that each Letter of Credit is Issued subject to and with
               the benefit of the provisions of Schedule 7 (Terms of Borrowers'
               Indemnity); and

          (iv) if a Finance Party suffers any liabilities, damages, costs,
               expenses, losses and charges whatsoever in relation to or arising
               out of any Letter of Credit Issued or in relation to or arising
               out of clause 4.7 (Banks' Guarantee and Indemnity), the benefit
               of Schedule 7 (Terms of Borrowers' Indemnity) shall extend to
               such Finance Party. A Borrower may finance a payment under such
               indemnity by drawing down a Revolving Advance if it is then
               entitled to do so in accordance with the terms of this Agreement.

     (c)  NON-CONTRAVENTION OF US LAW: No Obligor will request the Issue of a
          Letter of Credit which would contravene any of the laws of the United
          States Of America.

5.7  BANKS' GUARANTEE AND INDEMNITY

     Each Bank hereby irrevocably and unconditionally:

     (a)  subject to clause 4.7(b), guarantees to and indemnifies (in each case
          on the terms set out in Schedule 8 (Terms of Interbank Guarantee and
          Indemnity)) the Issuing Bank severally in its Proportion and on demand
          by the Issuing Bank, the due and punctual performance by any relevant
          Borrower of all its obligations in respect of each Letter of Credit
          Issued by the Issuing Bank;

     (b)  if it is not permitted by its constitutional documents or any
          applicable law to grant guarantees, agrees that, upon any failure of a
          relevant Borrower to make timely payment of any amount due in respect
          of a Letter of Credit, such Bank shall take (and upon the occurrence


                                       44
<PAGE>


          of an Event of Default specified in clauses 12.1 (e) to (n) (Events of
          Default) (or any event occurs which under the applicable law of any
          relevant jurisdiction has an analogous, similar or equivalent effect
          to any such events) shall be deemed to have taken without any further
          action, as of the Issue Date of each outstanding Letter of Credit), an
          undivided participating interest from the Issuing Bank in each Letter
          of Credit outstanding at such time in a proportion equal to such
          Bank's Proportion. Each Bank shall hold the Issuing Bank harmless and
          indemnify the Issuing Bank for such Bank's proportionate share of any
          drawing under any Letter of Credit in which it has taken an undivided
          participating interest under this clause 4.7;

     (c)  as a separate and independent stipulation agrees that any sum of money
          intended to be the subject of the guarantee in clause 4.7(a), shall be
          recoverable from it (in its Proportion) as sole principal debtor even
          if such sum would not be recoverable from any relevant Borrower by
          reason of any legal limitation, disability or incapacity or
          liquidation of any of them or any other fact or circumstance (whether
          known to the Issuing Bank or not) but which would have been
          recoverable from such Bank if it were the sole or principal debtor in
          respect of such liability in place of any such Borrower.

5.8  CALCULATION OF INTEREST IF BANK MAKES A GUARANTEE OR INDEMNITY PAYMENT

     Any payment made or to be made by a Bank pursuant to clause 4.7 (Banks'
     Guarantee and Indemnity) and any unreimbursed amount due to the Issuing
     Bank shall (for the purpose of calculating interest thereon which is due
     from the relevant Borrower) be deemed to have been made available to that
     Borrower by way of a Revolving Advance on the date such payment is made or
     is to be made (or reimbursed) and accordingly is subject to the terms and
     conditions hereof and, after the earliest date on which a Revolving Advance
     could have been drawn down to fund such liability, such amount shall be
     treated as if it were an overdue sum with an initial term of one month but
     (for all other purposes) shall be immediately due and payable by the
     relevant Borrower.

5.9  DEFAULTING BANKS

     If a Bank (a "DEFAULTING BANK") fails to make payment on its due date of
     any amount (an "OVERDUE AMOUNT") due from it for the account of the Issuing
     Bank pursuant to clause 4.7 (Banks' Guarantee and Indemnity) then until the
     Issuing Bank (or the Facility Agent on its behalf) has received payment of
     such overdue amount in full (and without prejudice to any other rights or
     remedies of the Issuing Bank in respect of such failure):

     (a)  the Issuing Bank shall be entitled to receive any remuneration which
          such Defaulting Bank would otherwise have been entitled to receive in
          respect of the Revolving Credit Facility; and

     (b)  the overdue amount shall bear interest at the rate of one per cent per
          annum over LIBOR plus the Mandatory Cost Rate for the time being from


                                       45
<PAGE>


          the due date until the date of payment and any such interest which
          accrues shall be compounded monthly.

5.10 SUBROGATION OF BANKS MAKING GUARANTEE PAYMENTS

     (a)  Each Obligor agrees that if any Bank makes any payment under clause
          4.7 (Banks' Guarantee and Indemnity) it will immediately be subrogated
          to any rights. that the Issuing Bank may then have against the
          relevant Borrower in respect of the amount paid and such subrogation
          will be subject to the terms set out in Schedule 7 (Terms of
          Borrowers' Indemnity).

     (b)  Each Obligor agrees to indemnify the Bank making such a payment in
          respect of that payment and all costs and expenses properly incurred
          by the Bank in recovering or attempting to recover any amount pursuant
          to such rights of subrogation.

5.11 CURRENCY FLUCTUATIONS

     In addition and without prejudice to the Banks' other rights hereunder, the
     Facility Agent shall on every Quarter Date (and at any other time at which
     it is requested to do so by the Majority Banks) calculate the aggregate of
     the Sterling Amounts of all Outstanding Contingent Liabilities under all
     Letters of Credit then outstanding.

5.12 CLAWBACK

     If the Facility Agent at any time issues a certificate addressed to the
     Primary Borrower that in its opinion the aggregate of the Sterling Amounts
     of Outstanding Contingent Liabilities under all Letters of Credit then
     outstanding is equal to or exceeds 105% of the aggregate amount of the
     Banks' Commitments under the Revolving Credit Facility less the amount of
     all outstanding Revolving Advances at that time, the Facility Agent may
     give notice to the Primary Borrower requiring it within five Banking Days
     either to:

     (a)  make arrangements to repay Revolving Advances and/or reduce the amount
          of the Letters of Credit outstanding so as to bring the Sterling
          Amount of all such Outstanding Contingent Liabilities to an amount
          equal to or below 100% of that aggregate amount; or

     (b)  provide the Issuing Bank with cash cover in the currency in which any
          Letter of Credit is denominated of such amount as would cause the
          requirements of this clause 4.12 to be satisfied.

5.13 CASH COVER

     Where cash cover is provided by an Obligor under clause 4.12 (Clawback) or
     otherwise under this Agreement, the Issuing Bank undertakes to place the
     relevant cash deposit in an account with it bearing interest at a rate and
     on the standard terms applicable to corporate customers of such Bank making
     deposits of an equivalent size and for an equivalent duration (or on such
     other terms as such Bank and the relevant Obligor may agree). Interest
     accruing on cash deposited as cash cover shall be for the account of and
     paid to such Obligor but shall not be paid to any Obligor (but shall be


                                       46
<PAGE>


     compounded) during the continuance of an Event of Default which shall not
     have been waived.

5.14 UNAVAILABILITY OF OPTIONAL CURRENCY

     If a Borrower requests that an Advance be denominated in an Optional
     Currency during its Maturity Period as provided in clause 4.2(b)(ii)
     (Amount), and:

     (a)  no later than 10.00 a.m. on the Quotation Date for such Advance, any
          Bank or Banks (in this clause 4.14 only, an "AFFECTED BANK" or, if
          more than one, the "AFFECTED BANKS") notifies the Facility Agent
          (providing detailed reasons and justification therefor) that it is not
          able to comply with such request; or

     (b)  no later than 11.00 a.m. on the Quotation Date for such Advance, the
          Facility Agent notifies the relevant Borrower and the Banks that by
          reason of circumstances affecting the London Interbank Market
          generally it is not feasible for such Advance to be made in such
          Optional Currency or, as the case may be, denominated in such Optional
          Currency for the relevant Maturity Period; or

     (c)  to give effect to such request would cause the Advances under the
          Facility to be denominated in more than four Optional Currencies,

          then:

          (i)  if the circumstances in paragraph (a) above only apply, the
               relevant Borrower and the Facility Agent shall agree to adjust
               the amount of such Advance to exclude the participation therein
               of the Affected Bank or Affected Banks and the Affected Bank or
               Affected Banks shall make a separate Advance in Sterling in the
               amount of their scheduled participation in such Advance Provided
               always that the Maturity Period thereof ends on the same day as
               the Maturity Period of such Advance; and/or

          (ii) if the circumstances in (b) and/or (c) apply, such Advance shall
               not be made unless the relevant Borrower specified in the
               Drawdown Notice in respect of such Advance and the Banks
               otherwise agree that such Advance should be denominated in
               Sterling and/or in one or more Optional Currencies in such
               circumstances, in which case such Advance shall be made in
               Sterling and/or (as the case may be) in such Optional Currency or
               Currencies in the Sterling Amount relating to such Advance.

6.   INTEREST AND INTEREST PERIODS

6.1  INTEREST ON THE TERM ADVANCES

     The Primary Borrower shall pay interest on each Term Advance in respect of
     each Interest Period on the relevant Interest Payment Date (or, in the case
     of Interest Periods of more than six months, by instalments, every six
     months from the commencement of the relevant Interest Period and on the
     relevant Interest Payment Date) at the rate per annum determined by the
     Facility Agent to be the aggregate of (a) the Applicable Margin, (b) the
     Mandatory Cost Rate and (c) LIBOR.


                                       47
<PAGE>


6.2  INTEREST PERIODS FOR THE TERM ADVANCES

     (a)  The Primary Borrower may by notice received by the Facility Agent not
          later than 11 a.m. on the second Banking Day before the beginning of
          each Interest Period in respect of each Term Advance specify whether
          such Interest Period shall have a duration of 1, 2, 3 or 6 months (or
          such other period as the Facility Agent, acting on the instructions of
          the Majority Banks, may agree).

     (b)  Every Interest Period in respect of each Term Advance shall be of the
          duration specified by the Primary Borrower pursuant to clause 5.2(a)
          but so that:

          (i)  each Interest Period in respect of each such Advance shall
               commence on the date of the expiry of the previous Interest
               Period;

          (ii) if otherwise there would be more than 10 Term Advances
               outstanding with different Interest Payment Dates, the Primary
               Borrower shall select Interest Periods for such Advances ending
               on the same day as the then current Interest Period for another
               such Advance and on the last day of such Interest Period such
               Advances shall be consolidated into and shall thereafter
               constitute a single Advance;

          (iii) if any Interest Period in respect of a Term Advance would
               otherwise overrun the Final Repayment Date, such Interest Period
               shall end on such date;

          (iv) if the Primary Borrower fails to select the duration of an
               Interest Period in respect of an Advance in accordance with the
               provisions of clause 5.2(a) and this clause 5.2(b), such Interest
               Period shall have a duration of 3 months subject to this clause
               5.2(b).

6.3  INTEREST UNDER THE REVOLVING CREDIT FACILITY

     The relevant Borrower shall pay interest on each Revolving Advance on its
     Maturity Date (or, in the case of a Revolving Advance having a Maturity
     Period of more than six months, by instalments, every six months from the
     relevant Drawdown Date and on the relevant Maturity Date) at the rate per
     annum determined by the Facility Agent to be the aggregate of (a) the
     Applicable Margin, (b) the Mandatory Cost Rate and (c) LIBOR.

6.4  INTEREST ON UNPAID SUMS

     (a)  If any Obligor fails to pay any sum (including, without limitation,
          any sum payable pursuant to this clause 5.4) on its due date for
          payment under this Agreement such Obligor shall pay interest on such
          sum from the due date up to the date of actual payment (after as well
          as before judgment) at a rate determined by the Facility Agent
          pursuant to this clause 5.4.

     (b)  The period beginning on the due date for payment and ending on the
          date of actual payment shall be divided into successive periods of not
          more than three months as selected by the Facility Agent (after
          consultation with the Banks so far as reasonably practicable in the


                                       48
<PAGE>


          circumstances) each of which (other than the first, which shall
          commence on such due date) shall commence on the last day of the
          preceding such period but so that if the unpaid sum is an amount of
          principal which shall have become due and payable prior to the next
          succeeding Interest Payment Date relating thereto or, as the case may
          be, prior to the relevant Maturity Date, then the first such period
          selected by the Facility Agent shall end on such Interest Payment Date
          or, as the case may be, such Maturity Date.

     (c)  The rate of interest applicable to each period referred to in clause
          5.4(b) shall (subject to clause 5.6 (Alternative Interest Rates)) be
          the aggregate (as determined by the Facility Agent) of (i) one per
          cent per annum, (ii) the Applicable Margin (iii) the Mandatory Cost
          Rate and (iv) LIBOR but so that if the unpaid sum is an amount of
          principal (as referred to in clause 5.4(b)) interest shall be payable
          on such unpaid sum during the first period determined pursuant to
          clause 5.4(b) at a rate one per cent above the rate applicable thereto
          immediately before it fell due.

     (d)  Interest under this clause 5.4 shall be due and payable on the last
          day of each period determined by the Facility Agent pursuant to this
          clause 5.4 or, if earlier, on the date on which the sum in respect of
          which such interest is accruing shall actually be paid or on such date
          or other dates which the Facility Agent may specify by written notice
          to the Primary Borrower (but not more frequently than once a month).
          Any interest payable under this clause 5.4 which is not paid when due
          shall be deemed an unpaid sum and shall itself bear interest
          accordingly.

6.5  NOTIFICATION OF INTEREST PERIODS AND INTEREST RATE The Facility Agent shall
     notify the Primary Borrower (who shall notify any other relevant Borrower)
     and the Banks promptly of the duration of each Interest Period, Maturity
     Period or other period for the calculation of interest (or, as the case may
     be, default interest) and of each rate of interest determined by it under
     this clause 5.

6.6  ALTERNATIVE INTEREST RATES

     If:

     (a)  in attempting to calculate LIBOR under paragraph (c) of the definition
          of LIBOR for a specified period the Facility Agent determines at 11.00
          a.m. (London time or, in the case of Euros, Central European Time) on
          the Quotation Date that it is unable to obtain quotations for LIBOR
          from any of the Reference Banks in respect of the relevant Advance or
          unpaid sum for the specified period; or

     (b)  before its close of business on such day, the Facility Agent has been
          notified in writing by a Bank or group of Banks to which 35% or more
          of the relevant Advance or unpaid sum is (or, if the relevant Advance
          were made, would then be) owed that LIBOR calculated in accordance
          with its definition in this Agreement does not accurately reflect the
          cost to them of funding their participation; or


                                       49
<PAGE>


     (c)  the Facility Agent, acting reasonably, determines that, by reason of
          circumstances affecting the London Inter-bank Market, adequate and
          fair means do not or will not exist for determining the rate of
          interest applicable to the specified period,

     then:

          (i)  the Facility Agent shall promptly notify in writing the Primary
               Borrower and the Banks of such event or circumstance;

          (ii) the Facility Agent (on behalf of and after consultation with the
               Banks) shall, within three Banking Days of such notice, negotiate
               with the Primary Borrower with a view to agreeing a substitute
               basis on which the relevant part of the Facility may be
               maintained;

          (iii) any substitute basis agreed in writing by the Facility Agent (on
               behalf of and with the consent of all the Banks) and the Primary
               Borrower within 30 days of such notice shall take effect in
               accordance with its terms and interest shall be calculated as if
               the substitute basis had come into effect from the beginning of
               the relevant specific period;

          (iv) in default of agreement within 30 days, each Bank's participation
               in the Advance or unpaid sum (if any) shall during that specific
               period bear interest at the annual rate equal to the cost to that
               Bank (as certified by it to the Primary Borrower within ten days
               of the end of that 30 day period and expressed as a percentage
               rate per annum) of funding its participation during that specific
               period by whatever means that Bank determines to be most
               appropriate plus the Applicable Margin and the Mandatory Cost
               Rate and if and to the extent that clause 5.4 (Interest on unpaid
               sums) applies, a further one per cent.

7.   REPAYMENT, PREPAYMENT, CANCELLATION AND REDUCTIONS

7.1  REPAYMENT OF THE TERM ADVANCES

     The Primary Borrower shall repay in full all outstanding Term Advances on
     the Final Repayment Date.

7.2  REPAYMENT OF REVOLVING ADVANCES

     The relevant Borrower shall repay each Revolving Advance in full on its
     Maturity Date, without prejudice to the right of that or any other
     Borrower, subject to the terms of this Agreement, to continue to make
     utilisations up to the Available Amount.

     On the Final Repayment Date for the Revolving Credit Facility, the balance
     of all outstanding Revolving Advances under such Facility shall in any
     event be repaid in full and may not be reborrowed.


                                       50
<PAGE>


7.3  OPTIONAL PREPAYMENT OF ALL THE BANKS

     The relevant Borrower may, subject to clause 6.6 (Cancellation of the
     Facilities), prepay:

     (a)  a Term Advance in whole or part (if in part, being (pound)10,000,000
          or any larger sum which is an integral multiple of (pound)5,000,000)
          on the next succeeding Interest Payment Date in respect of such
          Advance or, together with any relevant amounts payable pursuant to
          clause 13.1 (Miscellaneous Indemnities), any Banking Day, which amount
          shall be applied by the Facility Agent in prepayment to the Banks to
          whom such Advance is owing on a pro rata basis;

     (b)  a Revolving Advance in whole (but not in part) together with any
          relevant amounts payable pursuant to clause 13.1 (Miscellaneous
          Indemnities).

7.4  AFFECTED BANKS

     (a)  The relevant Borrower may and, where required under this Agreement
          shall, prepay (in whole but not in part only), without premium or
          penalty, subject to clause 6.6 (Cancellation of the Facilities), the
          whole of the Contributions to all the Facilities of any Affected Bank.
          Upon any such notice of such prepayment being given, or as provided
          for in clause 14.1 (Unlawfulness), the Commitments of the relevant
          Bank to all the relevant Facilities shall be reduced to zero and the
          undrawn amount of the Total Commitments in respect of all the
          Facilities shall be reduced accordingly.

     (b)  Instead of, or in addition to, its rights under clause 6.4(a) above
          the relevant Borrower may on payment of the amounts referred to under
          clause 6.5 (Prepayments Generally), without prejudice to clause 14.4
          (Mitigation), require the Affected Bank to transfer pursuant to clause
          16.5 (Substitution Certificate) at par all of its Commitments and
          Contributions to a Qualifying Bank nominated by the Borrower provided
          that the relevant Qualifying Bank agrees (in its absolute discretion)
          to accept the transfer to it and, in the case of clause 14.1
          (Unlawfulness), that Bank is lawfully able to do so and the transfer
          is to take effect prior to the prepayment date specified by the
          Facility Agent thereunder.

7.5  PREPAYMENTS GENERALLY

     (a)  No prepayment may be made pursuant to clauses 6.3 (Optional Prepayment
          of all the Banks) or 6.4 (Affected Banks) unless the Primary Borrower
          shall have given the Facility Agent 5 Banking Days' prior notice (or
          in the case of a prepayment pursuant to clause 14.1 (Unlawfulness)
          such notice as is required under clause 14.1 (Unlawfulness) specifying
          the proposed date of the prepayment and the amount to be prepaid.
          Every such notice shall be effective only on actual receipt by the
          Facility Agent, shall be irrevocable and shall oblige the relevant
          Borrower to make the relevant prepayment on the date specified.

     (b)  No amount of the Term Facility which is repaid or prepaid may be
          reborrowed.


                                       51
<PAGE>


     (c)  Prepayments required to be made to an Affected Bank should be applied
          first against the Affected Bank's Contribution to outstanding Term
          Advances, and then in the following order:

          (i)  in repayment of that Bank's Contribution to outstanding Revolving
               Advances and in permanent reduction of the Revolving Credit
               Facility;

          (ii) to provide cash cover for that Bank's Proportion of the
               Outstanding Contingent Liabilities under the Revolving Credit
               Facility.

     (d)  All prepayments shall be made together with (to the extent these
          relate to the amounts prepaid):

          (i)  accrued interest to the date of prepayment;

          (ii) any additional amount payable under clauses 8.5 (Grossing-up for
               Taxes) or 14.2 (Increased Costs); and

          (iii) all other sums payable by the Borrower to the Banks or the
               relevant Bank under this Agreement including, without limitation,
               any accrued commitment commission payable under clause 7.2
               (Commitment Fees), any Letter of Credit commission and fees under
               clause 7.3 (Letter of Credit Fees), expenses under clause 7.4
               (Expenses) and any amounts payable under clause 13.1
               (Miscellaneous Indemnities).

     (e)  No Borrower shall prepay all or any part of an Advance outstanding
          under this Agreement except at the times and in the manner expressly
          provided in this Agreement.

7.6  CANCELLATION OF THE FACILITIES

     The Primary Borrower may at any time prior to the Available Commitment
     Termination Date in respect of the Revolving Credit Facility by notice to
     the Facility Agent (effective only on actual receipt) cancel with effect
     from a date not less than 10 Banking Days after the receipt by the Facility
     Agent of such notice the whole or any part (if in part, being
     (pound)10,000,000 or any larger sum which is an integral multiple of
     (pound)5,000,000) of the Available Amount., in each case which is not the
     subject of a Drawdown Notice at such time. Such notice shall specify the
     date upon which such cancellation is to be made and the amount of such
     cancellation. Any such notice of cancellation, once given, shall be
     irrevocable and upon such cancellation taking effect the Commitments of the
     Banks shall be reduced accordingly (pro-rata their respective Commitments).

7.7  TERMINATION

     The Commitment of each Bank shall be automatically cancelled and reduced to
     zero at the close of business in London on the relevant Available
     Commitment Termination Date.


                                       52
<PAGE>


8.   FEES AND EXPENSES

8.1  ARRANGEMENT, UNDERWRITING, PARTICIPATION AND AGENCY FEES

     The Primary Borrower shall pay to the Facility Agent or shall procure that
     there is paid, whether or not any part of the Commitments is ever advanced:

     (a)  on the date of this Agreement fees of an amount agreed between the
          Primary Borrower and the Facility Agent in a letter dated on or about
          the date of this Agreement;

     (b)  on the date of this Agreement and on each anniversary thereof until
          the end of the Finance Period, for the account of the Facility Agent,
          an agency fee of an amount agreed between the Primary Borrower and the
          Facility Agent in a letter dated on or about the date of this
          Agreement.

8.2  COMMITMENT FEES

     The Primary Borrower shall pay to the Facility Agent, whether or not any
     part of the Commitments is ever advanced, from the Effective Date on each
     Fee Payment Date after the Effective Date and on the Available Commitment
     Termination Date in respect of the Revolving Credit Facility, for the
     account of each of the Banks (pro-rata to their respective Commitments for
     that Facility), commitment commission computed in arrears at the Applicable
     Fees Rate on the daily amount by which the Total Commitments in respect of
     the Revolving Credit Facility exceeds the aggregate of the Contributions in
     respect of the Revolving Credit Facility. Accrued commitment commission
     will also be payable on the amount of any Commitment when cancelled on the
     date of its cancellation.

8.3  LETTER OF CREDIT FEES

     (a)  Each relevant Borrower shall (on the dates set out in clause 7.3(c))
          pay commission in Sterling to the Facility Agent for the account of
          the Banks (in their respective Proportions) on the Issue of any Letter
          of Credit requested by such Borrower in Sterling at a percentage rate
          per annum equal to the Applicable Margin on the Sterling Amount of the
          Outstanding Contingent Liabilities under such Letter of Credit
          calculated in each case on the date of Issue and recalculated on each
          Quarter Date from the Issue Date of such Letter of Credit until the
          earlier of its Expiry Date or such date as the Issuing Bank and the
          Banks have ceased to be under any liability (actual or contingent) in
          respect thereof, and on the basis of a 365 day year. If the relevant
          Borrower has provided cash cover for any Letter of Credit, the
          percentage rate per annum payable on cash covered amounts shall
          instead be 0.25%.

     (b)  Each relevant Borrower shall pay a fronting fee to the Facility Agent
          for the account of the Issuing Bank on the Issue of any Letter of
          Credit at a rate of 0.2% per annum on the Sterling Amount of the face
          amount of the relevant Letter of Credit payable in advance on the date
          of Issue and on each Quarter Date thereafter.


                                       53
<PAGE>


     (c)  The commission and fronting fee payable under clauses 7.3(a) and
          7.3(b) respectively in respect of each Letter of Credit shall be paid
          in advance on the relevant Issue Date and on each Quarter Date in each
          year during the continuance of such Letter of Credit (or if such day
          is not a Banking Day, on the preceding Banking Day) commencing on the
          first Quarter Date falling on or after the Issue of the relevant
          Letter of Credit. If a Letter of Credit is terminated leaving no
          Outstanding Contingent Liabilities before a Quarter Date, that part of
          the commission paid in advance which is attributable to the period
          from the date of cancellation until the next Quarter Date shall be
          repaid to the Borrower which made the advance commission payment by
          set-off against any amounts then due from the Obligor to any Finance
          Party or, if no such amounts are due, by payment in cash.

     (d)  For the avoidance of doubt, the Issuing Bank's Proportion of the
          commission at the rate and calculated in the manner specified in
          clause 7.3(a) shall be payable to the Issuing Bank in respect of its
          residual liability in its capacity as a Bank, notwithstanding that it
          does not purport to guarantee itself in its capacity as Issuing Bank.

     (e)  The relevant Borrower shall pay interest on the amount demanded and
          outstanding under the indemnity given by them in respect of Letters of
          Credit in accordance with clause 4.8 (Calculation of Interest if Bank
          makes a Guarantee or Indemnity Payment) in addition to the commission
          and other fees payable under this Agreement in respect of the
          Revolving Credit Facility.

8.4  EXPENSES

     The Primary Borrower shall reimburse the Arrangers, the Banks and the
     Facility Agent from time to time within three Banking Days of receipt of
     demand:

     (a)  all reasonable costs and expenses (including without limitation legal,
          printing and out-of-pocket expenses) together with any VAT thereon
          incurred by the Facility Agent and the Arrangers in connection with
          the negotiation, preparation and execution of the Finance Documents
          and the completion of the transactions contemplated in the Finance
          Documents, and the negotiation, preparation and execution of any
          amendment or extension of, or the granting of any waiver or consent
          under, any of the Finance Documents; and

     (b)  without prejudice to the generality of (c) below, all expenses and
          costs (including without limitation the fees and expenses of lawyers,
          accountants, surveyors, valuers, environmental consultants and other
          professional advisers and out-of-pocket expenses) incurred by the
          Facility Agent in connection with the obtaining of reports and/or
          advice and/or the undertaking of investigations by or on behalf of the
          Facility Agent into or concerning the Primary Borrower or the Group
          following the occurrence of a Default and whilst it is continuing (or
          where the Majority Banks' reasonable opinion is that a Default may
          have occurred) and the Primary Borrower undertakes to give, and to
          procure that its Subsidiaries give, all such reasonable assistance


                                       54
<PAGE>


          (including, without limitation, access to its and/or their properties
          and financial and other records) at all times as the Facility Agent
          shall reasonably require for the purpose of enabling such reports or
          advice to be prepared or such investigations to be undertaken; and

     (c)  after a Default has occurred, all costs and expenses (including
          without limitation legal and out-of-pocket expenses) incurred by any
          of the Finance Parties in contemplation of, or otherwise in connection
          with, the enforcement or attempted enforcement of, or preservation or
          attempted preservation of any rights under, any of the Finance
          Documents, or otherwise in respect of the recovery, or attempted
          recovery, of moneys owing under the same, together with interest at
          the rate referred to in clause 5.4 (Interest on Unpaid Sums) from the
          date on which such expenses were incurred to the date of payment (as
          well after as before judgment).

8.5  VALUE ADDED TAX

     All fees, costs and expenses payable pursuant to this clause 7 shall be
     paid together with an amount equal to any VAT thereon payable by any of the
     Finance Parties in respect of such fees and expenses against a duly
     executed VAT invoice.

8.6  STAMP AND OTHER DUTIES

     The Primary Borrower shall pay all proper stamp, documentary, registration,
     notarisation or other duties or Taxes (including any duties or Taxes
     payable by, or assessed on, the Finance Parties) imposed on or in
     connection with the negotiation, preparation, implementation and execution
     of any of the Finance Documents and shall indemnify the Finance Parties
     against any liability arising by reason of any delay or omission by the
     Primary Borrower to pay such duties or Taxes.

9.   PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS

9.1  NO SET-OFF OR COUNTERCLAIM; DISTRIBUTION TO THE BANKS

     All payments to be made by any Obligor under this Agreement shall be:

     (a)  made in full, without any set-off or counterclaim whatsoever and,
          subject as provided in clause 8.5 (Grossing-up for Taxes), free and
          clear of any deductions or withholdings, on the due date to the
          account of the Facility Agent at such bank as the Facility Agent may
          from time to time specify for this purpose;

     (b)  made in respect of:

          (i)  each repayment or prepayment of, or payment of interest on, or
               participation by a Bank in, a Utilisation, in the currency in
               which the Utilisation is denominated;

          (ii) any payment of costs and expenses, in the currency in which they
               were incurred;


                                       55
<PAGE>


          (iii) all fees and/or commission payable under clause 7 (Fees and
               expenses) shall be paid in Sterling unless the Parent and the
               Facility Agent otherwise agree;

          (iv) any other amount expressed in any Finance Document to be payable
               in a currency, in that currency;

     (c)  for the account of all the Banks, and the Facility Agent shall
          forthwith distribute such payments in like funds as are received by
          the Facility Agent to the Banks rateably for the account of such
          Banks' respective Facility Offices in accordance with their
          Commitments or Contributions, as the case may be provided that where
          this Agreement provides for a payment to be made for the account of a
          particular Finance Party or Finance Parties, in which case the
          Facility Agent shall distribute the relevant payment to the relevant
          Finance Party or Finance Parties concerned.

9.2  PAYMENTS BY THE BANKS OR BY OBLIGORS

     (a)  All payments by an Obligor or a Bank under the Finance Documents shall
          be made to the Facility Agent to its account at such office or bank:

          (i)  in the principal financial centre of the country of the relevant
               currency; or

          (ii) in the case of Euro Units or national currency units, in
               Frankfurt am Main, Germany (or such other principal financial
               centre of a Participating Member State as the Facility Agent may
               from time to time nominate for this purpose) or London,

          as it may from time to time notify to that Obligor or Bank for this
          purpose.

     (b)  Payments under the Finance Documents to the Facility Agent shall be
          made for value on the due date at such times and in immediately
          available, freely transferable cleared funds (or such other funds as
          the Facility Agent may specify to the Party concerned as being
          customary at the time for the settlement of transactions in the
          relevant currency).

     (c)  Each payment received by the Facility Agent under the Finance
          Documents for another Party shall, subject to paragraph (d) below, be
          made available by the Facility Agent to that Party by payment (on the
          date and in the currency and funds of receipt) to its account with
          such office or bank:

          (i)  in the principal financial centre of the country of the relevant
               currency; or

          (ii) in the case of Euro Units or national currency units, in
               Frankfurt am Main, Germany (or such other principal financial
               centre of a Participating Member State as the Facility Agent may
               from time to time nominate for this purpose) or London,

          as it may from time to time notify the Facility Agent for this purpose
          by prior written notice.


                                       56
<PAGE>


     (d)  The Facility Agent may apply any amount received by it for an Obligor
          in or towards payment (on the date and in the currency and funds of
          receipt) of any amount due from an Obligor under this Agreement or in
          or towards the purchase of any amount of any currency to be so
          applied.

9.3  NON-BANKING DAYS

     When any payment under this Agreement would otherwise be due on a day which
     is not a Banking Day, the due date for payment shall be postponed to the
     next following Banking Day unless such Banking Day falls in the next
     calendar month, in which case payment shall be made on the immediately
     preceding Banking Day.

9.4  FACILITY AGENT MAY ASSUME RECEIPT

     (a)  Where any sum is to be paid under this Agreement to the Facility Agent
          for the account of another person, the Facility Agent may assume that
          the payment will be made when due and may (but shall not be obliged
          to) make such sum available to the person so entitled.

     (b)  If it proves to be the case that such payment was not made to the
          Facility Agent, then:

          (i)  the person to whom such sum was so made available shall on
               request refund such sum to the Facility Agent together with
               interest thereon sufficient to compensate the Facility Agent for
               the cost of making available such sum up to (and/or, as the case
               may be, the cost to the relevant other person of not receiving
               such sum until) the date of such repayment; and

          (ii) the person by whom such sum was payable shall indemnify the
               Facility Agent (or the relevant other person) for any and all
               loss or expense which the Facility Agent (or the relevant other
               person) may sustain or incur as a consequence of such sum not
               having been paid on its due date together with any interest,
               expenses and penalties payable or incurred in connection
               therewith.

9.5  GROSSING-UP FOR TAXES

     (a)  If at any time any Obligor is required to make any deduction or
          withholding in respect of Taxes from any payment due under any Finance
          Document for the account of any Finance Party (or if the Facility
          Agent is required to make any such deduction or withholding from a
          payment to a Finance Party), the sum due from the relevant Obligor in
          respect of such payment shall, subject to clause 8.6 (Qualifying
          Bank), be increased to the extent necessary to ensure that, after the
          making of such deduction or withholding (and any further deduction and
          withholding which may be levied on the additional amounts paid by
          reason of this clause), each Finance Party receives on the due date
          for such payment (and retains, free from any liability in respect of
          such deduction or withholding) a net sum equal to the sum which it


                                       57
<PAGE>


          would have received and so retained had no such deduction or
          withholding been made or required to be made.

     (b)  Each Obligor shall (without prejudice to the foregoing provisions of
          this clause 8.5) indemnify each Finance Party on demand by the
          Facility Agent against any losses or costs incurred by any of them
          together with any interest, expenses and penalties payable or incurred
          in connection therewith by reason of any failure of such Obligor to
          make any such deduction or withholding.

     (c)  Each Obligor shall promptly deliver to the Facility Agent any
          receipts, certificates or other proof evidencing the amounts (if any)
          paid or payable in respect of any such deduction or withholding.

9.6  QUALIFYING BANK

     (a)  If:

          (i)  any Bank is not or ceases to be a Qualifying Bank; and

          (ii) as a result an Obligor is required to deduct or withhold United
               Kingdom income tax in respect of payments of interest to be made
               by such Obligor to that Bank under any Finance Document or would
               otherwise have been required to make an indemnity payment or a
               greater indemnity payment under clause 8.5 (Grossing-up for
               Taxes) or 14.2 (Increased Costs),

          then such Obligor shall (as the case may be) not be liable to pay
          under clause 8.5 (Grossing-up for Taxes) in respect of any such
          payment of interest any amount in excess of the amount (if any) it
          would have been obliged to pay if such Bank were a Qualifying Bank,
          nor shall it be liable to make an indemnity payment or a greater
          indemnity payment under clause 8.5 (Grossing-up for Taxes) or, as the
          case may be, clause 14.2 (Increased Costs) than would have been
          required (if any) if the aforesaid Bank had been or had not ceased to
          be a Qualifying Bank.

     (b)  This clause 8.6 shall not apply, and such Obligor shall be obliged to
          comply with its obligations under clause 8.5 (Grossing-up for Taxes),
          or as the case may be 14.2 (Increased Costs), if on or after the date
          of this Agreement:

          (i)  there shall have been any change in, or in the official
               interpretation or application of, any relevant law or the
               practice of the United Kingdom Inland Revenue (or, in the case of
               a Treaty Lender, any Government Entity in the country in which it
               is resident for the purpose of the relevant double taxation
               treaty) and as a result thereof the Bank is not or ceases to be a
               Qualifying Bank, or

          (ii) the Bank referred to in clause 8.6(a) has transferred its
               Facility Office in respect of any Facility outside the United
               Kingdom or has become a Bank hereunder with a Facility Office
               outside the United Kingdom in respect of any Facility, in each
               case, with the consent of the Primary Borrower.

     (c)  A person intending to make a claim pursuant to clause 8.5 (Grossing-up
          for Taxes) shall, promptly after such person becomes aware of the
          circumstances giving rise to such claim and the amount of such claim,


                                       58
<PAGE>


          deliver to the Primary Borrower through the Facility Agent a
          certificate to that effect specifying the amount of such claim and
          setting out in reasonable detail the basis of such claim, provided
          that nothing shall require such person to disclose any confidential
          information relating to the organisation of its affairs.

     (d)  If at any time after the date of this Agreement any Bank is aware that
          it is not or will cease to be a Qualifying Bank (for whatever reason),
          it shall promptly notify the Primary Borrower.

     (e)  A Treaty Lender will submit such claim to the appropriate authorities
          (together with such forms, papers, other documents and/or evidence as
          necessary) as may be required for the Obligors to make payment of
          interest to such Treaty Lender on its Advances free of withholding or
          deduction on account of United Kingdom Tax. No Obligor will be liable
          to pay any additional amount under clause 8.5 (Grossing-up for Taxes)
          in respect of the withholding or deduction on account of United
          Kingdom income tax from any such interest unless such claim has been
          submitted to those authorities promptly after that Treaty Lender
          became a party to this Agreement as a Treaty Lender or the proviso to
          clause 8.6(a) applies.

9.7  CLAW-BACK OF TAX BENEFIT

     (a)  If following any such deduction or withholding as is referred to in
          clause 8.5 (Grossing-up for Taxes) any Finance Party determines in its
          sole discretion that it has received or been granted a credit against
          or remission for any Taxes payable by it, such Finance Party shall,
          subject to the relevant Obligor having made any increased payment in
          accordance with clause 8.5 (Grossing-up for Taxes) and subject to
          there not being any Event of Default which is continuing, and to the
          extent that such Finance Party can do so without prejudicing the
          retention of the amount of such credit or remission and without
          prejudice to the right of such Finance Party to obtain any other
          relief or allowance which may be available to it, reimburse the
          relevant Obligor with such amount as such Finance Party shall in its
          absolute discretion certify to be the proportion of such credit or
          remission as will leave such Finance Party (after such reimbursement)
          in no worse position than it would have been in had there been no such
          deduction or withholding from the payment by the relevant Obligor as
          aforesaid.

     (b)  Such reimbursement shall be made forthwith upon such Finance Party
          certifying that the amount of such credit or remission has been
          received by it, provided that the Finance Party shall be the sole
          judge of the amount of any such benefit and of the date on which it
          was received.

     (c)  Nothing contained in this Agreement shall interfere with the right of
          any Finance Party to arrange its tax affairs in whatever manner it
          thinks fit nor oblige any Finance Party to disclose any information
          regarding its tax affairs and computations. Without prejudice to the
          generality of the foregoing, no Obligor shall, by virtue of this


                                       59
<PAGE>


          clause 8.7, be entitled to enquire about any Finance Party's tax
          affairs or computations.

     (d)  The Finance Parties are under no obligation to investigate whether any
          tax credit is available or to claim any tax credit. Any amount paid by
          any Finance Party to an Obligor under this clause shall be conclusive
          evidence of the amount payable and will be accepted by the Obligor in
          full and final settlement of its claim.

9.8  BANK ACCOUNTS

     Each Bank shall maintain, in accordance with its usual practices, an
     account or accounts evidencing the amounts from time to time lent by, owing
     to and paid to it under this Agreement. The Facility Agent shall maintain a
     control account showing the utilisation of the Facilities and other sums
     owing by each Obligor under this Agreement and all payments in respect
     thereof made by each Obligor from time to time. In any legal action arising
     out of or in connection with the Finance Documents the entries made in the
     accounts maintained pursuant to this clause 8.8 shall, in the absence of
     manifest error, be conclusive as to the amount from time to time owing by
     each Obligor under this Agreement.

9.9  PARTIAL PAYMENTS

     If:

     (a)  on any date on which a payment is due to be made by any Obligor under
          this Agreement, the amount received by the Facility Agent from such
          Obligor falls short of the total amount of the payment due to be made
          by such Obligor on such date; or

     (b)  on any date on which the Facility Agent receives or recovers any
          payment from an Obligor or otherwise receives any amount representing
          proceeds of realisations or other recoveries under any of the Finance
          Documents, the amount of such payment or other receipt falls short of
          the total amount owing to the Finance Parties under this Agreement on
          such date,

     then (in any such case), without prejudice to any rights or remedies
     available to the Finance Parties under any of the Finance Documents, the
     Facility Agent shall apply the amount actually received by it in or towards
     discharge of the obligations of such Obligor under this Agreement in the
     following order, notwithstanding any appropriation made, or purported to be
     made, by such Obligor:

          (i)  first, in or towards payment, on a pro-rata basis, of any unpaid
               costs and expenses of the Facility Agent or the Arrangers under
               this Agreement;

          (ii) secondly, in or towards payment to the Banks, on a pro-rata
               basis, of any amount owing to the Banks under clause 20.2
               (Indemnity from Banks);


                                       60
<PAGE>


          (iii) thirdly, in or towards payment to the Facility Agent, of any
               portion of the fees payable under clause 7.1(a) (Arrangement,
               underwriting, participation and agency fees) which remains
               unpaid;

          (iv) fourthly, in or towards payment to the Facility Agent, on a
               pro-rata basis, of any portion of the fees payable under clause
               7.1(b) (Arrangement, underwriting, participation and agency fees)
               which remains unpaid;

          (v)  fifthly, in or towards payment to the Banks, on a pro-rata basis,
               of any accrued commitment commission payable under clause 7.2
               (Commitment fees) which shall have become due but remains unpaid;

          (vi) sixthly, in or towards payment to the Banks, on a pro-rata basis,
               of any accrued interest, Letter of Credit commission and (in the
               case of the Issuing Bank) Letter of Credit fronting fees or
               commission which shall have become due but remain unpaid, but so
               that any amount payable by virtue of clause 8.5 (Grossing-up for
               Taxes) shall be excluded;

          (vii) seventhly, in or towards payment to the Banks, on a pro-rata
               basis, of any principal which shall have become due but remains
               unpaid;

          (viii) eighthly,in or towards payment to any such Banks, on a pro-rata
               basis, of any amount payable to any Banks by virtue of clause 8.5
               (Grossing-up for Taxes) which remains unpaid; and

          (ix) ninthly, in or towards payment of any other sum which shall have
               become due but remains unpaid (and, if more than one such sum so
               remains unpaid, on a pro-rata basis).

     Each reference in clause 8.9(i) to (ix) (inclusive) to a category of unpaid
     sums shall include interest thereon payable in accordance with this
     Agreement (including, without limitation, default interest under clause 5.4
     (Interest on unpaid sums)). Accordingly, clause 8.9(vi) shall be construed
     as referring to interest on principal and accrued interest thereon which
     remain unpaid to the extent due.

     The order of application set out in this clause 8.9(v) to 8.9(ix) shall be
     varied by the Facility Agent if the Majority Banks so direct, without any
     reference to, or consent or approval from, the Obligors.

9.10 CALCULATIONS

     All interest and other payments of an annual nature under this Agreement or
     any of the Finance Documents shall accrue from day to day and be calculated
     on the basis of the actual number of days elapsed, and in the case of
     Sterling a 365 day year and in the case of other currencies a 360 day year
     (or, in any case where market practice differs, in accordance with market
     practice). In calculating the actual number of days elapsed in a period
     which is one of a series of consecutive periods with no interval between
     them or a period on the last day of which any payment falls to be made in
     respect of such period, the first day of such period shall be included but
     the last day excluded.


                                       61
<PAGE>


     Where the Applicable Margin or Mandatory Cost Rate changes during any
     period, interest and commitment fees shall be calculated on the rate
     prevailing from day to day.

9.11 CERTIFICATES PRIMA FACIE EVIDENCE

     Any certificate of, or determination by, a Finance Party as to any rate of
     interest or any other amount payable under this Agreement or any of the
     Finance Documents shall, in the absence of manifest error, be prima facie
     evidence of such rate or amount on each Obligor and (in the case of a
     certificate of or determination by the Facility Agent) on the Banks.

9.12 EFFECT OF MONETARY UNION

     The provisions of clauses 8.12 (a) to (h) (inclusive) apply in relation to
     any amount payable in the currency of a Participating Member State provided
     that, if and to the extent that any provision relates to any state (or the
     currency of such state) which was not a Participating Member State on 1
     January 1999, such provision shall come into effect in relation to such
     state (and the currency of such state) on and with effect from the date on
     which such state becomes a Participating Member State.

     (a)  REDENOMINATION AND ALTERNATIVE CURRENCIES: Each obligation under this
          Agreement of a party to this Agreement which has been denominated in
          the national currency unit of a Participating Member State shall be
          redenominated into the Euro Unit in accordance with EMU legislation,
          provided that, if and to the extent that any EMU legislation provides
          that following 1 January 1999 an amount denominated either in the Euro
          or in the national currency unit of a Participating Member State and
          payable within that Participating Member State by crediting an account
          of the creditor can be paid by the debtor either in the Euro Unit or
          in that national currency unit, each party to this Agreement shall be
          entitled to pay or repay any such amount either in the Euro Unit or in
          such national currency unit.

     (b)  ADVANCES: Any Advance in the currency of a Participating Member State
          shall be made in the Euro Unit.

     (c)  PAYMENTS TO THE FACILITY AGENT: Clause 8.2 (Payments by the Banks or
          Obligors) shall be construed so that, in relation to the payment of
          any sum denominated in the Euro or in a national currency unit, such
          sum shall be made available to the Facility Agent by payment in the
          Euro Unit or, as the case may be, such national currency unit and in
          immediately available, freely transferable, cleared funds to the
          account notified by it under clause 8.2(a)(ii).

     (d)  PAYMENTS BY THE FACILITY AGENT TO THE BANKS: Any amount payable by the
          Facility Agent to the Banks under this Agreement in the currency of a
          Participating Member State shall be paid in the Euro Unit.

     (e)  PAYMENTS BY THE FACILITY AGENT: The Facility Agent shall not be liable
          to the Borrower or any of the Banks in any way whatsoever for any
          delay, or the consequences of any delay, in the crediting to any
          account of any amount required by this Agreement to be paid by the
          Facility Agent if the Facility Agent shall have taken all relevant


                                       62
<PAGE>


          steps to achieve, on the date required by this Agreement, the payment
          of such amount in immediately available, freely transferable, cleared
          funds (in the Euro Unit or, as the case may be, in a national currency
          unit) to the account with the Bank in the principal financial centre
          in the Participating Member State which any Borrower or, as the case
          may be, any Bank shall have specified for such purpose. In this clause
          8.12(e) "ALL RELEVANT STEPS" means all such steps as may be prescribed
          from time to time by the regulations or operating procedures of such
          clearing or settlement system as the Facility Agent may from time to
          time after consultation with the Primary Borrower and the Banks
          determine for the purpose of clearing or settling payments of the
          Euro.

     (f)  BASIS OF ACCRUAL: If, in relation to the currency of any Participating
          Member State, the basis of accrual of interest or commitment
          commission expressed in this Agreement in respect of that currency
          shall be inconsistent with any convention or practice in the London
          Interbank Market for the basis of accrual of interest or commitment
          commission in respect of the Euro, such expressed basis shall be
          replaced by such convention or practice.

     (g)  ROUNDING AND OTHER CONSEQUENTIAL CHANGES: Without prejudice and in
          addition to any method of conversion or rounding prescribed by any EMU
          legislation and without prejudice to the respective liabilities for
          indebtedness of any Borrower to the Banks and the Banks to any
          Borrower under or pursuant to this Agreement (and after consultation
          with the Primary Borrower and the Banks):

          (i)  each reference in this Agreement to a minimum amount (or an
               integral multiple thereof) in a national currency unit to be paid
               to or by the Facility Agent shall be replaced by a reference to
               such reasonably comparable and convenient amount (or an integral
               multiple thereof) in the Euro Unit as the Facility Agent may from
               time to time specify; and

          (ii) save as expressly provided in this clause 8.12(g), each provision
               of this Agreement shall be subject to such reasonable changes of
               construction as the Facility Agent may from time to time specify
               to be necessary or appropriate to reflect the changeover to the
               Euro in Participating Member States.

     (h)  AMENDMENTS: After consultation with the Primary Borrower and the Banks
          and notwithstanding clause 22 (Determination of Matters), the Facility
          Agent shall be entitled to make from time to time such amendments to
          this Agreement as it may determine in good faith to be necessary to
          take account of monetary union and any consequent changes in market
          practices (whether as to the settlement or rounding of obligations,
          the calculation of interest, place of payment or otherwise howsoever).

          Any amendment so made to this Agreement by the Facility Agent shall be
          promptly notified to the other Finance Parties and the Primary
          Borrower by the Facility Agent and shall be binding on all the other


                                       63
<PAGE>


          Finance Parties and any Obligor and any other party to this Agreement.

9.13 CONFIRMATION OF END OF FINANCE PERIOD

     The Facility Agent undertakes with the Obligors that the confirmation
     referred to in the definition of "Finance Period" shall be given by it to
     all the other parties to this Agreement promptly upon the Facility Agent
     determining, acting reasonably, that none of the Finance Parties and none
     of the Obligors has any actual or contingent liabilities or obligations
     under any of the Finance Documents.

10.  REPRESENTATIONS AND WARRANTIES

10.1 REPRESENTATIONS AND WARRANTIES

     Each Obligor for itself makes the representation and warranties set out in
     this clause 9 to each Finance Party.

10.2 STATUS

     (a)  It and each Principal Subsidiary is duly incorporated under the laws
          of the jurisdiction of its incorporation and has power and is able
          lawfully to own its respective property and assets and carry on its
          respective businesses.

     (b)  It has power and is able lawfully to execute and deliver each Finance
          Document and to exercise its respective rights and perform its
          respective obligations under this Agreement and the transactions
          contemplated hereby and all corporate or other action required to be
          taken by it in order to authorise the execution and delivery by it of
          each Finance Document and the performance by it of its respective
          obligations has been duly taken.

10.3 LEGAL VALIDITY

     The Finance Documents to which it is a party constitute its legal, valid
     and binding obligations.

10.4 NON-CONTRAVENTION

     The execution and delivery by it of the Finance Documents to which it is a
     party and the performance by it of its obligations under the Finance
     Documents will not:

     (a)  contravene any provision of any law, statute (including the
          Electricity Act), decree, rule, regulation or code of practice to
          which it or any of its assets or revenues is subject, or of any order,
          judgement, injunction, decree, resolution, determination or award of
          any court or any judicial, administrative or Governmental Entity or
          organisation having applicability to it or any of its assets or
          revenues; or

     (b)  result in any breach of any of the terms, covenants, conditions or
          provisions of, or constitute a default under, any indenture, mortgage,
          deed of trust, bond, agreement or other instrument or obligation to


                                       64
<PAGE>


          which it is a party or by which it or any of its assets or revenues
          may be bound or affected; or

     (c)  violate any provision of its constitutive documents.

10.5 NO DEFAULT

     No Default has occurred which is continuing.

10.6 CONSENTS

     All consents, approvals, authorisations, exemptions, registrations and
     filings and all acts, conditions and things required to be obtained, done,
     fulfilled and performed in order to:

     (a)  enable it to enter into and exercise its rights and perform its
          obligations under each Finance Document to which it is party; and

     (b)  make the Finance Documents legal, valid and binding and admissible in
          evidence in England and Wales,

     have been obtained and are in full force and effect or have been done,
     fulfilled or performed (as the case may be).

10.7 ACCOUNTS

     The Original Group Accounts, and thereafter, the most recent consolidated
     audited financial statements of the Group, were prepared in accordance with
     the Appropriate Accounting Principles and consistently applied from one
     period to the next (except as shown in those financial statements) and give
     a true and fair view of the financial condition of, in the case of the
     Original Group Accounts, the Target and its Subsidiary Undertakings, and in
     the case of subsequent accounts, of the Group, as at the date as of which
     the same were prepared.

10.8 NO MATERIAL ADVERSE EFFECT

     Since 31 March 1998 there has been no change in the business, assets or
     financial condition of itself, or the Group taken as a whole, having a
     Material Adverse Effect.

10.9 LITIGATION

     No action or proceeding of or before any court, administrative tribunal,
     government body or regulatory authority (including, without limitation, the
     Competition Commission or the Office of Electricity Regulation) has been
     commenced, or (to the best of its knowledge) is threatened against any
     member of the Group which, in each case, has a Material Adverse Effect.

10.10 INDEBTEDNESS

     Its Indebtedness under the Finance Documents to which it is a party will
     rank at least pari passu with all its other unsubordinated and unsecured
     Indebtedness with the exception of that which is preferred by operation of
     law.


                                       65
<PAGE>


10.11 NO BREACH

     It is not in breach of or default under any agreement to which it is party
     or which is binding on it or any of its assets to an extent or in a manner
     which has a Material Adverse Effect.

10.12 NO SECURITY INTEREST

     No Security Interest exists over all or any of the present or future
     revenues or assets of any member of the Group, save for Permitted Security
     Interests.

10.13 NO OBLIGATION TO CREATE SECURITY INTEREST

     The execution of the Finance Documents and the exercise of its rights and
     performance of its obligations thereunder will not result in the existence
     of nor oblige it to create any Security Interest over all or any of its
     present and future revenues or assets.

10.14 LICENCES

     Each Licensee has been duly licensed to conduct its business as presently
     conducted, no notice has been given to revoke any Licence and no
     modification of or amendment to any of the terms of any Licence has been
     made or proposed by the Secretary of State or any other person having a
     right to do so which has a Material Adverse Effect.

10.15 NO CONTRAVENTION OF LICENCES

     No Licensee is in contravention of any term or condition of its Licence(s)
     or any requirement of the Electricity Act or any regulations made
     thereunder or any other statutory requirement or any final order or
     confirmed provisional order made under the Electricity Act or any
     undertaking given by it to the Director General or the Secretary of State
     in relation to the conduct of its business as a generator or Public
     Electricity Supplier, which contravention and/or any consequence thereof
     has a Material Adverse Effect.

10.16 ELECTRICITY SUPPLY

     REC or the relevant Licensee has been duly licensed by the Secretary of
     State as the Public Electricity Supplier (as defined in the Electricity
     Act) to supply electricity to any premises in the area designated in the
     PES Licence and is duly licensed to conduct its business as presently
     conducted and the PES Licence is in full force and effect and neither the
     Director General nor the Secretary of State has given notice to it to
     revoke the PES Licence except in circumstances where a replacement Licence
     for the distribution and/or supply of electricity is or is to be granted to
     any other member of the Group.

10.17 NO MODIFICATION OF PES LICENCE

     No modification or amendment of any of the terms of the PES Licence has
     been made or proposed by way of consideration with interested parties by
     the Director General or the Secretary of State pursuant to Section 11, 14
     or 15 of the Electricity Act or in accordance with the conditions set out
     in the PES Licence or otherwise which has a Material Adverse Effect.


                                       66
<PAGE>


10.18 NO VARIATION OF AUTHORISED AREA

     No variation of the authorised area in respect of which the PES Licence has
     been granted has been made pursuant to Section 6(1)(c) of the Electricity
     Act which has a Material Adverse Effect.

10.19 ENVIRONMENTAL LAW

     There has been no non-compliance by any member of the Group with any
     applicable environmental or safety law applicable to it which has a
     Material Adverse Effect

10.20 WHOLLY-OWNED SUBSIDIARY

     Each of REC and TXU Europe Group plc is a wholly-owned Subsidiary of Finco
     2.

10.21 NO DISPUTE

     There is no dispute subsisting between any Obligor and any other party to
     any of the Finance Documents and no material amendments have been made to
     any of the Finance Documents without the consent of the Facility Agent.

10.22 TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES The representations and
     warranties set out in this clause 9:

     (a)  are made by each Obligor on the Effective Date; and

     (b)  are deemed to be repeated by each Obligor on the date of each Drawdown
          Notice, Utilisation and the first day of each Interest Period with
          reference to the facts and circumstances then existing (other than in
          the case of any representation and warranty as to the Group's audited
          financial statements where such representation and warranty shall be
          read and construed as referring to the Group's then most recent
          audited financial statements, including notes to such statements) save
          that the following representations shall not be repeated: clauses 9.5
          (No default), 9.8 (No material adverse effect), 9.9 (Litigation), 9.12
          (No Security Interest) 9.13 (No obligation to create Security
          Interest), and 9.21 (No Dispute).

10.23 OBLIGORS' ACKNOWLEDGEMENT

     Each Obligor party hereto acknowledges that the Finance Parties are relying
     on the representations and warranties but not on any other information
     contradictory to them or varying them of which the Finance Parties or any
     of them or their respective agents or advisers may have actual or
     constructive knowledge.


                                       67
<PAGE>


11.  INFORMATION UNDERTAKINGS

11.1 UNDERTAKINGS

     Each of the Obligors (for itself) or as applicable the specified Obligor
     gives the undertakings in this clause 10 and clause 11 (General
     Undertakings) to each Finance Party (such undertakings to remain in force
     throughout the Finance Period).

11.2 PREPARATION OF FINANCIAL STATEMENTS The Primary Borrower will:

     (a)  ANNUAL AUDITED FINANCIAL STATEMENTS: beginning with the financial year
          ending 31 December 1998, prepare financial statements (which shall in
          any event include a balance sheet, profit and loss account, statement
          of total recognised gains and losses, cash flow statement, and notes
          to such statements) in respect of:

          (i)  itself and consolidated financial statements in respect of the
               Group; and

          (ii) consolidated financial statements of Finco 2;

          in accordance with the Appropriate Accounting Principles (consistently
          applied) in respect of each financial year and cause the same to be
          reported on by the Auditors; and

     (b)  QUARTERLY FINANCIAL STATEMENTS: prepare:

          (i)  unaudited consolidated financial statements (which shall in any
               event include a balance sheet, profit and loss account and cash
               flow statement) of the Group; and

          (ii) consolidated financial statements (which shall in any event
               include a balance sheet, profit and loss account and cash flow
               statement) of Finco 2 (together with (aa) a pro forma
               consolidation of the balance sheet of Finco 2 with the balance
               sheets of those Subsidiaries of the Primary Borrower which are
               not Finco 2 or its Subsidiaries and (bb) a notification setting
               out any changes in the identity of the Principal Subsidiaries
               (or, if there are no changes, so stating),

                    in respect of each Quarter in each financial year (on a
                    cumulative basis for each financial year) in accordance with
                    the Appropriate Accounting Principles (consistently applied)
                    in a form reasonably agreed with the Facility Agent.

11.3 DELIVERY OF FINANCIAL STATEMENTS

     The Primary Borrower will deliver, or will procure delivery, to the
     Facility Agent sufficient copies for all the Banks of each of the following
     documents:

     (a)  ANNUAL AUDITED FINANCIAL STATEMENTS: (i) within fifteen days of issue
          thereof to the shareholders of the Primary Borrower and Finco 2, but
          in any event not later than 180 days after the end of the financial
          year to which they relate, the audited financial statements referred
          to in clause 10.2(a) (Annual audited financial statements) for each
          financial year together, in each case, with the report of the Auditors
          thereon, the notes thereto, the directors' report thereon and the
          certificate referred to in clause 10.3(c) (Compliance with Financial


                                       68
<PAGE>


          Undertakings) and (ii), in respect of the Parent, its annual accounts
          most recently filed with the US Securities and Exchange Commission;

     (b)  UNAUDITED MANAGEMENT ACCOUNTS: (i) within 60 days after the end of
          each Quarter in each financial year, the financial statements and
          notification referred to in clause 10.2(b) (Quarterly financial
          statements)) in respect of such Quarter prepared in accordance with
          the requirements of clause 10.2(b) (Quarterly financial statements)
          together with (in relation to the Quarter ending December 1998 and
          thereafter) the certificate referred to in clause 10.3(c) (Compliance
          with Financial Undertakings) and, (ii) in the case of the Parent, its
          quarterly accounts most recently filed with the US Securities and
          Exchange Commission from time to time;

     (c)  COMPLIANCE WITH FINANCIAL UNDERTAKINGS: with each set of accounts
          delivered by it under clauses 10.3(a) (Annual audited financial
          statements) and (b) (Unaudited management accounts) above the Primary
          Borrower will deliver to the Facility Agent a certificate signed by a
          director of the Primary Borrower:

          (i)  confirming compliance or otherwise with the financial
               undertakings in clause 11.1 (Financial Ratios) as at the end of
               the relevant Test Period; and

          (ii) setting out in reasonable detail and in a form satisfactory to
               the Facility Agent the computations (including for the purpose of
               the Leverage Ratio a detailed statement of the calculation of
               Adjusted Share Capital and Reserves and Consolidated Net
               Borrowings) necessary to demonstrate such compliance or
               otherwise.

          The Facility Agent may from time to time request a further director's
          certificate setting out in reasonable detail the calculation of the
          Leverage Ratio (including a detailed statement of the calculation of
          Adjusted Share Capital and Reserves and Consolidated Net Borrowings)
          if the Facility Agent is requested to do so by the Majority Banks or
          if, acting reasonably, the Facility Agent determines that the amount
          of Adjusted Share Capital and Reserves and Consolidated Net Borrowings
          may have changed materially since the date as at which the last
          compliance certificate was prepared. The Primary Borrower shall
          provide such a certificate within ten Banking Days of any such
          request.

     (d)  PES REGULATORY ACCOUNTS: as soon as practicable after their issue to
          the relevant Government Entity or regulator, all accounts and other
          financial statements or financial information required under any law
          or regulation to be provided to any Government Entity, industry
          regulator or similar body or person and which are thereby placed in
          the public domain;

     (e)  REPORTS AND NOTICES TO SHAREHOLDERS AND CREDITORS: as soon as
          practicable after the issue thereof every report, circular, notice or
          like document issued by the Primary Borrower, Finco 2 and/or Bidco to
          its shareholders or creditors generally and every notice convening a
          meeting of its shareholders or any class of its shareholders; and


                                       69
<PAGE>


     (f)  FURTHER INFORMATION: promptly upon request, such further information
          concerning the financial position of the Group (or any member of it)
          as the Facility Agent shall reasonably require.

11.4 NOTICE OF DEFAULT

     Each Obligor will inform the Facility Agent promptly upon becoming aware of
     the occurrence of any material Default or any actual Event of Default and,
     upon receipt of a request to that effect from the Facility Agent, confirm
     to the Facility Agent and the Banks that, save as previously notified to
     the Facility Agent or as notified in such confirmation, no Default has
     occurred which is continuing.

11.5 NOTICE OF LITIGATION

     Each Obligor will, upon becoming aware that the same is threatened or
     pending and in any case promptly after the commencement thereof, give to
     the Facility Agent notice in writing of any litigation, alternative dispute
     resolution, arbitration or administrative proceedings or any dispute
     affecting any member of the Group or any of their respective assets, rights
     or revenues which if determined against it could reasonably be expected to
     result in a liability (including costs) of more than (pound)10,000,000 or
     otherwise have a Material Adverse Effect.

12.  GENERAL UNDERTAKINGS

12.1 FINANCIAL RATIOS

     The Primary Borrower will procure that, throughout the Finance Period:

     (a)  for each Test Period, the ratio of EBITDA to Net Interest Costs is not
          less than 2:1;

     (b)  at all times the Leverage Ratio is not more than 70% although the
          Leverage Ratio shall be tested only by reference to the compliance
          certificate provided quarterly with the unaudited management accounts
          unless the Facility Agent shall at any time exercise the right to
          request a further certificate in accordance with clause 10.3(c)
          (Compliance with Financial Undertakings).

12.2 CHANGE OF ACCOUNTING POLICIES

     (a)  The Primary Borrower and the Facility Agent hereby undertake that, in
          the event that:

          (i)  there is, or the Primary Borrower intends to make, a change in
               the manner in which the financial statements in clause 10.2
               (Preparation of Financial Statements) are prepared or in the
               accounting principles or standards applied in the preparation of
               those financial statements (including without limitation a change
               from UK GAAP to US GAAP); and

          (ii) such change affects the amounts utilised for the purposes of
               determining whether or not an Obligor has complied with the
               covenants contained in clause 11.1 (Financial Ratios);


                                       70
<PAGE>


               they will either (aa) renegotiate each of the covenants affected
               by such change with a view to putting in place covenants that
               fairly reflect that change or, (bb) where the change in the
               manner in which the financial statements are prepared is a change
               from the accounting principles at the date of the Restatement
               Agreement to US GAAP, the Primary Borrower shall, supply to the
               Facility Agent: (A) a description of any change necessary for
               those financial statements to reflect the accounting principles
               at the date of the Restatement Agreement; and (B) sufficient
               information to enable the Finance Parties to determine whether
               clause 11.1 (Financial Ratios) has been complied with and make an
               accurate comparison between the financial position shown by the
               set of financial statements prepared on the changed basis and the
               most recent financial statements delivered to the Facility Agent
               under this Agreement.

     (b)  If negotiations referred to in paragraph (a) (aa) above are not
          concluded to the reasonable satisfaction of the Facility Agent within
          a period of 30 days from the commencement of such negotiations the
          Primary Borrower agrees that it will procure (at the expense of the
          Primary Borrower) that the Auditors provide financial statements
          reflecting the Appropriate Accounting Principles, and any reference in
          this Agreement to financial statements under this Agreement shall be
          construed as a reference to such financial statements as adjusted to
          reflect the Appropriate Accounting Principles.

     (c)  If the ratio of EBITDA to Net Interest Costs under clause 11.1(a)
          above is less than 2:1 due to the payment or proper accrual of any
          exceptional, special or windfall tax or levy, then, notwithstanding
          the provisions of clause 12 (Events of Default), no Event of Default
          shall occur as a result thereof except:

          (i)  the Borrower and the Facility Agent (acting in accordance with
               the instructions of the Majority Banks) shall consult for a
               period not exceeding 30 days with a view to agreeing a revised
               basis for calculation of the ratio or a revised ratio; and

          (ii) the failure to agree a basis for such calculation or a revised
               ratio by the end of that 30-day period shall constitute an Event
               of Default under clause 12.1(b) (Breach of other obligations)
               which, for the purposes of that clause, shall not be capable of
               remedy.

12.3 AUTHORISATION

     Each Obligor shall obtain and comply with and do all that is necessary to
     maintain in full force and effect all consents, authorisations, approvals
     and licences required by law or regulation to enable it to enter into and
     perform its obligations under the Finance Documents to which it is a party
     or to ensure their legality, validity or admissibility in evidence.

12.4 DISPOSALS

     No Obligor shall, and the Primary Borrower will procure that no other
     member of the Group will, (either in a single transaction or in a series of
     transactions, whether related or not) sell, convey, transfer or otherwise
     dispose of:

     (a)  any shares in Finco 2, Bidco, The Energy Group Limited or any
          Principal Subsidiary;


                                       71
<PAGE>


     (b)  any loans to or other claims on any Principal Subsidiary;

     (c)  the whole or a substantial part of the undertaking or assets of (i)
          the Distribution Business or (ii) the Generation Business as a whole;
          or

     (d)  any other significant assets.

     The restrictions will not apply:

          (i)  with respect to paragraph (c) above, to (A) the expenditure or
               application of cash, or (B) any disposal in the ordinary course
               of business (including by way of securitisation) or (C) any
               disposal where the net book value of the assets disposed of, when
               aggregated with the net book value of any other assets forming
               part of the Distribution Business or (as the case may be) the
               Generation Business disposed of otherwise than in the ordinary
               course of operating the respective businesses in the same
               financial year of the Group, does not exceed 10 per cent. of the
               Adjusted Share Capital and Reserves at the end of the previous
               financial year;

          (ii) to a disposal made by any member of the Group to another member
               of the Group; or

          (iii) with respect to paragraph (d) above, to any disposal on arm's
               length terms (including by way of securitisation); or

          (iv) to any sale, conveyance, transfer or other disposal with respect
               to the King's Lynn generating facility which otherwise would
               infringe sub-clause (iii) above provided none of the parties to
               any such transaction is a Relevant Person or Project Finance
               Subsidiary.

12.5 NEGATIVE PLEDGE

     No Obligor shall, and the Primary Borrower will procure that none of its
     Subsidiaries shall:

     (a)  create or permit to subsist any Security Interests (other than
          Permitted Security Interests) upon the whole or any part of its
          present or future revenues or assets; or

     (b)  (i) sell, transfer or otherwise dispose of any of its assets on terms
          whereby it is or may be leased to or re-acquired by a member of the
          Group or any of its Associated Companies; or

          (ii) sell, transfer or otherwise dispose of any of its receivables on
               recourse terms (save for recourse for disputed or ineligible
               debts or similar rights of recourse) except for the discounting
               of bills or notes in the ordinary course of trading,

          in circumstances where the transaction is entered into primarily as a
          method of raising finance or of financing the acquisition of an asset,
          unless the aggregate disposal proceeds of all such transactions during
          any Accounting Reference Period is less than (pound)50,000,000,
          provided that the restriction in clause 11.5(b)(i) above shall not
          apply to any sale, transfer or other disposal and leaseback or
          re-acquisition with respect to the King's Lynn generating facility for


                                       72
<PAGE>


          so long as none of the parties to any such transaction is a Relevant
          Person or Project Finance Subsidiary.

12.6 PARI PASSU INDEBTEDNESS

     Each Obligor shall ensure that its Indebtedness under the Finance Documents
     to which it is a party will rank at least pari passu with all its other
     unsubordinated and unsecured Indebtedness with the exception of that
     preferred by operation of law.

12.7 GUARANTEES AND DISTRIBUTIONS

     No Obligor shall, and the Primary Borrower will procure that none of its
     Subsidiaries shall:

     (a)  give any guarantee, indemnity or other legally binding assurance
          against loss to any person (other than a member of the Group) in
          respect of the obligations of any Relevant Person other than any
          guarantee issued by the Primary Borrower or an SPV in connection with
          Equity-Credit Preferred Securities

     (b)  enter into any transaction under which (or do anything as a result of
          or by which) cash or other assets are transferred by or from it to any
          Relevant Person;

     provided that this clause 11.7 shall not prohibit:

          (i)  provided that no Default is outstanding or would result from the
               dividend, distribution or provision, the declaration, payment or
               making of any lawful dividends or other distributions or the
               provision of loans, deposits or other credit but excluding
               guarantees or indemnities entered into in favour of or in respect
               of the indebtedness of any Relevant Person or distributions as a
               result of any reduction in share capital; or

          (ii) anything done pursuant to a transaction entered into on terms no
               more onerous to the relevant member of the Group than a
               transaction entered into on an arm's length basis on normal
               commercial terms.

12.8 LICENSEES

     (a)  In so far as is necessary to prevent a Material Adverse Effect, each
          Obligor shall take, and procure that each Licensee takes, all
          appropriate steps efficiently to perform and discharge its duties and
          functions in accordance with the provisions of the Electricity Act,
          the terms and conditions of the relevant Licence, the provisions of
          any final order or confirmed provisional order made under the
          Electricity Act and all undertakings (if any) given by a Licensee to
          the Director General and/or the Secretary of State in respect of the
          matters referred to in Section 25(5) of the Electricity Act.

     (b)  The Primary Borrower shall promptly inform the Facility Agent of any
          material undertaking given by any member of the Group to the Director
          General and/or the Secretary of State.

     (c)  The Primary Borrower shall, forthwith upon receipt of the same,
          deliver to the Facility Agent in sufficient copies for the Banks,
          copies of all notices or orders served on any member of the Group by


                                       73
<PAGE>


          the Director General or the Secretary of State in exercise of the
          powers conferred on him by the Electricity Act and keep the Facility
          Agent informed of any references to the Competition Commission or the
          exercise or purported exercise by the Secretary of State or the
          Director General of the powers conferred on him by the Fair Trading
          Act 1973, the Competition Act 1980 and/or Section 12 of the
          Electricity Act.

     (d)  The Primary Borrower shall procure that the relevant Licensee will not
          consent to any revocation of the PES Licence (except where a public
          electricity supply licence is granted to a member of the Group in its
          place) or to any material modification or amendment to or restriction
          in the terms and conditions of the PES Licence if such revocation,
          modification, amendment or restriction ought to have a Material
          Adverse Effect.

     (e)  The Primary Borrower shall ensure at all times that the Licensee under
          the PES Licence has sufficient working capital to finance the
          performance and discharge of its duties as a Public Electricity
          Supplier in accordance with the provisions of the Electricity Act and
          the terms and conditions of the PES Licence.

12.9 NO OUTSTANDING LOANS

     The Primary Borrower shall procure that (except for investments
     constituting Liquid Assets) no Licensee will have outstanding at any one
     time any loans to (other than deposits with, or investments in debt
     instruments of, any institution authorised under the Banking Act 1987, or
     the Building Societies Act 1986 or any European Authorised Institution as
     defined in the Banking Act 1987) or investments in any person other than a
     member of the Group in excess of an aggregate of (pound)5 million.

12.10 ENVIRONMENTAL AND SAFETY LAWS

     Each Obligor shall, and the Primary Borrower shall procure that each other
     member of the Group will, comply with any environmental or safety laws
     applicable to it where failure to do so has a Material Adverse Effect.

12.11 INSURANCE

     Each Obligor shall, and the Primary Borrower shall procure that each member
     of the Group will have insurance and maintain insurance in respect of
     property damage, third party liability and such other risks in respect of
     its business and assets is in accordance with good industry practice.

12.12 GENERATION BUSINESS

     The Primary Borrower shall procure that any Licensee from time to time
     licensed to carry on the whole or part of the Generation Business will not
     consent to any revocation of the relevant Generation Licence (except where
     a Generation Licence is granted to a member of the Group in its place or
     the same arises in respect of a disposal permitted under clause 11.4) or to
     any material modification or amendment to or restriction in the terms and


                                       74
<PAGE>


     conditions of such Generation Licence if such revocation, modification,
     amendment or restriction might reasonably be expected to have a Material
     Adverse Effect.

12.13 BUSINESS OF REC

     Each Obligor shall procure that the REC will not enter into or engage in
     any business or activity other than the Supply Business, a Second-Tier
     Supply Business or the Distribution Business or the business of a holding
     company of the company carrying on any such business, other than any
     business or activity the aggregate turnover of which does not in any
     financial year exceed 5 per cent. of the aggregate turnover of the Supply
     Business, the Second-Tier Supply Businesses and the Distribution Business
     (excluding the turnover on transactions which the Supply Business, any of
     the Second-Tier Supply Businesses and/or the Distribution Business made
     with each other) in the immediately preceding financial year.

12.14 CHANGE IN BUSINESS

     No Obligor shall, and the Primary Borrower will procure that no other
     member of the Group shall, carry on any business other than those which are
     usual for energy companies and electricity companies (including, without
     limitation, electricity distribution, supply and generation and energy
     trading and business activities related to the gas, telecommunications and
     water industries) in Europe or the business of a holding company of any
     company carrying on any such business. Provided that the limitation of
     business activities contained in this clause 11.14 will not apply to any
     other business activities carried on by members of the Group as long as
     such other business activities do not in aggregate account for more than
     10% of the consolidated gross assets or consolidated gross revenues of the
     Group (as calculated in accordance with the Appropriate Accounting
     Principles).

12.15 FUNCTIONS OF THE PRIMARY BORROWER

     (a)  The Primary Borrower shall not carry on any business other than being
          the holding company of the Group (and any Project Finance
          Subsidiaries) and anything ancillary to any of the other matters
          described in this clause 11.15.

     (b)  The Primary Borrower shall not own any material assets other than (i)
          any Liquid Assets held by it from time to time, (ii) its shareholding
          in Finco 2, (iii) its direct or indirect interest in all persons
          ("EQUITY SPVS") issuing or guaranteeing Equity-Credit Preferred
          Securities and all intermediate undertakings through which it holds
          its interest in Equity SPVs, (iv) its direct or indirect interest in
          all SPVs and all intermediate undertakings through which it holds its
          interest in SPVs (provided always that, in respect of (iii) and (iv)
          above each such intermediate undertaking's sole purpose is to hold
          directly or indirectly an interest in an SPV or an Equity SPV and, if
          applicable, act as a conduit as between the SPV or Equity SPV and the
          Primary Borrower for any sums lent or arising or investments made in
          connection with the SPVs and Equity SPVs, issue or issues of capital
          market instruments or other securities), and (v) Indebtedness due to
          the Primary Borrower.


                                       75
<PAGE>


     (c)  The Primary Borrower shall not incur any liabilities (whether or not
          in connection with Borrowed Money) other than:

          (i)  as a result of borrowing under this Agreement or liabilities
               otherwise incurred in connection with this Agreement or the
               Original Facilities Agreement, or under the (pound)300,000,000
               revolving credit facility arranged by Chase Manhattan plc to be
               entered into by the Primary Borrower on or about the Effective
               Date, or as a result of borrowing (subject, in the case of any
               proposed Borrowed Money from Finco 2 or Bidco, to clause 11.18
               (Indebtedness of Finco 2 to the Primary Borrower) and of Bidco to
               Finco 2)) from other members of the Group or other persons
               (provided that each amount borrowed other than borrowings not
               exceeding (pound)30,000,000, is on-lent to Finco 2), or
               liabilities incurred in connection with the Acquisition; or

          (ii) incurred as a result of the Primary Borrower's existence and
               administrative operation in accordance with the terms of this
               Agreement, including, without limitation, audit and legal fees,
               taxation and other expenses incurred by it in acting as
               contemplated by this Agreement; or

          (iii) under any guarantee, indemnity or similar instrument in respect
               of Borrowed Money incurred by: (aa) a member of the Group which
               is, and for so long as such guarantee, indemnity or similar
               instrument is outstanding, remains, a holding company of the REC,
               or (bb) an SPV; or

          (iv) under any guarantee, undertaking, performance bond or similar
               instrument or obligation, not being in respect of Borrowed Money,
               in respect of the liabilities and/or obligations of members of
               the Group; or

          (v)  under any guarantee given by the Primary Borrower in replacement
               of, or in respect of the same obligations as are guaranteed
               under, certain guarantees given by Energy Holdings (No. 3)
               Limited (formerly The Energy Group PLC) on or prior to 22 October
               1998 in respect of the obligations of former direct and indirect
               Subsidiaries of Energy Holdings (No. 3) Limited.

          (vi) under any guarantee of or in connection with any Equity-Credit
               Preferred Securities.

12.16 DERIVATIVE TRANSACTIONS

     No Obligor shall, and the Primary Borrower will procure that no other
     member of the Group shall, enter into any Derivatives Transaction other
     than:

     (a)  in connection with the management of foreign currency or interest rate
          exposures likely to be incurred in the conduct of the Group's business
          or that of any Project Finance Subsidiary, and/or

     (b)  any contracts where the exposure is principally related to the future
          generation, availability, supply, distribution or pricing of fuel,
          power or energy, or other energy-related risks.


                                       76
<PAGE>


12.17 PROJECT FINANCE SUBSIDIARIES

     All transactions and arrangements between the Group on the one hand and
     Project Finance Subsidiaries (or members of the Group who incur Project
     Finance Borrowings falling within paragraph (c) of the definition of
     Project Finance Borrowings but only in connection with the Project to which
     such Project Finance Borrowing directly relates) on the other shall be (a)
     on arm's length terms, and (b) to the extent that they involve liability
     of, or recourse to the Group in respect of Indebtedness to finance or
     refinance, or in respect of the financing or refinancing of, a Project,
     such liability or recourse shall be limited to the degree of recourse
     described in paragraph (c) of the definition of "Project Finance
     Borrowings" unless the Primary Borrower shall promptly on the incurrence of
     such liability or right of recourse notify the Facility Agent that the
     relevant Project Finance Borrowing which is the subject of such liability
     or right of recourse shall have ceased or shall thereupon cease to be a
     Project Finance Borrowing, attaching a detailed re-calculation of the
     Leverage Ratio showing the effect of such re-designation.

12.18 INDEBTEDNESS OF FINCO 2 TO THE PRIMARY BORROWER The Primary Borrower will
     procure that:

     (a)  Finco 2 will not repay, forgive or novate nor shall the Primary
          Borrower accept the repayment or novation of amounts outstanding from
          Finco 2 to the Primary Borrower if and to the extent that such
          repayment, novation or forgiveness of any indebtedness from time to
          time due from Finco 2 to the Primary Borrower (after application of
          the proceeds of such repayment, forgiveness or novation by the Primary
          Borrower) would result (and shall ensure that it does not subsequently
          result) in the net amount owing (including any accrued interest) by
          Finco 2 to the Primary Borrower falling short of the aggregate of the
          Term Advance and the Revolving Advances and all other Borrowed Money
          of the Primary Borrower by more than(pound)30,000,000 (without double
          counting where Borrowed Money guaranteed by the Primary Borrower is
          also lent to it) (including in each case any accrued interest) unless
          the Primary Borrower shall immediately repay an equivalent amount of
          the Term Advance and to the extent that no Term Advance is
          outstanding, repay an equivalent amount of the Revolving Credit
          Facility.

     (b)  Once the Term Advance has been repaid in full and no other amount is
          due, owing or incurred by the Primary Borrower under the Facilities
          none of the restrictions in this clause 11.18 shall apply until and
          unless the Primary Borrower shall draw any further Revolving Advance
          and for so long as any such Revolving Advance is outstanding.

     (c)  Any amount which purports to be lent from Finco 2 to the Primary
          Borrower shall for the purpose of this clause be deemed to be applied
          in repayment of any existing indebtedness due from Finco 2 to the
          Primary Borrower at the relevant time and the provisions of this
          clause shall therefore apply to the lending of any such amount exactly
          as if it had been a repayment of debt.


                                       77
<PAGE>


     (d)  Any amount lent down by the Primary Borrower to Finco 2 which
          represents the on-lending of Borrowed Monies incurred or guaranteed by
          the Primary Borrower (the "Connected Borrowing") shall bear a rate of
          interest at least equal to that applicable to the Connected Borrowing
          from time to time.

     (e)  The Primary Borrower shall procure that each loan owing from The
          Energy Group Limited to Energy Group Overseas B.V. ("EGO B.V."), which
          originally came into being as a result of the on lending through the
          Group of the proceeds of the issuance by EGO B.V. of $500,000,000
          aggregate principal amount of unsecured debt securities ("Yankee
          Bonds") in October 1997 carries a rate of interest at least equal to
          that of the respective series of the Yankee Bonds and is not
          discharged, novated or assigned in any way which would either:

          (i)  cause the ultimate obligor to be a company which is not a holding
               company of the REC; or

          (ii) cause the ultimate beneficiary of the series of related
               indebtedness to be a person other than the Group Company which is
               the obligor under the Yankee Bonds.

12.19 RANKING OF BOND ISSUER

     (a)  Where the Primary Borrower issues a guarantee of the obligations of an
          SPV in respect of a raising of Borrowed Money by that SPV the amount
          raised by such SPV shall be on-lent to the Primary Borrower on terms
          that the obligations of the Primary Borrower in respect of repayment
          of that loan are expressly subordinated to the claims of all other
          unsecured and unsubordinated creditors of the Primary Borrower in the
          event of the insolvency of the Primary Borrower or such loan is made
          on such terms as are, in the opinion of the Facility Agent (acting
          reasonably), effective to provide that the creditors of the SPV under
          the relevant capital market instrument will not (after taking account
          of the possibility of the SPV making an intra-group claim against the
          Primary Borrower, in addition to the claim of the creditors of such
          SPV under the Primary Borrower's guarantee) become entitled to a claim
          against the Primary Borrower that ranks better than pari passu with
          the claims of the Finance Parties under the Finance Documents on a
          liquidation of the Primary Borrower.

     (b)  Where the SPV is an unlimited company (or any other entity whose
          immediate owner would have unlimited liability for that entity's
          liabilities and obligations), the Primary Borrower shall hold its
          interest in the SPV indirectly, by virtue of the Primary Borrower
          being the holder of the issued share capital of one or more private
          limited companies (or any other entities whose immediate owner would
          have limited liability (by reference only to unpaid share capital or a
          similar concept) for that entity's liabilities or obligations) which
          is the direct or indirect owner of such SPV.


                                       78
<PAGE>


     (c)  The Primary Borrower shall ensure that no Group Company other than the
          Primary Borrower or any holding company of the relevant SPV shall:

          (i)  transfer cash or assets to an SPV or holding company of an SPV;
               or

          (ii) give any guarantee, indemnity or other assurance for the
               obligations of an SPV or holding company of an SPV, unless the
               Facilities shall simultaneously be equally and rateably secured
               by a guarantee from the same Group Company.

     (d)  The Primary Borrower shall not and shall ensure that no holding
          company of the relevant SPV shall:

          (i)  transfer cash or assets to an SPV or holding company of an SPV
               save only to the extent required to service interest, principal
               and/or premium payable under capital markets instruments issued
               by the SPV or as the Primary Borrower may be required to pay
               pursuant to the terms of any loan between the SPV and the Primary
               Borrower made pursuant to clause 11.19(a) or as may be required
               initially to capitalise an SPV in accordance with professional
               advice received or to meet liabilities of such SPV arising from
               its existence and administration operation in accordance with the
               terms of this Agreement including audit and legal fees, taxation
               and other expenses incurred by it; or

          (ii) give any guarantee, indemnity or other assurance for the Borrowed
               Money of an SPV or holding company of an SPV, unless the
               Facilities shall simultaneously be equally and rateably secured
               by a guarantee from the same Group Company (save for any
               guarantee given by the Primary Borrower pursuant to clause
               11.19(a))

12.20 ADDITIONAL GUARANTORS

     The Primary Borrower shall ensure that, if after the signing of this
     Agreement, any member of the Group or any Relevant Person gives any
     guarantee of any Indebtedness of an Obligor in respect of Borrowed Money,
     that person shall simultaneously become a Guarantor under this Agreement in
     accordance with clause 24.1.

12.21 EQUITY-CREDITPREFERRED SECURITIES

     Nothing in this Agreement shall prevent, and this Agreement shall not be
     breached by, the issuance of Equity-CreditPreferred Securities or the
     incurring by any member of the Group of guarantees thereof complying with
     paragraph (iv) of the definition thereof.

12.22 RESTRICTIONS RELATED TO EXCESS EQUITY FUNDING

     Any Borrowed Money which is raised with a view to repaying, or is used to
     repay, all or part of the Excess Equity Funding, or which is raised to
     refinance any Indebtedness which was incurred for that purpose or so used,
     shall rank pari passu with the Facilities, and shall be raised by the


                                       79
<PAGE>


     Primary Borrower or by an SPV guaranteed by the Primary Borrower, and not
     by any other member of the Group.

13.  EVENTS OF DEFAULT

13.1 EVENTS OF DEFAULT

     Each of the events set out below is an Event of Default (whether or not
     caused by any reason whatsoever outside the control of any Relevant Company
     (or any other person)) namely if:

     (a)  NON-PAYMENT: any Obligor fails to pay any sum due from it under any of
          the Finance Documents on its due date in the manner stipulated in the
          relevant Finance Document (or within three Banking Days of the due
          date if the delay is caused by technical difficulties or
          administrative error in the transfer of funds); or

     (b)  BREACH OF OTHER OBLIGATIONS: any Borrower or other Obligor commits any
          breach of or omits to observe any of the obligations or undertakings
          expressed to be assumed by it under any of the Finance Documents
          (other than any such obligations referred to in clause 12.1(a)
          (Non-payment)) and in respect of any such breach or omission which, in
          the reasonable opinion of the Majority Banks, is capable of remedy,
          such action as shall remedy the same to the reasonable satisfaction of
          the Majority Banks shall not have been taken within 21 days of the
          relevant Obligor becoming aware of such default; or

     (c)  MISREPRESENTATION: any representation, warranty or statement made or
          deemed to be made or repeated by or on behalf of any Borrower or other
          Obligor in, or in connection with, any of the Finance Documents or in
          any notice, accounts, certificate or statement referred to in or
          delivered under any of the Finance Documents is or proves to have been
          incorrect or misleading and if capable of being remedied, in the
          reasonable opinion of the Majority Banks, is not remedied to the
          reasonable satisfaction of the Majority Banks 21 days after the date
          on which the relevant Group Company becomes aware of such
          misrepresentation; or

     (d)  CROSS-DEFAULT:

          (i)  any Borrowed Money of a member of the Group is not paid when due
               or within any originally stated applicable grace period; or

          (ii) (by reason of an event of default or default howsoever described)
               any Borrowed Money of a member of the Group is declared or
               becomes capable of being declared to be or otherwise becomes due
               and payable prior to its specified maturity; or

          (iii) any Borrowed Money of a member of the Group which is repayable
               on demand is not repaid on demand being made,

          in circumstances where, in all or any of the above paragraphs, the
          Borrowed Money amounts in aggregate at any one time to more than
          (pound)20,000,000 or, if higher, an amount of 2% of Adjusted Share
          Capital and Reserves or its equivalent in other currencies, unless the


                                       80
<PAGE>


          alleged default is being disputed in good faith and the Primary
          Borrower has shown to the Facility Agent's satisfaction (acting
          reasonably) that it has adequate cash resources to pay that Borrowed
          Money and its other debts as they fall due; or

     (e)  LEGAL PROCESS: (without prejudice to any other provision of this
          Agreement) any final judgment or order in an amount exceeding
          (pound)2,000,000 (or its equivalent in other currencies) made against
          any Relevant Company is not stayed or complied with or paid within 28
          days (or in the case of payments, when due (if later)) or a creditor
          attaches or takes possession of, or a distress, execution,
          sequestration or other process is levied or enforced upon or sued out
          against, any part of the undertakings, assets, rights or revenues of
          any Relevant Company with a book value or market value in excess of
          (pound)2,000,000 and is not discharged or stayed within 14 days; or

     (f)  INSOLVENCY: any Relevant Company:

          (i)  is deemed unable to pay its debts in accordance with Section
               123(1)(a), (b) or (e) or (2) of the Insolvency Act 1986 unless,
               in the case of Section 123(1)(a) only, a statutory notice has
               been withdrawn, stayed or dismissed within 14 days; or

          (ii) is unable generally to pay its debts as they fall due; or

     (g)  ADMINISTRATION:

          (i)  any meeting of the directors of any Relevant Company is convened
               for the purpose of considering any resolution to present an
               application for an administration order; or

          (ii) a petition for an administration order in relation to any
               Relevant Company is presented to the court or an administration
               order is sought of the court on the basis of an undertaking to
               subsequently present a petition which, if in either case it is
               being contested by the Relevant Company in good faith with
               appropriate proceedings diligently pursued, is not discharged
               within 21 days; or

          (iii) any Relevant Company passes a resolution to present an
               application for an administration order; or

          (iv) an administration order is made in relation to any Relevant
               Company; or

     (h)  COMPOSITIONS ETC: any steps are taken, or negotiations commenced, by
          any Relevant Company or by its creditors generally with a view to
          proposing any kind of composition, scheme of arrangement, compromise
          or arrangement, in each case involving such company and its creditors
          generally; or

     (i)  APPOINTMENT OF RECEIVERS AND MANAGERS:

          (i)  any administrative or other receiver or any manager is appointed
               of any Relevant Company or any material part of its assets and/or
               undertaking; or


                                       81
<PAGE>


          (ii) the directors of any Relevant Company request any person to
               appoint such a receiver or manager; or

          (iii) any other steps are taken to enforce any Security Interest over
               all or any material part of the assets and/or undertakings of any
               Relevant Company; or

     (j)  WINDING UP:

          (i)  any meeting of any Relevant Company is convened for the purpose
               of considering any resolution for (or to petition for) its
               winding up; or

          (ii) any Relevant Company passes such a resolution; or

          (iii) any person presents any petition for the winding up of any
               Relevant Company (not being a petition which the Primary Borrower
               can demonstrate to the satisfaction of the Facility Agent is
               frivolous vexatious or an abuse of the process of the court)
               which is not dismissed or discharged within 14 days of service
               thereof; or

          (iv) an order for the winding up of any Relevant Company is made, not
               (in any case) being a winding-up of a Subsidiary of the Primary
               Borrower involving an amalgamation or reorganisation on a solvent
               basis which has been approved in advance by the Facility Agent
               (acting reasonably); or

     (k)  DISSOLUTION: any corporate, legal or administrative proceedings are
          commenced by any person (including, without limitation, the Registrar
          of Companies) with a view to the dissolution of any Relevant Company,
          not being a dissolution involving an amalgamation or reorganisation on
          a solvent basis which has been approved in advance by the Facility
          Agent (acting reasonably); or

     (l)  ANALOGOUS PROCEEDINGS: there occurs, in relation to any Relevant
          Company, in any country or territory in which it carries on business
          or to the jurisdiction of whose courts any part of its assets is
          subject, any event which, in the reasonable opinion of the Majority
          Banks, appears in that country or territory corresponds with, or has
          an effect equivalent to, any of those mentioned in clauses 12.1(e)
          (Legal process) to (k) (Dissolution) (inclusive) or any Relevant
          Company otherwise becomes subject, in any such country or territory,
          to a legal procedure under of any law relating to insolvency,
          bankruptcy or liquidation; or

     (m)  CESSATION OF BUSINESS: other than in relation to a disposal permitted
          under this Agreement, any Relevant Company suspends or ceases or
          threatens to suspend or cease to carry on its business unless another
          member of the Group carries on such business in its place; or

     (n)  CHANGE OF CONTROL:

          (i)  Bidco ceases to be a wholly-owned subsidiary (as that term is
               used in section 736 of the Act) of Finco 2; or


                                       82
<PAGE>


          (ii) Finco 2 ceases to be a wholly-owned direct or indirect Subsidiary
               of the Parent (other than as permitted by paragraph (iii) below)
               and at least a 90% owned direct subsidiary of the Primary
               Borrower; or

          (iii) less than 50% plus one share of the equity share capital of the
               Primary Borrower is held by the Parent (directly or indirectly)
               at any time; or

          (iv) The Energy Group Limited (company no. 3613919) ceases to be a
               wholly-owned Subsidiary of Bidco; or

          (v)  REC or any other Licensee ceases to be a wholly-owned Subsidiary
               of the Primary Borrower; or

          (vi) there is a Change in Control of the Parent; or

     (o)  DISTRIBUTION BUSINESS/GENERATION BUSINESS:

          (i)  the Group ceases, or threatens to cease, to carry on the
               Distribution Business or the Generation Business as a whole;

          (ii) all or a majority of the issued shares of any Licensee or any
               other Relevant Company or the whole or any material part of the
               assets or revenues of (aa) the Distribution Business or (bb) the
               Generation Business (taken as a whole) are seized, nationalised,
               expropriated or compulsorily acquired by or under the authority
               of a Government Entity;

          (iii) any change is made in the statutory or regulatory requirements
               applicable to the Distribution Business or the Generation
               Business or any new statutory or regulatory requirements are
               imposed on it which would be reasonably likely to have a Material
               Adverse Effect; or

     (p)  LICENCES:

          (i)  the Secretary of State or any other person with the ability to do
               so gives notice in writing of the revocation of a Licence for any
               reason or a Licence ceases to be in full force and effect in any
               material respect except where a similar licence is or licences
               are granted to a member of the Group in its place;

          (ii) without prejudice to paragraph (i) above, any legislation
               (whether primary or subordinate) with regard to the creditors of
               Licensees or the ability of Licensees to raise finance under a
               Licence or with regard to generators or electricity or public
               electricity suppliers generally is enacted and that enactment
               would be reasonably likely to have a Material Adverse Effect;

          (iii) any amendment is made to the terms and conditions of a Licence
               and the amendment would be reasonably likely to have a Material
               Adverse Effect; or

     (q)  ELECTRICITY ACT:


                                       83
<PAGE>


          (i)  any of the provisions of the Electricity Act (or any subordinate
               legislation) detailing the rights, powers, authorities,
               obligations and duties of the Secretary of State or the Director
               General, or the manner in or time at which they are to be
               exercised, are repealed, amended or introduced in a manner which
               would be reasonably likely (in the opinion of the Majority Banks)
               to have a Material Adverse Effect; or

          (ii) the relevant licensee fails to comply with a final order (within
               the meaning of section 25 of the Electricity Act) or with a
               provisional order (within the meaning of that section) which has
               been confirmed under that section and in either case which has
               not been revoked under that section or the validity of which has
               not been questioned under section 27 of the Electricity Act, if
               such failure to comply would be reasonably likely to have a
               Material Adverse Effect; or

     (r)  POOLING AND SETTLEMENT AGREEMENT: REC or any other member of the Group
          ceases to be a party to the Pooling and Settlement Agreement, or any
          notice requiring REC or any other member of the Group to cease to be a
          party to the Pooling and Settlement Agreement is given to such company
          under the relevant clauses of the Pooling and Settlement Agreement,
          except where another member of the Group becomes a party to that
          agreement in its place or such cesser occurs or such notice is given
          in the context of a general disbandment of the Pooling and Settlement
          Agreement; or

     (s)  GAS FRAMEWORK AGREEMENT: the relevant member of the Group ceases to be
          a party to the Gas Framework Agreement where this would be reasonably
          likely to lead to a Material Adverse Effect, except where another
          member of the Group becomes a party to that agreement in its place;

     (t)  FINANCE DOCUMENTS: any Finance Document is not or ceases to be legal,
          valid and binding on or (subject to the Reservations) enforceable
          against any Obligor or is alleged by any Borrower or other Obligor to
          be ineffective for any reason; or

     (u)  UNLAWFULNESS: it becomes unlawful at any time for any Borrower or
          other Obligor to perform all or any of its material obligations under
          any of the Finance Documents; or

     (v)  MATERIAL ADVERSE EFFECT: at any time after the date of this Agreement
          there is a change in the financial condition of an Obligor which has a
          Material Adverse Effect.

13.2 ACCELERATION

     The Facility Agent may, and, if so requested by the Majority Banks, shall,
     without prejudice to any other rights of the Finance Parties after the
     happening of an Event of Default, and so long as the same is continuing, by
     notice to the Primary Borrower:

     (i)  declare that the obligation of each Bank to make its Commitments
          available shall be terminated, whereupon the Total Commitments in
          respect of all Facilities shall be reduced to zero forthwith; and/or


                                       84
<PAGE>


     (ii) declare that the Advances and all interest, fees and commitment
          commission accrued and all other sums payable under the Finance
          Documents have become due and payable or have become due and payable
          on demand, whereupon the same shall immediately or in accordance with
          the terms of such notice, become due and payable or become obligations
          payable on demand: and/or

     (iii) demand full cash cover for the Outstanding Contingent Liabilities
          under all Letters of Credit then outstanding in the currency in which
          those Letters of Credit are denominated; and/or

     (iv) declare that the Guarantees (or any of them) have become enforceable
          (in whole or in part).

     On or at any time after the making of any such declaration, the Facility
     Agent shall be entitled, to the exclusion of the Borrowers, to select the
     duration of Interest Periods.

14.  INDEMNITIES

14.1 MISCELLANEOUS INDEMNITIES

     The Primary Borrower shall within three Banking Days of demand indemnify
     each Finance Party, without prejudice to any of their other rights under
     any of the Finance Documents, against any cost, loss, claim, expense
     (including loss of Applicable Margin and legal fees) or liability together
     with any Tax thereon which such Finance Party shall certify as sustained or
     incurred by it as a consequence of:

     (a)  any default in payment by any Obligor of any sum under any of the
          Finance Documents when due,

     (b)  the occurrence of any other Default,

     (c)  any prepayment of the Facilities or part thereof being made otherwise
          than on an Interest Payment Date or, as the case may be, Maturity Date
          relative thereto,

     (d)  any Utilisation not being made for any reason (excluding, but only to
          the extent of the indemnification of a particular Finance Party, any
          gross negligence or wilful default by such Finance Party) after a
          Drawdown Notice has been given, or

     (e)  any notice sent by telefax failing to be received

     including, in any such case, but not limited to, any loss or expense
     sustained or incurred in maintaining or funding its Contributions or any
     part thereof or in liquidating or re-employing deposits from third parties
     acquired or contracted for to fund all or any part of its Contributions or
     any other amount owing to such Finance Party.

14.2 CURRENCY OF ACCOUNT; CURRENCY INDEMNITY

     (a)  No payment by any Obligor under any of the Finance Documents which is
          made in a currency other than the currency ("CONTRACTUAL CURRENCY") in
          which such payment is required to be made pursuant to the relevant
          Finance Documents shall discharge the obligation in respect of which
          it is made except to the extent of the net proceeds in the Contractual


                                       85
<PAGE>


          Currency received by the Facility Agent upon the sale of the currency
          so received, after taking into account any premium and costs of
          exchange in connection with such sale.

     (b)  The Finance Parties shall not be obliged to accept any such payment in
          a currency other than the Contractual Currency nor shall the Finance
          Parties be liable to any Obligor for any loss or alleged loss arising
          from fluctuations in exchange rates between the date on which such
          payment is so received by the Facility Agent and the date on which the
          Facility Agent effects such sale, as to which the Facility Agent shall
          (as against each Obligor) have an absolute discretion.

     (c)  If any sum due from any Obligor under any Finance Documents or any
          order or judgment given or made in relation hereto is required to be
          converted from the Contractual Currency or the currency in which the
          same is payable under such order or judgment (the "FIRST CURRENCY")
          into another currency (the "SECOND CURRENCY") for the purpose of (i)
          making or filing a claim or proof against any Obligor, (ii) obtaining
          an order or judgment in any court or other tribunal or (iii) enforcing
          any order or judgment given or made in relation to any of the Finance
          Documents, each Obligor shall indemnify and hold harmless each Finance
          Party from and against any loss suffered as a result of any difference
          between (A) the rate of exchange used for such purpose to convert the
          sum in question from the first currency into the second currency and
          (B) the rate or rates of exchange at which each such Finance Party may
          the ordinary course of business purchase the first currency with the
          second currency upon receipt of a sum paid to it in satisfaction, in
          whole or in part, of any such order, judgment, claim or proof.

     (d)  Any amount due from any Obligor under the indemnity contained in this
          clause 13.2 shall be due as a separate debt and shall not be affected
          by judgment being obtained for any other sums due under or in respect
          of any of the Finance Documents and the term "RATE OF EXCHANGE"
          includes any premium and costs of exchange payable in connection with
          the purchase of the first currency with the second currency.

14.3 ACQUISITION FINANCE INDEMNITY

     The Primary Borrower shall forthwith on demand indemnify each Finance Party
     and each of their respective Affiliates and Subsidiaries and its respective
     directors officers and employees (each being an "INDEMNIFIED PERSON") from
     and against any cost, claim, loss, expense (including without limitation,
     the fees, costs and expenses of legal advisors arising from any legal
     procedures (including, without limitation, any administrative regulatory or
     judicial actions or investigations) to which that Indemnified Person
     becomes subject or joined as a party or which may be threatened or pending
     against it) or liability together with any Tax thereon which may be
     incurred or asserted against such Indemnified Person arising out of or in
     connection with the Acquisition or it agreeing to finance or refinance any
     acquisition by Bidco or any person acting in concert with Bidco of any
     shares or share options of any class in Target or the use of the proceeds
     of any Advance (save to the extent any such loss or liability arises as a


                                       86
<PAGE>


     result of the gross negligence or wilful default of the relevant Finance
     Party).

14.4 ECB RESERVE REQUIREMENTS

     The Primary Borrower shall on demand indemnify each Finance Party against
     any cost or loss suffered by it as a result of complying with European
     Central Bank reserve requirements to the extent such requirements relate to
     its participation in the Facilities and are not recoverable by such Bank
     under clause 14.2 (Increased Costs).

14.5 NO SETTLEMENT WITHOUT CONSENT

     The Primary Borrower agrees on its own behalf and on behalf of each other
     member of the Group that, without the prior written consent of the Facility
     Agent and the Majority Banks, no member of the Group will settle,
     compromise or consent to the entry of any judgment in any pending or
     threatened claim, action, suit or proceeding in respect of which
     indemnification could be sought under the indemnification provisions of
     clauses 7.6 (Stamp and other duties), 8.4 (Facility Agent may assume
     receipt), 8.5 (Grossing-up for Taxes), 8.6 (Qualifying Bank), 13
     (Indemnities) or 20.2 (Indemnity from Banks) (whether or not any indemnitee
     thereunder (the "INDEMNITEE") is an actual or potential party to such
     claim, action, suit or proceeding), unless such settlement, compromise or
     consent does not include any statement as to an admission of fault,
     culpability or failure to act by or on behalf of any Indemnitee and does
     not involve any payment of money or other value by any Indemnitee or any
     injunctive relief or factual findings or stipulations binding on any
     Indemnitee.

15.  UNLAWFULNESS, INCREASED COSTS, ALTERNATIVE INTEREST RATES

15.1 UNLAWFULNESS

     (a)  If it is or becomes contrary to any law or regulation or contrary to
          any request from or requirement of any fiscal monetary or other
          authority (with which such Finance Party would normally comply) for a
          Finance Party to contribute to any Utilisation or to maintain its
          Commitments in respect of a Facility or fund its Contribution to a
          Facility, such Finance Party shall promptly after becoming aware of
          the same, through the Facility Agent, notify the Primary Borrower
          whereupon (a) such Finance Party's Commitments shall be reduced to
          zero (and, if it is the Issuing Bank, it shall have no further
          obligation to Issue Letters of Credit if to do so would in the opinion
          of the Issuing Bank be or become contrary to any law or regulation or
          contrary to any request from or requirement of any fiscal monetary or
          other authority (with which such Finance Party would normally comply))
          and (b) if the Facility Agent on behalf of the Finance Party so
          requires each relevant Borrower shall be obliged to prepay the
          Contribution of such Finance Party to such Facility and provide full
          cash cover to the Issuing Bank for any Outstanding Contingent
          Liabilities of the relevant Finance Party on a future date specified
          by the Facility Agent not being earlier than the latest date permitted


                                       87
<PAGE>


          by the relevant law or regulation or not contrary to such request or
          requirement. Any prepayment pursuant to this clause 14.1 shall be made
          together with all amounts referred to in clause 6.5 (Prepayments
          generally).

     (b)  When any relevant Borrower makes any prepayment under this clause 14.1
          the Issuing Bank shall not release the amount of such prepayment which
          is cash cover for any Outstanding Contingent Liabilities to such
          Finance Parties but shall place such monies on suspense account and
          such money may be used as collateral for the actual and the contingent
          liabilities of that Finance Party to the Issuing Bank, which
          liabilities shall remain in full force and effect notwithstanding such
          prepayment; and such Finance Party shall remain liable under all the
          relevant provisions of this Agreement to the Issuing Bank to pay in
          cash any shortfall between the amount held by the Facility Agent and
          its liabilities under this Agreement.

15.2 INCREASED COSTS

     If the result of any change in, or in the interpretation or application of,
     or the introduction of, (after the date of this Agreement):

     (a)  any law; or

     (b)  any regulation, request or requirement (which if not having the force
          of law is one of a kind with which the relevant Finance Party or, as
          the case may be, its holding company habitually complies), including
          those relating to Taxation, capital adequacy, European monetary union,
          liquidity, reserve assets, cash ratio deposits and special deposits or
          requested or required by any central bank (including without
          limitation the European Central Bank) or other fiscal monetary or
          other authority,

     is to:

          (i)  subject any Finance Party or its holding company to Taxes or
               change the basis of Taxation of any Finance Party with respect to
               any payment under this Agreement (other than Taxes or Taxation on
               the overall net income, profits or gains of such Finance Party
               imposed in the jurisdiction in which it is resident or
               incorporated or its principal office or Facility Office is
               located); and/or

          (ii) increase the cost to, or impose an additional cost on, any
               Finance Party or its holding company in entering into or
               performing its obligations under the Finance Documents and/or in
               making or keeping available all or part of such Finance Party's
               Commitments and/or maintaining or funding all or part of such
               Finance Party's Contributions (and/or providing any guarantee or
               indemnity of any other Finance Party's obligations); and/or

          (iii) reduce the amount payable or the effective return to any Finance
               Party under this Agreement; and/or


                                       88
<PAGE>


          (iv) reduce any Finance Party's or its holding company's rate of
               return on its overall capital by reason of a change in the manner
               in which it is required to allocate capital resources in respect
               of all or any of the advances or obligations comprised in a class
               of advances or obligations formed by or including such Finance
               Party's share in Utilisations made or to be made under this
               Agreement; and/or

          (v)  require any Finance Party or its holding company to make a
               payment or forgo a return calculated by reference to or on any
               amount received or receivable by such Finance Party under this
               Agreement; and/or

          (vi) require any Finance Party or its holding company to incur or
               sustain a loss (including a loss of future potential profits) by
               reason of being obliged to deduct all or part of such Finance
               Party's Commitments or Contributions from its capital for
               regulatory purposes,

     then and in each such case (but subject to clause 8.6 (Qualifying Bank) and
     14.3 (Exceptions)):

               (A)  such Finance Party shall notify the Primary Borrower through
                    the Facility Agent in writing of such event promptly upon
                    its becoming aware of the same; and

               (B)  following such notification the Primary Borrower shall,
                    whether or not such Finance Party's Contribution to any
                    Facility has been repaid, pay to the Facility Agent on
                    demand for the account of such Finance Party the amount
                    which such Finance Party specifies (in a certificate setting
                    forth the basis of the computation of such amount but not
                    including any matters which such Finance Party or its
                    holding company regards as confidential) is required to
                    compensate such Finance Party and/or its holding company in
                    its sole discretion for such liability to Taxes, increased
                    or additional cost, reduction, payment, forgone return or
                    loss.

     For the purposes of this clause 14.2 each Finance Party may in good faith
     allocate or spread costs and/or losses among its assets and liabilities (or
     any class thereof) on such basis as it considers appropriate and fair.

     Each Finance Party shall use all reasonable endeavours to notify the
     Primary Borrower as soon as reasonably practicable of any such increased
     cost, reduction, payment or forgone return which is to result in a demand
     under clause 14.2(B).

     For the purposes of this clause 14.2 and clause 14.4 (Mitigation) "HOLDING
     COMPANY" means, in relation to a Finance Party, the company or entity (if
     any) within the consolidated supervision of which such Finance Party is
     included.

     For the purposes of this clause 14.2, the Obligors acknowledge that any
     requirement that the Finance Parties treat interest hereunder as anything
     other than interest shall be a change in law or the interpretation thereof.


                                       89
<PAGE>


15.3  EXCEPTIONS

     Nothing in clause 14.2 (Increased costs) shall entitle any Finance Party to
     receive any amount in respect of compensation for any such liability to
     Taxes, increased or additional cost, reduction, payment, forgone return or
     loss to the extent that the same:

     (a)  is taken into account in calculating the Mandatory Cost Rate; or

     (b)  is (or would be if the Finance Party were or continued to be a
          Qualifying Lender) the subject of an additional payment under clause
          8.5 (Grossing-up for Taxes); or

     (c)  arises as a consequence of (or of any law or regulation implementing)
          (i) the proposals for international convergence of capital measurement
          and capital standards published by the Basle Committee on Banking
          Regulations and Supervisory Practices in July 1988 and/or (ii) any
          applicable directive of the European Union unless (in each case) it
          results from any change in, or in the interpretation or application
          of, such proposals or any such applicable directive (or any law or
          regulation implementing the same) occurring after the date hereof; or

     (d)  is attributable to Taxation save where it is recovered under clause
          14.2(i) (Increased Costs); or

     (e)  is attributable to the wilful default or gross negligence of a Finance
          Party.

     For the purposes of clause 14.3(c) the term "APPLICABLE DIRECTIVE" means
     (exclusively) each of the Own Funds Directive (89/299/EEC of 17th April
     1989), the Solvency Ratio Directive (89/647/EEC of 18th December 1989) and
     the Capital Adequacy Directive (93/6/EEC of 15 March 1993) as the foregoing
     have been amended up to the date of this Agreement.

15.4  MITIGATION

     If in respect of any Finance Party (an "AFFECTED BANK"), circumstances
     arise or exist which would result in: (a) any Obligor being required to
     make an increased payment to that Finance Party pursuant to clause 8.5
     (Grossing-up for Taxes);

     (b)  the reduction of that Finance Party's Commitment in respect of any
          Facility to zero or any Borrower being required to prepay that Finance
          Party's Contribution to any Facility pursuant to clause 14.1
          (Unlawfulness);

     (c)  any Obligor being required to make a payment to any Finance Party to
          compensate such Finance Party or its holding company for a liability
          to Taxes, increased or cost, reduction, payment, forgone return or
          loss pursuant to clause 14.2(B) (Increased Costs); or

     (d)  any Obligor not being entitled to a deduction for UK corporation tax
          purposes in respect of interest payable under this Agreement to that
          Finance Party;

     then, without in any way limiting, reducing or otherwise qualifying the
     obligations of any Obligor under clause 8 (Payments and Taxes, Accounts and
     Calculations) and this clause 14 (Unlawfulness, increased costs,


                                       90
<PAGE>


     alternative interest rates) (and subject to the Obligor's rights under
     clause 6.5 (Prepayments generally), such Finance Party shall, in
     consultation with the Facility Agent, endeavour to take such reasonable
     steps (and/or, in the case of clause 14.2(B) (Increased Costs) and where
     the increased or additional cost, reduction, payment, forgone return or
     loss is that of its holding company, endeavour to procure that its holding
     company takes such reasonable steps) as are open to it (or, as the case may
     be, its holding company) to mitigate or remove such circumstances unless
     the taking of such steps might (in the opinion of such Finance Party) be
     prejudicial to such Finance Party (or, as the case may be, its holding
     company) and provided that such Finance Party shall be under no obligation
     to take any such action if in the opinion of such Finance Party to do so
     might have any adverse effect upon its business, operations or financial
     condition.

16.  SET-OFF AND PRO-RATA PAYMENTS

16.1 SET-OFF

     (a)  Each Obligor hereby agrees that each Finance Party may at any time,
          whilst any Default shall be continuing notwithstanding any settlement
          of account or other matter whatsoever, combine or consolidate all or
          any of its then existing accounts wheresoever situate (including
          accounts in the name of such Finance Party or of such Obligor jointly
          with others), whether such accounts are current, deposit, loan or of
          any other nature whatsoever, whether they are subject to notice or not
          and whether they are denominated in Sterling or in any other currency,
          and set-off or transfer any sum standing to the credit of any one or
          more such accounts in or towards satisfaction of any moneys,
          obligations or liabilities which are due and payable by such Obligor
          to such Finance Party under the Finance Documents but are unpaid.

     (b)  For this purpose each Finance Party is authorised to purchase with the
          moneys standing to the credit of such account such other currencies as
          may be necessary to effect such application. No Finance Party shall be
          obliged to exercise any right given to it by this clause 15.1.

     (c)  Each Finance Party shall notify the Facility Agent promptly upon the
          exercise or purported exercise of any right of set-off in relation to
          any member of the Group giving full details in relation thereto and
          the Facility Agent shall inform the other Finance Parties.

16.2 PRO-RATA PAYMENTS

     (a)  If at any time any Bank (the "RECOVERING BANK") receives or recovers
          any amount owing to it by any Obligor under this Agreement by direct
          payment, set-off or in any manner other than by payment through the
          Facility Agent (not being a payment received from a Substitute or a
          sub-participant in such Bank's Contribution to any Facility or any
          other payment of an amount due to the Recovering Bank for its sole
          account), the Recovering Bank shall, within two Banking Days of such
          receipt or recovery (a "RELEVANT RECEIPT") notify the Facility Agent
          of the amount of the Relevant Receipt. If the Relevant Receipt exceeds


                                       91
<PAGE>


          the amount which the Recovering Bank would have received if the
          Relevant Receipt had been received by the Facility Agent then:

          (i)  within two Banking Days of demand by the Facility Agent, the
               Recovering Bank shall pay to the Facility Agent an amount equal
               to the excess;

          (ii) the Facility Agent shall treat the excess amount so paid by the
               Recovering Bank as if it were a payment made by the relevant
               Obligor and shall distribute the same to the Banks (other than
               the Recovering Bank); and

          (iii) as between the relevant Obligor and the Recovering Bank, the
               excess amount so re-distributed shall be treated as not having
               been paid but the obligations of the relevant Obligor to the
               other Banks shall, to the extent of the amount so re-distributed
               to them, be treated as discharged.

     (b)  If any part of a Relevant Receipt subsequently has to be wholly or
          partly refunded by the Recovering Bank (whether to a liquidator or
          otherwise) each Bank to which any part of such Relevant Receipt was so
          re-distributed shall on request from the Recovering Bank repay to the
          Recovering Bank such Bank's pro-rata share of the amount which has to
          be refunded by the Recovering Bank.

     (c)  Each Bank shall on request supply to the Facility Agent such
          information as the Facility Agent may from time to time request for
          the purpose of this clause 15.2.

     (d)  Notwithstanding the foregoing provisions of this clause 15.2, no
          Recovering Bank shall be obliged to share any Relevant Receipt which
          it receives or recovers pursuant to legal proceedings taken by it to
          recover any sums owing to it under this Agreement with any other party
          which has a legal right to, but does not, either join in such
          proceedings or commence and diligently pursue separate proceedings to
          enforce its rights in the same or another court (unless the
          proceedings instituted by the Recovering Bank are instituted by it in
          breach of clause 22.3 (Majority Bank matters: enforcement).

     (e)  The amounts due from each relevant Obligor to each of the Banks shall
          reflect any payments and receipts among the Banks prescribed by this
          clause.

     (f)  Nothing in this clause 15.2 shall prevent the Issuing Bank from
          recovering from the relevant Borrowers any amounts due under a Letter
          of Credit issued by the Issuing Bank or appropriating any cash cover
          provided by an Obligor under this Agreement provided that any cash
          cover not ultimately applied in respect of an amount due under a
          Letter of Credit shall be turned over to the Facility Agent and
          treated as a Relevant Receipt to which the provisions of this clause
          15.2 will generally apply.


                                       92
<PAGE>


16.3 NO RELEASE

     For the avoidance of doubt it is hereby declared that failure by any
     Recovering Bank to comply with the provisions of clause 15.2 (Pro-rata
     payments) shall not release any other Recovering Bank from any of its
     obligations or liabilities under clause 15.2 (Pro-rata payments).

16.4 NO CHARGE

     The provisions of this clause 15 (Set-off and pro-rata payments) are not
     intended to, shall not, and shall not be construed so as to, constitute a
     charge by a Bank. In particular it is not intended to create a charge over
     all or any part of a sum received or recovered by any Bank in the
     circumstances mentioned in clause 15.2 (Pro-rata payments).

17.  ASSIGNMENT, SUBSTITUTION AND LENDING OFFICES

17.1 BENEFIT AND BURDEN

     This Agreement shall be binding upon, and enure for the benefit of, the
     Finance Parties and the Obligors and their respective successors,
     transferees and assigns.

17.2 NO ASSIGNMENT BY THE OBLIGORS

     The Obligors may not assign or otherwise transfer any of their respective
     rights or obligations under any of the Finance Documents.

17.3 SUBSTITUTION

     Each Bank (an "EXISTING BANK") may at any time assign all or any of its
     rights and benefits under the Finance Documents or novate in accordance
     with clauses 16.5 (Substitution Certificate) and 16.12 (Restrictions on
     novations) (but not otherwise) all or any part of its rights, benefits
     and/or obligations under the Finance Documents to another Qualifying Bank
     (a "SUBSTITUTE") with the consent of the Issuing Bank, and with the consent
     of the Primary Borrower (not to be unreasonably withheld or delayed).

17.4 ASSIGNMENT

     If any Bank assigns all or any of its rights and benefits under the Finance
     Documents in accordance with clause 16.3 (Substitution), then, unless and
     until the assignee has agreed with the other Finance Parties and the
     Obligors that it shall be under the same obligations towards each of them
     as it would have been if it had been an original party thereto as a Bank,
     the other Finance Parties and the Obligors shall not be obliged to
     recognise that assignee as having the rights against each or any of them
     which it would have had if it had been such a party thereto.

17.5 SUBSTITUTION CERTIFICATE

     Subject to clause 16.6 (Reliance on Substitution Certificate), if a duly
     completed Substitution Certificate duly executed by the Existing Bank and
     the Substitute is delivered to and countersigned by the Facility Agent (for
     itself and the other parties to this Agreement other than the Existing
     Bank), then on the Effective Date (as specified in that Substitution
     Certificate) to the extent that the Existing Bank's rights, benefits and
     obligations under the Finance Documents are expressed in such Substitution
     Certificate to be the subject of a novation in favour of the Substitute
     effected pursuant to this clause 16.5:


                                       93
<PAGE>


     (i)  the existing parties to the Finance Documents and the Existing Bank
          shall be released from their respective obligations towards one
          another under the Finance Documents ("DISCHARGED OBLIGATIONS") except
          for any obligation which the Existing Bank has to the Issuing Bank
          under clause 4.7 (Bank's Guarantee and Indemnity) before the date on
          which the novation takes place unless otherwise agreed in writing by
          the Issuing Bank and their respective rights against one another under
          the Finance Documents ("DISCHARGED RIGHTS") (except with respect to
          antecedent breaches) shall be cancelled;

     (ii) the Substitute party to such Substitution Certificate and the existing
          parties to the Finance Documents shall assume obligations towards each
          other which differ from the discharged obligations only insofar as
          they are owed to or assumed by such Substitute instead of to or by
          such Existing Bank;

     (iii) the Substitute party to such Substitution Certificate and the
          existing parties to the Finance Documents shall acquire rights against
          each other which differ from the discharged rights only insofar as
          they are exercisable by or against such Substitute instead of by or
          against such Existing Bank; and

     (iv) the Finance Parties shall acquire the same rights and benefits and
          assume the same obligations between themselves as they would have
          acquired and assumed had such Substitute been an original party hereto
          as a Bank with the rights, benefits and/or obligations acquired or
          assumed by it as a result of such transfer;

     and, on such Effective Date, the Substitute shall pay to the Facility Agent
     for its own account a fee of (pound)750. The Facility Agent shall promptly
     deliver a copy of such Substitution Certificate to the Primary Borrower.

17.6 RELIANCE ON SUBSTITUTION CERTIFICATE

     The Facility Agent (on behalf of itself) and the Obligors shall be fully
     entitled to rely on any Substitution Certificate delivered to the Facility
     Agent in accordance with the foregoing provisions of this clause 16
     (Assignment, Substitution and Lending offices) which is complete and
     regular on its face as regards its contents and purportedly signed on
     behalf of the relevant Existing Bank(s) and the Substitute(s) and none of
     the Facility Agent and the Obligors shall have any liability or
     responsibility to any party as a consequence of placing reliance on and
     acting in accordance with any such Substitution Certificate if it proves to
     be the case that the same was not authentic or duly authorised.

17.7 AUTHORISATION OF FACILITY AGENT

     Each party to this Agreement irrevocably authorises the Facility Agent to
     counter-sign each Substitution Certificate on its behalf for the purposes
     of clause 16.5 (Substitution Certificate) without any further consent of,
     or consultation with, such party except, in the case of the Primary
     Borrower, the consent required pursuant to clause 16.3 (Substitution).


                                       94
<PAGE>


17.8 ACCESSION DEEDS

     The Obligors shall from time to time at the request of the Facility Agent
     promptly do any act or thing or execute such documents as directed by the
     Facility Agent in connection with the transfer of rights or benefits under
     clause 16.3 (Substitution).

17.9 CONSTRUCTION OF CERTAIN REFERENCES

     If any Bank novates all or any part of its rights, benefits and obligations
     as provided in clause 16.3 (Substitution) all relevant references in this
     Agreement to such Bank shall thereafter be construed as a reference to such
     Bank and/or its Substitute to the extent of their respective interests.

17.10 LENDING OFFICES

     Each Bank shall lend through its office at the address specified in
     Schedule 1 or, as the case may be, in or pursuant to any relevant
     Substitution Certificate or through any other office of such Bank selected
     from time to time by such Bank through which such Bank wishes to lend for
     the purposes of this Agreement (with the consent of the Primary Borrower,
     if such changed lending office is outside the United Kingdom). If the
     office through which a Bank is lending is changed pursuant to this clause
     16.10, such Bank shall notify the Facility Agent promptly of such change.
     No Bank shall exercise its rights under this clause in any manner which
     might reasonably be expected to result in it not being a Qualifying Bank.

17.11 DISCLOSURE OF INFORMATION

     The Obligors party to this Agreement agree that the Finance Parties may at
     any time disclose such information relating to the Obligors, their
     Affiliates and Associated Companies as shall come into their possession,
     whether or not in relation to the Facilities:

     (a)  to any prospective assignee, Substitute or sub-participant;

     (b)  to their respective advisers, professional or otherwise;

     (c)  to any Affiliate of such Finance Party;

     (d)  to the other Finance Parties;

     (e)  if required to do so by an order of a court of competent jurisdiction;

     (f)  under any law or regulation or to any applicable regulatory authority
          (including the Bank of England) in any relevant jurisdiction; and

     (g)  where such information shall have already entered the public domain
          other than by breach of confidence on the part of the relevant Finance
          Party,

     and in the case of (a) above, subject to first requiring and receiving a
     written confirmation from the recipient of the information addressed to,
     inter alios, the Primary Borrower itself and its Affiliates that the
     recipient will, and will cause its Affiliates to, treat in confidence any
     confidential information so disclosed to it and not use it for any
     unauthorised purpose and, upon receipt of such confirmation, such Finance
     Party shall in no way be liable or responsible for such information not
     being kept confidential by such proposed assignee, Substitute or other
     person.


                                       95
<PAGE>


17.12 RESTRICTIONS ON NOVATIONS

     Any novation by a Bank which is transferring part (but not all) of its
     Commitment may only be made if (a) it is made in respect of a Commitment of
     (pound)5,000,000 or any larger integral multiple of (pound)5,000,000 and
     (b) as a consequence of such novation (or as a consequence of that and any
     other novation between the same or related parties taking effect at or
     about the same time) the Commitment of the Existing Bank would be not less
     than (pound)5,000,000.

17.13 NO OBLIGATION

     The Existing Bank shall not be obliged by any Finance Document to:

     (a)  accept a re-transfer from the Substitute of any of the rights and/or
          obligations assigned or transferred under this clause 16 (Assignment,
          Substitution and Lending offices); or

     (b)  indemnify the Substitute for any losses arising by reason of any
          Obligor's failure to perform its obligations under any Finance
          Documents or otherwise.

18.  FACILITY AGENT

18.1 APPOINTMENT OF FACILITY AGENT

     Each Finance Party (except the Facility Agent) appoints the Facility Agent
     to act as its agent in connection with the Finance Documents to which the
     Facility Agent is a party, and authorises the Facility Agent to exercise
     such rights, remedies, powers and discretions as are specifically delegated
     to it by the terms of this Agreement and the Finance Documents, together
     with all reasonably incidental rights, powers and discretions. The Obligors
     shall be entitled to assume that the Facility Agent represents the Finance
     Parties (except the Facility Agent), the Reference Banks or the Majority
     Banks (as the case may be), and that all consents and notices given by the
     Facility Agent on their behalf are validly given.

18.2 SEPARATE TREATMENT OF SYNDICATION DIVISION

     In acting as Facility Agent, the Facility Agent's syndication division (or
     such other division as may undertake such task) shall be treated as a
     separate entity from any other of its divisions or departments and, despite
     the provisions of clauses 17 (Facility Agent) to 21 (Guarantee), if the
     Facility Agent or any Related Person acts for or transacts business with
     any member of a group comprising the Parent and its Affiliates or
     Associated Companies (the "PARENT GROUP") or any other person which may be
     a trade competitor of the Parent Group or Group or any member of either
     such group or may otherwise have commercial interests similar to those of
     any member of such groups in any capacity in relation to any other matter
     (including as a Bank under this Agreement), any information acquired by the
     Facility Agent or any Related Person in such other capacity may be treated
     as confidential by the Facility Agent. The Obligors hereby expressly
     acknowledge that the Finance Parties and Related Persons may be providing
     debt financing, equity capital or other services (including financial
     advisory services) to other persons with whom the Parent or the Group may
     have conflicting interests in respect of the Facilities or otherwise.


                                       96
<PAGE>


18.3 ACTIONS OF FACILITY AGENT

     Each action taken or decision made by the Facility Agent under or in
     relation to any Finance Document with requisite authority under this
     Agreement, including on the basis of the requisite instructions, shall be
     binding on all the Finance Parties.

18.4 NOTIFICATION OF RETIREMENT OF FACILITY AGENT OR ISSUING BANK

     Each of the Facility Agent and/or the Issuing Bank may resign its
     appointment under this Agreement at any time without assigning any reason
     therefor by giving not less than 30 days' prior written notice to that
     effect to each of the other parties to this Agreement Provided that no such
     resignation shall be effective until a successor for such Facility Agent or
     Issuing Bank (as the case may be) is appointed in accordance with the
     succeeding provisions of this clause.

18.5 SUCCESSOR FACILITY AGENT OR ISSUING BANK

     If the Facility Agent or Issuing Bank gives notice of its resignation
     pursuant to clause 17.4 (Notification of retirement of Facility Agent or
     Issuing Bank), then any reputable and experienced bank or other financial
     institution with an office in London may, with the consent of the Primary
     Borrower (such consent not to be unreasonably withheld), be appointed as a
     successor to such Facility Agent or Issuing Bank (as the case may be) by
     the Majority Banks but, if no such successor is so appointed, the Facility
     Agent or Issuing Bank (as the case may be) may appoint such a successor
     itself.

18.6 PROVISIONS RELATING TO SUCCESSOR FACILITY AGENT OR ISSUING BANK

     With effect from the date that a successor is appointed and accepts the
     office of Facility Agent or, as the case may be, Issuing Bank and executes
     such necessary documentation under this clause 17 (Facility Agent):

     (a)  as regards the other Finance Parties and the Obligors, such successor
          shall become bound by all the obligations of the Facility Agent or, as
          the case may be, the Issuing Bank and become entitled to all the
          rights, privileges, powers, authorities and discretions of the
          Facility Agent or, as the case may be, the Issuing Bank under the
          Finance Documents;

     (b)  the agency of the retiring Facility Agent or, as the case may be, the
          duties of the Issuing Bank shall terminate and the retiring Facility
          Agent or, as the case may be, the retiring Issuing Bank shall be
          discharged from any further liability or obligation under the Finance
          Documents, but without prejudice to any liabilities which the retiring
          Facility Agent or, as the case may be, the retiring Issuing Bank may
          have incurred (including with respect to the retiring Issuing Bank any
          then outstanding Issued Letter of Credit) before the termination of
          its agency, trusteeship and/or duties;

     (c)  the costs, charges and expenses of the retiring Facility Agent or, as
          the case may be, the retiring Issuing Bank shall be discharged if
          recoverable under the provisions of this Agreement;

     (d)  the provisions of the Finance Documents shall continue in effect for
          the benefit of any retiring Facility Agent or, as the case may be, the
          retiring Issuing Bank in respect of any actions taken or omitted to be


                                       97
<PAGE>


          taken by it or any event occurring before the termination of its
          agency, trusteeship and/or duties (including with respect to the
          retiring Issuing Bank any then outstanding Issued Letter of Credit);
          and

     (e)  the retiring Facility Agent or Issuing Bank shall (at the expense of
          the Primary Borrower) provide its successor with copies of such of its
          records as its successor reasonably requires to carry out its
          functions as such.

18.7 MERGER OF FACILITY AGENT OR ISSUING BANK

     Any corporation into which the Facility Agent or the Issuing Bank may be
     merged or converted or any corporation with which the Facility Agent or the
     Issuing Bank may be consolidated or any corporation resulting from any
     merger, conversion, amalgamation, consolidation or other reorganisation to
     which the Facility Agent or the Issuing Bank shall be a party shall, to the
     extent permitted by applicable law, be the successor Facility Agent, or, as
     the case may be, Issuing Bank under this Agreement and the other Finance
     Documents (as appropriate) without the execution or filing of any document
     or any further act on the part of any of the parties to this Agreement or,
     as the case may be, the other Finance Documents save that notice of merger,
     conversion, amalgamation, consolidation or other reorganisation shall
     forthwith be given to the Primary Borrower and the Banks.

18.8 ROLE OF ISSUING BANK

     The Issuing Bank shall act on behalf of the Banks with respect to any
     Letters of Credit Issued by it and the documents associated therewith until
     such time and except for so long as the Facility Agent may agree at the
     request of the Majority Banks to act for such Issuing Bank with respect
     thereto.

19.  POWERS

19.1 GENERAL POWERS

     Each of the Facility Agent and the Arrangers may:

     (a)  assume that the Facility Office of each Bank is that identified with
          its signature below (or, in the case of a Substitute, that identified
          in the Substitution Certificate under which it became a party to this
          Agreement) until it has received from such Bank a notice designating
          some other office of such Bank as its Facility Office, and may act
          upon any such notice until the same is superseded by a further such
          notice;

     (b)  engage and pay for the advice or services of any lawyers, accountants
          or other advisers whose advice or services may seem necessary,
          expedient or desirable to it and may rely upon any advice so obtained;

     (c)  rely as to matters of fact which might reasonably be expected to be
          within the knowledge of an Obligor upon a certificate or statement
          signed by or on behalf of that Obligor;


                                       98
<PAGE>


     (d)  rely upon any communication or document believed by it to be genuine
          and correct and to have been communicated or signed by the person by
          whom it purports to be communicated or signed;

     (e)  refrain from exercising any right, power or discretion vested in it
          under any Finance Document unless and until instructed by the Majority
          Banks or, where required, all of the Banks as to whether or not such
          right, power or discretion is to be exercised and, if it is to be
          exercised, as to the manner in which it should be exercised, and it
          shall not be liable for acting or refraining from acting in accordance
          with or in the absence of such instructions;

     (f)  refrain from taking any step to protect or enforce the rights of any
          Finance Party under any Finance Document and from beginning any legal
          action or proceeding arising out of or in connection with any Finance
          Document until it has been indemnified and/or secured as it may
          require (whether by way of payment in advance or otherwise) against
          all costs, claims, expenses (including legal fees) and liabilities
          which it will or may expend or incur in complying with such
          instructions;

     (g)  refrain from doing anything which would or might in its opinion be
          contrary to any applicable law or any requirements (whether or not
          having the force of law) of any governmental, judicial or regulatory
          body or otherwise render it liable to any person, and do anything
          which is in its opinion necessary to comply with any such applicable
          law or requirement;

     (h)  do any act or thing in the exercise of any of its powers and duties
          under the Finance Documents which may lawfully be done and which in
          its absolute discretion it deems advisable for the protection and
          benefit of the Finance Parties collectively;

     (i)  perform any of its duties, obligations and responsibilities under the
          Finance Documents by or through its personnel or agents; and

     (j)  accept deposits from, lend money (secured or unsecured) to and
          generally engage in any kind of banking or other business with, be the
          owner or holder of any shares or other securities of, and provide
          advisory or other services to the Parent and its Affiliates, and/or
          the Group or any of the Finance Parties, without any liability to
          account.

19.2 SPECIFIC POWERS OF FACILITY AGENT

     The Facility Agent:

     (a)  may assume that:

          (i)  any representation made by the Obligors in or in connection with
               the Finance Documents is true;

          (ii) no Default has occurred;


                                       99
<PAGE>


          (iii) no Obligor is in breach of or default under its obligations
               under any Finance Document; and

          (iv) any right, power, authority or discretion vested in any of the
               Finance Documents upon the Majority Banks, all Banks, or any
               other person or group of persons has not been exercised,

          unless the Facility Agent has in its capacity as agent for the
          relevant Finance Parties received actual notice to the contrary from
          any other party to any Finance Document;

     (b)  shall be at liberty to place any Finance Document and any other
          instruments, documents or deeds delivered to it pursuant thereto or in
          connection therewith for the time being in its possession in any safe
          deposit, safe or receptacle selected by the Facility Agent, as the
          case may be, or with any bank, any company whose business includes
          undertaking the safe custody of documents or any firm of lawyers of
          good repute and may make any such arrangements as it thinks fit for
          allowing the Primary Borrower access to, or its solicitors or auditors
          possession of, such documents when necessary or convenient and, in the
          absence of gross negligence or wilful default on its part, shall not
          be responsible for any loss thereby incurred;

     (c)  may, whenever it thinks fit, delegate by power of attorney or
          otherwise to any person or persons all or any of the rights, trusts,
          powers, authorities and discretion vested in it by any Finance
          Document and such delegation may be made upon such terms and subject
          to such conditions and subject to such regulations as the Facility
          Agent may think fit and shall not be bound to supervise the
          proceedings or (in the absence of gross negligence or wilful default
          on its part) be in any way responsible for any loss incurred by reason
          of any misconduct or default on the part of any such delegate;

     (d)  notwithstanding anything else herein contained, may refrain from doing
          anything which would or might in its opinion be contrary to any
          relevant law of any jurisdiction or any relevant directive or
          regulation of any agency of any state or which would or might
          otherwise render it liable to any persons and may do anything which
          is, in its opinion, necessary or desirable to comply with any such
          law, directive or, regulations;

     (e)  may indemnify itself and/or every attorney, agent or other person
          appointed by it under any Finance Document against all Liabilities (as
          defined in clause 20.2 (Indemnity from Banks)) and/or in respect of
          any other matter or thing done or omitted to be done in any way
          relating to any Finance Document or by law and/or acting as Facility
          Agent;

     (f)  shall have the power to institute, prosecute and defend any suits or
          actions or other proceedings affecting the Facility Agent and to
          compromise any matter or difference or submit any such matter to
          arbitration and to compromise or compound any debts owing to the
          Facility Agent or any other claims against it or any such terms as it


                                      100
<PAGE>


          shall deem sufficient and to make petition upon such terms as it shall
          deem desirable;

     (g)  save as otherwise expressly provided herein, shall have absolute
          discretion as to the exercise or non exercise (and as to the manner
          and time of any such exercise) of all rights, trust, powers,
          authorities and discretions vested in it by any of the Finance
          Documents but shall be entitled to refrain from exercising any right,
          power or discretion vested in it as agent or trustee under any Finance
          Document unless and until instructed by the Majority Banks or, where
          required under this Agreement, all Banks as to whether or not such
          right, power or discretion is to be exercised and, if it is to be
          exercised, as to the manner in which it should be exercised; and

     (h)  shall have absolute discretion as to the exercise or non-exercise (and
          as to the manner and time of any such exercise) of all rights, trust,
          powers, authorities and discretions in relation to any matter, or in
          any context, not expressly provided for by this Agreement to act or,
          as the case may be, refrain from acting in accordance with the
          instructions of the Majority Banks;

     (i)  shall (subject to clause 19 (Duties)) be entitled (in its own name or
          in the names of nominees) to invest moneys from time to time which, in
          the opinion of the Facility Agent, it would not be practicable to
          distribute immediately by placing the same on deposit in the name or
          under the control of itself as it may think fit without being under
          any duty to diversify the same and it shall not be responsible for any
          loss due to interest rate or exchange rate fluctuations;

     (j)  with respect to its own Commitments and Contributions (if any), shall
          have the same rights and powers under this Agreement and the other
          Finance Documents as any other Bank and may exercise the same as
          though it were not performing the duties and functions delegated to it
          under this Agreement and/or the other Finance Documents and the term
          "Banks" shall, unless the context clearly otherwise indicates, include
          the Facility Agent in its individual capacity as Bank.

20.  DUTIES

20.1 SPECIFIC DUTIES OF THE FACILITY AGENT

     The Facility Agent (for the benefit of the other Finance Parties only)
     shall:

     (a)  promptly upon receipt inform each Bank of the contents of any notice
          or document or other information received by it on or after the date
          of this Agreement in its capacity as Facility Agent under this
          Agreement from any Obligor;

     (b)  promptly notify each Bank of the occurrence of any Default or any
          material breach by any Obligor in the due performance of its
          obligations under this Agreement or any Finance Document of which the
          Facility Agent has received written notice from any other party to any
          Finance Document;


                                      101
<PAGE>


     (c)  save as otherwise provided herein, act in accordance with any
          instructions given to it by the Majority Banks (which instructions
          shall be binding on all of the Finance Parties);

     (d)  if so instructed by the Majority Banks (or, where so required under
          this Agreement, all Banks), refrain from exercising any right, remedy
          power or discretion vested in it under the Finance Documents;

     (e)  except as regards purely administrative acts, consult whenever
          reasonably practicable with the Banks before doing or refraining from
          doing any act or thing in the exercise of its powers as agent and/or
          trustee;

     (f)  to the extent that it receives or recovers monies following the
          service of a notice in accordance with clause 12.2 (Acceleration)
          pursuant to or as a result of any breach of any Finance Document to be
          applied in discharging any obligation (whether actual or contingent,
          present or future) of any Obligor under any Finance Document, apply
          such monies (without prejudice to the respective rights of the
          Facility Agent pursuant to any Finance Document to credit any monies
          received by it to any suspense account) as between the Finance Parties
          in accordance with clause 8.9 (Partial payments) as if they were a
          partial payment; and

     (g)  shall make each such application and/or distribution as soon as is
          practicable after the relevant moneys are received by, or otherwise
          become available to, it save that the Facility Agent may credit any
          moneys received by it to a suspense account for so long and in such
          manner as the Facility Agent may from time to time determine with a
          view to preserving the rights of the Finance Parties or any of them to
          prove for the whole of their respective claims against any Obligor or
          any other person liable.

21.  EXONERATION

21.1 ABSENCE OF OBLIGATION ON INITIAL FINANCE PARTIES

     Despite anything to the contrary expressed or implied in any Finance
     Document, each of the Facility Agent, the Issuing Bank and the Arrangers
     shall:

     (a)  not be bound to enquire as to and will have no liability in respect
          of:

          (i)  whether or not any representation or warranty made by any Obligor
               under or in connection with any Finance Document is true complete
               or adequate; the

          (ii) the occurrence or otherwise of any Default;

          (iii) the performance by any Obligor of its obligations under any
               Finance Document; or

          (iv) any breach or default by any Obligor of or under its obligations
               under any Finance Document;


                                      102
<PAGE>


     (b)  not be bound to account to any Finance Party for any fee or other sum
          or the profit element of any sum received by it for its own account;

     (c)  not be bound to disclose to any other person any information relating
          to any member of the Group if such disclosure would or might in its
          opinion constitute a breach of any law or regulation or duty of
          confidentiality or be otherwise actionable at the suit of any person;

     (d)  not be under any fiduciary or other duty towards any Finance Party or
          under any obligations other than those expressly provided for in any
          Finance Documents;

     (e)  not be liable (in the absence of its own gross negligence or wilful
          default):

          (i)  for any failure, omission, or defect in the due execution,
               delivery, validity, legality, adequacy, performance,
               enforceability, or admissibility in evidence of any Finance
               Document or any communication, report or other document delivered
               under any Finance Document; or

          (ii) in respect of its exercise or failure to exercise any of its
               powers and duties under any Finance Document; or

     (f)  not have any duties, obligations or liabilities other than those
          expressly provided for in this Agreement and have no liability or
          responsibility (in the absence of its own gross negligence or wilful
          default) of any kind to:

          (i)  any member of the Group arising out of or in relation to any
               failure or delay in the performance or breach by any Finance
               Party (other than itself) of any of its obligations under or in
               connection with any Finance Document; or

          (ii) any Finance Party arising out of or in relation to:

               (A)  the financial condition of any member of the Group; or

               (B)  any failure or delay in the performance or breach by any
                    Obligor of any of its obligations under or in connection
                    with any Finance Document or the Facilities;

     (g)  not be bound to check or enquire on behalf of any other Finance Party
          into or liable for the adequacy, accuracy, execution, genuineness,
          enforceability, admissibility in evidence or completeness of any
          communication delivered to it under any of the Finance Documents, any
          legal or other opinions, reports, valuations, certificates, appraisals
          or other documents delivered or made or required to be delivered or
          made at any time in connection with any of the Finance Documents, any
          security to be constituted thereby or any other report or other
          document, statement or information circulated, delivered or made,
          whether orally or otherwise and whether before, on or after the date
          of this Agreement;

     (h)  be entitled to accept without enquiry, requisition or objection such
          right and title as any Obligor may have to that part of the property
          belonging to it (or any part thereof) which is the subject matter of
          any Finance Document and not be bound or concerned to investigate or
          make any enquiry into the right or title of such person to such
          property (or any part thereof) or, without prejudice to the foregoing,


                                      103
<PAGE>


          to require such person to remedy any defect in such person's right or
          title as aforesaid;

     (i)  in determining the respective entitlements of the Finance Parties, be
          entitled to rely on its own account;

     (j)  be entitled to invest monies which in the opinion of the Facility
          Agent may not be paid out promptly following receipt m the name or
          under the control of such Facility Agent in any of the investments for
          the time being authorised by law for the investment by trustees of
          trust monies or in any other investments whether similar to the
          aforesaid or not which may be requested by the Majority Banks or by
          placing the same on deposit in the name or under the control of the
          Facility Agent as the Facility Agent may think fit and the Facility
          Agent may at any time vary or transpose any such investments for or
          into any others of a like nature and (in the absence of gross
          negligence or wilful default on the part of such Facility Agent) shall
          not be responsible for any loss thereby incurred whether due to
          depreciation in value of such investments or any other reason
          whatever;

     (k)  not be bound to take any steps or perform any obligation or exercise
          any right or fulfil any request if to do so might in its sole opinion
          breach or conflict with or contradict or be contrary to any rule,
          regulation, law, regulatory requirement, court order or judgment in
          any jurisdiction or expose the Facility Agent or the Arrangers to
          liabilities in any jurisdiction or be otherwise actionable at the suit
          of any person;

     (l)  not be liable for any failure:

          (i)  to obtain any licence, consent or other authority for the
               execution, delivery, validity, legality, adequacy, performance,
               enforceability or admissibility in evidence of any of the Finance
               Documents;

          (ii) to register or notify any of the foregoing in accordance with the
               provisions of any of the documents of title of any of the
               Obligors;

     (m)  have no liability (save as otherwise provided in clauses 17 (Facility
          Agent) to 23 (Basis of decisions)) otherwise in connection with the
          Facilities or their negotiations or for acting (or as the case may be
          refraining from acting) in connection with the instructions of the
          Majority Banks.

21.2 INDEMNITY FROM BANKS

     Each Bank and the Issuing Bank shall, in its Proportion, on demand by the
     Facility Agent or any Arranger from time to time, indemnify the Facility
     Agent or, as the case may be, any Arranger, against any and all fees (to
     the extent properly chargeable by the Facility Agent or, as the case may
     be, such Arranger under any Finance Document but not promptly recovered
     from the Obligors), costs, claims and expenses and liabilities including
     any VAT thereon (other than those arising from the Facility Agent's or any
     such Arranger's gross negligence or wilful misconduct):

     (a)  to which the Facility Agent becomes subject by reason of it acting as
          agent; or


                                      104
<PAGE>


     (b)  which it is otherwise entitled to recover from any Obligor,

     in each case under any of the Finance Documents or by law, including those
     relating to all actions, proceedings, claims and demands in respect of any
     matter or thing done or omitted in any way relating to the Finance
     Documents any exercise or non exercise of any right, power or discretion,
     and all amounts due to the Facility Agent by way of remuneration for acting
     as agent under any of the Finance Documents (collectively the
     "LIABILITIES"). Each Obligor shall counter-indemnify the Banks and the
     Issuing Bank against all payments by them under this clause 20.2. If a Bank
     or the Issuing Bank (referred to in this clause 20.2 as a "DEFAULTING
     BANK") fails to pay its due contribution under this indemnity, then the
     Facility Agent may (without prejudice to its other rights and remedies)
     deduct the amount due from the defaulting Bank from any sums which are then
     or afterwards in its possession which would otherwise be payable to the
     defaulting Bank.

21.3 DISCLAIMER

     Neither the Facility Agent, nor any Arranger accepts responsibility to any
     other Finance Party for the accuracy and/or completeness of any information
     supplied in connection with an Finance Document or for the legality,
     validity, effectiveness, adequacy or enforceability of any Finance Document
     and neither the Facility Agent, nor any Arranger, shall be under any
     liability to any other Finance Party as a result of taking or omitting to
     take any action in relation to any Finance Document (except in the case of
     its gross negligence or wilful misconduct).

21.4 NO ACTIONS AGAINST INDIVIDUALS

     (a)  Each of the Banks agrees that it will not assert or seek to assert
          against any director, officer or employee of the Facility Agent or any
          Arranger any claim it may have against any of them in respect of the
          matters referred to in clause 20.1 (Absence of obligation on initial
          Finance Parties).

     (b)  Any third party referred to in this Clause 20.4 may enjoy the benefit
          and enforce the terms of paragraph (a) above in accordance with the
          provisions of the Contracts (Rights of Third Parties) Act 1999.

21.5 CREDIT APPRAISALS

     It is agreed by each Bank, by virtue of its execution of this Agreement or
     its accession to this Agreement, that it has itself been, and will continue
     to be, solely responsible for making its own independent appraisal of and
     investigations into the financial condition, creditworthiness, condition,
     affairs, status and nature of each member of the Group, and, accordingly,
     each Bank confirms to the Facility Agent, and each Arranger that it:

     (a)  does not enter into this Agreement nor accede to it on the basis of
          and has not relied on and will not rely on any statement, opinion,
          forecast or other representation (whether negligent or innocent) or
          warranty or other provision (in any case whether oral, written,
          express or implied) made by, or agreed to, the Facility Agent, any
          Arranger or any Bank to induce it to enter into this Agreement or any
          other Finance Document except as expressly set out therein and the
          remedies available in respect of any such misrepresentation or untrue


                                      105
<PAGE>


          statement made to such Bank shall be limited to a claim for breach of
          contract under this Agreement; and

     (b)  has not relied on and will not rely on the Facility Agent, any
          Arranger or any Bank:

          (i)  to check or enquire on its behalf into the adequacy, accuracy or
               completeness of any information provided by or on behalf of any
               member of the Group in connection with any Finance Document
               and/or the transactions contemplated in the Finance Documents
               (whether or not such information has been or is after the date of
               this Agreement circulated to such Bank by the Facility Agent or
               any Arranger or as the case may be any other Bank); or

          (ii) to assess or keep under review on its behalf the financial
               condition, creditworthiness, condition, affairs, status or nature
               of any member of the Group.

     Provided that clause 20.5(a) shall not apply to any statement or
     representation made fraudulently, or to any provision of this Agreement
     which was induced by fraud for which the remedies available shall be all
     those available under English law.

21.6 EXONERATION OF RELATED PERSONS

     All the provisions of this clause 20 (Exoneration) and of any other
     provision of any Finance Document protecting (including indemnifying) or
     limiting the liability of any Finance Party, or exonerating it from
     liability or responsibility, which may enure to the benefit of such Finance
     Party shall also be deemed to be given for the benefit of all Related
     Persons to whom they are capable of relating or in respect of whom they are
     capable of taking effect.

21.7 PRE-CONTRACTUAL EFFECT OF EXONERATION

     For the avoidance of doubt, the guarantee, indemnity, exonerations and
     other protections in favour of the Facility Agent, the Arrangers and the
     Related Persons contained in the Finance Documents shall take effect in
     respect of all events, action and omissions occurring before the execution
     and completion of this Agreement as well as events, actions and omissions
     occurring on or after its execution and completion and to the extent that
     any liability should be adjudged to have arisen prior to the date of this
     Agreement, such liability is hereby completely released.

22.  GUARANTEE

     Each Guarantor covenants and guarantees on, and in accordance with, the
     terms of the Guarantee set out in Schedule 9 (Terms of Guarantee).


                                      106
<PAGE>


23.  DETERMINATION OF MATTERS

23.1 MAJORITY BANK MATTERS: AMENDMENTS AND WAIVERS

     Except as provided in clause 22.4 (All Bank matters: amendments and
     waivers) and 22.5 (New Obligors), with the prior written consent of the
     Majority Banks:

     (a)  the Facility Agent and the Primary Borrower may from time to time
          enter into written amendments, supplements or modifications to the
          Finance Documents (however fundamental) for the purpose of adding any
          provisions to the Finance Documents or changing in any manner the
          rights and/or obligations of any of the Obligors, the Facility Agent
          and the Banks; and

     (b)  the Facility Agent may from time to time execute and deliver to any
          Obligor a written instrument waiving prospectively or retrospectively,
          on such terms and conditions as the Facility Agent may specify in such
          instrument, any of the requirements of any of the Finance Documents,
          or giving any consents or approvals thereunder.

23.2 DOCUMENTATION OF MAJORITY BANK CHANGES

     Any action so authorised and effected by the Facility Agent under clause
     22.1 (Majority Bank matters: amendments and waivers) shall be documented in
     such manner as the Facility Agent shall (with the approval of the Majority
     Banks) determine, shall be promptly notified to the Banks by the Facility
     Agent and (without prejudice to the generality of clause 17.3 (Actions of
     Facility Agent)) shall be binding on all the Banks.

23.3 MAJORITY BANK MATTERS: ENFORCEMENT

     If the Facility Agent makes a declaration under clause 12.2 (Acceleration)
     the Facility Agent shall, in the names of all the Banks, take such action
     on behalf of the Banks and conduct such negotiations with any Obligor and
     any other members of the Group and generally administer the Advances in
     accordance with the wishes of the Majority Banks. All the Banks shall be
     bound by the provisions of this clause 22.3 and no Bank shall be entitled
     to take action (in relation to the tactics or means of enforcement)
     independently against any Obligor or any other member of the Group without
     the prior consent of the Majority Banks. In determining any matter under
     this clause 22.3, no consent by the Majority Banks shall be effective to
     approve either (a) the recovery of any particular Bank's or Banks' debt in
     priority to any other Bank's debt or (b) the effective discontinuation of
     recovery procedures or the final waiver of final of the claims of the Banks
     under this Agreement. Such determinations shall be for the purpose of
     effectively pursuing the Banks' rights and claims under this Agreement.

23.4 ALL BANK MATTERS: AMENDMENTS AND WAIVERS

     Except with the prior written consent of all the Banks, the Facility Agent
     shall not have authority on behalf of the Banks to agree with any Obligor
     any amendment or modification to the Finance Documents or to vary or waive
     breaches of or defaults under or otherwise excuse performance of any
     provision of the Finance Documents by any Obligor, if the effect of such
     would be to:


                                      107
<PAGE>


     (a)  postpone the due date or reduce the amount of any payment of
          principal, interest, commitment commission or other amount payable or
          which may become payable by any Obligor under the Finance Documents;

     (b)  except in accordance with clause 8. 1 (b)(iii) (No set-off or
          counterclaim; distribution to the Banks) and 8.12 (Effect of Monetary
          Union), change the currency in which any amount is payable by any
          Obligor under the Finance Documents;

     (c)  have the effect of changing the amount of any Facility, any Bank's
          Commitment or, except in accordance with clause 8.12 (Effect of
          Monetary Union), the principal or face amount or currency of any
          Advance;

     (d)  extend any period during which a Drawdown Notice may be delivered;

     (e)  change any provision of the Finance Documents which expressly requires
          the approval or consent of all the Banks such that the relevant
          approval or consent may be given otherwise than with the sanction of
          all the Banks;

     (f)  change the definition of Majority Banks;

     (g)  change clause 15.2 (Pro-rata Payments);

     (h)  or change this clause 22 (Determination of matters) or clause 23
          (Basis of Decisions).

23.5 NEW OBLIGORS

     For the purposes of this clause 22 (Determination of matters) it is
     expressly agreed and acknowledged that the execution of a guarantee and/or
     deed of adherence by a new Subsidiary or other Obligor or proposed Obligor
     or any deed or instrument pursuant to a further assurance provision in this
     Agreement or the other Finance Documents shall not constitute an amendment
     or modification to, or variation of, any of the Finance Documents.

23.6 VETO OF FACILITY AGENT

     Regardless of any other provision in this Agreement, the Facility Agent
     shall not be obliged to agree to any such waiver, amendment, supplement or
     modification if it would:

     (a)  amend, modify or waive any provision of this clause 22 (Determination
          of matters); or

     (b)  otherwise amend, modify or waive any of the Facility Agent's or the
          Arrangers' rights under any of the Finance Documents or subject the
          Facility Agent to any additional obligations under such documents.

23.7 ADMINISTRATIVE DETERMINATIONS

     The Facility Agent may determine purely administrative matters without
     reference to the Banks.


                                      108
<PAGE>


24.  BASIS OF DECISIONS

24.1 MEANING OF MAJORITY BANKS

     Where any of the Finance Documents provides for any matter to be determined
     by reference to the opinion of, or to be subject to the consent or request
     of, the Majority Banks or for any action to be taken on the instructions of
     the Majority Banks, such opinion, consent, request or instructions shall
     (as between the Banks) only be regarded as having been validly given or
     issued by the Majority Banks if all the Banks shall have received prior
     notice of the matter on which such opinion, consent, request or
     instructions are required to be obtained and the relevant majority of Banks
     shall have given or issued such opinion, consent, request or instructions,
     but so that (as between the Obligors and the Finance Parties) the Obligors
     shall each be entitled (and bound) to assume that such notice shall have
     been duly received by each Bank and that the relevant majority shall have
     been obtained to constitute Majority Banks when notified to this effect by
     the Facility Agent whether or not this is the case.

24.2 NOTICE TO MAJORITY BANKS

     If, within 10 Banking Days of the Facility Agent despatching to each Bank a
     notice requesting instructions (or confirmation of instructions) from the
     Banks or the agreement of the Banks to any amendment, modification, waiver,
     variation or excuse of performance for the purposes of, or in relation to,
     any of the Finance Documents, the Facility Agent has not received a reply
     specifically giving or confirming or refusing to give or confirm the
     relevant instructions or, as the case may be, approving or refusing to
     approve the proposed amendment, modification, waiver, variation or excuse
     of performance, then (subject to clause 23.4 (Late responses)) the Facility
     Agent shall treat any Bank which has not so responded as having indicated a
     desire to be bound by the wishes of 66 2/3 per cent. of those Banks
     (measured in terms of the relevant Contributions or, if none, the relevant
     Commitments of those Banks) which have so responded. Any Bank which
     notifies the Facility Agent of a wish or intention to abstain on any
     particular issue shall be treated as if it had not responded.

24.3 MEANING OF ALL BANKS

     (a)  Where this Agreement or any other Finance Document provides for any
          matter to be determined by reference to the opinion of, or to be
          subject to the consent of or request of, all of the Banks or the Banks
          acting unanimously or for any action to be taken on the instruction of
          all the Banks, such opinion, consent, request or instructions shall
          (as between the Banks) only be regarded as having been validly given
          or issued by all the Banks (or the Banks acting unanimously) if all
          the Banks shall have received prior notice (the "FACILITY AGENT'S
          NOTICE") of such matter containing a request for written instructions
          from such Bank to be received by the Facility Agent within ten Banking
          Days of the receipt (or the deemed receipt pursuant to clause 25.1 (b)
          (Address for Notice)) of the Facility Agent's Notice. Before the
          expiry of such deadline, the Facility Agent will use reasonable
          endeavours to contact any Bank which has not responded to the Facility
          Agent's Notice in order to obtain a response from such Bank.

     (b)  If, in respect of a Bank, the Facility Agent:

          (i)  shall not have received written instructions in respect of such
               matter from such Bank; and


                                      109
<PAGE>


          (ii) the Facility Agent shall have received written instructions in
               respect of such matter from at least five other Banks,

          in each case within such time period (and subject to clause 23.4 (Late
          responses)), such Bank shall be deemed to have irrevocably renounced
          and waived its right to make any such determination, approval, consent
          or provide instructions to the Facility Agent in respect of such
          matter; shall not have any rights, recourse or remedy against the
          Facility Agent in respect of such matter; and shall be bound (as shall
          each of the Obligors) by the determination, approval, consent or
          instructions of the other Banks in respect of such matter. This clause
          23.3(b) shall not apply in so far as it would create any obligation on
          a Bank to provide an increased Commitment without such Bank having
          expressed such increased Commitment in writing.

     (c)  Clauses 23.1 (Meaning of Majority Banks) and 23.2 (Notice to Majority
          Banks) shall not apply in relation to those matters which are to be
          decided by all the Banks.

24.4 LATE RESPONSES

     In any case where a Bank fails to respond within the time limit set down
     under clauses 23.2 (Notice to Majority Banks) or 23.3 (Meaning of All
     Banks), such Bank's response, if it responds before any determination or
     instruction is acted upon or communicated to any Obligor, will be taken
     into account as if it had been received within the time limit Provided that
     the Facility Agent has received actual notice of such response before any
     such action or communication.

24.5 COSTS

     If any Obligor requests, or if the Facility Agent requires in accordance
     with any provision of this Agreement, any amendment, supplement,
     modification or waiver under clause 22.1 (Majority Bank matters: amendments
     and waivers) or clauses 22.4 (All Bank matters: amendments and waivers) or
     22.5 (New Obligors), then the Obligors shall, on demand by the Facility
     Agent, reimburse the Facility Agent for all costs and expenses (including
     legal fees), together with any VAT on them, incurred by the Facility Agent
     in the negotiation, preparation and execution of any written instrument
     contemplated by clause 22.1 (Majority Bank matters: amendments and waivers)
     or clauses 22.4 (All Bank matters: amendments and waivers) or 22.5 (New
     Obligors).

24.6 NO PARTNERSHIP

     This Agreement shall not and shall not be construed so as to constitute a
     partnership between the parties or any of them.

24.7 CHANGE OF REFERENCE BANKS

     If:

     (a)  the whole of the Contributions (if any) of any Reference Bank are
          prepaid;

     (b)  the Commitments (if any) of any Reference Bank are reduced to zero
          prior to the end of the Finance Period;

     (c)  a Reference Bank novates the whole of its rights and obligations (if
          any) as a Bank under this Agreement; or


                                      110
<PAGE>


     (d)  a Reference Bank ceases to provide quotations to the Facility Agent
          upon request for the purposes of determining LIBOR (where such
          quotations are required having regard to the definition of "LIBOR" in
          clause 1.2 (Definitions))

     the Facility Agent may, acting on the instructions of the Majority Banks,
     terminate the appointment of such Reference Bank and after consultation
     with the Primary Borrower appoint another Bank to replace such Reference
     Bank.

25.  MATTERS CONCERNING THE OBLIGORS

25.1 ADDITIONAL OBLIGORS

     The Primary Borrower may, at any time during the term of this Agreement
     (unless a Default shall have occurred and be continuing), notify the
     Facility Agent that a member of the Group is to be designated as an
     Additional Guarantor. Such notice shall be in writing and signed by the
     Primary Borrower and the relevant member of the Group, respectively, and
     shall take effect in accordance with its terms on the condition that such
     member of the Group shall have entered into

     (a)  an Accession Certificate with the Facility Agent which, subject to (b)
          below, the Facility Agent shall execute on behalf of all the parties
          to this Agreement (and all such parties so authorise the Facility
          Agent without any further consent of, or consultation with, such
          party); and

     (b)  such member of the Group, respectively, before entering into such an
          Accession Certificate, shall have fulfilled all appropriate conditions
          precedent, as notified to the Primary Borrower by the Facility Agent,
          to the satisfaction of the Facility Agent including the delivery to
          the Facility Agent of the documents and evidence referred to in
          Schedule 3 (Conditions Precedent) in form and substance satisfactory
          to the Facility Agent.

     Upon satisfaction of such conditions such member of the Group shall become
     a party to this Agreement in the capacity of an Additional Guarantor and
     shall assume all the obligations and rights of such an Additional Guarantor
     under this Agreement.

25.2 PRIMARY BORROWER AS OBLIGORS' AGENT

     Each Obligor by its execution of this Agreement or an Accession
     Certificate, as the case may be, irrevocably appoints and authorises the
     Primary Borrower:

     (a)  as agent (the "OBLIGOR'S AGENT") for such Obligor to receive all
          notices, requests, demands or other communications under this
          Agreement which shall, without prejudice to any other effective mode
          of serving the same, be properly served on the Obligor concerned if
          served on the Primary Borrower in accordance with clause 25.1 (Address
          for Notice); and

     (b)  to give all notices (including any Drawdown Notices) and instructions
          and make such agreements expressed to be capable of being given or
          made by such Obligor or Obligors in this Agreement (including an
          agreement for the continuance of any guarantee or security)
          notwithstanding that they may affect such Obligor without further


                                      111
<PAGE>


          reference to, or the consent of, such Obligor and such Obligor shall,
          as regards the Finance Parties, be bound thereby as though such
          Obligor itself had given such notice or instructions or made such
          agreement.

25.3 OBLIGATIONS UNCONDITIONAL

     The obligations of each Obligor under this Agreement and the Finance
     Documents are unconditional and irrevocable (subject to the express
     provisions of this Agreement or any Finance Document) and shall not be in
     any way affected or discharged by reason of any matter affecting the
     Acquisition. Each Obligor acknowledges that any approval or authorisation
     given under this Agreement or a Finance Document by a Finance Party in
     relation to the Acquisition shall not constitute any representation or
     warranty by such (or any) Finance Party as to the adequacy or effectiveness
     of such Acquisition, the purchase consideration payable by Bidco, the
     commercial advisability of any Obligor or Bidco entering into the
     arrangements contemplated thereby or otherwise.

25.4 OBLIGATIONS SEVERAL

     The obligations of each Obligor under this Agreement and the Finance
     Documents are several (unless otherwise stated) and the failure of any
     Obligor to perform such obligations shall not release any other Obligor of
     its obligations under this Agreement.

26.  NOTICES AND OTHER MATTERS

26.1 ADDRESS FOR NOTICE

     Every notice, request, demand or other communication under this Agreement
     shall:

     (a)  be in writing delivered personally or by first-class prepaid letter
          (airmail if available) or telefax;

     (b)  be deemed to have been received, subject as otherwise provided in this
          Agreement, in the case of a letter, when delivered personally or 2
          days after it has been put into the post and, in the case of a
          telefax, when a complete and legible copy is received by the addressee
          (unless the time of despatch of any telefax is after close of business
          in which case it shall be deemed to have been received at the opening
          of business on the next Banking Day); and

     (c)  be sent:

          (i)  to the Primary Borrower (for itself and any other Obligors) at:

               TXU Europe Limited
               Wherstead Park
               Wherstead
               Ipswich
               Suffolk

               Telefax:            + 44 1473 555002
               Attention:    Group Finance Director

               with a copy for information only to:


                                      112
<PAGE>


               Texas Utilities Company
               Energy Plaza
               1601 Bryan Street
               Dallas
               Texas

               Telefax:                214 812 2488
               Attention:                 Treasurer

          (ii) to the Facility Agent at:

               Chase Manhattan International Ltd
               Trinity Tower
               9 Thomas More Street
               London E1 9YT

               Telefax:           + 44 207 777 2360
               Attention:            Stephen Clarke

          (iii) to the Issuing Bank at:

               Chase Manhattan International Ltd
               Trinity Tower
               9 Thomas More Street
               London E1 9YT

               Telefax:           + 44 207 777 2360
               Attention:            Stephen Clarke

          (iv) to each Bank at its address or telefax number specified in
               Schedule 1 (The Banks and their Commitments) or in, or pursuant
               to, any relevant Substitution Certificate

          (v)  to the Arrangers:

               Chase Manhattan plc
               125 London Wall
               London EC2Y 5AJ

               Telefax:           + 44 207 777 3840
               Attention:          Kristian Orssten

               Lehman Brothers International (Europe)
               One Broadgate
               London EC2M 7HA

               Telefax:           + 44 207 256 4018
               Attention:           Julian Entwisle

               Merrill Lynch Capital Corporation
               c/o Merrill Lynch & Co
               World Financial Center
               North Tower
               250 Vesey Street
               New York
               NY 10281


                                      113
<PAGE>


               Telefax:            001 212 738 1649
               Attention:            Pete Wersching

          or to such other address or telefax number as is notified by the
          Primary Borrower, or a Finance Party, as the case may be, to the other
          parties to this Agreement.

26.2 NOTICE TO FACILITY AGENT

     Every notice, request, demand or other communication under this Agreement
     to be given by an Obligor shall be given by the Primary Borrower and by the
     Primary Borrower to any other party shall be given to the Facility Agent
     for onward transmission as appropriate and to be given to an Obligor shall
     (except as otherwise provided in this Agreement) be given by the Facility
     Agent to the Primary Borrower.

26.3 NO IMPLIED WAIVER, REMEDIES CUMULATIVE

     No failure or delay on the part of the Finance Parties or any of them to
     exercise any power, right or remedy under this Agreement or any Finance
     Document shall operate as a waiver thereof, nor shall any single or partial
     exercise by the Finance Parties or any of them of any power, right or
     remedy preclude any other or further exercise thereof or the exercise of
     any other power, right or remedy. The remedies provided in this Agreement
     and each of the Finance Documents are cumulative and are not exclusive of
     any remedies provided by law.

26.4 ENGLISH TRANSLATIONS

     All certificates, instruments and other documents to be delivered under or
     supplied in connection with this Agreement shall be in the English language
     or shall be accompanied by a certified English translation upon which the
     Finance Parties shall be entitled to rely.

26.5 COUNTERPARTS

     This Agreement may be executed in any number of counterparts and by the
     different parties on separate counterparts, each of which when so executed
     and delivered shall be an original, but all counterparts shall together
     constitute one and the same instrument.

26.6 SEVERANCE

     If any provision of this Agreement is held to be illegal, invalid or
     unenforceable in whole or in part this Agreement shall continue to be valid
     as to its other provisions and the remainder of the affected provision.

26.7 THIRD PARTY RIGHTS

(a)  Except as otherwise expressly provided in a Finance Document, the terms of
     a Finance Document may be enforced only by a party to it and the operation
     of the Contracts (Rights of Third Parties) Act 1999 is excluded.

(b)  Notwithstanding any provision of any Finance Document, the parties to a
     Finance Document do not require the consent of any third party to rescind
     or vary any Finance Document at any time.


                                      114
<PAGE>


27.  GOVERNING LAW AND JURSIDICTION

27.1 LAW

     This Agreement shall be governed by English law.

27.2 SUBMISSION TO JURISDICTION

     The parties to this Agreement agree for the benefit of the Finance Parties
     that:

     (a)  if any party has any claim against any other arising out of or in
          connection with this Agreement, such claim shall (subject to clause
          26.2(c)) be referred to the High Court of Justice in England, to the
          jurisdiction of which each of the parties irrevocably submits;

     (b)  the jurisdiction of the High Court of Justice in England over any such
          claim against any Finance Party shall be a non-exclusive jurisdiction;
          and

     (c)  nothing in this clause 26.2 shall limit the right of any Finance Party
          to refer any such claim against any Obligor to any other court of
          competent jurisdiction outside England, to the jurisdiction of which
          any Obligor hereby irrevocably agrees to submit, nor shall the taking
          of proceedings by any Finance Party before the courts in one or more
          jurisdictions preclude the taking of proceedings in any other
          jurisdiction whether concurrently or not.

IN WITNESS whereof the parties to this Agreement have cause this Agreement to be
duly executed on the date first above written.


                                      115
<PAGE>


                                   SCHEDULE 1

                         THE BANKS AND THEIR COMMITMENTS

<TABLE>
<CAPTION>
                                                                  COMMITMENTS

BANK                                                   TERM FACILITY       REVOLVING CREDIT
                                                                               FACILITY

                                                          (POUND)               (POUND)

<S>                                                     <C>                  <C>
Deutsche Bank AG London                                 33,581,420.61        14,551,948.93

Abbey National Treasury Services plc                    28,210,186.47        12,224,414.14

Bayerische   Landesbank   Girozentrale,   London        24,757,891.18        10,728,419.51
Branch

Bank of America, N.A.                                   24,757,891.18        10,728,419.51

Commerzbank Aktiengesellschaft, London Branch           24,757,891.18        10,728,419.51

Credit Suisse First Boston                              24,757,891.18        10,728,419.51

Den Danske Bank Aktieselskab                            24,757,891.18        10,728,419.51

First Union National Bank, London Branch                24,757,891.18        10,728,419.51

ING Bank N.V., London Branch                            24,757,891.18        10,728,419.51

KBC Bank N.V., London Branch                            24,757,891.18        10,728,419.51

National Australia Bank Limited (ACN 004044937)         24,757,891.18        10,728,419.51

The Royal Bank of Scotland plc                          24,757,891.18        10,728,419.51

The Toronto-Dominion Bank                               24,757,891.18        10,728,419.51

Westdeutsche Landesbank Girozentrale                    24,757,891.18        10,728,419.51

CIBC World Markets plc                                  21,816,714.73         9,453,909.72

Credit Lyonnais                                         21,816,714.71         9,453,909.71

Bayerische  Hypo-  und  Vereinsbank  AG,  London        18,875,538.24         8,179,399.90
Branch

The Bank of New York                                    18,005,738.24         7,802,486.57

The Dai-ichi Kangyo Bank, Limited                       18,005,738.24         7,802,486.57

The Sanwa Bank, Limited                                 18,005,738.24         7,802,486.57
</TABLE>


                                      116
<PAGE>


<TABLE>
<CAPTION>
                                                                  COMMITMENTS

BANK                                                   TERM FACILITY       REVOLVING CREDIT
                                                                               FACILITY

                                                          (POUND)               (POUND)

<S>                                                     <C>                  <C>
Mellon Bank N.A.                                        18,005,738.24         7,802,486.57

Barclays Bank PLC                                       17,781,146.99         7,705,163.70

Citibank, N.A.                                          17,781,146.89         7,705,163.65

The Chase Manhattan Bank                                15,934,362.12         6,904,890.26

Societe Generale, London Branch                         15,934,361.76         6,904,890.10

National Westminster Bank Plc                           13,504,304.12         5,851,865.12

UBS AG, London Branch                                   13,504,304.12         5,851,865.12

Christiania Bank og Kreditkasse ASA                     11,764,705.88         5,098,039.21

Merrill Lynch Capital Corporation                        8,875,537.81         8,179,399.72

ABN AMRO Bank N.V.                                       8,005,738.24         7,802,486.57

Landesbank Schleswig-Holstein Girozentrale               8,172,525.30         5,708,094.30

ABC International Bank plc                               9,002,869.41         3,901,243.41

The Bank of Nova Scotia                                  9,002,869.41         3,901,243.41

BNP Paribas                                              9,002,869.41         3,901,243.41

The Bank of Tokyo-Mitsubishi, Ltd.                       9,002,869.41         3,901,243.41

Banca  Monte  dei  Paschi di Siena  SpA,  London         9,002,869.41         3,901,243.41
Branch

HSBC Bank plc                                            8,823,529.40         3,823,529.41

Landesbank Rheinland-Pfalz Girozentrale                  6,976,744.29         3,023,255.86

Tokai Bank Limited                                       6,976,744.19         3,023,255.81

Chang Hwa Commercial Bank, Ltd., London Branch          10,000,000.00                    -

National Bank of Kuwait (International) PLC             10,000,000.00                    -

Banca Nazionale del Lavoro S.p.A., London Branch         5,882,352.94         2,549,019.61

Calsse  Centrale  de  Caisses  d'Epargne  et  de         5,882,352.94         2,549,019.61
Prevoyance (CCCEP)

Arab Bank plc                                            4,501,434.12         1,950,621.45
</TABLE>


                                      117
<PAGE>


<TABLE>
<CAPTION>
                                                                  COMMITMENTS

BANK                                                   TERM FACILITY       REVOLVING CREDIT
                                                                               FACILITY

                                                          (POUND)               (POUND)

<S>                                                     <C>                  <C>
AIB International Finance                                4,501,434.12         1,950,621.45

Banco Comercial Portugues SA, London Branch              5,000,000.00                    -

Artesia Ireland                                          2,941,176.45         1,274,509.80

Banco de Sabadell S.A.                                   2,941,176.47         1,274,509.80

Bankhaus Lobbecke & Co.                                  2,941,176.47         1,274,509.80

United Mizrahi Bank Ltd                                  2,941,176.45         1,274,509.80


TOTAL                                           (POUND)750,000,000.00(POUND)325,000,000.00
</TABLE>


                                      118
<PAGE>


                                   SCHEDULE 2

                            FORMS OF DRAWDOWN NOTICE

                                     PART A

                            REVOLVING CREDIT FACILITY

To:   [NAME AND ADDRESS OF FACILITY AGENT]

                                                                          [DATE]

Attention:  o

   (POUND)1,075,000,000 FACILITIES AGREEMENT DATED 24 MARCH 1999 (AS AMENDED)

1.   We refer to the above Agreement and hereby give you notice that we wish to
     draw a Revolving Credit Advance:

(b)  on o 20o;

(c)  in the sum of(pound)o [or currencyo];

(d)  with a Maturity Period in respect thereof of o months; and

(e)  the proceeds of such fund to be credited to [NAME AND NUMBER OF ACCOUNT]
     with [DETAILS OF BANK IN LONDON].

2.   We confirm that each condition specified in clause 3 (The Conditions) is
     satisfied on the date of this Drawdown Notice.

3.   Words and expressions defined in the Agreement shall have the same meanings
     where used herein.

                              For and on behalf of

                               TXU Europe Limited

                          ............................

                                    Director


                                      119
<PAGE>


                                     PART B

                                LETTERS OF CREDIT

To:   [Name and address of Facility Agent]

                                                                          [DATE]

Attention: o

   (POUND)1,075,000,000 FACILITIES AGREEMENT DATED 24 MARCH 1999 (AS AMENDED)

1.   We refer to the above Agreement and hereby give you notice that [NAME OF
     BORROWER] requests the Issue of a Letter of Credit as follows under the
     Revolving Credit Facility:

(f)  Drawdown Date: [o]

(g)  Expiry Date: [o]

(h)  Currency: [o]

(i)  Beneficiary; [o]

(j)  Amount: [o]

(k)  Purpose: [o]

(l)  Issue instructions: [o]

(m)  Documents required to be presented: [o]

2.   We confirm that:

     (a)  no event or circumstance has occurred and is continuing which
          constitutes a Default that has not been waived; and

     (b)  the applicable representations and warranties contained in clause 9
          (Representations and Warranties) of the Agreement are true and correct
          at the date hereof as if made with respect to the facts and
          circumstances existing at such date.

3.   Words and expressions defined in the Agreement shall have the same meanings
     where used herein.

                              For and on behalf of

                               TXU Europe Limited

                          ............................

                                    Director


                                      120
<PAGE>


                                   SCHEDULE 3

         DOCUMENTS AND EVIDENCE REQUIRED AS CONDITIONS PRECEDENT TO THE

                            ACCESSION OF GUARANTORS

1.   A certified copy of the certificate of incorporation and the memorandum and
     articles of association of the Guarantor.

2.   A certified copy of the resolutions of the board of directors of the
     Guarantor evidencing approval of this Agreement and the Finance Documents
     (to which that company is a party) and authorising its appropriate duly
     authorised officers to execute and deliver this Agreement and those Finance
     Documents and to give all notices and take all other action required by the
     relevant company under this Agreement and those Finance Documents.

3.   Specimen signatures, authenticated by the company secretary or a director
     of the Guarantor, of the persons authorised in the resolutions of the board
     of directors referred to in paragraph 2 above.

4.   The Accession Certificate duly executed by the Guarantor.

5.   A certificate of a director of the Guarantor certifying that the
     guaranteeing of the liabilities guaranteed by it would not cause any
     borrowing limit binding on the Guarantor to be exceeded.

6.   A legal opinion of the legal advisers to the Finance Parties in the
     jurisdiction in which the Guarantor is incorporated.


                                      121
<PAGE>


                                   SCHEDULE 4

                       CALCULATION OF MANDATORY COST RATE

The Mandatory Cost Rate is an addition to the interest rate on a sum to
compensate the Banks for the cost resulting from the imposition from time to
time under the Bank of England Act 1998 and/or by the Bank of England and/or the
Financial Services Authority (the "FSA") (or other United Kingdom governmental
authorities or agencies) of a requirement to place non-interest-bearing cash
ratio deposits or Special Deposits (whether interest bearing or not) with the
Bank of England and/or pay fees to the FSA calculated by reference to
liabilities used to fund the sum.

The Mandatory Cost Rate will be the rate determined by the Facility Agent to be
the arithmetic mean (rounded upward, if necessary, to four decimal places) of
the rates notified by each Reference Bank to the Facility Agent as the rate
resulting from the application of the formula:

        for sterling sums:         XL + S (L - D)+Fx0.01
                                   ---------------------
                                        100-(X + S)

        for other sums:  Fx0.01
                         ------
                           300

where on the day of application:

X    is the percentage of Eligible Liabilities (in excess of any stated minimum)
     by reference to which such Reference Bank is required under the Bank of
     England Act 1998 to maintain cash ratio deposits with the Bank of England;

L    is the BBA sterling LIBOR rate quoted at or about 11.00 a.m. (London time)
     on Telerate (now at page 3750) on that day;

F    is the rate payable by such Reference Bank to the FSA under the Fees
     Regulations, expressed in pounds per(pound)1 million of such Reference
     Bank's fee base;

S    is the level of interest-bearing Special Deposits, expressed as a
     percentage of Eligible Liabilities, which such Reference Bank is required
     to maintain by the Bank of England (or other United Kingdom governmental
     authorities or agencies); and

D    is the percentage rate per annum payable by the Bank of England to such
     Reference Bank on Special Deposits.

(X, L, S and D are to be expressed in the formula as numbers and not as
percentages. A negative result obtained from subtracting D from L shall be
counted as zero.)

If any Reference Bank fails to notify any such rate to the Facility Agent, the
Mandatory Cost Rate shall be determined on the basis of the rate(s) notified to
the Facility Agent by the remaining Reference Bank(s).

The Mandatory Cost Rate attributable to a sum for any period shall be calculated
at or about 11.00 a.m. (London time) on the first day of such period for the
duration of such period.

The determination of the Mandatory Cost Rate for any period shall, in the
absence of manifest error, be conclusive and binding on the parties hereto. If
the Facility Agent determines that a change in circumstances has rendered, or
will render, the formula inappropriate, the Facility Agent (after consultation


                                      122
<PAGE>


with the Banks and the Primary Borrower) shall notify the Primary Borrower of
the manner in which the Mandatory Cost Rate will subsequently be calculated.

For the purposes of this Schedule:

     The terms "ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" have the meanings
     given to them under the Bank of England Act 1998 or by the Bank of England
     (as appropriate) on the date of the application of the formula.

     "FEE BASE" has the meaning given to it in the Fees Regulations.

     "FEES REGULATIONS" means, as appropriate, either:

     (a)  the Banking Supervision (Fees) Regulations 2000; and/or

     (b)  such regulations as may be in force from time to time relating to the
          payment of fees for banking supervision.


                                      123
<PAGE>


                                   SCHEDULE 5

                        FORM OF SUBSTITUTION CERTIFICATE

             (REFERRED TO IN CLAUSE 16.5 (SUBSTITUTION CERTIFICATE))

NB   1.   Banks are advised not to employ Substitution Certificates or
          otherwise to assign, novate or transfer interests in the Agreement
          without first ensuring that the transaction complies with all
          applicable laws and regulations, including the Financial Services Act
          1986 and regulations made thereunder.

     2.   It is expected that Banks will enter into separate arrangements
          dealing with the monies to be paid to the Existing Bank by the
          Substitute in consideration of the novation (e.g. principal, accrued
          interest, fees and any mismatched funding adjustment). Unless the
          Effective Date is a rollover date, mismatches of parties' funding may
          arise. This Certificate does not deal with these issues, nor does it
          deal with any interim risk participation the Existing Bank may grant
          to the substitute pending the Effective Date.

To:       [NAME OF FACILITY AGENT] on its own behalf, as Facility Agent and on
          behalf of each other party to the Agreement mentioned below.

Attention:     o

                                                                          [DATE]

                            SUBSTITUTION CERTIFICATE

This Substitution Certificate relates to a (pound)1,075,000,000 Facilities
Agreement (the "AGREEMENT") dated 24 March 1999 as amended and restated at o
2000 between TXU Europe Limited as the Primary Borrower (1) Chase Manhattan plc,
Lehman Brothers International (Europe), Merrill Lynch Capital Corporation as
Arrangers (2), various banks and financial institutions as Banks (3) The Chase
Manhattan Bank as Issuing Bank (4) and Chase Manhattan International Limited as
Facility Agent (5) (as amended). Terms defined in the Agreement shall have the
same meaning in this Substitution Certificate.

1.   [o Existing Bank o] (the "EXISTING BANK") (a) confirms the accuracy of the
     summary of its participation in the Agreement set out in the schedule
     below; and (b) requests [o Substitute Bank o] (the "SUBSTITUTE") to accept
     by way of novation the portion of such participation specified in the
     schedule to this Substitution Certificate by counter-signing and delivering
     this Substitution Certificate to the Facility Agent at its address for the
     service of notices specified in the Agreement.

2.   The Substitute hereby requests the Facility Agent (on behalf of itself, the
     other Finance Parties, the Obligors and all other parties to the Agreement)
     to accept this Substitution Certificate as being delivered to the Facility
     Agent pursuant to and for the purposes of clause 16.5 (Substitution
     Certificate) of the Agreement so as to take effect in accordance with the
     terms of such clause 16.5 (Substitution Certificate) on [o date of transfer
     o] (the "EFFECTIVE DATE") or on such later date as may be determined in
     accordance with the terms of the Agreement.

3.   The Facility Agent (on behalf of itself, the other Finance Parties, the
     Obligors and all other parties to the Agreement) confirms the novation
     effected by this Substitution Certificate pursuant to and for the purposes


                                      124
<PAGE>


     of clause 16.5 (Substitution Certificate) of the Agreement so as to take
     effect in accordance with the terms of such clause 16.5 (Substitution
     Certificate).

4.   The Substitute confirms:

     (a)  that it has received a copy of the Agreement and each of the Finance
          Documents and all other documentation and information required by it
          in connection with the transactions contemplated by this Substitution
          Certificate;

     (b)  that it has not relied upon any statement, opinion, forecast or other
          representation or warranty made by the Existing Bank or any other
          party to induce it to enter into this Substitution Certificate;

     (c)  that it has made and will continue to make, without reliance on the
          Existing Bank or any other Finance Party, and based on such documents
          as it considers appropriate, its own appraisal of the creditworthiness
          of any Obligor and the Group and its own independent investigation of
          the financial condition, prospects and affairs of any Obligor and the
          Group in connection with the making and continuation of the Facilities
          under the Agreement and the other Finance Documents;

     (d)  that neither the Existing Bank nor any other Finance Party shall at
          any time be deemed to have had or have a duty or responsibility,
          either historically, initially or on a continuing basis, to provide
          the Substitute with any credit or other information with respect to
          any Obligor or any other member of the Group whether coming into its
          possession before the making of any Advance or at any time or times
          thereafter, other than (in the case of the Facility Agent) as provided
          in clause 19.1 (Specific duties of the Facility Agent) of the
          Agreement;

     (e)  that it has made and will continue to make its own assessment of the
          legality, validity, enforceability and sufficiency of the Agreement,
          any other Finance Document and this Substitution Certificate and has
          not relied and will not rely on the Existing Bank or any other Finance
          Party or any statements made by any of them in that respect;

     (f)  that, accordingly, none of the Existing Bank nor any other Finance
          Party makes any representations or warranties in respect of, or shall
          have any liability or responsibility to the Substitute in respect of,
          any of the foregoing matters or any other matter referred to in clause
          20 (Exoneration) of the Agreement;

     (g)  that it is a Qualifying Bank; and

     (h)  that it has signed an appropriate confidentiality undertaking issued
          by the Existing Bank.

5.   The Substitute hereby undertakes to the Existing Bank, the Finance Parties,
     the Obligors and each of the other parties to the Agreement that it will
     perform in accordance with its terms all those obligations which by the
     terms of the Agreement will be assumed by it after counter-signature of
     this Substitution Certificate by the Facility Agent.

6.   The Substitute irrevocably and unconditionally guarantees to and
     indemnifies the Issuing Bank as required under clause 4.7 (Banks' Guarantee
     and Indemnity).

7.   Without limiting the above paragraphs, nothing in this Substitution
     Certificate obliges the Existing Bank to:

     (a)  accept any re-transfer from the Substitute of any of the rights,
          benefits and/or obligations hereby transferred; or


                                      125
<PAGE>


     (b)  support any losses incurred by the Substitute by reason of any
          non-performance by the Obligors or any other party to the Agreement or
          any of the Finance Documents or any document relating thereto of any
          of its obligations under the same.

8.    This Substitution Certificate and the rights and obligations of the
      parties hereunder shall be governed by and construed in accordance with
      English law.

NOTE:     This Substitution Certificate is not a security, bond, note,
          debenture, investment or similar instrument.

AS WITNESS the hands of the authorised signatories of the parties to this
Substitution Certificate on the date appearing below.

                                  THE SCHEDULE

<TABLE>
<CAPTION>
<S>                           <C>                                <C>
TERM FACILITY

Commitment ((pound))                                             Portion Transferred ((pound))

      [o]                                                                     [o]

Contribution ((pound))        Next Interest Payment Date         Portion Transferred ((pound))

      [o]                               [o]                                   [o]


REVOLVING CREDIT FACILITY

Commitment ((pound))                                             Portion Transferred ((pound))

      [o]                                                                     [o]

Contribution ((pound))        Next Maturity Date(s)              Portion Transferred ((pound))

      [o]                               [o]                                   [o]

Transferor's share of                                            Portion of Letters of Credit
Outstanding Letters of Credit                                    Transferred

      [o]                                                                     [o]
</TABLE>

                      ADMINISTRATIVE DETAILS OF SUBSTITUTE


Lending Office:

Account for payments:

Telephone:

Telefax:

Attention:


                                      126
<PAGE>


[EXISTING BANK]                                    [SUBSTITUTE]

By:..................                                 By:..................

Date:                                              Date:




THE FACILITY AGENT

By:..................

Date:


on its own behalf and on behalf of
all other parties to the Agreement (other than the Existing Bank).


                                      127
<PAGE>


                                   SCHEDULE 6

                          FORM OF ACCESSION CERTIFICATE

To: [NAME OF FACILITY AGENT] on its own behalf as Facility Agent and on behalf
of each other party to the Agreement.

Attention:

                                                                          [Date]
                              ACCESSION CERTIFICATE

This Accession Certificate relates to a (pound)1,075,000,000 Facility Agreement
(the "AGREEMENT") dated 24 March 1999 as amended and restated at o 2000 between,
among others, the Primary Borrower (1), Chase Manhattan plc, Lehman Brothers
International (Europe), Merrill Lynch Capital Corporation as Arrangers (2),
various banks and financial institutions as Banks (3), The Chase Manhattan Bank
as Issuing Bank (4) and Chase Manhattan International Limited as Facility Agent
(5) (as amended). Terms defined in the Agreement shall have the same meaning in
this Accession Certificate.

1.   [o] (the "ACCEDING GUARANTOR") hereby requests the Facility Agent (on
     behalf of itself and all other parties to the Agreement) to accept this
     Accession Certificate as being delivered to the Facility Agent pursuant to
     and for the purposes of clause 24.1 (Additional Obligors) of the Agreement
     so as to take effect in accordance with the respective terms thereof on the
     date hereof.

2.   The Acceding Guarantor is, pursuant to this Accession Certificate, acceding
     to the Agreement as a Guarantor in respect of the Revolving Credit Facility
     and accordingly shall, subject to the terms of this Accession Certificate
     and the Agreement, become an Additional Guarantor under the Agreement. o

3.   The Facility Agent (on behalf of itself and all other parties to the
     Agreement) confirms the novation effected by this Accession Certificate
     pursuant to and for the purposes of clause 24.1 (Additional Obligors) of
     the Agreement so as to take effect in accordance with the terms thereof.

4.   The Acceding Guarantor hereby undertakes to the Facility Agent (on behalf
     of itself and the other Finance Parties) that it will perform in accordance
     with their terms all those obligations which by the terms of the Agreement
     will be assumed by it as a Guarantor after acceptance of this Accession
     Certificate by the Facility Agent.

5.   This Accession Certificate is intended to take effect as a Deed
     notwithstanding that the Facility Agent may execute it under hand only.

6.   This Accession Certificate and the rights and obligations of the parties
     hereunder shall be governed by and construed in accordance with English
     law.

IN WITNESS whereof this Accession Certificate has been entered into as a Deed on
the date above.

                      NOTICE DETAILS OF ACCEDING GUARANTOR

Address:


                                      128
<PAGE>


Telephone:

Telefax:

Attention:


THE ACCEDING GUARANTOR

[Execution particulars - Acceding Guarantor to execute as a Deed]




THE FACILITY AGENT

By:

o

on its own behalf and on behalf of
all the other parties to the Facility Agreement.


                                      129
<PAGE>


                                   SCHEDULE 7

                          TERMS OF BORROWER'S INDEMNITY

1.   The relevant Borrower unconditionally and irrevocably undertakes to the
     Issuing Bank as follows:

     (a)  the relevant Borrower will at all times on demand indemnify the
          Issuing Bank against all actions, suits, proceedings, claims, demands,
          liabilities, damages, costs, expenses, losses and charges whatsoever
          (except those arising from the gross negligence or wilful misconduct
          of the Issuing Bank) in relation to or arising out of the Issue of any
          Letter of Credit and the relevant Borrower will pay to the Facility
          Agent for the account of the Issuing Bank in immediately available
          funds and in the currency in which the relevant Letter of Credit is
          denominated the amount of all payments made (whether directly or by
          way of set-off, counterclaim or otherwise howsoever) and all losses,
          costs or expenses suffered or incurred from time to time by the
          Issuing Bank, arising under any liability which the Issuing Bank has
          incurred under the Issue of any Letter of Credit and any of the
          indemnities relating thereto;

     (b)  the liability of the relevant Borrower under this indemnity shall not
          be affected by any time being given or by anything being done by the
          Issuing Bank unless the same constitutes the gross negligence or
          wilful misconduct of the Issuing Bank.

2.   The relevant Borrower specifically releases and indemnifies the Issuing
     Bank against the consequences of:

     (a)  the failure of the Issuing Bank or any other person to receive any
          telex or telephone message in a form in which it was despatched; and

     (b)  any delay that may occur during the course of the transmission of any
          such message save in respect of any failure arising from the gross
          negligence or wilful misconduct of the Issuing Bank.

3.

     (a)  The obligations of any Borrower under this Agreement and any
          L/C-Related Document to reimburse the Issuing Bank for a drawing under
          a Letter of Credit and to repay any drawing under a Letter of Credit
          which is converted into Advances, shall be unconditional and
          irrevocable, and shall be paid strictly in accordance with the terms
          of this Agreement and each such other L/C-Related Document under all
          circumstances, including the following (save in the case of gross
          negligence or wilful default):

          (i)  any lack of validity or enforceability of this Agreement or any
               L/C-Related Document;

          (ii) any change in the time, manner or place of payment of, or in any
               other term of, all or any of the obligations of the relevant
               Borrower in respect of any Letter of Credit or any other
               amendment or waiver of or any consent to departure from all or
               any of the L/C-Related Documents;


                                      130
<PAGE>


          (iii) the existence of any claim, set-off, defence or other right that
               the relevant Borrower may have at any time against any
               beneficiary or any transferee of any Letter of Credit (or any
               person for whom any such beneficiary or any such transferee may
               be acting), the Issuing Bank or any other person, whether in
               connection with this Agreement, the transactions contemplated
               hereby or by the L/C-Related Documents or any unrelated
               transaction;

          (iv) (save where the Issuing Bank should decline to make payment under
               the terms of the Uniform Customs and Practice for Documentary
               Credits (1993) (ICC Publication No. 500 (the "UCPDC")) any draft,
               demand, certificate or other document presented under any Letter
               of Credit proving to be forged, fraudulent, invalid or
               insufficient in any respect or any statement therein being untrue
               or inaccurate in any respect; or any loss or delay in the
               transmission or otherwise of any document required in order to
               make a drawing under any Letter of Credit;

          (v)  any payment by the Issuing Bank under any Letter of Credit
               against presentation of a draft or certificate that does not
               strictly comply with the terms of any Letter of Credit; or any
               payment made by the Issuing Bank under any Letter of Credit to
               any person purporting to be a trustee in bankruptcy,
               debtor-in-possession, assignee for the benefit of creditors,
               liquidator, receiver or other representative of or successor to
               any beneficiary or transferee of any Letter of Credit, including
               any arising in connection with any voluntary or involuntary
               proceeding, process or arrangement under any law, regulation or
               procedure relating to insolvency in any jurisdiction including in
               relation to winding up, bankruptcy, administration,
               administrative receivership, receivership and management,
               receivership, judicial custodianship, judicial trusteeship or the
               appointment of a judicial conservator or other official or the
               reconstruction, rescheduling, readjustment, moratorium or
               suspension of payments of any Indebtedness;

          (vi) any exchange, release or non-perfection of any collateral, or any
               release or amendment or waiver of or consent to departure from
               any other guarantee, for all or any of the obligations of the
               relevant Borrower in respect of any Letter of Credit; or

          (vii) any other circumstance or happening whatsoever, whether or not
               similar to any of the foregoing, including any other circumstance
               that might otherwise constitute a defence available to, or a
               discharge of, the relevant Borrower.

     (b)  The obligations of the relevant Borrower under the Finance Documents
          shall not be affected in any way by reason of any time or other
          indulgence which may be granted:

          (i)  to the Issuing Bank by any beneficiary of any Letter of Credit;
               or

          (ii) by the Issuing Bank to any person from whom it may seek
               reimbursement in respect of sums paid out by it under any Letter
               of Credit or any other obligation pursuant thereto or pursuant to
               this Agreement, as the case may be.

4.   The Issuing Bank may, at any time, without affecting any security created
     by, pursuant to or in relation to this Agreement or the rights, powers and
     remedies conferred upon it by this Agreement, any such security or by law:


                                      131
<PAGE>


     (a)  offer or agree to or enter into agreement for the extension or
          variation of the Issue of any Letter of Credit (provided it does so in
          accordance with written instructions of the relevant Borrower); or

     (b)  offer or agree to give any time or other indulgence for any sums paid
          out by it under any Letter of Credit or any obligation pursuant to any
          Letter of Credit.

5.   Any rights conferred on the Issuing Bank by this Agreement and by each
     document executed in relation to this Agreement shall be in addition to and
     not in substitution for or derogation of any other rights which the Issuing
     Bank may at any time have to seek from any person reimbursement of or
     indemnification against payments made or liabilities incurred under any
     Letter of Credit, any obligation pursuant thereto or to this Agreement.

6.   Any satisfaction of obligations by the relevant Borrower or any other
     person to the Issuing Bank or any discharge given by the Issuing Bank to
     that Borrower or any other person in respect of obligations under this
     Agreement or any related agreement between the Issuing Bank and that
     Borrower or any other person shall be, and be deemed always to have been,
     void if any act satisfying any of such obligations or on the faith of which
     any such discharge was given or any such agreement was entered into is
     subsequently avoided by law (otherwise than as a result of any act or
     default by the Issuing Bank).

7.   Any Letter of Credit shall be considered to be outstanding until the later
     of:

     (a)  its Expiry Date, or a reasonable time after its Expiry Date to allow
          for the presentation of documents through an advising bank; and

     (b)  if, in the opinion of the Issuing Bank, its liability under the Letter
          of Credit does not expire on its stated Expiry Date or there is any
          doubt as to its Expiry Date, the date of return of the document
          evidencing the Issuing Bank's liability to the relevant beneficiary
          under any Letter of Credit.

8.   That Borrower confirms and agrees that:

     (a)  the Issuing Bank shall make any payment that appears to be duly
          requested or demanded in writing by any beneficiary under any Letter
          of Credit subject to its compliance (where applicable) with its
          obligations as Issuing Bank under the UCPDC regardless of whether or
          not the relevant Borrower shall be in any way in breach of any of its
          obligations under or by virtue of the transaction in connection with
          which the Letter of Credit was Issued and without making any further
          reference to the relevant Borrower or any investigation as to the bona
          fide nature, validity or genuineness of any such request or demand
          (unless, under applicable law, the Issuing Bank is under no obligation
          to make such payment), and

     (b)  the liability of such Borrower hereunder and the right and obligation
          of the Issuing Bank to make such payment shall be in no way diminished
          or prejudiced if it should appear that, as between the relevant
          Borrower and that beneficiary, that beneficiary was not entitled for
          whatever reason to demand payment under the Letter of Credit or that
          such demand was not valid or genuine (subject as mentioned in
          paragraph 8(a) above).


                                      132
<PAGE>


                                   SCHEDULE 8

                   TERMS OF INTERBANK GUARANTEE AND INDEMNITY

1.   Each Bank agrees to pay to the Facility Agent for the account of the
     Issuing Bank on demand made through the Facility Agent under clause 4.7
     (Banks' Guarantee and Indemnity) to such account as the Facility Agent may
     have specified for the purpose in immediately available funds and in the
     currency in which the relevant Letter of Credit is denominated, its
     Proportion of:

     (a)  any and every sum of money which such Borrower shall from time to time
          be liable to pay to the Issuing Bank in respect of that Letter of
          Credit in full without set-off or counterclaim on the later of the
          date that the Issuing Bank has itself to make payment under the Letter
          of Credit (as notified by the Facility Agent to such Bank in the
          demand) and two Banking Days after receipt by such Bank of such
          demand; and

     (b)  full cash cover for the Outstanding Contingent Liabilities under that
          Letter of Credit at any time after the Issuing Bank has become
          entitled to demand an indemnity through the Facility Agent in respect
          thereof from the relevant Borrower and which shall not have been paid
          at the time such demand is made.

2.   Where a Bank makes a payment pursuant to paragraph 1 after the date on
     which the Issuing Bank makes the relevant payment under the Letter of
     Credit in question, such Bank shall pay on demand to the Issuing Bank its
     Proportion (as calculated in clause 4.7 (Banks' Guarantee and Indemnity) of
     such amount as the Issuing Bank certifies as necessary to compensate it for
     funding the amount demanded in the interim.

3.   No assurance, security or payment avoided under any law relating to
     bankruptcy, liquidation, insolvency, reconstruction or reorganisation or
     any similar laws and no release, settlement, arrangement or discharge which
     may have been given or made on the basis of any such assurance, security or
     payment shall prejudice or affect the right of the Issuing Bank to recover
     from each of the Banks to the full extent of their obligations under clause
     4.7 (Banks' Guarantee and Indemnity).

4.   The obligations of each Bank under clause 4.7 (Banks' Guarantee and
     Indemnity) shall not be impaired, affected or revoked (except to the extent
     arising from the Facility Agent's gross negligence or wilful default) by
     any act, omission, matter, thing or circumstance whatsoever which but for
     this provision might operate to release or exonerate such Bank from all or
     any part of its obligations under clause 4.7 (Banks' Guarantee and
     Indemnity) or reduce, impair or affect such obligations or cause all or any
     part of such obligations to be irrecoverable from or unenforceable against
     any Obligor or to discharge, reduce, affect or impair any of such
     obligations, including without limitation:

     (a)  any time, waiver or indulgence granted to any person or the
          forbearance of the Issuing Bank in enforcing the obligations of any
          person under any Finance Document or in respect of any other
          guarantee, security, obligation, right or remedy;

     (b)  the recovery of any judgment against any person or any action to
          enforce the same;

     (c)  the taking of any other security from any person or the failure,
          refusal or neglect to take, perfect or enforce any rights, remedies or
          securities from or against any person or all or any part of the
          security constituted by any of the Finance Documents;

     (d)  any alteration in the constitution of any Obligor or any defect in or
          irregular exercise of the borrowing or other powers of any person or
          any legal limitation, disability, incapacity or other circumstance


                                      133
<PAGE>


          relating to any person or any legal limitation, disability, incapacity
          or other circumstance relating to any person whether arising in
          relation to any Finance Document or otherwise howsoever;

     (e)  subject to clause 22.4 (All Bank matters: amendments and waivers) and
          22.5 (New Obligors), any amendment or supplement to or variation of
          any L/C - Related Document or any other Finance Document;

     (f)  the insolvency, bankruptcy, liquidation, reconstruction or
          reorganisation of, or analogous proceedings relating to any person or
          any composition or arrangement made by any of them with the Issuing
          Bank, any Bank or any other person or any transfer or extinction of
          any liabilities of any Obligor by any law, order regulation, decree,
          court order or similar instrument;

     (g)  any irregularity, unenforceability or invalidity of any obligations of
          any person under any security or document (to the intent that such
          Bank's obligations under clause 4.7 (Bank's Guarantee and Indemnity)
          shall remain in full force as if there were no such irregularity,
          unenforceability or invalidity);

     (h)  the occurrence of an Event of Default;

     (i)  the existence of any claim, set-off defence or other right which any
          Obligor may have against any beneficiary of any Letter of Credit or
          any other person; or

     (j)  any draft, certificate or any other document presented under any
          Letter of Credit proving to be forged, fraudulent, invalid or
          insufficient in any respect or any statement therein being untrue or
          inaccurate in any respect.

5.   The Issuing Bank shall be entitled to enforce the obligations of each Bank
     under clause 4.7 (Banks' Guarantee and Indemnity) without making any demand
     on or taking any proceedings against or filing any proof of claim in any
     insolvency, winding up, dissolution or liquidation of any person or
     exhausting any right or remedy against any person or taking any action to
     enforce any part of the security constituted or evidenced by any of the
     Finance Documents.

6.   The obligations of each Bank under clause 4.7 (Banks' Guarantee and
     Indemnity) shall be continuing obligations and shall extend to the ultimate
     balance of the obligations referred to therein. If, for any reason, such
     obligations cease to be continuing obligations, the Issuing Bank may open a
     new account with or continue any existing account with any person and the
     liability of each Bank in respect of amounts guaranteed by it pursuant to
     clause 4.7 (Banks' Guarantee and Indemnity) at the date of such cessation
     shall remain regardless of any payments in or out of any such account.

7.   The Issuing Bank's rights under clause 4.7 (Banks' Guarantee and Indemnity)
     shall be in addition to and shall be in no way prejudiced by any other
     rights of or security held by the Issuing Bank in relation to the
     obligations of any Obligor. The Issuing Bank's rights under clause 4.7
     (Banks' Guarantee and Indemnity) are in addition to and are not exclusive
     of those provided by law.

8.   A certificate of the Issuing Bank as to any amount due to it from any Bank
     pursuant to clause 4.7 (Banks' Guarantee and Indemnity) shall be conclusive
     (in the absence of manifest error).


                                      134
<PAGE>


                                   SCHEDULE 9

                               TERMS OF GUARANTEE

1.   GUARANTEE

     Each Guarantor irrevocably, unconditionally, jointly and severally:

     (a)  as principal obligor, and not merely as surety, guarantees to each
          Finance Party prompt performance by each other Obligor (other than the
          Primary Borrower) (the "GUARANTEED PARTIES") of all its obligations
          under the Revolving Credit Facility and the payment when due of all
          sums from time to time payable to each Finance Party by each other
          Guaranteed Party under or in connection with the Revolving Credit
          Facility;

     (b)  undertakes with each Finance Party that whenever a Borrower (other
          than the Primary Borrower) does not pay any amount when due under or
          in connection with obligations under the Revolving Credit Facility,
          that Guarantor shall forthwith on demand by the Facility Agent pay
          that amount as if that Guarantor instead of the relevant Borrower
          (other than the Primary Borrower) were expressed to be the principal
          obligor; and

     (c)  indemnifies each Finance Party on demand against any loss or liability
          suffered by such Finance Party if any obligation guaranteed by that
          Guarantor pursuant to this Guarantee is or becomes unenforceable,
          invalid or illegal.

     Provided that this guarantee shall not extend to:

          (i)  any obligation under or in connection with the Term Facility;

          (ii) interest, commission, fees, charges, costs or expenses relating
               to any of the matters excluded from the guarantee by sub-clause
               (i) above.

2.   CONTINUING GUARANTEE

     This guarantee is a continuing guarantee and will extend (subject to the
     proviso in paragraph 1 above) to the ultimate balance of all sums payable
     by the Guaranteed Parties or any of them under the Finance Documents under
     or in connection with the Revolving Credit Facility, regardless of any
     intermediate payment or discharge in whole or in part.

3.   REINSTATEMENT

     (a)  Where any discharge (whether in respect of the obligations of any
          Guaranteed Party or any security for those obligations or otherwise)
          in whole or in part of any arrangement is made on the faith of any
          payment, security or other disposition which is avoided or must be
          restored on insolvency, liquidation or otherwise without limitation,
          the liability of each Guarantor under this schedule 9 (Terms of
          Guarantee) shall continue as if the discharge or arrangement had not
          occurred.

     (b)  Each Finance Party may concede or compromise any claim that any
          payment, security or other disposition is liable to avoidance or
          restoration.

4.   WAIVER OF DEFENCES

     The obligations of each Guarantor under this schedule 9 (Terms of
     Guarantee) will not be affected by any act, circumstance, omission, matter
     or thing which, but for this provision, would reduce, release or prejudice
     any of its obligations under this schedule 9 (Terms of Guarantee) or


                                      135
<PAGE>


     prejudice or diminish those obligations in whole or in part, including
     without limitation (whether or not known to it or any other party):

     (a)  any time, indulgence or waiver granted to, or composition with, any
          Guaranteed Party or other person;

     (b)  the taking, variation, compromise, exchange, renewal or release of, or
          refusal or neglect to perfect, take up or enforce, any rights or
          remedies against, or security over assets of, any Guaranteed Party or
          other person or any non-presentation or non-observance of the full
          value of any security;

     (c)  any legal limitation, disability, incapacity or lack of powers,
          authority or legal personality of or dissolution or change in the
          members or status of any Guaranteed Party or any other person;

     (d)  any variation (however fundamental and whether or not involving an
          increase in liability of any Guaranteed Party) or replacement of a
          Finance Document or any other document or security so that references
          to that Finance Document in this schedule 9 (Terms of Guarantee) shall
          include each variation or replacement;

     (e)  any unenforceability, illegality, invalidity or frustration of any
          obligation of any person under any Finance Document or any other
          document or security or any failure of any Guaranteed Party or
          proposed Guaranteed Party to become bound by the terms of any Finance
          Document;

     (f)  any postponement, discharge, reduction, non-provability or other
          similar circumstance affecting any obligation of any Guaranteed Party
          under a Finance Document resulting from any insolvency, liquidation or
          dissolution proceedings or from any law, regulation or order;

     (g)  the release of any other Obligor or any other person under the terms
          of any composition or arrangement with any creditor of any member of
          the Group,

     so that each such obligation shall, for the purposes of the Guarantor's
     obligations under this schedule 9 (Terms of Guarantee) remain in full force
     and be construed as if there were no such act, circumstance, variation,
     omission, matter or thing.

5.   IMMEDIATE RECOURSE

     Each Guarantor waives any right it may have of first requiring any Finance
     Party (or any trustee or agent on its behalf) to proceed against or enforce
     any other rights or security or claim payment from or file any proof or
     claim in any insolvency proceedings of any person before claiming from the
     Guarantor under this schedule 9 (Terms of Guarantee).

6.   APPROPRIATIONS

     Until all amounts which may be or become payable by the Guaranteed Parties
     under or in connection with the Revolving Credit Facility have been
     irrevocably paid in full, each Finance Party (or any trustee or agent on
     its behalf) may:

     (a)  refrain from applying or enforcing any other monies, security or
          rights held or received by that Finance Party (or any trustee or agent
          on its behalf) in respect of those amounts, or apply and enforce the
          same in such manner and order as it sees fit (whether against those
          amounts or otherwise) and no Guarantor shall be entitled to the
          benefit of the same; and


                                      136
<PAGE>


     (b)  hold in an interest bearing suspense account any monies received from
          any Guarantor or on account of any Guarantor's liability under this
          schedule 9 (Terms of Guarantee).

7.   NON-COMPETITION

     Until all amounts which may be or become payable by the Guaranteed Parties
     under or in connection with the Revolving Credit Facility have been
     irrevocably paid in full, no Guarantor shall, after a claim has been made
     or by virtue of any payment or performance by it under this schedule 9
     (Terms of Guarantee):

     (a)  be subrogated to any rights, security or monies held, received or
          receivable by any Finance Party (or any trustee or agent on its
          behalf) or be entitled to any right of contribution or indemnity in
          respect of any payment made or monies received on account of that
          Guarantor's liability under this schedule 9 (Terms of Guarantee) and,
          to the extent that any Guarantor is so subrogated or entitled by law,
          that Guarantor (to the fullest extent permitted by law) waives and
          agrees not to exercise or claim those rights, security or money or
          that right of contribution or indemnity;

     (b)  claim, rank, prove or vote as a creditor of any Guaranteed Party or
          its estate in competition with any Finance Party (or any trustee or
          agent on its behalf) unless otherwise required by the Facility Agent
          or by law (in which case any proceeds of any claim in respect of any
          rights, security or monies of any Finance Party to which such
          Guarantor was subrogated will be paid by such Guarantor to the
          Facility Agent to be applied in accordance with the provisions of the
          Finance Documents); or

     (c)  receive, claim or have the benefit of any payment, distribution or
          security from or on account of any Guaranteed Party, or exercise any
          right of set-off as against any Guaranteed Party (and without
          prejudice to the foregoing, each Guarantor shall forthwith pay to the
          Facility Agent for the benefit of the Finance Parties an amount equal
          to any amount so set-off by it).

     Each Guarantor shall hold in trust for and forthwith pay or transfer to the
     Facility Agent for the Finance Parties any payment or distribution or
     benefit of security received by it contrary to this schedule 9 (Terms of
     Guarantee).

8.   ADDITIONAL SECURITY

     This guarantee is in addition to and is not in any way prejudiced by any
     other security now or hereafter held by any Finance Party.

9.   FINANCIAL ASSISTANCE

     Notwithstanding any other provision of this guarantee, this guarantee shall
     not operate to guarantee, or create any indemnity in respect of, any money
     or liability if and insofar as such money was borrowed or such liability
     was incurred directly or indirectly for the purpose of the acquisition by
     any person of shares in the Guarantor or its holding company or the
     reduction or discharge of any existing liability incurred for the purpose
     of such acquisition and if and for so long as it would not be lawful under
     Chapter VI, Part V, of the Companies Act 1985 for such money or liability
     to be guaranteed by this guarantee.


                                      137
<PAGE>


SIGNATORIES TO THE AMENDMENT AND RESTATEMENT AGREEMENT

PRIMARY BORROWER

TXU Europe Limited

By:       H.C. GOODBOURN



FINCO 2

TXU Finance (No.2) Limited

By:       H.C. GOODBOURN



BIDCO

TXU Acquisitions Limited

By:       H.C. GOODBOURN



JOINT LEAD ARRANGERS

Chase Manhattan plc

Lehman Brothers International Europe

Merrill Lynch Capital Corporation

BANKS

Deutsche Bank AG London

Abbey National Treasury Services plc

Bayerische Landesbank Girozentrale, London
Branch


                                      138
<PAGE>


Bank of America, N.A.

Commerzbank Aktiengesellschaft, London Branch

Credit Suisse First Boston

Den Danske Bank Aktieselskab

First Union National Bank, London Branch

ING Bank N.V., London Branch

KBC Bank N.V., London Branch

National Australia Bank Limited (ACN 004044937)

The Royal Bank of Scotland plc

The Toronto-Dominion Bank

Westdeutsche Landesbank Girozentrale

CIBC World Markets plc

Credit Lyonnais

Bayerische Hypo- und Vereinsbank AG, London
Branch

The Bank of New York

The Dai-ichi Kangyo Bank, Limited

The Sanwa Bank, Limited

Mellon Bank N.A.

Barclays Bank PLC

Citibank, N.A.

The Chase Manhattan Bank

Societe Generale, London Branch

National Westminster Bank Plc

UBS AG, London Branch

Christiania Bank og Kreditkasse ASA

Merrill Lynch Capital Corporation

ABN AMRO Bank N.V.


                                      139
<PAGE>


Landesbank Schleswig-Holstein Girozentrale

ABC International Bank plc

The Bank of Nova Scotia

BNP Paribas

The Bank of Tokyo-Mitsubishi, Ltd.

Banca Monte dei Paschi di Siena SpA, London
Branch

HSBC Bank plc

Landesbank Rheinland-Pfalz Girozentrale

Tokai Bank Limited

Chang Hwa Commercial Bank, Ltd., London Branch

National Bank of Kuwait (International) PLC

Banca Nazionale del Lavoro S.p.A., London Branch

Calsse Centrale de Caisses d'Epargne et de
Prevoyance (CCCEP)

Arab Bank plc

AIB International Finance

Banco Comercial Portugues SA, London Branch

Artesia Ireland

Banco de Sabadell S.A.

Bankhaus Lobbecke & Co.

United Mizrahi Bank Ltd


THE ISSUING BANK

The Chase Manhattan Bank

By:       KATHRYN JEPSON


                                      140
<PAGE>


THE FACILITY AGENT

Chase Manhattan International Limited

By:       KATHRYN JEPSON


For itself and on behalf of each of the Joint Lead Arrangers and Banks and the
Issuing Bank listed above, as authorised by the Majority Banks in accordance
with the provisions of clause 22.1 (Majority Bank matters: amendments and
waivers) of the Principal Agreement.


                                      141