Document:

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                                                                   EXHIBIT 10.52

                           FIRST AMENDED AND RESTATED
                        SUPPLEMENTAL RETIREMENT PLAN FOR
                               DESIGNATED OFFICERS

                           MIDAMERICAN ENERGY COMPANY

AMENDED AND RESTATED AS OF MAY 10, 1999

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                           MIDAMERICAN ENERGY COMPANY
                           FIRST AMENDED AND RESTATED
              SUPPLEMENTAL RETIREMENT PLAN FOR DESIGNATED OFFICERS

                                    CONTENTS

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 I. ESTABLISHMENT.................................................................................................1

 II. PURPOSE .....................................................................................................1

 III. CONSTRUCTION................................................................................................1

         Section 3.1.  Definitions................................................................................1
         Section 3.2.  Gender and Number..........................................................................6
         Section 3.3.  Severability...............................................................................6

 IV. ADMINISTRATION...............................................................................................6

         Section 4.1.  The Committee..............................................................................6
         Section 4.2.  Authority of the Committee.................................................................6
         Section 4.3.  Decisions Binding..........................................................................7
         Section 4.4.  Terms of Participation.....................................................................7

 V. ELIGIBILITY AND PARTICIPATION.................................................................................7

         Section 5.1.  Participation..............................................................................7
         Section 5.2.  No Employment Guarantee....................................................................8

 VI. BENEFITS ....................................................................................................8

         Section 6.1.  Benefits Upon Normal Retirement............................................................8
         Section 6.2.  Benefits Upon Early Retirement.............................................................8
         Section 6.3.  Benefits Upon Disability...................................................................8
         Section 6.4.  Benefits Upon Death........................................................................8
         Section 6.5.  Forfeiture Upon Termination for Cause.....................................................10
         Section 6.6.  General Payout Restrictions...............................................................10
         Section 6.7.  General Release...........................................................................10

 VII. INDIVIDUAL ACCOUNTS AND THE RABBI TRUST....................................................................10

         Section 7.1.  Establishment of a Rabbi Trust............................................................10
         Section 7.2.  Causing the Trust to Become Irrevocable...................................................10
         Section 7.3.  Payment of Benefits from the Trust........................................................10

 VIII. BENEFICIARY DESIGNATION...................................................................................11

         Section 8.1.  Designation of Beneficiary................................................................11
         Section 8.2. Payment to a Participant's Estate..........................................................11

 IX. MISCELLANEOUS...............................................................................................11

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         Section 9.1.  Unfunded Plan.............................................................................11
         Section 9.2.  Withholding...............................................................................11
         Section 9.3.  Costs of the Plan.........................................................................12
         Section 9.4.  Nontransferability........................................................................12
         Section 9.5.  Successors ...............................................................................12
         Section 9.6.  Address of Participant or Beneficiary.....................................................12
         Section 9.7.  Applicable Law............................................................................12
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                           MIDAMERICAN ENERGY COMPANY
                           FIRST AMENDED AND RESTATED
              SUPPLEMENTAL RETIREMENT PLAN FOR DESIGNATED OFFICERS

I.   ESTABLISHMENT

     MidAmerican Energy Company, an Iowa corporation (the "Company"), and an
     indirect wholly owned subsidiary of MidAmerican Energy Holdings Company
     ("Holdings"), hereby adopts the Company's First Amended and Restated
     Supplemental Retirement Plan for Designated Officers (the "Plan"),
     effective as of May 10, 1999. The Plan is an amendment and restatement of
     the Supplemental Retirement for Designated Officers, which was adopted on
     January 1, 1996, as previously amended through March 12, 1999.

II.  PURPOSE

     The purpose of the Plan is to enable the Company, Holdings and their
     Subsidiaries to attract, retain, and motivate persons of outstanding
     competence, and to provide appropriate supplemental retirement and
     survivor benefits to Designated Officers of the Company, Holdings and
     their Subsidiaries.

III. CONSTRUCTION

     Section 3.1. Definitions. Whenever used herein, the following terms shall
     have the respective meanings set forth below:

     (a) "Board" means the Board of Directors of the Company.

     (b) "Cause" means, unless otherwise defined in a Participant's employment
         agreement, a Participant's discharge from the employment of the
         Company, Holdings or any Subsidiary because such Participant
         willfully engages in conduct, or lack thereof, that is demonstrably
         and materially injurious to the Company, Holdings or any Subsidiary
         or their business reputation or financial structure. Determination of
         "Cause" shall be made by the Committee in the exercise of good faith
         and reasonable judgment.

     (c) "Change in Control" means either:

         (i)  The closing date of the restructuring of the Company as a result
              of merger, consolidation, takeover or reorganization unless at
              least sixty percent (60%) of the members of the board of
              directors of the corporation resulting from such merger,
              consolidation, takeover or reorganization were members of the
              Incumbent Board; or

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         (ii) The occurrence of any other event that is designated as being a
              "Change in Control" by a majority vote of the directors of the
              Incumbent Board who are not also employees of the Company.

     (d) "Code" means the Internal Revenue Code of 1986, as amended.

     (e) "Committee" means an Administrative Committee comprised of Company
         employees selected by the President of the Company and approved by
         the Board to administer the Plan pursuant to Article IV herein.

     (f) "Company" means MidAmerican Energy Company.

     (g) "Designated Officer" means an officer of the Company, Holdings or any
         Subsidiary who has been approved by the Board or the Committee, as
         applicable, to participate in the Plan.

     (h) "Disability" means a Termination of Services resulting from a total
         disability of a Participant, as a result of a medically determinable
         physical or mental impairment which renders such Participant unable
         to engage in any substantial gainful employment, and which can be
         expected to be of indefinite duration. Such Disability shall be
         determined by the Committee in the exercise of good faith and
         reasonable judgment in reliance on competent medical advice from one
         or more qualified individuals selected by the Committee.

     (i) "Disability Benefit" means, for such Participant, the Normal
         Retirement Supplemental Benefit or Early Retirement Supplemental
         Benefit, computed as though the Participant is deemed to have
         continued in employment during the period of disability and incurred
         a Termination of Services on the date he or she elects to begin
         receiving benefits hereunder.

     (j) "Early Retirement Total Benefit" means a Normal Retirement Total
         Benefit reducing the 65% in the formula in Section 3.l(q) at the rate
         of one percentage point for each full and one percentage point for
         each fraction of a year that, on the Participants Early Retirement
         Date, such Participant's age is less than sixty-five (65) years
         (i.e., 60% at age 60, 55% at age 55).

     (k) "Early Retirement" means, for each Participant, the commencement of
         benefits after Termination of Services of such Participant other than
         because of

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         death or Cause, but prior to such Participant reaching Normal
         Retirement Age.

     (l) "Early Retirement Date" means the first day of the month chosen by
         the Participant for commencement of the Early Retirement Supplement
         Benefit, which, in general, shall not be earlier than the first day
         of the month following the Participant's attainment of age fifty-five
         (55), provided that the Board or the Committee, as applicable, may
         allow for an earlier Early Retirement Date in its discretion on a
         Participant-by-Participant basis.

     (m) "Early Retirement Supplemental Benefit" (see subsection (r) below).

     (n) "Effective Date" means January 1, 1996.

     (o) "ERISA" means the Employee Retirement Income Security Act of 1974, as
         amended from time to time, or any successor thereto.

     (p) "Incumbent Board" means the members of the Board on August 1, 1995.
         For this purpose, an individual who becomes a member of the Board
         subsequent to August 1, 1995 and who has been nominated for election
         by the Company's shareholders by resolution adopted by a vote of at
         least two-thirds of the directors then comprising the Incumbent Board
         at a duly convened meeting thereof shall be deemed to be a member of
         the Incumbent Board.

     (q) "Normal Retirement Total Benefit" means the annual benefit provided
         under the Plan on a Participant's Normal Retirement Date, in the
         amount of sixty-five percent (65%) of such Participant's Total Cash
         Compensation in effect immediately prior to such Termination of
         Services, times a fraction, the numerator being the number of years
         (including fractions of a year) of participation in this Plan (or
         participation in a similar supplemental retirement plan of a
         Predecessor Company) as of the date of Termination of Services, and
         the denominator being the number of years of participation if the
         Participant had remained employed to age 55 (the factor shall not
         exceed 1.0). The Board or the Committee, as applicable, shall have
         the authority to grant the crediting of service with a former
         employer of a Participant in the calculation of such Participant's
         number of years of participation in the Plan or to provide other
         credit for service on a case by case basis.

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     (r) "Normal Retirement Supplemental Benefit" and "Early Retirement
         Supplemental Benefit", respectively, mean the Normal Retirement Total
         Benefit or Early Retirement Total Benefit, as applicable, reduced by
         the sum of:

         (i)  the annual benefits provided to such Participant under a Tax
              Qualified Pension Plan (determined as if the Participant elected
              a joint and 2/3 survivor benefit under such plan and beginning
              on the same date that payments begin under this Plan);

         (ii) benefits under Iowa-Illinois Gas and Electric Company
              Supplemental Retirement Plan, the Iowa Resources Inc. and
              Subsidiaries Supplemental Retirement Income Plan and the Midwest
              Resources Supplemental Retirement Plan, after converting such
              benefits to an actuarially equivalent amount, as determined by
              the Committee in the exercise of good faith and reasonable
              judgment; and

        (iii) tax qualified defined benefit pension type retirement plan
              benefits payable to such Participant by other employers of such
              Participant if service with such other employers is credited as
              service under the Tax Qualified Pension Plan, after converting
              such benefits to an actuarially equivalent amount, as determined
              by the Committee in the exercise of good faith and reasonable
              judgment;

         provided, however, that unless otherwise provided in a Participant's
         employment agreement, a Participant's Normal Retirement Supplemental
         Benefit and Early Retirement Supplemental Benefit may not exceed $1
         million per year. An Early Retirement Supplemental Benefit will not
         be available to any Participant whose Termination of Services occurs
         prior to being credited with five (5) Years of Service unless
         otherwise provided in a Participant's employment agreement.

     (s) "Normal Retirement Age" means, for each Participant, the attainment
         of age sixty-five (65) years.

     (t) "Normal Retirement Date" means the first day of the month in which a
         Participant reaches Normal Retirement Age.

     (u) "Participant" means a Designated Officer of the Company, Holdings or
         any Subsidiary who has been approved by the Board or the Committee,
         as

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         applicable, to participate in the Plan, and any retired individual
         who has a vested accrued benefit under the Plan as specified in
         Article V.

     (v) "Plan Year" means the calendar year beginning January 1 and ending
         December 31.

     (w) "Predecessor Company" means CalEnergy Company, Inc., MidWest
         Resources Inc., Iowa-Illinois Gas and Electric Company, Midwest
         Energy Company, Iowa Resources Inc., any subsidiaries of any of these
         companies and any member of the same controlled group of corporations
         of any of these companies.

     (x) "Rabbi Trust" means a grantor trust, within the meaning of Sections
         671-678 of the Code, established by the Company for the benefit of
         the Participants, both active and retired, and the Participants'
         designated beneficiaries, as specified in Article VIII.

     (y) "Spouse" means a husband or wife as licensed in marriage by the
         state.

     (z) "Subsidiary" means a company as to which Holdings or the Company
         directly or indirectly holds securities representing at least 50% of
         the total voting power of all voting securities.

    (aa) "Survivor's Benefit" means the benefit payable to a Participant's
         surviving Spouse, designated beneficiary or estate under the Plan as
         specified in Section 6.6 in the event of such Participant's death.

    (bb) "Tax Qualified Pension Plan" shall mean the tax qualified defined
         benefit plan, cash balance plan and money purchase pension plan, if
         any, maintained by the Company, Holdings or any Subsidiary, but shall
         not include any profit sharing plans, employee stock ownership plans
         or qualified salary reduction or cash or deferred plan.

    (cc) "Termination of Services" means the severing of a Participant's
         employment with the Company, Holdings or any Subsidiary for any
         reason.

    (dd) "Total Cash Compensation" means (i) the highest amount payable to a
         Participant by the Company, Holdings or any Subsidiary (or a
         Predecessor Company) as monthly base salary during the five years
         immediately prior to termination of services (including the year in
         which termination occurs) multiplied by twelve, plus (ii) the average
         of the Participant's Awards during the most recent three

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          year period under the Company's Key Employee Annual Incentive Plan or
          its successor plan(s), or bonus awards under a similar annual
          incentive bonus program for executives of Holdings, a Subsidiary or a
          Predecessor Company, plus (iii) the prior three-year average annual
          amount of any other special, additional or non-recurring bonus awards
          or other compensation, but only if such awards or compensation are
          (A) required to be included in Total Cash Compensation under a
          Participant's employment agreement or (B) approved by the Committee
          for inclusion in Total Cash Compensation as set forth in written
          notice to a Participant. Monthly base salary shall include amounts
          deferred under any (ss.) 401(k) plans, (ss.) 125 cafeteria plans,
          nonqualified deferred compensation plans or similar arrangements. If
          less than three years of bonus awards have been made for the
          Participation during the most recent three year period prior to
          termination of employment, the average of the number of bonus awards
          actually made during such three year period shall be used.

     (ee) "Year of Service" or "Years of Service" means each full twelve
          months of service with the Company, Holdings, a Subsidiary or a
          Predecessor Company.

     Section 3.2. Gender and Number. Except when otherwise indicated by the
     context, any masculine term used herein also shall include the feminine;
     the plural shall include the singular; and the singular shall include the
     plural.

     Section 3.3. Severability. In the event any provision of the Plan shall
     be held illegal or invalid for any reason, the illegality or invalidity
     shall not affect the remaining parts of the Plan; and the Plan shall be
     construed and enforced as if the illegal or invalid provision had not
     been included.

IV.  ADMINISTRATION

     Section 4.1. The Committee. The Plan shall be administered by the
     Committee which shall be selected by the Board, and unless the Board
     otherwise directs in writing, the Committee shall possess, in addition to
     any powers specifically vested in the Committee, any or all of the powers
     vested in the Board hereunder. The Committee may delegate the
     responsibility of performing ministerial acts to such administrative
     agents as it deems advisable or desirable to carry out the purpose of the
     Plan.

     Section 4.2. Authority of the Committee. The Committee shall have the
     power to construe and interpret the Plan and any agreement or instrument
     entered into hereunder, to prescribe, amend, or waive rules and
     regulations for the

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     Plan's administration; and to make any other determination which may be
     necessary or advisable for the Plan's administration. The Committee may
     correct any defect or supply any omission or reconcile any inconsistency
     in the Plan in the manner and to the extent reasonable to effect its
     purpose. The Committee shall have full discretion to administer the Plan
     as it sees fit. All decisions of the Committee shall be final and binding
     absent manifest error.

     The Company may elect to insure the lives of Participants; in such case,
     Participants must agree to undergo physical examinations and otherwise
     cooperate in obtaining such insurance as a condition precedent to
     participation in the Plan. Any such life insurance policies shall be
     owned by and be considered a general asset of the Company. Subject to
     Section 7.2, no Participant or beneficiary shall have any rights to or
     interest in or shall be entitled to any benefits under such policies.

     Section 4.3. Decisions Binding. All determinations and decisions made by
     the Committee pursuant to the provisions of the Plan, and all related
     orders or resolutions of the Board shall be final, conclusive, and
     binding on all persons, including the Company, its shareholders,
     employees, the Participants and their estates and designated
     beneficiaries.

     The Board or the Committee, as applicable, shall have the full power to
     amend or terminate the Plan at any time; provided that no such amendment
     or termination shall adversely affect the vested or accrued rights of any
     Participant under the Plan without such Participant's written consent.

     Section 4.4. Terms of Participation. The Board or Committee, as
     applicable, may establish terms of participation in the Plan for any
     Participant which may differ from the specific terms of the Plan and
     which may be more favorable than the terms applicable to Participants
     generally. Without limitation, the Board or the Committee, as applicable,
     may establish a minimum annual benefit or death benefit for any
     Participant, on a case-by-case basis, which annual benefit or death
     benefit may be greater than the annual benefit or death benefit to which
     such Participant would otherwise be entitled under the benefit formulas
     set forth in the Plan.

V.   ELIGIBILITY AND PARTICIPATION

     Section 5.1. Participation. Upon approval by the Board or the Committee,
     as applicable, Designated Officers shall automatically become
     Participants under the Plan. Retired

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     individuals who have a vested accrued benefit under the Plan will also be
     considered to be Participants.

     Section 5.2. No Employment Guarantee. Neither this Plan nor any action
     taken hereunder shall be construed as giving a Participant the right to
     be retained as an employee of the Company, Holdings or any Subsidiary for
     any period.

VI.  BENEFITS

     Section 6.1. Benefits Upon Normal Retirement. Unless a Participant has
     elected Early Retirement as provided in Section 6.2 below, upon a
     Participant reaching Normal Retirement Age, the Company shall pay to such
     Participant, as compensation for services rendered prior to such date,
     his or her Normal Retirement Supplemental Benefit in equal monthly
     installments commencing on the Normal Retirement Date, or, if later, the
     first day of the month then following Termination of Services, and
     continuing on the first day of each month thereafter during the lifetime
     of such Participant.

     Section 6.2. Benefits Upon Early Retirement. Upon a Participant's Early
     Retirement (as chosen by the Participant), and following Termination of
     Services, the Company shall pay to the Participant, as compensation for
     services rendered prior to such date, his or her Early Retirement
     Supplemental Benefit in equal monthly installments commencing on the
     Participant's Early Retirement Date, and, in all cases, continuing on the
     first day of each month thereafter during the lifetime of such
     Participant.

     Section 6.3. Benefits Upon Disability. Upon a Participant's election to
     begin receiving benefits hereunder following Termination of Services for
     Disability, the Company shall begin payment to the Participant (but no
     earlier than his or her Early Retirement Date), as compensation for
     services rendered prior to such date, his or her Disability Benefit in
     equal monthly installments commencing on the first day of the month
     selected by the Participant and continuing on the first day of each month
     thereafter during the lifetime of such Participant.

     Section 6.4. Benefits Upon Death. Upon a Participant's death, the Company
     shall pay to such Participant's designated beneficiary or estate, as
     appropriate, the following Survivor's Benefit;

     (a) Death Prior to Commencement of Benefits. If a Participant dies prior
         to commencement of the payment of any benefit hereunder, the Company
         shall pay to such Participant's designated beneficiary or estate a
         Survivor's Benefit equal to the Normal Retirement

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     Supplemental Benefit (without application of the percentage reduction
     based upon years of participation prior to age 55) in one hundred eighty
     (180) equal monthly installments commencing on the first date of the
     month following such date of death and receipt of a death certificate by
     the Company, and continuing on the first day of each month thereafter
     until the one hundred eighty (180) payments have been made.

     (b) Death After Commencement of Benefits. If a Participant dies after
         commencement of the payment of any benefit hereunder, the Company
         shall pay to the Participant's surviving Spouse a Survivor's Benefit
         commencing on the first day of the month following such date of death
         and receipt of a death certificate by the Company and continuing on
         the first day of each month thereafter for the remaining lifetime of
         the surviving Spouse. The Survivor's Benefit means a benefit equal to
         two-thirds of the Normal Retirement Supplemental Benefit, Early
         Retirement Supplemental Benefit or Disability Benefit, as applicable,
         that the Participant was receiving immediately prior to death, except
         that the total Survivor's Benefit shall be limited to fifty percent
         (50%) of the total benefit based upon an actuarial calculation at the
         time benefits commence.

     (c) Payment by the Company of the benefit in Section 6.4(a) or (b) shall
         relieve the Company of the obligation to pay a Normal Retirement
         Supplemental Benefit, an Early Retirement Supplemental Benefit, a
         Disability Benefit, or any other benefit which the Participant might
         have otherwise received under the Plan.

     (d) In the event a Participant dies without a surviving Spouse, after
         commencement of the payment of any benefits hereunder, the Company
         shall pay to such Participant's designated beneficiary or estate a
         Survivor's Benefit equal to the Normal Retirement Supplemental
         Benefit, Early Retirement Supplemental Benefit or Disability Benefit,
         as applicable, that the Participant was receiving immediately prior
         to death such that a total of one hundred eighty (180) equal monthly
         installments is paid to the Participant and such Participant's
         designated beneficiary or estate. The Survivor's Benefit portion
         shall commence on the first day of the month following such date of
         death and receipt of a death certificate by the Company, and continue
         on the first day of each month thereafter until a total of one
         hundred eighty (180) payments have been made.

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     Section 6.5. Forfeiture Upon Termination for Cause. Unless otherwise
     provided in a Participant's employment agreement or otherwise provided by
     the Committee in writing to a Participant, upon a Participant's
     Termination of Services for Cause, such Participant shall immediately
     forfeit all rights and benefits provided under the Plan, and the Company
     shall have no further obligation to such Participant under the Plan.

     Section 6.6. General Payout Restrictions. No benefits shall be paid under
     this Plan prior to the actual Termination of Services of a Participant.

     Section 6.7. General Release. Unless otherwise provided in a
     Participant's employment agreement, the Committee in its discretion may
     require a Participant to execute a general release of claims, in such
     form as the Company may prescribe, as a condition to the payment of
     benefits hereunder.

VII. INDIVIDUAL ACCOUNTS AND THE RABBI TRUST

     Section 7.1. Establishment of a Rabbi Trust. After the Effective Date,
     the Company shall be authorized, but shall not be required, to establish
     a revocable Rabbi Trust for the benefit of the Participants, both active
     and retired. Any such Rabbi Trust shall have an independent trustee,
     selected by the Company, and, it shall contain restrictions on the
     Company's ability to amend or terminate any of the terms thereof after
     the Rabbi Trust shall become irrevocable as provided in Section 7.2.

     All assets held in the Rabbi Trust (while revocable or irrevocable) shall
     at all times be specifically subject to the claims of the Company's
     general creditors in the event of bankruptcy or insolvency; such terms
     shall be specifically defined within the provisions of the Rabbi Trust,
     along with a required procedure for notifying the Trustee of any such
     bankruptcy or insolvency.

     Section 7.2. Causing the Trust to Become Irrevocable. The instrument
     establishing any such Rabbi Trust shall provide that the Rabbi Trust
     shall be revocable until the occurrence of either of the following:

         (i)  A Change in Control; or

         (ii) A majority vote by the Incumbent Board to make the Rabbi Trust
              irrevocable.

     Section 7.3. Payment of Benefits from the Trust. The Company shall be
     primarily obligated to pay all benefits of Participants under the Plan,
     whether the Rabbi Trust is revocable or irrevocable at the time. In the
     event the

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      Company fails to fulfill any such obligation hereunder in a timely
      manner, the Trustee shall be empowered, under the terms of the Rabbi
      Trust, to either cash in any related life insurance policies or to
      borrow against the policies, to the extent necessary to pay past due
      benefits directly from the Trust.

VIII. BENEFICIARY DESIGNATION

      Section 8.1. Designation of Beneficiary. Each Participant shall be
      entitled to designate one or more beneficiaries by filing a signed,
      written notice of such designation with the Committee, in a form as the
      Committee may prescribe. A Participant may revoke or modify a
      beneficiary designation at any time by filing a new beneficiary
      designation form with the Committee.

      Section 8.2. Payment to a Participant's Estate. A Participant's
      beneficiary designation shall be deemed automatically revoked in the
      event all designated beneficiaries predecease such Participant or, if
      the sole beneficiary is such Participant's Spouse, in the event of
      dissolution of marriage. In such event, or in the event a Participant
      does not designate a beneficiary, the benefits under Sections 6.5(a) and
      6.5(d) shall be paid to such Participant's estate.

IX.   MISCELLANEOUS

      Section 9.1. Unfunded Plan. This Plan is intended to be an unfunded plan
      maintained primarily to provide benefits to a "select group of
      management or highly compensated employees" within the meaning of
      Sections 201, 301, and 401 of ERISA and, therefore, is further intended
      to be exempt from the provisions of Parts 2, 3, and 4 of Title I of
      ERISA. Accordingly, the Committee may terminate the Plan for any or all
      Participants in order to achieve and maintain this intended result,
      provided that previously accrued benefits hereunder shall not be reduced
      or otherwise adversely affected without the written consent of the
      affected Participants.

      Section 9.2. Withholding. The Company shall have the right to require
      Participants to remit to the Company an amount sufficient to satisfy
      Federal, state, and local tax withholding requirements, or to deduct
      from any or all payments made pursuant to the Plan amounts sufficient to
      satisfy such tax withholding requirements. In the event any FICA, FUTA,
      Social Security, Medicare or any similar taxes become due on benefits
      (or the value of such benefits) accrued under this Plan at any time
      prior to the actual payment of benefits under this Plan, the Company
      shall be authorized to withhold from the regular salary of such
      Participant the amount of any such tax payable by the

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     Participant. Withholding shall take place during the same calendar year
     in which the taxes on such benefits become due, or at such time as may be
     required by Internal Revenue Service regulations.

     Section 9.3. Costs of the Plan. All costs of implementing and
     administering the Plan shall be borne by the Company.

     Section 9.4. Nontransferability. Neither the Participants nor any
     designated beneficiary shall have the right to sell, assign, transfer, or
     otherwise convey the right to receive any payment hereunder; nor shall
     any such payment be subject to attachment, garnishment, levy, pledge,
     bankruptcy, or any other manner or kind of execution in connection with
     any claim against the Participants or any designated beneficiary thereof.

     Section 9.5. Successors. All obligations of the Company under the Plan
     shall be binding upon and inure to the benefit of any successor to the
     Company, whether the existence of such successor is the direct or
     indirect result of a merger, consolidation, or reorganization involving
     the Company or the purchase or other acquisition of all or substantially
     all of the business and/or assets of the Company.

     Section 9.6. Address of Participant or Beneficiary. Each Participant
     shall keep the Company apprised of his or her current address and that of
     any designated beneficiary during his or her participation in the Plan.
     Upon the death of a Participant, any beneficiaries entitled to receive
     benefit payment under the Plan shall keep the Company apprised of their
     current address until the entire amount to be distributed has been paid.

     Section 9.7. Applicable Law. To the extent not preempted by Federal law,
     the Plan shall be governed by and construed in accordance with the laws
     of the state of Iowa.

                                     -12-<PAGE>

CONFORMED COPY

                               Dated 6 August 2001

                            NPOWER YORKSHIRE LIMITED
                               INNOGY HOLDINGS PLC
                               CE ELECTRIC UK PLC
                                       AND
                              NORTHERN ELECTRIC PLC

                              SHARE SALE AGREEMENT

                                 - relating to -
                the sale of 94.75% of the issued share capital of
                          Yorkshire Power Group Limited

                                                    LINKLATERS
                                                    One Silk Street
                                                    London EC2Y 8HQ

                                                    Telephone: (44-20) 7456 2000
                                                    Facsimile: (44-20) 7456 2222

                                                    Ref: IAR

<PAGE>

SHARE SALE AGREEMENT

THIS AGREEMENT is made on 6 August 2001

BETWEEN:

(1)      NPOWER YORKSHIRE LIMITED registered in England and Wales with
         registered number 3937808 and whose registered office is at Windmill
         Hill Business Park, Whitehill Way, Swindon, Wiltshire SN5 6PB (INNOGY);

(2)      INNOGY HOLDINGS PLC registered in England and Wales with registered
         number 3987817 and whose registered office is at Windmill Hill Business
         Park, Whitehill Way, Swindon, Wiltshire SN5 6PB (the INNOGY Guarantor);

(3)      CE ELECTRIC UK PLC registered in England and Wales with registered
         number 3271033 having its registered office at Carliol House, Market
         Street, Newcastle NE1 6NE (NORTHERN); and

(4)      NORTHERN ELECTRIC PLC registered in England and Wales with registered
         number 2366942 having its registered office at Carliol House, Market
         Street, Newcastle NE1 6NE (NE PLC).

IT IS AGREED as follows:

INTERPRETATION

         In this Agreement, including its Schedules, the headings shall not
         affect its interpretation and, unless the context otherwise requires,
         the provisions in this Clause 1 apply:

1.1      Definitions

         AGREED TERMS means, in relation to any document, such document in the
         terms agreed between the parties and signed by Northern or Northern's
         Solicitors, on the one hand, and Innogy or Innogy's Solicitors, on the
         other hand, in each case for the purposes of identification, and which
         are attached as an annexure to this Agreement as that document may be
         amended by agreement in writing between Innogy and Northern from time
         to time for any reason, including to take account of any changes
         between the date of this Agreement and Completion;

         AMBAC means Ambac Insurance UK Limited;

         AMBAC BONDS means the (pound)200 million bonds @ 7.25% due 2022 issued
         by CE Electric UK Funding Company and guaranteed by Ambac;

         ASSIGNMENT AGREEMENT means the assignment and assumption of expenses
         agreement in the agreed terms between the Innogy Guarantor, Yorkshire
         Capital Trust (the TRUST) and NE plc pursuant to which NE plc will
         assume and receive all of the rights and obligations of the Innogy
         Guarantor under the Agreement for Expenses and Liabilities dated 1 June
         (as amended) between the Innogy Guarantor and the Trust;

         ASSUMED FACILITIES means each of the credit facilities provided
pursuant to:

         (a)    Norddeutsche Landesbank Girozentrale, London Branch's facility
                letter dated 11 April 2000 to YEG;

         (b)    The Toronto-Dominion Bank's facility letter dated 22 May 1992 to
                YEG;

         (c)    Banco di Napoli S.p.A, London Branch's facility letter dated 21
                October 1999 to YEG;

                                       2
<PAGE>

         (d)    KBC Bank N.V., London Branch's facility letter dated 4 September
                2000 to YEG;

         (e)    Midland Bank plc's (HSBC) facility letter dated 27 August 1999
                to YEG; and

         (f)    YEG's overdraft with National Westminster Bank plc referred to
                in a letter from National Westminster Bank plc dated 28 October
                1999;

         ASSUMED YORKSHIRE DEBT means indebtedness in respect of moneys borrowed
         or raised pursuant to the following:

         (a)    (pound)200 million bonds @ 9.25% due 2020 issued by YEG plc;

         (b)    (pound)200 million bonds @ 7.25% due 2028 issued by Yorkshire
                Power Finance Limited;

         (c)    (pound)155 million Reset Notes due 2020 issued by Yorkshire
                Power Finance 2 Limited;

         (d)    $275 million Junior Subordinate Debentures @ 8.08% due 2038
                issued by Yorkshire Power Finance Limited;

         (e)    $300 million series B notes @ 6.496% due 2008 issued by
                Yorkshire Power Finance Limited; and

         (f)    Retained Company Intra-Group Loans;

         together with the associated liabilities and obligations of the Sale
         Companies in connection with such debt.

         ASSUMED YORKSHIRE SWAPS means the swaps entered into under:

         (a)    in relation to the (pound)155 million Reset Notes due 2020
                issued by Yorkshire Power Finance 2 Limited held by Yorkshire
                Power Pass-Through Asset Trust 2001:

                (i)  ISDA Master Agreement and Schedule thereto dated 1 February
                     2000 between UBS AG, London Branch and the Bank of New York
                     (acting as Trustee for Yorkshire Power Pass-Through Asset
                     Trust 2000-1) and (i) related Confirmation dated 9 February
                     2000 (Option 1 - UBS Call Option with Trust); and (ii)
                     related Confirmation dated 9 February 2000 (Swap 1 -
                     Sterling to US Dollar Swap between UBS and Trust,
                     reference: YPF2 PATS 2000-1 Sterling-Dollar Swap); and

                (ii) ISDA Master Agreement and Schedule thereto dated 1 February
                     2000 between UBS AG, London Branch and Yorkshire Power
                     Finance 2 Limited and related confirmation dated 9 February
                     2000 (Option 2 - Company Call Option with UBS reference:
                     YPF2 Call Option);

         (b)    in relation to the $275 million Junior Subordinated Debentures
                8.08% due 2038 issued by Yorkshire Power Finance Limited:

                (i)  ISDA Master Agreement and Schedule thereto dated 22 July
                     1997 between Yorkshire Power Group Limited and National
                     Westminster Bank PLC and related Confirmation dated 9 June
                     1998 (Amended Reference: NYO 3073); and

                (ii) ISDA Master Agreement and schedule thereto dated 15 August
                     1997 between Yorkshire Power Group Limited and Nationsbank
                     N.A. and related Confirmation dated 20 March 2000 (Ref:
                     IRP736525/311425-LI998a);

                                       3
<PAGE>

         AUDITED ACCOUNTS means the audited consolidated group accounts of
         Yorkshire and its subsidiary undertakings for the financial period
         ended on the Balance Sheet Date;

         BALANCE SHEET DATE means 31 December 2000;

         BASE RATE has the meaning set out in Clause 8.3;

         BIG FIVE means KPMG Audit Plc, Ernst & Young, PricewaterhouseCoopers,
         Andersen and Deloitte;

         BORROWINGS means:

         (a)    money borrowed or raised and debit balances at banks;

         (b)    any bond, note, loan stock, debenture or similar debt
                instrument;

         (c)    acceptance credit facilities and documentary credit facilities;

         (d)    receivables sold or discounted (otherwise than on a non-recourse
                basis);

         (e)    finance leases and hire purchase contracts; and

         (f)    any swap, hedging or similar treasury instrument taking the mark
                to market valuation of the relevant instrument;

         BUSINESS means (a) the Northern Sale Business in relation to the sale
         of the Northern Sale Business pursuant to the Northern Electricity
         Business Sale Agreement and the Northern Non-Electricity Business Sale
         Agreement and (b) the Yorkshire Sale Business in relation to the sale
         of the Yorkshire Shares;

         BUSINESS DAY means a day on which banks are open for business in
         England (excluding Saturdays, Sundays and public holidays);

         CAA 2001 means Capital Allowances Act 2001;

         CHAPS means clearing houses automated payment systems;

         COMPETENT AUTHORITY means any legal person (including any government
         department, authority or agency), including the EC Commission and Ofgem
         having regulatory powers and/or authority at law and/or any court of
         law or tribunal;

         COMPLETION means the completion of the sale and purchase of the
         Yorkshire Shares pursuant to this Agreement;

         COMPLETION AMOUNT has the meaning set out in Clause 3.1;

         COMPLETION DATE means the date on which Completion occurs;

         CONFIDENTIAL INFORMATION means business, technical, financial,
         operational, administrative, staff management, marketing and economic
         information, the identities of customers and all other information of a
         secret and/or proprietary nature but shall not include such information
         which is in, or which comes into the public domain or a party's
         possession other than as a result of (i) a breach of any obligations
         imposed by this Agreement or (ii) a breach of any other duty of
         confidentiality relating to that information;

         CONFIDENTIALITY AGREEMENT means the agreement between the Innogy
         Guarantor and NE plc dated 15 March 2001 as to the confidentiality of
         information exchanged between the Innogy Guarantor and NE plc;

         CONNECTED COMPANY has the meaning set out in Clause 13.4;

                                       4
<PAGE>

         DEED OF GUARANTEE AND INDEMNITY means the deed of guarantee and
         indemnity between, among others, the Innogy Guarantor and NE plc in the
         agreed terms;

         DEED OF WARRANTY means the deed of warranty dated today between NE plc,
         NEAGL and Npower Northern Limited;

         DISCLOSURE LETTER means the letter of even date with this Agreement
         from Innogy to Northern disclosing:

         (a)    information constituting exceptions to the Warranties; and

         (b)    details of other matters referred to in this Agreement;

         DRAFT POST-CLOSING STATEMENT has the meaning given to that term in
         Schedule 7;

         ELECTRIC LINE has the same meaning as in Section 64 of The Electricity
         Act 1989;

         ENCUMBRANCE means any claim, charge, mortgage, security, lien, option,
         equity, power of sale, hypothecation or other third party right;

         ENVIRONMENT has the meaning set out in paragraph 2.1.9 of Part A of
         Schedule 2;

         ENVIRONMENTAL LAW has the meaning set out in paragraph 2.1.9 of Part A
         of Schedule 2;

         ESPS means the Electricity Supply Pensions Scheme;

         ESTIMATED YORKSHIRE CASH AND WORKING CAPITAL STATEMENT has the meaning
         given to that term in Schedule 7;

         ESTIMATED YORKSHIRE NET CASH AND WORKING CAPITAL has the meaning given
         to that term in Schedule 7;

         FTA means the Fair Trading Act 1973;

         GROUP means, in respect of any company, the company, its parent
         undertaking and any subsidiary undertaking of that company or of its
         parent undertaking;

         INFORMATION TECHNOLOGY means computer systems, communications systems,
         software and hardware owned by or licensed to any Sale Company;

         INNOGY PRICE MATRIX has the meaning set out in Clause 5.4;

         INNOGY GROUP means the Innogy Guarantor and its subsidiary undertakings
         (excluding Sale Companies to be sold pursuant to this Agreement);

         INNOGY'S SOLICITORS means Linklaters of One Silk Street, London EC2Y
         8HQ;

         INTELLECTUAL PROPERTY means trade marks, service marks, trade names,
         logos, get-up, patents, inventions (whether patentable or not),
         registered and unregistered design rights, utility models, copyright,
         semi-conductor topography rights, domain names, database rights and all
         other similar proprietary rights and the goodwill attaching to them
         which may subsist in any part of the world (including Know-how)
         including, where such rights are obtained or enhanced by registration,
         any registration of such rights and applications and rights to apply
         for such registrations;

         KNOW-HOW means all material know-how, trade secrets and confidential
         industrial and commercial information and techniques in any form
         (including paper, electronically stored data, magnetic media, film and
         microfilm) including without limitation drawings, formulae, test
         results, reports, project reports and testing procedures, instruction
         and training manuals, tables of operating conditions, market forecasts,
         lists and particulars of customers and

                                       5
<PAGE>

         suppliers, sales targets, sales statistics, price, discounts, margins,
         tenders, price sensitive information and any information derived from
         them;

         LONG-STOP DATE means midnight on 31 December 2001 or such later date as
         the parties may agree in writing;

         LOSSES means all losses, liabilities, damages, costs (including,
         without limitation, reasonable legal costs), charges, expenses,
         actions, proceedings, claims and demands;

         MATERIAL PROPERTIES means the properties briefly described in Part A of
         Schedule 3 and MATERIAL PROPERTY means any of them and includes every
         part of each of them;

         NEAGL means Northern Electric & Gas Limited;

         NET CASH has the meaning given to that term in Schedule 7;

         NETTING AGREEMENT means the agreement of the date herewith between,
         inter alia, Northern, NE plc, NEAGL, Innogy and the Innogy Guarantor
         with respect to the netting of consideration payable by Northern
         hereunder and by Npower Northern Limited under the Northern Electricity
         Business Sale Agreement and the Northern Non-Electricity Business Sale
         Agreement;

         NON-ASSUMED YORKSHIRE BONDS means:

                (i)    $350 million series B senior notes due 2003 issued by
                       Yorkshire Power Finance Limited; and

                (ii)   (pound)150 million 8 5/8% bonds due 2005 issued by
                       YEG plc;

         NON-ASSUMED YORKSHIRE SWAPS means any transactions, other than the
         Assumed Yorkshire Swaps, which have been entered into by any Sale
         Company and the relevant swap counterparty and which is a rate swap
         transaction, basis swap, forward rate transaction, equity or equity
         index swap, equity or equity index option, bond option, interest rate
         option, foreign exchange transaction, cap transaction, floor
         transaction, collar transaction, currency swap transaction,
         cross-currency rate swap transaction, currency option or any other
         similar transaction of a treasury nature;

         NON-RETAINED INTER-COMPANY LOANS means all loans or other indebtedness
         (including any Borrowings) between any Sale Company and any company in
         the Vendor's Group company referred to in Part 1 of Schedule 1 or in
         Schedule 2 of the Yorkshire Hiveout Agreement, including:

         (a)    overdraft facility provided by YEG to Scarcroft Investments
                Limited dated 27 March 2000;

         (b)    overdraft facility provided by YEG to Yeleco 29 Limited dated 27
                March 2000;

         (c)    overdraft facility provided by YEG to YE Gas Limited dated 6
                August 1999 (as amended);

         (d)    inter-company loan between Yorkshire Electric Power Limited and
                YEG dated 27 March 2000;

         (e)    inter-company loan between Scarcroft Leasing (September) Limited
                and YEG dated 27 March 2000; and

         (f)    inter-company loan agreement between Yorkshire Energy Limited
                and YEG dated 27 March 2000.

         NORTHERN BONDS means:

                                       6
<PAGE>

         (a)    (pound)100 million 8.875% bonds due 2020 issued by Northern
                Electric Finance plc;

         (b)    (pound)100 million 8.625% bonds due 2005 issued by Northern
                Electric Finance plc; and

         (c)    the Ambac Bonds.

         NORTHERN DATA ROOM has the meaning set out in Disclosure Letter (as
         defined in the Deed of Warranty);

         NORTHERN ELECTRICITY BUSINESS SALE AGREEMENT means the agreement dated
         today between the Npower Northern Limited and NE plc for the sale and
         purchase of the electricity assets of the Northern Sale Business and
         certain metering assets of NE plc;

         NORTHERN NON-ELECTRICITY BUSINESS SALE AGREEMENT means the agreement
         dated today between Npower Northern Limited and NEAGL and others for
         the sale and purchase of the non-electricity assets of the Northern
         Sale Business;

         NORTHERN GROUP or NORTHERN GROUP COMPANIES means NE plc, its parent
         undertaking and any subsidiary undertaking of that company or of its
         parent undertaking and NORTHERN GROUP COMPANY means any of them;

         NORTHERN SALE BUSINESS means the business of Northern to be acquired
         pursuant to the Northern Electricity Business Sale Agreement and the
         business of NEAGL and certain other assets to be acquired pursuant to
         the Northern Non-Electricity Business Sale Agreement;

         NORTHERN SENIOR EMPLOYEE has the meaning set out in the Northern
         Non-Electricity Business Sale Agreement;

         NORTHERN'S SOLICITORS means Herbert Smith of Exchange House, Primrose
         Street, London EC2A 2HS;

         NORTHERN TRANSFER SCHEME means a transfer scheme for the transfer and
         separation of, inter alia, the Tariff Supply Business (as defined in
         the Northern Electricity Business Sale Agreement) to the Successor
         Supply Company (as defined in the Northern Electricity Business Sale
         Agreement) (to the extent not already transferred under the Northern
         Electricity Business Sale Agreement) as agreed between the parties
         after the date hereof or as may be required to be made by the Secretary
         of State for Trade and Industry under the Utilities Act 2000;

         NORTHERN WARRANTIES means the warranties and representations given by,
         inter alia, NE plc and NEAGL contained in the Deed of Warranty;

         OFGEM means the Office of Gas and Electricity Markets;

         PAYMENT ACCOUNT DETAILS means, in relation to any relevant payment to
         be made under or pursuant to this Agreement, the name, account number,
         sort code, account location and other details specified by the payee
         and necessary to effect payment to the payee in accordance with this
         Agreement;

         PERSON means any person, company, firm, partnership, association or
         body corporate;

         PLANNING ACTS means the Town and Country Planning Act 1990, the
         Planning (Listed Buildings and Conservation Areas) Act 1990, the
         Planning (Hazardous Substances) Act 1990, the Planning (Consequential
         Provisions) Act 1990 and the Planning and Compensation Act 1991;

         PROPERTIES means:

                                       7
<PAGE>

         (a)    the Material Properties; and

         (b)    the Secondary Substations;

         PURCHASER means:

         (a)    Npower Northern Limited in relation to the purchase of the
                Northern Sale Business; and

         (b)    Northern in relation to the purchase of the Yorkshire Shares;

         RECEIVABLES AGREEMENT means the amended and restated receivables
         purchase agreement dated 16th October 2000 and made between (1)
         Northern Electric Plc (2) Cragside Limited (3) Mont Blanc Capital
         Corp. and (4) ING Barings (U.S.) Capital Markets LLC;

         REGULATION means Council Regulations (EEC) No. 4064/89 (as amended by
         Regulation (EC) 1310/97;

         REPORTING ACCOUNTANTS means a firm of Chartered Accountants which is
         one of the Big Five, independent to Northern and Innogy, to be agreed
         between Northern and Innogy within seven days of a notice by one to the
         other requiring such agreement and failing such, agreement means a firm
         of Chartered Accountants which is nominated as a result of the
         application of either of them by or on behalf of the President for the
         time being of the Institute of Chartered Accountants in England and
         Wales;

         RESTRICTED ACTIVITY means a business operating in the United Kingdom
         which is competitive with the Northern Sale Business, in relation to
         the Northern Sale Business, or the Yorkshire Sale Business, in relation
         to the Yorkshire Sale Business;

         RETAINED COMPANY INTRA-GROUP LOANS means loans or other indebtedness
         between Sale Companies, including;

         (a)    inter-company loan agreement between Yorkshire Power Group
                Limited and Yorkshire Holdings plc dated 11 September 1997
                relating to loan dated 23 February 1997;

         (b)    promissory note between Yorkshire Power Group Limited and
                Yorkshire Power Finance Limited dated 9 June 1998 (as amended);

         (c)    promissory note between Yorkshire Power Group Limited and
                Yorkshire Power Finance Limited for $298,050,000 dated 25
                February 1998;

         (d)    (pound)143,500,000 notes due 2019 issued by Yorkshire Power
                Group Limited to Yorkshire Power Finance 2 Limited;

         (e)    inter-company loan agreement between Yorkshire Power Finance
                Limited and Yorkshire Power Group Limited dated 4 February 1998;

         (f)    promissory note between Yorkshire Electricity Group plc and
                Yorkshire Power Finance 2 Limited dated 16 February 2000;

         (g)    inter-company loan agreement between Yorkshire Power Finance 2
                Limited and Yorkshire Electricity Group plc dated 16 February
                2000;

         (h)    inter-company loan agreement between Yorkshire Power Finance
                Limited and Yorkshire Electricity Group plc dated 3 February
                1998; and

                                       8
<PAGE>

         (i)    inter-company loan agreement between Yorkshire Power Finance
                Limited and Yorkshire Electricity Group plc dated 20 December
                1999;

         SALE COMPANIES means Yorkshire and the Yorkshire Subsidiaries and SALE
         COMPANY means any of them;

         SECONDARY SUBSTATIONS means all of the substations (other than the
         principal substations listed in Part A of Schedule 3) which are at the
         date of this Agreement used for the Yorkshire Sale Business;

         SENIOR EMPLOYEE means (i) a Northern Senior Employee in relation to the
         sale of the Northern Sale Business and (ii) a Yorkshire Senior Employee
         in relation to the Yorkshire Warranties and the sale of the Yorkshire
         Shares;

         SHARE AMOUNT has the meaning set out in Clause 3.1;

         SHAREHOLDERS AGREEMENT DEED OF ADHERENCE means the deed of adherence to
         the Yorkshire Shareholders Agreement in the agreed terms to be entered
         into between Xcel Energy International, Inc, Northern, Yorkshire,
         Innogy and the Innogy Guarantor;

         STERLING BONDS means the (pound)200 million bonds @ 9.25% due 2020
         issued by YEG plc and the (pound)200 million bonds @ 7.25 % due 2028
         issued by Yorkshire Power Finance Limited;

         TAXATION has the meaning given to that term in the Tax Deed of
         Covenant;

         TAX DEED OF COVENANT means the deed of covenant against Taxation in the
         agreed terms to be entered into at Completion;

         TAXES ACT means the Income and Corporation Taxes Act 1988;

         TCGA 1992 means the Taxation of Chargeable Gains Act 1992;

         TRANSFER NOTICE INCORPORATING THE TAG ALONG NOTICE means the transfer
         notice incorporating the tag along notice to be agreed between the
         parties and to be given by Innogy to Xcel Energy International, Inc.
         pursuant to Clauses 6 and 11 of the Yorkshire Shareholders Agreement;

         VAT means United Kingdom Value Added Tax;

         VATA means Value Added Tax Act 1994;

         VENDOR means:

         (a)    Innogy in relation to the sale of the Yorkshire Shares; and

         (b)    Northern and NEAGL in relation to the sale of the Northern Sale
                Business;

         VENDOR INTELLECTUAL PROPERTY means all rights and interests held by the
         Sale Companies (whether as owner, licensee or otherwise) in
         Intellectual Property;

         VENDOR'S GROUP means the Vendor its parent undertaking or any
         subsidiary undertaking of the Vendor or of its parent undertaking
         (excluding Sale Companies to be sold by the Vendor pursuant to this
         Agreement);

         WARRANTIES means the warranties and representations given by Innogy
         contained in Part A of Schedule 2;

         WORKING CAPITAL has the meaning given to that term in Schedule 7;

         WORKING CAPITAL DETERMINATION DATE has the meaning given to that term
         in Schedule 7;

                                       9
<PAGE>

         XCEL OPTION AGREEMENT means the agreement in agreed terms between
         Innogy and Northern in relation to the 23,100,001 Ordinary Shares of
         (pound)1 each in the capital of Yorkshire held, as at the date of this
         Agreement, by Xcel Energy International, Inc;

         YEG means Yorkshire Electricity Group plc;

         YORKSHIRE means Yorkshire Power Group Limited, details of which are
         contained in Part 1 of Schedule 1;

         YORKSHIRE CASH AND WORKING CAPITAL STATEMENT has the meaning given to
         that term in Schedule 7;

         YORKSHIRE HIVEOUT AGREEMENT means the agreement for the intra group
         sale of the Yorkshire electricity supply business assets and other
         assets dated 1 August 2001 between YEG plc and Npower Yorkshire Limited
         (as amended);

         YORKSHIRE NET CASH AND WORKING CAPITAL has the meaning given to that
         term in Schedule 7;

         YORKSHIRE SALE BUSINESS means the entire business carried on by the
         Sale Companies;

         YORKSHIRE SHAREHOLDERS AGREEMENT means the shareholders agreement
         relating to Yorkshire dated 26 February 2001 between Innogy, the Innogy
         Guarantor, Xcel Energy Inc, Xcel Energy International, Inc and
         Yorkshire;

         YORKSHIRE SENIOR EMPLOYEE means an employee of a Sale Company who is in
         receipt of an annual basic salary (on the basis of full-time
         employment) in excess of (pound)56,000;

         YORKSHIRE SHARES means 416,900,001 Ordinary Shares of(pound)1 each in
         the capital of Yorkshire, being 94.75 per cent. of the issued share
         capital of Yorkshire;

         YORKSHIRE SUBSIDIARIES means the subsidiary undertakings Yorkshire
         brief details of which are set out in Part 2 of Schedule 1; and

         YORKSHIRE TRANSFER SCHEME means a transfer scheme for the transfer and
         separation of, inter alia, the Tariff Supply Business (as defined in
         the Yorkshire Hiveout Agreement) to the Successor Supply Company (as
         defined in the Yorkshire Hiveout Agreement) (to the extent not already
         transferred under the Yorkshire Hiveout Agreement) as agreed between
         the parties after the date hereof or as may be required to be made by
         the Secretary of State for Trade and Industry under the Utilities Act.

1.2      Subordinate Legislation

         Any reference to a statutory provision shall include any subordinate
         legislation made from time to time under that provision;

1.3      Modification etc. of Statutes

         Any reference to a statutory provision:

         1.3.1  shall include such provision as from time to time modified or
                re-enacted or consolidated whether before or after the date of
                this Agreement so far as such modification, re-enactment or
                consolidation applies or is capable of applying to any
                transactions entered into under this Agreement on or prior to
                Completion; and

         1.3.2  (so far as any liability thereunder may exist or can arise)
                shall include also any past statutory provision (as from time to
                time modified, re-enacted or consolidated) which such provision
                has directly or indirectly replaced;

1.4      Companies Act 1985

                                       10
<PAGE>

         The terms PARENT UNDERTAKING and SUBSIDIARY UNDERTAKING and
         WHOLLY-OWNED SUBSIDIARY shall have the same meanings in this Agreement
         as their respective definitions in the Companies Act 1985 as amended;

1.5      Interpretation Act 1978

         The Interpretation Act 1978 shall apply to this Agreement in the same
         way as it applies to an enactment;

1.6      Accounts

         Any reference to "ACCOUNTS" shall include the directors' and auditors'
         reports, relevant balance sheets and profit and loss accounts and
         related notes together with all documents which are or would be
         required by law to be annexed to the accounts of the company concerned
         to be laid before that company in general meeting in respect of the
         accounting reference period in question;

1.7      References

         References to this Agreement shall include any Schedules to it and
         references to Clauses and Schedules are to Clauses of, and Schedules
         to, this Agreement;

1.8      Singular/Plural

         References in this Agreement (including the definitions in Clause 1.1)
         to the singular include the plural and vice versa;

1.9      Information

         Any reference to books, records or other information means books,
         records or other information in any form including paper,
         electronically stored data, magnetic media, film and microfilm;

1.10     Indemnity on an After-Tax Basis

         Where any indemnity contained in this Agreement is expressed to be ON
         AN AFTER TAX BASIS, then in calculating the liability of the
         indemnifying party, there shall be taken into account, having regard to
         the time value of money:

         1.10.1 the amount by which any liability to Taxation of the party to be
                indemnified (or any member of the Innogy Group (in the event of
                Innogy being such party) or the Northern Group (in the event of
                Northern being such party)) is actually reduced or extinguished
                as a result of the matter giving rise to the indemnity claim;
                and

         1.10.2 the amount by which any liability to Taxation of the party to be
                indemnified (or any member of the Innogy Group (in the event of
                Innogy being such party) or the Northern Group (in the event of
                Northern being such party)) is actually increased as a result of
                the payment by the indemnifying party in respect of the matter
                giving rise to the indemnity claim; and

1.11     Awareness

         Any Warranty which is qualified as being made SO FAR AS INNOGY IS AWARE
         or TO THE BEST OF THE KNOWLEDGE, INFORMATION AND BELIEF OF INNOGY means
         so far as Innogy is aware or to the best of Innogy's knowledge,
         information and belief, as the case may be, having made all reasonable
         enquiries. REASONABLE ENQUIRIES for this purpose means those enquiries
         made of those persons identified in the Disclosure Letter (including
         any supplemental enquiries arising therefrom that it would be
         reasonable to make); and

                                       11
<PAGE>

1.12     Headings

         1.12.1  Headings shall be ignored in construing this Agreement.

         1.12.2  Mentioning anything after "include" or "including" does not
                 limit what else might be included.

2.       AGREEMENT TO BUY AND SELL SHARES

2.1      Sale and Purchase of Yorkshire Shares

         Innogy agrees to sell and Northern agrees to purchase the Yorkshire
         Shares free from all encumbrances and together with all rights and
         advantages now and hereafter attaching thereto.

3.       CONSIDERATION

3.1      Purchase Price

         The consideration for the purchase of the Yorkshire Shares shall be
         equal to:

         (a)     the cash sum of 57.207962 pence for each Yorkshire Share making
                 an aggregate amount of (pound)238,500,000 (the SHARE AMOUNT)
                 plus

         (b)     an amount equal to the Estimated Yorkshire Net Cash and Working
                 Capital

         (the Share Amount plus the Estimated Yorkshire Net Cash and Working
         Capital together being referred to herein as the COMPLETION AMOUNT);
         and the Completion Amount shall be paid to Innogy on Completion
         (subject to adjustment as expressly provided for in Clause 8 of this
         Agreement and subject to the Netting Agreement).

3.2      Payment Details

         Wherever in this Agreement provision is made for the payment of cash by
         one party to another, such payment shall be made in pounds sterling and
         shall be effected by crediting the account specified in the Payment
         Account Details of the party or entity entitled to the payment by way
         of CHAPS on or before the due date for payment unless the payee by
         notice to the payer, not later than three Business Days prior to the
         due date for payment, elects to be paid by banker's draft drawn on any
         international bank reasonably acceptable to the payer and having an
         office in London. Payment of such sum shall be a good discharge to the
         payer of its obligation to make such payment.

4.       CONDITIONS

4.1      Conditions Precedent

         The agreement for the sale and purchase of the Yorkshire Shares
         contained in Clause 2 is conditional upon (and accordingly beneficial
         ownership in the Yorkshire Shares will not pass until) satisfaction of
         the following conditions, or their satisfaction subject only to
         Completion of this Agreement:

         4.1.1   to the extent the transactions contemplated by this Agreement
                 fall within the scope of the EC Merger Regulation, the EC
                 Commission:

                 (a)  taking a decision under Article 6(1)(b) of the Regulation
                      that the transaction hereby contemplated does not raise
                      serious doubts as to its compatibility with the Common
                      Market, any conditions attached to the EC Commission's

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<PAGE>

                      decision of compatibility being in form and substance
                      satisfactory to Northern (or the EC Commission allowing
                      its jurisdiction to lapse by allowing the time limit for
                      opening proceedings under Article 6(1)(c) of the
                      Regulation to expire without opening proceedings in
                      respect of the transaction and accordingly the transaction
                      being deemed compatible with the Common Market); or

                 (b)  declaring, if the EC Commission has initiated proceedings
                      pursuant to Article 6(1)(c) of the Regulation, that the
                      transaction hereby contemplated is compatible with the
                      Common Market, any conditions attached to the Commission's
                      decision of compatibility being in form and substance
                      satisfactory to Northern (or that the Commission has
                      allowed its jurisdiction to lapse by failing to take a
                      decision on compatibility with the Common Market within
                      the time limit prescribed by the Regulation following the
                      opening of proceedings and accordingly the transaction,
                      pursuant to Article 10(6) of the Regulation, is deemed to
                      be compatible with the Common Market); or

                 (c)  referring the transaction hereby contemplated to the
                      national authorities of the United Kingdom under Article 9
                      of the Regulation;

                 in each case, any application of the provisions of Articles 81
                 and 82 EC Treaty (ex Articles 85 and 86) and/or the Regulation
                 by the EC Commission in the course of its consideration of the
                 transaction resulting in the imposition of no conditions, or
                 only of conditions satisfactory in form and substance to
                 Northern; or

         4.1.2   either:

                 (a)  receipt of a notice in a form reasonably satisfactory to
                      Northern and Innogy of a confirmation from Xcel Energy
                      International Inc. that it will not exercise any rights
                      pursuant to the Yorkshire Shareholders Agreement to
                      purchase the Yorkshire Shares; or

                 (b)  the expiry of the Preemption Offer Period (as defined in
                      the Yorkshire Shareholders Agreement), following issue of
                      the Transfer Notice incorporating the Tag Along Notice,
                      without acceptances having been received for all of the
                      Yorkshire Shares;

         4.1.3   either

                 (a)  the Sale Companies obligations in respect of the
                      redemption of the Non-Assumed Yorkshire Bonds having been
                      satisfied in full in accordance with the terms and
                      conditions of such bonds having fully discharged such
                      Non-Assumed Yorkshire Bonds; or

                 (b)  (a) the Sale Companies having irrevocably deposited with
                      the relevant paying agent funds sufficient to fully
                      discharge such Non-Assumed Yorkshire Bonds and (b)
                      irrevocable notice of redemption of such Non-Assumed
                      Yorkshire Bonds having been given and (c) irrevocable
                      instructions to the relevant paying agents having been
                      given to pay such funds to the bondholders or the relevant
                      trustee in accordance with the terms of such bonds;

         4.1.4   the trustees of the Northern Bonds and in the case of the Ambac
                 Bonds, Ambac (and/or the trustee of the Ambac bonds, as
                 appropriate) and/or (in each case) any independent financial
                 adviser appointed under the documents relating to such bonds:

                                       13
<PAGE>

                 (a)  having issued or agreed to issue any approvals or
                      certifications under the relevant bond documents; and/or

                 (b)  having agreed all documentation required to amend the
                      relevant bond documents;

                 in each case, as may be required in connection with the sale
                 of the Northern Sale Business;

         4.1.5   the Sale Companies having reduced their aggregate Borrowings to
                 below (pound)10 million (without any other liability on the
                 part of the Sale Companies in respect of such Borrowings other
                 than in relation to the retained Borrowings below
                 (pound)10,000,000);

         4.1.6   Yorkshire holding (by way of deposit in a bank account) the
                 cash sum of not less than(pound)180 million.

4.2      Responsibility for Satisfaction

         4.2.1   Northern hereby undertakes to use all reasonable endeavours to
                 ensure the satisfaction of the conditions set out in Clauses
                 4.1.1 and 4.1.4 and Innogy hereby undertakes to use all
                 reasonable endeavours to ensure the satisfaction of the
                 conditions set out in Clauses 4.1.2, 4.1.3, 4.1.5 and 4.1.6, in
                 each case on or before the Long-Stop Date.

         4.2.2   Without prejudice to the foregoing, each of the parties agrees
                 that it shall, upon a request from the other, promptly
                 co-operate with and provide all necessary information
                 reasonably required by the other party or by any Competent
                 Authority or any government, governmental, supranational or
                 trade agency, court or other regulatory body, or any other
                 third party in respect of all requests and enquiries in
                 connection with this Agreement and the arrangements relating
                 thereto (including, in relation to the satisfaction of the
                 condition precedent set out in Clause 4.1) from any such
                 Competent Authority or government, governmental, supranational
                 or trade agency, court or other regulatory body and Innogy
                 shall use its reasonable endeavours to procure that the Sale
                 Companies do so).

         4.2.3   If the EC Commission decides to initiate proceedings pursuant
                 to Article 6(1)(c) of the Regulation in relation to the
                 transaction or matters arising therefrom, each of the parties
                 undertakes to use its reasonable endeavours to persuade the EC
                 Commission to issue a decision declaring the transaction
                 compatible with the Common Market without any conditions or
                 obligations attaching thereto (subject to the Purchaser
                 indemnifying the Vendor in respect of any costs or expenses
                 incurred to third parties in connection with fulfilling its
                 obligations hereunder).

         4.2.4   The Purchaser shall file with the EC Commission the Form CO
                 required under the Regulation as soon as reasonably practicable
                 and (provided the Vendor has provided all relevant information
                 in respect of the Sale Companies or the Vendor required for the
                 Form CO) in any event no later than ten Business Days after the
                 date of this Agreement and shall consult with the Vendor and
                 the Vendor's Solicitors on the content of the Form CO prior to
                 its submission to the EC Commission.

4.3      Satisfaction

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<PAGE>

         4.3.1   Northern shall give notice to Innogy of the satisfaction of the
                 conditions set out in Clauses 4.1.1 and 4.1.4, and Innogy shall
                 give notice to Northern of the satisfaction of the conditions
                 set out in Clauses 4.1.2, and 4.1.3, 4.1.5 and 4.1.6 in each
                 case within two Business Days of becoming aware of the same.

         4.3.2   Northern in its sole discretion may waive satisfaction of any
                 of the conditions set out in Clause 4.1 (other than clause
                 4.1.2) by written notice to the Vendor.

4.4      Break-fee

         4.4.1   (a)   If any of the conditions contained in Clause 4.1.4 are
                       not satisfied by the Long-Stop Date, then this Agreement
                       shall (save for Clauses 12 and 13) terminate and Northern
                       shall pay to Innogy within three Business Days of the
                       Long-Stop Date an amount in cash of (pound)20 million.

                 (b)   If the condition contained in Clause 4.1.1 is not
                       satisfied by the Long-Stop Date, then this Agreement
                       shall (save for Clauses 12 and 13) terminate and, if the
                       only reason for such non-satisfaction relates to a
                       request for any disposal, undertaking or other action
                       related to activities not carried on by Mid-American
                       Energy Holding Company and its subsidiaries and
                       affiliates, (and all other conditions contained in Clause
                       4.1 have been satisfied) Northern shall pay Innogy within
                       three Business Days of the Long-Stop Date an amount in
                       cash of(pound)5 million; and, if the reason for such
                       non-satisfaction relates to a request for any disposal,
                       undertaking or other action related to activities of
                       Mid-American Energy Holding Company and its subsidiaries
                       and affiliates, Northern (and all other conditions
                       contained in Clause 4.1 have been satisfied) shall pay
                       Innogy within three Business Days of the Long-Stop Date
                       an amount in cash of(pound)10 million,

                 provided always that, if on the Long-Stop Date the condition
                 in Clause 4.1.1 remains unsatisfied and also the condition in
                 Clause 4.1.4 remains unsatisfied, then notwithstanding the
                 previous of 4.4.1(b), the amount payable by Northern shall be
                 the relevant amount referred to in Clause 4.4.1(a) (and not
                 the amount referred to in Clause 4.4.1(b)).

         4.4.2   If any of the conditions contained in Clause, 4.1.2, 4.1.3,
                 4.1.5 or 4.1.6 are not satisfied by the Long-Stop Date, then
                 this Agreement shall terminate (save for Clauses 12 and 13) and
                 Innogy shall pay to Northern within three Business Days of the
                 Long-Stop Date an amount in cash of (pound)20 million.

4.5      Covenant

         4.5.1   Innogy covenants to Northern that all amounts outstanding and
                 owed by Innogy to Xcel International Inc. under Clauses 10.6 or
                 10.7 of the Yorkshire Shareholders Agreement as at Completion
                 will be paid in full by Completion and any further sums payable
                 under such Clauses following Completion will be paid by Innogy
                 in accordance with the terms of such Clauses.

         4.5.2   Innogy covenants to Northern that it will procure that
                 Borrowings of the Sale Companies (other than in respect of the
                 Assumed Yorkshire Debt and the Assumed Yorkshire Swaps) are,
                 prior to Completion, reduced to below(pound)10 million (without
                 any other liability on the part of any Sale Companies in
                 respect of such Borrowings other than in relation to the
                 retained Borrowings) and all of the Non-Retained Inter-Company
                 Loans are repaid in full (without any further liability on the
                 part of any of the

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<PAGE>

                 Sale Companies in respect of such Loans) and on or prior to
                 Completion Innogy shall provide Northern with such
                 information as Northern may reasonably require to show that
                 Innogy has complied with its obligations under this Clause.

         4.5.3   Innogy covenants to Northern that it will procure that all
                 Non-Assumed Yorkshire Swaps are closed out and settled prior to
                 Completion (without any further liability on the part of the
                 Sale Companies in respect of such Swaps) and on or prior to
                 Completion Innogy shall provide Northern with such information
                 as Northern may reasonably require to show that Innogy has
                 complied with its obligations under this Clause. Without
                 prejudice to any liability for failure to close out and settle
                 all Non-Assumed Yorkshire Swaps, if after Completion Northern
                 becomes aware that there were any Non-Assumed Yorkshire Swaps
                 in existence at Completion (and which have not been already
                 taken into account in the Working Capital adjustment), Northern
                 shall be entitled within five Business Days of Northern
                 becoming aware of such Swaps to close out and settle such
                 Non-Assumed Yorkshire Swaps and, if such Non-Assumed Yorkshire
                 Swaps are so closed-out and settled with any payment due to any
                 Sale Company, Northern shall account to Innogy for such monies
                 and if the close-out and settlement results in any Sale Company
                 making a payment to any third party which results in the Sale
                 Company making a payment or having any other liability to a
                 third party, Innogy shall forthwith on demand indemnify the
                 relevant Sale Company in respect thereof or, at the option of
                 Northern, pay such amounts directly to Northern or as Northern
                 may direct.

         4.5.4   Innogy covenants to Northern to procure that the Sale Companies
                 will keep in place and not cancel the Assumed Facilities.

         4.5.5   Innogy covenants to Northern that it will procure that, on or
                 prior to Completion, all intra-group contracts between the
                 Innogy Group and any of the Sale Companies entered into between
                 3 April and Completion, other than contracts entered into in
                 the ordinary course of business and the Yorkshire Hiveout
                 Agreement and agreements entered into pursuant to the Yorkshire
                 Hiveout Agreement shall be terminated.

5.       ACTION PENDING COMPLETION

5.1      Mutual Undertakings

         Subject to Clauses 5.2 to 5.5 below each of Innogy (in relation to the
         Sale Companies) and the Northern Guarantor (in relation to the Northern
         Sale Business) shall procure that:

         5.1.1   in the case of Innogy, no Sale Company shall and, in the case
                 of NE plc, no Northern Group Company shall in relation to the
                 Northern Sale Business:

                    (i)    incur any expenditure on capital account exceeding
                           (pound)100,000 in relation to the Northern Sale
                           Business, (pound)200,000 in relation to the Sale
                           Companies (exclusive of VAT) in the case of any
                           single item or (pound)1 million in relation to the
                           Northern Sale Business, (pound)2 million in relation
                           to the Sale Companies (exclusive of VAT) in
                           aggregate, in both cases other than any such
                           expenditure details of which are set out in Schedule
                           8; or

                    (ii)   sell or dispose of or purchase or agree to sell or
                           dispose of or purchase or grant any option or right
                           of pre-emption in respect of any asset or any
                           interest in any asset for a consideration in excess
                           of (pound)100,000 in relation to the

                                       16
<PAGE>

                           Northern Sale Business, (pound)200,000 in relation to
                           the Sale Companies (exclusive of VAT) or create any
                           encumbrance over any material part of its assets
                           (other than pursuant to the existing financing of the
                           Sale Companies, details of which are set out in
                           Schedule 8); or

                    (iii)  create or raise any debt or borrow any money or make
                           any payments (except payments in the ordinary course
                           of business including pursuant to existing
                           contractual commitments) in each case except as
                           described in Schedule 8 or between Sale Companies; or
                    (iv)   enter into:

                           (a)  (save as provided in Clause 5.1.1 (ix) in
                                respect of any additional employee) any
                                contracts, transactions or commitments outside
                                the ordinary course of business or which are not
                                on arms-length commercial terms; or

                           (b)  except for contracts entered into in accordance
                                with Clause 5.5, any contracts, transactions or
                                commitments which are (i) not capable of being
                                terminated without compensation at any time in
                                the case of Yorkshire with three months' notice
                                or less and in the case of Northern Group
                                Company with three months' notice or less or
                                (ii) which involve or may involve total annual
                                expenditure in excess of (x)(pound)250,000 in
                                relation to the Northern Sale Business,
                                (pound)500,000 in relation to the Sale
                                Companies, in each case in the case of any
                                single contract, transaction or commitment or
                                (y)(pound)1 million in relation to the Northern
                                Sale Business,(pound)2 million in relation to
                                the Sale Companies, in aggregate (in each case
                                exclusive of VAT) in each case other than those
                                details of which are contained in Schedule 8;

                           provided that nothing in this subparagraph (iv) shall
                           prevent any Sale Company or Northern Group Company
                           from entering into connection agreements, use of
                           system agreements and quotations and other agreements
                           where in each case it is obliged to do so pursuant to
                           its licence or any other legal or regulatory
                           requirement and any contracts in relation thereto or
                           contracts in relation to the routine repair,
                           replacement, reinforcement, maintenance and new
                           connections of the distribution network; or

                    (v)    substantially amend the terms of any existing
                           contracts or agreements involving revenue or
                           expenditure in excess of (pound)100,000 per annum
                           (exclusive of VAT) in relation to the Northern Sale
                           Business or (pound)200,000 per annum (exclusive of
                           VAT) in relation to the Sale Companies; or

                    (vi)   in the case of the Yorkshire Sale Companies declare,
                           make or pay any dividend or other distribution other
                           than (a) to another Sale Company or (b) to meet
                           interest payments in respect of the existing
                           financing arrangements of any Sale Company or (c) any
                           stock dividend or other similar distribution as
                           described in Schedule 8; or

                    (vii)  grant, issue or redeem any mortgage, charge,
                           debenture or other security or give any guarantee or
                           indemnity (other than in the ordinary course); or

                                       17
<PAGE>

                    (viii)  make any change in the material terms and conditions
                            of employment of any of its directors or Senior
                            Employees or any material change to the terms and
                            conditions or rates of pay pursuant to any
                            collective agreement affecting more than 100
                            employees in aggregate; or

                    (ix)    terminate the employment of any Senior Employee
                            (save for gross misconduct) or make an offer of
                            employment to any additional employee (unless on
                            either a fixed term contract of less than one year's
                            duration or a contract with a notice period of less
                            than three months), save as required by the terms of
                            this agreement or as required by the terms of any
                            agreement existing at the date of this agreement as
                            described in Schedule 8; or

                    (x)     announce or agree any redundancies or redundancy
                            terms in relation to more than 35 employees in
                            aggregate during the period to which this covenant
                            applies; or

                    (xi)    in respect of any employees of the Sale Companies
                            (in the case of the Sale Companies) or in respect of
                            any employees of the Northern Sale Business (in the
                            case of any Northern Group Company), initiate any
                            alterations to pension scheme contributions and
                            rules (save in relation to the introduction of bulk
                            transfer provisions to Northern's Scheme), or
                            initiate any increase in the pension benefits or
                            reduction in member contributions; or

                    (xii)   introduce any new share incentive, share option,
                            profit sharing, bonus or other incentive scheme or
                            vary in any way the terms of any such scheme as it
                            currently operates, including any variation to
                            performance targets, objectives, quanta of payment
                            or any variation to the identities of participants;
                            or

                    (xiii)  enter into or settle any litigation which is
                            material to the Sale Companies or the Northern Sale
                            Business, as the case may be; or

                    (xiv)   permit any of its insurances to lapse or knowingly
                            do any thing which would make any policy of
                            insurance void or voidable or fail to notify any
                            material insurance claim of which such Sale Company
                            or Northern Group Company as the case may be, has
                            become aware, in accordance with the provisions of
                            the relevant policy or settle any such claim
                            materially below the amount claimed; or

                    (xv)    create, issue, purchase or redeem any class of share
                            or loan capital; or

                    (xvi)   manage its debtors and creditors otherwise than
                            substantially in accordance with the current
                            practice of the Sale Companies or the Northern Sale
                            Companies as the case may be; or

                    (xviii) in the case of any Northern Group Company, alter any
                            published tariffs that apply to any date after
                            Completion in relation to the supply of electricity
                            or gas or other consumer products where (i) a
                            Northern Group Company has sole discretion on
                            pricing and (ii) where such products are sold
                            directly by a Northern Group Company to residential
                            customers, small or medium enterprise customers or
                            any customer of any Northern Group Company which
                            accounts for one per cent. or more of the turnover
                            of the Northern Sale Business; or

                                       18
<PAGE>

                    (xix)   terminate any contracts or agreements with sales
                            agents (and in the event that any such contracts are
                            to lapse, expire or otherwise terminate under their
                            terms, to notify NE plc (in the case of Innogy) or
                            Innogy (in the case of NE plc) as far in advance as
                            reasonably practicable prior to such termination or
                            expiry and at the other party's cost take such
                            action as the other party may reasonably require in
                            relation to the same) or appoint any new or enter
                            into any further contracts with sales agents; or

                    (xx)    terminate any contracts or agreements involving
                            revenue or expenditure in excess of (pound)100,000
                            per annum (exclusive of VAT) in relation to the
                            Northern Sale Business or (pound)200,000 per annum
                            (exclusive of VAT) in relation to the Sale Companies
                            (other than where such contracts or agreements
                            lapse, expire or otherwise terminate under their
                            terms); or

                    (xxi)   make any changes in its accounting policies other
                            than as required by law or any relevant accounting
                            body; or

                    (xxii)  in the case of the Sale Companies, make any
                            alterations to its memorandum or articles of
                            association or acquire any shares in any other
                            company; or

                    (xxiii) give any undertakings to any Competent Authority or
                            agree with any Competent Authority or consent to the
                            adoption by any Competent Authority of any
                            additions, deletions, amendments or modifications to
                            the terms or conditions of any licence which licence
                            is material to the Sale Companies taken as a whole
                            or the Northern Sale Business taken as a whole; or

                    (xxiv)  not sell, dispose or agree to sell or dispose any of
                            the shares (or any interest in any of the shares) in
                            any of the Sale Companies; or

                    (xxv)   implement any material new advertising or marketing
                            campaigns in respect of the Business; or

                    (xxvi)  in the case of the Sale Companies make any amendment
                            to the terms of the Yorkshire Hiveout Agreement or
                            the Agency Agreement (as defined in the Yorkshire
                            Hiveout Agreement); or

                    (xxvii) agree, conditionally or otherwise, to do any of the
                            foregoing.

         5.1.2      subject to the restrictions contained in Clause 5.1.1 above
                    and in subparagraphs 5.1.3, 5.1.4 and 5.1.5 below, each
                    Northern Group Company and the Sale Company shall carry on
                    its Business in the ordinary course and in particular, no
                    Northern Group Company nor any Sale Company will enter into
                    any contract (a) for the supply of electricity or gas to
                    industrial and/or commercial customers or (b) in the case of
                    the Sale Companies for the provision of external contracting
                    services, in each case which is, in the opinion of the
                    management of the relevant entity acting reasonably entered
                    into on the basis of a loss making transaction;

         5.1.3      Innogy in relation to the Sale Companies shall procure that
                    no member of the Innogy Group shall, before Completion:

                    (i)     dispose of any interest in the Yorkshire Shares or
                            grant any option or right of pre-emption over, or
                            mortgage, charge or otherwise encumber the Yorkshire
                            Shares or any of them; or

                    (ii)    except as required by law permit any Sale Company to
                            pass any resolution in general meeting; or

                                       19
<PAGE>

                    (iii)   liquidate any Sale Company or dispose of any shares
                            in any Sale Company;

         5.1.4      so far as permitted by law and subject to Clauses 13.2 and
                    13.3 the other party and its agents will, upon reasonable
                    notice and during normal working hours, be allowed
                    reasonable access to, and, where reasonably practicable to
                    take copies of, the books and records of each Sale Company,
                    or of each Northern Group Company to the extent such books
                    and records relate to the Northern Sale Business, as the
                    case may be, subject to such access not interfering with the
                    carrying on of the business of any Sale Company or of the
                    Northern Sale Business, as the case may be or the business
                    of the relevant party allowing access or any member of its
                    Group;

         5.1.5      so far as permitted by law and subject to Clauses 13.2 and
                    13.3 each party will consult, and, in the case of Innogy,
                    will cause the relevant Sale Companies to consult, and in
                    the case of Northern will cause the relevant Northern Group
                    Companies to consult with one or more of the other party's
                    representatives with respect to any action between the date
                    of this agreement and Completion which may materially affect
                    the business of the relevant Sale Company or Northern Sale
                    Business. Such party will provide, and will cause the
                    relevant Yorkshire Sale Company, or Northern Group Company
                    as the case may be to provide to such representatives such
                    information as the other party's representatives may
                    reasonably request for this purpose;

         5.1.6      Innogy shall consult with NE plc and NE plc shall consult
                    with Innogy before making arrangements under Clause 14(5) of
                    Innogy's Scheme and Northern's Scheme respectively to deal
                    with any surpluses disclosed in Innogy's Scheme and
                    Northern's Scheme respectively by the actuarial valuations
                    as at 31 March 2001 in relation to whether and how those
                    arrangements would affect Yorkshire Scheme Relevant
                    Employees and Northern Scheme Relevant Employees
                    respectively;

         5.1.7      NE plc shall consult with Innogy in relation to renewal of
                    the Northern Group's insurance policies to the extent that
                    such policies relate to the Northern Sale Business and take
                    into account the reasonable requirements of Innogy in
                    relation to such insurance renewal to the extent they
                    require Northern to maintain in all material respects the
                    existing scope and level of insurance cover which applies to
                    the Northern Sale Business as at the date hereof; and

         5.1.8      Innogy undertakes to provide that as soon as practicable and
                    in any event no later than 10 August 2001, additional
                    information to the extent required to comply with the
                    Warranties in respect of each of the Telecom Employees as
                    defined in the Disclosure Letter.

5.2      Consent

         Innogy may permit a Sale Company to do any of the matters set out in
         Clauses 5.1 or 5.5 with the prior written consent of Northern. Northern
         may permit a Northern Group Company to do any of the matters set out in
         Clauses 5.1 or 5.5 with the prior written consent of Innogy.

5.3      Compliance with laws etc.

         Consent shall not be required (i) in respect of actions taken to comply
         with any legal, licence or regulatory requirements or (ii) where Innogy
         or NE plc as the case may be can demonstrate that it was necessary for
         it to take the relevant action without the prior consent of the other

                                       20
<PAGE>

         party due to emergency operational requirements which would have caused
         significant operational difficulties if not remedied before it was
         practicable to consult with and obtain the consent of the other party
         and Clauses 5.1 and 5.5 shall not apply in the circumstances set out in
         this Clause.

5.4      Innogy Price Matrices

         Prior to the date of this agreement the Innogy Guarantor shall provide
         NE plc with matrices of prices in accordance with standard practice in
         the gas and electricity industries, and in a format and manner agreed
         by Northern and Innogy, setting out prices at which the Innogy
         Guarantor would be willing for the period of this agreement, up to and
         including September 2003, to sell wholesale (i) electricity and (ii)
         gas to the Northern Sale Business (the INNOGY PRICE MATRIX). Further,
         Innogy shall provide NE plc with a matrix of supplier Balancing Service
         Use of System (BSUoS) costs prior to the date of this agreement and in
         a format and manner agreed by Northern and Innogy. Innogy shall be
         entitled to alter the Innogy Price Matrices prospectively on any
         business day if any such alterations are in accordance with standard
         industry practice in the gas and electricity industries. Alterations to
         any Innogy price matrix are not to apply retrospectively.

5.5      Trading Contracts

         Provided that the Innogy Guarantor has provided the Innogy Price Matrix
         (or, if any alterations are made to the Innogy Price Matrix in
         accordance with Clause 5.4, the Innogy Price Matrix so altered) to
         Northern (to the address for notices set out in Clause 13.12.1 and via
         fax to Neil Middleton at Northern (fax number 0191 210 2159), and
         subject to Clauses 5.2 and 5.3, Northern shall procure that none of the
         Group Companies operating the Northern Sale Business shall in the
         period from the date of this agreement and before Completion:

         5.5.1      enter into any option, forward contract or other commitment
                    to purchase wholesale electricity or gas which is not
                    intended in the reasonable judgement of Northern, to cover
                    its expected demand; or

         5.5.2      purchase or enter into any option, forward contract or other
                    commitment to purchase wholesale electricity or gas at
                    prices above those in the most recent Innogy Price Matrix (a
                    "EXCLUDED PURCHASE COMMITMENT") provided that on any date on
                    which Northern notifies Andrew Butterworth and Graeme Iles
                    at Innogy (fax number: 01793 892061) that Northern wishes to
                    enter into any Excluded Purchase Commitment, and Innogy is
                    unwilling to enter into such Excluded Purchase Commitment at
                    prices indicated in the then current Innogy Price Matrix and
                    for the volumes which Northern so notifies Innogy, then
                    Northern shall be permitted to do any of the foregoing on
                    such date at such prices and for the volumes notified by
                    Northern to Innogy ; or

         5.5.3      sell or enter into any option, forward contract or other
                    commitment to sell wholesale electricity or gas at prices
                    below those in the most recent Innogy Price Matrix (an
                    "EXCLUDED SALE COMMITMENT") provided that on any date on
                    which Northern notifies Andrew Butterworth and Graeme Iles
                    at Innogy (fax number: 01793 892 061) that Northern wishes
                    to enter into any Excluded Sale Commitment, and Innogy is
                    unwilling to enter into such Excluded Sale Commitment at the
                    prices indicated in the then current Innogy Price Matrix and
                    for the volumes which Northern so notifies Innogy, then
                    Northern shall be permitted to do any of the foregoing on
                    such date at such prices and for the volumes notified by
                    Northern to Innogy; or

                                       21
<PAGE>

         5.5.4      enter into any electricity spill contract other than in
                    respect of the Viking power plant located at Seal Sands,
                    Teesside in substantially the form set out in Document 8.2.7
                    in the Black Data Room,

         Provided that nothing in this Clause 5.5 shall prevent NE plc or NEAGL
         (or any other company in the Northern Group) from entering into any
         forward contract or other commitment to purchase wholesale electricity
         or gas to trade out of speculative positions existing as at the date of
         this agreement.

5.6      Electricity Spot Trading

         Northern shall use all reasonable endeavours to balance daily forecast
         demand and purchase contract requirements to within plus or minus 5
         percent of forecast demand. Northern and Innogy shall on a day ahead
         basis review their requirements for short term balancing trades and
         where possible, and to the extent that both Northern and Innogy agree,
         conclude trades with each other to balance Northern's position.

5.7      Transfer Notice

         Innogy shall send the Transfer Notice incorporating the Tag Along
         Notice to Yorkshire as soon as reasonably practicable following the
         execution of this Agreement.

5.8      Northern shall use reasonable endeavours to procure all balancing on a
         daily average basis is within a mean tolerance of plus or minus 4 per
         cent of actual demand.

5.9      Northern shall procure that the non-pool generator spill agreements
         contained at document 8.5.12 to 8.5.19 (inclusive) in the Northern Data
         Room shall not be amended to any material extent from the proposals as
         set out in the Northern Data Room with respect to such contracts.

5.10     Northern shall observe and perform the TPL Realignment Document (as
         contained at document 8.3.10 in the Black Data Room) in all material
         respects in accordance with its terms and using the same practices as
         conducted in relation thereto prior to the date of this Agreement.

5.11     Northern shall not, with Innogy's consent, engage in any further
         development or investment in respect of the proposed data centre at
         Team Valley, Gateshead.

6.       COMPLETION

6.1      Date and Place

         Subject to Clause 4, Completion shall take place at the offices of
         Innogy's Solicitors in Brussels two Business Days following fulfilment
         or waiver of the conditions set out in Clause 4.1 (or such later time
         as the parties may agree).

6.2      Simultaneous Completion

         Innogy shall not be obliged to sell, and Northern shall not be obliged
         to purchase, the Yorkshire Shares unless NE plc and NPower Northern
         Limited simultaneously complete the sale and purchase of the Northern
         Sale Business and the NEAGL Sale Business pursuant to the Northern
         Business Sale Agreement.

6.3      Northern's Obligations on Completion

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<PAGE>

         On Completion, Northern shall procure that its obligations as set out
         in Schedule 5 are fulfilled.

6.4      Innogy's Obligations on Completion

         On Completion, Innogy shall procure that its obligations as set out in
         Schedule 5 are fulfilled.

6.5      Payment of Price

         Against compliance with the foregoing provisions, and subject to the
         Netting Agreement, Northern shall pay Innogy the Completion Amount.

6.6      Right to Terminate

         If the foregoing provisions of this Clause are not complied with in all
         material respects by Innogy or Northern by or on the date set for
         Completion, then Innogy (in the case of non-compliance by Northern) or
         Northern (in the case of non-compliance by Innogy) shall be entitled
         (in addition to and without prejudice to all other rights or remedies
         available to it including the right to claim damages) by written notice
         to the other party served on such date:

         6.6.1      to effect Completion so far as practicable having regard to
                    the defaults which have occurred; or

         6.6.2      to fix a new date for Completion (not being more than 20
                    Business Days after the agreed date for Completion) in which
                    case the foregoing provisions of this Clause 6.6 shall apply
                    to Completion as so deferred but provided such deferral may
                    only occur once, and if the other party continues to be
                    unable to comply with the foregoing provisions of this
                    Clause, the party able to comply shall be entitled (in
                    addition to and without prejudice to all other rights or
                    remedies available to it including the right to claim
                    damages) by written notice served on the other party to
                    terminate this Agreement without liability on its part.

6.7      Termination of VAT Group Registration

         6.7.1      As soon as reasonably practicable after the date of this
                    Agreement, Innogy shall procure that (if one has not already
                    been made) an application shall be made to H.M. Customs &
                    Excise pursuant to Section 43B of the VATA 1994 for the
                    exclusion of each Sale Company from the bodies treated as
                    members of the same VAT group as Innogy for the purposes of
                    Section 43 of the VATA 1994 (the VENDOR VAT GROUP) and for
                    such exclusion to take effect on Completion or, if H.M.
                    Customs & Excise do not permit this, at the earliest date
                    following Completion permitted by Section 43B.

         6.7.2      Pending the taking effect of such application and for so
                    long thereafter as may be necessary, each of Innogy and
                    Northern shall procure that such information (if applicable)
                    is provided to the other as may be required to enable the
                    continuing representative member of the Vendor VAT Group to
                    make all the returns required of it in respect of the Vendor
                    VAT Group.

         6.7.3      When the exclusion takes effect after Completion, Innogy and
                    Northern shall procure that such payments shall be made
                    between such representative member and the Sale Companies as
                    may be appropriate to ensure that the resulting position as
                    between such companies is as close as possible to the
                    position which would have obtained if such application or
                    applications had taken effect on the date of Completion.

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<PAGE>

6.8      Back to Back Agreement

         Innogy will use reasonable endeavours to procure that at Completion,
         AEP Resources Inc. will enter into an agreement with Northern or a
         member of the Northern Group nominated by Northern (a "NOMINEE"), in
         form satisfactory to such parties acting reasonably, under which AEP
         Resources Inc. will undertake to exercise all its rights under any
         documents to which it is a party in respect of the $275 million Junior
         Subordinated Debentures at 8.08% issued by Yorkshire Power Finance
         Limited as agent and trustee for Northern (or such nominee) and act in
         accordance with the directions of Northern (or such nominee) subject to
         AEP Resources Inc. being indemnified by Northern (or such nominee) in
         respect of any actions taken by it pursuant to such directions.

6.9      Transfer Scheme

         Following Completion, Northern shall not make and shall procure that no
         member of the Northern Group shall make or agree any amendment to the
         Yorkshire Transfer Scheme which is material to the Yorkshire supply
         business sold pursuant to the Yorkshire Hiveout Agreement without the
         consent of Innogy (such consent not to be unreasonably delayed), save
         as may be required by the Secretary of State for Trade and Industry.

7.       WARRANTIES

7.1      Incorporation of Schedule 2

         7.1.1      Innogy warrants and represents to Northern in the terms set
                    out in Schedule 2 (Part A) subject only to:

                    (i)     any matter which is fairly disclosed in the
                            Disclosure Letter and any matter provided for under
                            the terms of this Agreement; and

                    (ii)    any matter or thing hereafter done or omitted to be
                            done pursuant to this Agreement or otherwise at the
                            request in writing or with the approval in writing
                            of the Purchaser.

         7.1.2      Save as expressly otherwise provided, the Warranties shall
                    be separate and independent and shall not be limited by
                    reference to any other paragraph of the said Schedule or by
                    anything in this Agreement or the Tax Deed of Covenant.

         7.1.3      The only Warranties given in respect of the Properties are
                    those set out in paragraph 2.5 of Part A of Schedule 2 and
                    for the purposes of Schedule 2 only "assets" does not
                    include the Properties. The only Warranties given in respect
                    of the Environment or Environmental Law are those set out in
                    paragraph 2.1.9 of Part A of Schedule 2.

7.2      Limitation of Liability

         The provisions of Schedule 6 shall apply.

7.3      Effect of Completion

         The Warranties and all other provisions of this Agreement and the Tax
         Deed of Covenant insofar as the same shall not have been performed at
         Completion shall not be extinguished or affected by Completion, or by
         any other event or matter whatsoever (including any satisfaction and/or
         waiver of any condition contained in Clause 4.1), except by a specific
         and duly authorised written waiver or release by the Purchaser.

7.4      Right of Termination

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<PAGE>

         If prior to Completion, any event (or events) shall occur which would
         result in any of the Northern Warranties (in the case of Northern) or
         the Innogy Warranties (in the case of Innogy) being untrue or
         misleading as if they had been given again at Completion which
         individually (or in aggregate) results in or is reasonably likely to
         result in a deterioration of 20 percent of the enterprise value of the
         Northern Sale Business or the Sale Companies in each case as a whole
         compared with the enterprise value of such Business or Companies (as
         the case may be) as a whole as at the date of this Agreement (such
         deterioration being a deterioration of (pound)94,400,000 in the case of
         the Northern Sale Business and of (pound)200,800,000 in the case of the
         Sale Companies), ignoring for this purpose any event (or events)
         affecting or likely to affect generally all persons carrying on similar
         businesses in the United Kingdom, then Northern (in the event such
         deterioration occurs in relation to the Sale Companies) and the Innogy
         Guarantor (in the event such deterioration occurs in relation to the
         Northern Sale Business) shall be entitled by notice in writing to the
         Innogy Guarantor or Northern respectively to terminate this Agreement;
         but the occurrence of such an event (or events) shall not give rise to
         any right to damages or compensation.

         If Northern and the Innogy Guarantor are unable to agree within 5
         Business Days from the date of service of written notice by Northern or
         the Innogy Guarantor (as the case may be) in accordance with this
         Clause 7.4 that such event or events has resulted in or would be
         reasonably likely to result in a deterioration of 20 per cent of the
         enterprise value (as described above), either Northern or Innogy may
         call for an independent expert, jointly appointed by the parties (the
         "EXPERT"), to determine whether such a deterioration has occurred or
         would be reasonably likely to occur and the Expert shall make such
         determination (but shall not address whether such deterioration arose
         as a result of a breach of warranty) within 10 Business Days from the
         date of the referral to him. If Northern and the Innogy Guarantor are
         unable to agree upon the Expert within 5 business days from the date
         either Northern or the Innogy Guarantor calls for an independent
         expert, then the Expert shall be appointed by the President for the
         time being of the Institute of Chartered Accountants in England and
         Wales on the application of either Northern or the Innogy Guarantor.
         The Expert shall act as an expert and not as an arbitrator and his
         decision shall (in the absence of manifest error) be final and binding
         on the parties. The fees and expenses of the Expert shall be borne by
         Northern and the Innogy Guarantor in equal shares unless the Expert
         otherwise determines.

7.5      Waiver

         Save in the case of fraud, Innogy undertakes to Northern not to make or
         pursue any claim against any Sale Company or its respective officers,
         employees or agents in connection with assisting Innogy in giving the
         Warranties, preparing the Disclosure Letter and/or entering into this
         Agreement and the documents entered into pursuant to this Agreement.

7.6      Northern Warranties

         Each of Northern and NE plc warrants and represents to Innogy in the
         terms set out in Parts B and D respectively of Schedule 2.

7.7      Whole Agreement

         7.7.1      Except as otherwise expressly contemplated by this Agreement
                    or agreed in writing between the parties, this Agreement and
                    the Tax Deed of Covenant contains the whole agreement
                    between the parties relating to the subject matter of this
                    Agreement at the date hereof to the exclusion of any terms
                    implied by law which may be excluded by contract. Each of
                    Northern and NE plc acknowledges that it has not been

                                       25
<PAGE>

                    induced to enter this Agreement by and, so far as is
                    permitted by law (and except in the case of fraud), hereby
                    waives any remedy in respect of (and acknowledges that no
                    other party nor any of their agents, officers or employees
                    have given), any warranties, representations, indemnities,
                    undertakings or other statements whatsoever (written or
                    oral) not incorporated into this Agreement or the Tax Deed
                    of Covenant or any agreement expressly contemplated by this
                    Agreement.

         7.7.2      So far as is permitted by law (and except in case of fraud),
                    each of the parties agree and acknowledge that the only
                    right and remedy which shall be available to it in
                    connection with or arising out of or related to any of the
                    statements contained in the Warranties shall be damages in
                    contract for breach of this Agreement and not rescission of
                    this Agreement, nor damages in tort or under statute
                    (whether under the Misrepresentation Act 1967 or otherwise),
                    nor any other remedy.

         7.7.3      Each party to this Agreement confirms that it has received
                    independent legal advice relating to all the matters
                    provided for in this Agreement, including the provisions of
                    this Clause, and agrees, having considered the terms of this
                    Clause and the Agreement as a whole, that the provisions of
                    this Clause are fair and reasonable.

         7.7.4      In this Clause 7.7, the term THIS AGREEMENT includes the
                    Disclosure Letter and all documents entered into pursuant to
                    this Agreement by Northern and/or Innogy and/or the Innogy
                    Guarantor and/or NE plc.

8.       ADJUSTMENTS TO COMPLETION AMOUNT

8.1      Net Cash and Working Capital Statements

         8.1.1      Innogy, shall, at least ten Business Days prior to (but not
                    more than 20 Business Days prior to) the Completion Date,
                    draw up and deliver to Northern an Estimated Yorkshire Cash
                    and Working Capital Statement showing Innogy's then best
                    good faith estimate as to the projected amount of Yorkshire
                    Net Cash and Working Capital as of the Completion Date.

         8.1.2      Northern shall, within 60 days following Completion, draw up
                    a Draft Post-Closing Statement to determine the Yorkshire
                    Net Cash and Working Capital and the Yorkshire Cash and
                    Working Capital Statement in accordance with the provisions
                    set out in Schedule 7.

8.2      Adjustment to the Completion Amount

         If the Yorkshire Net Cash and Working Capital exceeds the Estimated
         Yorkshire Net Cash and Working Capital, then Northern shall pay to
         Innogy, in immediately available funds, an additional amount equal to
         the whole of the surplus of the Yorkshire Net Cash and Working Capital
         above the Estimated Yorkshire Net Cash and Working Capital. If the
         Estimated Yorkshire Net Cash and Working Capital exceeds the Yorkshire
         Net Cash and Working Capital, then Innogy shall pay to Northern, in
         immediately available funds, an additional amount equal to the whole of
         the deficit of the Yorkshire Net Cash and Working Capital to the
         Estimated Yorkshire Net Cash and Working Capital, in either case such
         payments to be made, subject to Clause 8.3, on the day falling 10
         Business Days after the Working Capital Determination Date. Any payment
         under this Clause 8.2, shall constitute an adjustment to the Completion
         Amount.

8.3      Net Interest

                                       26
<PAGE>

         Any payment by way of an adjustment to the Completion Amount pursuant
         to Clauses 8.2 shall include interest thereon calculated from the date
         of Completion to the date of payment at the base rate from time to time
         of National Westminster Bank PLC (the BASE RATE). Such interest shall
         accrue day to day on the adjustment amount payable and, for the
         avoidance of doubt, interest shall not be compounded.

9.       PENSIONS

         The provisions of Schedule 4 shall have effect

10.      GUARANTEES

10.1     Release of Innogy Guarantees

         Northern shall use all reasonable endeavours to procure that following
         Completion Innogy and/or any member of the Innogy Group is released
         from any guarantees and indemnities given by it in respect of the
         obligations of any Sale Company details of which are notified to the
         Northern and, pending such release, Northern shall indemnify Innogy or
         the member of the Innogy Group against all liabilities under those
         guarantees and indemnities provided that Northern shall have no
         liability to Innogy under this sub-Clause to the extent that any such
         guarantee contains any obligations on Innogy which extend beyond a
         guarantee or indemnity of obligations of any Sale Company or which
         extend the liability of Innogy beyond the liability which the relevant
         Sale Company has in respect of such obligation.

10.2     Release of the Company Guarantees

         Innogy shall procure that on Completion, or as soon as reasonably
         practicable following Completion, each Sale Company is released from
         all guarantees and indemnities given by it in respect of obligations of
         Innogy and/or any member of the Innogy Group and pending such release,
         Innogy shall indemnify the relevant Sale Company against all
         liabilities under those guarantees and indemnities.

11.      RESTRICTIONS

11.1     Restrictions

         Each Vendor covenants with the Purchaser for itself and in the case of
         Northern as trustee for each Sale Company that it shall not and shall
         procure that no member of the Vendor's Group shall:

         11.1.1     for a period of two years from Completion, directly or
                    indirectly induce or attempt to induce any director or
                    Senior Employee to leave his or her employment, provided
                    that the placing of an advertisement of a post available to
                    a member of the public generally and the recruitment of a
                    person through an employment agency shall not constitute a
                    breach of this Clause 11 provided that the Vendor does not
                    encourage or advise such agency to approach any such Senior
                    Employee; or

         11.1.2     for a period of five years from Completion, make use of or
                    (except as required by law or any competent regulatory body
                    or stock exchange or to any tax authority in connection with
                    its tax affairs) disclose or divulge to any third party any
                    Confidential Information of a secret or confidential nature
                    relating to the Business acquired by the Purchaser; or

         11.1.3     subject to Clause 11.2, for a period of one year from
                    Completion, carry on a Restricted Activity or canvass, or
                    solicit orders for services or goods similar to those

                                       27
<PAGE>

                    being provided by any Sale Company or Northern Group Company
                    (as the case may be) at Completion from any person, firm or
                    company who has within one year prior to Completion been a
                    customer of any Sale Company or Northern Group Company (as
                    the case may be) in connection with the Business.

11.2     Nothing in Clause 11.1.3 shall prevent or restrict:

         11.2.1     any Northern Group Company or any Sale Company from
                    acquiring any group of companies (the "ACQUIRED Group") in
                    respect of which any company or companies in that group
                    carry on an electricity or gas supply business and, from
                    such acquisition, the carrying on of such businesses in the
                    same manner provided that such company or companies do not
                    solicit orders for services or goods similar to those being
                    provided by any Northern Group Company at Completion in
                    connection with the Business from any person, firm or
                    company who has within 1 year prior to Completion been a
                    customer of any Northern Group Company in connection with
                    the Business unless such person, firm or company was already
                    a customer of the supply business of the Acquired Group; or

         11.2.2     the carrying on in the wholesale market of the oil and gas
                    and generation businesses carried on by companies in the
                    Northern Group, including Northern Electric Generation
                    Limited and CalEnergy Gas Limited.

11.3     Independence

         Each of the restrictions in each paragraph or subClauses above shall be
         enforceable independently of each of the others and its validity shall
         not be affected if any of the others is invalid.

11.4     Validity

         If any of those restrictions is void but would be valid if some part of
         the restrictions were deleted the restriction in question shall apply
         with such modification as may be necessary to make it valid.

11.5     Scope of protection

         Each of Innogy and Northern acknowledges that the above provisions of
         this Clause are no more extensive than is reasonable to protect the
         other as the purchaser of the Northern Sale Business and the Yorkshire
         Shares respectively.

12.      GUARANTEE

12.1     Innogy Guarantee

         The Innogy Guarantor hereby guarantees to Northern the due and punctual
         performance and observance by Innogy of all its obligations,
         commitments, undertakings and warranties under or pursuant to this
         Agreement and the Tax Deed of Covenant (the INNOGY GUARANTEED
         OBLIGATIONS). The liability of the Innogy Guarantor under this Clause
         shall not be released or diminished by any variation of the terms of
         the Innogy Guaranteed Obligations, or any forbearance, neglect or delay
         in seeking performance of the Innogy Guaranteed Obligations or any
         granting of time for such performance.

12.2     Vendor's Default

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<PAGE>

         If and whenever Innogy defaults in the performance of any of the Innogy
         Guaranteed Obligations the Innogy Guarantor shall forthwith upon demand
         unconditionally perform (or procure performance of) and satisfy (or
         procure the satisfaction of) the Innogy Guaranteed Obligations in
         regard to which such default has been made in the manner prescribed by
         this Agreement and so that the same benefits shall be conferred on
         Northern as it would have received if the Innogy Guaranteed Obligations
         had been duly performed and satisfied by Innogy (as the case may be).

12.3     Continuing Guarantee

         The guarantee in Clause 12.1 is to be a continuing guarantee and
         accordingly is to remain in force until all the Innogy Guaranteed
         Obligations shall have been performed or satisfied. This guarantee is
         in addition to and without prejudice to and not in substitution for any
         rights or security which Northern may now or hereafter have or hold for
         the performance and observance of the Innogy Guaranteed Obligations.

12.4     Legal limitations etc.

         As a separate and independent stipulation the Innogy Guarantor agrees
         that any of the Innogy Guaranteed Obligations (including, without
         limitation, any moneys payable) which may not be enforceable against or
         recoverable from Innogy by reason of any legal limitation, disability
         or incapacity on or of Innogy or any other fact or circumstance (other
         than any limitation imposed by this Agreement) shall nevertheless be
         enforceable against and recoverable from the Innogy Guarantor.

12.5     Warranties

         The Innogy Guarantor warrants and represents to Northern in the terms
         set out in Part B of Schedule 2.

12.6     Northern Guarantee

         NE plc hereby guarantees to Innogy the due and punctual performance and
         observance by Northern of all its obligations, commitments,
         undertakings and warranties under or pursuant to this Agreement (the NE
         PLC GUARANTEED OBLIGATIONS). The liability of NE plc under this Clause
         shall not be released or diminished by any variation of the terms of
         the NE plc Guaranteed Obligations, or any forbearance, neglect or delay
         in seeking performance of the NE plc Guaranteed Obligations or any
         granting of time for such performance.

12.7     Vendor's Default

         If and whenever Northern defaults in the performance of any of the NE
         plc Guaranteed Obligations NE plc shall forthwith upon demand
         unconditionally perform (or procure performance of) and satisfy (or
         procure the satisfaction of) the NE plc Guaranteed Obligations in
         regard to which such default has been made in the manner prescribed by
         this Agreement and so that the same benefits shall be conferred on
         Innogy as it would have received if the NE plc Guaranteed Obligations
         had been duly performed and satisfied by NE plc (as the case may be).

12.8     Continuing Guarantee

         The guarantee in Clause 12.6 is to be a continuing guarantee and
         accordingly is to remain in force until all NE plc Guaranteed
         Obligations shall have been performed or satisfied. This guarantee is
         in addition to an without prejudice to and not in substitution for any
         rights or

                                       29
<PAGE>

         security which Innogy may now or hereafter have or hold for the
         performance and observance of the NE plc Guaranteed Obligations.

12.9     Legal limitations etc.

         As a separate and independent stipulation NE plc agrees that any of the
         NE plc Guaranteed Obligations (including, any moneys payable) which may
         not be enforceable against or recoverable from Northern by reason of
         any legal limitation, disability or incapacity on or of NE plc or any
         other fact or circumstance (other than any limitation imposed by this
         Agreement) shall nevertheless be enforceable against and recoverable
         from the Innogy Guarantor.

12.10    Warranties

         NE plc warrants and represents to Innogy in the terms set out in Part C
         of Schedule 2.

13.      OTHER PROVISIONS

13.1     Release, indulgence etc.

         Any liability to any party under this Agreement may in whole or in part
         be released, compounded or compromised or time or indulgence given by
         that party in its absolute discretion without in any way prejudicing or
         affecting its rights against the other under the same or a like
         liability.

13.2     Confidentiality

         13.2.1     The parties acknowledge that the Confidentiality Agreement
                    shall cease to have any force or effect from Completion.

         13.2.2     Subject to Clause 13.2.4, Innogy shall (and shall procure
                    that other members of its Group shall) treat as confidential
                    and not disclose or use any information received or obtained
                    as a result of entering into this Agreement or the Northern
                    Electricity Business Sale Agreement or the Northern
                    Non-Electricity Business Sale Agreement (or any agreement
                    entered into pursuant to any such Agreement) which relates
                    to:

                    (a)     the provisions of this Agreement and any agreement
                            entered into pursuant to this Agreement; or

                    (b)     the negotiations relating to this Agreement (and
                            such other agreements);

                    (c)     Northern's business, financial or other affairs.

         13.2.3     Subject to Clause 13.2.4, Northern shall (and shall procure
                    that other members of its Group shall) treat as confidential
                    and not disclose or use any information received or obtained
                    as a result of entering into this Agreement or the Northern
                    Electricity Business Sale Agreement or the Northern
                    Non-Electricity Business Sale Agreement (or any agreement
                    entered into pursuant to any such Agreement) which relates
                    to:

                    (a)     the provisions of this Agreement and any agreement
                            entered into pursuant to this Agreement; or

                    (b)     the negotiations relating to this Agreement (and
                            such other agreements);

                    (c)     Innogy's business, financial or other affairs.

         13.2.4     Neither Clause 13.2.2 or 13.2.3 shall prohibit disclosure or
                    use of any information if and to the extent:

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<PAGE>

                    (a)     the disclosure or use is required by law, any
                            regulatory body or the rules and regulations of any
                            recognised stock exchange;

                    (b)     the disclosure or use is required for the purpose of
                            any judicial proceedings arising out of this
                            Agreement or any other agreement entered into under
                            or pursuant to this Agreement or the disclosure is
                            reasonably required to be made to a Taxation
                            authority in connection with the Taxation affairs of
                            the disclosing party;

                    (c)     the disclosure is made to professional advisers of
                            the Purchaser or the Vendors on terms that such
                            professional advisers undertake to comply with the
                            provisions of Clause 13.2.2 or 13.2.3 in respect of
                            such information as if they were a party to this
                            Agreement;

                    (d)     the information becomes publicly available (other
                            than by breach of the Confidentiality Agreement or
                            of this Agreement);

                    (e)     the other party has given prior written approval to
                            the disclosure or use;

                    (f)     the information is independently developed after
                            Completion,

                    provided that prior to disclosure or use of any information
                    pursuant to Clause 13.2.4 (i), (ii) (except in the case of
                    disclosure to a Taxation authority) or (iii), the party
                    concerned shall promptly notify the other party of such
                    requirement with a view to providing the other party with
                    the opportunity to contest such disclosure or use or
                    otherwise to agree the timing and content of such disclosure
                    or use.

13.3     Announcements

         No announcement or circular in connection with the existence or the
         subject matter of this Agreement shall be made or issued by or on
         behalf of any party without the prior written approval of the other
         parties hereto. This shall not affect any announcement or circular
         required by law or any regulatory body or the rules of any recognised
         stock exchange but the party with an obligation to make an announcement
         or issue a circular shall consult with the other party/parties insofar
         as is reasonably practicable before complying with such an obligation.

13.4     Successors And Assigns

         13.4.1     Subject to Clause 13.4.2 this Agreement is personal to the
                    parties to it. Accordingly, no party may, without the prior
                    written consent of the others, assign the benefit of all or
                    any of the other's obligations under this Agreement, or any
                    benefit arising under or out of this Agreement.

         13.4.2     Except as otherwise expressly provided in this Agreement,
                    any party may, without the consent of the others, assign to
                    a connected company the benefit of all or any of the other
                    parties' obligations under this Agreement provided that:

                    (i)     if the assignee ceases to be a connected company of
                            the relevant party, the benefit of those obligations
                            shall be reassigned to the relevant party or a
                            connected party of the relevant party; and

                    (ii)    the assignee shall not be entitled to receive under
                            this Clause any greater amount than that to which
                            the relevant assignor would have been entitled.

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<PAGE>

                    For the purposes of this sub-Clause a CONNECTED COMPANY is,
                    in relation to the Innogy Guarantor and Innogy, the Innogy
                    Guarantor and any wholly-owned subsidiary of the Innogy
                    Guarantor and, in relation to Northern and NE plc, NE plc
                    and any wholly-owed subsidiary of NE plc.

13.5     Third Party Rights

         A person who is not a party to this Agreement has no right under the
         Contracts (Rights of Third Parties) Act 1999 to enforce any term of
         this Agreement.

13.6     Further Assurance

         At any time after the date of this Agreement either party shall and
         shall use reasonable endeavours to procure that any necessary third
         party shall at the cost of the other party execute such documents and
         do such acts and things as the other party may reasonably require for
         the purpose of giving to the other party the full benefit of all the
         provisions of this Agreement.

13.7     Variation etc.

         No variation of this Agreement shall be effective unless in writing and
         signed by or on behalf of each of the parties to this Agreement.

13.8     Time of the Essence

         Any time, date or period referred to in any provision of this Agreement
         may be extended by mutual agreement between the parties but any time,
         date or period so extended time shall be of the essence.

13.9     Costs

         Each party shall bear all legal, accountancy and other costs and
         expenses incurred by it in connection with this Agreement and all
         agreements and transactions contemplated by this Agreement (and, in the
         case of Innogy, by any of the Sale Companies prior to Completion in
         relation to the Hiveout Agreement).

13.10    Interest

         If any party defaults in the payment when due of any sum payable under
         this Agreement (whether determined by agreement or pursuant to an order
         of a court or otherwise) the liability of such party (as the case may
         be) shall be increased to include a payment of interest on such sum
         (subject to deduction or withholding of Taxation as appropriate) from
         the date when such payment is due until the date of actual payment (as
         well after as before judgement) at a rate per annum of two per cent
         above the base rate from time to time of National Westminster Bank PLC.
         Such interest shall accrue from day to day.

13.11    Withholdings and Deductions

         13.11.1    All sums payable under this Agreement shall be paid free and
                    clear of all deductions or withholdings whatsoever save only
                    as provided in this Agreement or as may be required by law
                    and without abatement or set-off (whether equitable or
                    otherwise) save only as provided in this Agreement. If any
                    deductions or withholdings are required by law the party
                    making the payment shall (except in the case of payments of
                    interest) be obliged to pay the other party such sums as
                    will, after such deduction or withholding has been made,
                    leave the other party with the same amounts as it

                                       32
<PAGE>

                    would have been entitled to receive in the absence of any
                    such requirement to make a deduction or withholding provided
                    that, if either party shall have assigned the benefit in
                    whole or in part of this Agreement in accordance with the
                    provisions of Clause 13.4, the liability of the other party
                    under this Clause 13.11.1 shall be limited to that (if any)
                    which it would have been had no such assignment taken place.

         13.11.2    If the party receiving the payment under this Agreement
                    receives a credit for or refund of any Taxation or other
                    monies payable by it or similar benefit by reason of any
                    deduction or withholding for or on account of Taxation or
                    any other matter then it shall reimburse to the other party
                    such part of such additional payments paid to it pursuant to
                    Clause 13.11.1 above as the party receiving the payment
                    certifies to the other party will leave it (after such
                    reimbursement) in no better or worse position than it would
                    have been if the other party had not been required to make
                    such deduction or withholding.

13.12    Notices

         13.12.1    Any notice or other communication requiring to be given or
                    served under or in connection with this Agreement shall be
                    in writing and shall be sufficiently given or served if
                    delivered or sent:

                    In the case of Innogy or the Innogy Guarantor to:

                            Windmill Hill Business Park
                            Whitehill Way
                            Swindon
                            Wiltshire SN5 6PB

                            Fax: 01793 892631

                            Attention: The Company Secretary

                    In the case of Northern or NE plc to:

                            Carliol House
                            Market Street
                            Newcastle
                            NE1 6NE

                            Fax: 0191 210 2409

                            Attention: Company Secretary

                    (or such other representative or address in the United
                    Kingdom as either party may by notice in writing to the
                    other party expressly substitute).

         13.12.2    Any such notice or other communication shall be delivered by
                    hand or sent by courier, fax or prepaid first class post. If
                    sent by hand or courier such notice or communication shall
                    be deemed to have been given or served at the time of
                    despatch, in case of service in the United Kingdom, or on
                    the following Business Day, in the case of international
                    service. If sent by fax such notice or communication shall
                    be deemed to have been given or served at the time of
                    despatch provided a suitable confirmation of such delivery
                    is received by the sender of such fax and a copy of the fax
                    containing such notice or communication (together with such
                    confirmation) is sent by post as soon as practicable
                    thereafter. If sent by post such notice or communication
                    shall be deemed to have been received two Business Days from
                    the

                                       33
<PAGE>

                    time of posting, in the case of inland mail in the United
                    Kingdom, or four Business Days from the time of posting, in
                    the case of international mail. Notices sent by post shall
                    also be transmitted by fax. Any notice received after 5.00
                    pm on a Business Day at the place of receipt will be deemed
                    effective at 9.00 am on the following Business Day.

13.13    Severance

         If at any time any term or provision hereof is or becomes illegal,
         invalid or unenforceable, in whole or in part, under the law of any
         jurisdiction or any enactment or rule of law, such term or provision or
         part shall to that extent be deemed not to form part of this Agreement
         but the legality, validity or enforceability of any other term or
         provision of this Agreement (including under the law of any other
         jurisdiction) shall not in any way be affected or impaired thereby.

13.14    Counterparts

         This Agreement may be executed in any number of counterparts each of
         which shall be deemed an original, but all the counterparts shall
         together constitute one and the same instrument.

13.15    Governing Law and Submission to Jurisdiction

         This Agreement and, save as expressly referred to therein, the
         documents to be entered into pursuant to it shall be governed by and
         construed in accordance with English law and the parties irrevocably
         agree that the Courts of England shall have exclusive jurisdiction to
         settle any claims or disputes which may arise out of or in connection
         with this Agreement and such documents and each party irrevocably
         submits to the jurisdiction of the Courts of England for such purpose.

13.16    Reduction in Consideration

         Any payment made for the breach of any Warranties or any other breach
         of this Agreement (or any agreement entered into pursuant to this
         Agreement) or under the Tax Deed of Covenant or pursuant to any
         indemnity hereunder shall be treated as an adjustment to the
         consideration paid by Northern for the Yorkshire Shares under this
         Agreement and the consideration paid shall be deemed to have been
         reduced by the amount of such payment.

IN WITNESS whereof this Agreement has been duly executed the day and year first
before written.

SIGNED by  Caroline Farebrother                   /s/   C FAREBROTHER

as attorney for and on behalf of

NPOWER YORKSHIRE LIMITED

in the presence of:

                                       34
<PAGE>

SIGNED by Steve Fletcher as                       /s/   S P FLETCHER

attorney for and on behalf of

INNOGY HOLDINGS PLC

in the presence of:

SIGNED by James Stallmeyer                       /s/   JAMES STALLMEYER

for and on behalf of

CE ELECTRIC UK PLC

in the presence of:

SIGNED by James Stallmeyer as                   /s/   JAMES STALLMEYER

attorney for and on behalf of

NORTHERN ELECTRIC PLC

in the presence of:

                                       35

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