Document:

EXHBIIT 10.76

CLIFFORD                                          LIMITED LIABILITY PARTNERSHIP
CHANCE
                                                                 CONFORMED COPY

                              DATED 1 OCTOBER 2001

                     YORKSHIRE ELECTRICITY DISTRIBUTION plc

                   as Substituted Issuer as of 1 October 2001

                                     - and -

                         YORKSHIRE ELECTRICITY GROUP PLC

                         as Former Issuer and Guarantor

                                     - and -

                         BANKERS TRUSTEE COMPANY LIMITED

                                   as Trustee

                          THIRD SUPPLEMENTAL TRUST DEED

                 relating to (pound)200,000,000 9 1/4 per cent.
                                 Bonds due 2020

<PAGE>

                                    CONTENTS

Clause Page

1. Definitions And Interpretation.............................................1

2. Representations And Warranties.............................................2

3. Amendments To The Principal Trust Deed.....................................2

4. Substituted Issuer And Guarantor...........................................3

5. Conditions Precedent.......................................................3

6. Costs, Expenses And Indemnification........................................4

7. Further Assurance..........................................................4

8. Counterparts...............................................................4

9. Governing Law And Jurisdiction.............................................5

10. Third Party Rights........................................................5

Schedule 1 AMENDED AND RESTATED TRUST DEED FOR 2020 BONDS.....................6

Schedule 2 LEGAL OPINION AS TO ENGLISH LAW...................................86

Schedule 3 FORM OF DIRECTOR'S CERTIFICATE....................................91

Schedule 4 FORM OF NOTICE TO BONDHOLDERS.....................................92

<PAGE>

THIS THIRD SUPPLEMENTAL TRUST DEED is made on 1 October 2001

BETWEEN:

(1)      YORKSHIRE ELECTRICITY DISTRIBUTION plc as substituted issuer as of 1
         October 2001 (the "Substituted Issuer");

(2)      YORKSHIRE ELECTRICITY GROUP plc as former issuer (in such capacity, the
         "Former Issuer") and as guarantor (in such capacity, the "Guarantor");
         and

(3)      BANKERS TRUSTEE COMPANY LIMITED (the "Trustee" which expression where
         the context so admits, includes all persons for the time being the
         trustee or trustees of this Third Supplemental Trust Deed).

WHEREAS:

(A)      The Former Issuer has issued Original Bonds constituted by a trust deed
         (the "Principal Trust Deed") dated 17 January 1995 made between the
         Former Issuer and the Trustee.

(B)      This Third Supplemental Trust Deed is supplemental to the Principal
         Trust Deed as modified by a first supplemental trust deed (the "First
         Supplemental Trust Deed") dated 27 July 1995 amending the terms of the
         Principal Trust Deed for the purposes of issuing further Bonds and for
         such purposes the Principal Trust Deed and the First Supplemental Trust
         Deed should be read and construed in conjunction as one deed. The
         parties to the Principal Trust Deed and the First Supplemental Trust
         Deed entered into a Second Supplemental Trust Deed (the "Second
         Supplemental Trust Deed") dated 19 September 1996 for the purposes of
         making certain amendments to the Principal Trust Deed.

(C)      The parties hereto have agreed to amend and restate the Principal Trust
         Deed on the terms of this Third Supplemental trust deed (the "Third
         Supplemental Trust Deed") Set out in Schedule 1 hereof, (i) so as to
         incorporate all the amendments made by the Second Supplemental Trust
         Deed, (ii) as a consequence of changes in the UK regulatory regime for
         the electricity sector under the Utilities Act 2000, to provide for the
         substitution of the Substituted Issuer for the Former Issuer as issuer
         and the addition of the Guarantor pursuant to Condition 14 and Clause
         20 of the Principal Trust and to make various other amendments (the
         "Regulatory Changes") and (iii) to make various miscellaneous
         amendments to the Conditions, pursuant to Condition 16(b) and Clause
         18(B)(i) of the Principal Trust Deed.

NOW THIS DEED WITNESSETH and it is hereby agreed and declared as follows:

1. DEFINITIONS AND INTERPRETATION

1.1      Definitions

<PAGE>

         In this Third Supplemental Trust Deed the following expressions have
         the following meanings:

         "IFA" means an independent financial advisor, appointed pursuant to an
         engagement letter dated 28 September 2001; and

         "Completion Date" means 1 October 2001 or such other date as the
         Trustee may agree by notice to the other parties hereto.

1.2      Principles of interpretation

         In this Third Supplemental Trust Deed:

1.2.1    Clauses and  Schedules:  any reference to a Schedule or a Clause or
         sub-clause  is, unless  otherwise  stated,  to a schedule hereto or a
         clause or sub-clause hereof respectively; and

1.2.2    Principal Trust Deed: save as herein otherwise provided, all Words and
         expressions defined in the Principal Trust Deed shall where the context
         so requires and admits have the same meaning in this Third Supplemental
         Trust Deed and the principles of interpretation specified in Clause
         1(B) of the Principal Trust Deed shall where the context so requires
         and admits also apply to this Third Supplemental Trust Deed.

2. REPRESENTATIONS AND WARRANTIES

         The Former Issuer, the Substituted Issuer and the Guarantor, represent
         and warrant to the Trustee as follows:

2.1      Each of the Former Issuer, the Substituted Issuer and the Guarantor is
         duly incorporated under the laws of England and has full power and
         capacity to execute and deliver this Third Supplemental Trust Deed and
         to undertake and perform the Obligations expressed to be assumed by it
         herein and has taken all necessary action to approve and authorise the
         same;

2.2.1    All authorisations, consents and approvals required by each of the
         Former Issuer, the Substituted Issuer and the Guarantor, for or in
         connection with the execution of this Third Supplemental Trust Deed and
         the performance by the Former Issuer, the Substituted Issuer and the
         Guarantor of the respective obligations expressed to be undertaken by
         them herein have been obtained and are in full force and effect;

2.3      No Event of Default, and no condition, event, or act which, with the
         lapse of time and/or the giving of a notice and/or the issuing of any
         certificate, would be an Event of Default, has occurred or will occur
         on the Completion Date.

3. AMENDMENTS TO THE PRINCIPAL TRUST DEED
<PAGE>

3.1      The Principal Trust Deed, as supplemented by the Second Supplemental
         Trust Deed, with effect from the Completion Date, shall stand amended
         and restated in the form set out in Schedule 1.

3.2      The Principal Trust Deed, the Second Supplemental Trust Deed and this
         Third Supplemental Trust Deed shall be read and construed as one
         document.

3.3      The Trustee agrees, pursuant to Clause 18(b)(i) and Clause 20 of the
         Principal Trust Deed, and based, in respect of the amendments
         consequent on the Regulatory Changes, on expert advice received from
         the IFA, that the amendments made by this Third Supplemental Trust Deed
         are not materially prejudicial to the Holders and Couponholders and
         concurs with the amendments.

4. SUBSTITUTED ISSUER AND GUARANTOR

4.1      With effect as from the Completion Date, the Substituted Issuer shall
         observe and perform the obligations of the Former Issuer as issuer
         under the Principal Trust Deed and the Securities (including the
         Conditions endorsed thereon) as if it were and had been named as a
         party to the Principal Trust Deed and referred to in the Securities in
         place of the Former Issuer as issuer.

4.2      With effect as from the Completion Date, all the terms, provisions and
         conditions of the Principal Trust Deed and the Securities shall apply
         to the Substituted Issuer in all respects as if the Substituted Issuer
         had been the Issuer under the Principal Trust Deed and the Securities
         in place of the Former Issuer as issuer.

4.3      The Substituted Issuer hereby covenants with the Trustee that as from
         the Completion Date it will comply with, perform and observe all the
         provisions of the Principal Trust Deed and the Securities which are
         expressed to be binding on the Former Issuer as issuer.

4.4      The Guarantor hereby covenants with the Trustee that as from the
         Completion Date, in relation to the Securities, it will comply with and
         perform and observe all the obligations of the Third Supplemental Trust
         Deed and the Securities which are expressed to be binding on the
         Guarantor (as that term is defined in the Amended and Restated Trust
         Deed in Schedule 1).

5. CONDITIONS PRECEDENT

5.1      Conditions Precedent

5.1.1    This Third Supplemental Trust Deed shall only take effect on the
         Completion Date upon the delivery to the Trustee of the following
         documents in a form satisfactory to the Trustee:

<PAGE>

         (a)      Legal Opinion: opinion of Allen & Overy as to English law
                  substantially in the form set out in Schedule 2;

         (b)      Supplemental Agency Agreement: a duly executed supplemental
                  agency agreement where the Substituted Issuer agrees to be
                  bound by the Agency Agreement insofar as it relates to the
                  Original Bonds as if it had been a party thereto in place of
                  the Former Issuer and the Guarantor agrees to be bound by the
                  Agency Agreements insofar as it relates to the Original Bonds;

         (c)      IFA`s Certificate: a certificate dated on or before the
                  Completion Date from the IFA;

         (d)      Directors' Certificate: a certificate from two directors of
                  the Substituted Issuer substantially in the form set out in
                  Schedule 3; and

         (e)      Notice to Bondholders: the notice to Bondholders substantially
                  in the form set out in Schedule 4 ("Notice to Bondholders").

5.1.2    The Substituted Issuer shall procure the publication of the Notice to
         Bondholders in accordance with the Third Supplemental Trust Deed as
         soon as practicable after the Completion Date.

5.2      The Trustee may in its discretion waive the delivery, or the form, of
         any of the documents referred to in Clause 5.1.1 of this Third
         Supplemental Trust Deed or any part of them.

6. COSTS, EXPENSES AND INDEMNIFICATION

6.1      The Substituted Issuer and the Guarantor shall, from time to time on
         demand of the Trustee, reimburse the Trustee for all proper costs and
         expenses (including legal fees) incurred by it in connection with the
         negotiation, preparation and execution or purported execution of this
         Third Supplemental Trust Deed and the completion of the matters herein
         contemplated.

6.2      The Substituted Issuer and the Guarantor shall jointly and severally
         indemnify the Trustee and every attorney, manager, agent, delegate or
         other person properly appointed by it hereunder against any and all
         losses, liabilities, costs, claims, actions or demands incurred by it
         or him or which may be made against it or him as a result of or in
         connection with the execution or purported execution of this Third
         Supplemental Trust Deed, the substitution of the Issuer, the addition
         of the Guarantor and the other amendments hereby effected.

7. FURTHER ASSURANCE

         Each of the Former Issuer, the Substituted Issuer and the Guarantor
         undertake to the Trustee to execute all such other documents and comply

<PAGE>

         with all such other requirements to effect the substitution of the
         Substituted Issuer for the Former Issuer as issuer in relation to the
         Bonds and this Third Supplemental Trust Deed, the giving of the
         guarantee by the Guarantor, the other amendments contemplated hereby
         and any other matter incidental thereto as the Trustee may direct in
         the interests of the Holders.

8.       COUNTERPARTS

         This Third Supplemental Trust Deed may be executed in counterparts (and
         in engrossment, photocopy or facsimile form) and the executed documents
         shall, from the date on which all parties hereto have executed a
         counterpart hereof, be construed and have effect as though all such
         counterparts were one document executed by the parties hereto.

9. GOVERNING LAW AND JURISDICTION

9.1      This Third Supplemental Trust Deed is governed by, and shall be
         construed in accordance with, the laws of England.

9.2      Each of the Issuer, the Substituted Issuer and the Guarantor agrees for
         the benefit of the Trustee and the Holders that the courts of England
         shall have jurisdiction to hear and determine any suit, action or
         proceedings, and to settle any disputes, which may arise out of or in
         connection with this Third Supplemental Trust Deed or the Securities
         (respectively, "Proceedings" and "Disputes") and for such purposes,
         irrevocably submits to the jurisdiction of such courts. Each of the
         Former Issuer, the Substituted Issuer and the Guarantor irrevocably
         waives any objection which it might now or hereafter have to the courts
         of England being nominated as the forum to hear and determine any
         Proceedings and to settle any Disputes and agrees not to claim that any
         such court is not a convenient or appropriate forum. The submission to
         the jurisdiction of the courts of England shall not (and shall not be
         construed so as to) limit the right of the Trustee or any of the
         Holders to take Proceedings in any other court of competent
         jurisdiction nor shall the taking of Proceedings in any one or more
         jurisdictions preclude the taking of Proceedings in any other
         jurisdiction (whether concurrently or not) if and to the extent
         permitted by applicable law.

10. THIRD PARTY RIGHTS

         A person who is not party to this Third Supplemental Trust Deed may not
         enforce any terms of this Third Supplemental Trust Deed under the
         Contracts (Rights of Third Parties) Act 1999, but this does not affect
         any right or remedy of any third party which exists or is available
         apart from that Act.

IN WITNESS WHEREOF this Third Supplemental Trust Deed has been executed as a
deed by the parties hereto and is intended to be and is hereby delivered on the
day first before written.

<PAGE>

                                   SCHEDULE 1

                 AMENDED AND RESTATED TRUST DEED FOR 2020 BONDS

                            DATED 17TH JANUARY, 1995,
                  AS AMENDED AND RESTATED ON 1ST OCTOBER, 2001

                     YORKSHIRE ELECTRICITY DISTRIBUTION PLC

                                     - and -

                         YORKSHIRE ELECTRICITY GROUP plc

                                     - and -

                         BANKERS TRUSTEE COMPANY LIMITED

                                   TRUST DEED

                                  constituting
                               (pound)200,000,000
                         9 1/4 percent. Guaranteed Bonds
                                    due 2020
                (with authority to issue further bonds or notes)

                                 For the Issuer:

                                  Allen & Overy
                                 One New Change
                                 London EC4M 9QQ

                                For the Trustee:

                                 Clifford Chance
                              200 Aldersgate Street
                                 London EC1A 7JJ

<PAGE>

                                TABLE OF CONTENTS

Clause                                                                    Page

1.       Definitions .........................................................1
2.       Covenant to Repay and to Pay Interest on Original Bonds..............8
3.       Form and Issue of Original Bonds and Original Coupons...............11
4.       Fees, Duties and Taxes..............................................12
5.       Covenant of Compliance..............................................12
6.       Cancellation of Securities and Records..............................13
7.       Guarantee...........................................................14
8.       Enforcement.........................................................16
9.       Proceedings, Action and Indemnification.............................16
10.      Application of Moneys...............................................16
11.      Notice of Payments..................................................17
12.      Investment by Trustee...............................................17
13       Partial Payments....................................................18
14       Covenants by the Issuer and the Guarantor...........................18
15       Remuneration and Indemnification of Trustee.........................22
16.      Supplement of Trustee Acts..........................................23
17.      Trustee's Liability.................................................26
18.      Trustee Contracting with Issuer and the Guarantor...................26
19.      Waiver, Authorisation and Determination.............................27
20.      Holder of Definitive Bearer Security Assumed to be Couponholder.....27
21.      Substitution........................................................28
22.      Currency Indemnity..................................................29
23.      New Trustee.........................................................29
24.      Trustee's Retirement and Removal....................................30
25.      Trustee's Powers to be Additional...................................30
26.      Notices.............................................................31
27.      Governing Law.......................................................31
28.      Counterparts........................................................31
29.      Contracts (Rights of Third Parties) Act 1999........................31

THE FIRST SCHEDULE...........................................................35
THE SECOND SCHEDULE..........................................................50
THE THIRD SCHEDULE...........................................................72
THE FOURTH SCHEDULE..........................................................74
THE FIFTH SCHEDULE...........................................................82

<PAGE>

THIS TRUST DEED is made on 17th January, 1995 and amended and restated as of 1st
October, 2001 BETWEEN:

(1)      YORKSHIRE ELECTRICITY DISTRIBUTION PLC, a company incorporated under
         the laws of England, whose registered office is at Carliol House,
         Market Street, Newcastle-upon-Tyne NEl 6NE (the "Issuer");

(2)      YORKSHIRE ELECTRICITY GROUP plc, a company incorporated under the laws
         of England, whose registered office is at Carliol House, Market Street,
         Newcastle-upon-Tyne NEl 6NE ("YEG" or, in its capacity as guarantor,
         the "Guarantor"); and

(3)      BANKERS TRUSTEE COMPANY LIMITED, a company incorporated under the laws
         of England, whose registered office is at Winchester House, 1 Great
         Winchester Street, London EC2A 2DB (the "Trustee", which expression
         shall, wherever the context so admits, include such company and all
         other persons or companies for the time being the trustee or trustees
         of these presents) as trustee for the Holders and Couponholders (each
         as defined below).

WHEREAS:

(1)      On 17th January, 1995 YEG issued(pound)200,000,000 9 1/4 per cent.
         Bonds due 2020 (the "Bonds").

(2)      The Bonds are constituted by a trust deed dated 17th January, 1995 (the
         "Principal Trust Deed") as supplemented by a second supplemental trust
         deed dated 19th September, 1996, both made between YEG and the Trustee,
         and as further supplemented by a third supplemental trust deed made
         between the parties hereto and dated the date of this Trust Deed.

(3)      By a resolution of the Board of Directors of the Issuer passed on 28th
         September, 2001 the Issuer agreed to become the principal debtor in
         respect of the Bonds in substitution for YEG.

(4)      By a resolution of the Board of Directors of the Guarantor passed on
         4th June, 2001 the Guarantor agreed to guarantee the Bonds and to enter
         into certain covenants as set out in this Trust Deed.

(5)      The Bonds in definitive form will be either in bearer form with Coupons
         attached or in registered form without Coupons but holders of
         definitive Bonds in bearer form will have the option to exchange such
         Bonds for definitive Bonds in registered form and vice versa, all upon
         and subject to the terms and conditions of these presents.

(6)      The Trustee has agreed to act as trustee of these presents for the
         benefit of the Holders and Couponholders upon and subject to the terms
         and conditions of these presents.

                                       1

<PAGE>

NOW THIS TRUST DEED WITNESSES AND IT IS AGREED AND DECLARED as follows:

1.       DEFINITIONS

(A)      In these presents unless there is anything in the subject or context
         inconsistent therewith the following expressions shall have the
         following meanings:

         "Agency Agreement" means, in relation to the Securities of any series,
         the agreement appointing the initial Paying Agents and, if applicable,
         Registrar and Transfer Agents in relation to such Securities and any
         other agreement for the time being in force appointing Successor paying
         agents and, if applicable, registrars or transfer agents in relation to
         such Securities, or in connection with their duties, the terms of which
         have previously been approved in writing by the Trustee, together with
         any agreement for the time being in force amending or modifying with
         the prior written approval of the Trustee any of the aforesaid
         agreements in relation to such Securities;

         "Agent Bank" means, in relation to the Securities of any relevant
         series, the bank initially appointed as agent bank in relation to such
         Securities by the Issuer and the Guarantor pursuant to the relative
         Agent Bank Agreement or, if applicable, any Successor agent bank in
         relation to such Securities;

         "Agent Bank Agreement" means, in relation to the Securities of any
         relevant series, the agreement (which may, but need not, be the
         relative Agency Agreement) appointing the initial Agent Bank in
         relation to such Securities and any other agreement for the time being
         in force appointing any Successor agent bank in relation to such
         Securities, or in connection with its duties, the terms of which have
         previously been approved in writing by the Trustee, together with any
         agreement for the time being in force amending or modifying with the
         prior written approval of the Trustee any of the aforesaid agreements
         in relation to such Securities;

         "Appointee" means any attorney, manager, agent, delegate or other
         person appointed by the Trustee under these presents;

         "Auditors" means the auditors for the time being of the Issuer or of
         the Guarantor (as the case may be) or, in the event of their being
         unable or unwilling promptly to carry out any action requested of them
         pursuant to the provisions of these presents, such other firm of
         accountants as may be nominated or approved by the Trustee for the
         purposes of these presents after consultation with the Issuer and the
         Guarantor where, in the opinion of the Trustee, such consultation is
         practicable;

         "Bearer Securities" means those of the Securities which are for the
         time being in bearer form;

         "Capital and Reserves" has the meaning set out in Condition 5;

                                       2

<PAGE>

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

         "Conditions" means:

         (i)      in relation to the Original Bonds, the Conditions to be
                  endorsed on the Original Bonds in definitive form in the form
                  or substantially in the form set out in the Second Schedule as
                  the same may from time to time be modified in accordance with
                  these presents and any reference in these presents to a
                  particular specified Condition or paragraph of a Condition
                  shall in relation to the Original Bonds be construed
                  accordingly; and

         (ii)     in  relation to the Further  Securities  of any series,  the
                  Conditions  to be endorsed  on such  Further  Securities  in
                  definitive form in the form or substantially in the form set
                  out or referred to in the  supplemental  Trust Deed relating
                  thereto  as the same may from  time to time be  modified  in
                  accordance  with these  presents and any  reference in these
                  presents to a particular specified Condition or paragraph of
                  a Condition  shall in relation to the Further  Securities of
                  any  series,  unless  either  referring  specifically  to  a
                  particular  specified  Condition or paragraph of a Condition
                  of  such  Further   Securities  or  the  context   otherwise
                  requires,  be construed as a reference to the provisions (if
                  any)  in the  Conditions  thereof  which  correspond  to the
                  provisions  of  the   particular   specified   Condition  or
                  paragraph of a Condition of the Original Bonds;

         "Couponholders" means the several persons who are for the time being
         holders of the Coupons;

         "Coupons" means the bearer interest coupons appertaining to the Bearer
         Securities in definitive form or, as the context may require, a
         specific number thereof and includes any replacements for Coupons
         issued pursuant to Condition 15 and, where the context so permits, the
         Talons;

         "Distribution Licence" has the meaning set out in Condition 5;

         "Distribution Subsidiary" has the meaning set out in Condition 5;

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

         "Event of Default" means any of the conditions, events or acts provided
         in Condition 12 to be events upon the happening of which the Securities
         of any series would, subject only to notice by the Trustee as therein
         provided, become immediately due and repayable;

         "Excluded Subsidiary" has the meaning set out in Condition 5;

         "Extraordinary Resolution" has the meaning set out in paragraph 20 of
         the Fourth Schedule;

                                       3

<PAGE>

         "Further Securities" means bonds or notes (whether in bearer or
         registered form) of the Issuer constituted by a trust deed supplemental
         to this Trust Deed pursuant to Clause 2(D) or the principal amount
         thereof for the time being outstanding or as the context may require a
         specific number thereof and includes any replacements for Further
         Securities issued pursuant to Condition 15 and where applicable any
         Global Security issued in respect thereof and, where the context
         requires or admits, includes the Receipts issued in respect of any
         Further Securities;

         "Global Security" means the Original Global Bond and/or any other
         global bond or note issued in respect of the Further Securities of any
         series and includes any replacements for Global Securities issued
         pursuant to Condition 15;

         "Holders" means the several persons who are for the time being holders
         of the Securities (being, in the case of Bearer Securities, the bearers
         thereof and, in the case of Registered Securities, the several persons
         whose names are entered in the register of holders of the Registered
         Securities as the holders thereof) and the words "holder" and "holders"
         and related expressions shall (where appropriate) be construed
         accordingly;

         "indebtedness for borrowed money" has the meaning set out in Condition
         5;

         "Liability" means any loss, damage, cost, charge, claim, demand,
         expense, judgment, action, proceeding or other liability whatsoever
         (including, without limitation, in respect of taxes, duties, levies,
         imposts and other charges) and including any value added tax or similar
         tax charged or chargeable in respect thereof and legal fees and
         expenses on a full indemnity basis;

         "London Stock Exchange" means the London Stock Exchange plc or any
         successor thereto;

         "Original Bearer Bonds" means those of the Original Bonds which are for
         the time being in bearer form;

         "Original Bondholders" means the several persons who are for the time
         being holders of the Original Bonds and, where the context so requires
         or admits, shall include the Original Receiptholders;

         "Original Bonds" means the bonds (whether in bearer or registered form)
         comprising the said (pound)200,000,000 9 1/4 per cent. Guaranteed Bonds
         due 2020 hereby constituted or the principal amount thereof for the
         time being outstanding or, as the context may require, a specific
         number thereof and includes any replacements for Original Bonds issued
         pursuant to Condition 15, where the context so requires or admits any
         Original Receipts and (except for the purposes of Clause 3) the
         Original Global Bond;

         "Original Couponholders" means the several persons who are for the time
         being holders of the Original Coupons;

                                       4

<PAGE>

         "Original Coupons" means the Coupons appertaining to the Original
         Bearer Bonds;

         "Original Global Bond" means the global bond in respect of the Original
         Bearer Bonds issued pursuant to Clause 3(A) in the form or
         substantially in the form set out in the Part I of the First Schedule;

         "Original Receiptholders" means the holders of the Original Receipts;

         "Original Receipts" means the Receipts appertaining to the Original
         Bonds;

         "Original Registered Bonds" means those of the Original Bonds which are
         for the time being in registered form;

         "Original Talons" means the Talons appertaining to the Original Bearer
         Bonds in definitive form;

         "outstanding" means in relation to the Securities all the Securities
         issued other than:

         (a)      those Securities which have been redeemed pursuant to these
                  presents;

         (b)      those Securities in respect of which the date for redemption
                  in accordance with the Conditions has occurred and the
                  redemption moneys (including premium (if any) and all interest
                  payable thereon) have been duly paid to the Trustee or to the
                  Principal Paying Agent in the manner provided in the Agency
                  Agreement (and where appropriate notice to that effect has
                  been given to the relative Holders in accordance with
                  Condition 16) and remain available for payment against
                  presentation of the relevant Securities and/or Coupons;

         (c)      those Securities which have been purchased and cancelled in
                  accordance with Condition 8;

         (d)      those Securities which have become void under Condition 11;

         (e)      those mutilated or defaced Securities which have been
                  surrendered and cancelled and in respect of which replacements
                  have been issued pursuant to Condition 15;

         (f)      (for the purpose only of ascertaining the principal amount of
                  the Securities outstanding and without prejudice to the status
                  for any other purpose of the relevant Securities) those
                  Securities which are alleged to have been lost, stolen or
                  destroyed and in respect of which replacements have been
                  issued pursuant to Condition 15;

         (g)      any Global Security to the extent that it shall have been
                  exchanged for another Global Security in respect of the
                  Securities of the relevant series or for the Securities of the
                  relevant series in definitive form pursuant to its provisions;
                  and
                                      5

<PAGE>

         (h)      those Bearer Securities which have been exchanged for
                  Registered Securities (and, where applicable, vice versa) and
                  which have been cancelled or, if permitted by the Conditions
                  of such Securities, are for the time being retained by or on
                  behalf of the Issuer, in each case pursuant to the provisions
                  of these presents;

         PROVIDED THAT for each of the following purposes, namely:

         (i)      the right to attend and vote at any meeting of the Holders or
                  any of them;

         (ii)     the determination of how many and which Securities are for the
                  time being outstanding for the purposes of Clause 9(A),
                  Conditions 12, 13 and 17 and paragraphs 2, 5, 6 and 9 of the
                  Fourth Schedule;

         (iii)    any discretion, power or authority (whether contained in these
                  presents or vested by operation of law) which the Trustee is
                  required, expressly or impliedly, to exercise in or by
                  reference to the interests of the Holders or any of them; and

         (iv)     the determination by the Trustee whether any event,
                  circumstance, matter or thing is, in its opinion, materially
                  prejudicial to the interests of the Holders or any of them,

         those Securities (if any) which are for the time being held by, for the
         benefit of, or on behalf of, the Issuer, the Guarantor or any other
         Subsidiary of the Guarantor, any holding company of the Guarantor or
         any other Subsidiary of any such holding company shall (unless and
         until ceasing to be so held) be deemed not to remain outstanding;

         "Participating Securities" means Registered Securities comprised in or,
         as the case may be, comprising any series of Securities which are, for
         the time being, participating securities pursuant to the Regulations;

         "Paying Agents" means, in relation to the Securities of any series, the
         several institutions (including where the context permits the Principal
         Paying Agent) at their respective specified offices initially appointed
         as paying agents in relation to such Securities by the Issuer and the
         Guarantor pursuant to the relative Agency Agreement and/or, if
         applicable, any Successor paying agents in relation to such Securities;

         "Potential Event of Default" means any condition, event or act which,
         with the lapse of time and/or the issue, making or giving of any
         notice, certification, declaration, demand, determination and/or
         request and/or the taking of any similar action and/or the fulfilment
         of any similar condition, would constitute an Event of Default;

         "Principal Paying Agent" means, in relation to the Securities of any
         series, the institution at its specified office initially appointed as
         principal paying agent in relation to such Securities by the Issuer and
         the Guarantor pursuant to the relative Agency Agreement or, if
         applicable, any Successor principal paying agent in relation to such
         Securities;
                                      6

<PAGE>

         "Project Finance Indebtedness" has the meaning set out in Condition 5;

         "Receiptholders" means the holders of the Receipts;

         "Receipts" means the non-transferable receipts (if any) for Securities
         to be issued by Paying Agents to the Holders pursuant to Condition
         9(c);

         "Redemption Date" means, in relation to Participating Securities, the
         due date for the redemption (in whole or in part) of the Participating
         Securities;

         "Reference Banks" means, in relation to the Securities of any relevant
         series, the several banks initially appointed as reference banks in
         relation to such Securities by the Issuer and the Guarantor and
         referred to in the Conditions of such Securities and/or, if applicable,
         any Successor reference banks in relation to such Securities;

         "Register" means, in relation to Participating Securities, the register
         referred to in Condition 7;

         "Registered Securities" means those of the Securities which are for the
         time being in registered form;

         "Registrar" means, in relation to the Securities of any relevant series
         (being, or which are exchangeable for, Registered Securities), the
         institution at its specified office initially appointed as registrar in
         relation to such Securities by the Issuer and the Guarantor pursuant to
         the relative Agency Agreement or, if applicable, any Successor
         registrar in relation to such Securities;

         "Regulations" means the Uncertificated Securities Regulations 1995 (SI
         1995 No. 95/3272) including any modification thereof or any regulations
         in substitution thereof made under Section 207 of the Companies Act
         1989 and for the time being in force;

         "Relevant Date" has the meaning set out in Condition 10;

         "Relevant Indebtedness" has the meaning set out in Condition 5;

         "repay", "redeem" and "pay" shall each include both the others and
         cognate expressions shall be construed accordingly;

         "Restructuring Event" has the meaning set out in Condition 9(d)(vi);

         "Security Interest" has the meaning set out in Condition 5;

         "Securities" means, as the context may require, the Original Bonds
         and/or any Further Securities and/or any series thereof;

                                      7

<PAGE>

         "Subsidiary" has the meaning set out in Condition 5;

         "Successor" means, in relation to the Agent Bank, the Principal Paying
         Agent, the other Paying Agents, the Reference Banks, the Registrar and
         the Transfer Agents, any successor to any one or more of them in
         relation to the Securities of the relevant series which shall become
         such pursuant to the provisions of these presents, the relative Agent
         Bank Agreement and/or the relative Agency Agreement (as the case may
         be) and/or such other or further agent bank, principal paying agent,
         paying agents, reference banks, registrar and/or transfer agents (as
         the case may be) in relation to such Securities as may (with the prior
         approval of, and on terms previously approved by, the Trustee in
         writing) from time to time be appointed as such, and/or, if applicable,
         such other or further specified offices (in the former case being
         within the same city as those for which they are substituted) as may
         from time to time be nominated, in each case by the Issuer and, if
         applicable, the Guarantor, and (except in the case of the initial
         appointments and specified offices made under and specified in the
         Conditions, the relative Agent Bank Agreement and/or the relative
         Agency Agreement, as the case may be) notice of whose appointment or,
         as the case may be, nomination has been given to the relevant Holders
         pursuant to Clause 14(xiii) in accordance with Condition 16;

         "Talons" means the talons appertaining to, and exchangeable in
         accordance with the provisions therein contained for further Coupons
         appertaining to, the Bearer Securities of any relevant series in
         definitive form and includes any replacements for Talons issued
         pursuant to Condition 15;

         "The Stock Exchange" means, in relation to the Securities of any
         relevant series, the stock exchange or exchanges (if any) on which such
         Securities are quoted or listed on the issue thereof;

         "these presents" means this Trust Deed and the Schedules and any Trust
         Deed supplemental hereto and the Schedules (if any) thereto and the
         Securities, the Coupons and the Conditions, all as from time to time
         modified in accordance with the provisions herein or therein contained;

         "Transfer Agents" means, in relation to the Securities of any relevant
         series (being, or which are exchangeable for, Registered Securities),
         the institutions at their respective specified offices initially
         appointed as transfer agents in relation to such Securities by the
         Issuer and the Guarantor pursuant to the relative Agency Agreement
         and/or, if applicable, any Successor transfer agents in relation to
         such Securities;

         "Trust Corporation" means a corporation entitled by rules made under
         the Public Trustee Act 1906 of Great Britain or entitled pursuant to
         any other comparable legislation applicable to a trustee in any other
         jurisdiction to carry out the functions of a custodian trustee;

         "UK Listing Authority" means the Financial Services Authority in its
         capacity as competent authority under the Financial Services Act 1986;

                                      8

<PAGE>

         words denoting the singular shall include the plural and vice versa;

         words denoting one gender only shall include the other genders; and

         words denoting persons only shall include firms and corporations and
         vice versa.

(B)               (i) All references in these presents to principal and/or
                  premium and/or interest in respect of the Securities or to any
                  moneys payable by the Issuer and/or the Guarantor under these
                  presents shall be deemed to include a reference to any
                  additional amounts which may be payable under Condition 10 or,
                  if applicable, under any undertaking or covenant given
                  pursuant to Clause 14(xv) or Clause 21 (A)(2)(ii).

         (ii)     All references in these presents to principal or principal
                  amount shall, unless the context otherwise requires, be deemed
                  to include the Redemption Price (as defined in Condition 8).

         (iii)    All references in these presents to "pounds", "sterling",
                  "pounds sterling" or the sign "(pound)" shall be construed as
                  references to the lawful currency for the time being of the
                  United Kingdom.

         (iv)     All references in these presents to any statute or any
                  provision of any statute shall be deemed also to refer to any
                  statutory modification or re-enactment thereof or any
                  statutory instrument, order or regulation made thereunder or
                  under any such modification or re-enactment.

         (v)      All references in these presents to guarantees or to an
                  obligation being guaranteed shall be deemed to include
                  respectively references to indemnities or to an indemnity
                  being given in respect thereof.

         (vi)     All references in these presents to any action, remedy or
                  method of proceeding for the enforcement of the rights of
                  creditors shall be deemed to include, in respect of any
                  jurisdiction other than England, references to such action,
                  remedy or method of proceeding for the enforcement of the
                  rights of creditors available or appropriate in such
                  jurisdiction as shall most nearly approximate to such action,
                  remedy or method of proceeding described or referred to in
                  these presents.

         (vii)    All references in these presents to taking proceedings against
                  the Issuer or the Guarantor shall be deemed to include
                  references to proving in the winding up of the Issuer and/or
                  the Guarantor.

         (viii)   Wherever in these presents the Issuer or the Guarantor is
                  required to give an opinion or make any determination, the
                  Issuer or, as the case may be, the Guarantor shall, in so
                  doing, be entitled to rely on advice from professional
                  advisers but so that, as between the Issuer, the Guarantor,

                                       9
<PAGE>

                  the Trustee, the Holders and the Couponholders, the Issuer or,
                  as the case may be, the Guarantor shall be liable as to the
                  validity of such opinion or determination.

         (ix)     Unless the context otherwise requires words or expressions
                  used in these presents hall bear the same meanings as in the
                  Companies Act 1985 of Great Britain.

         (x)      In this Trust Deed references to Schedules, Clauses,
                  sub-clauses, paragraphs and sub-paragraphs shall be construed
                  as references to the Schedules to this Trust Deed and to the
                  Clauses, sub-clauses, paragraphs and sub-paragraphs of this
                  Trust Deed respectively.

         (xi)     In these presents, tables of contents and Clause headings are
                  included for ease of reference and shall not affect the
                  construction of these presents.

         (xii)    In these presents, words and expressions defined in the
                  Regulations and not defined in these presents or in the
                  Companies Act 1985 of Great Britain shall when used in these
                  presents have the same meanings as are given to them in the
                  Regulations.

         (xiii)   In these presents, references to any Registered Securities
                  being in uncertificated form or in certificated form are
                  references to those Registered Securities being an
                  uncertificated unit or uncertificated units of the relevant
                  Securities or a certificated unit or certificated units of the
                  relevant Securities respectively.

         (xiv)    All references in these presents to Securities being "listed"
                  or "having a listing" shall, in relation to the London Stock
                  Exchange, be construed to mean that such Securities have been
                  admitted to the Official List by the UK Listing Authority and
                  to trading on the London Stock Exchange's market for listed
                  securities and all references in these presents to "listing"
                  or "listed" shall include references to "quotation" and
                  "quoted", respectively.

         (xv)     All references in these presents to Euroclear and/or
                  Clearstream, Luxembourg shall be deemed to include references
                  to any other clearing system as is approved by the Trustee.

2.       COVENANT TO REPAY AND TO PAY INTEREST ON ORIGINAL BONDS

(A)      THE aggregate principal amount of the Original Bonds is limited to
         (pound)200,000,000.

(B)      The  Issuer  covenants  with the  Trustee  that it will,  in
         accordance  with these  presents,  on the due date for the final
         maturity of the Original  Bonds  provided for in the  Conditions, or on
         such earlier date as the same or any part thereof may become
         immediately due and repayable  thereunder,  pay or procure to be paid
         unconditionally to or to the order of the Trustee in pounds sterling in
         London in immediately  available  funds the principal amount of the
         Original  Bonds  repayable on that date and shall in the  meantime and
         until  such date  (both  before  and  after  any  judgment  or other
         order of a court of competent  jurisdiction)  pay or procure to be paid

                                       10
<PAGE>

         unconditionally  to or to the order of the Trustee as aforesaid
         interest (which shall accrue from day to day) on the principal amount
         of the Original Bonds at the rate of 9 1/4 per cent.  per annum payable
         (less tax, if  appropriate)  annually in arrear on 17th  January, the
         first such payment to be made on 17th January, 1996 and to amount to a
         full year's interest PROVIDED THAT:

         (i)      every payment of principal or interest in respect of the
                  Original Bearer Bonds and every payment of principal in
                  respect of the Original Registered Bonds to or to the account
                  of the Principal Paying Agent in the manner provided in the
                  Agency Agreement shall operate in satisfaction pro tanto of
                  the relative covenant by the Issuer in this Clause except to
                  the extent that there is default in the subsequent payment
                  thereof in accordance with the Conditions to the relevant
                  Original Bondholders or Original Couponholders (as the case
                  may be);

         (ii)     every payment of interest in respect of the Original
                  Registered Bonds to the relevant Original Bondholders as
                  provided in the Conditions (whether by the Issuer or the
                  Registrar) shall operate in satisfaction pro tanto of the
                  relative covenant by the Issuer in this Clause;

          (iii)   in any case where payment of principal is not made to the
                  Trustee or the  Principal  Paying  Agent on or before the due
                  date, interest shall continue to accrue on the principal
                  amount of the Original Bonds (both  before  and after  any
                  judgment  or other  order of a court of competent
                  jurisdiction) at the rate aforesaid (or, if higher, the rate
                  of interest on judgment  debts for the time being  provided by
                  English law) up to and including  the date which the Trustee
                  determines to be the date on and  after  which  payment is to
                  be made to the  Original Bondholders  in  respect  thereof as
                  stated in a notice  given to the Original  Bondholders in
                  accordance with Condition 16 (such date to be not  later than
                  30 days  after  the day on  which  the  whole of such
                  principal amount,  together with an amount equal to the
                  interest which has  accrued  and is to  accrue  pursuant to
                  this  proviso  up to and including that date, has been
                  received by the Trustee or the Principal Paying Agent);

          (iv)    in any case where payment of the whole or any part
                  of the  principal amount of any Original Bond is improperly
                  withheld or refused upon due  presentation  thereof  (other
                  than in  circumstances contemplated by proviso (iii) above)
                  interest  shall accrue on that  principal  amount payment of
                  which has been so withheld or refused (both before and after
                  any  judgment  or  other  order  of  a  court  of  competent
                  jurisdiction) at the rate aforesaid (or, if higher, the rate
                  of interest on judgment debts for the time being provided by
                  English law) from and including the date of such withholding
                  or  refusal  up to and  including  the date on  which,  upon
                  further  presentation of the relevant Original Bond, payment
                  of the full  amount  (including  interest as  aforesaid)  in
                  pounds sterling  payable in respect of such Original Bond is
                  made or (if  earlier)  the seventh day after notice is given
                  to the relevant Original Bondholder (either  individually or
                  in  accordance  with  Condition  16) that  the  full  amount
                  (including interest as aforesaid) in pounds sterling payable
                  in provided that,  upon further  presentation  thereof being
                  duly made,  such payment is made.

                                       11
<PAGE>

The Trustee will hold the benefit of this covenant on trust for the   Original
Bondholders and the Original Couponholders in accordance with these presents.

         TRUSTEE'S REQUIREMENTS REGARDING PAYING AGENTS, REGISTRAR
         AND TRANSFER AGENTS

(C)      At any time after an Event of Default or a Potential Event of Default
         shall have occurred or the Securities shall otherwise have become due
         and repayable or the Trustee shall have received any money which it
         proposes to pay under Clause 10 to the Holders and/or Couponholders,
         the Trustee may:

         (i)      by notice in writing to the Issuer, the Guarantor, the
                  Principal Paying Agent, the other Paying Agents, the Registrar
                  and the Transfer Agents require the Principal Paying Agent,
                  the other Paying Agents, the Registrar and the Transfer Agents
                  pursuant to the Agency Agreement:

                  (a)    to act  thereafter as Principal  Paying  Agent,  Paying
                         Agents,  Registrar and Transfer Agents  respectively of
                         the Trustee in relation to payments to be made by or on
                         behalf of the  Trustee  under the  provisions  of these
                         presents  mutatis mutandis on the terms provided in the
                         Agency  Agreement  (save that the  Trustee's  liability
                         under any provisions  thereof for the  indemnification,
                         remuneration and payment of  out-of-pocket  expenses of
                         the  Paying  Agents,  the  Registrar  and the  Transfer
                         Agents  shall be  limited to the  amounts  for the time
                         being  held  by the  Trustee  on the  trusts  of  these
                         presents  relating  to  the  relative  Securities)  and
                         thereafter to hold all  Securities  and Coupons and all
                         sums,  documents and records held by them in respect of
                         Securities and Coupons on behalf of the Trustee; or

                  (b)    to deliver up all  Securities and Coupons and all sums,
                         documents  and  records  held  by them  in  respect  of
                         Securities and Coupons to the Trustee or as the Trustee
                         shall direct in such notice  provided  that such notice
                         shall  be  deemed  not to  apply  to any  documents  or
                         records which the relative Paying Agent,  the Registrar
                         or the relative  Transfer Agent, as the case may be, is
                         obliged not to release by any law or regulation; and

         (ii)     by notice in writing to the Issuer and the Guarantor require
                  each of them to make all subsequent payments in respect of the
                  Securities and Coupons to or to the order of the Trustee and
                  not to the Principal Paying Agent; with effect from the issue
                  of any such notice to the Issuer and the Guarantor and until
                  such notice is withdrawn provisos (i) and (ii) to sub-clause
                  (B) of this Clause relating to the Original Bonds and any
                  similar provisos relating to any Further Securities shall
                  cease to have effect.

         FURTHER ISSUES

                                       12
<PAGE>

(D)      (i)      The Issuer shall be at liberty from time to time (but
                  subject always to the provisions of these presents) without
                  the consent of the Holders or Couponholders to create and
                  issue further bonds or notes (whether in bearer or registered
                  form) either (a) ranking pari passu in all respects (or in all
                  respects save for the first payment of interest thereon), and
                  so that the same shall be consolidated and form a single
                  series, with the Original Bonds and/or the Further Securities
                  of any series or (b) upon such terms as to ranking, interest,
                  conversion, redemption and otherwise as the Issuer may at the
                  time of issue thereof determine.

         (ii)     Any  further  bonds or notes  which  are to be  created  and
                  issued  pursuant to the provisions of paragraph (i) above so
                  as to form a single  series with the  Original  Bonds and/or
                  the Further Securities of any series shall be constituted by
                  a trust deed  supplemental  to this Trust Deed and any other
                  further  bonds or notes  which are to be created  and issued
                  pursuant  to the  provisions  of  paragraph  (i)  above  may
                  (subject to the consent of the Trustee) be  constituted by a
                  trust deed supplemental to this Trust Deed. In any such case
                  the Issuer and the Guarantor shall prior to the issue of any
                  further bonds or notes to be so  constituted  (being Further
                  Securities)  execute and deliver to the Trustee a trust deed
                  supplemental  to this Trust Deed (in  relation  to which all
                  applicable stamp duties or other  documentation fees, duties
                  or taxes have been paid and, if applicable,  duly stamped or
                  denoted accordingly) and containing a covenant by the Issuer
                  in the form  mutatis  mutandis of Clause 2(B) in relation to
                  the  principal,  premium (if any) and interest in respect of
                  such Further  Securities and such other provisions  (whether
                  or not  corresponding to any of the provisions  contained in
                  this Trust Deed) as the Trustee shall require.

         (iii)    A memorandum of every such supplemental Trust Deed shall be
                  endorsed by the Trustee on this Trust Deed and by the Issuer
                  and the Guarantor on their duplicates of this Trust Deed.

         (iv)     Whenever it is proposed to create and issue any Further
                  Securities the Issuer shall give to the Trustee not less than
                  14 days' notice in writing of its intention so to do stating
                  the amount of further bonds or notes proposed to be created
                  and issued.

(E)      Any Further Securities not forming a single series with the Original
         Bonds or Further Securities of any series shall form a separate series
         and accordingly, unless for any purpose the Trustee in its absolute
         discretion shall otherwise determine, the provisions of sub-clause (C)
         of this Clause and of Clauses 4 to 22 (both inclusive) and 23(B) and
         the Third and Fourth Schedules shall apply mutatis mutandis separately
         and independently to each series of the Securities and in such Clauses
         and Schedules the expressions "Securities", "Holders", "Coupons",
         "Couponholders", "Receipts", "Receiptholders" and "Talons" shall be
         construed accordingly.

3.        FORM AND ISSUE OF ORIGINAL BONDS AND ORIGINAL COUPONS

(A)      THE Original Bearer Bonds were represented initially by the Original
         Global Bond which the Issuer issued to a bank depositary  common to
         both Euroclear and Clearstream, Luxembourg on terms that such

                                       13
<PAGE>

         depositary held the same for the account of the persons who would
         otherwise  be entitled to receive the Original  Bearer Bonds in
         definitive  form  ("Definitive  Original  Bearer Bonds")  (as  notified
         to such  depositary  by UBS Limited on behalf of the managers of the
         issue of the Original Bonds) and the successors in title to such
         persons as appearing  in the records of  Euroclear  and  Clearstream,
         Luxembourg  for  the  time  being.  The  Original  Global  Bond  was in
         the aggregate principal amount of  (pound)187,500,000  and was
         exchangeable for Definitive  Original  Bearer Bonds in accordance with
         the provisions of the Original Global Bond.

(B)      The Original Global Bond was printed or typed in the form or substan-
         tially  in the  form  set out in  Part I of the  First  Schedule.  The
         Original  Global Bond was signed  manually by a person duly authorised
         by YEG on behalf of YEG and was  authenticated  by or on behalf of the
         Principal  Paying  Agent.  The  Original  Global Bond so executed  and
         authenticated shall be a binding and valid obligation of the Issuer.

(C)      YEG issued the Definitive Original Bearer Bonds (together with the
         unmatured  Original  Coupons  attached)  in exchange  for the Original
         Global Bond in accordance with the provisions thereof.

(D)      (i)      The Definitive Original Bearer Bonds and the Original
                  Coupons are to bearer in the respective forms or substantially
                  in the respective forms set out in Part I of the Second
                  Schedule to the Principal Trust Deed (subject to sub-clause
                  3(D)(iii) below) and the Definitive Original Bearer Bonds are
                  issued in the denominations of (pound)1,000, (pound)10,000 and
                  (pound)100,000 each (serially numbered) and are endorsed with
                  the Conditions. Title to the Definitive Original Bearer Bonds
                  and the Original Coupons shall pass by delivery.

         (ii)     The Original Registered Bonds are in definitive registered
                  form, are in the form or substantially in the form set out in
                  Part II of the Second Schedule to the Principal Trust Deed
                  (subject to sub-clause 3(D)(iii) below), are in the
                  denomination and transferable in units of (pound)1 each or
                  integral multiples thereof and are endorsed with the
                  Conditions. Title to the Original Registered Bonds shall pass
                  upon the registration of transfers in respect thereof in
                  accordance with the provisions of these presents.

                                       14
<PAGE>

         (iii)    Definitive Original Bearer Bonds or Original Registered Bonds
                  in issue at 1st October, 2001, as well as any Definitive
                  Original Bearer Bonds or Original Registered Bonds issued in
                  replacement thereof pursuant to Condition 15, shall be deemed
                  to be in the form of, and shall bear the rights and
                  obligations set out in Part II or III, as the case may be, of
                  the First Schedule and the Conditions set out in the Second
                  Schedule, notwithstanding that the Definitive Original Bearer
                  Bonds or Original Registered Bonds may be in the forms of Part
                  I or Part II, as the case may be, of the Second Schedule to
                  the Principal Trust Deed and may have endorsed thereon the
                  Conditions in the form set out in Part III of the Second
                  Schedule to the Principal Trust Deed.

(E)      The Definitive Original Bearer Bonds and the Original Registered Bonds
         are  signed  manually  or in  facsimile  by a  Director  of the issuer
         thereof  on its behalf  and,  in the case of the  Definitive  Original
         Bearer Bonds,  shall be authenticated by or on behalf of the Principal
         Paying Agent. The issuer may use the facsimile signature of any person
         who at the date such  signature is affixed is a Director of the issuer
         notwithstanding  that at the time of  issue  of any of the  Definitive
         Original  Bearer  Bonds or the Original  Registered  Bonds he may have
         ceased for any reason to be the holder of such office.  The Definitive
         Original  Bearer  Bonds so executed  and  authenticated,  the Original
         Registered Bonds so executed, and the Original Coupons, upon execution
         and authentication of the relevant  Definitive  Original Bearer Bonds,
         are binding and valid obligations of the Issuer.  The Original Coupons
         shall not be signed.

4.       FEES, DUTIES AND TAXES

         THE Issuer will pay any stamp, issue, registration, documentary and
         other fees, duties and taxes, including interest and penalties, payable
         on or in connection with (i) the execution and delivery of these
         presents, (ii) the constitution and original issue of the Securities
         and the Coupons and (iii) any action taken by or on behalf of the
         Trustee or (where permitted under these presents so to do) any Holder
         or Couponholder to enforce, or to resolve any doubt concerning, or for
         any other purpose in relation to, these presents.

5.       COVENANT OF COMPLIANCE

         EACH of the Issuer and the Guarantor severally covenants with the
         Trustee that it will comply with and perform and observe all the
         provisions of these presents which are expressed to be binding on it.
         The Conditions shall be binding on the Issuer, the Guarantor, the
         Holders and the Couponholders. The Trustee shall be entitled to enforce
         the obligations of the Issuer and the Guarantor under the Securities
         and the Coupons as if the same were set out and contained in the trust
         deeds constituting the same, which shall be read and construed as one
         document with the Securities and the Coupons.

         The Trustee shall hold the benefit of this covenant upon trust for
         itself and the Holders and Couponholders according to its and their
         respective interests.

6.       CANCELLATION OF SECURITIES AND RECORDS

(A)      THE Issuer shall procure that all Securities (i) redeemed or (ii)
         purchased by or on behalf of the Issuer, the Guarantor or any other
         Subsidiary of the Guarantor and surrendered for cancellation or (iii)
         which, being mutilated or defaced, have been surrendered and replaced
         pursuant to Condition 15 or (iv) exchanged as provided in these
         presents (together in each case with all unmatured Coupons attached
         thereto or delivered therewith) and all Coupons paid in accordance with
         the Conditions or which, being mutilated or defaced, have been
         surrendered and replaced pursuant to Condition 15 and all Talons
         exchanged in accordance with the Conditions for further Coupons shall
         forthwith be cancelled by or on behalf of the Issuer and a certificate
         stating:

                                       15
<PAGE>

         (a)      the aggregate principal amount of Securities which have been
                  redeemed and the aggregate amounts in respect of Coupons which
                  have been paid;

         (b)      the serial numbers of such Bearer Securities in definitive
                  form;

         (c)      the total numbers (where applicable, of each denomination) by
                  maturity date of such Coupons;

         (d)      the aggregate amount of interest paid (and the due dates of
                  such payments) on Global Securities and/or on Registered
                  Securities;

         (e)      the aggregate principal amount of Securities (if any) which
                  have been purchased by or on behalf of the Issuer, the
                  Guarantor or any other Subsidiary of the Guarantor and
                  cancelled and the serial numbers of such Bearer Securities in
                  definitive form and the total number (where applicable, of
                  each denomination) by maturity date of the Coupons attached
                  thereto or surrendered therewith;

         (f)      the aggregate principal amounts of Securities and the
                  aggregate amounts in respect of Coupons which have been so
                  exchanged or surrendered and replaced and the serial numbers
                  of such Bearer Securities in definitive form and the total
                  number (where applicable, of each denomination) by maturity
                  date of such Coupons;

         (g)      the total number (where applicable, of each denomination) by
                  maturity date of unmatured Coupons missing from Securities in
                  definitive form bearing interest at a fixed rate which have
                  been redeemed or exchanged or surrendered and replaced and the
                  serial numbers of the Bearer Securities in definitive form to
                  which such missing unmatured Coupons appertained; and

         (h)      the total number (where applicable, of each denomination) by
                  maturity date of Talons which have been exchanged for further
                  Coupons

         shall be given to the Trustee by or on behalf of the Issuer as soon as
         possible and in any event within four months after the date of such
         redemption, purchase, payment, exchange or replacement (as the case may
         be). The Trustee may accept such certificate as conclusive evidence of
         redemption, purchase, exchange or replacement pro tanto of the
         Securities or payment of interest thereon or exchange of the Talons
         respectively and of cancellation of the relative

(B)      The Issuer  shall  procure (i) that the  Principal  Paying Agent shall
         keep a full and complete  record of all  Securities and Coupons (other
         than serial numbers of Coupons) and of their  redemption,  purchase by
         or on behalf of the Issuer,  the Guarantor or any other  Subsidiary of
         the Guarantor,  cancellation, payment or exchange (as the case may be)
         and of all  replacement  securities  or  coupons  or talons  issued in
         substitution  for  lost,  stolen,  mutilated,   defaced  or  destroyed
         Securities  or Coupons (ii) that the  Principal  Paying Agent shall in
         respect of the Coupons of each maturity retain (in the case of Coupons

                                       16
<PAGE>

         other than Talons) until the expiry of 10 years from the Relevant Date
         in respect of such  Coupons  and (in the case of Talons)  indefinitely
         either all paid or exchanged Coupons of that maturity or a list of the
         serial numbers of Coupons of that maturity still  remaining  unpaid or
         unexchanged  and (iii) that such records and Coupons (if any) shall be
         made available to the Trustee at all reasonable times.

7.       GUARANTEE

(A)      THE Guarantor hereby irrevocably and unconditionally guarantees to the
         Trustee:

         (1)      the due and punctual payment in accordance with the provisions
                  of these presents of the principal of and premium (if any) and
                  interest on the Securities and of any other amounts payable by
                  the Issuer under these presents; and

         (2)      the due and punctual performance and observance by the Issuer
                  of each of the other provisions of these presents on the
                  Issuer's part to be performed or observed.

(B)      If the Issuer fails for any reason whatsoever punctually to pay any
         such principal, premium, interest or other amount, the Guarantor shall
         cause each and every such payment to be made as if the Guarantor
         instead of the Issuer were expressed to be the primary obligor under
         these presents and not merely as surety (but without affecting the
         nature of the Issuer's obligations) to the intent that the holder of
         the relevant Security or Coupon or the Trustee (as the case may be)
         shall receive the same amounts in respect of principal, premium,
         interest or such other amount as would have been receivable had such
         payments been made by the Issuer.

(C)      If any payment  received by the Trustee or any Holder or  Couponholder
         under  the   provisions  of  these  presents  shall  (whether  on  the
         subsequent bankruptcy,  insolvency or corporate  reorganisation of the
         Issuer or, without  limitation,  on any other event) be avoided or set
         aside  for  any  reason,  such  payment  shall  not be  considered  as
         discharging  or  diminishing  the  liability of the Guarantor and this
         guarantee  shall continue to apply as if such payment had at all times
         remained  owing by the Issuer and the  Guarantor  shall  indemnify the
         Trustee and the Holders and/or  Couponholders  (as the case may be) in
         respect thereof PROVIDED THAT the obligations of the Issuer and/or the
         Guarantor under this sub-clause shall, as regards each payment made to
         the  Trustee  or any  Holder or  Couponholder  which is avoided or set
         aside, be contingent upon such payment being  reimbursed to the Issuer
         or other persons entitled through the Issuer.

(D)      The  Guarantor  hereby agrees that its  obligations  under this Clause
         shall be  unconditional  and that the Guarantor  shall be fully liable
         irrespective of the validity,  regularity,  legality or enforceability
         against the Issuer of, or of any defence or  counter-claim  whatsoever
         available  to the Issuer in relation to, its  obligations  under these
         presents, whether or not any action has been taken to enforce the same
         or any judgment obtained against the Issuer, whether or not any of the

                                       17
<PAGE>

         other provisions of these presents have been modified,  whether or not
         any  time,  indulgence,  waiver,  authorisation  or  consent  has been
         granted  to  the  Issuer  by  or on  behalf  of  the  Holders  or  the
         Couponholders  or the Trustee,  whether or not any  determination  has
         been made by the  Trustee  pursuant  to Clause  19(A),  whether or not
         there have been any dealings or transactions  between the Issuer,  any
         of the Holders or  Couponholders  or the  Trustee,  whether or not the
         Issuer  has  been   dissolved,   liquidated,   merged,   consolidated,
         bankrupted or has changed its status, functions, control or ownership,
         whether or not the Issuer has been  prevented  from making  payment by
         foreign exchange provisions applicable at its place of registration or
         incorporation and whether or not any other circumstances have occurred
         which might otherwise  constitute a legal or equitable discharge of or
         defence to a guarantor.  Accordingly  the  validity of this  guarantee
         shall  not be  affected  by reason  of any  invalidity,  irregularity,
         illegality or unenforceability of all or any of the obligations of the
         Issuer under these presents and this guarantee shall not be discharged
         nor shall the  liability  of the  Guarantor  under  these  presents be
         affected by any act, thing or omission or means  whatever  whereby its
         liability  would not have been discharged if it had been the principal
         debtor.

(E)      Without prejudice to the provisions of Clause 9(A) the Trustee may
         determine from time to time whether or not it will enforce this
         guarantee which it may do without making any demand of or taking any
         proceedings against the Issuer and may from time to time make any
         arrangement or compromise with the Guarantor in relation to this
         guarantee which the Trustee may consider expedient in the interests of
         the Holders.

(F)      The Guarantor waives diligence, presentment, demand of payment, filing
         of claims with a court in the event of dissolution, liquidation, merger
         or bankruptcy of the Issuer, any right to require a proceeding first
         against the Issuer, protest or notice with respect to these presents or
         the indebtedness evidenced thereby and all demands whatsoever and
         covenants that this guarantee shall be a continuing guarantee, shall
         extend to the ultimate balance of all sums payable and obligations owed
         by the Issuer under these presents, shall not be discharged except by
         complete performance of the obligations in these presents and is
         additional to, and not instead of, any security or other guarantee or
         indemnity at any time existing in favour of any person, whether from
         the Guarantor or otherwise.

(G)      If any moneys shall become payable by the Guarantor under this
         guarantee the Guarantor shall not, so long as the same remain unpaid,
         without the prior written consent of the Trustee:

         (i)      in respect of any amounts paid by it under this guarantee,
                  exercise any rights of subrogation or contribution or, without
                  limitation, any other right or remedy which may accrue to it
                  in respect of or as a result of any such payment; or

         (ii)     in respect of any other moneys for the time being due to the
                  Guarantor by the Issuer, claim payment thereof or exercise any
                  other right or remedy;

         (including in either case claiming the benefit of any security or right
         of set-off or, on the liquidation of the Issuer, proving in competition
         with the Trustee). If, notwithstanding the foregoing, upon the
         bankruptcy, insolvency or liquidation of the Issuer, any payment or
         distribution of assets of the Issuer of any kind or character, whether
         in cash, property or securities, shall be received by the Guarantor

                                       18
<PAGE>

         before payment in full of all amounts payable under these presents
         shall have been made to the Holders, the Couponholders and the Trustee,
         such payment or distribution shall be received by the Guarantor on
         trust to pay the same over immediately to the Trustee for application
         in or towards the payment of all sums due and unpaid under these
         presents in accordance with Clause 10.

(H)      Until all amounts which may be or become payable by the Issuer under
         these presents have been irrevocably paid in full, the Trustee may:

         (i)      refrain from applying or enforcing any other moneys, security
                  or rights held or received by the Trustee in respect of those
                  amounts, or apply and enforce the same in such manner and
                  order as it sees fit (whether against those amounts or
                  otherwise), and the Guarantor shall not be entitled to the
                  benefit of the same; and

         (ii)     hold in a suspense account any moneys received from the
                  Guarantor or on account of the Guarantor's liability under
                  this guarantee, without liability to pay interest on those
                  moneys.

(I)      The obligations of the Guarantor under these presents constitute
         direct, unconditional and (subject to the provisions of Condition 5)
         unsecured obligations of the Guarantor and (subject as aforesaid) rank
         and will rank pari passu with all other outstanding unsecured and
         unsubordinated obligations of the Guarantor, present and future, but,
         in the event of insolvency, only to the extent permitted by applicable
         laws relating to creditors' rights.

(J)      As separate,  independent and alternative stipulations,  the Guarantor
         unconditionally  and  irrevocably  agrees  (1)  that  any  sum  which,
         although  expressed to be payable by the Issuer under this Trust Deed,
         the Securities or the Coupons,  is for any reason  (whether or not now
         existing and whether or not now known or becoming known to the Issuer,
         the  Guarantor,  the  Trustee  or  any  holder  or  Couponholder)  not
         recoverable  from  the  Guarantor  on the  basis of a  guarantee  will
         nevertheless  be recoverable  from it as if it were the sole principal
         debtor  and will be paid by it to the  Trustee  on demand and (2) as a
         primary  obligation  to indemnify  the  Trustee,  each Holder and each
         Couponholder  against  any loss  suffered by it as a result of any sum
         expressed  to be  payable by the Issuer  under  this Trust  Deed,  the
         Securities  or the Coupons not being paid on the date and otherwise in
         the manner  specified in this Trust Deed or any payment  obligation of
         the Issuer under this Trust Deed,  the Securities or the Coupons being
         or becoming void, voidable or unenforceable for any reason (whether or
         not now existing and whether or not now known or becoming known to the
         Trustee, any Holder or any Couponholder),  the amount of any such loss
         being the amount  expressed  to be payable by the Issuer in respect of
         the relevant sum.

8.       ENFORCEMENT

(A)      THE Trustee may at any time, at its discretion and without notice, take
         such proceedings and/or other action as it may think fit against or in
         relation to each of the Issuer and the Guarantor to enforce their
         respective obligations under these presents.

                                       19
<PAGE>

(B)      Proof that as regards any specified Security or Coupon the Issuer or
         the Guarantor (as the case may be) has made default in paying any
         amount due in respect of such Security or Coupon shall (unless the
         contrary be proved) be sufficient evidence that the same default has
         been made as regards all other Securities or Coupons (as the case may
         be) in respect of which the relevant amount is due and payable.

(C)      References in the provisions of any trust deed supplemental to this
         Trust Deed corresponding to provisos (iii) and (iv) to Clause 2(B) to
         "the rate aforesaid" shall, in respect of any Securities bearing
         interest at a floating or variable rate, in the event of such
         Securities having become due and repayable, with effect from the expiry
         of the interest period during which such Securities become due and
         repayable, be construed as references to a rate of interest calculated
         mutatis mutandis in accordance with the Conditions except that no
         notices need be published in respect thereof.

9.       PROCEEDINGS, ACTION AND INDEMNIFICATION

(A)      THE Trustee shall not be bound to take any proceedings mentioned in
         Clause 8(A) or any other action in relation to these presents unless
         respectively directed or requested to do so (i) by an Extraordinary
         Resolution or (ii) in writing by the holders of at least one-quarter in
         principal amount of the Securities then outstanding and in either case
         then only if it shall be indemnified to its satisfaction against all
         Liabilities to which it may thereby render itself liable or which it
         may incur by so doing.

(B)      Only the Trustee may enforce the provisions of these presents. No
         Holder or Couponholder shall be entitled to proceed directly against
         the Issuer or the Guarantor to enforce the performance of any of the
         provisions of these presents unless the Trustee having become bound as
         aforesaid to take proceedings fails to do so within a reasonable period
         and such failure is continuing.

10.      APPLICATION OF MONEYS

         ALL moneys received by the Trustee under these presents shall, unless
         and to the extent attributable in the opinion of the Trustee to a
         particular series of the Securities, be apportioned pari passu and
         rateably between each series of the Securities, and all moneys received
         by the Trustee under these presents to the extent attributable in the
         opinion of the Trustee to a particular series of the Securities or
         which are apportioned to such series as aforesaid (including any moneys
         which represent principal, premium or interest in respect of Securities
         or Coupons which have become void under Condition 11) shall be held by
         the Trustee upon trust to apply them (subject to Clause 12):

         FIRST in payment or satisfaction of all amounts then due and unpaid
         under Clauses 15 and/or 16(J) to the Trustee and/or any Appointee;

         SECONDLY in or towards payment pari passu and rateably of all
         principal, premium (if any) and interest then due and unpaid in respect
         of the Securities of that series;

                                       20
<PAGE>

         THIRDLY in or towards payment pari passu and rateably of all principal,
         premium (if any) and interest then due and unpaid in respect of the
         Securities of each other series; and

         FOURTHLY in payment of the balance (if any) to the Issuer (without
         prejudice to, or liability in respect of, any question as to how such
         payment to the Issuer shall be dealt with as between the Issuer, the
         Guarantor and any other person).

         Without prejudice to this Clause 10, if the Trustee holds any moneys
         which represent principal, premium (if any) and interest in respect of
         the Securities which have become void or in respect of which claims
         have been prescribed under Condition 11, the Trustee will hold such
         moneys on the above trusts.

11.      NOTICE OF PAYMENTS

         THE Trustee shall give notice to the relevant Holders in accordance
         with Condition 16 of the day fixed for any payment to them under Clause
         10. Such payment may be made in accordance with Condition 6 and any
         payment so made shall be a good discharge to the Trustee.

12.      INVESTMENT BY TRUSTEE

(A)      IF the amount of the moneys at any time available for the payment of
         principal, premium (if any) and interest in respect of the Securities
         under Clause 10 shall be less than 10 per cent. of the principal amount
         of the Securities then outstanding the Trustee may at its discretion
         invest such moneys in some or one of the investments authorised below.
         The Trustee at its discretion may vary such investments and may
         accumulate such investments and the resulting income until the
         accumulations, together with any other funds for the time being under
         the control of the Trustee and available for such purpose, amount to at
         least 10 per cent. of the principal amount of the Securities then
         outstanding and then such accumulations and funds shall be applied
         under Clause 10.

(B)      Any moneys which under the trusts of these presents ought to or may be
         invested  by the  Trustee  may be  invested  in the name or under  the
         control of the Trustee in any  investments or other assets in any part
         of the world whether or not they produce income or by placing the same
         on  deposit in the name or under the  control  of the  Trustee at such
         bank  or  other  financial  institution  and in such  currency  as the
         Trustee may think fit. If such bank or  financial  institution  is the
         Trustee or a subsidiary,  holding or associated company of the Trustee
         it need only  account for an amount of  interest  equal to the largest
         amount of interest  payable by it on such a deposit to an  independent
         customer. The Trustee may at any time vary any such investments for or
         into other  investments  or convert any moneys so  deposited  into any
         other  currency and shall not be  responsible  for any loss  resulting
         from any such investments or deposits,  whether due to depreciation in
         value, fluctuations in exchange rates or otherwise.

13.      PARTIAL PAYMENTS

                                       21
<PAGE>

         UPON any payment under Clause 10 (other than payment in full against
         surrender of a Security or Coupon) the Security or Coupon in respect of
         which such payment is made shall be produced to the Trustee or the
         Paying Agent by or through whom such payment is made and the Trustee
         shall or shall cause such Paying Agent to enface thereon a memorandum
         of the amount and the date of payment but the Trustee may in any
         particular case or generally in relation to Registered Securities
         dispense with such production and enfacement upon such indemnity being
         given as it shall think sufficient.

14.      COVENANTS BY THE ISSUER AND THE GUARANTOR

         SO long as any of the Securities remains outstanding (or, in the case
         of paragraphs (viii), (ix), (xiii) to (xvi) inclusive and (xviii), so
         long as any of the Securities or Coupons remains liable to
         prescription) each of the Issuer and the Guarantor severally covenants
         with the Trustee that it shall:

         (i)      at all times carry on and conduct its affairs and procure its
                  Subsidiaries to carry on and conduct their respective affairs
                  in a proper and efficient manner;

         (ii)     give or procure to be given to the Trustee such opinions,
                  certificates, information and evidence as it shall properly
                  require and in such form as it shall properly require
                  (including without limitation the procurement by the Issuer
                  and/or the Guarantor of all such certificates called for by
                  the Trustee pursuant to Clause 16(C)) for the purpose of the
                  proper discharge or exercise of the duties, trusts, powers,
                  authorities and discretions vested in it under these presents
                  or by operation of law;

         (iii)    cause to be prepared and certified by the Auditors in respect
                  of each financial accounting period accounts in such form as
                  will comply with all relevant legal and accounting
                  requirements and all applicable requirements for the time
                  being of The Stock Exchange;

         (iv)     at all times keep and procure its Subsidiaries to keep proper
                  books of account and following the occurrence of an Event of
                  Default or a Potential Event of Default or if the Trustee has
                  grounds to believe that an Event of Default or a Potential
                  Event of Default has occurred or is likely to occur allow and
                  procure its Subsidiaries to allow the Trustee and any person
                  appointed by the Trustee to whom the Issuer, the Guarantor or
                  the relevant Subsidiary (as the case may be) shall have no
                  reasonable objection free access to such books of account at
                  all reasonable times during normal business hours;

         (v)      send to the Trustee (in addition to any copies to which it may
                  be entitled as a holder of any securities of the Issuer or the
                  Guarantor) two copies in English of every balance sheet,
                  profit and loss account, report, circular and notice of
                  general meeting and every other document issued or sent to its
                  shareholders together with any of the foregoing, and every
                  document issued or sent to holders of securities other than

                                       22
<PAGE>

                  its shareholders (including the Holders) as soon as reasonably
                  practicable after the issue or publication thereof

         (vi)     forthwith give notice in writing to the Trustee of the coming
                  into existence of any Security Interest which would require
                  any security to be given to any series of the Securities
                  pursuant to Condition 5 or of the occurrence of any Event of
                  Default or any Potential Event of Default or any Restructuring
                  Event;

         (vii)    give to the  Trustee  (a) within  seven days after  demand by
                  the Trustee  therefore  and (b) (without the  necessity  for
                  any such demand) promptly after the publication of its audited
                  accounts in respect of each financial  period  commencing
                  with the financial period  ending 31st  March,  1995 and in
                  any event not later than 180  days  after  the  end  of  each
                  such  financial   period  a certificate  of the Issuer  signed
                  by two Directors of the Issuer and two  Directors  of the
                  Guarantor  to the effect that as at a date not more than seven
                  days before  delivering such certificate (the  "relevant
                  date")  there did not exist and had not  existed since the
                  relevant date of the previous  certificate any Event of
                  Default or any  Potential  Event of Default or any
                  Restructuring Event (or if such exists or existed specifying
                  the same) and that during the period from and  including  the
                  relevant  date of the last such  certificate to and including
                  the relevant date of such certificate  each of the Issuer and
                  the  Guarantor  has  complied with all its obligations
                  contained in these presents or (if such is not the  case)
                  specifying  the  respects  in which it has not complied;

         (viii)   at all times execute and do all such further documents, acts
                  and things as may be necessary at any time or times in the
                  opinion of the Trustee to give effect to these presents;

         (ix)     at all times maintain an Agent Bank, Reference Banks, Paying
                  Agents, a Registrar and Transfer Agents in accordance with the
                  Conditions;

         (x)      procure the Principal Paying Agent to notify the Trustee
                  forthwith in the event that it does not, on or before the due
                  date for any payment in respect of the Securities or any of
                  them or any of the Coupons, receive unconditionally pursuant
                  to the Agency Agreement payment of the full amount in the
                  requisite currency of the moneys payable on such due date on
                  all such Securities or Coupons as the case may be;

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

         (xii)    use all reasonable endeavours to maintain the listing of the
                  Securities on The Stock Exchange or, if it is unable to do so
                  having used all reasonable endeavours, use all reasonable
                  endeavours to obtain and maintain a quotation or listing of

                                       23
<PAGE>

                  the Securities on such other stock exchange or exchanges or
                  securities market or markets as the Issuer may (with the prior
                  written approval of the Trustee) decide and shall also upon
                  obtaining a quotation or listing of the Securities on such
                  other stock exchange or exchanges or securities market or
                  markets enter into a trust deed supplemental to this Trust
                  Deed to effect such consequential amendments to these presents
                  as the Trustee may require or as shall be requisite to comply
                  with the requirements of any such stock exchange or securities
                  market;

         (xiii)   give notice to the Holders in accordance with Condition 16
                  of any  appointment,  resignation  or removal of any Agent
                  Bank, Reference Bank, Paying Agent,  Registrar or Transfer
                  Agent (other than the appointment of the initial Agent Bank,
                  Reference Banks, Paying  Agents,  Registrar  and  Transfer
                  Agents)  after  having obtained the prior written approval of
                  the Trustee thereto or any change of any Paying  Agent's,
                  Registrar's  or Transfer  Agent's specified  office  and
                  (except  as  provided  by the Agent  Bank Agreement or the
                  Agency  Agreement or the Conditions) at least 30 days prior to
                  such event taking effect;  PROVIDED  ALWAYS THAT so long as
                  any of the Securities remains  outstanding in the case of
                  the  termination  of the  appointment  of  the  Agent  Bank,
                  the Registrar or a Transfer Agent or so long as any of the
                  Securities or  Coupons  remains  liable to  prescription  in
                  the case of the termination of the  appointment of the
                  Principal  Paying Agent no such  termination  shall  take
                  effect  until a new  Agent  Bank, Registrar,  Transfer Agent
                  or Principal Paying Agent (as the case may be) has  been
                  appointed  on  terms  previously  approved  in writing by the
                  Trustee;

         (xiv)    obtain the prior written approval of the Trustee to, and
                  promptly give to the Trustee two copies of, the form of every
                  notice given to the Holders in accordance with Condition 16
                  (such approval, unless so expressed, not to constitute
                  approval for the purposes of Section 57 of the Financial
                  Services Act 1986 of the United Kingdom of any such notice
                  which is an investment advertisement (as therein defined));

         (xv)     if  payments  of  principal,  premium  or  interest  in
                  respect of the  Securities  or the  Coupons by the Issuer or
                  the Guarantor  shall become subject  generally to the taxing
                  jurisdiction of any territory or any political  sub-division
                  thereof or any authority  therein or thereof having power to
                  tax other than or in addition  to the United  Kingdom or any
                  such  political  sub-division  thereof or any such authority
                  therein or thereof, as soon as reasonably  practicable after
                  having become aware thereof notify the Trustee of such event
                  and (unless the Trustee  otherwise  agrees) enter  forthwith
                  into a trust deed supplemental to this Trust Deed, giving to
                  the  Trustee an  undertaking  or covenant in form and manner
                  satisfactory  to the Trustee in terms  corresponding  to the
                  terms of Condition 10 with the  substitution for (or, as the
                  case may be, the addition to) the references  therein to the
                  United Kingdom or any political  sub-division thereof or any
                  authority   therein  or  thereof  having  power  to  tax  of
                  references  to that  other or  additional  territory  or any
                  political  sub-division  thereof or any authority therein or
                  thereof  having  power to tax to whose  taxing  jurisdiction
                  such payments  shall have become  subject as aforesaid  such

                                       24
<PAGE>

                  trust deed also (where  applicable) to modify Condition 8(c)
                  so that such Condition  shall make reference to the other or
                  additional territory, any political sub-division thereof and
                  any authority therein or thereof having power to tax;

         (xvi)    comply with and perform all its obligations under the Agent
                  Bank Agreement and the Agency Agreement and use all reasonable
                  endeavours to procure that the Agent Bank, the Paying Agents,
                  the Registrar and the Transfer Agents comply with and perform
                  all their respective obligations thereunder and (in the case
                  of the Paying Agents) any notice given by the Trustee pursuant
                  to Clause 2(C)(i) and not make any amendment or modification
                  to either of such agreements without the prior written
                  approval of the Trustee;

         (xvii)   in order to enable the Trustee to ascertain the principal
                  amount of Securities of each series for the time being
                  outstanding for any of the purposes referred to in the proviso
                  to the definition of "outstanding" in Clause 1, deliver to the
                  Trustee forthwith upon being so requested in writing by the
                  Trustee a certificate in writing signed by two Directors of
                  the Issuer or of the Guarantor (as appropriate) setting out
                  the total number and aggregate principal amount of Securities
                  of each series which:

                  (a)      up to and including the date of such certificate have
                           been purchased by the Issuer, the Guarantor or any
                           other Subsidiary of the Guarantor and cancelled; and

                  (b)      are at the date of such certificate held by, for the
                           benefit of, or on behalf of, the Issuer, the
                           Guarantor, any other Subsidiary of the Guarantor, any
                           holding company of the Guarantor or any other
                           Subsidiary of any such holding company;

         (xviii)  procure its Subsidiaries to comply with all (if any)
                  applicable provisions of Condition 8(d);

         (xix)    procure that each of the Paying Agents makes available for
                  inspection by Holders and Couponholders at its specified
                  office copies of these presents, the Agency Agreement, the
                  Agent Bank Agreement and the then latest audited balance sheet
                  and profit and loss account (consolidated if applicable) of
                  the Issuer and of the Guarantor;

         (xx)     if, in accordance with the provisions of the Conditions,
                  interest in respect of Bearer Securities denominated in U.S.
                  dollars becomes payable at the specified office of any Paying
                  Agent in the United States of America promptly give notice
                  thereof to the Holders in accordance with Condition 16;
         (xxiii)  upon due surrender in accordance with the Conditions, pay the
                  face value of all Coupons (including Coupons issued in
                  exchange for Talons) appertaining to all Securities purchased
                  by the Issuer or the Guarantor or any other Subsidiary of the
                  Guarantor;

                                       25
<PAGE>

         (xxiv)   give to the Trustee a certificate of the Auditors of the
                  Guarantor:

                  (a)      specifying the amount of the Capital and Reserves for
                           the purposes of Condition 5, such certificate to be
                           provided before the Issuer, the Guarantor or any
                           Distribution Subsidiary creates or has outstanding a
                           Security Interest in respect of any Relevant
                           Indebtedness and/or guarantees within Condition 5;

                  (b)      specifying that a Subsidiary of the Guarantor
                           satisfies the provisions of Condition 5(D)(i) and
                           (ii), such certificate to be provided before or at
                           the same time as any written notice given to the
                           Trustee by the Guarantor under Condition 5(D)(iii)
                           that a Subsidiary of the Guarantor is an Excluded
                           Subsidiary; and

                  (c)      specifying the amount of the Capital and Reserves for
                           the purposes of Condition 12(c) (and, for the
                           avoidance of doubt, using the definition of "Capital
                           and Reserves" as set out in Condition 12(c)), such
                           certificate to be provided within 10 days of any
                           request by the Trustee for its provision;

         (xxv)    give to the Trustee a certificate of two Directors of the
                  Issuer or of the Guarantor (as appropriate):

                  (a)      specifying the aggregate amount of any Relevant
                           Indebtedness of the Issuer, the Guarantor or any
                           Distribution Subsidiary or guaranteed by the Issuer,
                           the Guarantor or any Distribution Subsidiary and in
                           respect of which a Security Interest or Security
                           Interests has or have been created or is or are
                           outstanding, such certificate to be provided before
                           the Issuer, the Guarantor or any Distribution
                           Subsidiary creates or has outstanding any new
                           Security Interest;

                  (b)      specifying details of any modification to the terms
                           and conditions of the Distribution Licence, such
                           certificate to be provided promptly upon any such
                           modification being made; and

                  (c)      specifying any higher figure determined by the Gas
                           and Electricity Markets Authority as is mentioned in
                           Condition 12, such certificate to be provided within
                           5 days of the Gas and Electricity Markets Authority
                           determining such figure by notice in writing to the
                           Secretary of State for Trade and Industry; and

         (xxvi)   give notice to the Trustee as soon as practicable after its
                  Directors or the Directors of any Distribution Subsidiary have
                  resolved to give any Security Interest in respect of any
                  Relevant Indebtedness or guarantee as described in Condition
                  5.

15.      REMUNERATION AND INDEMNIFICATION OF TRUSTEE

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<PAGE>

(A)      THE Issuer shall pay to the Trustee  remuneration for its services
         as trustee as from the date of this Trust Deed,  such  remuneration to
         be at such rate as may from time to time be agreed  between the Issuer
         and the Trustee. Such remuneration shall be payable in advance on 17th
         January in each year.  Upon the issue of any  Further  Securities  the
         rate of  remuneration  in force  immediately  prior  thereto  shall be
         increased by such amount as shall be agreed between the Issuer and the
         Trustee,  such increased  remuneration to be calculated from such date
         as shall be agreed as  aforesaid.  The rate of  remuneration  in force
         from  time to time may upon the final  redemption  of the whole of the
         Securities  of any series be reduced by such amount as shall be agreed
         between the Issuer and the Trustee,  such reduced  remuneration  to be
         calculated  from  such  date as shall be  agreed  as  aforesaid.  Such
         remuneration  shall accrue from day to day and be payable (in priority
         to payments to the Holders and  Couponholders) up to and including the
         date when, all the Securities  having become due for  redemption,  the
         redemption  moneys and interest thereon to the date of redemption have
         been paid to the Principal  Paying Agent or the Trustee  PROVIDED THAT
         if upon due  presentation  of any  Security  or Coupon  or any  cheque
         payment of the moneys due in respect thereof is improperly withheld or
         refused, remuneration will commence again to accrue.

(B)      In the event of the occurrence of an Event of Default or a Potential
         Event of Default or the Trustee considering it expedient or necessary
         or being requested by the Issuer or the Guarantor to undertake duties
         which the Trustee and the Issuer or, as the case may be, the Guarantor
         agree to be of an exceptional nature or otherwise outside the scope of
         the normal duties of the Trustee under these presents the Issuer shall
         pay to the Trustee such additional remuneration as shall be agreed
         between them.

(C)      The Issuer shall in addition pay to the Trustee an amount equal to the
         amount of any value added tax or similar tax chargeable in respect of
         its remuneration under these presents.

(D)      In the event of the Trustee and the Issuer or, as the case may be, the
         Guarantor failing to agree:

         (1)      (in a case to which sub-clause (A) above applies) upon the
                  amount of the remuneration; or

         (2)      (in a case to which sub-clause (B) above applies) upon whether
                  such duties shall be of an exceptional nature or otherwise
                  outside the scope of the. normal duties of the Trustee under
                  these presents, or upon such additional remuneration, such
                  matters shall be determined by a merchant bank (acting as an
                  expert and not as an arbitrator) selected by the Trustee and
                  approved by the Issuer or, failing such approval, nominated
                  (on the application of the Trustee) by the President for the
                  time being of The Law Society of England and Wales (the
                  expenses involved in such nomination and the fees of such
                  merchant bank being payable by the Issuer) and the
                  determination of any such merchant bank shall be final and
                  binding upon the Trustee, the Issuer and the Guarantor.

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<PAGE>

(E)      The Issuer shall also pay or discharge all Liabilities incurred by the
         Trustee in relation to the preparation and execution of, the exercise
         of its powers and the performance of its duties under, and in any other
         manner in relation to, these presents, including but not limited to
         travelling expenses and any stamp, issue, registration, documentary and
         other taxes or duties paid or payable by the Trustee in connection with
         any action taken or contemplated by or on behalf of the Trustee for
         enforcing, or resolving any doubt concerning, or for any other purpose
         in relation to, these presents.

(F)      All amounts payable pursuant to sub-clause (E) above and/or Clause
         16(J) shall be payable by the Issuer on the date specified in a demand
         by the Trustee and in the case of payments actually made by the Trustee
         prior to such demand shall (if not paid within three days after such
         demand and the Trustee so requires) carry interest at the rate of two
         per cent. per annum above the Base Rate from time to time of National
         Westminster Bank Plc from the date specified in such demand, and in all
         other cases shall (if not paid on the date specified in such demand or,
         if later, within three days after such demand and, in either case, the
         Trustee so requires) carry interest at such rate from the date
         specified in such demand. All remuneration payable to the Trustee shall
         carry interest at such rate from the due date therefor.

(G)      Unless otherwise specifically stated in any discharge of these presents
         the provisions of this Clause and Clause 16(J) shall continue in full
         force and effect notwithstanding such discharge.

(H)      The Trustee shall be entitled in its absolute discretion to determine
         in respect of which series of Securities any Liabilities incurred under
         these presents have been incurred or to allocate any such Liabilities
         between the Original Bonds and any Further Securities of any series.

16.      SUPPLEMENT TO TRUSTEE ACTS

THE Trustee shall have all the powers conferred upon trustees by the Trustee Act
1925 and the Trustee Act 2000 of England and Wales (together the "Trustee Acts")
and by way of supplement thereto it is expressly declared as follows:

(A)      The Trustee may in relation to these presents act on the advice or
         opinion of or any information obtained from any lawyer, valuer,
         accountant, surveyor, banker, broker, auctioneer or other expert
         whether obtained by the Issuer, the Guarantor, the Trustee or otherwise
         and shall not be responsible for any Liability occasioned by so acting.

(B)      Any such advice, opinion or information may be sent or obtained by
         letter, telex, telegram, facsimile transmission or cable and the
         Trustee shall not be liable for acting on any advice, opinion or
         information purporting to be conveyed by any such letter, telex,
         telegram, facsimile transmission or cable although the same shall
         contain some error or shall not be authentic.

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<PAGE>

(C)      The Trustee may call for and shall be at liberty to accept as
         sufficient evidence of any fact or matter or the expediency of any
         transaction or thing a certificate signed by any two Directors of the
         Issuer and/or by any two Directors of the Guarantor and the Trustee
         shall not be bound in any such case to call for further evidence or be
         responsible for any Liability that may be occasioned by it or any other
         person acting on such certificate.

(D)      The Trustee may appoint and pay any person to act as a custodian or
         nominee on any terms in relation to such assets of the trust as the
         Trustee may determine, including for the purpose of depositing with a
         custodian these presents or any document relating thereto and the
         Trustee shall not be responsible for any loss, liability, expense,
         demand, cost, claim or proceedings incurred by reason of the
         misconduct, omission or default on the part of any person appointed by
         it hereunder or to be bound to supervise the proceedings or acts of any
         such person; the Trustee is not obliged to appoint a custodian if the
         Trustee invests in securities payable to the bearer.

(E)      The Trustee shall not be responsible for the receipt or application of
         the proceeds of the issue of any of the Securities by the Issuer, the
         exchange of any Global Security for another Global Security or
         definitive Securities or the delivery of any Global Security or
         definitive Securities to the person(s) entitled to it or them.

(F)      The Trustee shall not be bound to give notice to any person of the
         execution of any documents comprised or referred to in these presents
         or to take any steps to ascertain whether any Event of Default,
         Potential Event of Default, Negative Rating Event, any Restructuring
         Event or any event which could lead to the occurrence of or could
         constitute a Restructuring Event has occurred and, until it shall have
         actual knowledge or express notice pursuant to these presents to the
         contrary, the Trustee shall be entitled to assume that no Event of
         Default, Potential Event of Default, Negative Rating Event, any
         Restructuring Event or any other such event has occurred and that each
         of the Issuer and the Guarantor is observing and performing all its
         obligations under these presents.

(G)      Save as expressly otherwise provided in these presents, the Trustee
         shall have absolute and uncontrolled discretion as to the exercise of
         its trusts, powers, authorities and discretions under these presents
         (the exercise of which as between the Trustee and the Holders and
         Couponholders shall be conclusive and binding on the Holders and
         Couponholders) and shall not be responsible for any Liability which may
         result from their exercise or non-exercise.

(H)      The Trustee shall not be liable to any person by reason of having acted
         upon any resolution purporting to have been passed at any meeting of
         the Holders of Securities of all or any series in respect whereof
         minutes have been made and signed even though subsequent to its acting
         it may be found that there was some defect in the constitution of the
         meeting or the passing of the resolution or that for any reason the
         resolution was not valid or binding upon such Holders and the relative
         Couponholders.

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<PAGE>

(I)      The Trustee shall not be liable to any person by reason of having
         accepted as valid or not having rejected any Security or Coupon
         purporting to be such and subsequently found to be forged or not
         authentic.

(J)      Without prejudice to the right of indemnity by law given to trustees,
         each of the Issuer and the Guarantor shall severally indemnify the
         Trustee and every Appointee and keep it or him indemnified against all
         Liabilities to which it or he may be or become subject or which may be
         incurred by it or him in the execution or purported execution of any of
         its trusts, powers, authorities and discretions under these presents or
         its or his functions under any such appointment or in respect of any
         other matter or thing done or omitted in any way relating to these
         presents or any such appointment.

(K)      Any consent or approval given by the Trustee for the purposes of these
         presents may be given on such terms and subject to such conditions (if
         any) as the Trustee thinks fit and notwithstanding anything to the
         contrary in these presents may be given retrospectively.

(L)      The Trustee shall not (unless and to the extent ordered so to do by a
         court of competent jurisdiction) be required to disclose to any Holder
         or Couponholder any information (including, without limitation,
         information of a confidential, financial or price sensitive nature)
         made available to the Trustee by the Issuer or the Guarantor or any
         other person in connection with these presents and no Holder or
         Couponholder shall be entitled to take any action to obtain from the
         Trustee any such information.

(M)      Where it is necessary or desirable for any purpose in connection with
         these presents to convert any sum from one currency to another it shall
         (unless otherwise provided by these presents or required by law) be
         converted at such rate or rates, in accordance with such method and as
         at such date for the determination of such rate of exchange, as may be
         agreed by the Trustee in consultation with the Issuer or the Guarantor
         as relevant and any rate, method and date so agreed shall be binding on
         the Issuer, the Guarantor, the Holders and the Couponholders.

(N)      The Trustee may certify whether or not any of the conditions, events
         and acts set out in sub-paragraphs (b), (c), (e), (f) and (g) of
         Condition 12 (each of which conditions, events and acts shall, unless
         in any case the Trustee in its absolute discretion shall otherwise
         determine, for all the purposes of these presents be deemed to include
         the circumstances resulting therein and the consequences resulting
         therefrom) is in its opinion materially prejudicial to the interests of
         the Holders and any such certificate shall be conclusive and binding
         upon the Issuer, the Guarantor, the Holders and the Couponholders.

(O)      The Trustee as between itself and the Holders and Couponholders may
         determine all questions and doubts arising in relation to any of the
         provisions of these presents. Every such determination, whether or not
         relating in whole or in part to the acts or proceedings of the Trustee,
         shall be conclusive and shall bind the Trustee and the Holders and
         Couponholders.

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<PAGE>

(P)      In  connection  with the exercise by it of any of its trusts,
         powers,  authorities and discretions under these presents  (including,
         without   limitation,   any   modification,   waiver,   authorisation,
         determination or  substitution),  the Trustee shall have regard to the
         interests  of the  Holders as a class and, in  particular  but without
         limitation, shall not have regard to the consequences of such exercise
         for individual Holders or Couponholders resulting from their being for
         any purpose domiciled or resident in, or otherwise  connected with, or
         subject  to the  jurisdiction  of,  any  particular  territory  or any
         political  sub-division  thereof and the Trustee shall not be entitled
         to require, nor shall any Holder or Couponholder be entitled to claim,
         from the Issuer,  the  Guarantor,  the Trustee or any other person any
         indemnification  or payment in respect of any tax  consequence  of any
         such exercise upon individual  Holders or Couponholders  except to the
         extent  already  provided for in  Condition 10 and/or any  undertaking
         given in  addition  thereto or in  substitution  therefor  under these
         presents.

(Q)      Any trustee of these presents being a lawyer, accountant, broker or
         other person engaged in any profession or business shall be entitled to
         charge and be paid all usual professional and other charges for
         business transacted and acts done by him or his firm in connection with
         the trusts of these presents and also his reasonable charges in
         addition to disbursements for all other work and business done and all
         time spent by him or his firm in connection with matters arising in
         connection with these presents.

(R)      The Trustee may  whenever it thinks fit  delegate by power of attorney
         or otherwise to any person or persons or  fluctuating  body of persons
         (whether being a joint trustee of these presents or not) all or any of
         its trusts, powers,  authorities and discretions under these presents.
         Such  delegation  may be made  upon  such  terms  (including  power to
         sub-delegate)  and subject to such  conditions and  regulations as the
         Trustee may in the  interests  of the Holders  think fit.  The Trustee
         shall not be under any obligation to supervise the proceedings or acts
         of any such delegate or  sub-delegate or be in any way responsible for
         any Liability  incurred by reason of any  misconduct or default on the
         part of any such delegate or sub-delegate.  The Trustee shall within a
         reasonable time after any such delegation or any renewal, extension or
         termination thereof give notice thereof to the Issuer.

(S)      The Trustee may in the conduct of the trusts of these presents instead
         of acting personally employ and pay an agent on any terms (whether
         being a lawyer or other professional person) to transact or conduct, or
         concur in transacting or conducting, any business and to do, or concur
         in doing, all acts required to be done in connection with these
         presents (including the receipt and payment of money). The Trustee
         shall not be in any way responsible for any Liability incurred by
         reason of any misconduct or default on the part of any such agent or be
         bound to supervise the proceedings or acts of any such agent.

(T)      The Trustee shall not be responsible for the execution, delivery,
         legality, effectiveness, adequacy, genuineness, validity,
         enforceability or admissibility in evidence of these presents or any
         other document relating thereto and shall not be liable for any failure
         to obtain any licence, consent or other authority for the execution,

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<PAGE>

         delivery, legality, effectiveness, adequacy, genuineness, validity,
         performance, enforceability or admissibility in evidence of these
         presents or any other document relating thereto.

(U)      Section 1 of the Trustee Act 2000 shall not apply to the duties of the
         Trustee in relation to the trusts constituted by these presents. Where
         there are any inconsistencies between the Trustee Acts and these
         presents, this Trust Deed shall, to the extent allowed by law, prevail
         and, in the case of any such inconsistency with the Trustee Act 2000,
         these presents shall constitute a restriction or exclusion for the
         purposes of the Trustee Act 2000.

17.      TRUSTEE'S LIABILITY

NOTHING in these  presents  shall in any case in which the Trustee has failed to
show the degree of care and diligence required of it as trustee having regard to
the  provisions  of  these  presents  conferring  on  it  any  trusts,   powers,
authorities or  discretions  exempt the Trustee from or indemnify it against any
liability  for breach of trust or any  Liability  which by virtue of any rule of
law would otherwise attach to it in respect of any negligence,  default,  breach
of duty or breach of trust of which it may be guilty in  relation  to its duties
under these presents.

18.   TRUSTEE CONTRACTING WITH ISSUER AND THE GUARANTOR

NEITHER the Trustee nor any director or officer of a corporation acting as a
trustee under these presents shall by reason of its or his fiduciary position be
in any way precluded from:

      (i)      entering into or being interested in any contract or financial or
               other transaction or arrangement with the Issuer or the Guarantor
               or any person or body corporate associated with the Issuer or the
               Guarantor (including without limitation any contract, transaction
               or arrangement of a banking or insurance  nature or any contract,
               transaction  or arrangement in relation to the making of loans or
               the  provision  of  financial  facilities  to,  or the  purchase,
               placing  or  underwriting  of or  the  subscribing  or  procuring
               subscriptions for or otherwise acquiring, holding or dealing with
               the  Securities  or  any  other  bonds,  notes,  stocks,  shares,
               debenture stock, debentures or other securities of, the Issuer or
               the  Guarantor  or any  person or body  corporate  associated  as
               aforesaid); or

      (ii)     accepting  or holding  the  trusteeship  of any other  trust deed
               constituting  or  securing  any  other  securities  issued  by or
               relating  to the Issuer or the  Guarantor  or any such  person or
               body  corporate so associated or any other office of profit under
               the Issuer or the Guarantor or any such person or body  corporate
               so associated and shall be entitled to retain and shall not be in
               any way  liable  to  account  for any  profit  made or  share  of
               brokerage or commission or remuneration or other benefit received
               thereby or in connection therewith.

19.     WAIVER, AUTHORISATION AND DETERMINATION

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<PAGE>

        (A)    THE Trustee may without prejudice to its rights in respect of any
               subsequent breach, Event of Default or Potential Event of Default
               from time to time and at any time but only if and in so far as in
               its opinion the  interests of the Holders shall not be materially
               prejudiced  thereby  waive or  authorise  any breach or  proposed
               breach by the Issuer or the  Guarantor of any of the covenants or
               provisions  contained  in these  presents or  determine  that any
               Event of  Default  or  Potential  Event of  Default  shall not be
               treated  as such  for the  purposes  of these  presents  PROVIDED
               ALWAYS THAT the Trustee  shall not exercise any powers  conferred
               on it by this Clause in  contravention  of any express  direction
               given by Extraordinary Resolution or by a request under Condition
               12 but so that no such  direction  or  request  shall  affect any
               waiver,  authorisation or determination previously given or made.
               Any such waiver,  authorisation or determination  may be given or
               made on such terms and subject to such conditions (if any) as the
               Trustee  may  determine,  shall be binding on the Holders and the
               Couponholders and, if, but only if, the Trustee shall so require,
               shall be notified by the Issuer to the Holders in accordance with
               Condition 16 as soon as practicable thereafter.

     MODIFICATION

     (B)       The   Trustee   may   without  the  consent  of  the  Holders  or
               Couponholders  at any time and from time to time  concur with the
               Issuer and the Guarantor in making any  modification (i) to these
               presents  (other  than the  proviso to  paragraph 5 of the Fourth
               Schedule or any of the matters referred to in that proviso) which
               in the opinion of the  Trustee it may be proper to make  PROVIDED
               THAT the Trustee is of the opinion  that such  modification  will
               not be materially  prejudicial to the interests of the Holders or
               (ii) to these  presents  if in the  opinion of the  Trustee  such
               modification  is of a  formal,  minor or  technical  nature or to
               correct a manifest error.  Any such  modification  may be made on
               such terms and subject to such conditions (if any) as the Trustee
               may  determine,  shall  be  binding  upon  the  Holders  and  the
               Couponholders and, unless the Trustee agrees otherwise,  shall be
               notified  by  the  Issuer  to  the  Holders  in  accordance  with
               Condition 16 as soon as practicable thereafter.

20.  HOLDER OF DEFINITIVE BEARER SECURITY ASSUMED TO BE COUPONHOLDER

     (A)       WHEREVER in these presents the Trustee is required or entitled to
               exercise a power,  trust,  authority  or  discretion  under these
               presents,  except as ordered by a court of competent jurisdiction
               or  as   required  by   applicable   law,   the  Trustee   shall,
               notwithstanding  that it may have express notice to the contrary,
               assume that each Holder is the holder of all Coupons appertaining
               to each  Bearer  Security in  definitive  form of which he is the
               holder.

     NO NOTICE TO COUPONHOLDERS

     (B)       Neither the Trustee nor the Issuer nor the Guarantor shall be
               required to give any notice to the Couponholders for any purpose
               under these presents and the Couponholders shall be deemed for

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<PAGE>

               all purposes to have notice of the contents of any notice given
               to the Holders in accordance with Condition 16.

     ENTITLEMENT TO TREAT HOLDER AS ABSOLUTE OWNER

     (C)       The Issuer,  the Guarantor,  the Trustee,  the Paying Agents, the
               Registrar  and the  Transfer  Agents may (to the  fullest  extent
               permitted  by  applicable  laws) deem and treat the holder of any
               Security  and the holder of any Coupon as the  absolute  owner of
               such  Security  or Coupon,  as the case may be, for all  purposes
               (whether  or not such  Security  or Coupon  shall be overdue  and
               notwithstanding  any notice of ownership  thereof,  any notice of
               loss or theft  thereof or any writing  thereon),  and the Issuer,
               the Guarantor,  the Trustee, the Paying Agents, the Registrar and
               the  Transfer  Agents  shall not be affected by any notice to the
               contrary.  All  payments  made to any such holder  shall be valid
               and, to the extent of the sums so paid,  effective to satisfy and
               discharge the liability for the moneys payable in respect of such
               Security or Coupon, as the case may be.

21.  SUBSTITUTION

(A)  (1)       The  Trustee  may  without  the  consent  of the  Holders  or
               Couponholders at any time agree with the Issuer and the Guarantor
               to the  substitution in place of the Issuer or the Guarantor (or,
               in either case, of any previous  substitute under this Clause) as
               the principal  debtor under, or, as the case may be, guarantor in
               respect  of,  these  presents  of any  Subsidiary  of the Issuer,
               including  a  Relevant   Subsidiary   (as  defined  in  Condition
               9(d)(vi)),  or the  Guarantor  (such  substituted  company  being
               hereinafter  called the "New Company") provided that a trust deed
               is executed or some other form of undertaking is given by the New
               Company in form and manner satisfactory to the Trustee,  agreeing
               to be  bound  by  the  provisions  of  these  presents  with  any
               consequential  amendments  which the Trustee may deem appropriate
               as fully as if the New Company  had been named in these  presents
               as  the  principal  debtor  in  place  of  the  Issuer  or as the
               guarantor in place of the  Guarantor  (or, in either case, of the
               previous  substitute under this Clause) and provided further that
               the  Issuer  or the  Guarantor  unconditionally  and  irrevocably
               guarantee all amounts payable under these presents,  except where
               (a) the Issuer has  transferred the  Distribution  Licence to the
               New Company,  in which only the Guarantor may act as guarantor or
               (b) the New Company is the Guarantor,  in which case no guarantee
               shall be necessary.

     (2)       The following further conditions shall apply to sub-clause (A)(1)
               above:

               (i)  the Issuer, the Guarantor and the New Company shall comply
                    with such other requirements as the Trustee may direct in
                    the interests of the Holders;

               (ii) where the New Company is incorporated, domiciled or resident
                    in, or subject generally to the taxing jurisdiction of, a
                    territory other than or in addition to the United Kingdom or
                    any political sub-division thereof or any authority therein

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<PAGE>

                    or thereof having power to tax, undertakings or covenants
                    shall be given by the New Company in terms corresponding to
                    the provisions of Condition 10 with the substitution for
                    (or, as the case may be, the addition to) the references to
                    the United Kingdom of references to that other or additional
                    territory in which the New Company is incorporated,
                    domiciled or resident or to whose taxing jurisdiction it is
                    subject and (where applicable) Condition 8(c) shall be
                    modified accordingly;

              (iii) without prejudice to the rights of reliance of the Trustee
                    under the immediately following paragraph (iv), the Trustee
                    is satisfied that the relevant transaction is not materially
                    prejudicial to the interests of the Holders; and

               (iv) if two Directors of the New Company (or other officers
                    acceptable to the Trustee) shall certify that the New
                    Company is solvent at the time at which the relevant
                    transaction is proposed to be effected (which certificate
                    the Trustee may rely upon absolutely) the Trustee shall not
                    be under any duty to have regard to the financial condition,
                    profits or prospects of the New Company or to compare the
                    same with those of the Issuer or the previous substitute
                    under this Clause as applicable.

(B)  Any such trust deed or undertaking shall, if so expressed, operate to
     release the Issuer, the Guarantor or the previous substitute as aforesaid
     from all of its obligations under these presents. Not later than 14 days
     after the execution of such documents and compliance with such
     requirements, the New Company shall give notice thereof in a form
     previously approved by the Trustee to the Holders in the manner provided in
     Condition 16. Upon the execution of such documents and compliance with such
     requirements, the New Company shall be deemed to be named in these presents
     as the principal debtor in place of the Issuer or as the guarantor in place
     of the Guarantor (or, in either case, in place of the previous substitute
     under this Clause) under these presents and these presents shall be deemed
     to be amended in such manner as shall be necessary to give effect to the
     above provisions and, without limitation, references in these presents to
     the Issuer and/or the Guarantor (as the case may be) shall, where the
     context so requires, be deemed to be or include references to the New
     Company.

22.  CURRENCY INDEMNITY

     EACH of the Issuer and the Guarantor shall severally indemnify the Trustee,
     every Appointee, the Holders and the Couponholders and keep them
     indemnified against:

     (a)  any Liability incurred by any of them arising from the non-payment by
          the Issuer or the Guarantor of any amount due to the Trustee or the
          Holders or Couponholders under these presents by reason of any
          variation in the rates of exchange between those used for the purposes

                                       35
<PAGE>

          of calculating the amount due under a judgment or order in respect
          thereof and those prevailing at the date of actual payment by the
          Issuer or the Guarantor; and

     (b)  any deficiency arising or resulting from any variation in rates of
          exchange between (i) the date as of which the local currency
          equivalent of the amounts due or contingently due under these presents
          (other than this Clause) is calculated for the purposes of any
          bankruptcy, insolvency or liquidation of the Issuer or the Guarantor
          and (ii) the final date for ascertaining the amount of claims in such
          bankruptcy, insolvency or liquidation. The amount of such deficiency
          shall be deemed not to be reduced by any variation in rates of
          exchange occurring between the said final date and the date of any
          distribution of assets in connection with any such bankruptcy,
          insolvency or liquidation.

     The above indemnities shall constitute obligations of the Issuer and the
     Guarantor separate and independent from their obligations under the other
     provisions of these presents and shall apply irrespective of any indulgence
     granted by the Trustee or the Holders or the Couponholders from time to
     time and shall continue in full force and effect notwithstanding the
     judgment or filing of any proof or proofs in any bankruptcy, insolvency or
     liquidation of the Issuer or the Guarantor for a liquidated sum or sums in
     respect of amounts due under these presents (other than this Clause). Any
     such deficiency as aforesaid shall be deemed to constitute a loss suffered
     by the Holders and Couponholders and no proof or evidence of any actual
     loss shall be required by the Issuer or the Guarantor or their liquidator
     or liquidators.

23.  NEW TRUSTEE

(A)  THE power to appoint a new trustee of these presents shall be vested in the
     Issuer but no person shall be appointed who shall not previously have been
     approved by an Extraordinary Resolution. One or more persons may hold
     office as trustee or trustees of these presents but such trustee or
     trustees shall be or include a Trust Corporation. Whenever there shall be
     more than two trustees of these presents the majority of such trustees
     shall be competent to execute and exercise all the duties, powers, trusts,
     authorities and discretions vested in the Trustee by these presents
     provided that a Trust Corporation shall be included in such majority. Any
     appointment of a new trustee of these presents shall as soon as practicable
     thereafter be notified by the Issuer to the Principal Paying Agent, the
     Registrar, the Transfer Agents and the Holders.

     SEPARATE AND CO-TRUSTEES

(B)  Notwithstanding the provisions of sub-clause (A) above, the Trustee may,
     upon giving prior notice to the Issuer and the Guarantor (but without the
     consent of the Issuer, the Guarantor, the Holders or the Couponholders),
     appoint any person established or resident in any jurisdiction (whether a
     Trust Corporation or not) to act either as a separate trustee or as a
     co-trustee jointly with the Trustee:

     (i)  if the Trustee considers such appointment to be in the interests of
          the Holders;

                                       36
<PAGE>

     (ii) for the purposes of conforming to any legal requirements, restrictions
          or conditions in any jurisdiction in which any particular act or acts
          is or are to be performed; or

    (iii) for the purposes of obtaining a judgment in any jurisdiction or the
          enforcement in any jurisdiction of either a judgment already obtained
          or any of the provisions of these presents against the Issuer and/or
          the Guarantor.

     Each of the Issuer and the Guarantor irrevocably appoints the Trustee to be
     its attorney in its name and on its behalf to execute any such instrument
     of appointment. Such a person shall (subject always to the provisions of
     these presents) have such trusts, powers, authorities and discretions (not
     exceeding those conferred on the Trustee by these presents) and such duties
     and obligations as shall be conferred or imposed by the instrument of
     appointment. The Trustee shall have power in like manner to remove any such
     person. Such reasonable remuneration as the Trustee may pay to any such
     person, together with any attributable Liabilities incurred by it in
     performing its function as such separate trustee or co-trustee, shall for
     the purposes of these presents be treated as Liabilities incurred by the
     Trustee.

24.  TRUSTEE'S RETIREMENT AND REMOVAL

     A trustee of these presents may retire at any time on giving not less than
     three months' prior written notice to the Issuer and the Guarantor without
     giving any reason and without being responsible for any Liabilities
     incurred by reason of such retirement. The Holders may by

     Extraordinary Resolution remove any trustee or trustees for the time being
     of these presents. The Issuer and the Guarantor undertake that in the event
     of the only trustee of these presents which is a Trust Corporation giving
     notice under this Clause or being removed by Extraordinary Resolution they
     will use their best endeavours to procure that a new trustee of these
     presents being a Trust Corporation is appointed as soon as reasonably
     practicable thereafter. The retirement or removal of any such trustee shall
     not become effective until a successor trustee being a Trust Corporation is
     appointed and if, in such circumstances no such appointment has become
     effective within two months of such notice of retirement or Extraordinary
     Resolution, the Trustee shall (with prior written consent of the Issuer and
     the Guarantor, such consent not to be unreasonably withheld) be entitled to
     appoint a trust corporation as Trustee and shall notify the Issuer and the
     Guarantor of such appointment.

25.  TRUSTEE'S POWERS TO BE ADDITIONAL

     THE powers conferred upon the Trustee by these presents shall be in
     addition to any powers which may from time to time be vested in the Trustee
     by the general law or as a holder of any of the Securities or Coupons.

26.  NOTICES

                                       37
<PAGE>

     ANY notice or demand to the Issuer and the Guarantor or the Trustee to be
     given, made or served for any purposes under these presents shall be given,
     made or served by sending the same by pre-paid post (first class if inland,
     first class airmail if overseas), telex or facsimile transmission or by
     delivering it by hand as follows:

     to the Issuer
     or the Guarantor:              Carliol House
                                  Market Street
                                    Newcastle-upon-Tyne
                                   NEl 6NE5DS

                                    Attention: Company Secretary

                                    Fax No. 0191 2102037

     to the Trustee:                Winchester House
                                    1 Great Winchester Street
                                    London EC2N 2DB

                                    Attention: Managing Director

                                    Fax No. 020 7547 6149

     or to such other address, telex or facsimile number as shall have been
     notified (in accordance with this Clause) to the other parties hereto and
     any notice or demand sent by post as aforesaid shall be deemed to have been
     given, made or served three days in the case of inland post or seven days
     in the case of overseas post after despatch and any notice or demand sent
     by telex or facsimile transmission as aforesaid shall be deemed to have
     been given, made or served 24 hours after the time of despatch provided
     that in the case of a notice or demand given by telex or facsimile
     transmission such notice or demand shall forthwith be confirmed by post.
     The failure of the addressee to receive such confirmation shall not
     invalidate the relevant notice or demand given by telex or facsimile
     transmission.

27. GOVERNING LAW

     THESE presents are governed by, and shall be construed in accordance with,
     English law.

28.  COUNTERPARTS

     THIS Trust Deed and any trust deed supplemental hereto may be executed and
     delivered in any number of counterparts, all of which, taken together,
     shall constitute one and the same deed and any party to this Trust Deed or
     any trust deed supplemental hereto may enter into the same by executing and
     delivering a counterpart.

                                       38
<PAGE>

29.  CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

     A person who is not a party to these presents has no right under the
     Contracts (Rights of Third Parties) Act 1999 to enforce any term of these
     presents, but this does not affect any right or remedy of a third party
     which exists or is available apart from that Act.

IN WITNESS whereof this Trust Deed has been executed as a deed by the Issuer,
the Guarantor and the Trustee and delivered on the date first stated above.

                                       39
<PAGE>

                               THE FIRST SCHEDULE

                                     Part I

                        - FORM OF ORIGINAL GLOBAL BOND -

                         YORKSHIRE ELECTRICITY GROUP plc

       (Incorporated in England with limited liability under the Companies
                    Act 1985 with registered number 2366995)

                              TEMPORARY GLOBAL BOND

                                  Representing
                  (pound)[ ] in principal amount of an issue of

                    (pound)200,000,000 9 1/4 PER CENT. BONDS
                                    DUE 2020

This Bond is a temporary Global Bond without interest coupons in respect of
(pound)[  ] in principal amount of a duly authorised issue of Bonds of Yorkshire
Electricity Group plc (the "Issuer"), designated as specified in the title
hereof (the "Bonds"), limited to the aggregate principal amount of Two Hundred
Million Pounds Sterling ((pound)200,000,000) and constituted by a Trust Deed
dated 17th January, 1995 (the "Trust Deed") between the Issuer and Bankers
Trustee Company Limited as trustee (the trustee for the time being thereof being
herein called the "Trustee"). References herein to the Conditions (or to any
particular numbered Condition) shall be to the Conditions (or that particular
one of them) set out in Part III of the Second Schedule to the Trust Deed.

1.       Promise to pay

         Subject as provided in this temporary Global Bond the Issuer promises
         to pay to the bearer the principal amount of this temporary Global Bond
         (being at the date hereof [ ] Pounds Sterling ((pound)[ ])) on 17th
         January, 2020 (or on such earlier date as the said principal amount may
         become repayable in accordance with the Conditions or the Trust Deed)
         and to pay interest annually in arrear on 17th January on the principal
         amount from time to time of this temporary Global Bond at the rate of 9
         1/4 per cent. per annum together with such other amounts (if any) as
         may be payable, all subject to and in accordance with the Conditions
         and the provisions of the Trust Deed.

2.       Exchange for definitive Bonds and purchases

         This temporary Global Bond is exchangeable in whole or in part upon the
         request of the bearer for definitive Bonds only on and subject to the
         terms and conditions set out below. The definitive Bonds to be issued
         on such exchange will be in bearer form ("Definitive Bearer Bonds") in
         the denominations of (pound)1,000, (pound)10,000 and (pound)100,000

                                       40
<PAGE>

         each with interest coupons ("Coupons") and one Talon for further
         interest coupons ("Talon") attached.

         On and after 27th February, 1995 this temporary Global Bond may be
         exchanged in whole or in part at the specified office of the Principal
         Paying Agent (or such other place as the Trustee may agree) for
         Definitive Bearer Bonds and the Issuer shall procure that the Principal
         Paying Agent shall issue and deliver, in full or partial exchange for
         this temporary Global Bond, Definitive Bearer Bonds (together with the
         Coupons and Talons appertaining thereto) in an aggregate principal
         amount equal to the principal amount of this temporary Global Bond
         submitted for exchange Provided that Definitive Bearer Bonds will be so
         issued and delivered only if and to the extent that there shall have
         been presented to the Issuer a certificate from Morgan Guaranty Trust
         Company of New York, Brussels office, as operator of the Euroclear
         System ("Euroclear") or from Cedel, societe anonyme ("Cedel")
         substantially in the form of the certificate attached as Exhibit A.

         Any person who would, but for the provisions of this temporary Global
         Bond and the Trust Deed, otherwise be entitled to receive a Definitive
         Bearer Bond or Bonds shall not be entitled to require the exchange of
         an appropriate part of this temporary Global Bond for a Definitive
         Bearer Bond or Definitive Bearer Bonds unless and until he shall have
         delivered or caused to be delivered to Euroclear or Cedel a certificate
         substantially in the form of the certificate attached as Exhibit B
         (copies of which form of certificate will be available at the offices
         of Euroclear in Brussels and Cedel in Luxembourg and the specified
         office of each of the Paying Agents).

         Upon (i) any exchange of a part of this temporary Global Bond for a
         Definitive Bearer Bond or Definitive Bearer Bonds or (ii) the purchase
         by or on behalf of the Issuer or any Subsidiary) of the Issuer and
         cancellation of a part of this temporary Global Bond in accordance with
         the Conditions, the portion of the principal amount hereof so exchanged
         or so purchased and cancelled shall be endorsed by or on behalf of the
         Principal Paying Agent on behalf of the Issuer on Part II of the
         Schedule hereto, whereupon the principal amount hereof shall be reduced
         for all purposes by the amount so exchanged or so purchased and
         cancelled and endorsed.

3.       Payments

         Until the entire principal amount of this temporary Global Bond has
         been extinguished, this temporary Global Bond shall in all respects be
         entitled to the same benefits as the Definitive Bearer Bonds and shall
         be entitled to the benefit of and be bound by the Trust Deed, except
         that the holder of this temporary Global Bond shall not (unless upon
         due presentation of this temporary Global Bond for exchange, delivery
         of the appropriate number of Definitive Bearer Bonds (together with the
         Coupons and Talons appertaining thereto) is improperly withheld or
         refused and such withholding or refusal is continuing at the relevant
         payment date be entitled to receive any payment of interest on this
         temporary Global Bond except upon certification as hereinafter
         provided. Upon any payment of principal or interest on this temporary

                                       41
<PAGE>

         Global Bond the amount so paid shall be endorsed by or on behalf of the
         Principal Paying Agent on behalf of the Issuer on Part I of the
         Schedule hereto.

         Payments of interest in respect of Bonds for the time being represented
         by this temporary Global Bond shall be made to the bearer only upon
         presentation to the Issuer or its agent of a certificate from Euroclear
         or from Cedel substantially in the form of the certificate attached as
         Exhibit A. Any person who would, but for the provisions of this
         temporary Global Bond and of the Trust Deed, otherwise be beneficially
         entitled to a payment of interest on this temporary Global Bond shall
         not be entitled to require such payment unless and until he shall have
         delivered or caused to be delivered to Euroclear or Cedel a certificate
         substantially in the form of the certificate attached as Exhibit B
         (copies of which form of certificate will be available at the offices
         of Euroclear in Brussels and Cedel in Luxembourg and the specified
         office of each of the Paying Agents).

         Upon any payment of principal and endorsement of such payment on Part I
         of the Schedule hereto, the principal amount of this temporary Global
         Bond shall be reduced for all purposes by the principal amount so paid
         and endorsed.

         All payments of any amounts payable and paid to the bearer of this
         temporary Global Bond shall be valid and, to the extent of the sums so
         paid, effectual to satisfy and discharge the liability for the moneys
         payable hereon and on the relevant Definitive Bearer Bonds and Coupons.

4.       Authentication

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

5.       Governing law

         This temporary Global Bond is governed by, and shall be construed in
         accordance with, the laws of England.

                                       42
<PAGE>

IN WITNESS whereof the Issuer has caused this temporary Global Bond to be signed
manually by a person duly authorised on its behalf.

                         YORKSHIRE ELECTRICITY GROUP plc

                          By: ________________________
                                 Duly authorised

Issued in London, England on 17th January, 1995.

Certificate of authentication

This temporary Global Bond is duly authenticated (without recourse, warranty or
liability).

............................

Duly authorised
for and on behalf of
Morgan Guaranty Trust Company
of New York, London Office,
as Principal Paying Agent

                                       43
<PAGE>

                                  THE SCHEDULE

                                     PART I

                       PAYMENTS OF PRINCIPAL AND INTEREST

The following payments on this temporary Global Bond have been made:

Date Interest Principal Remaining principal Notation made paid
<TABLE>
<S>                <C>               <C>              <C>                           <C>

Date               Interest          Principal        Remaining Principal            Notation
Made               Paid              Paid             Amount of this                 made on
                                                      Temporary Global               behalf of
                                                      Bond following                 the Issuer
                                                      such payment

                      (pound)           (pound)              (pound)

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------

--------------     ------------      -------------    --------------------------     --------------
</TABLE>

                                       44
<PAGE>

                                     PART II

                    EXCHANGES FOR DEFINITIVE BEARER BONDS AND
                           PURCHASES AND CANCELLATIONS

The following exchanges of a part of this temporary Global Bond for Definitive
Bearer Bonds and/or purchases and cancellations of a part of this temporary
Global Bond have been made:
<TABLE>
<S>                <C>                     <C>                  <C>                            <C>
Date               Part of principal       Part of               Aggregate principal            Notation
Made               Amount of this          Principal             amount of this                 made on
                   Temporary               Amount of this        temporary                      behalf of
                   Global Bond             Temporary             Global Bond                    the Issuer
                   exchanged for           Global Bond           following such
                   Definitive Bearer       Purchased and         exchange or purchase
                   Bonds                   Cancelled             and cancellation
                         (pound)               (pound)                     (pound)

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------

--------------     -------------------     -----------------     --------------------------     --------------
</TABLE>

                                       45

<PAGE>

                                    EXHIBIT A

                         YORKSHIRE ELECTRICITY GROUP plc

                               (pound)200,000,000

                         9 1/4 per cent. Bonds due 2020

                               (the "Securities")

This is to certify that, based solely on certifications we have received in
writing, by tested telex or by electronic transmission from member organisations
appearing in our records as persons being entitled to a portion of the principal
amount set forth below (our "Member Organisations") substantially to the effect
set forth in the Trust Deed, as of the date hereof, (pound)[ ] principal amount
of the above captioned Securities (i) is owned by persons that are not citizens
or residents of the United States, domestic partnerships, domestic corporations
or any estate or trust the income of which is subject to United States Federal
income taxation regardless of its source ("United States persons"), (ii) is
owned by United States persons that (a) are foreign branches of United States
financial institutions (as defined in U.S. Treasury Regulations Section
l.165-12(c)(l)(v)) ("financial institutions") purchasing for their own account
or for resale, or (b) acquired the Securities through foreign branches of United
States financial institutions and who hold the Securities through such United
States financial institutions on the date hereof (and in either case (a) or (b),
each such United States financial institution has agreed, on its own behalf or
through its agent, that we may advise the Issuer or the Issuer's agent that it
will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder), or
(iii) is owned by United States or foreign financial institutions for purposes
of resale during the restricted period (as defined in U.S. Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7)), and to the further effect that United States or
foreign financial institutions described in clause (iii) above (whether or not
also described in clause (i) or (ii)) have certified that they have not acquired
the Securities for purposes of resale directly or indirectly to a United States
person or to a person within the United States or its possessions.

If the Securities are of the category contemplated in Section 230.903(c)(3) of
Regulation S under the Securities Act of 1933, as amended, then this is also to
certify with respect to such principal amount of Securities set forth above
that, except as set forth below, we have received in writing, by tested telex or
by electronic transmission, from our Member Organisations entitled to a portion
of such principal amount, certifications with respect to such portion,
substantially to the effect set forth in the Trust Deed.

We further certify (i) that we are not making available herewith for exchange
(or, if relevant, exercise of any rights or collection of any interest) any
portion of the temporary global Security excepted in such certifications and
(ii) that as of the date hereof we have not received any notification from any
of our Member Organisations to the effect that the statements made by such
Member Organisations with respect to any portion of the part submitted herewith

                                       46
<PAGE>

for exchange (or, if relevant, exercise of any rights or collection of any
interest) are no longer true and cannot be relied upon as of the date hereof.

We understand that this certification is required in connection with certain tax
laws and, if applicable, certain securities laws of the United States. In
connection therewith, if administrative or legal proceedings are commenced or
threatened in connection with which this certification is or would be relevant,
we irrevocably authorise you to produce this certification to any interested
party in such proceedings.

                                       47
<PAGE>

*Dated

                   [Morgan Guaranty Trust Company of New York,

                       Brussels office, as operator of the

                   Euroclear System] [Cedel, societe anonyme]

                     By.....................................
                              Authorised Signatory

---------------------

*    To be dated no earlier than the date to which this certification relates,
     namely (a) the payment date or (b) the date set for the exchange of the
     temporary Global Bond for Definitive Bearer Bonds.

                                       48
<PAGE>

                                    EXHIBIT B

                         YORKSHIRE ELECTRICITY GROUP plc

                               (pound)200,000,000

                         9 1/4 per cent. Bonds due 2020

                               (the "Securities")

This is to certify that as of the date hereof, and except as set forth below,
the above-captioned Securities held by you for our account (i) are owned by
person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States person(s) that (a)
are foreign branches of United States financial institutions (as defined in U.S.
Treasury Regulations Section 1.165-12(c)(l)(v)) ("financial institutions")
purchasing for their own account or for resale, or (b) acquired the Securities
through foreign branches of United States financial institutions and who hold
the Securities through such United States financial institutions on the date
hereof (and in either case (a) or (b), each such United States financial
institution hereby agrees, on its own behalf or through its agent, that you may
advise the Issuer or the Issuer's agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as amended, and the regulations thereunder), or (iii) are owned by United
States or foreign financial institution(s) for purposes of resale during the
restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the Securities is a
United States or foreign financial institution described in clause (iii) above
(whether or not also described in clause (i) or (ii)) this is further to certify
that such financial institution has not acquired the Securities for the purposes
of resale directly or indirectly to a United States person or to a person within
the United States or its possessions.

If the Securities are of the category contemplated in Section 230.903(c)(3) of
Regulation S under the Securities Act of 1933, as amended (the "Act"), then this
is also to certify that, except as set forth below (i) in the case of debt
securities, the Securities are beneficially owned by (a) non-U.S. person(s) or
(b) U.S. person(s) who purchased the Securities in transactions which did not
require registration under the Act; or (ii) in the case of equity securities,
the Securities are owned by (x) non-U.S. person(s) (and such person(s) are not
acquiring the Securities for the account or benefit of U.S. person(s)) or (y)
U.S. person(s) who purchased the Securities in a transaction which did not
require registration under the Act. If this certification is being delivered in
connection with the exercise of warrants pursuant to Section 230.902(m) of
Regulation S under the Act, then this is further to certify that, except as set
forth below, the Securities are being exercised by and on behalf of non-U.S.
person(s). As used in this paragraph the term "U.S. person" has the meaning
given to it by Regulation S under the Act.

As used herein, "United States" means the United States of America (including
the States and the District of Columbia); and its "possessions" include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.

                                       49
<PAGE>

We undertake to advise you promptly by tested telex on or prior to the date on
which you intend to submit your certification relating to the Securities held by
you for our account in accordance with your operating procedures if any
applicable statement herein is not correct on such date, and in the absence of
any such notification it may be assumed that this certification applies as of
such date.

This certification excepts and does not relate to (pound)[ ] of such interest in
the above Securities in respect of which we are not able to certify and as to
which we understand exchange and delivery of definitive Securities (or, if
relevant, exercise of any rights or collection of any interest) cannot be made
until we do so certify.

We understand that this certification is required in connection with certain tax
laws and, if applicable, certain securities laws of the United States. In
connection therewith, if administrative or legal proceedings are commenced or
threatened in connection with which this certification is or would be relevant,
we irrevocably authorise you to produce this certification to any interested
party in such proceedings.

* Dated

         By ..........................................

         [Name of person giving certification] (As, or as agent for, the
         beneficial owner(s) of those of the Securities to which this
         certification relates)

------------------------

*    To be dated no earlier than the fifteenth day before the date to which this
     certification relates, namely (a) the payment date or (b) the date set for
     the exchange of the temporary Global Bond for Definitive Bearer Bonds.

                                       50
<PAGE>

                                     Part II

                        - FORM OF ORIGINAL BEARER BOND -

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

-------------------------------------------------------------------------------

(pound)[l,000] [10,000] [100,000] XS0055251010 [SERIES] [Serial No.]

-------------------------------------------------------------------------------

                     YORKSHIRE ELECTRICITY DISTRIBUTION PLC

       (Incorporated in England with limited liability under the Companies
                    Act 1985 with registered number 4112320)

          (pound)200,000,000 9 1/4 PER CENT. GUARANTEED BONDS DUE 2020

   unconditionally and irrevocably guaranteed as to principal and interest by

                         YORKSHIRE ELECTRICITY GROUP plc

       (Incorporated in England with limited liability under the Companies
                    Act 1985 with registered number 2366995)

The original issue of the Bonds was authorised by resolutions of the Board of
Directors of Yorkshire Electricity Group plc ("YEG") passed on 15th December,
1994 and by resolutions of a duly authorised Committee of the Board of Directors
of the Issuer passed on 4th and 5th January, 1995.

By a resolution of the Board of Directors of Yorkshire Electricity Distribution
plc (the "Issuer") passed on 28th September, 2001 the Issuer agreed to become
the principal debtor in respect of the Bonds in substitution for YEG. By a
resolution of the Board of Directors of YEG passed on 4th June, 2001 YEG agreed
to guarantee the obligations of the Issuer under the Bonds.

This Bond forms one of a series of Bonds constituted by a Trust Deed dated 17th
January, 1995 between YEG and Bankers Trustee Company Limited as trustee for the
holders of the Bonds (the "Trustee"), as supplemented by a Second Supplemental
Trust Deed dated 19th September, 1996 made between YEG and the Trustee and by a
Third Supplemental Trust Deed dated 1st October, 2001 and made between the
Issuer, YEG and the Trustee, as modified and restated by an Amended and Restated
Trust Deed dated 1st October, 2001 made between the Issuer, YEG and the Trustee
(together, the "Trust Deed") and issued either as bearer bonds in the

                                       51
<PAGE>

denominations of (pound)1,000, (pound)10,000 and (pound)100,000 each with
Coupons and one Talon attached or as registered bonds in the denomination of
(pound)1 each or an integral multiple thereof, in an aggregate principal amount
of (pound)200,000,000.

The Issuer for value received and subject to and in accordance with the
Conditions endorsed hereon hereby promises to pay to the bearer on 17th January,
2020 (or on such earlier date as the principal sum hereunder mentioned may
become repayable in accordance with the said Conditions) the principal sum of:

     (pound)[l,000] [10,000] [100,000] ([One] [Ten] [One Hundred Thousand Pounds
Sterling)

together with interest on the said principal sum at the rate of 9 1/4 per cent.
per annum payable annually in arrear on 17th January and together with such
other amounts (if any) as may be payable, all subject to and in accordance with
the said Conditions and the provisions of the Trust Deed.

Neither this Bond nor the Coupons and Talon appertaining hereto shall be or
become valid or obligatory for any purpose unless and until this Bond has been
authenticated by or on behalf of the Principal Paying Agent.

IN WITNESS whereof this Bond has been executed on behalf of the Issuer.

                     YORKSHIRE ELECTRICITY DISTRIBUTION PLC

                     By: ________________________
                     Director

Issued in London, England.

Certificate of authentication

This Bond is duly authenticated (without recourse, warranty or liability).

.........................

Duly authorised
for and on behalf of the
Principal Paying Agent

                                       52
<PAGE>

                           - FORM OF ORIGINAL COUPON -

On the front:

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

                     YORKSHIRE ELECTRICITY DISTRIBUTION PLC

          (pound)200,000,000 9 1/4 PER CENT. GUARANTEED BONDS DUE 2020

Coupon appertaining to a Bond in the denomination of (pound)[l,000] [10,000]
[100,000].

         This Coupon is separately          Coupon for
         negotiable, payable to bearer,     (pound)[92.50] [925.00] [9,250.00]
         and subject to the                 due on
         Conditions of the said Bonds.      l7th January, [         ]

-------------------------------------------------------------------------------

   [No.] (pound)[l,000] [10,000] [100,000] XS0055251010 [Series] [Serial No.]

-------------------------------------------------------------------------------

                                       53
<PAGE>

                           - FORM OF ORIGINAL TALON -

On the front:

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

                     YORKSHIRE ELECTRICITY DISTRIBUTION PLC

          (pound)200,000,000 9 1/4 PER CENT. GUARANTEED BONDS DUE 2020

Talon appertaining to a Bond in the denomination of(pound)[1,000][10,000]
[100,000]

On and after 17th January, [2005/2015] [ten/five] further Coupons [and a further
Talon] will be issued at the specified office of any of the Paying Agents set
out on the reverse hereof (and or any other or further Paying Agents and/or
specified offices as may from time to time be duly appointed and notified to the
Bondholders) upon production and surrender of this Talon.

-------------------------------------------------------------------------------

[No.] [1,000][10,000][l00,00] XS0055251010 [Series] [Serial No.]

-------------------------------------------------------------------------------

On the back of the Original Coupons and the Original Talons:

                             PRINCIPAL PAYING AGENT

                                 CITIBANK, N.A.
                               5 Carmelite Street
                                 London EC4Y OPA

                        Telephone:            020 7508 3841
                        Fax:                  020 7508 3878
                        Attention:            Agency and Trust

                               OTHER PAYING AGENT

                             BNP PARIBAS LUXEMBOURG
                               10A Boulevard Royal
                                L-2093 Luxembourg

                                       54
<PAGE>

                                    Part III

                      - FORM OF ORIGINAL REGISTERED BOND -

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

-------------------------------------------------------------------------------

Certificate Number Transfer No. Holder Code  Registration Date   Amount (pound)

-------------------------------------------------------------------------------

                     YORKSHIRE ELECTRICITY DISTRIBUTION PLC

       (Incorporated in England with limited liability under the Companies
                    Act 1985 with registered number 4112320)

           (pound)200,000,000 91/4 PER CENT. GUARANTEED BONDS DUE 2020

   unconditionally and irrevocably guaranteed as to principal and interest by

                         YORKSHIRE ELECTRICITY GROUP plc

       (Incorporated in England with limited liability under the Companies
                    Act 1985 with registered number 2366995)

Interest at the rate of 9 1/4 per cent. per annum is payable on the principal
amount of this Registered Bond annually in arrear on 17th January in each year,
subject to and in accordance with the Conditions endorsed hereon and the
provisions of the Trust Deed dated 17th January. 1995 between Yorkshire
Electricity Group plc ("YEG") and Bankers Trustee Company Limited as trustee for
the holders of the Bonds (the "Trustee"), as supplemented by a Second
Supplemental Trust Deed dated 19th September, 1996 made between YEG and the
Trustee and by a Third Supplemental Trust Deed dated 1st October, 2001 and made
between Yorkshire Electricity Distribution plc (the "Issuer"), YEG and the
Trustee, as modified and restated by an Amended and Restated Trust Deed dated
1st October, 2001 made between the Issuer, YEG and the Trustee (together, the
"Trust Deed") constituting the Bonds.

THIS IS TO CERTIFY that is/are the registered holder(s) of in principal amount
of the above-mentioned Registered Bonds and is/are entitled on 17th January,
2020 (or on such earlier date as such principal amount may become repayable in
accordance with the Conditions) to the repayment of such principal amount
together with such other amounts (if any) as may be payable, all subject to and
in accordance with the said Conditions and the provisions of the said Trust
Deed.

IN WITNESS whereof this Registered Bond has been executed on behalf of the
Issuer.

                                       55
<PAGE>

                     YORKSHIRE ELECTRICITY DISTRIBUTION PLC

                     By: __________________________
                     Director

This Certificate must be surrendered before any transfer of the whole or part of
the Registered Bonds herein mentioned can be registered.

                                       56
<PAGE>

                     - FORM OF TRANSFER OF REGISTERED BOND -

FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s) to

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

(Please print or type name and address (including postal code) of transferee)

(pound) principal amount of this Registered Bond and all rights hereunder,
hereby irrevocably constituting and appointing ___________________________
as attorney to transfer such principal amount of this Bond in the register
maintained by the Issuer with full power of substitution.

                         Signature(s) of transferor(s) ________________________

                                                       ________________________

Date: ____________________

N.B.:

1.       This form of transfer must be accompanied by such documents, evidence
         and information as may be required pursuant to the Conditions and must
         be executed under the hand of the transferor or, if the transferor is a
         corporation, either under its common seal or under the hand of two of
         its officers duly authorised in writing and, in such latter case, the
         document so authorising such officers must be delivered with this form
         of transfer.

2.       In each case the signature(s) must be guaranteed by a commercial bank
         with a correspondent bank in New York City, Luxembourg or London or by
         an institution which is a member of The New York Stock Exchange or The
         American Stock Exchange in New York City or the Luxembourg Stock
         Exchange or The Stock Exchange in London.

3.       The signature(s) on this form of transfer must correspond with the
         name(s) at it/they appear(s) on the face of this Registered Bond in
         every particular, without alteration or enlargement or any change
         whatever.

4.       Registered Bonds are only transferable in amounts of (pound)1 or any
         integral multiples thereof.

                                       57
<PAGE>

                               THE SECOND SCHEDULE

                           - CONDITIONS OF THE BONDS -

The following is the text of the terms and conditions of the Bonds which
(subject to amendment) will be deemed to be endorsed on each Bond in definitive
form:

The (pound)200,000,000 9 1/4 per cent. Guaranteed Bonds due 2020 (the "Bonds",
which expression shall in these Terms and Conditions, unless the context
otherwise requires, include any further bonds issued pursuant to Condition 19
and forming a single series with the Bonds) of Yorkshire Electricity
Distribution plc (the "Issuer") are constituted by a trust deed dated 17th
January, 1995 (the "Principal Trust Deed") supplemented by a second supplemental
trust deed dated 19th September, 1996 (the "Second Supplemental Trust Deed")
both made between Yorkshire Electricity Group plc ("YEG") and Bankers Trustee
Company Limited (the "Trustee", which expression shall include any successor) as
trustee for the holders of the Bonds (the "Bondholders"), as further
supplemented by a third supplemental trust deed (the "Third Supplemental Trust
Deed") dated 1st October, 2001 and made between the Issuer, YEG (in its capacity
as guarantor, the "Guarantor") and the Trustee. The Third Supplemental Trust
Deed includes the form of amended and restated trust deed relating to the Bonds
dated 1st October, 2001 (the "Amended and Restated Trust Deed") made between the
Issuer, the Guarantor and the Trustee. The Principal Trust Deed, the Second
Supplemental Trust Deed and the Third Supplemental Trust Deed, as amended and
restated by the Amended and Restated Trust Deed, are together referred to as the
"Trust Deed". The issue of the Bonds was authorised by resolutions of the board
of directors of YEG passed on 15th December, 1994 and by resolutions of a duly
authorised committee of the board of directors of YEG passed on 4th and 5th
January, 1995. The substitution of the Issuer in place of YEG as issuer of the
Bonds and the giving of the Guarantee (as defined below) was authorised by
resolutions of the board of directors of YEG passed on 4th June, 2001. The
substitution of the Issuer in place of YEG as issuer of the Bonds was authorised
by resolutions of the board of directors of the Issuer passed on 28th September,
2001. The Bonds are on issue, listed on The London Stock Exchange plc (the
"London Stock Exchange"). The statements in these Terms and Conditions include
summaries of, and are subject to, the detailed provisions of and definitions in
the Trust Deed. The Bonds are also issued with the benefit of an agency
agreement dated 17th January, 1995 (the "Principal Agency Agreement") made
between YEG, Morgan Guaranty Trust Company of New York, London office, as
principal paying agent (the "Principal Paying Agent", which expression shall
include any successor), The Royal Bank of Scotland plc as registrar (the
"Registrar", which expression shall include any successor), the other paying
agents named therein (together with the Principal Paying Agent, the "Paying
Agents", which expression shall include any additional or successor paying
agents) and the Trustee supplemented by a supplemental agency agreement dated
1st October, 2001 (the "Supplemental Agency Agreement") made between the Issuer,
the Guarantor, the Registrar (being Computershare Investor Services PLC, as
successor to The Royal Bank of Scotland plc in that capacity), the Paying Agents
(including Citibank, N.A. as principal paying agent, being the successor to
Morgan Guaranty Trust Company of New York, London office in that capacity) and
the Trustee. The Principal Agency Agreement and the Supplemental Agency
Agreement are together referred to as the "Agency Agreement". Copies of the
Trust Deed and the Agency Agreement are available for inspection during normal
business hours by the Bondholders and the holders of the interest coupons
appertaining to the Bonds (respectively, the "Couponholders" and the "Coupons",

                                       58
<PAGE>

which latter expression shall, unless the context otherwise requires, include
the Talons referred to below) at the registered office for the time being of the
Trustee, being at 1st October, 2001 at Winchester House, I Great Winchester
Street, London EC2N 2DB, and at the specified office of each of the Paying
Agents and the Registrar. The Bondholders and the Couponholders are entitled to
the benefit of, are bound by, and are deemed to have notice of, all the
provisions of the Trust Deed and the Agency Agreement.

1.       Form, Denominations and Title

         The Bonds are in bearer form, serially numbered, in the denominations
         of (pound)1,000, (pound)10,000 and (pound)100,000 each ("Bearer Bonds")
         with Coupons and one Talon for further Coupons (a "Talon") attached on
         issue and in registered form in the denominations of (pound)1 and
         integral multiples thereof ("Registered Bonds") without interest
         coupons. Title to the Bearer Bonds and to the Coupons will pass by
         delivery and title to the Registered Bonds will pass upon the
         registration of transfers in accordance with the provisions of the
         Agency Agreement and the Trust Deed. Bearer Bonds of one denomination
         cannot be exchanged for Bearer Bonds of another denomination.

         The Issuer, the Guarantor, any Paying Agent, the Registrar and the
         Trustee may (to the fullest extent permitted by applicable laws) deem
         and treat the holder of any Bearer Bond and the holder of any Coupon
         and the registered holder of any Registered Bond as the absolute owner
         for all purposes (whether or not the Bond or Coupon shall be overdue
         and notwithstanding any notice of ownership or writing on the Bond or
         Coupon or any notice of previous loss or theft of the Bond or Coupon).

2.       Transfer and Exchange

         (a)      Transfer of Registered Bonds

         A Registered Bond may be transferred in whole or in part (in the
         principal amount of (pound)1 or any integral multiple thereof) by the
         transferor depositing the Registered Bond for registration of the
         transfer of the Registered Bond (or the relevant part of the Registered
         Bond) at the specified office of the Registrar, with the form of
         transfer endorsed on the Registered Bond duly completed and signed by
         or on behalf of the transferor and upon the Registrar after due and
         careful enquiry being satisfied with the documents of title and the
         identity of the person making the request and subject to such
         reasonable regulations as the Issuer and the Registrar may (with the
         prior approval of the Trustee) prescribe. Subject as provided above,
         the Registrar will, within three business days of the request (or such
         longer period as may be required to comply with any applicable fiscal
         or other laws or regulations), deliver at its specified office to the
         transferee or (at the risk and, if mailed at the request of the
         transferee otherwise than by ordinary uninsured mail, at the expense of
         the transferee) send by mail to such address as the transferee may
         request a new Registered Bond of a like aggregate principal amount to
         the Registered Bond (or the relevant part of the Registered Bond)
         transferred. In the case of the transfer of part only of a Registered
         Bond, a new Registered Bond in respect of the balance of the Registered

                                       59
<PAGE>

         Bond not transferred will be so delivered or (at the risk and, if
         mailed at the request of the transferor otherwise than by ordinary
         uninsured mail, at the expense of the transferor) sent by mail to the
         transferor.

         (b)      Exchange of Bearer Bonds for Registered Bonds

         At the option of the holder thereof, upon presentation to the Principal
         Paying Agent at any time on or after 27th February, 1995 (the "Exchange
         Date") of a duly completed and signed request for exchange (in the form
         for the time being obtainable from the specified office of the
         Registrar or the Principal Paying Agent) together with the relevant
         Bearer Bonds, subject to the terms of the Agency Agreement, Bearer
         Bonds are exchangeable for the same aggregate principal amount of
         Registered Bonds, provided that (save as provided below) all unmatured
         Coupons relating thereto are attached thereto or are surrendered
         therewith. Bearer Bonds may not be surrendered in exchange for
         Registered Bonds after a Record Date (as defined in Condition 7) and on
         or before the next following Interest Payment Date (as defined in
         Condition 6). Interest on a Registered Bond issued on exchange will
         accrue as from the immediately preceding Interest Payment Date or, if
         none, as from 17th January, 1995 (the "Closing Date"). Within seven
         business days of the request, the Registrar will deliver at its
         specified office to the Bondholder or (at the risk and, if mailed at
         the request of the Bondholder otherwise than by ordinary uninsured
         mail, at the expense of the Bondholder) send by mail to such address as
         may be specified by the Bondholder in the request a Registered Bond of
         a like aggregate principal amount to the Bearer Bond exchanged.

         (c)      Exchange of Registered Bonds for Bearer Bonds

         At the option of the holder thereof upon presentation to the Registrar
         at any time on or after the Exchange Date of a duly completed and
         signed request for exchange (in the form for the time being obtainable
         from the specified office of the Registrar or the Principal Paying
         Agent (a "Bearer Request")) together with the relevant Registered
         Bonds, subject to the terms of the Agency Agreement, Registered Bonds
         are exchangeable in whole or in part in principal amounts of
         (pound)1,000 or integral multiples thereof for the same aggregate
         principal amount of Bearer Bonds. Interest on a Registered Bond
         surrendered for exchange will cease to accrue as from the Interest
         Payment Date immediately preceding the date of surrender or, if none,
         the Closing Date. Bearer Requests may not be presented on or after the
         Record Date in respect of any Interest Payment Date up to and including
         such Interest Payment Date. Bearer Requests may only be presented, and
         Registered Bonds may only be surrendered for exchange for Bearer Bonds,
         at the specified office of the Registrar. The Principal Paying Agent
         will within seven business days of the date of presentation to the
         Registrar of any Bearer Request together with the relevant Registered
         Bonds deliver at its specified office (or (at the risk and, if mailed
         at the request of the Bondholder otherwise than by ordinary uninsured
         mail, at the expense of the Bondholder) mail to such address, other
         than an address in the United States, as the Bondholder may request)
         the Bearer Bond or Bearer Bonds requested together with all Coupons in
         respect of all Interest Payment Dates falling after the date of
         presentation. In the case of exchange of part only of the Bonds

                                       60
<PAGE>

         represented by a Registered Bond, a Registered Bond for the balance
         after such exchange will be sent by mail by the Registrar (at the risk
         and, if mailed at the request of the Bondholder otherwise than by
         ordinary uninsured mail, at the expense of the Bondholder) to such
         address, other than an address in the United States, as the Bondholder
         may request.

         (d)      Closed Periods

         In the event of a partial redemption of Bonds under Condition 8, the
         Issuer shall not be required:

         (i)      to register the transfer of Registered Bonds (or parts of
                  Registered Bonds) or to exchange Bearer Bonds for Registered
                  Bonds (or vice versa) during the period beginning on the
                  sixty-fifth day before the date of the partial redemption and
                  ending on the day on which notice is given specifying the
                  serial numbers of Bonds called (in whole or in part) for
                  redemption (both inclusive); or

         (ii)     to register the transfer of any Registered Bond (or part
                  thereof) called for partial redemption; or

         (iii)    to exchange any Registered Bond (or part thereof) or Bearer
                  Bond called for partial redemption; except that a Registered
                  Bond (or part thereof) or Bearer Bond called for partial
                  redemption may be exchanged for a Bearer Bond or Registered
                  Bond, respectively, which is simultaneously surrendered not
                  later than the relevant Record Date.

         (e)      Formalities free of charge

         Bondholders will not be required to bear the costs and expenses of
         effecting any registration of transfer or any exchange as provided
         above, except for any costs or expenses of delivery other than by
         ordinary uninsured mail and except that the Issuer may require the
         payment of a sum sufficient to cover any stamp duty, tax or other
         governmental charge that may be imposed in relation to the registration
         or exchange.

         (f)      Registrar

         The name of the initial Registrar and its initial specified office are
         set out at the end of these Terms and Conditions. The Issuer reserves
         the right, subject to the approval of the Trustee, at any time to vary
         or terminate the appointment of the Registrar and to appoint another
         Registrar. Notice of any termination or appointment and of any changes
         in specified office will be given to the Bondholders promptly by the
         Issuer in accordance with Condition 16.

3.       Status

         The Bonds and the Coupons are direct, unconditional and, subject to the
         provisions of Condition 5, unsecured obligations of the Issuer and,

                                       61
<PAGE>

         subject as aforesaid, rank and will rank pari passu, without any
         preference among themselves, with all other outstanding unsecured and
         unsubordinated obligations of the Issuer, present and future, but, in
         the event of insolvency, only to the extent permitted by the applicable
         laws relating to creditors' rights.

4.       Guarantee

         The payment of the principal and interest in respect of the Bonds and
         all other moneys payable by the Issuer under or pursuant to the Trust
         Deed has been unconditionally and irrevocably guaranteed by the
         Guarantor (the "Guarantee") in the Trust Deed. The obligations of the
         Guarantor under the Guarantee constitute direct, unconditional and
         (subject to the provisions of Condition 5) unsecured and unsubordinated
         obligations of the Guarantor and (subject as provided above) rank and
         will rank pari passu with all other outstanding unsecured and
         unsubordinated obligations of the Guarantor, present and future, but,
         in the event of insolvency, only to the extent permitted by applicable
         laws relating to creditors' rights.

5.       Negative Pledge

         So long as any of the Bonds remains outstanding (as defined in the
         Trust Deed) the Issuer and the Guarantor will ensure that no Relevant
         Indebtedness (as defined below) of the Issuer, the Guarantor or any
         Distribution Subsidiary (as defined below) or of any other person and
         no guarantee by the Issuer, the Guarantor or any Distribution
         Subsidiary of any Relevant Indebtedness of any other person will be
         secured by a mortgage, charge, lien, pledge or other security interest
         (each a "Security Interest") upon, or with respect to, any of the
         present or future business, undertaking, assets or revenues (including
         any uncalled capital) of the Issuer, the Guarantor or any Distribution
         Subsidiary unless the Issuer and the Guarantor shall, before or at the
         same time as the creation of the Security Interest, take any and all
         action necessary to ensure that:

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

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

         save that the Issuer, the Guarantor or any Distribution Subsidiary may
         create or have outstanding a Security Interest in respect of any of its
         Relevant Indebtedness and/or any guarantees given by the Issuer, the

                                       62
<PAGE>

         Guarantor or any Distribution Subsidiary in respect of any Relevant
         Indebtedness of any other person (without the obligation to provide a
         Security Interest or guarantee or other arrangement in respect of the
         Bonds, the Coupons and the Trust Deed as aforesaid) where such Relevant
         Indebtedness has an initial maturity falling not earlier than 17th
         January, 2020 and is of a maximum aggregate amount outstanding at any
         time not exceeding the greater of (pound)200,000,000 and 20 per cent.
         of the Capital and Reserves (as defined below).

         For the purposes of these Terms and Conditions:

         (A) "Capital and Reserves" means the aggregate of:

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

             (ii)   the total of the capital, revaluation and revenue reserves
                    of the Group, including any share premium account, capital
                    redemption reserve and credit balance on the profit and loss
                    account, but excluding sums set aside for taxation and
                    amounts attributable to outside shareholders in Subsidiary
                    Undertakings (as defined below) and deducting any debit
                    balance on the profit and loss account,

              all as shown in the then latest audited consolidated balance sheet
              of the Group prepared in accordance with the historical cost
              convention (as modified by the revaluation of certain fixed
              assets) for the purposes of the Companies Act 1985, but adjusted
              as may be necessary in respect of any variation in the paid up
              share capital or share premium account of the Guarantor since the
              date of that balance sheet and further adjusted as may be
              necessary to reflect any change since the date of that balance
              sheet in the Subsidiary Undertakings comprising the Group and/or
              as the Auditors (as defined in the Trust Deed) may consider
              appropriate.

              A report by the Auditors as to the amount of the Capital and
              Reserves at any given time shall, in the absence of manifest
              error, be conclusive and binding on all parties;

         (B)  "Distribution Licence" means the electricity distribution licence
              granted under section 6(l)(c) of the Electricity Act, as amended
              by the Utilities Act 2000, to the Issuer;

         (C)  "Distribution Subsidiary" means any Subsidiary of the Guarantor
              (other than the Issuer) which holds the Distribution Licence from
              time to time;

         (D)  "Excluded Subsidiary" means any Subsidiary of the Guarantor (other
              than the Issuer or a Distribution Subsidiary):

                                       63
<PAGE>

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

              (ii)  none of whose indebtedness for borrowed money in respect of
                    the financing of such ownership, acquisition, development
                    and/or operation of an asset is subject to any recourse
                    whatsoever to any member of the Group (other than another
                    Excluded Subsidiary) in respect of the repayment thereof,
                    except as expressly referred to in paragraph (G)(ii)(3); and

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

         (E)   "Group" means the Guarantor and its Subsidiary Undertakings;

         (F)   "indebtedness  for  borrowed  money"  means any present or future
               indebtedness (whether being principal, premium, interest or other
               amounts)  for  or  in  respect  of  (i)  money   borrowed,   (ii)
               liabilities  under or in respect of any  acceptance or acceptance
               credit, or (iii) any notes, bonds,  debentures,  debenture stock,
               loan stock or other  securities  offered,  issued or  distributed
               whether  by way of public  offer,  private  placing,  acquisition
               consideration  or  otherwise  and  whether  issued for cash or in
               whole or in part for a consideration other than cash;

         (G)   "Project Finance Indebtedness" means any indebtedness for
               borrowed money to finance the ownership, acquisition, development
               and/or operation of an asset:

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

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

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

                    (2)  recourse to such borrower for the purpose only of
                         enabling amounts to be claimed in respect of such
                         indebtedness for borrowed money in an enforcement of
                         any encumbrance given by such borrower over such asset
                         or the income, cash flow or other proceeds deriving
                         therefrom (or given by any shareholder or the like in

                                       64
<PAGE>

                         the borrower over its shares or the like in the capital
                         of the borrower) to secure such indebtedness for
                         borrowed money, provided that (aa) the extent of such
                         recourse to such borrower is limited solely to the
                         amount of any recoveries made on any such enforcement,
                         and (bb) such person or persons are not entitled, by
                         virtue of any right or claim arising out of or in
                         connection with such indebtedness for borrowed money,
                         to commence proceedings for the winding up or
                         dissolution of the borrower or to appoint or procure
                         the appointment of any receiver, trustee or similar
                         person or officer in respect of the borrower or any of
                         its assets (save for the assets the subject of such
                         encumbrance); and/or

                    (3)  recourse to such borrower generally, or directly or
                         indirectly to a member of the Group, under any form of
                         assurance, undertaking or support, which recourse is
                         limited to a claim for damages (other than liquidated
                         damages and damages required to be calculated in a
                         specified way) for breach of an obligation (not being a
                         payment obligation or an obligation to procure payment
                         by another or an indemnity in respect thereof or any
                         obligation to comply or to procure compliance by
                         another with any financial ratios or other tests of
                         financial condition) by the person against whom such
                         recourse is available;

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

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

         (J)      "Subsidiary Undertaking" shall have the meaning given to it by
                  Section 258 of the Companies Act 1985 (but shall exclude any
                  undertakings (as defined in the Companies Act 1985) whose
                  accounts are not included in the then latest published audited
                  consolidated accounts of the Guarantor nor (in the case of an
                  undertaking which has first become a subsidiary undertaking of
                  a member of the Group since the date as at which any such
                  audited accounts were prepared) would its accounts have been
                  so included or consolidated if it had become so on or before
                  that date); and

         (K)      any reference to an obligation being guaranteed shall include
                  a reference to an indemnity being given in respect of the
                  obligation.

6.       Interest

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         The Bonds bear interest from (and including) the Closing Date at the
         rate of 9 1/4 per cent. per annum, payable annually in arrear on 17th
         January in each year (each an "Interest Payment Date"), the first such
         payment to be made on 17th January, 1996 and to amount to a full year's
         interest.

         Each Bond or, in the case of the redemption of part only of a
         Registered Bond, that part only of the Registered Bond will cease to
         bear interest from its due date for redemption unless, upon due
         presentation, payment of the principal in respect of the Bond is
         improperly withheld or refused or unless default is otherwise made in
         respect of such payment, in which event interest shall continue to
         accrue as provided in the Trust Deed.

         When interest is required to be calculated in respect of a period of
         less than a full year, it shall be calculated on the basis of a 360 day
         year consisting of 12 months of 30 days each.

7.       Payments and Exchange of Talons

         Payments of principal and interest in respect of each Bearer Bond will
         be made against presentation and surrender (or, in the case of part
         payment only, endorsement) of the Bearer Bond, except that payments of
         interest due on an Interest Payment Date will be made against
         presentation and surrender (or, in the case of part payment only,
         endorsement) of the relevant Coupons, in each case at the specified
         office of any of the Paying Agents.

         Payments in respect of each Bearer Bond will be made at the specified
         office of any Paying Agent, at the option of the holder, by sterling
         cheque drawn on, or by transfer to a sterling account maintained by the
         payee with, a bank in London, subject in all cases to any applicable
         fiscal or other laws and regulations, but without prejudice to the
         provisions of Condition 10.

         Each Bearer Bond should be presented for payment together with all
         relative unmatured Coupons, failing which the full amount of any
         relative missing unmatured Coupon (or, in the case of payment not being
         made in full, that proportion of the full amount of the missing
         unmatured Coupon which the amount so paid bears to the total amount
         due) will be deducted from the amount due for payment. Each amount so
         deducted will be paid in the manner mentioned above against
         presentation and surrender (or, in the case of part payment only,
         endorsement) of the relative missing Coupon at any time before the
         expiry of 10 years after the Relevant Date (as defined in Condition 10)
         in respect of the relevant Bond (whether or not the Coupon would
         otherwise have become void pursuant to Condition 11), or, if later,
         five years after the date on which the Coupon would have become due,
         but not thereafter.

         Payments of principal in respect of each Registered Bond will be made
         against presentation and surrender (or, in the case of part payment
         only, endorsement) of the Registered Bond at the specified office of

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         the Registrar in London by sterling cheque drawn on a bank in London.
         Payments of interest on each Registered Bond will be made by sterling
         cheque drawn on a bank in London and mailed on the Business Day (as
         defined below) in London immediately preceding the relevant due date to
         the holder (or to the first named of joint holders) of the Registered
         Bond appearing on the register at the close of business on the seventh
         day before the relevant due date (the "Record Date") at his address
         shown on the register on the Record Date. Upon application of the
         holder to the specified office of the Registrar, not less than three
         Business Days in London before the due date for any payment in respect
         of a Registered Bond, the payment may be made (in the case of payment
         of principal against presentation and surrender (or, in the case of
         part payment only, endorsement) of the relevant Registered Bond as
         provided above) by transfer on the due date to a sterling account
         maintained by the payee with a bank in London. Payments in respect of
         principal and interest on Registered Bonds are subject in all cases to
         any fiscal or other laws and regulations applicable in the place of
         payment, but without prejudice to the provisions of Condition 10.

         A holder shall be entitled to present a Bond or Coupon for payment only
         on a Presentation Date and shall not be entitled to any further
         interest or other payment if a Presentation Date is after the due date.

         "Presentation Date" means a day which (subject to Condition 11):

         (a)      is or falls after the relevant due date but, if the due date
                  is not or was not a Business Day in London, is or falls after
                  the next following such Business Day; and

         (b)      is a Business Day in the place of the specified office of the
                  Paying Agent (or the Registrar in the case of payments of
                  principal in respect of Registered Bonds) at which the Bond or
                  Coupon is presented for payment and, in the case of payment by
                  transfer to a sterling account in London as referred to above,
                  in London.

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

         On and after the Interest Payment Date on which the final Coupon
         comprised in any Coupon sheet matures, the Talon comprised in the
         Coupon Sheet may be surrendered at the specified office of any Paying
         Agent in exchange for a further Coupon sheet (including any appropriate
         further Talon), subject to the provisions of Condition 11. Each Talon
         shall, for the purposes of these Conditions, be deemed to mature on the
         Interest Payment Date on which the final Coupon comprised in the
         relative Coupon sheet matures.

         The names of the Paying Agents and their specified offices are set out
         at the end of these Terms and Conditions. The Issuer reserves the
         right, subject to the prior written approval of the Trustee, at any
         time to vary or terminate the appointment of any Paying Agent and to
         appoint additional or other Paying Agents provided that it will at all
         times maintain at least two Paying Agents having specified offices in

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         separate European cities approved by the Trustee, one of which, so long
         as the Bonds are listed on the London Stock Exchange, shall be London
         or such other place as the London Stock Exchange may approve and one of
         which shall be outside the United Kingdom. Notice of any termination or
         appointment and of any changes in specified offices will be given to
         the Bondholders promptly by the Issuer in accordance with Condition 16.

8.       Redemption and Purchase

(a)      Unless previously redeemed or purchased and cancelled as provided
         below, the Issuer will redeem the Bonds at their principal amount on
         17th January, 2020.

(b)      The Issuer may, at any time, having given notice to the Bondholders in
         accordance with this Condition 8(b) (which notice shall be
         irrevocable), redeem the Bonds in whole or in part (but if in part, in
         integral multiples of (pound)1,000,000 in principal amount thereof), at
         the price which shall be the higher of the following, together with
         interest accrued up to the date of redemption:

         (i)   par; and

         (ii)  that price (the "Redemption Price"), expressed as a percentage
               rounded to three decimal places (0.0005 being rounded down), at
               which the Gross Redemption Yield on the Bonds, if they were to be
               purchased at such price on the third dealing day prior to the
               publication of the notice of redemption or, in the case of a
               partial redemption, the first notice of redemption referred to
               below, would be equal to the Gross Redemption Yield on such
               dealing day of the 8 3/4 per cent. Treasury Stock 2017 or of such
               other United Kingdom Government Stock as the Trustee, with the
               advice of three leading brokers operating in the gilt-edged
               market and/or gilt-edged market makers, shall determine to be
               appropriate (the "Reference Stock") on the basis of the middle
               market price of the Reference Stock prevailing on such dealing
               day, as determined by UBS Limited or its successors (or such
               other person(s) as the Trustee may approve).

         The Gross Redemption Yield on the Bonds and the Reference Stock will be
         expressed as a percentage and will be calculated on the basis indicated
         by the Joint Index and Classification Committee of the Institute and
         Faculty of Actuaries as reported in the Journal of the Institute of
         Actuaries, Vol. 105, Part 1, 1978, page 18 or on such other basis as
         the Trustee may approve.

         In the case of a partial redemption of Bonds, Bonds (or, as the case
         may be, parts of Registered Bonds) to be redeemed will be selected
         individually by lot in such place as the Trustee may approve and in
         such manner as the Trustee shall deem to be appropriate and fair
         without involving any part only of a Bearer Bond, not more than 65 days
         before the date fixed for redemption. In the case of a redemption of
         all of the Bonds pursuant to this Condition 8(b), notice will be given
         to the Bondholders by the Issuer in accordance with Condition 16 once
         not less than 30 nor more than 60 days before the date fixed for

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<PAGE>

         redemption. In the case of a partial redemption, notice will be so
         given twice, first not less than 80 nor more than 95 days, and secondly
         not less than 30 nor more than 60 days, before the date fixed for
         redemption. Each notice will specify the date fixed for redemption and
         the redemption price and, in the case of a partial redemption, the
         aggregate principal amount of the Bonds to be redeemed, the serial
         numbers of Bonds previously called (in whole or in part) for redemption
         and not presented for payment and the aggregate principal amount of the
         Bonds which will be outstanding after the partial redemption. In
         addition, in the case of a partial redemption, the first notice will
         specify the period during which exchanges or transfers of Bonds may not
         be made as provided in Condition 2 and the second notice will specify
         the serial numbers of the Bonds called (in whole or, in the case of
         Registered Bonds, in part) for redemption.

         Upon the expiry of any such notice as is referred to above, the Issuer
         shall be bound to redeem the Bonds to which the notice refers at the
         relative redemption price applicable at the date of such redemption
         together with interest accrued to but excluding such date.

(c)      If as a result of any change in, or amendment to, the laws or
         regulations of the United Kingdom or any political sub-division of, or
         any authority in, or of, the United Kingdom having power to tax, or any
         change in the application or official interpretation of such laws or
         regulations, which change or amendment becomes effective after 17th
         January, 1995, either (1) the Issuer has or will become obliged to pay
         additional amounts as provided or referred to in Condition 10 (and such
         amendment or change has been evidenced by the delivery by the Issuer to
         the Trustee (who shall, in the absence of manifest error, accept such
         certificate and opinion as sufficient evidence thereof) of (i) a
         certificate signed by two directors of the Issuer on behalf of the
         Issuer stating that such amendment or change has occurred (irrespective
         of whether such amendment or change is then effective), describing the
         facts leading thereto and stating that such obligation cannot be
         avoided by the Issuer or, as the case may be, the Guarantor taking
         reasonable measures available to it and (ii) an opinion in a form
         satisfactory to the Trustee of independent legal advisers of recognised
         standing to whom the Trustee shall have no reasonable objection to the
         effect that such amendment or change has occurred (irrespective of
         whether such amendment or change is then effective)), or (2) the
         Guarantor would be unable for reasons outside its control to procure
         payment by the Issuer and in making payment itself would be required to
         pay additional amounts, the Issuer may at its option, having given not
         less than 30 nor more than 60 days' notice to the Bondholders in
         accordance with Condition 16 (which notice shall be irrevocable),
         redeem all the Bonds (other than Bonds in respect of which the Issuer
         shall have given a notice of redemption pursuant to Condition 8(b)
         prior to any notice being given under this Condition 8(c)) but not some
         only, at their principal amount together with interest (if any) accrued
         to the date of redemption, provided that no notice of redemption shall
         be given earlier than 90 days before the earliest date on which the
         Issuer or, as the case may be, the Guarantor would be required to pay
         such additional amounts were a payment in respect of the Bonds then
         due.

         Upon the expiry of any such notice as is referred to above (and subject
         as provided above), the Issuer shall be bound to redeem the Bonds at
         their principal amount together with interest accrued to but excluding
         the redemption date.

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<PAGE>

(d)      The Issuer, the Guarantor or any of the Guarantor's other Subsidiaries
         may at any time purchase Bonds in any manner and at any price. If
         purchases are made by tender, tenders must be available to all
         Bondholders alike.

(e)      All Bonds which are redeemed by the Issuer will forthwith be cancelled
         (together, in the case of Bearer Bonds, with all relative unmatured
         Coupons attached to the Bearer Bonds or surrendered with the Bearer
         Bonds) and may not be reissued or resold. Bonds purchased by the
         Issuer, the Guarantor or any of the Guarantor's other Subsidiaries may
         be held or reissued or resold or surrendered for cancellation.

9.       Redemption at the Option of Bondholders

(a)      (i) If, at any time while any of the Bonds remains outstanding, a
         Restructuring Event (as defined below) occurs and prior to the
         commencement of or during the Restructuring Period (as defined below)
         an independent financial adviser (as defined below) shall have
         certified in writing to the Trustee that such Restructuring Event will
         not be or is not, in its opinion, materially prejudicial to the
         interests of the Bondholders, the following provisions of this
         Condition 9 shall cease to have any further effect in relation to such
         Restructuring Event.

         (ii) If, at any time while any of the Bonds remains outstanding, a
         Restructuring Event occurs and (subject to Condition 9(a)(i)):

               (A) within the Restructuring Period, either:

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

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

               (B)  an independent financial adviser shall have certified in
                    writing to the Trustee that such Restructuring Event will be
                    or is, in its opinion, materially prejudicial to the
                    interests of the Bondholders (a "Negative Certification"),

         then, unless at any time the Issuer shall have given a notice under
         Condition 8(b) in respect of the Bonds in whole or in part or Condition
         8(c) in respect of all of the Bonds, in each case expiring prior to the
         Put Date (as defined below), the holder of each Bond will, upon the
         giving of a Put Event Notice (as defined below), have the option (the
         "Put Option") to require the Issuer to redeem or, at the option of the
         Issuer, purchase (or procure the purchase of) that Bond on the Put Date
         at its principal amount together with (or, where purchased, together
         with an amount equal to) interest (if any) accrued to (but excluding)
         the Put Date.

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<PAGE>

         A Restructuring Event shall be deemed not to be materially prejudicial
         to the interests of the Bondholders if, notwithstanding the occurrence
         of a Rating Downgrade, the rating assigned to the Rated Securities by
         any Rating Agency (as defined below) is subsequently increased to an
         investment grade rating (BBB-/Baa3 or their respective equivalents for
         the time being, or better) prior to any Negative Certification being
         issued.

         Any certification by an independent financial adviser as aforesaid as
         to whether or not, in its opinion, any Restructuring Event will be or
         is materially prejudicial to the interests of the Bondholders shall, in
         the absence of manifest error, be conclusive and binding on the
         Trustee, the Issuer, the Guarantor and the Bondholders. For the
         purposes of this Condition 9, an "independent financial adviser" means
         a financial adviser appointed by the Issuer and the Guarantor and
         approved by the Trustee (such approval not to be unreasonably withheld
         or delayed) or, if the Issuer and the Guarantor shall not have
         appointed such an adviser within 21 days after becoming aware of the
         occurrence of such Restructuring Event and the Trustee is indemnified
         to its satisfaction against the costs of such adviser, appointed by the
         Trustee following consultation with the Issuer.

(b)      Promptly upon the Issuer becoming aware that a Put Event (as defined
         below) has occurred, and in any event not later than 14 days after the
         occurrence of a Put Event, the Issuer shall, and at any time upon the
         Trustee becoming similarly so aware the Trustee may, and if so
         requested by the holders of at least one-quarter in principal amount of
         the Bonds then outstanding shall, give notice (a "Put Event Notice") to
         the Bondholders in accordance with Condition 16 specifying the nature
         of the Put Event and the procedure for exercising the Put Option.

(c)      To exercise  the Put Option,  the holder of a Bond must  deliver  such
         Bond to the specified  office of any Paying Agent, on a day which is a
         Business Day (as defined in Condition 7) in London and in the place of
         such specified  office falling within the period (the "Put Period") of
         45 days after that on which a Put Event  Notice is given,  accompanied
         by a duly completed and signed notice of exercise in the form (for the
         time being current) obtainable from any specified office of any Paying
         Agent (a "Put  Notice")  and in which the  holder  may  specify a bank
         account  complying  with  the  requirements  of  Condition  7 to which
         payment is to be made under this  Condition 9. Each Bearer Bond should
         be delivered together with all Coupons  appertaining  thereto maturing
         after the day (the "Put Date") being the  fifteenth day after the date
         of expiry of the Put Period, failing which an amount equal to the face
         value of any such missing  Coupon will be deducted from the amount due
         for  payment.  Each  amount  so  deducted  will be paid in the  manner
         provided in Condition 7 against presentation and surrender (or, in the
         case of part payment only, endorsement) of the relevant missing Coupon
         at any time before the expiry of 10 years after the  Relevant  Date in
         respect of the relevant  Bearer Bond  (whether or not the Coupon would
         otherwise  have become void  pursuant to  Condition  11) or, if later,
         five years after the date on which such Coupon  would have become due,
         but not thereafter. The Paying Agent to which such Bond and Put Notice
         are   delivered   shall   issue   to  the   Bondholder   concerned   a
         non-transferable receipt in respect of the Bond so delivered.  Payment
         in respect of any Bond so delivered  shall be made, if the holder duly

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<PAGE>

         specifies a bank  account in the Put Notice to which  payment is to be
         made on the Put Date,  by transfer to that bank  account and, in every
         other case, on or after the Put Date in each case against presentation
         and surrender or (as the case may be)  endorsement  of such receipt at
         any specified office of any Paying Agent,  subject in any such case as
         provided  in  Condition  7.  A  Put  Notice,   once  given,  shall  be
         irrevocable.  For the purposes of  Conditions 1, 11, 12, 13, 15 and 17
         and for certain other purposes  specified in the Trust Deed,  receipts
         issued  pursuant to this  Condition 9 shall be treated as if they were
         Bonds.  The  Issuer  shall  redeem  or, at the  option of the  Issuer,
         purchase  (or  procure  the  purchase  of)  the  relevant  Bond on the
         applicable Put Date unless previously redeemed or purchased.

(d)      For the purposes of these Terms and Conditions:

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

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

         (iii)    "Rating Agency" means Standard & Poor's Ratings Group or any
                  of its successors or Moody's Investors Service or any of its
                  successors or any rating agency substituted for either of them
                  (or any permitted substitute of them) by the Issuer from time
                  to time with the prior written approval of the Trustee (such
                  approval not to be unreasonably withheld or delayed).

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

         (v)      "Rated Securities" means the Bonds, if at any time and for so
                  long as they shall have a rating from a Rating Agency, and

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<PAGE>

                  otherwise any other unsecured and unsubordinated debt of the
                  Issuer (or of any Subsidiary of the Guarantor and which is
                  guaranteed on an unsecured and unsubordinated basis by the
                  Guarantor or the Issuer) having an initial maturity of five
                  years or more which is rated by a Rating Agency.

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

                  (A)    (aa) the  Secretary of State for Trade and Industry (or
                         any  successor)  giving the Issuer or any  Distribution
                         Subsidiary   written   notice  of   revocation  of  the
                         Distribution   Licence   or  (bb)  the  Issuer  or  any
                         Distribution  Subsidiary  agreeing in writing  with the
                         Secretary  of State  for  Trade  and  Industry  (or any
                         successor)  to  any  revocation  or  surrender  of  the
                         Distribution  Licence or (cc) any legislation  (whether
                         primary or  subordinate)  being enacted  terminating or
                         revoking the Distribution  Licence,  except in any such
                         case in  circumstances  where a licence or  licences on
                         substantially  no  less  favourable  terms  is  or  are
                         granted to the Issuer or a  wholly-owned  Subsidiary of
                         the Issuer (the "Relevant  Subsidiary") and in the case
                         of such  Relevant  Subsidiary at the time of such grant
                         it  either   executes  in  favour  of  the  Trustee  an
                         unconditional  and irrevocable  guarantee in respect of
                         the Bonds in such form as the Trustee may approve (such
                         approval not to be unreasonably withheld or delayed) or
                         becomes  the  primary   obligor   under  the  Bonds  in
                         accordance with Condition 14; or

                    (B)  any modification (other than a modification which is of
                         a formal, minor or technical nature) being made to the
                         terms and conditions of the Distribution Licence on or
                         after 1st October, 2001 unless two directors of the
                         Guarantor have certified in good faith to the Trustee
                         that the modified terms and conditions are not
                         materially less favourable to the business of the
                         Guarantor; or

                    (C)  any legislation (whether primary or subordinate) is
                         enacted which removes, qualifies or amends (other than
                         an amendment which is of a formal, minor or technical
                         nature) the duties of the Secretary of State for Trade
                         and Industry (or any successor) and/or the Gas and
                         Electricity Markets Authority (or any successor) under
                         Section 3 of the Electricity Act 1989, as amended by
                         the Utilities Act 2000, unless two directors of the
                         Guarantor have certified in good faith to the Trustee
                         that such removal, qualification or amendment does not
                         have a materially adverse effect on the financial
                         condition of the Guarantor.

           (vii) "Restructuring Period" means:

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

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<PAGE>

                    (B)  if at the time a Restructuring Event occurs there are
                         no Rated Securities, the period staffing from and
                         including the day on which that Restructuring Event
                         occurs and ending on the day 90 days following the
                         later of (aa) the date on which the Issuer shall seek
                         to obtain a rating pursuant to Condition 9(d)(i) prior
                         to the expiry of the 14 days referred to in the
                         definition of Negative Rating Event and (bb) the date
                         on which a Negative Certification shall have been given
                         to the Issuer in respect of that Restructuring Event.

           (viii)   A  Rating  Downgrade  or  a  Negative  Rating  Event  or a
                    non-investment  grade  rating  shall be  deemed  not to have
                    occurred as a result or in respect of a Restructuring  Event
                    if the Rating Agency making the relevant reduction in rating
                    or,  where  applicable,  declining  to assign a rating of at
                    least  investment grade as provided in this Condition 9 does
                    not  announce or  publicly  confirm or inform the Trustee in
                    writing  at  its  request  that  the   reduction  or,  where
                    applicable,  declining  to  assign  a  rating  of  at  least
                    investment grade was the result, in whole or in part, of any
                    event or circumstance comprised in or arising as a result of
                    the applicable Restructuring Event.

         The Trust Deed provides that the Trustee is under no obligation to
         ascertain whether a Restructuring Event, a Negative Rating Event or any
         event which could lead to the occurrence of or could constitute a
         Restructuring Event has occurred and until it shall have actual
         knowledge or express notice pursuant to the Trust Deed to the contrary
         the Trustee may assume that no Restructuring Event, Negative Rating
         Event or other such event has occurred.

10.      Taxation

         All payments in respect of the Bonds or the Guarantee by the Issuer or,
         as the case may be, the Guarantor shall be made without withholding or
         deduction for, or on account of, any present or future taxes, duties,
         assessments or governmental charges of whatever nature ("Taxes")
         imposed or levied by or on behalf of the United Kingdom, or any
         political sub-division of, or any authority in, or of, the United
         Kingdom having power to tax, unless the withholding or deduction of the
         Taxes is required by law. In that event, the Issuer or, as the case may
         be, the Guarantor will pay such additional amounts as may be necessary
         in order that the net amounts received by the Bondholders and
         Couponholders after the withholding or deduction shall equal the
         respective amounts which would have been receivable in respect of the
         Bonds or, as the case may be, Coupons in the absence of the withholding
         or deduction; except that no additional amounts shall be payable in
         relation to any payment in respect of any Bond or Coupon:

         (a)      to, or to a third party on behalf of, a holder who is liable
                  to the Taxes in respect of the Bond or Coupon by reason of his
                  having some connection with the United Kingdom other than the
                  mere holding of the Bond or Coupon; or

         (b)      where the Coupon is presented for payment in the United
                  Kingdom; or

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<PAGE>

         (c)      presented for payment more than 30 days after the Relevant
                  Date except to the extent that a holder would have been
                  entitled to additional amounts on presenting the same for
                  payment on the last day of such period of 30 days; or

         (d)      to, or to a third party on behalf of, a holder who would not
                  be liable or subject to the withholding or deduction by making
                  a declaration of non-residence or other similar claim for
                  exemption to the relevant tax authority; or

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

         (f)      presented for payment by or on behalf of a holder who would
                  have been able to avoid the withholding or deduction by
                  presenting the relevant Bond or Coupon to another Paying Agent
                  in a Member State of the EU.

         As used herein, "Relevant Date" means the date on which the payment
         first becomes due but, if the full amount of the money payable has not
         been received in London by the Principal Paying Agent or the Trustee on
         or before the due date, it means the date on which, the full amount of
         the money having been so received, notice to that effect shall have
         been duly given to the Bondholders by the Issuer in accordance with
         Condition 16.

         Any reference in these Terms and Conditions to any amounts in respect
         of the Bonds shall be deemed also to refer to any additional amounts
         which may be payable under this Condition or under any undertakings
         given in addition to, or in substitution for, this Condition pursuant
         to the Trust Deed.

11.      Prescription

         Bonds (whether in bearer or registered form) and Coupons (which for
         this purpose shall not include Talons) will become void unless
         presented for payment within periods of 10 years (in the case of
         principal) and five years (in the case of interest) from the Relevant
         Date in respect of the Bonds or, as the case may be, the Coupons,
         subject to the provisions of Condition 7. There shall not be included
         in any Coupon sheet issued upon exchange of a Talon any Coupon which
         would be void upon issue under this Condition or Condition 7.

12.      Events of Default

         The Trustee at its discretion may, and if so requested in writing by
         the holders of at least one-quarter in principal amount of the Bonds
         then outstanding or if so directed by an Extraordinary Resolution of
         the Bondholders shall, (but, in the case of the happening of any of the
         events mentioned in sub-paragraphs (b), (c), (e), (f) and (g) below,

                                       75
<PAGE>

         only if the Trustee shall have certified in writing to the Issuer that
         such event is, in its opinion, materially prejudicial to the interests
         of the Bondholders and subject in each case to being indemnified by, or
         on behalf of, Bondholders to its satisfaction), give notice to the
         Issuer that the Bonds are, and they shall accordingly thereby forthwith
         become, immediately due and repayable at their principal amount
         together with accrued interest (as provided in the Trust Deed) if any
         of the following events (each an "Event of Default") shall have
         occurred (unless such Event of Default has been remedied to the
         satisfaction of the Trustee):

         (a)      if default is made for a period of 14 days or more in the
                  payment of any principal or the purchase price due in respect
                  of any Bond pursuant to Condition 9 or 21 days or more in the
                  payment of any interest due in respect of the Bonds or any of
                  them; or

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

         (c)      if (i) any  other  indebtedness  for  borrowed  money of the
                  Issuer  becomes  due  and  repayable  prior  to  its  stated
                  maturity  by  reason  of  an  event  of  default  (howsoever
                  described) or (ii) any such  indebtedness for borrowed money
                  is not paid  when due or,  as the  case may be,  within  any
                  applicable  grace period (as  originally  provided) or (iii)
                  the  Issuer  fails to pay when due (or,  as the case may be,
                  within any  originally  applicable  grace period) any amount
                  payable by it under any present or future  guarantee for, or
                  indemnity in respect of, any indebtedness for borrowed money
                  of any person or (iv) any  security  given by the Issuer for
                  any  indebtedness  for  borrowed  money of any person or any
                  guarantee or indemnity of indebtedness for borrowed money of
                  any  person  becomes  enforceable  by reason of  default  in
                  relation  thereto  and  steps  are  taken  to  enforce  such
                  security  save in any such case  where  there is a bona fide
                  dispute as to whether the relevant indebtedness for borrowed
                  money or any such guarantee or indemnity as aforesaid  shall
                  be due and payable,  provided that the  aggregate  amount of
                  the relevant  indebtedness  for borrowed money in respect of
                  which any one or more of the events  mentioned above in this
                  sub-paragraph  (c) has or have  occurred  equals or  exceeds
                  whichever   is  the  greater   of(pound)20,000,000   or  its
                  equivalent  in  other   currencies  (as  determined  by  the
                  Trustee) or 2 per cent. of the Capital and Reserves, and for
                  the purposes of this  sub-paragraph  (c),  "indebtedness for
                  borrowed money" shall exclude  Project Finance  Indebtedness
                  and "Capital and Reserves" shall be determined as if, in the
                  definition  in clause (A) of Condition 5, the word  "Issuer"
                  appeared  in  place of the word  "Guarantor"  and the  terms
                  "Group" and  "Subsidiary  Undertakings"  shall be determined
                  with reference to the Issuer rather than the Guarantor; or

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<PAGE>

         (d)      if any order shall be made by any competent court or any
                  resolution shall be passed for the winding up or dissolution
                  of the Issuer, save for the purposes of amalgamation, merger,
                  consolidation, reorganisation, reconstruction or other similar
                  arrangement on terms previously approved in writing by the
                  Trustee or by an Extraordinary Resolution of the Bondholders;
                  or

         (e)      if the Issuer shall cease to carry on the whole or
                  substantially the whole of its business, save for the purposes
                  of amalgamation, merger,  consolidation,  reorganisation,
                  reconstruction or other similar  arrangement (i) under which
                  all or substantially  all of its assets are  transferred to a
                  third party or parties  (whether associates  or not) for full
                  consideration  by the  Issuer on an arm's  length  basis or
                  (ii) the terms of which  have  previously been  approved in
                  writing by the  Trustee or by an  Extraordinary Resolution of
                  the Bondholders,  provided that if the Issuer shall cease to
                  hold or shall transfer the Distribution Licence it shall be
                  deemed to have  ceased to carry on the whole or  substantially
                  the whole of its  business  (and  exception  (i) does not
                  apply) unless the transferee assumes all the Issuer's
                  obligations under the  Bonds  and the  Trust  Deed as  primary
                  obligor  or gives a guarantee  in form and  substance
                  acceptable  to the  Trustee in respect of the  obligations of
                  the Issuer under the Bonds and the Trust Deed; or

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

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

         For the purposes of sub-paragraph (f) above, Section 123(l)(a) of the
         Insolvency Act 1986 shall have effect as if for "(pound)750" there was
         substituted "(pound)250,000" or such higher figure as the Gas and
         Electricity Markets Authority (or any successor) may from time to time
         determine by notice in writing to the Secretary of State for Trade and
         Industry (or any successor).

         The Issuer shall not be deemed to be unable to pay its debts for the
         purposes of sub-paragraph (f) above if any such demand as is mentioned

                                       77
<PAGE>

         in Section 123(1)(a) of the Insolvency Act 1986 is being contested in
         good faith by the Issuer with recourse to all appropriate measures and
         procedures or if any such demand is satisfied before the expiration of
         such period as may be stated in any notice given by the Trustee under
         the first paragraph of this Condition 11.

13.      Enforcement

         The Trustee may at any time, at its discretion and without notice, take
         such proceedings against the Issuer or the Guarantor as it may think
         fit to enforce the provisions of the Trust Deed, the Bonds and the
         Coupons but it shall not be bound to take any proceedings or any other
         action in relation to the Trust Deed, the Bonds or the Coupons unless
         (a) it shall have been so directed by an Extraordinary Resolution of
         the Bondholders or so requested in writing by the holders of at least
         one-quarter in principal amount of the Bonds then outstanding, and (b)
         it shall have been indemnified to its satisfaction. No Bondholder or
         Couponholder shall be entitled to proceed directly against the Issuer
         or the Guarantor unless the Trustee, having become bound so to proceed,
         fails so to do within a reasonable period and such failure shall be
         continuing.

14.      Substitution

         The Trustee may, without the consent of the Bondholders or
         Couponholders, agree with the Issuer and the Guarantor to the
         substitution in place of the Issuer or the Guarantor (or, in either
         case, of any previous substitute under this Condition) as the principal
         debtor under or, as the case may be, guarantor in respect of, the
         Bonds, the Coupons and the Trust Deed of any Subsidiary of the Issuer
         (including a Relevant Subsidiary, as defined in, and subject to
         compliance with Condition 9(d)(vi)) or the Guarantor, subject to (a)
         the Bonds being unconditionally and irrevocably guaranteed by the
         Issuer (save where the Issuer has transferred the Distribution Licence
         to the substituted Subsidiary) or the Guarantor, (b) the Trustee being
         satisfied that the interests of the Bondholders will not be materially
         prejudiced by the substitution, and (c) certain other conditions set
         out in the Trust Deed being complied with.

15.      Replacement of Bonds and Coupons

         Should any Bond or Coupon be lost, stolen, mutilated, defaced or
         destroyed, it may be replaced at the specified office of the Paying
         Agent in London, in the case of a Bearer Bond or Coupon, or the
         Registrar, in the case of a Registered Bond, upon payment by the
         claimant of the expenses incurred in connection with the replacement
         and on such terms as to evidence and indemnity as the Issuer may
         reasonably require. Mutilated or defaced Bonds or Coupons must be
         surrendered before replacements will be issued.

16.      Notices

         Notices to holders of Registered Bonds will be mailed to them at their
         respective addresses in the Register and deemed to have been given on
         the fourth weekday after the date of mailing, provided that, if at any
         time by reason of suspension or curtailment (or expected suspension or

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         curtailment) of postal services within the United Kingdom or elsewhere,
         the Issuer is unable effectively to give notice to holders of
         Registered Bonds through the post, notices to holders of Registered
         Bonds will be valid if given in the same manner as other notices set
         out below.

         Other notices to the Bondholders will be valid if published in a
         leading English language daily newspaper published in London or such
         other English language daily newspaper with general circulation in
         Europe as the Trustee may approve. Any notice shall be deemed to have
         been given on the date of publication or, if so published more than
         once, on the date of the first publication. It is expected that
         publication will normally be made in the Financial Times. If
         publication as provided above is not practicable, notice will be given
         in such other manner, and shall be deemed to have been given on such
         date, as the Trustee may approve.

         Couponholders will be deemed for all purposes to have notice of the
         contents of any notice given to the Bondholders in accordance with this
         Condition.

17.      Meetings of Bondholders, Modification, Waiver and Authorisation

(a)      The Trust Deed  contains  provisions  for  convening  meetings  of the
         Bondholders  to  consider  any  matter   affecting  their   interests,
         including the modification by Extraordinary  Resolution of these Terms
         and  Conditions or the provisions of the Trust Deed. The quorum at any
         meeting for passing an  Extraordinary  Resolution  will be one or more
         persons  present holding or representing a clear majority in principal
         amount  of  the  Bonds  for  the  time  being  outstanding,  or at any
         adjourned  such  meeting  one or more  persons  present  whatever  the
         principal  amount of the  Bonds  held or  represented  by him or them,
         except  that at any  meeting,  the  business  of  which  includes  the
         modification   of  certain  of  the  provisions  of  these  Terms  and
         Conditions  and  certain  of the  provisions  of the Trust  Deed,  the
         necessary quorum for passing an  Extraordinary  Resolution will be one
         or  more  persons  present  holding  or  representing  not  less  than
         two-thirds,  or at any adjourned such meeting not less than one-third,
         of the principal  amount of the Bonds for the time being  outstanding.
         An Extraordinary  Resolution  passed at any meeting of the Bondholders
         will be binding on all Bondholders, whether or not they are present at
         the meeting, and on all Couponholders.

(b)      The Trustee may agree, without the consent of the Bondholders or
         Couponholders, to any modification (subject to certain exceptions) of,
         or to the waiver or authorisation of any breach or proposed breach of,
         any of these Terms and Conditions or any of the provisions of the Trust
         Deed which is not, in the opinion of the Trustee, materially
         prejudicial to the interests of the Bondholders or to any modification
         which is of a formal, minor or technical nature or to correct a
         manifest error.

(c)      In  connection  with the exercise by it of any of its trusts,  powers,
         authorities  or  discretions  (including,   without  limitation,   any
         modification,  waiver,  authorisation  or  substitution),  the Trustee
         shall have regard to the interests of the  Bondholders as a class and,
         in  particular  but without  limitation,  shall not have regard to the

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<PAGE>

         consequences  of the exercise of its trusts,  powers,  authorities  or
         discretions  for individual  Bondholders and  Couponholders  resulting
         from  their  being  for any  purpose  domiciled  or  resident  in,  or
         otherwise  connected  with,  or  subject to the  jurisdiction  of, any
         particular territory and the Trustee shall not be entitled to require,
         nor shall any Bondholder or  Couponholder  be entitled to claim,  from
         the Issuer,  the Trustee or any other  person any  indemnification  or
         payment in respect of any tax  consequences  of any such exercise upon
         individual  Bondholders or Couponholders  except to the extent already
         provided for in Condition 10 and/or any undertaking  given in addition
         to, or in substitution for, Condition 10 pursuant to the Trust Deed.

(d)      Any modification, waiver or authorisation shall be binding on the
         Bondholders and the Couponholders and, unless the Trustee agrees
         otherwise, any modification shall be notified by the Issuer to the
         Bondholders as soon as practicable thereafter in accordance with
         Condition 16.

18.      Indemnification of the Trustee

         The Trust Deed contains provisions for the indemnification of the
         Trustee and for its relief from responsibility, including provisions
         relieving it from taking action unless indemnified to its satisfaction.

19.      Further Issues

         The Issuer is at liberty from time to time without the consent of the
         Bondholders or Couponholders to create and issue further bonds or notes
         (whether in bearer or registered form) either (a) ranking pari passu in
         all respects (or in all respects save for the first payment of interest
         thereon) and so that the same shall be consolidated and form a single
         series with the outstanding bonds or notes of any series (including the
         Bonds) constituted by the Trust Deed or any supplemental deed or (b)
         upon such terms as to ranking, interest, conversion, redemption and
         otherwise as the Issuer may determine at the time of the issue. Any
         further bonds or notes which are to form a single series with the
         outstanding bonds or notes of any series (including the Bonds).
         constituted by the Trust Deed or any supplemental deed shall, and any
         other further bonds or notes may (with the consent of the Trustee), be
         constituted by a deed supplemental to the Trust Deed. The Trust Deed
         contains provisions for convening a single meeting of the Bondholders
         and the holders of bonds or notes of other series in certain
         circumstances where the Trustee so decides.

20.      Contracts (Rights of Third Parties) Act 1999

         No rights are conferred on any person under the Contracts (Rights of
         Third Parties) Act 1999 to enforce any term of this Bond, but this does
         not affect any right or remedy of a third party which exists or is
         available apart from that Act.

21.      Governing Law

                                       80

<PAGE>

         The Trust Deed, the Bonds and the Coupons are governed by, and will be
         construed in accordance with, English law.

                                       81
<PAGE>

                             PRINCIPAL PAYING AGENT

                                 CITIBANK, N.A.
                               5 Carmelite Street
                                 London EC4Y OPA

                            Telephone: 020 7508 3841
                               Fax: 020 7508 3878
                           Attention: Agency and Trust

                               OTHER PAYING AGENT

                             BNP PARIBAS LUXEMBOURG
                               10A Boulevard Royal
                                L-2093 Luxembourg

                                    REGISTRAR

                           COMPUTERSHARE SERVICES PLC
                                  The Pavilions
                                Bridgewater Road
                                     Bristol
                                    BS99 7NH

and/or such other or further Principal Paying Agent, other Paying Agents and
Registrar and/or specified offices as may from time to time be appointed by the
Issuer or the Guarantor with the approval of the Trustee and notice of which has
been given to the Bondholders.

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                               THE THIRD SCHEDULE

                 REGISTER AND TRANSFER OF REGISTERED SECURITIES

1.       The Issuer shall at all times ensure that the Registrar maintains in
         Bristol, London, or at such other place as the Trustee may agree, a
         register showing the amount of the Registered Securities from time to
         time outstanding and the dates of issue and all subsequent transfers
         and changes of ownership thereof and the names and addresses of the
         holders of the Registered Securities. The Trustee and the holders of
         the Registered Securities or any of them and any person authorised by
         it or any of them may at all reasonable times during office hours
         inspect the register and take copies of or extracts from it. The
         register may be closed by the Issuer for such periods at such times
         (not exceeding in total 30 days in any one year) as it may think fit.

2.       Each Registered Security shall have an identifying certificate number
         which shall be entered on the register.

3.       The Registered Securities are transferable by execution of the form of
         transfer endorsed thereon under the hand of the transferor or, where
         the transferor is a corporation, under its common seal or under the
         hand of two of its officers duly authorised in writing. In each case
         the signature(s) must be guaranteed by a commercial bank with a
         correspondent bank in New York City, Luxembourg or London or by an
         institution which is a member of The New York Stock Exchange or The
         American Stock Exchange in New York City or the Luxembourg Stock
         Exchange or The International Stock Exchange of the United Kingdom and
         the Republic of Ireland Limited.

4.       The Registered Securities to be transferred must be delivered for
         registration to the specified office of the Registrar or any Transfer
         Agent with the form of transfer endorsed thereon duly completed and
         executed and must be accompanied by such documents, evidence and
         information as may be required pursuant to the Conditions and such
         other evidence as the Issuer may reasonably require to prove the title
         of the transferor or his right to transfer the Registered Securities
         and, if the form of transfer is executed by some other person on his
         behalf or in the case of the execution of a form of transfer on behalf
         of a corporation by its officers, the authority of that person or those
         persons to do so.

5.       The executors or administrators of a deceased holder of Registered
         Securities (not being one of several joint holders) and in the case of
         the death of one or more of several joint holders the survivor or
         survivors of such joint holders shall be the only person or persons
         recognised by the Issuer as having any title to such Registered
         Securities.

6.       Any person becoming entitled to Registered Securities in consequence of
         the death or bankruptcy of the holder of such Registered Securities may
         upon producing such evidence that he holds the position in respect of
         which he proposes to act under this paragraph or of his title as the
         Issuer shall require be registered himself as the holder of such
         Registered Securities or, subject to the preceding paragraphs as to
         transfer, may transfer such Registered Securities. The Issuer shall be
         at liberty to retain any amount payable upon the Registered Securities

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<PAGE>

         to which any person is so entitled until such person shall be
         registered as aforesaid or shall duly transfer the Registered
         Securities.

7.       Unless otherwise requested by him, the holder of Registered Securities
         of any series shall be entitled to receive only one Registered Security
         in respect of his entire holding of such series.

8.       The joint holders of Registered Securities of any series shall be
         entitled to one Registered Security only in respect of their joint
         holding of such series which shall, except where they otherwise direct,
         be delivered to the joint holder whose name appears first in the
         register of the holders of Registered Securities in respect of such
         joint holding.

9.       Where a holder of Registered Securities has transferred part only of
         his holding of any series there shall be delivered to him without
         charge a Registered Security in respect of the balance of such holding.

10.      The Issuer shall make no charge to the Holders for the registration of
         any holding of Registered Securities or any transfer thereof or for the
         issue thereof or for the delivery thereof at the specified office of
         the Registrar or of any Transfer Agent or by post to the address
         specified by the Holder. If any Holder entitled to receive a Registered
         Security wishes to have the same delivered to him otherwise than at the
         specified office of the Registrar or of any Transfer Agent, such
         delivery shall be made, upon his written request to the Registrar or
         such Transfer Agent, at his risk and (except where sent by post to the
         address specified by the Holder) at his expense.

11.      The holder of a Registered Security may (to the fullest extent
         permitted by applicable laws) be treated at all times, by all persons
         and for all purposes as the absolute owner of such Registered Security
         notwithstanding any notice any person may have of the right, title,
         interest or claim of any other person thereto. The Issuer and the
         Trustee shall not be bound to see to the execution of any trust to
         which any Registered Security may be subject and no notice of any trust
         shall be entered on the register. The holder of a Registered Security
         will be recognised by the Issuer as entitled to his Registered Security
         free from any equity, set-off or counterclaim on the part of the Issuer
         against the original or any intermediate holder of such Registered
         Security.

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<PAGE>
                              THE FOURTH SCHEDULE

                       PROVISIONS FOR MEETINGS OF HOLDERS

1.   (A)
As used in this Schedule the following expressions shall have
               the following meanings unless the context otherwise requires:

               (i)  "voting certificate" shall mean an English language
                    certificate issued by a Paying Agent and dated in which it
                    is stated:

                    (a)  that on the date thereof Bearer Securities (not being
                         Bearer Securities in respect of which a block voting
                         instruction has been issued and is outstanding in
                         respect of the meeting specified in such voting
                         certificate or any adjourned such meeting) were
                         deposited with such Paying Agent or (to the
                         satisfaction of such Paying Agent) were held to its
                         order or under its control and that no such Bearer
                         Securities will cease to be so deposited or held until
                         the first to occur of:

                         (1)  the conclusion of the meeting specified in such
                              certificate or, if later, of any adjourned such
                              meeting; and

                         (2)  the surrender of the certificate to the Paying
                              Agent who issued the same; and

                    (b)  that the bearer thereof is entitled to attend and vote
                         at such meeting and any adjourned such meeting in
                         respect of the Bearer Securities represented by such
                         certificate;

               (ii) "block voting instruction" shall mean an English language
                    document issued by a Paying Agent and dated in which:

                    (a)  it is certified that Bearer Securities (not being
                         Bearer Securities in respect of which a voting
                         certificate has been issued and is outstanding in
                         respect of the meeting specified in such block voting
                         instruction and any adjourned such meeting) have been
                         deposited with such Paying Agent or (to the
                         satisfaction of such Paying Agent) were held to its
                         order or under its control and that no such Bearer
                         Securities will cease to be so deposited or held until
                         the first to occur of:

                         (1)  the conclusion of the meeting specified in such
                              document or, if later, of any adjourned such
                              meeting; and

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<PAGE>

                         (2)  the surrender to the Paying Agent not less than 48
                              hours before the time for which such meeting or
                              any adjourned  such meeting is convened of the
                              receipt issued by such Paying Agent in respect of
                              each such  deposited  Bearer Security  which is to
                              be  released  or  (as  the  case  may require) the
                              Bearer  Security or Bearer  Securities  ceasing
                              with the agreement of the Paying Agent to be held
                              to its order or under its  control  and the giving
                              of notice by the Paying Agent to the Issuer in
                              accordance  with  paragraph 17 hereof  of  the
                              necessary  amendment  to the  block  voting
                              instruction;

                           (b)      it is certified that each holder of such
                                    Bearer Securities has instructed such Paying
                                    Agent that the vote(s) attributable to the
                                    Bearer Security or Bearer Securities so
                                    deposited or held should be cast in a
                                    particular way in relation to the resolution
                                    or resolutions to be put to such meeting or
                                    any adjourned such meeting and that all such
                                    instructions are during the period
                                    commencing 48 hours prior to the time for
                                    which such meeting or any adjourned such
                                    meeting is convened and ending at the
                                    conclusion or adjournment thereof neither
                                    revocable nor capable of amendment;

                           (c)      the aggregate principal amount of the Bearer
                                    Securities so deposited or held are listed
                                    distinguishing with regard to each such
                                    resolution between those in respect of which
                                    instructions have been given as aforesaid
                                    that the votes attributable thereto should
                                    be cast in favour of the resolution and
                                    those in respect of which instructions have
                                    been so given that the votes attributable
                                    thereto should be cast against the
                                    resolution; and

                           (d)      one or more persons named in such document
                                    (each hereinafter called a "proxy") is or
                                    are authorised and instructed by such Paying
                                    Agent to cast the votes attributable to the
                                    Bearer Securities so listed in accordance
                                    with the instructions referred to in (c)
                                    above as set out in such document;

                  (iii)    "24 hours" shall mean a period of 24 hours including
                           all or part of a day upon which banks are open for
                           business in both the place where the relevant meeting
                           is to be held and in each of the places where the
                           Paying Agents have their specified offices
                           (disregarding for this purpose the day upon which
                           such meeting is to be held) and such period shall be
                           extended by one period or, to the extent necessary,
                           more periods of 24 hours until there is included as
                           aforesaid all or part of a day upon which banks are
                           open for business in all of the places as aforesaid;
                           and

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                  (iv)     "48 hours" shall mean a period of 48 hours including
                           all or part of two days upon which banks are open for
                           business both in the place where the relevant meeting
                           is to be held and in each of the places where the
                           Paying Agents have their specified offices
                           (disregarding for this purpose the day upon which
                           such meeting is to be held) and such period shall be
                           extended by one period or, to the extent necessary,
                           more periods of 24 hours until there is included as
                           aforesaid all or part of two days upon which banks
                           are open for business in all of the places as
                           aforesaid.

     (B)  A holder of a Bearer Security may obtain a voting certificate in
          respect of such Bearer Security from a Paying Agent or require a
          Paying Agent to issue a block voting instruction in respect of such
          Bearer Security by depositing such Bearer Security with such Paying
          Agent or (to the satisfaction of such Paying Agent) by such Bearer
          Security being held to its order or under its control, in each case
          not less than 48 hours before the time fixed for the relevant meeting
          and on the terms set out in sub-paragraph (i)(a) or (ii)(a) above (as
          the case may be), and (in the case of a block voting instruction)
          instructing such Paying Agent to the effect set out in sub-paragraph
          (ii)(b) above. The holder of any voting certificate or the proxies
          named in any block voting instruction shall for all purposes in
          connection with the relevant meeting or adjourned meeting of Holders
          be deemed to be the holder of the Bearer Securities to which such
          voting certificate or block voting instruction relates and the Paying
          Agent with which such Bearer Securities have been deposited or the
          person holding the same to the order or under the control of such
          Paying Agent shall be deemed for such purposes not to be the holder of
          those Bearer Securities.

     (C)  (i)       A holder of Registered  Securities may, by an instrument
                    in  writing  in the  English  language  (a "form of  proxy")
                    signed  by the  holder  or,  in the  case of a  corporation,
                    executed under its common seal or signed on its behalf by an
                    attorney or a duly authorised officer of the corporation and
                    delivered to the specified  office of the Registrar not less
                    than 48  hours  before  the  time  fixed  for  the  relevant
                    meeting, appoint any person (a "proxy") to act on his or its
                    behalf in connection with any meeting of the Holders and any
                    adjourned such meeting.

          (ii)      Any holder of Registered Securities which is a corporation
                    may by resolution of its directors or other governing body
                    authorise any person to act as its representative (a
                    "representative") in connection with any meeting of the
                    Holders and any adjourned such meeting.

          (iii)     Any proxy appointed  pursuant to sub-paragraph  (i) above or
                    representative  appointed  pursuant  to  sub-paragraph  (ii)
                    above shall so long as such appointment  remains in force be
                    deemed,  for all  purposes in  connection  with the relevant
                    meeting  or  adjourned  meeting  of the  Holders,  to be the
                    holder  of  the   Registered   Securities   to  which   such

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                    appointment   relates  and  the  holder  of  the  Registered
                    Securities  shall be deemed for such  purposes not to be the
                    holder.

2.       The Issuer, the Guarantor or the Trustee may at any time and the Issuer
         shall upon a requisition in writing signed by the holders of not less
         than one-tenth in principal amount of the Securities of any series for
         the time being outstanding convene a meeting of the Holders and if the
         Issuer makes default for a period of seven days in convening such a
         meeting the same may be convened by the Trustee or the requisitionists.
         Every such meeting shall be held at such time and place as the Trustee
         may appoint or approve.

3.       At least 21 days' notice  (exclusive of the day on which the notice is
         given and the day on which the meeting is to be held)  specifying  the
         place,  day and hour of meeting shall be given to the Holders prior to
         any meeting of the Holders in the manner  provided  by  Condition  16.
         Such  notice,  which  shall be in the  English  language,  shall state
         generally  the nature of the business to be  transacted at the meeting
         thereby convened but (except for an Extraordinary Resolution) it shall
         not be necessary to specify in such notice the terms of any resolution
         to be proposed.  Such notice shall include statements,  if applicable,
         to the effect that (i) Bearer  Securities  may, not less than 48 hours
         before the time fixed for the meeting, be deposited with Paying Agents
         or (to their  satisfaction) held to their order or under their control
         for the purpose of obtaining voting certificates or appointing proxies
         and (ii) the holders of Registered  Securities may appoint  proxies by
         executing  and  delivering a form of proxy in the English  language to
         the  specified  office of the  Registrar not less than 48 hours before
         the time fixed for the  meeting or, in the case of  corporations,  may
         appoint  representatives  by  resolution  of their  directors or other
         governing  body.  A copy of the  notice  shall  be sent by post to the
         Trustee (unless the meeting is convened by the Trustee), to the Issuer
         (unless the  meeting is  convened by the Issuer) and to the  Guarantor
         (unless the meeting is convened by the Guarantor).

4.       A person (who may but need not be a Holder) nominated in writing by the
         Trustee shall be entitled to take the chair at the relevant meeting or
         adjourned meeting but if no such nomination is made or if at any
         meeting or adjourned meeting the person nominated shall not be present
         within 15 minutes after the time appointed for holding the meeting or
         adjourned meeting the Holders present shall choose one of their number
         to be Chairman. The Chairman of an adjourned meeting need not be the
         same person as was Chairman of the meeting from which the adjournment
         took place.

5.       At any such meeting one or more persons present holding  Securities or
         voting certificates or being proxies or representatives and holding or
         representing  in the  aggregate  not less  than  one-twentieth  of the
         principal  amount of the  Securities  for the time  being  outstanding
         shall (except for the purpose of passing an Extraordinary  Resolution)
         form a quorum for the  transaction of business and no business  (other
         than the choosing of a Chairman)  shall be  transacted  at any meeting
         unless the  requisite  quorum be present  at the  commencement  of the
         relevant  business.  The  quorum at any such  meeting  for  passing an
         Extraordinary  Resolution  shall (subject as provided below) be one or
         more persons  present  holding  Securities or voting  certificates  or
         being proxies or  representatives  and holding or  representing in the

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         aggregate a clear  majority in principal  amount of the Securities for
         the time being  outstanding  PROVIDED THAT at any meeting the business
         of which  includes any of the following  matters (each of which shall,
         subject only to Clause  19(B)(ii),  only be capable of being  effected
         after having been approved by Extraordinary Resolution) namely:

         (i)      reduction or cancellation of the amount payable or, where
                  applicable, modification (except where such modification is,
                  in the opinion of the Trustee, bound to result in an
                  increase), of the method of calculating the amount payable or
                  modification of the date of payment or, where applicable, of
                  the method of calculating the date of payment in respect of
                  any principal, premium or interest in respect of the
                  Securities;

         (ii)     alteration of the currency in which payments under the
                  Securities and Coupons are to be made;

         (iii)    alteration of the majority required to pass an Extraordinary
                  Resolution;

         (iv)     the sanctioning of any such scheme or proposal as is described
                  in paragraph 18(I) below; and

         (v)      alteration of this proviso or the proviso to paragraph 6
                  below;

         the quorum shall be one or more persons present holding Securities or
         voting certificates or being proxies or representatives and holding or
         representing in the aggregate not less than two-thirds of the principal
         amount of the Securities for the time being outstanding.

6.       If within 15 minutes (or such longer  period not  exceeding 30 minutes
         as the  Chairman  may decide)  after the time  appointed  for any such
         meeting a quorum is not present for the  transaction of any particular
         business,  then,  subject and without  prejudice to the transaction of
         the business (if any) for which a quorum is present, the meeting shall
         if convened upon the requisition of Holders be dissolved. In any other
         case it shall stand  adjourned to the same day in the next week (or if
         such day is a public holiday the next succeeding  business day) at the
         same  time and  place  (except  in the case of a  meeting  at which an
         Extraordinary  Resolution  is to be  proposed  in which  case it shall
         stand adjourned for such period, being not less than 14 clear days nor
         more than 42 clear days,  and to such place as may be appointed by the
         Chairman  either at or  subsequent to such meeting and approved by the
         Trustee). If within 15 minutes (or such longer period not exceeding 30
         minutes as the Chairman may decide)  after the time  appointed for any
         adjourned  meeting a quorum is not present for the  transaction of any
         particular  business,  then,  subject  and  without  prejudice  to the
         transaction  of the  business  (if any) for which a quorum is present,
         the Chairman  may either  (with the approval of the Trustee)  dissolve
         such meeting or adjourn the same for such period,  being not less than
         14 clear days (but without any maximum  number of clear days),  and to
         such place as may be appointed by the Chairman either at or subsequent
         to  such  adjourned  meeting  and  approved  by the  Trustee,  and the
         provisions of this sentence shall apply to all further  adjourned such
         meetings. At any adjourned meeting one or more persons present holding

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         Securities or voting  certificates or being proxies or representatives
         (whatever  the  principal   amount  of  the   Securities  so  held  or
         represented by them) shall  (subject as provided  below) form a quorum
         and  shall  (subject  as  provided  below)  have  power  to  pass  any
         Extraordinary  Resolution or other  resolution  and to decide upon all
         matters which could  properly have been dealt with at the meeting from
         which the adjournment took place had the requisite quorum been present
         PROVIDED THAT at any adjourned  meeting the quorum for the transaction
         of business  comprising any of the matters specified in the proviso to
         paragraph  5  above  shall  be one or  more  persons  present  holding
         Securities or voting  certificates or being proxies or representatives
         and holding or  representing  in the aggregate not less than one-third
         of  the  principal  amount  of  the  Securities  for  the  time  being
         outstanding.

7.       Notice of any adjourned meeting at which an Extraordinary Resolution is
         to be submitted shall be given in the same manner as notice of an
         original meeting but as if 10 were substituted for 21 in paragraph 3
         above and such notice shall state the relevant quorum. Subject as
         aforesaid it shall not be necessary to give any notice of an adjourned
         meeting.

8.       Every question submitted to a meeting shall be decided in the first
         instance by a show of hands and in case of equality of votes the
         Chairman shall both on a show of hands and on a poll have a casting
         vote in addition to the vote or votes (if any) to which he may be
         entitled as a Holder or as a holder of a voting certificate or as a
         proxy or as a representative.

9.       At any meeting unless a poll is (before or on the declaration of the
         result of the show of hands) demanded by the Chairman, the Issuer, the
         Guarantor the Trustee or any person present holding a Security or a
         voting certificate or being a proxy or representative (whatever the
         principal amount of the Securities so held or represented by him) a
         declaration by the Chairman that a resolution has been carried or
         carried by a particular majority or lost or not carried by a particular
         majority shall be conclusive evidence of the fact without proof of the
         number or proportion of the votes recorded in favour of or against such
         resolution.

10.      Subject to paragraph 12 below, if at any such meeting a poll is so
         demanded it shall be taken in such manner and subject as hereinafter
         provided either at once or after an adjournment as the Chairman directs
         and the result of such poll shall be deemed to be the resolution of the
         meeting at which the poll was demanded as at the date of the taking of
         the poll. The demand for a poll shall not prevent the continuance of
         the meeting for the transaction of any business other than the motion
         on which the poll has been demanded.

11.      The Chairman may with the consent of (and shall if directed by) any
         such meeting adjourn the same from time to time and from place to place
         but no business shall be transacted at any adjourned meeting except
         business which might lawfully (but for lack of required quorum) have
         been transacted at the meeting from which the adjournment took place.

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12.      Any poll demanded at any such meeting on the election of a Chairman or
         on any question of adjournment shall be taken at the meeting without
         adjournment.

13.      The Trustee and its lawyers and  financial  advisers and any director,
         officer or employee of a corporation being a trustee of these presents
         and any director or officer of each of the Issuer or the Guarantor and
         its lawyers and its accountants  and financial  advisers and any other
         person  authorised so to do by the Trustee may attend and speak at any
         meeting.  Save as aforesaid,  but without  prejudice to the proviso to
         the  definition  of  "outstanding"  in Clause  1, no  person  shall be
         entitled  to attend and speak nor shall any person be entitled to vote
         at any meeting of the Holders or join with  others in  requesting  the
         convening of such a meeting or to exercise the rights conferred on the
         Holders by Conditions  12 and 13 unless he either  produces the Bearer
         Security  or Bearer  Securities  of which he is the holder or a voting
         certificate  or is a proxy or a  representative  or is the holder of a
         Registered  Security  or  Registered  Securities.  No person  shall be
         entitled to vote at any meeting in respect of Securities  held by, for
         the benefit of, or on behalf of, the Issuer,  the  Guarantor any other
         Subsidiary of the Guarantor,  any holding  company of the Guarantor or
         any other Subsidiary of any such holding company. Nothing herein shall
         prevent any of the proxies  named in any block voting  instruction  or
         form of proxy or any representative from being a director,  officer or
         representative  of or  otherwise  connected  with  the  Issuer  or the
         Guarantor.

14.      Subject as provided in paragraph 13 hereof at any meeting:

         (A)      on a show of hands every person who is present in person and
                  produces a Bearer Security or voting certificate or is a
                  holder of Registered Securities or is a proxy or
                  representative shall have one vote; and

         (B)      on a poll every person who is so present shall have one vote
                  in respect of each (pound)1 or such other amount as the
                  Trustee may in its absolute discretion stipulate (or, in the
                  case of meetings of holders of Securities denominated in
                  another currency, such amount in such other currency as the
                  Trustee in its absolute discretion may stipulate) in principal
                  amount of the Securities so produced or represented by the
                  voting certificate so produced or in respect of which he is a
                  proxy or representative or in respect of which he is the
                  holder.

         Without prejudice to the obligations of the proxies named in any block
         voting instruction or form of proxy any person entitled to more than
         one vote need not use all his votes or cast all the votes to which he
         is entitled in the same way.

15.      The proxies named in any block voting instruction or form of proxy and
         representatives need not be Holders.

16.      Each  block  voting  instruction  together  (if  so  requested  by the
         Trustee) with proof  satisfactory  to the Trustee of its due execution
         on behalf of the relevant Paying Agent and each form of proxy shall be
         deposited by the relevant  Paying Agent or (as the case may be) by the
         Registrar at such place as the Trustee  shall approve not less than 24

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         hours before the time  appointed  for holding the meeting or adjourned
         meeting at which the proxies named in the block voting  instruction or
         form of  proxy  propose  to  vote  and in  default  the  block  voting
         instruction  or form of proxy shall not be treated as valid unless the
         Chairman  of the meeting  decides  otherwise  before  such  meeting or
         adjourned meeting proceeds to business. A notarially certified copy of
         each block  voting  instruction  and form of proxy shall be  deposited
         with the Trustee before the  commencement  of the meeting or adjourned
         meeting but the Trustee shall not thereby be obliged to investigate or
         be  concerned  with the  validity of or the  authority  of the proxies
         named in any such block voting instruction or form of proxy.

17.      Any vote given in accordance with the terms of a block voting
         instruction or form of proxy shall be valid notwithstanding the
         previous revocation or amendment of the block voting instruction or
         form of proxy or of any of the Holders' instructions pursuant to which
         it was executed provided that no intimation in writing of such
         revocation or amendment shall have been received from the relevant
         Paying Agent or in the case of a Registered Security from the holder
         thereof by the Issuer at its registered office (or such other place as
         may have been required or approved by the Trustee for the purpose) by
         the time being 24 hours and 48 hours respectively before the time
         appointed for holding the meeting or adjourned meeting at which the
         block voting instruction or form of proxy is to be used.

18.      A meeting of the Holders shall in addition to the powers hereinbefore
         given have the following powers exercisable only by Extraordinary
         Resolution (subject to the provisions relating to quorum contained in
         paragraphs 5 and 6 above) namely:

         (A)      Power to sanction any compromise or arrangement proposed to be
                  made between the Issuer, the Guarantor, the Trustee, any
                  Appointee and the Holders and Couponholders or any of them.

         (B)      Power to sanction any abrogation, modification, compromise or
                  arrangement in respect of the rights of the Trustee, any
                  Appointee, the Holders, the Couponholders. the Issuer or the
                  Guarantor against any other or others of them or against any
                  of their property whether such rights shall arise under these
                  presents or otherwise.

         (C)      Power to assent to any modification of the provisions of these
                  presents which shall be proposed by the Issuer, the Guarantor,
                  the Trustee or any Holder.

         (D)      Power to give any authority or sanction which under the
                  provisions of these presents is required to be given by
                  Extraordinary Resolution.

         (E)      Power to appoint any persons (whether Holders or not) as a
                  committee or committees to represent the interests of the
                  Holders and to confer upon such committee or committees any
                  powers or discretions which the Holders could themselves
                  exercise by Extraordinary Resolution.

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         (F)      Power to approve of a person to be appointed a trustee and
                  power to remove any trustee or trustees for the time being of
                  these presents.

         (G)      Power to discharge or exonerate the Trustee and/or any
                  Appointee from all liability in respect of any act or omission
                  for which the Trustee and/or such Appointee may have become
                  responsible under these presents.

         (H)      Power to authorise the Trustee and/or any Appointee to concur
                  in and execute and do all such deeds, instruments, acts and
                  things as may be necessary to carry out and give effect to any
                  Extraordinary Resolution.

         (I)      Power to sanction any scheme or proposal for the exchange or
                  sale of the Securities for or the conversion of the Securities
                  into or the cancellation of the Securities in consideration of
                  shares, stock, bonds, notes, debentures, debenture stock
                  and/or other obligations and/or securities of the Issuer or
                  any other company formed or to be formed, or for or into or in
                  consideration of cash, or partly for or into or in
                  consideration of such shares, stock, bonds, notes, debentures,
                  debenture stock and/or other obligations and/or securities as
                  aforesaid and partly for or into or in consideration of cash.

19.      Any resolution passed at a meeting of the Holders duly convened and
         held in accordance with these presents shall be binding upon all the
         Holders whether present or not present at such meeting and whether or
         not voting and upon all Couponholders and each of them shall be bound
         to give effect thereto accordingly and the passing of any such
         resolution shall be conclusive evidence that the circumstances justify
         the passing thereof. Notice of the result of the voting on any
         resolution duly considered by the Holders shall be published in
         accordance with Condition 16 by the Issuer within 14 days of such
         result being known PROVIDED THAT the non-publication of such notice
         shall not invalidate such result.

20.      The expression "Extraordinary Resolution" when used in these presents
         means a resolution  passed at a meeting of the Holders  duly  convened
         and held in accordance with these presents by a majority consisting of
         not less than  three-fourths of the persons voting thereat upon a show
         of hands or if a poll is duly demanded by a majority consisting of not
         less than three-fourths of the votes cast on such poll.

21.      Minutes of all  resolutions  and  proceedings  at every meeting of the
         Holders  shall be made and  entered  in books to be from  time to time
         provided  for that  purpose  by the  Issuer  and any such  Minutes  as
         aforesaid if purporting to be signed by the Chairman of the meeting at
         which such resolutions were passed or proceedings  transacted shall be
         conclusive  evidence of the matters  therein  contained  and until the
         contrary is proved every such meeting in respect of the proceedings of
         which  Minutes  have been made  shall be deemed to have been duly held
         and  convened and all  resolutions  passed or  proceedings  transacted
         thereat to have been duly passed or transacted.

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22.      (A)    If and whenever the Issuer shall have issued and have
                outstanding Securities of more than one series the foregoing
                provisions of this Schedule shall have effect subject to the
                following modifications:

                (i)        a resolution which in the opinion of the Trustee
                           affects the Securities of only one series shall be
                           deemed to have been duly passed if passed at a
                           separate meeting of the holders of the Securities of
                           that series;

                (ii)       a resolution which in the opinion of the Trustee
                           affects the Securities of more than one series but
                           does not give rise to a conflict of interest between
                           the holders of Securities of any of the series so
                           affected shall be deemed to have been duly passed if
                           passed at a single meeting of the holders of the
                           Securities of all the series so affected;

                (iii)      a resolution which in the opinion of the Trustee
                           affects the Securities of more than one series and
                           gives or may give rise to a conflict of interest
                           between the holders of the Securities of one series
                           or group of series so affected and the holders of the
                           Securities of another series or group of series so
                           affected shall be deemed to have been duly passed
                           only if passed at separate meetings of the holders of
                           the Securities of each series or group of series so
                           affected; and

                (iv)       to all such meetings all the preceding provisions of
                           this Schedule shall mutatis mutandis apply as though
                           references therein to Securities, Holders and holders
                           were references to the Securities of the series or
                           group of series in question or to the holders of such
                           Securities, as the case may be.

         (B)    If the Issuer shall have issued and have  outstanding
                Securities which are not denominated in pounds sterling,  in the
                case of any meeting of holders of  Securities  of more than one
                currency the principal amount of such Securities shall (i) for
                the purposes of paragraph  2 above be the  equivalent  in pounds
                sterling at the spot rate of a bank  nominated by the Trustee
                for the  conversion of the relevant  currency or currencies
                into pounds  sterling on the seventh dealing day prior to the
                day on which the requisition in writing is received by the
                Issuer and (ii) for the purposes of paragraphs  5, 6 and 14
                above  (whether in respect of the meeting or any adjourned such
                meeting or any poll resulting therefrom) be the equivalent at
                such spot rate on the seventh dealing day prior to the day of
                such meeting.  In such  circumstances,  on any poll each person
                present shall have one vote for each(pound)1 (or such other
                pound  sterling  amount as the Trustee may in its  absolute
                discretion  stipulate)  in  principal  amount  of the
                Securities (converted as above) which he holds or represents.

23.      Subject to all other provisions of these presents the Trustee may
         without the consent of the Issuer, the Guarantor, the Holders or the
         Couponholders prescribe such further regulations regarding the
         requisitioning and/or the holding of meetings of Holders and attendance
         and voting thereat as the Trustee may in its sole discretion think fit.

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                               THE FIFTH SCHEDULE

     PROVISIONS AS TO REGISTERED SECURITIES IN UNCERTIFICATED FORM

(1)      The Issuer may, but shall not be obliged to, make arrangements for
         Registered Securities comprised in any series of Securities to be
         Participating Securities.

(2)      For so long as the Registered Securities comprised in or, as the case
         may be, comprising any series of Securities continue to be
         Participating Securities, no provision of those presents (including,
         but not limited to, any Condition of such Participating Securities)
         shall apply to such Participating Securities or have effect in respect
         of the same, to the extent that it is in any respect inconsistent with:

         (i)    the holding of title to such Participating Securities in
                uncertificated form;

         (ii)   the transfer of title to such Participating Securities by means
                of a relevant system or

         (iii)  the Regulations.

(3)      Without prejudice to the generality of paragraph (2) of this Schedule
         and notwithstanding any provision of these presents (including, but not
         limited to, any Condition of any Participating Securities):

         (i)      the Register in respect of Participating Securities shall be
                  maintained at all times in the United Kingdom and shall
                  specify the amount of Participating Securities held by each
                  holder which is in certificated and uncertificated form
                  respectively;

         (ii)     subject to sub-paragraph (vi) below, an entry on to the
                  Register which records a holder as holding Participating
                  Securities in uncertificated form shall be evidence of such
                  title to such Participating Securities to the same extent as
                  would be evidenced if the entry on the Register related to
                  Participating Subsidiaries held in certified form;

         (iii)    entries on the Register in respect of Participating Securities
                  held in uncertificated form may not be rectified except with
                  the consent of the Operator or by order of a court in the
                  United Kingdom and, where an entry on the Register is in
                  respect of such Participating Securities is so rectified or
                  otherwise changed (except in response to an
                  Operator-instruction), the Operator and the holders of the
                  relevant Participating Subsidiaries shall be immediately
                  notified of the changes to the entry;

         (iv)     notwithstanding Section 358 of the Companies Act 1985, any
                  other enactment or any provision of these presents, the
                  Register in relation to Participating Securities shall not be
                  closed by the Issuer without the consent of the Operator;

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         (v)      transfers of title to Participating Securities in
                  uncertificated form shall be effected by means of the relevant
                  system concerned in the manner provided for, and subject as
                  provided in, the Regulations and accordingly (and in
                  particular) where the Conditions of the Participating
                  Securities require or contemplate the effecting of a transfer
                  of an instrument in writing and the production of
                  Participating Securities in certified form such provisions
                  shall not apply in respect of such Participating Securities in
                  uncertificated form;

         (vi)     transfers of title to uncertificated Participating Securities
                  shall be registered in accordance with, and subject as
                  provided in, the Regulations and any purported registration of
                  title in respect of Participating Securities in uncertificated
                  form otherwise than in accordance with the Regulations shall
                  have no effect;

         (vii)    Participating Securities shall not be changed from
                  uncertificated form to certificated form except in accordance
                  with and subject as provided in the Regulations;

         (viii)   Participating Securities shall not be changed from
                  certificated form to if uncertificated form except in
                  accordance with and subject as provided in the Regulations;

         (ix)     Participating Securities may be issued in uncertificated form
                  to a person who is a system-member and, upon the issue in
                  uncertificated form of new Participating Securities, the
                  Issuer or a sponsoring system participant on its behalf shall
                  by issuer-instruction notify the Operator to whom the
                  uncertificated Participating Securities have been issued and
                  the number of units of Participating Securities issued to each
                  such person. For the purposes of calculating the number of
                  units of new uncertificated Participating Securities to which
                  a system-member is entitled, the Issuer may treat a
                  system-member's holdings of certificated Participating
                  Securities and uncertificated Participating Securities as if
                  they were separate holdings;

         (x)      the provisions of the Fourth Schedule with respect to meetings
                  of Holders shall have effect subject to the provisions of
                  regulation 34 of the Regulations;

         (xi)     none of the provisions of these presents (including, but not
                  limited to, any Condition of any Participating Securities
                  relating to form, denomination, title and transfer of such
                  Participating Securities) shall apply so as to require the
                  Issuer or the Registrar to issue a certificate for such
                  Participating Securities to any person hold, such
                  Participating Securities in uncertificated form;

         (xii)    notwithstanding sub-paragraph (xi) above and, for the
                  avoidance of doubt, the Conditions of any Participating
                  Securities shall remain so applicable (and accordingly the
                  Issuer shall continue to comply with the same in accordance
                  with the provisions of these presents) notwithstanding that

                                       96
<PAGE>

                  they are not endorsed on, or on any certificate for, any
                  Participating Securities which are in uncertificated form;

         (xiii)   each holder of Participating Securities in uncertificated form
                  shall be sent by the Issuer within seven days of becoming such
                  a holder, a copy of the Conditions thereof and any other
                  document containing equivalent information to that normally
                  endorsed on any certificates (but so that joint holders of
                  such Participating Securities shall be entitled to receive one
                  copy only of the Conditions or such other document in respect
                  of the Participating Securities held jointly by them, which
                  copy shall be sent to that one of the joint holders whose name
                  stands first in the Register in respect of that holding);

         (xiv)    notwithstanding   any   Condition   of   any   Participating
                  Securities or any other provision of these presents relating
                  to payment in respect of any Participating Securities, where
                  the  Issuer  is  authorised  to do so by or on behalf of the
                  holder or all joint holders of such Participating Securities
                  in  uncertificated  form in such manner as the Issuer  shall
                  from time to time consider sufficient, the Issuer may pay or
                  procure  the payment of the  principal  and premium (if any)
                  for the time being owing on, the interest payable in respect
                  of and/or  any other  moneys  payable  by the Issuer to such
                  holder  or  joint  holders  pursuant  to these  presents  in
                  respect  of such  Participating  Securities  by means of the
                  relevant system concerned  (subject always to the facilities
                  and requirements of that relevant system).  Such payment may
                  include  the  sending  by  the  Issuer  or  by a  sponsoring
                  system-participant on its behalf of an issuer-instruction to
                  the Operator of the relevant system  concerned to credit the
                  account of the holder or joint holders  concerned or of such
                  person  as the  holder  or a joint  holders  may in  writing
                  direct,  in either case being an account  designated  by the
                  Operator  of such  relevant  system  as the cash  memorandum
                  account of the holder or joint  holders  or, as the case may
                  be, of such person. The making of such payment in accordance
                  with the facilities and  requirements of the relevant system
                  concerned  shall  constitute a good  discharge to the Issuer
                  therefor.  For the  purposes  of this  sub-paragraph  (xiv),
                  evidence  of  title  to  any  Participating   Securities  in
                  uncertificated form in accordance with the Regulations shall
                  be sufficient for such payments to be made;

         (xv)     notwithstanding   any   Condition   of   any   Participating
                  Securities or any other  provision of these  presents  which
                  provides for or which contemplates  payment of principal and
                  premium (if any) against  presentation and surrender (or, in
                  the  case of  part  payment  only,  endorsement)  of,  or of
                  certificates for, Participating Securities, if Participating
                  Securities  fail to be  redeemed  and are in  uncertificated
                  form  on the  relevant  Redemption  Date  then,  subject  to
                  sub-paragraph  (xvi) below and provided that it has complied
                  with its  obligations  in  relation to payment of the amount
                  due in respect of the relevant  redemption pursuant to these
                  presents and the relevant Agency Agreement the Issuer may at
                  any time on or after the  Redemption  Date  send or  procure
                  that a sponsoring  system-participant sends on its behalf an

                                       97
<PAGE>

                  issuer-instruction  to the Operator of the  relevant  system
                  concerned   requesting  or  requiring  the  cancellation  or
                  deletion of the  appropriate  computer-based  entries in the
                  relevant  system  concerned  that  relate  to  the  relevant
                  Participating  Securities  (being or including  entries that
                  caused or could cause the  Operator to generate an Operator-
                  instruction    to   the   Issuer   or   to   a    sponsoring
                  system-participant  acting  on  its  behalf  to  register  a
                  transfer  of the  relevant  Participating  Securities).  The
                  Issuer or a sponsoring  system-participant on its behalf may
                  obtain,  by means of the relevant  system  concerned  (or by
                  such other means as the Issuer shall determine having regard
                  to the facilities and  requirements  of the relevant  system
                  concerned), confirmation of such cancellation or deletion;

         (xvi)    in relation to any Participating Securities which are to be
                  redeemed and which are (or, in the absence of this
                  sub-paragraph (xvi), would or may be) in uncertificated form
                  on the relevant Redemption Date, the Issuer shall be entitled
                  to determine and/or alter the procedure for effecting the
                  redemption of such Participating Securities in such manner as
                  it shall, in its absolute discretion, determine, subject
                  always to the facilities and requirements of the relevant
                  system concerned. In particular (but without limiting the
                  generality of the foregoing):

                  (a)      the issuer-instruction referred to in sub-paragraph
                           (xv) above may be given in such form as the Issuer
                           may from time to time determine and may have such
                           effect, and/or cause the Operator to take such
                           action, in relation to the relevant system concerned
                           and the relevant Participating Securities as the
                           Issuer may from time to time determine (consistent
                           always with the facilities and requirements of the
                           relevant system concerned, the Regulations and the
                           redemption, on the relevant Redemption Date, of the
                           relevant Participating Securities);

                    (b)    if  the  Issuer  or any  sponsoring  system-
                           participant acting on its behalf is unable, for any
                           reason, to send or  receive   properly
                           authenticated   dematerialised instructions,  or  if
                           the  Issuer  or  any  sponsoring system-  participant
                           acting  on  its  behalf  has  not received
                           confirmation  in a form  satisfactory  to the Issuer
                           of the  cancellation or deletion of the computer
                           based  entries as  contemplated  by  subparagraph
                           (xv) above or if the  Issuer  so  determines  for any
                           other reason,  the Issuer  may,  so far as it is able
                           having regard  to  the  facilities  and  requirements
                           of  the relevant system concerned and the
                           Regulations,  require or  request  the  Operator  of
                           the   relevant   system concerned   to  take   the
                           action   referred   to  in sub-paragraph (xv) above
                           (subject always as provided in sub-paragraph  (a)
                           above) by some  means  other than by means of an
                           issuer-instruction  or the  Issuer may (by notice in
                           writing to the relevant  holder or holders of the
                           relevant Participating Securities, which notice may
                           be included in the relevant  notice of  redemption
                           (if any)) require  such  holder or holders to convert
                           the relevant  Participating  Securities from
                           uncertificated to certificated form; and

                                       98

<PAGE>

         (xvii)   for the avoidance of doubt, any Participating Securities may
                  be held in uncertificated form by not more than four joint
                  holders.

(4)      The Trustee shall be entitled, without the consent of the Holders, to
         concur in making any modifications to the provisions of these presents
         requested by the Issuer in order to reflect changes in the Regulations
         or in the law and practice relating to the holding and transfer of
         Participating Securities in uncertificated form.

(5)      The Issuer shall concur at the request of the Trustee in making any
         modifications to the provisions of these presents reasonably requested
         by the Trustee relating to the Regulations and/or the holding and
         transfer of Participating Securities in uncertificated form.

(6)      The due performance and/or observance by the Registrar in respect of
         the relevant Participating Securities of the terms of paragraph (3) of
         this Schedule and the Regulations shall be a good discharge of the
         obligations of the Issuer under such paragraph and the Regulations to
         the extent of such performance and/or observance.

                                       99
<PAGE>

Executed as a deed by
YORKSHIRE ELECTRICITY DISTRIBUTION PLC

Acting by:

--------------------------
Director

--------------------------
Director/Secretary

Executed as a deed by
YORKSHIRE ELECTRICITY GROUP PLC

Acting by:

--------------------------
Director

--------------------------
Director/Secretary

THE COMMON SEAL of           )
BANKERS TRUSTEE              )
COMPANY LIMITED was          )
affixed to this deed in the  )
presence of:                 )

                  Director

                  Assistant Secretary

                                      100EXHIBIT 10.77

                   YORKSHIRE POWER FINANCE LIMITED, AS ISSUER

                                       AND

                   YORKSHIRE POWER GROUP LIMITED, AS GUARANTOR

                                       AND

                        THE BANK OF NEW YORK, AS TRUSTEE,
              PRINCIPAL PAYING AGENT, REGISTRAR AND TRANSFER AGENT

                                       AND

                       BANQUE GENERALE DU LUXEMBOURG S.A.,
                          AS PAYING AND TRANSFER AGENT

                                    INDENTURE

                          DATED AS OF FEBRUARY 1, 1998

                                 DEBT SECURITIES

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

RECITALS OF THE COMPANY                                                       1

ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION           1

         SECTION 101.  Definitions                                            1
         SECTION 102.  Compliance Certificates and Opinions                   9
         SECTION 103.  Form of Documents Delivered to Trustee                10
         SECTION 104.  Acts of Holders                                       10
         SECTION 105.  Notices, Etc., to Trustee and Company                 13
         SECTION 106.  Notice of Holders; Waiver                             13
         SECTION 107.  Conflict with Trust Indenture Act                     14
         SECTION 108.  Effect of Headings and Table of Contents              14
         SECTION 109.  Successors and Assigns                                15
         SECTION 110.  Separability Clause                                   15
         SECTION 111.  Benefits of Indenture                                 15
         SECTION 112.  Governing Law                                         15
         SECTION 113.  Legal Holidays                                        15

ARTICLE TWO SECURITY FORMS  15

         SECTION 201.  Forms Generally                                       15
         SECTION 202.  Form of Trustee's Certificate of Authentication       16
         SECTION 203.  Form of Trustee's Certificate of Authentication
                       by an Authenticating Agent                            16
         SECTION 204.  Form of Guarantee                                     17

ARTICLE THREE THE SECURITIES                                                 18

         SECTION 301.  Amounted Unlimited; Issuable in Series                18
         SECTION 302.  Denominations                                         20
         SECTION 303.  Execution, Authentication, Delivery and Dating        20
         SECTION 304.  Transfer Agent and Paying Agent                       21
         SECTION 305.  Temporary Securities                                  22
         SECTION 306.  Registration, Registration of Transfer and Exchange   23
         SECTION 307.  Mutilated, Destroyed, Lost and Stolen Securities      24
         SECTION 308.  Payment of Interest; Interest Rights Reserved         25
         SECTION 309.  Persons Deemed Owners                                 27
         SECTION 310.  Cancellation                                          27
         SECTION 311.  Computation of Interest                               27
         SECTION 312.  Global Securities                                     28

                                       i

<PAGE>

ARTICLE FOUR SATISFACTION AND DISCHARGE                                      28

         SECTION 401.  Satisfaction and Discharge of Indenture               28
         SECTION 402.  Application of Trust Money                            30
         SECTION 403.  Satisfaction, Discharge and Defeasance of Securities
                       of any Series                                         30

ARTICLE FIVE REMEDIES                                                        32

         SECTION 501.  Events of Default                                     32
         SECTION 502.  Acceleration of Maturity; Rescission and Annulment    33
         SECTION 503.  Collection of Indebtedness and Suits for Enforcement
                       by Trustee                                            34
         SECTION 504.  Trustee May File Proofs of Claim                      35
         SECTION 505.  Trustee May Enforce Claims Without Possession of
                       Securities                                            35
         SECTION 506.  Application of Money Collected                        35
         SECTION 507.  Limitation on Suits                                   36
         SECTION 508.  Unconditional Right of Holders to Receive Principal,
                       Premium and Interest                                  37
         SECTION 509.  Restoration of Rights and Remedies                    37
         SECTION 510.  Rights and Remedies Cumulative                        37
         SECTION 511.  Delay or Omission Not Waiver                          38
         SECTION 512.  Control by Holders                                    38
         SECTION 513.  Waiver of Past Defaults                               38
         SECTION 514.  Undertaking for Costs                                 38

ARTICLE SIX THE TRUSTEE                                                      39

         SECTION 601.  Certain Duties and Responsibilities                   39
         SECTION 602.  Notice of Defaults                                    40
         SECTION 603.  Certain Rights of Trustee                             40
         SECTION 604.  Not Responsible for Recitals or Issuance of
                       Securities                                            41
         SECTION 605.  May Hold Securities                                   41
         SECTION 606.  Money Held in Trust                                   42
         SECTION 607.  Compensation and Reimbursement                        42
         SECTION 608.  Disqualification; Conflicting Interests               42
         SECTION 609.  Corporate Trustee Required; Eligibility               42
         SECTION 610.  Resignation and Removal; Appointment of Successor
                       Trustee                                               43
         SECTION 611.  Acceptance of Appointment by Successor                44
         SECTION 612.  Merger, Conversion, Consolidation or Succession
                       to Business                                           45
         SECTION 613.  Preferential Collecting of Claims Against Company     45
         SECTION 614.  Authenticating Agents                                 49

                                       ii
<PAGE>

ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY              50

         SECTION 701.  Company to Furnish Trustee Names and Addresses
                       of Holders                                            50
         SECTION 702.  Preservation of Information; Communications to
                       Holders                                               51
         SECTION 703.  Reports by Trustee                                    52
         SECTION 704.  Reports                                               53

ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, SALE OR LEASE               54

         SECTION 801.  Company or Guarantor May Consolidate Etc., Only on
                       Certain Terms                                         54
         SECTION 802.  Successor Corporation to be Substituted               55

ARTICLE NINE SUPPLEMENTAL INDENTURES                                         55

         SECTION 901.  Supplemental Indentures without Consent of Holders    55
         SECTION 902.  Supplemental Indentures with Consent of Holders       56
         SECTION 903.  Execution of Supplemental Indentures                  57
         SECTION 904.  Effect of Supplemental Indentures                     57
         SECTION 905.  Conformity with Trust Indenture Act                   57
         SECTION 906.  Reference in Securities to Supplemental Indentures    58

ARTICLE TEN COVENANTS   58
         SECTION 1001. Payment of Principal, Premium, if any, and Interest   58
         SECTION 1002. Maintenance of Office or Agency                       58
         SECTION 1003. Money for Securities Payments to Be Held in Trust     59
         SECTION 1004. Limitation on Liens                                   60
         SECTION 1005. Limitation on Sale and Lease-Back Transactions        63
         SECTION 1006. Statement by Officers as to Default                   63
         SECTION 1007. Waiver of Certain Covenants                           63
         SECTION 1008. Further Assurances                                    64
         SECTION 1009. Payment of Additional Amounts                         64
         SECTION 1010. Copies Available to Holders                           65

ARTICLE ELEVEN REDEMPTION OF SECURITIES                                      66

         SECTION 1101. Applicability of Article                              66
         SECTION 1102. Election to Redeem; Notice to Trustee                 66
         SECTION 1103. Selection by Trustee of Securities to
                       Be Redeemed                                           66
         SECTION 1104. Notice of Redemption                                  67
         SECTION 1105. Deposit of Redemption Price                           68
         SECTION 1106. Securities Payable on Redemption Date                 68
         SECTION 1107. Securities Redeemed in Part                           68
         SECTION 1108. Optional Redemption in the Event of Change
                       in Taxing Jurisdiction Tax Treatment                  69

                                      iii

<PAGE>

ARTICLE TWELVE SINKING FUNDS                                                 69

         SECTION 1201. Applicability of Article                              69
         SECTION 1202. Satisfaction of Sinking Fund Payments With Securities 70
         SECTION 1203. Redemption of Securities for Sinking Fund             70

ARTICLE THIRTEEN MEETINGS OF HOLDERS OF SECURITIES                           71

         SECTION 1301. Purposes of Meetings                                  71
         SECTION 1302. Place of Meetings                                     71
         SECTION 1303. Voting at Meetings                                    72
         SECTION 1304. Voting Rights, Conduct and Adjournment                72
         SECTION 1305. Revocation of Consent by Holders                      73

ARTICLE FOURTEEN GUARANTEE OF SECURITIES                                     73

         SECTION 1401. Applicability of Article; Unconditional Guarantee     73
         SECTION 1402. Waiver of Notice and Demand                           74
         SECTION 1403. Guarantor Obligations Not Affected                    74
         SECTION 1404. Execution of Guarantee                                75
         SECTION 1405. Subrogation                                           75
         SECTION 1406. Independent Obligations                               76

ARTICLE FIFTEEN MISCELLANEOUS                                                76

         SECTION 1501. Consent to Jurisdiction; Appointment of Agent to
                       Accept Service of Process                             76
         SECTION 1502. Counterparts                                          78

NOTE:  THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE A PART
OF THE INDENTURE.

                                       iv
<PAGE>

         Reconciliation and tie between Trust Indenture Act of 1939 and
                     Indenture, dated as of February 1, 1998

           Trust Indenture Act Section                      Indenture Section
           ---------------------------                      -----------------
           (S)310(a)(1)                                         609
                 (a)(2)                                         609
                 (a)(3)                                         Not Applicable
                 (a)(4)                                         Not Applicable
                 (b)                                            608
                                                                610
           (S)311(a)                                            613(a)
                 (b)                                            613(b)
                 (b)(2)                                         703(a)(2)
                                                                703(b)
           (S)312(a)                                            701
                                                                702(a)
                 (b)                                            702(b)
                 (c)                                            702(c)
           (S)313(a)                                            703(a)
                 (b)(1)                                         Not Applicable
                 (b)(2)                                         703(b)
                 (c)                                            703(a), 703(b)
                 (d)                                            703(c)
           (S)314(a)                                            704
                 (a)(4)                                         704
                 (b)                                            Not Applicable
                 (c)(1)                                         102
                 (c)(2)                                         102
                 (c)(3)                                         Not Applicable
                 (d)                                            Not Applicable
                 (e)                                            102
            (S)315(a)                                           601(a)
                 (b)                                            602
                                                                703(a)(7)
                 (c)                                            601(b)
                 (d)                                            601(c)
                 (d)(1)                                         601(a)(1)
                 (d)(2)                                         601(c)(1)
                 (d)(3)                                         601(c)(3)
                 (e)                                            514
           (S)316(a)(1)(A)                                      502
                                                                512
                 (a)                                            513
                 (a)(2)                                         Not Applicable

                                       v

<PAGE>

                 (b)                                            508
                 (c)                                            105
           (S)317(a)(1)                                         503
                 (a)(2)                                         504
                 (b)                                            100
           (S)318(a)                                            107

NOTE:  This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.

                                       vi
<PAGE>

                  INDENTURE, dated as of February 1, 1998, among YORKSHIRE POWER
FINANCE LIMITED, a limited liability company organized under the laws of the
Cayman Islands, as issuer (the "Company"), having its registered office at P. O.
Box 309, George Town, Grand Cayman, Cayman Islands, British West Indies,
YORKSHIRE POWER GROUP LIMITED, a private limited company incorporated under the
laws of England and Wales, having its registered office at Wetherby Road,
Scarcroft, Leeds, England, as guarantor (the "Guarantor"), THE BANK OF NEW YORK,
as trustee, principal paying agent, registrar and transfer agent (the
"Trustee"), and BANQUE GENERALE DU LUXEMBOURG S.A., as paying and transfer
agent.

                    RECITALS OF THE COMPANY AND THE GUARANTOR

                  The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of certain of its
unsecured debentures, notes or other evidences of indebtedness (herein called
the "Securities") to be issued in one or more series as provided in this
Indenture.

                  All things necessary to make this Indenture a valid agreement
of the Company, and the Guarantor, in accordance with its terms, have been done.

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

                  For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, or of
series thereof, as follows:

                                   ARTICLE ONE

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101.      Definitions

                  For all purposes of this Indenture, all indentures
supplemental hereto and any document or instrument delivered pursuant to the
provisions hereof, except as otherwise expressly provided or unless the context
otherwise requires:

                  (1) The terms defined in this Article have the respective
         meanings assigned to them in this Article and include the plural as
         well as the singular;

                  (2) all other terms used herein which are defined in the Trust
         Indenture Act, either directly or by reference therein, have the
         meanings assigned to them therein;

                  (3) all accounting terms not otherwise defined herein have the
         meaning assigned to them in accordance with generally accepted
         accounting principles in the United States and, except as otherwise
         herein expressly provided, the term "generally accepted accounting

                                       1
<PAGE>

         principles", with respect to any computation required or permitted
         hereunder shall mean such accounting principles as are generally
         accepted in the United States at the date of such computation; and

                  (4) the words "herein", "hereof" and "hereunder" and other
         words of similar import refer to this Indenture as a whole and not to
         any particular Article, Section or other subdivision.

                  Certain terms, used principally in Article Six, are defined in
that Article.

                  "Act", when used with respect to any Holder, has the meaning
specified in Section 104.

                  "Additional Amounts" has the meaning specified in Section
1009.

                  "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling", and "controlled" have meanings correlative to the
foregoing.

                  "Attributable Debt" means, in respect of a Sale and Lease-Back
Transaction, as at the time of determination, the present value (discounted at
the rate borne by the applicable series of Securities) of the total obligations
of the lessee for rental payments during the remaining term of the lease
included in such Sale and Lease-Back Transaction (including any period for which
such lease has been extended).

                  "Authenticating Agent" means any Person authorized to
authenticate and deliver Securities on behalf of the Trustee pursuant to Section
614.

                  "Bearer Security" means any Security that is payable to
bearer.

                  "Board of Directors" means a copy of a resolution certified by
a Director of the Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification.

                  "Book-Entry Depositary" means, with respect to the Securities
of any series issuable or issued in whole or in part in the form of one or more
Global Securities, the Person designated as Book-Entry Depositary (or a nominee
thereof) by the Company pursuant to Section 301, and, if so provided pursuant to
Section 301 with respect to the Securities of a series, any successor to such
Person. If at any time there is more than one Person, "Book-Entry Depositary"
shall mean, with respect to any series of Securities, the qualifying entity
which has been appointed with respect to the Securities of that series.

                                       2

<PAGE>

                  "Book-Entry Interests", means certificateless depositary
interests to be issued by the Book-Entry Depositary to DTC representing in the
aggregate a 100% beneficial interest in a Global Bearer Security.

                  "Business Day", when used with respect to the Place of Payment
of the Securities of any series, means each day which is not a Saturday, a
Sunday or a day on which banking institutions in any Place of Payment for the
Securities of that series are authorized or obligated by law to remain closed.

                  "Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.

                  "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor company shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor company.

                  "Company Request" or "Company Order" means a written request
or order signed in the name of the Company by any Director and by any other
Director or the Treasurer, Secretary, or Assistant Treasurer or Assistant
Secretary or any other officer so authorized and delivered to the Trustee.

                  "Consolidated Net Tangible Assets" shall mean the total of all
assets (including revaluations thereof as a result of commercial appraisals,
price level restatement or otherwise) appearing on a consolidated balance sheet
of the Guarantor, net of applicable reserves and deductions, but excluding
goodwill, trade names, trademarks, patents, unamortized debt discount and all
other like intangible assets (which term shall not be construed to include such
revaluations), less the aggregate of the consolidated current liabilities of the
Guarantor appearing on such balance sheet.

                  "Corporate Trust Office" means the principal office of the
Trustee in The City of New York, at which at any particular time its corporate
trust business shall be administered, which at the date hereof is 101 Barclay
Street, New York, New York, 10286.

                  "corporation" includes corporations, associations, companies
and business trusts.

                  "Debt" has the meaning specified in Section 1004.

                  "default" for purposes of Section 601 of this Indenture is
defined to mean an "Event of Default" as specified in Section 501 hereof, and
for purposes of Section 310(b) of the Trust Indenture Act, "default" shall mean
an "Event of Default" as specified in Section 501 hereof but exclusive of any
period of grace or requirement of notice.

                  "Defaulted Interest" has the meaning specified in Section 308.

                                       3

<PAGE>

                  "Deposit Agreement" means any deposit agreement among the
Company, a Book-Entry Depositary and the holders and beneficial owners from time
to time of interests in the Book-Entry Interests.

                  "Director" means any member of the Board of Directors at the
time of determination.

                  "discharged" means, with respect to the Securities of any
series, the discharge of the entire indebtedness represented by, and obligations
of the Company under, the Securities of such series and the satisfaction of all
the obligations of the Company under this Indenture relating to the Securities
of such series, except (A) the rights of Holders of the Securities of such
series to receive, from the trust fund described in Section 403 hereof, payment
of the principal of, premium, if any, and interest, if any, of the Securities of
such series when such payments are due, (B) the Company's obligations with
respect to the Securities of such series with respect to registration, transfer,
exchange and maintenance of a Place of Payment and (C) the rights, powers,
trusts, duties, protections and immunities of the Trustee under this Indenture.

                  "Dollar" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time shall be legal tender
for the payment of public and private debt in the United States.

                  "DTC" means The Depository Trust Company (or a nominee
thereof) or its successors.

                  "Event of Default" has the meaning specified in Section 501.

                  "Exchange Act" means the United States Securities Exchange Act
of 1934, as amended.

                  "Global Bearer Security" means a Bearer Security, evidencing
all or part of a series of Securities, issued to the Book-Entry Depository for
such series.

                  "Global Registered Security" means a Registered Security,
evidencing all or part of a series of Securities, issued to the Book-Entry
Depository for such series.

                  "Global Security" means a Global Registered Security or a
Global Bearer Security.

                  "Gross-Up Taxes" has the meaning specified in Section 1009.

                  "Guarantee" means the guarantee set forth in Article Fourteen
by the Guarantor of any Security of any series authenticated and delivered
pursuant to this Indenture either (i) if specified, as contemplated by Section
301, to be applicable to Securities of such series and not endorsed on such
Securities pursuant to Article Fourteen hereof, or (ii) in all other cases,
endorsed on such Securities.

                                       4

<PAGE>

                  "Guarantor" means the Person named as the "Guarantor" in the
first paragraph of this instrument, until a successor company shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Guarantor" shall mean such successor company.

                  "Holder" means, in the case of a Registered Security, the
Person in whose name a Security is registered in the Security Register and, in
the case of a Global Bearer Security, the Book-Entry Depositary therefore.

                  "Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by a Board Resolution and an
Officers' Certificate issued pursuant thereto or by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301.

                  "Indirect Participant" means a Person that holds an interest
in the Book-Entry Interests through a Participant.

                  "Interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity at the rate prescribed in such Original Issue
Discount Security.

                  "Interest Payment Date", when used with respect to any
Security means the Stated Maturity of an installment of interest on such
Security.

                  "Letter of Representations" means, with respect to the
Securities of any series, the letter of representations from the Company and the
Trustee to DTC with respect to the Securities of that series that are
represented by Global Registered Securities issued to DTC or the letter of
representations from the Company and the Book-Entry Depositary to DTC with
respect to the Securities of that series that are represented by Global Bearer
Securities issued to such Book-Entry Depositary.

                  "Lien" means any mortgage, lien, pledge, security interest or
other encumbrance; provided, however, that the term "Lien" shall not mean any
easements, rights-of-way, restrictions and other similar encumbrances and
encumbrances consisting of zoning restrictions, leases, subleases, licenses,
sublicenses, restrictions on the use of property or defects in title thereto.

                  "Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.

                  "Officers' Certificate" means a certificate signed by any
Director or the Treasurer, Secretary, any Assistant Treasurer or Assistant
Secretary of the Company or any other officer of the Company so authorized and
delivered to the Trustee.

                                       5

<PAGE>

                  "Opinion of Counsel" means a written opinion of counsel, who,
unless otherwise required by the Trust Indenture Act, may be an employee of, or
regular counsel for, the Company, or may be other counsel reasonably acceptable
to the Trustee.

                  "Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 502.

                  "Outstanding", when used with respect to Securities of any
series, means, as of the date of determination, all Securities of such series
theretofore authenticated and delivered under this Indenture, except:

                  (i) Securities theretofore canceled by the Trustee or
         delivered to the Trustee for cancellation;

                  (ii) Securities, or portions thereof, for whose payment or
         redemption money or U.S. Government Obligations in the necessary amount
         has been theretofore deposited with the Trustee or any Paying Agent
         (other than the Company) in trust or set aside and segregated in trust
         by the Company (if the Company shall act as its own Paying Agent) for
         the Holders of such Securities; provided that, if such Securities are
         to be redeemed, notice of such redemption has been duly given pursuant
         to this Indenture or provision therefore satisfactory to the Trustee
         has been made; and

                  (iii) Securities which have been paid pursuant to the terms
         hereof or thereof or in exchange for or in lieu of which other
         Securities have been authenticated and delivered pursuant to Section
         306 of this Indenture, other than any such Securities in respect of
         which there shall have been presented to the Trustee proof satisfactory
         to it that such Securities are held by a bona fide purchaser in whose
         hands such Securities are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (a) the principal
amount of an Original Issue Discount Security that shall be deemed to be
outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the Maturity thereof pursuant to Section 502, and (b)
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible
Officer of the Trustee actually knows to be so owned shall be so disregarded.
Securities so owned as described in clause (b) above which have been pledged in
good faith may be regarded as Outstanding if the pledgee certifies to the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor.

                                       6

<PAGE>

                  "Participant" means a Person that has an account with DTC.

                  "Paying Agent" means Banque Generale du Luxembourg S.A. and
any other Person authorized by the Company to pay the principal of, premium, if
any, or interest on any Securities on behalf of the Company hereunder,
including, without limitation, the Principal Paying Agent.

                  "Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

                  "Place of Payment", when used with respect to the Securities
of any series, means the place or places where the principal of, premium, if
any, and interest, if any, on the Securities of that series are payable as
specified in or as contemplated by Section 301.

                  "Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purpose of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen security.

                  "Principal Paying Agent" means The Bank of New York until a
successor Principal Paying Agent shall have become such pursuant to the
applicable provisions of this Indenture and, thereafter, "Principal Paying
Agent" shall mean such successor Principal Paying Agent.

                  "Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

                  "Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture, exclusive of accrued and unpaid interest.

                  "Registered Security" means any Security that is payable to a
registered owner or registered assigns thereof as registered in the Security
Register.

                  "Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.

                  "Relevant Date" for any payment made with respect to the
Securities of any series means whichever is the later of (i) the date on which
the relevant payment first becomes due and (ii) if the full amount payable has
not been received in The City of New York by the Book-Entry Depositary or the
Trustee on or prior to such due date, the date on which, the full amount having
been so received, notice to that effect shall have been given to the Holders in
accordance with this Indenture.

                                       7

<PAGE>

                  "Responsible Officer", when used with respect to the Trustee,
means any officer within the Corporate Trust Office including any vice
president, managing director, the secretary, assistant vice president, assistant
secretary, or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above-designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.

                  "Sale and Lease-Back Transaction" has the meaning specified in
Section 1005.

                  "Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any securities authenticated and
delivered under this Indenture.

                  "Securities Act" means the United States Securities Act of
1933, as amended.

                  "Security Register" and "Security Registrar" have the
respective meanings specified in Section 306.

                  "Significant Subsidiary" means, at any particular time, any
Subsidiary whose gross assets or gross revenues (having regard to the
Guarantor's direct and/or indirect beneficial interest in the shares, or the
like, of that subsidiary) represent at least 25% of the consolidated gross
assets or consolidated gross revenues, as the case may be, of the Guarantor.

                  "Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 308.

                  "Stated Maturity", when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.

                  "Subsidiary" means a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by the
Guarantor or by one or more other Subsidiaries, or by the Guarantor and one or
more other Subsidiaries.

                  "Taxing Jurisdiction" means (i) any supranational federation
to which the United Kingdom belongs or (ii) the jurisdiction (or any political
subdivision or taxing authority thereof) in which the Company or the Guarantor,
is incorporated or in which the Company or the Guarantor is managed and
controlled or has a place of business.

                  "Transfer Agent" means any Person authorized by the Company to
effectuate the exchange or transfer of any Security on behalf of the Company
hereunder, including, initially pursuant to Section 304, The Bank of New York
and Banque Generale du Luxembourg S.A.

                  "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such

                                       8
<PAGE>

pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.

                  "Trust Indenture Act" means the United States Trust Indenture
Act of 1939 as in force at the date as of which this instrument was executed,
except as provided in Section 905.

                  "United Kingdom" means the United Kingdom of Great Britain and
Northern Ireland, its territories, its possessions and other areas subject to
its jurisdiction.

                  "United States" means the United States of America (including
the States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.

                  "U.S. Government Obligations" means direct obligations of the
United States for the payment of which its full faith and credit is pledged, or
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States and the payment of which is unconditionally
guaranteed by the United States, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of a
holder of a depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government obligation or the specific payment of interest on
or principal of the U.S. Government Obligation evidenced by such depository
receipt.

                  "Voting Stock" of any corporation means stock of the class or
classes having general voting power under ordinary circumstances to elect at
least a majority of the board of directors of a corporation (irrespective of
whether or not at the time stock of any other class or classes shall have or
might have voting power by reason of the happening of any contingency).

SECTION 102.      Compliance Certificates and Opinions

                  Except as otherwise expressly provided by this Indenture, upon
any application or request by the Company to the Trustee to take any action
under any provision of this Indenture, the Company shall furnish to the Trustee
an Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.

                  Every certificate or opinion with respect to compliance with a
condition or covenant provide for in this Indenture shall include:

                                       9

<PAGE>

                  (1) a statement that each individual signing such certificate
         or opinion has read such covenant or condition and the definitions
         herein relating thereto;

                  (2) a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

                  (3) a statement that, in the opinion of each such individual,
         he has made such examination or investigation as is necessary to enable
         him to express an informed opinion as to whether or not such covenant
         or condition has been complied with; and

                  (4) a statement as to whether, in the opinion of each such
         individual, such condition or covenant has been complied with.

SECTION 103.      Form of Documents Delivered to Trustee

                  In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

                  Any certificate or opinion of an officer or Director may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer or Director knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers or Director or
Directors stating that the information with respect to such factual matters is
in the possession of the Company, unless such counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

                  Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.

SECTION 104.      Acts of Holders

                  (a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in Person or by agent duly
appointed in writing, and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such

                                       10

<PAGE>

instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section 104.

                  Without limiting the generality of the foregoing, unless
otherwise established in or pursuant to a Board Resolution or set forth or
determined in an Officers' Certificate, or established in one or more indentures
supplemental hereto, pursuant to Section 301, a Holder including a Book-Entry
Depositary that is a Holder of a Global Security, may make, give or take, by a
proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in
this Indenture to be made, given or taken by Holders, and a Book-Entry
Depositary that is a Holder of a Global Security may provide its proxy or
proxies to the beneficial owners of interests in any such Global Security
through such Book-Entry Depositary's standing instructions and customary
practices.

                  (b) The fact and date of the execution by any Person of any
such instrument, writing or proxy may be proved by the affidavit of a witness of
such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgements of deeds, certifying that the
individual signing such instrument, writing or proxy acknowledged to him the
execution thereof.

                  Where such execution is by a signer acting in a capacity other
than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the execution
of any such instrument, writing or proxy, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.

                  (c) The ownership of Registered Securities shall be proved by
the Security Register.

                  (d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefore or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such actions is made
upon such Security.

                  (e) The principal or face amount and serial numbers of Bearer
Securities of any series held by any Person, and the date of holding the same,
may be proved by the production of such Bearer Securities or by a certificate
executed by the Book-Entry Depositary for such Bearer Securities.

                  (f) If the Company shall solicit from the Holders of
Securities of any series any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company may, at its option, by Board
Resolution, fix in advance a record date for purposes of determining the

                                       11

<PAGE>

identity of Holders of Securities entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. Any such record date shall be fixed at the
Company's discretion. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be sought or
given before or after the record date, but only the Holders of Securities of
record at the close of business on such record date shall be deemed to be
Holders of Securities for the purpose of determining whether Holders of the
requisite proportion of Securities of such series Outstanding have authorized or
agreed or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the Securities of such series
Outstanding shall be computed as of such record date.

                  With regard to any record date set pursuant to this
subsection, the Holders of Outstanding Securities of the relevant series on such
record date (or their duly appointed agents), and only such Persons, shall be
entitled to take relevant action, whether or not such Holders remain Holders
after such record date. With regard to any action that may be taken hereunder
only by Holders of a requisite principal amount of Outstanding Securities of any
series (or their duly appointed agents) and for which a record date is set
pursuant to this subsection, the Company may, at its option, set an expiration
date after which no such action purported to be taken by any Holder shall be
effective hereunder unless taken on or prior to such expiration date by Holders
of the requisite principal amount of Outstanding Securities of such series on
such record date (or their duly appointed agents).

                  On or prior to any expiration date set pursuant to this
subsection, the Company may, on one or more occasions at its option, extend such
expiration date to any later date. Nothing in this subsection shall prevent any
Holder (or any duly appointed agent thereof) from taking, at any time, any
action contrary to or different from, any action previously taken, or purported
to have been taken, hereunder by such Holder, in which event the Company may set
a record date in respect thereof pursuant to this subsection. Notwithstanding
the foregoing or the Trust Indenture Act, the Company shall not set a record
date for, and the provisions of this paragraph shall not apply with respect to,
any action to be taken by Holders pursuant to Section 501, 502, 512.

                  Upon receipt by the Trustee of written notice of any default
described in Section 501, any declaration of acceleration, or any rescission and
annulment of any such declaration, pursuant to Section 502 or of any direction
in accordance with Section 512, a record date shall automatically and without
any other action by any Person be set for the purpose of determining the Holders
of Outstanding Securities of the series entitled to join in such notice,
declaration, or rescission and annulment, or direction, as the case may be,
which record date shall be the close of business on the day the Trustee receives
such notice, declaration, rescission and annulment of direction, as the case may
be. The Holders of Outstanding Securities of such series on such record date (or
their duly appointed agent), and only such Persons, shall be entitled to join in
such notice, declaration, rescission and annulment, or direction, as the case
may be, whether or not such Holders remain Holders after such record date;
provided that, unless such notice, declaration, rescission and annulment, or
direction, as the case may be, shall have become effective by virtue of Holders
of the requisite principal amount of Outstanding Securities of such series on
such record date (or their duly appointed agents) having joined thereon on or

                                       12
<PAGE>

prior to the 90th day after such record date, such notice of default,
declaration, rescission and annulment, or direction, as the case may be, given
or made by the Holders, as the case may be, shall automatically and without any
action by any Person be canceled and of no further effect.

                  Nothing in this paragraph shall prevent a Holder (or a duly
appointed agent thereof) from giving, before or after the expiration of such
90-day period, a notice of default, a declaration of acceleration, a rescission
and annulment of a declaration of acceleration or a direction in accordance with
Section 512, contrary to or different from, or, after the expiration of such
period, identical to, a previously given notice, declaration, rescission and
annulment, or direction, as the case may be, that has been canceled pursuant to
the proviso to the preceding sentence, in which event a new record date in
respect thereof shall be set pursuant to this paragraph.

SECTION 105.      Notices, Etc., to Trustee and Company

                  Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,

                  (1) the Trustee by any Holder or by the Company or the
         Guarantor shall be sufficient for every purpose hereunder if made,
         given, furnished or filed in writing to or with the Trustee at its
         Corporate Trust Office, or

                  (2) the Company by the Trustee or by any Holder shall be
         sufficient for every purpose hereunder (unless otherwise herein
         expressly provided) if in writing and mailed, first-class postage
         prepaid, to the Company addressed to it at the address of its
         registered office, with a copy addressed to the Guarantor at the
         address of its registered office, each as specified in the first
         paragraph of this instrument or at any other address previously
         furnished in writing to the Trustee by the Company.

SECTION 106.      Notice to Holders; Waiver

                  Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event. (i) in the case of a Holder of Registered
Securities, at his address as it appears in the Security Register, and (ii) in
the case of a Holder of Global Bearer Securities, at the address provided in or
pursuant to the relevant Deposit Agreement of the relevant Book-Entry
Depositary, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders.

                  If Securities of any series are listed on the Luxembourg Stock
Exchange and the rules of such Stock Exchange so require, notice to Holders of
such Securities shall be published in a leading newspaper having general
circulation in Luxembourg.

                                       13

<PAGE>

                  If, by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to give such notice by
mail, then such notification as shall be made at the direction of the Company in
a manner reasonably calculated, to the extent practicable under the
circumstances, to provide prompt notice shall constitute a sufficient
notification for every purpose hereunder.

                  Except as otherwise expressly provided herein or otherwise
specified with respect to any Securities pursuant to Section 301, where this
Indenture provides for notice to Holders of Bearer Securities of any event and
the rules of any securities exchange on which such Bearer Securities are listed
so require, such notice shall be sufficiently given to Holders of such Bearer
Securities if published in such newspaper or newspapers as may be specified in
such Securities on a Business Day at least twice, the first such publication to
be not earlier than the earliest date, and not later than the latest date,
prescribed for the giving of such notice. Any such notice by publication shall
be deemed to have been given on the date of the first such publication. In
addition, notice to the Holder of any Global Bearer Security shall be given by
mail in the manner provided above.

                  If by reason of any cause it shall be impracticable to publish
any notice to Holders of Bearer Securities as provided above, then such
notification to Holders of Bearer Securities as shall be given with the approval
of the Trustee shall constitute sufficient notice to such Holders for every
purpose hereunder. Neither the failure to give notice by publication to Holders
of Bearer Securities as provided above, nor any defect in any notice so
published, shall affect the sufficiency of such notice with respect to other
Holders of Bearer Securities or the sufficiency of any notice to Holders of
Registered Securities given as provided herein.

                  Any request, demand, authorization, direction, notice,
consent, waiver or Act required or permitted under this Indenture shall be in
the English language, except that any published notice may be in an official
language of the country of publication.

                  Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.

SECTION 107.      Conflict with Trust Indenture Act

                  If any provision hereof limits, qualifies of conflicts with
any provision of the Trust Indenture Act or another provision which is required
or deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, the provision or requirement of the Trust Indenture Act shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, such provision
of the Trust Indenture Act shall be deemed to apply to this Indenture as so
modified or excluded, as the case may be.

                                       14

<PAGE>

SECTION 108.      Effect of Headings and Table of Contents

                  The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.

SECTION 109.      Successors and Assigns

                  All covenants and agreements in this Indenture by the Company
or the Guarantor shall bind their respective successors and assigns, whether so
expressed or not.

SECTION 110.      Separability Clause

                  In case any provision in this Indenture, in the Securities or
in any Guarantee shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

SECTION 111.      Benefits of Indenture

                  Nothing in this Indenture, in the Securities or in any
Guarantee, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.

SECTION 112.      Governing Law

                  This Indenture, the Securities and any Guarantee shall be
governed by and construed in accordance with the laws of the State of New York.

SECTION 113.      Legal Holidays

                  In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities) payments of principal, premium, if any, or interest, if any, need
not be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, and no interest shall accrue for the period from and after such
Interest Payment Date, Redemption Date or Stated Maturity, as the case may be.

                                   ARTICLE TWO

                                 SECURITY FORMS

SECTION 201.      Forms Generally

                  The Securities of each series shall be in substantially the
form appended to the supplemental indenture establishing such series, or in such

                                       15
<PAGE>

other form as shall be established by or pursuant to a Board Resolution (or
Officers' Certificate delivered pursuant thereto) or in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, a Board Resolution or one or more
indentures supplemental hereto, and may have such letters, number of other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the Director or Directors executing such
Securities, as evidenced by the Director's or Directors' execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of any appropriate record of such
action shall be certified by an authorized Director or officer of the Company
and delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such
Securities.

                  The Trustee's certificates of authentication shall be in
substantially the form set forth in this Article or in a Board Resolution (or
Officers' Certificate delivered pursuant thereto) or an indenture supplemental
hereto.

                  The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the Director or Directors executing such Securities, as
evidenced by the Director's or Directors' execution of such Securities.

SECTION 202.      Form of Trustee's Certificate of Authentication

                  This is one of the Securities of the series designated herein
and referred to in the within-mentioned Indenture.

Dated:                  __________________________________
                                as Trustee

                        By: ____________________________
                              Authorized Signatory

SECTION 203.      Form of Trustee's Certificate of Authentication by an
Authenticating Agent

                  If at any time there shall be an Authenticating Agent
appointed with respect to any series of Securities, then the Trustee's
Certificate of Authentication by such Authenticating Agent to be borne by the
Securities of each such series shall be substantially as follows:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                  This is one of the Securities of the Series designated herein
and referred to in the within-mentioned Indenture.

                                       16

<PAGE>

Dated:                   __________________________________
                                as Trustee

                         By:  [NAME OF AUTHENTICATING AGENT]
                              Authenticating Agent

                         By: ______________________________
                                Authorized Signatory

SECTION 204.      Form of Guarantee

                  FOR VALUE RECEIVED, YORKSHIRE POWER GROUP LIMITED, a private
limited company duly incorporated and existing under the laws of England and
Wales (the "Guarantor", which term includes any successor Person under the
Indenture referred to in the Security on which this notation is endorsed),
hereby fully and unconditionally guarantees to the Holder of the accompanying
Security issued by Yorkshire Power Finance Limited (the "Company"), pursuant to
the terms of the Guarantee contained in Article Fourteen of the Indenture, the
due and punctual payment of the principal of, premium, if any, and interest, if
any, on this Security (and any Additional Amounts payable in respect thereof),
when and as the same shall become due and payable, whether at Stated Maturity,
by declaration of acceleration, call for redemption or otherwise, in accordance
with the terms of this Security and the Indenture. In case of the failure of the
Company punctually to pay any such principal, premium, if any, or interest, if
any, the Guarantor hereby agrees to cause any such payment to be made punctually
when and as the same shall become due and payable as if such payment were made
by the Company.

                  The obligations of the Guarantor to the Holders of the
Securities and to the Trustee pursuant to the Guarantee and the Indenture are
expressly set forth in Article Fourteen of the Indenture, and reference is
hereby made to such Article and Indenture for the precise terms of the
Guarantee.

                  THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                  The Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Security upon which this notation
of the Guarantee is endorsed shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.

                              YORKSHIRE POWER GROUP LIMITED

                              By: ____________________________
                                  Authorized Signatory

                                       17

<PAGE>

                                  ARTICLE THREE

                                 THE SECURITIES

Section 301.      Amount Unlimited; Issuable in Series

                  The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.

                  The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution and, subject to
Section 303, set forth or determined in the manner provided in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series, the terms of such series, which may
include the following:

                  (1) title of the Securities of the series (which shall
         distinguish the Securities series from all other Securities);

                  (2) any limit upon the aggregate principal amount of the
         Securities of the series which may be authenticated and delivered under
         this Indenture (except for Securities authenticated and delivered upon
         registration of transfer or, or in exchange for, or in lieu of, other
         Securities of the series pursuant to Sections 305, 306, 307 or 906, and
         except for any Securities which, pursuant to Section 303, are deemed
         never to have been authenticated and delivered hereunder);

                  (3) the Person to whom any interest on a Security of the
         series shall be payable, if other than the bearer (in the case of a
         Bearer Security) or the Person in whose name the Security (or one or
         more Predecessor Securities) is registered at the close of business on
         the Regular Record Date for such interest (in the case of a Registered
         Security);

                  (4) the date or dates on which the principal of the Securities
         of the series is payable;

                  (5) the rate or rates at which the Securities of the series
         shall bear interest, if any, the date or dates from which such interest
         shall accrue, the Interest Payment Dates on which such interest shall
         be payable and the Regular Record Date for the interest payable on any
         Interest Payment Date;

                  (6) the place or places, if any, in addition to or in the
         place of the Corporate Trust Office, where the principal of, premium,
         if any, and interest, if any, on Securities of the series shall be
         payable and (in the case of the Registered Securities) where such
         Securities may be registered or transferred;

                                       18

<PAGE>

                  (7) the period or periods within which, the price or prices at
         which and the terms and conditions upon which Securities of the series
         may be redeemed, in whole or in part, at the option of the Company;

                  (8) the obligation, if any, of the Company to redeem, repay or
         purchase Securities of the series pursuant to any sinking fund or
         analogous provisions or at the option of a Holder thereof, and the
         period or periods within which, the price or prices at which and the
         terms and conditions upon which Securities of the series shall be
         redeemed, repaid or purchased, in whole or in part, pursuant to such
         obligation;

                  (9) if other than denominations of $1,000 and any integral
         multiple thereof, the denominations in which Securities of the series
         shall be issuable;

                  (10) if other than the principal amount thereof, the portion
         of the principal amount of Securities of the series which shall be
         payable upon declaration of acceleration of the Maturity thereof
         pursuant to Section 502;

                  (11) if other than such coin or currency of the United States
         as at the time of payment is legal tender for payment of public or
         private debts, the coin or currency, including composite currencies
         such as the European Currency Unit, in which payment of the principal
         of, premium, if any, and interest, if any, on the Securities of the
         series shall be payable;

                  (12) if the principal of, premium, if any, or interest, if
         any, on the Securities of the series are to be payable, at the election
         of the Company or a Holder thereof, in a coin or currency other than
         that in which the Securities are stated to be payable, the period or
         periods within which, and the terms and conditions upon which, such
         election may be made;

                  (13) if the amount of payments of principal of, premium, if
         any, or interest, if any, on the Securities of the series may be
         determined with reference to an index based on a coin or currency other
         than that in which the Securities are stated to be payable, the manner
         in which such amounts shall be determined;

                  (14) any provisions permitted by this Indenture relating to
         Events of Default or covenants of the Company or the Guarantor with
         respect to such series of Securities;

                  (15) if the Securities of the series shall be issued in whole
         or in part in the form of one or more Global Securities, (i) whether
         beneficial owners of interests in any such Global Security or
         Securities may exchange such interests for definitive Registered
         Securities of such series of like tenor and of authorized form and
         denomination and the circumstances under which any such changes may
         occur, if other than in the manner provided in Section 306, and (ii)
         the Book-Entry Depositary for such Global Security or Securities;

                                       19
<PAGE>

                  (16) if the Company ever wishes to issue definitive Bearer
         Securities then all provisions relating to or governing such Bearer
         Securities will be set forth in an indenture supplemental hereto;

                  (17) if Article Fourteen and the other provisions of this
         Indenture relating to the Guarantee of the Securities are applicable to
         such series; and

                  (18) any other terms of the series (which terms shall not be
         inconsistent with the provisions of this Indenture).

                  All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to above and set forth in the
Officers' Certificate referred to above or in any indenture supplemental hereto
referred to above.

                  If any of the terms of the Securities of a series, including
the form of Security of such series, are established by action taken pursuant to
a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary or other authorized officer
or Director, and delivered to the Trustee at or prior to the delivery of the
Company Order contemplated by Section 303 for the authentication and delivery of
such series of Securities.

SECTION 302.      Denominations

                  The Securities of each series shall be issuable in bearer form
or in registered form without coupons, except as otherwise expressly provided in
a supplemental indenture hereto, in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such provisions with respect
to the Securities of any series, the Securities of such series shall be issuable
in denominations of $1,000 and any integral multiple thereof.

SECTION 303.      Execution, Authentication, Delivery and Dating

                  The Securities shall be executed on behalf of the Company by
any Director, the Secretary or any other officer of the Company so authorized
and need not be attested. Definitive Registered Securities of any series may
have the Company's seal reproduced thereon which need not be attested. The
Securities of any series shall be executed by such additional Director or
officer, if any, as shall be specified pursuant to Section 301. The signature of
any of these officers on the Securities may be manual or facsimile.

                  Securities bearing the manual or facsimile signature of any
individual who was at any time the proper Director or officer of the Company
shall bind the Company, notwithstanding that such individual has ceased to hold
such office prior to the authentication and delivery of such Securities or did
not hold such office at the date of authentication of such Securities.

                  At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series

                                       20
<PAGE>

executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,

                  (a) if the form of such Securities has been established by or
         pursuant to Board Resolution as permitted by Section 201, that such
         form has been established in conformity with the provisions of this
         Indenture;

                  (b) if the terms of such Securities have been established by
         or pursuant to Board Resolution as permitted by Section 301, that such
         terms have been established in conformity with the provisions of this
         Indenture; and

                  (c) that such Securities, when authenticated and delivered by
         the Trustee and issued by the Company in the manner and subject to any
         conditions specified in such opinion of Counsel, will constitute valid
         and legally binding obligations of the Company, enforceable in
         accordance with their terms, subject to bankruptcy, insolvency,
         reorganization and other laws of general applicability relating to or
         affecting the enforcement of creditors' rights and to general
         principles of equity.

                  Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the time of authentication of each Security of such series if such
documents are delivered at or prior to the time of authentication upon original
issuance of the first Security of such series to be issued.

                  Each Security shall be dated the date of its authentication.

                  No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee or an Authenticating Agent by manual signature,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 310 together
with a written statement (which need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.

                                       21

<PAGE>

SECTION 304.      Transfer Agent and Paying Agent

                  For so long as the Securities are listed on the Luxembourg
Stock Exchange and such stock exchange shall so require, the Company shall
maintain a Paying Agent and Transfer Agent in Luxembourg.

                  The Company shall enter into an appropriate agency agreement
with any Registrar, Transfer Agent or Paying Agent not a party to this
Indenture, which shall implement the provisions of this Indenture that relate to
such Person. The Company shall notify the Trustee of the name and address of any
such Person. If the Company fails to maintain a Registrar or Paying Agent, the
Trust shall act as such and shall be entitled to appropriate compensation
therefore pursuant to Section 607. The Company initially appoints the Trustee as
Registrar, Transfer Agent and Principal Paying Agent in The City of New York and
Banque Generale du Luxembourg S.A. as Paying Agent and Transfer Agent in
Luxembourg in connection with the Securities.

                  Banque Generale du Luxembourg S.A. shall be responsible for
only those duties that are described in the provisions of this Indenture that
relate to the Paying Agent and Transfer Agent. No implied duties or obligations
shall be read into this Indenture against Banque Generale du Luxembourg S.A. It
is understood and agreed that the actions taken by Banque Generale du Luxembourg
S.A. as Paying Agent and Transfer Agent shall be limited to actions including
definitive Registered Securities.

SECTION 305.      Temporary Securities

                  Pending the preparation of a permanent Global Security or
definitive Securities of any series, the Company may execute, and upon Company
Order the Trustee or the Authenticating Agent shall authenticate, and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued, in
registered form or, if authorized, in bearer form, and with such appropriate
insertions, omissions, substitutions and other variations as the officer or
officers executing such Securities may determine, as evidenced by their
execution of such Securities.

                  If temporary Securities of any series are issued, the Company
will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Company in a Place of Payment for
that series, without charge to the Holder except as provided in Section 306 in
connection with a transfer and except that a Person receiving definitive Bearer
Securities shall bear the cost of insurance, postage, transportation and the
like. Upon surrender for cancellation of any one or more temporary Securities of
any series the Company shall execute and the Trustee or the Authenticating Agent
shall authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series and of like tenor of authorized
denominations.

                                       22

<PAGE>

                  Upon any exchange of a portion of a temporary Global Security
for a definitive Global Security for the individual Securities represented
thereby pursuant to this Section 305 or Section 306, the temporary Global
Security shall be endorsed by the Trustee to reflect the reduction of the
principal amount of such temporary Global Security, and such principal amount
shall be reduced for all purposes by the amount so exchanged and endorsed.

SECTION 306.      Registration, Registration of Transfer and Exchange

                  The Company shall cause to be kept at the Corporate Trust
Office a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Trustee is hereby appointed "Security Registrar" for the purpose of
registering Registered Securities and transfers of Registered Securities as
herein provided. The Company may have one or more co-registrars and the term
"Security Registrar" includes any co-registrar.

                  Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency in a Place of Payment for that
series, the Company shall execute, and the Trustee or the Authenticating Agent
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Registered Securities of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor.

                  At the option of the Holder, any Registered Security or
Registered Securities of any series, other than a Global Security, may be
exchanged for other Registered Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Registered Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Company shall execute, and
upon receipt of a Company Order the Trustee or the Authenticating Agent shall
authenticate and deliver, the Registered Securities which the Holder making the
exchange is entitled to receive. Bearer Securities may not be delivered by the
Trustee, the Authenticating Agent or the Security Registrar in exchange for
Registered Securities.

                  All Securities issued upon any registration of transfer or
exchange of Registered Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Registered Securities surrendered upon such registration of
transfer or exchange.

                  Every Registered Security presented or surrendered for
registration of transfer or for exchange shall (if so required by the Company or
the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed, by the Holder thereof or his Attorney duly authorized in writing.

                  Interests in a Global Security or Securities may be exchanged
for definitive Registered Securities of the same series in whole or in part only

                                       23
<PAGE>

under the circumstances provided in this Indenture, in an Officers' Certificate
(pursuant to a Board Resolution) or in an indenture supplemental hereto pursuant
to which Securities of that series are issued or in the Securities of that
series. In such event the Company will execute, and the Trustee or the
Authenticating Agent, upon receipt of a Company Order for the authentication and
delivery of definitive Registered Securities of such series, will authenticate
and deliver such definitive Registered Securities. Any such definitive
Registered Securities so issued shall be registered in the name of such Person
or Persons as the Book-Entry Depositary shall instruct the Trustee and the
Security Registrar in writing. The Trustee or the Security Registrar shall
deliver such definitive Registered Securities to the Persons in whose names such
definitive Registered Securities are so registered. Upon the exchange (i) in
whole of a Global Security or Securities for definitive Registered Securities in
equal aggregate principal amount, such Global Security or Securities shall be
delivered to the Trustee for cancellation or (ii) in part of a Global Security
or securities for definitive Registered Securities, then the principal amount of
such Global Security or Securities shall be reduced by an endorsement on such
Global Security or Securities in an amount equal to the aggregate principal
amount of such definitive Registered Securities. Interests in a Global Security
or Securities may not be exchanged for definitive bearer Securities.
Notwithstanding the foregoing, interests in a Global Security may not be
exchanged for definitive Registered Securities during the sixteen day period
immediately prior to and including each Interest Payment Date.

                  No service charge shall be made to the Holder for any
registration of transfer or exchange of Securities, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 305, 906, 1107 not
involving any transfer.

                  The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption under Section 1103 and ending at the close of business on the day of
such mailing, (ii) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part or (iii) to exchange any Bearer Security so
selected for redemption except that such a Bearer Security may be exchanged for
a Registered Security of the series (but only if and under the circumstances for
which the Securities of such series are issuable as Registered Securities),
provided that such Registered Security shall be immediately surrendered for
redemption with written instructions for payment consistent with the provisions
of this Indenture.

                  The provisions of this Section 306 are, with respect to any
Global Security, subject to Section 312 hereof.

SECTION 307       Mutilated, Destroyed, Lost and Stolen Securities

                  If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange

                                       24
<PAGE>

therefore a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

                  If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such Security or indemnity as may be required by them to save each of
them and any agent of either or them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its written request the Trustee
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

                  In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.

                  Upon the issuance of any new Security under this Section 307,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

                  Every new Security of any series issued pursuant to this
Section 307 in lieu of any destroyed, lost or stolen Security shall constitute
an original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.

                  The provisions of this Section 307 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.

SECTION 308       Payment of Interest; Interest Rights Reserved

                  Interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid (in the
case of a Bearer Security) to the bearer thereof and (in the case of a
Registered Security) to the Person in whose name that Registered Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest.

                  Payment of interest, if any, in respect of any Registered
Security will be made by check mailed to the address of the Person entitled
thereto as such person's address appearing in the Security Register. Payment of
interest, if any, in respect of any Registered Security may also be made, in the
case of a Holder of at least U.S. $1,000,000 aggregate principal amount of
Registered Securities, and payment of interest, if any in respect of a Global
Registered Security shall be made, by wire transfer to a U.S. Dollar account
maintained by the Holder with a bank in the United States; provided that such
Holder elects payment by wire transfer by giving written notice to the Trustee

                                       25
<PAGE>

or a Paying Agent to such effect designating such account no later than 15 days
immediately preceding the relevant due date for payment (or such other date as
the Trustee may accept in its discretion).

                  Any interest on any Security of any series which is payable
but is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall, in the case of Registered
Securities, forthwith cease to be payable to the Holder thereof on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:

                  (1) The Company may elect to make payment of any Defaulted
         Interest to the Persons in whose names the Registered Securities of
         such series (or their respective Predecessor Securities) are registered
         at the close of business on a Special Record Date for the payment of
         such Defaulted Interest, which shall be fixed in the following manner.
         The Company shall notify the Trustee in writing of the amount of
         Defaulted Interest proposed to be paid on each Registered Security of
         such series and the date of the proposed payment, and at the same time
         the Company shall deposit with the Trustee an amount of money equal to
         the aggregate amount proposed to be paid in respect of such Defaulted
         Interest or shall make arrangements satisfactory to the Trustee for
         such deposit prior to the date of the proposed payment, such money when
         deposited to be held in trust for the benefit of the Persons entitled
         to such Defaulted Interest as in this clause provided. Thereupon the
         Trustee shall fix a Special Record Date for the payment of such
         Defaulted Interest which shall be not more than 15 days and not less
         than 10 days prior to the date of the proposed payment and not less
         than 10 days after the receipt by the Trustee of the notice of the
         proposed payment. Unless the Trustee is acting as the Security
         Registrar, promptly after such Special Record Date, the Company shall
         furnish the Trustee with a list, or shall make arrangements
         satisfactory to the Trustee with respect thereto, of the names and
         addresses of, and respective principal amounts of such Registered
         securities held by, the Holders appearing on the Security Register at
         the close of business on such Special Record Date. The Trustee shall
         promptly notify the Company of such Special Record Date and, in the
         name and at the expense of the Company, shall cause notice of the
         proposed payment of such Defaulted Interest and the Special Record Date
         therefore to be mailed, first-class postage prepaid, to each Holder of
         Securities of such series at his address as it appears in the Security
         Register, not less than 10 days prior to such Special Record Date.
         Notice of the proposed payment of such Defaulted Interest and the
         Special Record Date therefor having been so mailed, such Defaulted
         Interest shall be paid to the Persons in whose names the Securities of
         such series (or their respective predecessor Securities) are registered
         at the close of business on such Special Record Date and shall no
         longer be payable pursuant to the following clause (2).

                  (2) The Company may make payment of any Defaulted Interest on
         the Registered Securities of any series or any Global Registered
         Security in any other lawful manner not inconsistent with the
         requirements of any securities exchange on which such Registered
         Securities may be listed, and upon such notice as may be required by
         such exchange.

                                       26

<PAGE>

                  Defaulted Interest on Bearer Securities shall be payable to
the bearer thereof at the time of payment of such Defaulted Interest by the
Company.

                  Subject to the foregoing provisions of this Section 308, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security, shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.

SECTION 309.      Persons Deemed Owners

                  Prior to due presentment of a Registered Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Registered Security is
registered as the owner of such Registered Security for the purpose of receiving
payment of principal of, premium, if any, and (subject to Section 308) interest,
if any, on such Registered Security and for all other purposes whatsoever,
whether or not such Registered Security be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary. All such payments so made to any such person, or upon such
person's order, shall be valid, and, to the extent of the sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Security.

                  The Company, the Trustee and any agent of the Company or the
Trustee may treat the Book-Entry Depositary for a Global Bearer Security as the
absolute owner of such Global Bearer Security for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Global Bearer Security or coupon be overdue, and neither the
Company or the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

                  No holder of any beneficial interest in any Global Security
held on its behalf by a Book-Entry Depositary may be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall impair, as between a Book-Entry Depositary and such holders of
beneficial interests, the operation of customary practices governing the
exercise of the rights of the Book-Entry Depositary as holder of any Security.

SECTION 310.      Cancellation

                  All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and shall be promptly canceled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly canceled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities canceled as provided in this Section 310, except as expressly

                                       27
<PAGE>

permitted by this Indenture. All canceled Securities held by the Trustee shall
be disposed of as directed by a Company Order.

SECTION 311.      Computation of Interest

                  Except as otherwise specified as contemplated by Section 301
for Securities of any series, interest, if any, on the Securities of each series
shall be computed on the basis of a 360-day year of twelve 30-day months.

SECTION 312.      Global Securities

                  If the Company shall establish pursuant to Section 301 that
the Securities of a particular series are to be issued in the form of a Global
Security, then the Company shall execute and the Trustee shall, in accordance
with Section 303, authenticate and deliver, a Global Security or Securities
which (i) shall represent, and shall be denominated in an aggregate amount equal
to the aggregate principal amount of, all the Outstanding Securities of such
series, (ii) shall be in bearer form or, if in registered form registered in the
name of the Book-Entry Depositary or its nominee, (iii) shall be delivered by
the Trustee to the Book-Entry Depositary or pursuant to the Book-Entry
Depositary's instruction and (iv) shall bear a legend substantially to the
following effect:

                  "This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and if this Security is in bearer form, is
held by a Book-Entry Depositary or, if this Security is in registered form, is
registered in the name of a Book-Entry Depositary or a nominee of a Book-Entry
Depositary. This Security is exchangeable for Securities, if this Security is in
bearer form, held by, or if this Security is in registered form, registered in
the name of, a person other than the Book-Entry Depositary or its nominee only
in the limited circumstances described in the Indenture.

                  Unless this Global Security is presented by an authorized
representative of the Book-Entry Depositary to the Company or its agent for
registration of transfer, if this Security is in registered form, exchange or
payment, and any definitive Registered Security is issued in the name or names
as directed in writing by the Book-Entry Depositary, ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as
much as the bearer or the registered owner hereof, as the case may be, the
Book-Entry Depositary, has an interest herein."

                  Unless and until definitive Registered Securities of a series
are issued in exchange for the Global Security of a series as permitted by this
Indenture, the Global Security of a series may be transferred, in whole but not
in part and in the manner provided in Section 306, only to another nominee of
the Book-Entry Depositary for such series, or to a successor Book-Entry
Depositary for such series selected or approved by the Company or to a nominee
of such successor Book-Entry Depositary.

                                       28

<PAGE>

                  No Security that is not a Global Bearer Security may be
payable to bearer (except as otherwise provided in an indenture supplemental
hereto or in an Officers' Certificate (pursuant to a Board Resolution) pursuant
to Section 301(16)).

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

SECTION 401.      Satisfaction and Discharge of Indenture

                  This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for and rights to receive
payments of any principal, premium or interest in respect thereof and any right
to receive any Additional Amount as provided in Section 1009), and the Trustee
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when

                  (1) either (A) all Securities theretofore authenticated and
         delivered (other than (i) Securities which have been destroyed, lost or
         stolen and which have been replaced or paid as provided in Section 307
         and (ii) Securities for whose payment money has theretofore been
         deposited in trust with the Trustee or any paying agent or segregated
         and held in trust by the Company and thereafter repaid to the Company
         or discharged from such trust, as provided in Section 1003) have been
         delivered to the Trustee for cancellation; or

                  (B) all such Securities not theretofore delivered to the
         Trustee for cancellation

                           (i) have become due and payable, or

                           (ii) will become due and payable at their Stated
                  Maturity within one year, or

                           (iii) are to be called for redemption within one year
                  under arrangements for the giving of notice of redemption by
                  the Trustee in the name, and at the expense, of the Company,
                  or

                           (iv) are deemed paid and discharged pursuant to
                  Section 403, as applicable.

and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the purpose
an amount of (a) money in the currency or units of currency in which such
Securities are payable, or (b) U.S. Government Obligations (denominated in the
same currency or units of currency in which such Securities are payable) which
through the payment of interest and principal in respect thereof in accordance
with their terms will provide not later than one day before the Stated Maturity
or Redemption Date, as the case may be, money in an amount, or (c) a combination

                                       29
<PAGE>

of money or U.S. Government Obligations as provided in (b) above, in each case,
sufficient to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal (and
premium, if any) and interest, if any, to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;

                  (2) the Company has paid or caused to be paid all other sums
         payable hereunder by the Company; and

                  (3) the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent herein provided for relating to the satisfaction and
         discharge of this Indenture have been complied with.

                  Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 614 and, if
money shall have been deposited with the Trustee pursuant to subclause (B) of
clause (1) of this Section 401 or if money or U.S. Government Obligations shall
have been deposited with or received by the Trustee pursuant to Section 403, the
obligations of the Trustee under Section 402 and the last paragraph of Section
1003 shall survive.

SECTION 402.      Application of Trust Money

                  (a) Subject to the provisions of the last paragraph of Section
1003, all money or U.S. Government Obligations deposited with the Trustee
pursuant to Sections 401 or 403 and all money received by the Trustee in respect
of U.S. Government Obligations deposited with the Trustee pursuant to Sections
401 or 403, shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, to the persons
entitled thereto, of the principal of, premium, if any, and interest, if any, on
the Securities for whose payment such money has been deposited with or received
by the Trustee or to make mandatory sinking fund payments or analogous payments
as provided by Sections 401 or 403.

                  (b) The Company shall pay and shall indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against U.S.
Government Obligations deposited pursuant to Sections 401 or 403 or the interest
and principal received in respect of such obligations other than any payable by
or on behalf of Holders.

                  (c) The Trustee shall deliver or pay to the Company from time
to time upon Company request any U.S. Government Obligations or money held by it
as provided in Sections 401 or 403 which, in the opinion of a nationally
recognized firm of independent certified public accountants expressed in a
written certification thereof delivered to the Trustee, are then in excess of
the amount thereof which then would have been required to be deposited for the
purpose for which such U.S. Government Obligations or money was deposited or
received. This provision shall not authorize the sale by the Trustee of any U.S.
Government Obligations held under this Indenture.

                                       30

<PAGE>

                  (d) Any monies paid by the Company to the Trustee or any
Paying Agent, or held by the Company in trust, for the payment of the principal
of, premium, if any, or interest, if any, or Additional Amounts on any
Securities and remaining unclaimed at the end of two years after such principal,
premium, interest or Additional Amounts become due and payable will be repaid to
the Company, or released from the trust, upon its written request, and upon such
repayment or release all liability of the Company, the Trustee and such Paying
Agent with respect thereto will cease.

SECTION 403.      Satisfaction, Discharge and Defeasance of Securities of any
Series

                  The Company, at its option, may elect (a) to be discharged
from any and all obligations in respect of the Securities of a Series (except in
each case for the obligations to register the transfer or exchange of the
Securities of that series, replace stolen, lost or mutilated Securities of that
series, maintain paying agencies and hold moneys for payment in Trust); or (b)
not to comply with any term, provision or condition set forth in Sections 801,
1004 and 1005 with respect to the Securities of any series, provided that the
following conditions shall have been satisfied:

                  The Company has deposited or caused to be irrevocably
deposited (except as provided in Section 607, 402(d) and the last paragraph of
Section 1003) with the Trustee (specifying that each deposit is pursuant to this
Section 403) as trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities of such
series, (i) money or (ii) U.S. Government Obligations which through the payment
of interest and principal in respect thereof in accordance with their terms will
provide money in an amount, or (iii) a combination thereof, in each case, in an
amount sufficient, in the opinion of a nationally recognized firm of independent
accountants, to pay and discharge the principal of, premium, if any, and
interest, if any (including any Additional Amounts then known), if any, on the
outstanding Securities of such series on the dates such payments are due in
accordance with the terms of the Securities of such series, or if the Company
has designated a redemption date pursuant to the final sentence of this
paragraph, to and including the redemption date so designated by the Company),
and no Event of Default or event which with notice or lapse of time would become
an Event of Default (including by reason of such deposit) with respect to the
Securities of such series shall have occurred and be continuing on the date of
such deposit or, insofar as Section 501(7) is concerned, at any time during the
period ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be satisfied until the expiration of
such period), and the Securities of such series will not be delisted by any
securities exchange on which they are traded as a result of the deposit of trust
funds in trust. To exercise any such option, the Company is required to deliver
to the Trustee (i) an opinion of independent counsel of recognized standing to
the effect that (x) the Holders of the Securities of such series will not
recognize income, gain or loss for United States federal income tax purposes as
a result of such deposit, and will be subject to United States federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case absent such deposit and (y) the deposit shall not result in the
Company being deemed to be an "investment company" required to be registered
under the Investment Company Act of 1940, as amended, which in the case of
clause (a) must be based on a change in law or a published ruling by the United
States Internal Revenue Service and (ii) an Officers' Certificate as to

                                       31
<PAGE>

compliance with all conditions precedent provided for in the indenture relating
to the satisfaction and discharge of the Securities of such series. If the
Company shall wish to deposit or cause to be deposited money or U.S. Government
Obligations to pay or discharge the principal of, premium, if any and interest,
if any, (including any Additional Amounts then known), if any, on the
outstanding Securities of such series to and including a Redemption Date on
which all of the outstanding Securities of such series are to be redeemed, such
Redemption Date shall be irrevocably designated by a Board Resolution delivered
to the Trustee on or prior to the date of deposit of such money or U.S.
Government Obligations, and such Board Resolution shall be accompanied by a
irrevocable Company Request that the Trustee give notice of such redemption in
the name and at the expense of the Company not less than 30 nor more than 60
days prior to such Redemption Date in accordance with this Indenture.

                                  ARTICLE FIVE

                                    REMEDIES

SECTION 501.      Events of Default

                  "Event of Default",  wherever used herein with respect to
Securities  of any series,  means any one of the following events:

                  (1) default in the payment of any interest or any Additional
         Amounts upon any Security of that series when it becomes due and
         payable and continuance of such default for a period of 30 days; or

                  (2) default in the payment of the principal of (or premium, if
         any, on) any Security of that series at its Maturity; or

                  (3) default in the payment of any installment of any sinking
         fund provided with respect to such series, when and as due by the terms
         of a Security of that series; or

                  (4) material default in the performance, or material breach,
         of any covenant or obligation of the Company or the Guarantor in this
         Indenture (other than a covenant a default in whose performance or
         whose breach is elsewhere in this Section 501 specifically dealt with
         or which has expressly been included in this Indenture solely for the
         benefit of a series of Securities other than that series) and
         continuance of such material default or breach for a period of 90 days
         after there has been given, by registered or certified mail, to the
         Company or the Guarantor by the Trustee or to the Company or the
         Guarantor and the Trustee by the Holders of at least 25% in aggregate
         principal amount of the Outstanding Securities of that series a written
         notice specifying such default or breach and requiring it to be
         remedied and stating that such notice is a "Notice of Default"
         hereunder; or

                  (5) a default in the payment of the principal of any bond,
         debenture, note or other evidence of indebtedness, in each case for
         money borrowed, or in the payment of principal under any mortgage,
         indenture (including this Indenture) or instrument under which there

                                       32
<PAGE>

         may be issued or by which there may be secured or evidenced any
         indebtedness for money borrowed, of the Company, the Guarantor or any
         Significant Subsidiary, which default for payment of principal is in an
         aggregate principal amount exceeding U.S. $50,000,000 (or its
         equivalent in any other currency or currencies) when such indebtedness
         becomes due and payable (whether at maturity, upon redemption of
         acceleration or otherwise), if such default shall continue unremedied
         or unwaived for more than 30 Business Days and the time for payment of
         such amount has not been expressly extended; provided, however, that,
         subject to the provisions of Sections 601 and 602, the Trustee shall
         not be deemed to have knowledge of such default unless either (A) a
         Responsible Officer of the Trustee shall have actual knowledge of such
         default or (B) the Trustee shall have received written notice thereof
         from the Company or the Guarantor, from any Holder, from the holder of
         any such indebtedness or from the trustee under any such mortgage,
         indenture or other instrument; and provided, further, that if such
         default under such indenture or instrument shall be remedied or cured
         by the Company, the Guarantor or such Significant Subsidiary or waived
         by the holders of such indebtedness, then the Event of Default
         hereunder by reason thereof shall be deemed likewise to have been
         remedied, cured or waived without further action upon the part of the
         Trustee or any of the Holders; or

                  (6) any Guarantee shall be held in a judicial proceeding to be
         unenforceable or invalid or shall cease for any reason to be in full
         force and effect; or

                  (7) the failure of the Company, the Guarantor, or a
         Significant Subsidiary generally to pay its debts as they become due,
         or the admission in writing of its inability to pay its debts
         generally, or the making of a general assignment for the benefit of its
         creditors, or the institution of any proceeding by or against the
         Company, the Guarantor or a Significant Subsidiary (other than any such
         proceeding brought against the Company, the Guarantor or a Significant
         Subsidiary that is dismissed within 180 days from the commencement
         thereof) seeking to adjudicate it bankrupt or insolvent, or seeking
         liquidation, winding up, reorganization, arrangement, adjustment,
         protection, relief or composition (in each case, other than a solvent
         liquidation, winding up, reorganization, arrangement, adjustment,
         protection, relief or composition) of it or its debts under any law
         relating to bankruptcy, insolvency, reorganization, moratorium or
         relief of debtors, or seeking the entry of an order for relief or
         appointment of an administrator, receiver, trustee, intervenor or other
         similar official for it or for any substantial part of its property, or
         the taking of any action by the Company, the Guarantor or a Significant
         Subsidiary to authorize any of the actions set forth in this
         subparagraph (7); or

                  (8) any other Event of Default provided in the supplemental
         indenture or provided in or pursuant to the Board Resolution under
         which such series of Securities is issued or in the form of Security
         for such series.

SECTION 502.      Acceleration of Maturity; Rescission and Annulment

                                       33

<PAGE>

                  If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.

                  At any time after such declaration of acceleration with
respect to Securities of any series has been made, but before a judgment or
decree for payment of money has been obtained by the Trustee as hereinafter in
this Article provided, if all Events of Default with respect to Securities of
that series have been cured or waived (other than the non-payment of principal
of the Securities which has become due solely by reason of such declaration of
acceleration) then such declaration of acceleration and its consequences shall
be automatically annulled and rescinded.

                  No such rescission shall affect any subsequent default or
impair any right consequent thereon.

                  For all purposes under this Indenture, if a portion of the
principal of any Original Issue Discount Securities shall have been accelerated
and declared due and payable pursuant to the provisions hereof, then, from and
after such declaration, unless such declaration has been rescinded and annulled,
the principal amount of such Original Issue Discount Securities shall be deemed,
for all purposes hereunder, to be such portion of the principal thereof as shall
be due and payable as a result of such acceleration, together with interest, if
any, thereon and all other amounts owing thereunder, shall constitute payment in
full of such Original Issue Discount Securities.

SECTION 503.      Collection of Indebtedness and Suits for Enforcement by
Trustee

                  The Company covenants that if

                  (1) default is made in the payment of any interest on any
         Security of a series when such interest becomes due and payable and
         such default continues for a period of 30 days, or

                  (2) default is made in the payment of the principal of,
         premium, if any, on any Security of a series at the Stated Maturity
         thereof,

the Company will, upon written demand of the Trustee, pay to it, for the benefit
of the Holders of such Securities of such series, the whole amount then due and
payable on such Securities of such series for principal of, premium, if any, and
interest, if any, and, to the extent that payment of such interest shall be
legally enforceable, interest on any overdue principal of, premium, if any, and
any overdue interest, at the rate or rates prescribed therefore in such
Securities of such series, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the

                                       34
<PAGE>

reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

                  If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities, wherever situated.

                  If any Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights.

SECTION 504.      Trustee May File Proofs of Claim

                  In case of the pendency of any receivership, insolvency,
liquidation (other than a solvent liquidation), bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,

         (i)      to file and prove a claim for the whole amount of principal
                  of, premium, if any, and interest owing and unpaid in respect
                  of the Securities and to file such other papers or documents
                  as may be necessary or advisable in order to have the claims
                  of the Trustee (including any claim for the reasonable
                  compensation, expenses, disbursements and advances of the
                  Trustee, its agents and counsel) and of the Holders allowed in
                  such judicial proceeding, and

         (ii)     to collect and receive any moneys or other property payable or
                  deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.

                  Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the

                                       35
<PAGE>

Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.

SECTION 505.      Trustee May Enforce Claims Without Possession of Securities

                  All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

SECTION 506.      Application of Money Collected

                  Any money  collected by the  Trustee pursuant  to this Article
shall be applied in the  following  order with respect to the  Securities of any
series,  at the  date  or  dates  fixed  by the  Trustee  and,  in  case  of the
distribution  of such money on account of  principal  of,  premium,  if any,  or
interest,  if any, upon  presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:

                  FIRST:   To the payment of all amounts due to the Trustee
under Section 607;

                  SECOND:  In case the principal and premium, if any, of the
Securities of such series in respect of which moneys have been  collected  shall
not have become and be then due and payable, to the payment of interest, if any,
on the  Securities  of such a series in default in the order of the  maturity of
the  installments  of such  interest,  with  interest  (to the extent  that such
interest has been  collected by the Trustee and to the extent  permitted by law)
upon the overdue  installments of interest at the rate  prescribed  there for in
such  Securities,  such  payments  to be made  ratably to the  Persons  entitled
thereto, without discrimination or preference;

                  THIRD:   In case the principal or premium, if any, of the
Securities of such series in respect of which moneys have been  collected  shall
have  become  and shall be then due and  payable,  to the  payment  of the whole
amount then owing and unpaid on all the Securities of such series for principal,
premium, if any, and interest,  if any, with interest upon the overdue principal
of premium,  if any, and (to the extent that such interest has been collected by
the Trustee and to the extent  permitted  by law) upon overdue  installments  of
interest at the rate prescribed  therefor in the Securities of such series;  and
in case such moneys shall be insufficient to pay in full the whole amount so due
and unpaid  upon the  Securities  of such  series,  then to the  payment of such
principal  and any  premium  and  interest,  without  preference  or priority of
principal  over interest,  or of interest over  principal or premium,  or of any
installment  of  interest  over any other  installment  of  interest,  or of any
Security of such series over any other  Security of such series,  ratably to the
aggregate of such principal and any premium and accrued and unpaid interest; and

                                       36

<PAGE>

                  FOURTH:  To the payment of the remainder, if any, to the
Company or any other Person lawfully entitled thereto.

SECTION 507.      Limitation on Suits

                  No Holder of any Security of any series shall have any right
to  institute  any  proceeding,  judicial  or  otherwise,  with  respect to this
Indenture,  or for the  appointment  of a receiver or trustee,  or for any other
remedy hereunder, unless

                  (1) such Holder has previously given written notice to the
         Trustee of a continuing Event of Default with respect to the Securities
         of that series;

                  (2) the Holders of not less than 25% in principal amount of
         the Outstanding Securities of that series shall have made written
         request to the Trustee to institute proceedings in respect of such
         Event of Default in its own name as Trustee hereunder;

                  (3) such Holder or Holders have offered to the Trustee
         indemnity satisfactory to the Trustee against the costs, expenses and
         liabilities to be incurred in compliance with such requests;

                  (4) the Trustee for 60 days after its receipt of such notice,
         request and offer of indemnity has failed to institute any such
         proceeding; and

                  (5) no direction inconsistent with such written request has
         been given to the Trustee during such 60-day period by the Holders of a
         majority in principal amount of the outstanding Securities of that
         series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.

SECTION 508.      Unconditional Right of Holders to Receive Principal, Premium
and Interest

                  Notwithstanding Section 507, the Holder of any Security shall
have the right, which is absolute and unconditional, to receive payment of the
principal of, premium, if any, or (subject to Section 307) interest, if any, on
such Security on the Stated Maturity or Maturities expressed in such Security,
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.

SECTION 509.      Restoration of Rights and Remedies

                                       37
<PAGE>

                  If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been

discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Company, the Trustee and the Holders
shall continue as through no such proceeding had been instituted.

SECTION 510.      Rights and Remedies Cumulative

                  Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

SECTION 511.      Delay or Omission Not Waiver

                  No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right to remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient by the Trustee or by the Holders,
as the case may be.

SECTION 512.      Control by Holders

                  The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such series; provided that

                  (1) such direction shall not be in conflict with any rule of
         law or with this Indenture,

                  (2) the Trustee may take any other action deemed proper by the
         Trustee which is not inconsistent with such direction, and

                  (3) the Trustee shall not determine that the action so
         directed would be prejudicial to Holders not taking part in such
         action.

SECTION 513.      Waiver of Past Defaults

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<PAGE>

                  The Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities of any series may on behalf of the Holders
of all the Securities of such series waive any past default hereunder with
respect to such series and its consequences, except a default.

                  (1) in the payment of the principal of,  premium,  if any, or
         interest,  if any, on any Security of such series, or

                  (2) in respect of a covenant or provision hereof which under
         Article Nine cannot be modified or amended without the consent of the
         Holder of each Outstanding Security of such series affected.

                  Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.

SECTION 514.      Undertaking for Costs

                  All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant in such
suit, but the provisions of this Section 514 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
outstanding Securities of any series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal, of, premium, if any, or
interest, if any, on any Security on or after the Stated Maturity or Maturities
expressed in such Security.

                                   ARTICLE SIX

                                   THE TRUSTEE

SECTION 601.      Certain Duties and Responsibilities

                  (a) Except during the continuance of a default with respect to
the Securities of any series,

                  (1) the Trustee undertakes to perform, such duties and only
         such duties as are specifically set forth in this Indenture, and no
         implied covenants or obligations shall be read into this Indenture
         against the Trustee; and

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<PAGE>

                  (2) in the absence of bad faith on its part, the Trustee may
         conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         this Indenture; but in the case of any such certificates or opinions
         which by any provision hereof are specifically required to be furnished
         to the Trustee, the Trustee shall examine the same to determine whether
         or not they conform to the requirements of this Indenture.

                  (b) In case a default has occurred and is continuing, the
         Trustee shall exercise such of the rights and powers vested in it by
         this Indenture, and use the same degree of care and skill in their
         exercise, as a prudent man would exercise or use under the
         circumstances in the conduct of his own affairs.

                  (c) No provision of this Indenture shall be construed to
         relieve the Trustee from liability for its own negligent action, its
         own negligent failure to act, or its own willful misconduct, except
         that

                  (1) the Trustee shall not be liable for any error of judgment
         made in good faith by a Responsible Officer, unless the Trustee was
         negligent in ascertaining the pertinent facts;

                  (2) no provision of this Indenture shall require the Trustee
         to spend or risk its own funds or otherwise incur any financial
         liability in the performance of any of its duties hereunder, or in the
         exercise of any of its rights or powers, if repayment of such funds or
         adequate indemnity against such risk or liability satisfactory to the
         Trustee has not been assured to it; and

                  (3) the Trustee shall not be liable with respect to any action
         taken or omitted to be taken by it in good faith in accordance with the
         direction of the Holders of not less than a majority in principal
         amount of the outstanding Securities of any series, determined as
         provided in Section 512, relating to the time, method and place of
         conducting any proceeding for any remedy available to the Trustee, or
         exercising any trust or power conferred upon the Trustee, under this
         Indenture with respect to the Securities of such series.

                  (d) Whether or not herein expressly so provided, every
         provision of this Indenture relating to the conduct or affecting the
         liability of or affording protection to the Trustee shall be subject to
         the provisions of this Section 601.

SECTION 602.      Notice of Defaults

                  Within 90 days after the occurrence of any default hereunder
with respect to the Securities of any series, the Trustee shall transmit by mail
to all Holders of Securities of such series notice of such default hereunder
known to the Trustee, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of the
principal of, premium, if any, or interest, if any, on any Security of such
series or in the payment of any sinking fund installment with respect to
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a

                                       40
<PAGE>

trust committee of directors of a Responsible Officer of the Trustee in good
faith determine that the withholding of such notice is in the interest of the
Holders of Securities of such series; and provided, further, that in the case of
any default of the character specified in Section 501(4) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section 602,
the term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Securities of such
series.

SECTION 603.      Certain Rights of Trustee

                  Subject to the provisions of Section 601:

                  (a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;

                  (b) any request or direction of the company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order or as
otherwise expressly provided herein and any resolution of the Board of Directors
may be sufficiently evidenced by a Board Resolution;

                  (c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;

                  (d) the Trustee may consult with counsel, and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;

                  (e) the Trustee shall be under no obligation to expand or risk
its own funds or to exercise, at the request or direction of any of the Holders,
any of the rights or powers vested in it by this Indenture pursuant to this
Indenture, unless such Holders shall have offered to the Trustee security or
indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;

                  (f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled

                                       41
<PAGE>

upon reasonable prior request and during normal business hours to examine the
books, records and premises of the company, personally or by agent or attorney;
and

                  (g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and shall not be liable for the actions or omissions of such
agents appointed and supervised by it with due care.

SECTION 604.      Not Responsible for Recitals or Issuance of Securities

                  The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee or any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.

SECTION 605.      May Hold Securities

                  The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.

SECTION 606.      Money Held in Trust

                  Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.

SECTION 607.      Compensation and Reimbursement

                  The Company agrees

                  (1) to pay to the Trustee from time to time such compensation
         as is agreed upon in writing;

                  (2) except as otherwise expressly provided herein, to
         reimburse the Trustee upon its request for all reasonable expenses,
         disbursement and advances incurred or made by the Trustee in accordance
         with any provision of this Indenture (including the reasonable
         compensation and the expenses and disbursements of its agents and
         counsel, which compensation, expenses and disbursements shall be set
         forth in sufficient written detail to the satisfaction of the Company),
         except any such expense, disbursement or advance as may be attributable
         to its or their negligence or bad faith; and

                                       42

<PAGE>

                  (3) to indemnify the Trustee, its officers, directors and
         employees for, and to hold it harmless against, any loss, liability or
         expense incurred without negligence, bad faith, or willful misconduct
         on its part, arising out of or in connection with the acceptance or
         administration of the trust or trusts hereunder, including the costs
         and expenses of defending itself against any claim or liability in
         connection with the exercise or performance of any of its powers or
         duties hereunder. Obligations under this Section 607(3) will survive
         the satisfaction and discharge of this Indenture pursuant to Section
         401 hereof.

SECTION 608.      Disqualification;  Conflicting Interests

                  If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.

SECTION 609.      Corporate Trustee Required; Eligibility

                  There shall at all times be a Trustee hereunder which shall be
eligible to act as trustee under the Trust Indenture Act and which shall have a
combined capital and surplus of at least U.S. $50,000,000. If the Trustee does
not have an office in The City of New York, the Trustee may appoint an agent in
The City of New York reasonably acceptable to the Company to conduct any
activities which the Trustee may be required under this Indenture to conduct in
The City of New York. If the Trustee does not have an office in The City of New
York or has not appointed an agent in The City of New York, the Trustee shall be
a participant in The Depository Trust Company and FAST distribution systems. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of a United States federal, state, territorial or
District of Columbia supervising or examining authority, then for the purposes
of this Section 609, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 609, the Trustee
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.

SECTION 610.      Resignation and Removal;  Appointment of Successor Trustee

                  (a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.

                  (b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any

                                       43
<PAGE>

court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.

                  (c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.

                  (d) If at any time:

                  (1) the Trustee shall fail to comply with section 310(b) of
         the Trust Indenture Act pursuant to Section 608 with respect to any
         series of Securities after written request therefor by the Company or
         by any Holder who has been a bona fide holder of a Security for at
         least six months, or

                  (2) the Trustee shall cease to be eligible under Section 609
         and shall fail to resign after written request therefor by the Company
         or by any such Holder, or

                  (3) the Trustee shall become incapable of acting or shall be
         adjudged a bankrupt or insolvent or a receiver of the trustee or of its
         property shall be appointed or any public officer shall take charge or
         control of the Trustee or of its property or affairs for the purpose of
         rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.

                  (e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities of one or more series, the Company, by
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series) and shall comply with
the applicable requirements of Section 611. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company and
accepted appointment in the manner required by Section 611, any Holder who has
been a bona fide Holder of a Security of such series for at least six months
may, on behalf of himself and all others similarly situations, petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.

                  (f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
all Holders of Securities of such series as their names and addresses appear in

                                       44
<PAGE>

the Security Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.

SECTION 611.      Acceptance of Appointment by Successor

                  (a) In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.

                  (b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but on request of the company or any successor
trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.

                  (c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section 611, as the case may be.

                                       45
<PAGE>

                  (d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.

SECTION 612.      Merger, Conversion, Consolidation or Succession to Business

                  Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder;
provided such corporation shall be otherwise qualified and eligible under this
Article without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.

SECTION 613.      Preferential Collecting of Claims Against Company

                  (a) Subject to Subsection (b) of this Section 613, if the
Trustee shall be or shall become a creditor, directly or indirectly,  secured or
unsecured,  of the Company within three months prior to a default, as defined in
Subsection  (c) of this  Section  613, or  subsequent  to such a default,  then,
unless and until such default  shall be cured,  the Trustee  shall set apart and
hold in a special  account  for the  benefit of the  Trustee  individually,  the
Holders of the  Securities  and the holders of other  indenture  securities,  as
defined in Subsection (c) of this Section 613:

                  (1) an amount equal to any and all reductions in the amount
         due and owing upon any claim as such creditor in respect of principal
         or interest effected after the beginning of such three months' period
         and valid as against the Company and its other creditors, except any
         such reduction resulting from the receipt or disposition of any
         property described in paragraph (2) of this Subsection, or from the
         exercise of any right of setoff which the Trustee could have exercised
         if a petition in bankruptcy had been applied by or against the Company
         upon the date of such default; and

                  (2) all property received by the Trustee in respect of any
         claims as such creditor, either as security therefor, or in
         satisfaction or composition thereof, or otherwise, after the beginning
         of such three months' period, or an amount equal to the proceeds of any
         such property, if disposed of, subject, however, to the rights, if any,
         of the Company and its other creditors in such property or such
         proceeds.

                  Nothing herein contained, however, shall affect the right of
the Trustee:

                  (A) to retain for its own account (i) payments made on account
         of any such claim by any Person (other than the Company) who is liable
         thereon, and (ii) the proceeds of the bona fide sale of any such claim
         by the Trustee to a third Person, and (iii) distributions made in cash,

                                       46
<PAGE>

         securities or other property in respect of claims filed against the
         Company in bankruptcy or receivership or in proceedings for
         reorganization pursuant to the Federal Bankruptcy Act or applicable
         State law;

                  (B) to realize, for its own account, upon any property held by
         it as security for any such claim, if such property was so held prior
         to the beginning of such three months' period;

                  (C) to realize, for its own account, but only to extent of the
         claim hereinafter mentioned, upon any property held by it as security
         for any such claim, if such claim was created after the beginning of
         such three months' period and such property was received as security
         therefor simultaneously with the creation thereof, and if the Trustee
         shall sustain the burden of proving that at the time such property was
         so received the Trustee had no reasonable cause to believe that a
         default, as defined in Subsection (c) of this Section 613, would occur
         within three months; or

                  (D) to receive payment on any claim referred to in paragraph
         (B) or (C), against the release of any property held as security for
         such claim as provided in paragraph (B) or (C), as the case may be, to
         the extent of the fair value of such property.

                  For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three months' period for property held
as security at the time of such substitution shall, to the extent of the fair
value of the property released, have the same status as the property released,
and, to the extent that any claim referred to in any of such paragraphs is
created in renewal of or in substitution for or for the purpose of repaying or
refunding any pre-existing claim of the Trustee as such creditor, such claim
shall have the same status as such pre-existing claim.

                  If the Trustee shall be required to account for the funds and
property held in such special account, the proceeds thereof shall be apportioned
among the Trustee, the Holders and the holders of other indenture securities in
such manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law or winding up or administration pursuant
to the insolvency laws of the Cayman Islands or the United Kingdom, as
applicable, the same percentage of their respective claims, figured before
crediting to the claim of the Trustee anything on account of the receipt by it
from the Company of the funds and property in such special account and before
crediting to the receptive claims of the Trustee and the Holders and the holders
of other indenture securities dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law or winding up or administration
pursuant to the insolvency laws of the Cayman Islands or the United Kingdom, as
applicable, but after crediting thereon receipts on account of the indebtedness
represented by their respective claims from all sources other than from such
dividends and from the funds and property so held in such special account. As
used in this paragraph, with respect to any claim, the term "dividends" shall
include any distribution with respect to such claim, in bankruptcy or
receivership or proceedings for reorganization pursuant to the Federal

                                       47
<PAGE>

Bankruptcy Act or applicable State law or winding up or administration pursuant
to the insolvency laws of the Cayman Islands or the United Kingdom, as
applicable, whether such distribution is made in cash, securities or other
property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim.

                  Any Trustee which has resigned or been removed after the
beginning of such three months' period shall be subject to the provisions of
this Subsection as through such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such three
months' period, it shall be subject to the provisions of this Subsection if and
only if the following conditions exist:

                  (i) the receipt of property or reduction of claim, which would
         have given rise to the obligation to account, if such Trustee had
         continued as Trustee, occurred after the beginning of such three
         months' period; and

                  (ii) such receipt of property or reduction of claim occurred
         within three months after such resignation or removal.

                  (b) There shall be excluded  from the operation of  Subsection
(a) of this Section 613 a creditor relationship arising from:

                  (1) the ownership or acquisition of securities issued under
         any indenture, or any security or securities having a maturity of one
         year or more at the time of acquisition by the Trustee;

                  (2) advances authorized by a receivership or bankruptcy court
         of competent jurisdiction or by this Indenture, for the purpose of
         preserving any property which shall at any time be subject to the lien
         of this Indenture or of discharging tax liens or other prior liens or
         encumbrances thereon, if notice of such advances and of the
         circumstances surrounding the making thereof is given to the Holders at
         the time and in the manner provided in this Indenture;

                  (3) disbursements made in the ordinary course of business in
         the capacity of trustee under an indenture, transfer agent, registrar,
         custodian, paying agent, fiscal agent or depository, or other similar
         capacity;

                  (4) an indebtedness created as a result of services rendered
         or premises rented; or an indebtedness created as a result of goods or
         securities sold in a cash transaction, as defined in Subsection (c) of
         this Section 613;

                  (5) the ownership of stock or of other securities of a
         corporation organized under the provisions of Section 25(a) of the
         Federal Reserve Act, as amended, which is directly or indirectly a
         creditor of the Company; and

                                       48

<PAGE>

                  (6) the acquisition, ownership, acceptance or negotiation of
         any drafts, bills of exchange, acceptances or obligations which fall
         within the classification of self-liquidating paper, as defined in
         Subsection (c) of this Section 613.

                  (c) For the purposes of this Section 613 only:

                  (1) The term "default" means any failure to make payment in
         full of the principal of or interest on any of the Securities or upon
         the other indenture securities when and as such principal or interest
         becomes due and payable;

                  (2) the term "other indenture securities" means securities
         upon which the Company is an obligor (as defined in the Trust Indenture
         Act) outstanding under any other indenture (i) under which the Trustee
         is also trustee, (ii) which contains provisions substantially similar
         to the provisions of this Section 613, and (iii) under which a default
         exists at the time of the apportionment of the funds and property held
         in such special account;

                  (3) the term "cash transaction" means any transaction in which
         full payment for goods or securities sold is made within seven days
         after delivery of the goods or securities in currency or in checks or
         other orders drawn upon banks or bankers and payable upon demand;

                  (4) the term "self-liquidating paper" means any draft, bill of
         exchange, acceptance or obligation which is made, drawn, negotiated or
         incurred by the Company for the purpose of financing the purchase,
         processing, manufacturing, shipment, storage or sale of goods, wares or
         merchandise and which is secured by documents evidencing title to,
         possession of, or a lien upon, the goods, wares or merchandise or the
         receivables or proceeds arising from the sale of the goods, wares or
         merchandise previously constituting the security, provided the security
         is received by the Trustee simultaneously with the creation of the
         creditor relationship with the Company arising from the making,
         drawing, negotiating or incurring of the draft, bill of exchange,
         acceptance or obligation;

                  (5) the term "company" means any obligor upon the Securities;
         and

                  (6) the term "Federal Bankruptcy Act" means the Bankruptcy
         Code or Title 11 of the United States Code.

SECTION 614.      Authenticating Agents

                  From time to time the Trustee, with the prior written approval
of the Company, may appoint one or more Authenticating Agents with respect to
one or more series of Securities with power to act on the Trustee's behalf and
subject to its direction in the authentication and delivery of Securities of

                                       49
<PAGE>

such series or in connection with transfers and exchanges under Sections 304,
305, 306 and 1104 as fully to all intents and purposes as though the
Authenticating Agent had been expressly authorized by those Sections of this
Indenture to authenticate and deliver Securities of such series. For all
purposes of this Indenture, the authentication and delivery of Securities by an
Authenticating Agent pursuant to this Section 614 shall be deemed to be
authentication and delivery of such Securities "by the Trustee". Each such
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least U.S. $50,000,000 and subject to supervision or examination by
Federal, state or District of Columbia authority. If such corporation publishes
reports of condition at least annually pursuant to law or the requirements of
such authority, then for the purposes of this Section 614 the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section 614, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 614.

                  Any corporation into which any Authenticating Agent may be
merged or with which it may be consolidated, or any corporation resulting from,
any merger or consolidation or to which any Authenticating Agent shall be a
party, or any corporation succeeding to the corporate trust business of any
Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section 614, without the execution or filing of any paper or any further act on
the part of the parties hereto or the Authenticating Agent or such successor
corporation.

                  An Authenticating Agent may resign at any time by giving
written notice of resignation to the Trustee and to the Company. The Trustee may
at any time terminate the agency of any Authenticating Agent by giving written
notice of termination to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time any Authenticating Agent shall cease to be eligible under this Section
614, the Trustee may appoint a successor Authenticating Agent with the prior
written approval of the Company and shall mail notice of such appointment to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve, as the names and addresses of such Holders appear on the
Security Register. Any successor Authenticating Agent, upon acceptance of its
appointment hereunder, shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section 614.

                  The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section 614 as
may be agreed in a separate writing among the Company, the Trustee and such
Authenticating Agent, and the Trustee shall be entitled to be reimbursed for
such payments pursuant to Section 607.

                  If an appointment with respect to one or more series of
Securities is made pursuant to this Section 614, the Securities of such series
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:

                                       50

<PAGE>

                  This is one of the Securities of the series designated herein
referred to in the within mentioned Indenture.

Dated:
                                     ______________________________________
                                     As Trustee

                                     {NAME OF AUTHENTICATING AGENT}

                                     _______________________________________
                                                        Authenticating Agent

                                     By:

                                     _______________________________________
                                                       Authorized Signatory

                                  ARTICLE SEVEN

                HOLDERS' LIST AND REPORTS BY TRUSTEE AND COMPANY

SECTION 701.      Company to Furnish Trustee Names and Address of Holders

                  The Company will furnish or cause to be furnished to the
Trustee with respect to the Registered Securities of each series

                  (a) semi-annually, not later than 15 days after each Regular
Record Date, or, in the case of any series of Registered Securities on which
semiannual interest is not payable, not more than 15 days after such semi-annual
dates as may be specified by the Trustee, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders as of such
Regular Record Date or semi-annual date, as the case may be, and

                  (b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar from and content as of a date not more than 15 days prior to the time
such list is furnished;

provided, however, that if and so long as the Trustee is Security Registrar for
any series of Registered Securities, no such list shall be required to be
furnished with respect to any such series.

SECTION 702.      Preservation of Information; Communications to Holders

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<PAGE>

                  (a)      The Trustee shall preserve, in as current a form as
is reasonably  practicable,  the names and addresses of Holders contained in the
most  recent  list  furnished  to the Trustee as provided in Section 701 and the
names and  addresses  of Holders  received  by the  Trustee in its  capacity  as
Security Registrar.

                  (b)      If three or more Holders (herein referred to as
"applicants")  apply in  writing to the  Trustee,  and  furnish  to the  Trustee
reasonable  proof that each such  applicant has owned a Security for a period of
at least six months preceding the date of such application, and such application
states that the applicants desire to communicate with other Holders with respect
to their rights under this  Indenture or under the Securities and is accompanied
by a copy of the  form of proxy or other  communication  which  such  applicants
propose to transmit, then the Trustee shall, within five business days after the
receipt of such application, at its election, either

                  (i)      afford such applicants access to the information
                           preserved at the time by the Trustee in accordance
                           with Section 702(a), or

                  (ii)     inform such applicants as to the approximate number
                           of Holders whose names and addresses appear in the
                           information preserved at the time by the Trustee in
                           accordance with Section 702(a), and as to the
                           approximate cost of mailing to such Holders the form
                           of proxy or other communication, if any, specified in
                           such application.

                           If the Trustee shall elect not to afford such
applicants access to such information, the Trustee shall,
upon the written request of such applicants, mail to each Holder whose name and
address appear in the information preserved at the time by the Trustee in
accordance with Section 702(a) a copy of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing, unless within
five days after such tender the Trustee shall mail to such applicants and file
with the Commission, together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion of the Trustee, such
mailing would be contrary to the best interest of the Holders or would be in
violation of applicable law. Such written statement shall specify the basis of
such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections to sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Holders with reasonable promptness after the entry of
such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.

                  (c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable, by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 702(b), regardless of the source from which

                                       52
<PAGE>

such information was derived, and that the Trustee shall not be held accountable
by reason of mailing any material pursuant to a request made under Section
702(b).

SECTION 703.      Reports by Trustee

                  (a) Within 60 days after July 1 of each year, commencing July
1, 1998, the Trustee shall transmit by mail to all Holders of Securities a brief
report  dated  as of  such  July  1, of such  year  with  respect  to any of the
following  events which may have occurred  within the previous 12 months (but if
no such event has occurred within such period no report need be transmitted):

                  (1) any change to its eligibility under Section 609 and its
         qualifications under Section 608;

                  (2) the creation of or any material change to a relationship
         specified in Section 608;

                  (3) the character and amount of any advances (and if the
         Trustee elects so to state, the circumstances surrounding the making
         thereof) made by the Trustee (as such) which remain unpaid on the date
         of such report, and for the reimbursement of which it claims or may
         claim a lien or charge, prior to that of the Securities, on any
         property or funds held or collected by it as Trustee, except that the
         Trustee shall not be required (but may elect) to report such advances
         if such advances so remaining unpaid aggregate not more than one-half
         of one percentum of the principal amount of the Securities outstanding
         on the date of such report;

                  (4) any change to the amount, interest rate and maturity date
         of all other indebtedness owing by the Company (or by any other obligor
         on the Securities) to the Trustee in its individual capacity, on the
         date of such report, with a brief description of any property held as
         collateral security therefor, except an indebtedness based upon a
         creditor relationship arising in any manner described in Sections
         613(b)(2), (3), (4) or (6);

                  (5) any change to the property and funds, if any, physically
         in the possession of the Trustee as such on the date of such report;

                  (6) any additional issue of Securities which the Trustee has
         not previously reported; and

                  (7) any action taken by the Trustee in the performance of its
         duties hereunder which it has not previously reported and which in its
         opinion materially affects the Securities, except action in respect of
         a default, notice of which has been or is to be withheld by the Trustee
         in accordance with Section 602.

                  (b) The Trustee shall transmit by mail to all Holders of
Securities  a brief  report  with  respect  to the  character  and amount of any
advances (and if the Trustee elects so to state, the  circumstances  surrounding

                                       53
<PAGE>
the making  thereof)  made by the  Trustee  (as such) since the date of the last
report transmitted pursuant to Subsection (a) of this Section 703 (or if no such
report  has yet  been so  transmitted,  since  the  date  of  execution  of this
instrument)  for the  reimbursement  of which it  claims  or may claim a lien or
charge, prior to that of the Securities,  on property or funds held or collected
by it as  Trustee  and which it has not  previously  reported  pursuant  to this
Subsection,  except  that the Trustee  shall not be required  (but may elect) to
report such advances if such advances remaining unpaid at any time aggregate 10%
or less of the principal amount of the securities outstanding at such time, such
report to be transmitted within 90 days after such time.

                  (c) A copy of each such report shall, at the time of such
transmission  to  Holders,  be filed by the  Trustee  with  each  United  States
national  securities  exchange upon which any  Securities  are listed,  with the
Commission  and with the  Company.  The Company will notify the Trustee when any
securities are listed on any United States national securities exchange.

SECTION 704.      Reports

                  The Company and the Guarantor shall:

                  (1) file with the Trustee, within 30 days after the Guarantor
         is required to file the same with the Commission, copies of the annual
         reports and of the information, documents and other reports (or copies
         of such portions of any of the foregoing as the Commission may from
         time to time by rules and regulations prescribe) which the Guarantor
         may be required to file with the Commission pursuant to Section 13 or
         Section 15(d) of the Securities Exchange Act of 1934; or, if the
         Guarantor is not required to file information, documents or reports
         pursuant to either of said Sections and one or more series of the
         Securities is listed on a United States national securities exchange,
         then it shall file with the Trustee and the Commission, in accordance
         with rules and regulations prescribed from time to time by the
         Commission, such of the supplementary and periodic information,
         documents and reports which may be required pursuant to Section 13 of
         the Exchange Act in respect of a security listed and registered on a
         United States national securities exchange as may be prescribed from
         time to time in such rules and regulations;

                  (2) file with the Trustee and the Commission, in accordance
         with rules and regulations prescribed from time to time by the
         Commission, such additional information, documents and reports with
         respect to compliance by the Company with the conditions and covenants
         of this Indenture as may be required from time to time by such rules
         and regulations; and

                  (3) transmit by mail to all Holders of Securities within 30
         days after the filing thereof with the Trustee, such summaries of any
         information, documents and reports required to be filed by the Company
         pursuant to paragraphs (1) and (2) of this Section 704 as may be
         required by rules and regulations prescribed from time to time by the
         Commission.

                                       54
<PAGE>

                                  ARTICLE EIGHT

                CONSOLIDATION, MERGER, CONVEYANCE, SALE OR LEASE

SECTION 801.      Company or Guarantor May Consolidate Etc., Only on Certain
Terms

                  Nothing contained in this Indenture or in the Securities of
any series shall prevent the Company or the Guarantor from consolidating with or
merging into another corporation or corporations, or successive consolidations
or mergers or conveying, transferring, leasing or otherwise disposing of its
properties and assets substantially as an entirety to any person, provided that
(a) the successor entity expressly assumes all of the Company's applicable
obligations on the Securities or the Guarantor's applicable obligations under
the guarantee, as the case may be, and (b) immediately after giving effect to
such transaction no Event of Default and no event which, after notice or lapse
of time or both, would become an Event of Default shall have happened and be
continuing. In addition, each of the Company and the Guarantor may assign and
delegate all of its rights and obligations on the Securities of any series,
under this Indenture, on the Guarantee and all other documents, agreements and
instruments related thereto, as applicable, to any Person that owns all of the
ordinary shares of the Company or the Guarantor or to any Person that owns all
of the ordinary shares of a Person that owns all of the ordinary shares of the
Company or the Guarantor, and upon any such Person assuming such rights and
obligations the Company or the Guarantor shall be automatically released from
such obligations, provided that immediately after given effect to such
transaction no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default shall have happened and be
continuing.

                  In the event that any such successor entity is organized under
the laws of a country located outside of a Taxing Jurisdiction and withholding
or deduction is required by law for or on account of any present or future
taxes, duties, assessments or governmental charges of whatever nature imposed,
levied, collected, withheld or assessed by or within such country in which the
successor entity is organized or by or within any political subdivision thereof
or any authority therein or thereof having power to tax, the successor entity
shall pay to the relevant Holder of the Securities of such series such
Additional Amounts, under the same circumstances and subject to the same
limitations as are specified for in Section 1009 hereof, but substituting for
the applicable Taxing Jurisdiction in each place the name of the country under
the laws of which such successor entity is organized, managed and controlled or
has a place of business. In addition, such successor entity shall be entitled to
effect an optional tax redemption under the same circumstances and subject to
the same limitations as are set forth in Section 1108 hereof, but substituting
for the applicable Taxing Jurisdiction in each place the name of the country
under the laws of which such successor entity is organized, managed and
controlled or has a place of business and substituting the date of such
succession for the date of the relevant underwriting agreement for the
Securities of such series.

SECTION 802       Successor Corporation to be Substituted

                                       55

<PAGE>

                  Upon any consolidation by the Company or the Guarantor with or
merger by the Company or the Guarantor into any other corporation or any
conveyance, transfer, lease or other disposition of the properties and assets of
the Company or the Guarantor substantially as an entirety in accordance with
Section 801, the successor corporation formed by such consolidation or into
which the Company or the Guarantor is merited or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company or the Guarantor under this
Indenture with the same effect as if such successor corporation had been named
as the Company or the Guarantor herein, and thereafter the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities.

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

SECTION 901.      Supplemental Indentures without Consent of Holders

                  Without the consent of any Holders, the Company, the Guarantor
and the Trustee, at any time and form time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:

                  (1) to evidence the succession of another company to the
         Company or the Guarantor and the assumption by any such successor of
         the covenants of the Company or the Guarantor herein and in the
         Securities or any Guarantee;

                  (2) to add to the covenants of the Company or the Guarantor
         for the benefit of the Holders of all or any series of Securities (and
         if such covenants are to be for the benefit of less than all series of
         Securities, stating that such covenants are expressly being included
         solely for the benefit of such series) or to surrender any right or
         power herein conferred upon the Company or the Guarantor;

                  (3) to add any additional Events of Default (and if such
         Events of Default are to be for the benefit of less than all series of
         Securities, stating that such Events of Default are expressly being
         included solely for the benefit of such series);

                  (4) to add to or change any of the provisions of this
         Indenture to such extent as shall be necessary to permit or facilitate
         the issuance of Bearer Securities, registrable or not registrable as to
         principal, and with or without interest coupons, or to facilitate the
         issuance of Securities in uncertificated form, or to permit or
         facilitate the issuance of extendible Securities;

                  (5) to change or eliminate any of the provisions of this
         Indenture; provided that an such change or elimination shall become
         effective only as to the Securities of any series created by such
         supplemental indenture and Securities of any series subsequently
         created to which such change or elimination is made applicable by the
         subsequent supplemental indenture creating such series;

                                       56

<PAGE>

                  (6) to secure the Securities;

                  (7) to establish the form and terms of the Securities of any
         series as permitted by Sections 201 and 301;

                  (8) to evidence and provide for the acceptance of appointment
         hereunder by a successor Trustee which respect to the Securities of one
         or more series and to add to or change any of the provisions of this
         Indenture as shall be necessary to provide for or facilitate the
         administration of the trusts hereunder by more than one Trustee,
         pursuant to the requirements of Section 611(b);

                  (9) to provide for any rights of the Holders of Securities of
         any series to require the repurchase of Securities of such series by
         the Company; or

                  (10) to cure any ambiguity, to correct or supplement any
         provision herein which may be inconsistent with any other provision
         herein, to evidence the merger of the Company or the replacement of the
         Trustee, or to make any other provisions with respect to matters or
         questions arising under this Indenture; provided such action shall not
         materially and adversely affect the interests of the Holders of
         Securities of any series.

SECTION 902.      Supplemental Indentures with Consent of Holders

                  With the consent of the Holders of a majority in aggregate
principal amount of the outstanding Securities of all series affected by such
supplemental indenture (voting as one class), by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by or pursuant to a
Board Resolution, the Guarantor and the Trustee may enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this indenture or
of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,

                  (1) change the Stated Maturity of the principal of, or any
         installment of principal of or interest, if any, on, any Security, or
         reduce the principal amount thereof or the rate of interest thereon
         (including Additional Amounts) or any premium payable upon the
         redemption thereof, or reduce the amount of the principal of an
         Original Issue Discount Security that would be due and payable upon a
         declaration of acceleration of the maturity thereof pursuant to Section
         502, or change any Place of Payment where, or the coin or currency in
         which, any Security or any premium or the interest thereon is payable,
         or impair the right to institute suit for the enforcement of any such
         payment on or after the Stated Maturity thereof (or, in the case of
         redemption, on or after the Redemption Date), or

                  (2) reduce the percentage in principal amount of the
         outstanding Securities of any series, the consent of whose Holders is

                                       57
<PAGE>

         required for any such supplemental indenture, or the consent of whose
         Holders is required for any waiver of compliance with certain
         provisions of this Indenture or certain defaults hereunder and their
         consequences provided for in this Indenture, or

                  (3) modify any of the provisions of this Section 902 or
         Section 513, except to increase any such percentage or to provide that
         certain other provisions of this Indenture cannot be modified or waived
         without the consent of the Holder of each Outstanding Security affected
         thereby; provided, however, that this clause shall not be deemed to
         require the consent of any Holder with respect to changes in the
         references to "the Trustee" and concomitant changes in this Section
         902, or the deletion of this proviso, in accordance with the
         requirements of Sections 611(b) and 901(8).

A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

                  It shall not be necessary for any Act of Holders under this
Section 902 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.

SECTION 903.      Execution of Supplemental Indentures

                  In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
Indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.

SECTION 904.      Effect of Supplemental Indentures

                  Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.

SECTION 905.      Conformity with Trust Indenture Act

                  Every supplemental indenture executed pursuant to this Article
shall, if so required by the Trust Indenture Act, conform to the requirements of
the Trust Indenture Act as then in effect.

SECTION 906.      Reference in Securities to Supplemental Indentures

                                       58

<PAGE>

                  Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

                                   ARTICLE TEN

                                    COVENANTS

SECTION 1001.     Payment of Principal, Premium, if any, and Interest

                  The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of,
premium, if any, and interest and Additional Amounts, if any, on the Securities
of that series in accordance with the terms of the Securities and this
Indenture. An installment of principal of or interest on the Securities of a
series shall be considered paid on the date it is due if the Trustee or Paying
Agent holds at 11:00 a.m. New York City time on that date money deposited by the
Company in immediately available funds and designated for, and sufficient to
pay, the installment in full.

                  Neither the Company, the Guarantor, nor any agent of the
Company or the Guarantor will have any responsibility or liability for any
aspect relating to payments made or to be made by the Book-Entry Depositary to
DTC in respect of the Securities of a series or the Book-Entry Interests. None
of the Company, the Trustee, the Book-Entry Depositary or any agent of any of
the foregoing will have any responsibility or liability for any aspect relating
to payments made or to be made by DTC on account of a Participant's or Indirect
Participant's ownership or an interest in the Book-Entry Interest or for
maintaining, supervising or reviewing any records relating to a Participant's
interests in the Book-Entry Interests.

SECTION 1002.  Maintenance of Office or Agency

                  The Company will maintain (i) in the Borough of Manhattan, The
City of New York, an office or agency where Securities of any series may be
presented or surrendered for payment, and where notices and demands to or upon
the Company in respect of the Securities of such series and this Indenture may
be served and if definitive Registered Securities have been issued, an office or
agency of a Transfer Agent where Securities may be surrendered for registration
of transfer or exchange, and (ii) an office or agency of a Paying Agent where
the Securities may be paid in Luxenbourg so long as the Securities are listed on
the Luxembourg Stock Exchange and the rules of such exchange so require. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, except that Bearer Securities of that series pursuant to Section 1001

                                       59

<PAGE>

may be presented at the place specified for the purpose pursuant to Section 301,
and the Company hereby appoints the Paying Agent as its agent to receive all
such presentations, surrenders, notices and demands.

                  The Company may also from time to time designate one or more
other offices or agencies (in or outside of such Place of Payment) where the
Securities of one or more series and any appurtenant coupons (subject to Section
1001) may be presented or surrendered for any or all of such purposes, and may
from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in each Place of Payment for any
series of Securities for such purposes. The Company will give prompt written
notice to the Trustee of any such designation and any change in the location of
any such other office or agency. The Company will at all times maintain at least
one Paying Agent which is located outside the United Kingdom for each series of
Securities.

SECTION 1003.     Money for Securities Payments to Be Held in Trust

                  If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on or before each due date of
the principal of, premium, if any, or interest, if any, on any of the Securities
of that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal, premium, if any or
interest, if any, so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.

                  Whenever the Company shall have one or more Paying Agents for
any series of Securities, it will, no later than 11:00 A.M., New York City time,
on or prior to each due date of the principal of, premium, if any, or interest,
if any, on any securities of that series, deposit with a Paying Agent a sum in
immediately available funds sufficient to pay the principal, premium, if any, or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest.

                  The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the Provisions of this Section 1003, that such Paying Agent will:

                  (1) hold all sums held by it for the payment of the principal
         of, premium, if any, or interest, if any, on Securities of that series
         in trust for the benefit of the Persons entitled thereto until such
         sums shall be paid to such Persons or otherwise disposed of as herein
         provided;

                  (2) give the Trustee notice of any default by the Company (or
         any other obligor upon the Securities of that series) in the making of
         any payment of principal of, premium, if any, or interest, if any, on
         the Securities of that series; and

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<PAGE>

                  (3) at any time during the continuance of any such default,
         upon the written request of the Trustee, forthwith pay to the Trustee
         all sums so held in trust by such Paying Agent.

                  The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by the Company or by any Paying Agent
to the Trustee, the Company or such Paying Agent, as the case may be, shall be
released from all further liability with respect to such money.

                  Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest, if any, on any Security of any series and remaining
unclaimed for two years after such principal, premium, if any, or interest has
become due and payable shall be paid to the Company on Company Request, or (if
then held by the Company) shall be discharged from such trust; and the Holder of
such Security shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease.

SECTION 1004.     Limitation on Liens

                  If this covenant shall be made applicable to the Securities of
a particular series as contemplated by Section 301 hereof, the Company and the
Guarantor shall not, and shall not cause or permit any Significant Subsidiary
to, issue, assume or guarantee any notes, bonds, debentures or other similar
evidences of indebtedness, in each case for money borrowed ("Debt"), secured by
a Lien upon any property or assets (other than cash) of the Company, the
Guarantor or such Significant Subsidiary, as applicable, without effectively
providing that the outstanding Securities (together with, if the Guarantor so
determines, any other indebtedness or obligation then existing or thereafter
created ranking equally with such Securities) shall be secured equally and
ratably with (or prior to) such Debt so long as such Debt shall be so secured.
The foregoing restriction on Liens will not, however, apply to:

                  (a) Liens in existence on the date of original issue of such
Securities;

                  (b) (i) any Lien created or arising over any property which is
acquired, constructed or created by the Company, the Guarantor or any of its
Significant Subsidiaries, but only if (A) such Lien secures only principal
amounts (not exceeding the cost of such acquisition, construction or creation)
raised for the purposes of such acquisition, construction or creation, together
with any costs, expenses, interest and fees incurred in relation thereto or a
guarantee given in respect thereof, (B) such Lien is created or arises on or
before 90 days after the completion of such acquisition, construction or
creation and (C) such Lien is confined solely to the property so acquired,
constructed or created; or (ii) any Lien to secure Debt of the Company, the
Guarantor or a Significant Subsidiary incurred in connection with a specifically
identifiable project where the Lien relates to and is confined to a property or
properties (including, without limitation, shares or other rights of ownership

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in the entries which own such property or project) involved in such project and
acquired by the Company, the Guarantor or a Significant Subsidiary after the
date of original issue of the Securities of any series and the recourse of the
creditors in respect of such Debt is limited to any or all of such project and
property (including as aforesaid);

                  (c) any Lien securing amounts not more than 90 days overdue or
otherwise being contested in good faith;

                  (d) (i) rights of financial institutions to offset credit
balances in connection with the operation of cash management programs
established for the benefit of the Company, the Guarantor or a Significant
Subsidiary or in connection with the issuance of letters of credit for the
benefit of the Company, the Guarantor or a Significant Subsidiary; (ii) any Lien
securing Debt of the Company, the Guarantor or a Significant Subsidiary incurred
in connection with the financing of accounts receivable; (iii) any Lien incurred
or deposits made in the ordinary course of business, including, but not limited
to, (A) any mechanics', materialmens', carriers', workmens', vendors' or other
like Liens and (B) any Liens securing amounts in connection with workers'
compensation, unemployment insurance and other types of social security; (iv)
any Lien upon specific items of inventory or other goods and proceeds of the
Company, the Guarantor or a Significant Subsidiary securing obligations of the
Company, the Guarantor or a Significant Subsidiary in respect of bankers'
acceptances issued or created for the account of such person to facilitate the
purchase, shipment or storage of such inventory or other goods; (v) any Lien
incurred or deposits made securing the performance of tenders, bids, leases,
trade contracts (other than for borrowed money), statutory obligations, surety
bonds, appeal bonds, government contracts, performance bonds, return-of-money
bonds and other obligations of like nature incurred in the ordinary course of
business; (vi) any Lien created by the Company, the Guarantor or a Significant
Subsidiary under or in connection with or arising out of any pooling and
settlement agreements or pooling and settlement arrangements of the United
Kingdom electricity industry including, without limitation, the Pooling and
Settlement Agreement dated March 30, 1990, as amended, modified or supplemented
from time to time, or any transactions or arrangements entered into in
connection with hedging or management of risks relating to the electricity
industry in the United Kingdom; (vii) any Lien constituted by a right of set off
or right over a margin call account or any form of cash or cash collateral or
any similar arrangement for obligations incurred in respect of the hedging or
management or risks under transactions involving any currency or interest rate
swap, cap or collar arrangements, forward exchange transaction, option, warrant,
forward rate agreement, futures contract or other derivative instrument of any
kind; (viii) any Lien arising out of title retention or like provisions in
connection with the purchase of goods and equipment in the ordinary course of
business; and (ix) any Lien securing reimbursement obligations under letters of
credit, guaranties and other forms of credit enhancement given in connection
with the purchase of goods and equipment in the ordinary course of business;

                  (e) Liens in favor of the Company, the Guarantor or a
Significant Subsidiary;

                  (f) (i) Liens on any property or assets acquired from a
corporation which is merged with or into the Company, the Guarantor or a
Significant Subsidiary, or any Liens on the property or assets of any

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corporation or other entity existing at the time such corporation or other
entity becomes a Subsidiary of the Guarantor and, in either such case, is not
created in anticipation of any such transaction (unless such Lien is created to
secure or provide for the payment of any part of the purchase price of such
corporation); (ii) any Lien on any property or assets existing at the time of
acquisition thereof and which is not created in anticipation of such acquisition
(unless such Lien was created to secure or provide for the payment of any part
of the purchase price of such property or assets); and (iii) any Lien created or
outstanding on or over any asset of any Person which becomes a Significant
Subsidiary on or after the date of the issuance of such Securities when such
Lien is created prior to the date on which such Person becomes a Significant
Subsidiary.

                  (g) (i) Liens required by any contract or statute in order to
permit the Company, the Guarantor or a Significant Subsidiary to perform any
contract or subcontract made by it with or at the request of a governmental
entity or any department, agency or instrumentality thereof, or to secure
partial, progress, advance or any other payments by the Company, the Guarantor
or a Significant Subsidiary to such governmental unit pursuant to the provisions
of any contract or statue; (ii) any Lien securing industrial revenue,
development or similar bonds issued by or for the benefit of the Company, the
Guarantor or a Significant Subsidiary, provided that such industrial revenue,
development or similar bonds are nonrecourse to the Company, the Guarantor or
such Significant Subsidiary; and (iii) any Lien securing taxes or assessments or
other applicable governmental charges or levies;

                  (h) (i) any Lien which arises pursuant to any order of
attachment, distraint or similar legal process arising in connection with court
proceedings and any Lien which secures the reimbursement obligation for any bond
obtained in connection with an appeal taken in any court proceeding, so long as
the execution or other enforcement of such Lien arising pursuant to such legal
process is effectively stayed and the claims secured thereby are being contested
in good faith and, if appropriate, by appropriate legal proceedings, or any Lien
in favor of a plaintiff or defendant in any action before a court or tribunal as
security for costs and/or other expenses; or (ii) any Lien arising by operation
of law or by order of a court or tribunal or any Lien arising by an agreement of
similar effect, including, without limitation, judgment liens; or

                  (i) any extension, renewal or replacement (or successive
extensions, renewals or replacements), as a whole or in part, of any Liens
referred to in the foregoing clauses, for amounts not exceeding the principal
amount of the Debt secured by the Lien so extended, renewed or replaced,
provided that such extension, renewal or replacement Lien is limited to all or a
part of the same property or assets that were covered by the Lien extended,
renewed or replaced (plus improvements on such property or assets).

                  Notwithstanding the foregoing, the Company, the Guarantor or a
Significant Subsidiary may create or permit to subsist Liens over any property
or assets, so long as the aggregate amount of Debt secured by all such Liens
(excluding therefrom the amount of Debt secured by Liens set forth in clauses
(a) through (i), inclusive, above) does not exceed 10% of Consolidated Net
Tangible Assets.

                  Nothing contained in this Indenture in any way restricts or
prevents the Company or any Subsidiary from incurring any Debt.

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SECTION 1005.     Limitation on Sale and Lease-Back Transactions

                  If this covenant shall be made applicable to the Securities of
a particular series as contemplated by Section 301 hereof, each of the Company
and the Guarantor covenants and agrees that so long as any Securities of such
series remains outstanding, each will not, and the Guarantor will not permit any
Significant Subsidiary to, enter into any arrangement with any person (other
than the Company, the Guarantor or a Significant Subsidiary), providing for the
leasing to the Company, the Guarantor or a Significant Subsidiary of any assets
which have been or are to be sold or transferred by the Company, the Guarantor
or such Significant Subsidiary to such person (a "Sale and Lease-Back
Transaction") unless; (i) such transaction involves a lease for a temporary
period not to exceed three years; (ii) such transaction is between the Company,
the Guarantor or a Significant Subsidiary and an affiliate of the Guarantor;
(iii) the Company or the Guarantor would be entitled to incur debt secured by a
Lien on the assets or property involved in such transaction at least equal in
amount to the Attributable Debt with respect to such Sale and Lease-Back
Transaction, without equally and ratably securing the Securities, pursuant to
the limitation on Liens described above other than pursuant to the penultimate
paragraph thereof; (iv) such transaction is entered into within 90 days after
the initial acquisition by the Company or the Guarantor of the assets or
property subject to such transaction; (v) after giving effect thereto, the
aggregate amount of all Attributable Debt with respect to all such Sale and
Lease-Back Transactions does not exceed 10% of Consolidated Net Tangible Assets;
or (vi) the Company, the Guarantor or a Significant Subsidiary within the twelve
months preceding the sale or transfer or the twelve months following the sale or
transfer, regardless of whether such sale or transfer may have been made by the
Company, the Guarantor or such Significant Subsidiary, applies in the case of a
sale or transfer for cash, an amount equal to the net proceeds thereof and, in
the case of a sale or transfer otherwise than for cash, an amount equal to the
fair value of the assets so leased at the time of entering into such arrangement
(as determined by the Board of Directors of the Company, the Guarantor or such
Significant Subsidiary), (a) to the retirement of debt, incurred or assumed by
the Company, the Guarantor or a Significant Subsidiary, which by its terms
matures at, or is extendible or renewable at the option of the obligor to, a
date more than twelve months after the date of incurring, assuming or
guaranteeing such debt or (b) to investment in any assets of the Company, the
Guarantor or any Significant Subsidiary.

SECTION 1006.     Statement by Officers as to Default

                  The Guarantor will deliver to the Trustee within 120 days
after the end of each fiscal year of the Guarantor a certificate from the
principal executive, financial or accounting officer of the Guarantor, stating
that in the course of the performance by such signer of his duties as an officer
of the Guarantor he would normally have knowledge of any default by the Company
or the Guarantor in the performance and observance of any of the covenants
contained in Sections 1001 to 1008, stating whether or not he has knowledge of
any such default without regard to any period of grace or requirement of notice
and, if so, specifying each such default of which such signer has knowledge and
the nature thereof.

SECTION 1007.     Waiver of Certain Covenants

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                  The Company or the Guarantor may omit in any particular
instance to comply with any term, provision or condition set forth in this
Indenture with respect to the Securities of any series if before the time for
such compliance the Holders of at least a majority in aggregate principal amount
of the Outstanding Securities of such series shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such term, provision or condition, provided that no such waiver shall without
the consent of each Holder (a) change the Stated Maturity upon which the
principal of or the interest on the Securities is due and payable, (b) reduce
the principal amount thereof or the rate of interest thereon, (c) change any
obligation of the Company to pay Additional Amounts, (d) change any Place of
Payment or the currency in which, the Securities or any premium or the interest
thereon is payable, (e) impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date) or (f) reduce the percentage in
principal amount of the outstanding Securities of any series, the consent of
whose Holders is required for any waiver of compliance with certain provisions
of the Indenture of certain defaults hereunder and their consequences provided
for in the Indenture. The Securities owned by the Company, the Guarantor or any
of its Affiliates shall be deemed not to be outstanding for, among other
purposes, consenting to any such waiver.

SECTION 1008.     Further Assurances

                  The Company, the Guarantor and the Trustee shall execute and
deliver all such other documents, instruments and agreements and do all such
other acts and things as may be reasonably required to enable the Trustee to
exercise and enforce its rights under this Indenture and under the documents,
instruments and agreements required under this Indenture and to carry out the
intent of this Indenture.

SECTION 1009.     Payment of Additional Amounts

                  Unless the Securities of a particular series otherwise
provide, all payments of principal and interest (including payments of discount
and premium, if any) with respect to the Securities of a particular series shall
be made free and clear of, and without withholding or deduction for or on
account of, any present or future taxes, duties, assessments or governmental
charges of whatever nature imposed, levied, collected, withheld or assessed by
or within a Taxing Jurisdiction or by or within any political subdivision
thereof or any authority therein or thereof having power to tax ("Gross-Up
Taxes"), unless such withholding or deduction is required by law. In the event
of any such withholding or deductions, the Company or the Guarantor, as the case
may be, shall pay to the Holder of such securities such additional amounts
("Additional Amounts") as will result in the payment to such Holder of the
amount that would otherwise have been due to such Holder in the absence of such
withholding or deduction, except that no such Additional Amounts shall be
payable:

                  (a) to, or to a person on behalf of, a Holder who is liable
for such Gross-Up Taxes with respect to the Securities or any Guarantee, by
reason of such Holder having some connection with the relevant Taxing
Jurisdiction (including being a citizen or resident or national of, or carrying
on a business or maintaining a permanent establishment in, or being physically
present in, such Taxing Jurisdiction) other than the mere holding of a Security

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or the receipt of principal and interest (including payments of discount and
premium, if any) in respect thereof or in respect of the Guarantee; or

                  (b) to, or to a Person on behalf of, a Holder who presents a
Security (where presentation is required) for payment more than 30 days after
the Relevant Date except to the extent that such Holder would have been entitled
to such Additional Amounts on presenting such Security for payment on the last
day of such period of 30 days;

                  (c) to, or to a Person on behalf of, a Holder who presents a
Security (where presentation is required) in a Taxing Jurisdiction;

                  (d) to, or to a Person on behalf of, a Holder who would not be
liable or subject to the withholding or deduction by making a declaration of
non-residence or similar claim for exemption to the relevant tax authority; or

                  (e) to, or to a Person on behalf of, a Holder of a Registered
Security that is not a Global Security issued pursuant to the request of owners
representing a majority in Outstanding principal amount of such Securities
following and during the continuance of an Event of Default if such Holder (or
any predecessor Holder) was one of such owners requesting that such Registered
Securities be so issued.

                  Such Additional Amounts will also not be payable where, had
the beneficial owner of the Security (or any interest therein) been the Holder
of the Security, he would not have been entitled to payment of Additional
Amounts by reason of any one or more of clauses (a) through (e) above. If the
Company or the Guarantor, as applicable, shall determine that Additional Amounts
will not be payable because of the immediately preceding sentence, the Company
or the Guarantor, as applicable, will inform such Holder promptly after making
such determination setting forth the reason(s) therefor.

                  Reference to principal, interest, discount or premium in
respect of the Securities (or any payments pursuant to any Guarantee) shall be
deemed also to refer to any Additional Amounts which may be payable as set forth
in this Indenture or in the Securities.

                  At least 10 Business Days prior to the first Interest Payment
Date (and at least 10 Business Days prior to each succeeding Interest Payment
Date if there has been any change with respect to the matters set forth in the
below-mentioned Officers' Certificate) the Company will furnish to the Trustee
and any Paying Agent an Officers' Certificate instructing the Trustee and any
Paying Agent whether payments of principal of or interest on the Securities due
on such Interest Payment Date shall be without deduction or withholding for or
on account of any Gross-Up Taxes. If any such deduction or withholding shall be
required, prior to such Interest Payment Date the Company will furnish the
Trustee and any Paying Agent with an Officers' Certificate which specifies the
amount, if any, required to be withheld on such payment to Holders and certifies
that the Company shall pay such withholding or deduction. The Company covenants
to indemnify the Trustee for, and to hold the Trustee harmless against, any
loss, liability or expense reasonably incurred without negligence, willful
misconduct or bad faith on their part, arising out of or in connection with
actions taken or omitted by the Trustee in reliance on any Officers' Certificate

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furnished pursuant to this paragraph. Any Officers' Certificate required by this
Section 1009 to be provided to the Trustee and any Paying Agent shall be deemed
to be duly provided if telecopied to the Trustee and such Paying Agent.

                  The Company shall furnish to the Trustee the official receipts
(or a certified copy of the official receipts) evidencing payment of Gross-Up
Taxes. Copies of such receipts shall be made available to the Holders of the
Securities upon request.

SECTION 1010.     Copies Available to Holders

                  Copies of this Indenture shall be available for inspection by
the Holders on a Business Day during normal business hours at the principal
office of the Company and at the Corporate Trust Office. In addition, if the
Securities of any series are listed on the London Stock Exchange, the Luxembourg
Stock Exchange or any other stock exchange located outside the United States and
such stock exchange shall so require, copies of this Indenture, the Deposit
Agreement, the Letter of Representations, the memorandum and articles of
association of the Company and the most recent publicly available annual report
of the Guarantor shall be made available for inspection by the Holders of such
Securities on a business Day during normal business hours at the offices of the
paying agents and at the office of the listing agent required to be maintained
by such exchange for so long as the Securities of such series are outstanding
and are listed on such stock exchange.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

SECTION 1101.     Applicability of Article

                  Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified in or contemplated by Section 301 for Securities of any
series) in accordance with this Article Eleven.

SECTION 1102.     Election to Redeem;  Notice to Trustee

                  The election of the Company to redeem any Securities shall be
authorized by a Board of Directors resolution and evidenced by an Officers'
Certificate. In case of any redemption at the election of the Company of less
than all the Securities of any series, the Company shall, at least 45 days prior
to the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities of such series to be redeemed. In the case of
any redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, or pursuant to an election by the Company which is subject to a
condition specified in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction or conditions.

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SECTION 1103.     Selection by Trustee of Securities to Be Redeemed

                  If less than all the Securities of any series are to be
redeemed, the particular securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions equal to the minimum authorized
denomination for Securities of that series (or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series.

                  Securities shall be excluded from eligibility for selection
for redemption if they are identified by certificate number in a written
statement signed by an authorized officer of the Company and delivered to the
Security Registrar at least 30 days prior to the Redemption Date as being owned
of record and beneficially by, and not pledged or hypothecated by either (a) the
Company or (b) an entity specifically identified in such written statement which
is an Affiliate of the Company.

                  The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount there of to be redeemed.

                  For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.

SECTION 1104.     Notice of Redemption

                  Notice of redemption shall be given not less than 30 days nor
more than 60 days prior to the Redemption date to each Holder of Securities to
be redeemed.

                  All notices of redemption shall state:

                  (1) the Redemption Date,

                  (2) the Redemption Price,

                  (3) if less than all the Outstanding Securities of any series
         are to be redeemed, the identification (and, in the case of partial
         redemption, the principal amounts) of the particular Securities to be
         redeemed,

                  (4) that on the Redemption Date the Redemption Price will
         become due and payable upon each such Security to be redeemed and, if
         applicable, that interest thereon will case to accrue on and after said
         date,

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                  (5) the place or places where such Securities are to be
         surrendered for payment of the Redemption Price, and

                  (6) that the redemption is for a sinking fund, if such is the
         case.

                  Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.

SECTION 1105.     Deposit of Redemption Price

                  On or prior to any Redemption Date, the Company shall deposit
with the Trustee or with a Principal Paying Agent (or, if the Company is acting
as its own Paying Agent, segregate and hold in trust as provided in Section
1003) an amount of money sufficient to pay the Redemption Price of, and (except
if the Redemption Date shall be an Interest Payment Date) accrued interest on,
all the Securities which are to be redeemed on that date (to the extent that
such amounts are not already on deposit at such time in accordance with the
provisions of Sections 401, 403 or 1007).

SECTION 1006.     Securities Payable on Redemption Date

                  Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued and unpaid interest) such Securities shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with said notice,
such Security shall be paid by the Company at the Redemption Price, together
with accrued and unpaid interest to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, and in the case of Registered Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 307.

                  If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date as the rate prescribed
therefor in the Security.

SECTION 1107.     Securities Redeemed in Part

                  Any Security (including any Global Security) which is to be
redeemed only in part shall be surrendered at a Place of Payment therefor (with,
if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing), and
the Company shall execute, and the Trustee upon written direction shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities of the same series, of any authorized denomination
as requested by such Holder, in aggregate principal amount equal to and in

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exchange for the unredeemed portion of the principal of the security so
surrendered; provided, that if a Global Security is so surrendered, the new
Global Security shall be in a denomination equal to the unredeemed portion of
the principal of the Global Security so surrendered.

SECTION 1108.     Optional Redemption in the event of Change in Taxing
Jurisdiction Tax Treatment

                  The Securities of any series may be redeemed at the election
of the Company, as a whole, but not in part, by the giving of notice as provided
in Section 1104, at a price equal to the outstanding principal amount thereof,
together with Additional Amounts, if any, and accrued interest, if any, to the
Redemption Date, if (a) the Company or the Guarantor satisfies the Trustee that
it has or will become obligated to pay Additional Amounts on the Securities of
such series, as a result of either (x) any change in, or amendment to, the laws
or regulations of a Taxing Jurisdiction, or any change in the application or
interpretations of such laws or regulations, which change or amendment becomes
effective on or after the date of the relevant underwriting agreement for the
Securities of such series, or (y) (i) the issuance of definitive Registered
Securities as the result of DTC having notified the Company and the Book-Entry
Depositary that it is unable or unwilling to continue to hold the Book-Entry
Interests or at any time ceases to be a "clearing agency" registered as such
under the Exchange Act, and, in either case, a successor is not appointed by the
Company within 120 days, (ii) the book-Entry Depositary with respect to the
Global Securities of such series and a successor Book-Entry Depositary is not
appointed within 120 days or (iii) there has occurred and is continuing an Event
of Default with respect to the Securities of such series and the Holder, in such
circumstances, has requested in writing a definitive Registered Security, and
(b) such obligation cannot be avoided by the Company or the Guarantor taking
reasonable measures available to it; provided, however, that no such notice of
redemption shall be given earlier than 90 days prior to the earliest date on
which the Company or the Guarantor would be obligated to pay such Additional
Amounts were a payment in respect of the Securities then due. Prior to the
publication of any notice of redemption of such Securities pursuant to this
Indenture, the Company or the Guarantor will deliver to the Trustee an Officers'
Certificate stating that the obligation to pay such Additional Amounts cannot be
avoided by the Company or the Guarantor taking reasonable measures available to
it, and the Trustee shall accept such certificate as sufficient evidence of the
condition precedent set forth in clause (b) above, and such certificate shall be
conclusive and binding on the Holders of the Securities of such series.

                                 ARTICLE TWELVE

                                  SINKING FUNDS

SECTION 1201.     Applicability of Article

                  The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 301 for Securities of such series.

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                  The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Securities of
any series, the cash amount of any sinking fund payment may be subject to
redemption as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.

SECTION 1202.     Satisfaction of Sinking Fund Payments with Securities

                  In lieu of making all or any part of any mandatory sinking
fund payment with respect to any series of Securities in cash, the Company may
at its option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Company or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise acquired
(except as aforesaid) by the Company and delivered to the Trustee for
cancellation pursuant to Section 310, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section 1202,
or (c) receive credit for Securities of such series (not previously so credited)
redeemed by the Company through any optional redemption provision contained in
the terms of such series. Securities so delivered or credited shall be received
or credited by the Trustee at the sinking fund Redemption Price specified in
such Securities. SECTION 1203. Redemption of Securities for Sinking Fund

                  Not less than 30 days prior to each sinking fund payment date
for any series of Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying (a) the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, (b) whether or not
the Company intends to exercise its right, if any, to make an optional sinking
fund payment with respect to such series on the next ensuing sinking fund
payment date and, if so, the amount of such optional sinking fund payment, and
(c) the portion thereof, if any, which is to be satisfied by payment of cash and
the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities of that series pursuant to Section 1202, and will also
deliver to the Trustee any Securities to be so delivered. Such written statement
shall be irrevocable and upon its receipt by the Trustee the Company shall
become unconditionally obligated to make all the cash payments or payments
therein referred to, if any, on or before the next succeeding sinking fund
payment date. Failure of the Company, on or before any such 30th day, to deliver
such written statement and Securities specified in this paragraph, if any, shall
not constitute a default but shall constitute, on and as of such date, the
irrevocable election of the Company (i) that the mandatory sinking fund payment
for such series due on the next succeeding sinking fund payment date shall be
paid entirely in cash without the option to deliver or credit Securities of such
series in respect therefore and (ii) that the Company will make no optional
sinking fund payment with respect to such series as provided in this Section
1203.

                  Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 1104. Such notice having been duly

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<PAGE>

given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1105, 1106, and 1107.

                  The Trustee shall not redeem or cause to be redeemed any
Security of a series with sinking fund moneys or mail any notice of redemption
of Securities of such series by operation of the sinking fund during the
continuance of a default in payment of interest with respect to Securities of
that series or an Event of Default with respect to the Securities of that series
except that, where the mailing of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Company a sum
sufficient for such redemption Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default,
shall occur, and any moneys thereafter paid into the sinking fund, shall during
the continuance of such default or Event of Default, be deemed to have been
collected under Article Five and held for the payment of all such Securities. In
case such Event of Default shall have been waived as provided in Section 513 or
the default or Event of Default cured on or before the 30th day preceding the
sinking fund payment date, such moneys shall thereafter be applied on the next
succeeding sinking fund payment date in accordance with this Section 1203 to the
redemption of such Securities.

                                ARTICLE THIRTEEN

                        MEETINGS OF HOLDERS OF SECURITIES

SECTION 1301.  Purposes of Meetings

                  A meeting of the Holders may be called at any time from time
to time pursuant to this Article Thirteen for any of the following purposes.

                  (1) to give any notice to the Company or to the Trustees, or
         to consent to the waiving of any default hereunder and its consequence,
         or to take any other action authorized to be taken by Holders pursuant
         to Article Nine hereof;

                  (2) to remove the Trustee and appoint a successor trustee
         pursuant to Article Six hereof;

                  (3) to consent to the execution of an indenture supplemental
         hereto pursuant to Section 902 hereof.

SECTION 1302.  Place of Meetings

         (a)      The Trustee may at any time (upon not less than 21 days'
         notice) call a meeting of Holders to be held at such time and at such
         place in the location determined by the Trustee pursuant to Section
         1302 hereof. Notice of every meeting of Holders, setting forth the time
         and the place of such meeting and in general terms the action proposed

                                       72
<PAGE>

         to be taken at such meeting, shall be mailed to each Holder and
         published in the manner contemplated by Section 106 hereof.

         (b)      In case at any time the Company, pursuant to a Board
         Resolution,  or the  Holders  of at least 25% in  aggregate  principal
         amount of the Securities  then  outstanding,  shall have requested the
         Trustee to call a meeting of the Holders,  by written  request setting
         forth in  reasonable  detail  the action  proposed  to be taken at the
         meeting,  and the Trustee  shall not have made the first giving of the
         notice of such meeting  within 20 days after  receipt of such request,
         then the  Company or the  Holders in the amount  above  specified  may
         determine  the time (not less than 21 days after  notice is given) and
         the place in the  location  determined  by the  Company or the Holders
         pursuant  to this  Section  1302 for such  meeting  and may call  such
         meeting to take any action authorized in Section 1301 hereof by giving
         notice thereof as provided in Section 1302(a) hereof.

SECTION 1303.  Voting at Meetings

                  To be entitled to vote at any meeting of Holders, a Person
shall be (i) a Holder or (ii) a Person appointed by an instrument in writing as
proxy for a Holder or Holders by such Holder or Holders. The only Persons who
shall be entitled to be present or to speak at any meeting of Holders shall be
the Persons so entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel, any representatives of the
Company and its counsel.

SECTION 1304.  Voting Rights, Conduct, and Adjournment

                  (a) Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders in regard to proof of the holding of Securities of a
series and of the appointment of proxies and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall deem appropriate. Except as
otherwise permitted or required by any such regulations, the holding of
Securities of a series shall be proved in the manner specified in Article Two
hereof and the appointment of any proxy shall be proved in such manner as it is
deemed appropriate by the Trustee or by having the signature of the person
executing the proxy witnessed or guaranteed by any bank, banker, or trust
company customarily authorized to certify to the holding of a security such as a
Global Note.

                  (b) At any meeting of Holders, the representative of Persons
holding or representing Securities of a series in an aggregate principal amount
sufficient under the appropriate provision of this Indenture to take action upon
the business for the transaction of which such meeting was called shall
constitute a quorum. Except as otherwise provided with respect to any required
aggregate principal amount of Securities of a series required for the taking of
any action pursuant to Article Nine hereof, in no event shall less than 75% of
the votes given by Persons holding or representing Securities of such series at
any meeting of Holders be sufficient to approve an action. Any meetings of
Holders duly called pursuant to Section 1303 hereof may be adjourned from time
to time by vote of the Holders (or proxies for the Holders) of a majority of the

                                       73
<PAGE>

Securities of a series represented at the meeting and entitled to vote, whether
or not a quorum shall be present; and the meeting may be held as so adjourned
without further notice. No action at a meeting of Holders shall be effective
unless approved by Persons holding or representing Securities of a series in the
aggregate principal amount required by the provision of this Indenture pursuant
to which such action is being taken.

         (c) At any meeting of Holders, each Holder or proxy shall be entitled
to one vote for each $1,000 principal amount of outstanding Securities of a
series held or represented.

SECTION 1305.  Revocation of Consent by Holders

                  At any time prior to (but not after) the evidencing the
Trustee of the taking of any action at a meeting of Holders by the Holders of
the percentage in aggregate principal amount of the Securities specified in this
Indenture in connection with such action, any Holder of a Security the serial
number of which is included in the Securities the Holders of which have
consented to such action may, by filing written notice with the Trustee at its
principal Corporate Trust Office and upon proof of holding as provided herein,
revoke such consent so far as concerns such Securities. Except as aforesaid any
such consent given by the Holders of any Securities shall be conclusive and
binding upon such Holder and upon all future Holders and owners of such
Securities and of any Securities issued in exchange therefore, in lieu thereof
or upon transfer thereof, irrespective of whether or not any notation in regard
thereto is made upon such Securities. Any action taken by the Holders of the
percentage in aggregate principal amount of the Holders specified in this
Indenture in connection with such action shall be conclusively binding upon the
Company, the Trustee and the Holders of all the Securities.

                                ARTICLE FOURTEEN

                             GUARANTEE OF SECURITIES

SECTION 1401.     Applicability of Article:  Unconditional Guarantee

                  If, pursuant to Section 301, provision is made for the
Guarantee of the Securities of any series by the Guarantor, then provisions of
this Article Fourteen, with such modifications thereto as may be specified
pursuant to Section 301 with respect to any Securities, shall apply to such
Securities. The Guarantor hereby fully and unconditionally guarantees to each
Holder of a Security of each series authenticated and delivered by the Trustee
the due and punctual payment of the principal of (including any amount due in
respect of original issue discount), premium, if any, and interest in respect of
each Security (and any Additional Amounts payable in respect thereof) and the
due and punctual payment of any sinking fund payments provided for pursuant to
terms of such Security, when and as the same shall become due and payable,
whether at the Stated Maturity, by declaration of acceleration, call for
redemption or otherwise, in accordance with the terms of such Security and of
this Indenture, regardless of any defense, right of set-off or counterclaim that
the Guarantor may have or assert, except the defense of payment. The Guarantor's
obligation to make a payment under this Article Fourteen may be satisfied by

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<PAGE>

direct payment of the required amounts by the Guarantor to the Holders or by
causing the Company to pay such amounts to the Holders.

                  To the extent permitted under applicable law, if any Holder or
the Trustee is required by a final non-appealable judgment of any court or
otherwise to return to either the Company or the Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or the Guarantor, any amount paid by either the Company or the Guarantor to such
Holder or the Trustee, any Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. To the extent permitted under
applicable law, the Guarantor further agrees that, as between the Guarantor, on
the one hand, and the Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article Five for the purpose of any Guarantee, notwithstanding any stay,
injunction, or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any acceleration of such
obligations as provided in Article Five, such obligations (whether or not due
and payable) shall forthwith become due and payable by the Guarantor for the
purpose of any Guarantee.

                  No past, present or future stockholder, officer, director,
employee, or incorporator of the Guarantor shall have any personal liability
under the Guarantee set forth in this Section 1401 by reason of his or its
status as such stockholder, officer, director, employee or incorporator.

                  The Guarantee set forth in this Section 1401 shall not be
valid or become obligatory for any purpose with respect to a Security until the
certificate of authentication on such Security shall have been authenticated by
or on behalf of the Trustee by manual signature.

SECTION 1402.     Waiver of Notice and Demand

                  The Guarantor hereby waives notice of acceptance of this
guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, the Trustee, or any other Person before proceeding against the
Guarantor, protest, notice of non-payment, notice of dishonor, notice of
redemption and all other notices and demands.

SECTION 1403.     Guarantor Obligations Not Affected

                  The obligations, covenants, agreements and duties of the
Guarantor under this Article Fourteen shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:

                  (a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Company of any express or implied
agreement, covenant, term or condition relating to the Securities to be
performed or observed by the Company;

                                       75

<PAGE>

                  (b) the extension of time for the payment by the Company of
all or any portion of the interest on the Securities, the Redemption Price of
any other sums payable under the terms of the Securities or the extension of
time for the performance of any other obligation under, arising out of, or in
connection with, the Securities.

                  (c) any failure, omission, delay, or lack of diligence on the
part of the Holders to enforce, assert, or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Securities, or
any action on the part of the Company granting indulgence or extension of any
kind;

                  (d) the voluntary or involuntary liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting the Company or any of the assets of the Company;

                  (e) any invalidity or, or defect or deficiency in, the
Securities;

                  (f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or

                  (g) any other circumstances whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor (other than
payment of the underlying obligation) it being the intent of this Article
Fourteen that the obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.

There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.

SECTION 1404.     Execution of Guarantee

                  To evidence its guarantee to the Holders specified in Section
1401, the Guarantor hereby agrees to execute the notation of the Guarantee in
substantially the form set forth in Section 204 to be endorsed on each Security
authenticated and delivered by the Trustee. The Guarantor hereby agrees that is
Guarantee set forth in Section 1401 shall remain in full force and effect
notwithstanding any failure to endorse on each Security a notation of such
Guarantee. Each such notation of the Guarantee shall be signed on behalf of the
Guarantor, by a director or officer, prior to the authentication of the Security
on which it is endorsed, and the delivery of such Security by the Trustee, after
the due authentication thereof by the Trustee hereunder, shall constitute due
delivery of the Guarantee on behalf of the Guarantor. Such signature upon the
notation of the Guarantee may be a manual or facsimile signature of any present,
past, or future such director or officer and may be imprinted or otherwise
reproduced below the notation of the Guarantee, and in case any such director or
officer who shall have signed the notation o the Guarantee shall cease to be
such director or officer before the Security on which such notation is endorsed
shall have been authenticated and delivered by the Trustee or disposed of by the
Company, such Security nevertheless may be authenticated and delivered or

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<PAGE>

disposed of as though the person who signed the notation of the Guarantee had
not ceased to be such director or officer of the Guarantor.

SECTION 1405.     Subrogation

                  The Guarantor shall be subrogated to all rights (if any) of
the Holders against the Company in respect to any amounts paid to the Holders by
the Guarantor under this Article Fourteen with respect to any series of
Securities; provided, however, that Guarantor shall not (except to the extent
required by mandatory  provisions of law) be entitled to enforce or exercise any
rights  which  it  may  require  by  way  of   subrogation   or  any  indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Article  Fourteen with respect to a series of Securities if, at any time of such
payment, any amounts are due and unpaid under such series of Securities.  If any
amount shall be paid to the  Guarantor in violation of the  preceding  sentence,
the  Guarantor  agrees to hold such  amount in trust for the  Holders and to pay
over such amount to the Holders.

SECTION 1406.     Independent Obligations

                  The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Company with respect to the Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to make
payments pursuant to the terms of the Securities notwithstanding the occurrence
of any event referred to in subsections (a) through (g), inclusive, of Section
1403 hereof.

                                 ARTICLE FIFTEEN

                                  MISCELLANEOUS

SECTION 1501.     Consent to Jurisdiction; Appointment of Agent to Accept
Service of Process

                  (a) Each of the Company and the Guarantor irrevocably consents
and agrees, for the benefit of the Holders from time to time of the Securities
and the Trustee, that any civil legal action, suit or proceeding against it with
respect to its obligations, liabilities or any other matter arising out of or in
connection with this Indenture, the Securities or any Guarantee may be brought
in the Supreme Court of New York, New York County or the United States District
Court for the Southern District of New York and any appellate court from either
thereof and, until amounts due and to become due in respect of the Securities or
any Guarantee have been paid, hereby irrevocably consents and submits to the
non-exclusive jurisdiction of each such court in personam, generally and
unconditionally with respect to any legal action, suit or proceeding for itself
and in respect of its properties, assets and revenues and agrees to file such
consents with such authorities as may be required to irrevocably evidence such
agreement.

                  (b) Each of the Company and the Guarantor has irrevocably
designated, appointed, and empowered CT Corporation System, acting through its
office at 1633 Broadway, New York, New York 10019, as its designee, appointee

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<PAGE>

and agent to receive, accept and acknowledge for and on its behalf, and its
properties, assets and revenues, service of any and all legal process, summons,
notices and documents which may be served in any legal action, suit or
proceeding brought against the Company or the Guarantor in any United States or
state court. If for any reason such designee, appointee and agent hereunder
shall cease to be available to act as such, each of the Company and the
Guarantor agrees to designate a new designee, appointee and agent in the Borough
of Manhattan, The City of New York on the terms and for the purposes of this
Section 1501 satisfactory to the Trustee. Each of the Company and the Guarantor
further hereby irrevocably consents and agrees to the service of any and all
legal process, summons, notices and documents in any legal action, suit or
proceeding against the Company or the Guarantor by service a copy thereof upon
the relevant agent for service of process referred to in this Section 1501
(whether or not the appointment of such agent shall for any reason prove to be
ineffective or such agent shall accept or acknowledge such service) or by
mailing copies thereof by registered or certified air mail, postage prepaid, to
each of the Company or the Guarantor at its address specified in or designated
pursuant to this Indenture. Each of the Company and the Guarantor agrees that
the failure of any such designee, appointee and agent to give any notice of such
service to it shall not impair or affect in any way the validity of such service
or any judgment rendered in any action or proceeding based thereon. Nothing
herein shall in any way be deemed to limit the ability of the holders of the
Securities and the Trustee, to serve any such legal process, summons, notices
and documents in any other manner permitted by applicable law or to obtain
jurisdiction over the Company or the Guarantor or bring legal actions, suits or
proceedings against the Company or the Guarantor in such other jurisdictions,
and in such manner, as may be permitted by applicable law. Each of the Company
and the Guarantor irrevocably and unconditionally waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any of the aforesaid actions, suits or proceedings arising out of or
in connection with this Indenture brought in the Supreme Court of New York, New
York, County or the United States District Court for the Southern District of
New York and any appellate court from either thereof and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceedings brought in any such court
has been brought in an inconvenient forum.

                  (c) To the extent that the Company or the Guarantor may in any
jurisdiction claim for itself or its assets immunity (to the extent such
immunity may now or hereafter exist, whether on the grounds of sovereign
immunity or otherwise) from suit, execution, attachment (whether in aid of
execution, before judgment or otherwise) or other legal process (whether through
service or notice or otherwise), and to the extent that in any such jurisdiction
there may be attributed to itself or its assets such immunity (whether or not
claimed), the Company or the Guarantor irrevocably agrees with respect to any
matter arising under the Indenture for the benefit of the Holders from time to
time of the Securities, not to claim, and irrevocably waives, such immunity to
the full extent permitted by the laws of such jurisdiction.

                  (d) If for the purpose of obtaining a judgment or order in any
court it is necessary to convert a sum due hereunder to the holder of any
Security from U.S. dollars into another currency, each of the Company or the
Guarantor has agreed, and each holder by holding such Security will be deemed to
have agreed, to the fullest extent that they may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures such Holder could purchase U.S. dollars with such other currency in

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<PAGE>

The City of New York on the Business Day preceding the day on which final
judgment is given.

                  (e) The obligation of the Company or the Guarantor in respect
of any sum payable by it to the holder of a Security shall, notwithstanding any
judgment or order in a currency (the "judgment currency") other than U.S.
dollars, to be discharged only to the extent that on the Business Day following
receipt by the Holder of such security of any sum, adjudged to be so due in the
judgment currency, the Holder of such Security may in accordance with normal
banking procedures purchase U.S. dollars with the judgment currency; if the
amount of the U.S. dollars so purchased is less than the sum originally due to
the holder of such Security in the judgment currency (determined in the manner
set forth in the preceding paragraph), each of the Company or the Guarantor
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Holder of such Security against such loss, and if the amount of
the U.S. dollars so purchased exceeds the sum originally due to the Holder of
such Security, such Holder agrees to remit to the Company or the Guarantor such
excess, provided that such Holder shall have no obligation to remit any such
excess as long as the Company or the Guarantor shall have failed to pay such
Holder any obligations due and payable under the Security, in which case such
excess may be applied to such obligations of the Company or the Guarantor under
such Security in accordance with the terms thereof. The foregoing indemnity
shall constitute a separate and independent obligation of the Company or the
Guarantor and shall continue in full force and effect notwithstanding any such
judgment or order as aforesaid.

SECTION 1502.     Counterparts

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

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<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers, directors or signatories duly
authorized thereto, all as of the day and year first above written.

                                   YORKSHIRE POWER FINANCE LIMITED

                                   By:
                                      -----------------------------------------
                                   Authorized Signatory

                                   YORKSHIRE POWER GROUP LIMITED

                                   By:
                                      -----------------------------------------
                                   Authorized Signatory

                                   THE BANK OF NEW YORK, as
                                   Trustee, Principal Paying Agent,
                                   Security Registrar and Transfer Agent

                                   By:
                                      -----------------------------------------
                                   Title:

                                   BANQUE GENERALE DU LUXEMBOURG S.A.,
                                   as Paying Agent and Transfer Agent

                                   By:
                                      -----------------------------------------
                                   Title:

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<PAGE>

                   YORKSHIRE POWER FINANCE LIMITED, as Issuer

                                       and

                   YORKSHIRE POWER GROUP LIMITED, as Guarantor

                                       and

                              THE BANK OF NEW YORK,

                       As Trustee, Principal Paying Agent,

                          Registrar and Transfer Agent

                                       and

                       BANQUE GENERALE DU LUXEMBOURG S.A.,

                       As Paying Agent and Transfer Agent

                      6.496% Series A Senior Notes due 2008

                      6.496% Series B Senior Notes due 2008

                          Second Supplemental Indenture

                          Dated as of February 25, 1998

                                       81
<PAGE>

                  SECOND SUPPLEMENTAL INDENTURE, dated as of February 25, 1998
(this "Second Supplemental Indenture"), among YORKSHIRE POWER FINANCE LIMITED, a
limited liability company organized under the laws of the Cayman Islands, an
issuer (the "Company"), YORKSHIRE POWER GROUP LIMITED, a private limited company
incorporated under the laws of England and Wales, as guarantor (the
"Guarantor"), THE BANK OF NEW YORK, as Trustee, Principal Paying Agent,
Registrar and Transfer Agent under the Original Indenture referred to below (the
"Trustee") and BANQUE GENERALE DU LUXEMBOURG S.A., as Paying and Transfer Agent
under the Original Indenture.

                                   WITNESSETH:

                  WHEREAS, each of the Company or the Guarantor has heretofore
executed and delivered to the Trustee an indenture dated as of February 1, 1998,
as supplemented (hereinafter called the "Original Indenture"), to provide for
the issuance from time to time of certain of its unsecured debentures, notes or
other evidences of indebtedness (herein called the "Securities"), the form and
terms of which are to be established as set forth in Sections 201 and 301 of the
Original Indenture;

                  WHEREAS, Section 901 of the Original Indenture provides, among
other things, that the Company or the Guarantor and the Trustee may enter into
indentures supplemental to the Original Indenture for, among other things, the
purpose of establishing the form and terms of the Securities of any series as
permitted by Sections 201 and 301 of the Original Indenture and of appointing an
Authenticating Agent with respect to the Securities of any series;

                  WHEREAS, the Company desires to create a series of the
Securities in an aggregate principal amount of $300,000,000 to be designated the
"6.496% Series A Senior Notes due 2008" and a series of Securities in an
aggregate principal amount of $300,000,000 to be designated the "6.496% Series B
Senior Notes due 2008", and all action on the part of the Company necessary to
authorize the issuance of these Securities under the Original Indenture and this
Second Supplemental Indenture has been duly taken; and

                  WHEREAS, all acts and things necessary to make such
Securities, when executed by the Company and authenticated and delivered by the
Trustee as in the Original Indenture provided, the valid and binding obligations
of the Company and to constitute these presents a valid and binding supplemental
indenture and agreement according to its terms, have been done and performed;

                  NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:

                  That in consideration of the premises and of the acceptance
and purchase of the 2008 Securities (hereinafter defined) by the holders thereof
and of the acceptance of this trust by the Trustee, each of the Company or the
Guarantor covenants and agrees with the Trustee, for the equal benefit of
holders of the 2008 Securities, as follows:

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<PAGE>

                                   ARTICLE ONE

                                   Definitions

                  The use of the terms and expressions herein is in accordance
with the definitions, uses and constructions contained in the Original Indenture
and the forms of Securities attached hereto as Exhibits A and B, respectively.
In addition, for all purposes of this Second Supplemental Indenture, except as
otherwise expressly provided or unless the context otherwise expressly requires,
the following terms shall have the respective meanings assigned to them as
follows and shall be construed as if defined in Article One of the Original
Indenture:

                  "Book-Entry Depositary" means The Bank of New York as
designated by the Company in the Deposit Agreement until a successor shall have
become such pursuant to the applicable provisions of the Deposit Agreement, and
thereafter "Book-Entry Depositary" shall mean such successor Book-Entry
Depositary or its nominee or the custodian of either.

                  "Definitive Registered 2008 Securities" means 2008 Securities
substantially in the form of Exhibit B to this Second Supplemental Indenture.

                  "Deposit Agreement" means the Deposit Agreement, dated as of
February 1, 1998, among the Company, the Book-Entry Depositary and the holder
and beneficial owners from time to time of interests in the Book-Entry Interests
issued thereunder.

                  "DTC" means The Depository Trust Company, New York, New York,
or its successors.

                  "Exchange Offer" means the offer that may be made pursuant to
the Registration Rights Agreement by the Company to exchange Series B Securities
and the Guarantee of the Series B Securities for the Series A Securities and the
Guarantee of the Series A Securities.

                  "Global 2008 Securities" means Global Bearer Securities,
evidencing the 2008 Securities, issued to the Book-Entry Depositary
substantially in the form of Exhibit A to this Second Supplemental Indenture.

                  "Registration Rights Agreement" means the registration Rights
Agreement, dated February 25, 1998 among the Company, the Guarantor and the
Initial Purchasers named therein as such agreement may be amended, modified or
supplemented from times to time.

                  "Regulation S" means Regulation S under the Securities Act, as
such Regulation may be amended from time to time, or under any similar rules or
regulations hereafter adopted by the Commission.

                  "Restricted Securities Legend" means a legend substantially in
the form of the legend contained in the form of Global 2008 Securities set forth
in Exhibit A hereto.

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<PAGE>

                  "Restricted Security" means 2008 Securities that bear or are
required to bear the Restricted Securities Legend.

                  "Rule 144A" means Rule 144A under the Securities Act, as such
Rule may be amended from time to time, or under any similar rules or regulation
hereafter adopted by the Commission.

                  "Series A Securities"  means the Company's 6.496% Series A
Senior Notes due 2008, as  authenticated  and issued under this Indenture.

                  "Series B Securities"  means the Company's 6.496% Series B
Senior Notes due 2008, as  authenticated  and issued under this Indenture.

                  "2008 Securities" means, collectively, the Series A Securities
and the Series B Securities.

                                   ARTICLE TWO

                    Terms and Issuance of the 2008 Securities

                  SECTION 201. Issue of Securities. A Series of Securities which
shall be designated the "6.496% Series A Senior Notes due 2008" and a series of
Securities shall be designated the "6.496% Series B Senior Notes due 2008" each
shall be executed, authenticated and delivered in accordance with the provisions
of, and shall in all respects be subject to, the terms, conditions and covenants
of the Original Indenture and this Second Supplemental Indenture (including the
forms of 2008 Securities set forth in Exhibits A and B hereto). The aggregate
principal amount of the 2008 Securities which may be authenticated and delivered
under the Second Supplemental Indenture shall not, except as permitted by the
provisions of the Original Indenture, exceed $300,000,000.

                  SECTION 202. Form of 2008 Securities; Incorporation of Terms.
The forms of the Global 2008 Securities and the Definitive Registered 2008
Securities shall be substantially in the forms of Exhibits A and B,
respectively, attached hereto, the terms of which are herein incorporated by
reference and which are part of this Second Supplemental Indenture. Series A
Securities offered and sold in their initial distribution in reliance on Rule
144A shall initially be issued in the form of one or more separate Global 2008
Securities (each, a "Rule 144A Global Security"). Series A Securities offered
and sold in their initial distribution in reliance on Regulation S shall
initially be issued in the form of one or more separate Global 2008 Securities
(each, a "Regulation S Global Security").

                  SECTION 203. Limitation on Liens. The covenant provided by
Section 1004 of the Original Indenture shall be applicable to the 2008
Securities.

                  SECTION 204. Limitation on Sale and Lease-Back Transactions.
The covenant provided by Section 1005 of the Original Indenture shall be
applicable to the 2008 Securities.

                                       84

<PAGE>

                  SECTION 205. Guarantee. The Guarantee provided by Article
Fourteen of the Original Indenture shall be applicable to the 2008 Securities.

                  SECTION 206. Place of Payment. The Place of Payment in respect
of the 2008 Securities will be in The City of New York, initially the Corporate
Trust Office of The Bank of New York, and, for so long as the 2008 Securities
are listed on the Luxembourg Stock Exchange, in Luxembourg, initially the
corporate trust office of Banque Generale du Luxemborg S.A., which at the date
hereof, is located at 50 Avenue J.F. Kennedy, L-2951 Luxembourg.

                  SECTION 207. Issuance of Global 2008 Securities. Each of the
Series A Securities and the Series B Securities shall be issued as one or more
Global 2008 Securities and delivered by the Trustee to the Book-Entry
Depositary, as the Holder thereof, of a nominee or custodian therefore, to be
held by the Book-Entry Depositary pursuant to the Deposit Agreement. Definitive
Registered 2008 Securities shall only be issued by the Company in exchange for
the Global 2008 Securities in the circumstances set forth in the Global 2008
Securities.

                  SECTION 208. Transfer Restrictions; Exchange Offer.

                  (a) Transfer Restrictions. Except as permitted by subsection
(b) of this Section 208 or as otherwise determined by the Company as set forth
below in this subsection (a), the 2008 Securities shall bear the Restricted
Securities Legend and may not be transferred except in compliance with the
Restricted Securities Legend unless otherwise determined by the Company in
accordance with applicable law. Unless with respect to the whole or any portion
of any Restricted Security the Company determines otherwise in accordance with
applicable law, the Restricted Securities Legend borne by such Restricted
Security shall be removed by the Company (i) in the case of any Rule 144A Global
Security or any Definitive Registered 2008 Security issued in exchange for an
interest therein, upon presentation to the Trustee of such Restricted Security
by the Holder thereof at any time on or after the occurrence of the "Resale
Restriction Termination Date" on such Legend and (ii) in the case of any
Regulation S Global Security or any Definitive Registered 2008 Security issued
in exchange for an interest therein, upon presentation to the Trustee of such
Restricted Security by the Holder thereof at any time on or after the expiration
of the "restricted period" (within the meaning of Regulation S) with respect to
any such Security shall have occurred.

                  If a holder of a beneficial interest in a Rule 144A Global
Security wishes at any time to transfer such interest to a Person who wishes to
take delivery thereof in the form of a beneficial interest in a Regulation S
Global Security, or if a holder of a beneficial interest in a Regulation S
Global Security wishes at any time to transfer such interest to a Person who
wishes to take delivery thereof in the form of a beneficial interest in a Rule
144A Global Security, upon receipt of the Trustee of (A) written instructions
given in accordance with the rules and procedures of DTC (together with, as
applicable, the rules and procedures of the Euroclear System and Cedel Bank, the
"Applicable Procedures") from the applicable Participant directing the
Book-Entry Depositary to cause to be credited to another account of a

                                       85
<PAGE>

Participant a beneficial interest in such Regulation S Global Security or Rule
144A Global Security (as the case may be) equal to that of the beneficial
interest in such Rule 144A Global Security or Regulation S Global Security (as
the case may be) to be so transferred, (B) a written order given in accordance
with the Applicable Procedures containing information regarding such other
account, as well as the account of The Euroclear System or Cedel Bank ( as the
case may be) for which such other account is held, to be credited with, and the
account of such applicable Participant to be debited for, such beneficial
interest and (C) a certificate satisfactory to the Company, the Guarantor and
the Trustee, as to such transfer's compliance with the registration requirements
of the Securities Act, given by the transferor of such beneficial interest, the
Trustee shall (1) reduce or increase (as the case may be) the principal amount
of such Rule 144A Global Security, and increase or reduce (as the case may be)
the principal amount of such Regulation S Global Security, in each case by an
amount equal to the principal amount of the beneficial interest in such Rule
144A Global Security or Regulation S Global Security (as the case may be) to be
so transferred, as evidenced by appropriate endorsement on Schedule A to each
such Global Security, (2) instruct the Book-Entry Depositary to make a
corresponding reduction or increase (as the case may be) to the Book-Entry
Interests relating to such Global Security and (3) cause the Book-Entry
Depositary to instruct DTC to credit and debit such beneficial interests to the
respective accounts specified in the instructions referred to above.

                  (b) Exchange of Series A Securities for Series B Securities.
The Company shall issue and the Trustee shall authenticate Series B Securities
in exchange for Series A Securities accepted for exchange in the Exchange Offer
as follows:

                  The Company shall present the Trustee with an Officers'
                  Certificate certifying (i) that, upon issuance of the Series B
                  Securities, the transactions contemplated by the Exchange
                  Offer have been consummated and (ii) the aggregate principal
                  amount of Series A Securities properly tendered in the
                  Exchange Offer.

                  The Trustee, upon receipt of (i) such Officer's Certificate,
(ii) an Opinion of Counsel (A) to the effect that the Series B Securities have
been registered under the Securities Act and the Indenture has been qualified
under the Trust Indenture Act and (B) with respect to the matters set forth in
Section 3(m) of the Registration Rights Agreement and (iii) a Company Order,
shall (A) authenticate 2008 Global Securities representing the Series B
Securities in an aggregate principal amount equal to the aggregate principal
amount of Series A Securities represented by a 2008 Global Security indicated in
such Officers' Certificate has having been properly tendered with terms
substantially identical to such Series A Securities, and substantially in the
form of Exhibit A hereto, except that such Series B Securities (x) shall not
contain the Restricted Securities Legend, and (y) will not provide for any
increase in the interest rate thereon under the circumstances set forth in such
Series A Securities and (B) deliver such Global 2008 Securities representing
such Series B Securities to the Book-Entry Depositary in exchange for such
Global 2008 Security representing such Series A Securities pursuant to the terms
of the Deposit Agreement.

                  Notwithstanding anything, contained in the Indenture, the
Series A Securities and the Series B Securities will vote and consent together
on all matters as one class and will not have the right to vote or consent as a
separate class in any matter.

                                       86

<PAGE>

                  SECTION 209. Regular Record Date for the 2008 Securities. The
Regular Record Date for the 2008 Securities shall be 15 calendar days
immediately prior to each Interest Payment Date.

                                  ARTICLE THREE

                   Authenticating Agent; Book-Entry Depositary

                  SECTION 301. Authenticating Agent; Book-Entry Depositary. The
Bank of New York, a New York banking corporation, and its successors are hereby
appointed Authenticating Agent and Book-Entry Depositary with respect to the
2008 Securities.

                                  ARTICLE FOUR

                                  Miscellaneous

                  SECTION 401. Execution of Supplemental Indenture. This Second
Supplemental Indenture is executed and shall be construed as an indenture
supplemental to the Original Indenture and, as provided in the Original
Indenture, this Second Supplemental Indenture forms a part thereof.

                  SECTION 402. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision hereof
which is required to be included in this Second Supplemental Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control.

                  SECTION 403. Effect of Headings. The Article and Section
headings herein are for convenience only and shall not affect the construction
hereof.

                  SECTION 404. Successors and Assigns. All Covenants and
agreements in this Second Supplemental Indenture by each of the Company or the
Guarantor shall bind its successors and assigns, whether so expressed or not.

                  SECTION 405. Separability Clause. In case any provision in
this Second Supplemental Indenture or in the 2008 Securities shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

                  SECTION 406. Benefits of Second Supplemental Indenture.
Nothing in this Second Supplemental Indenture or in the 2008 Securities, express
or implied, shall give to any person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Second Supplemental Indentures.

                                       87

<PAGE>

                  SECTION 407. Execution and Counterparts. This Second
Supplemental Indenture may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

                                       88
<PAGE>

                  IN WITNESS WHEREOF, the parties hereof have caused this Second
Supplemental Indenture to be duly executed by their respective officers,
directors or signatories duly authorized thereto, all as of the day and year
first above written.

                                        YORKSHIRE POWER FINANCE LIMITED

                                        By:
                                           -------------------------------------
                                        Title:

                                        YORKSHIRE POWER GROUP LIMITED

                                        By:
                                           -------------------------------------
                                        Title:

                                        THE BANK OF NEW YORK,
                                        As Trustee, Principal Paying Agent,
                                        Security Registrar and Transfer Agent

                                       By:
                                          --------------------------------------
                                       Title:

                                       BANQUE GENERALE DU LUXEMBOURG S.A.,
                                       As Paying Agent and Transfer Agent

                                       By:
                                          --------------------------------------
                                       Title:

                                       89
<PAGE>

                                                                      EXHIBIT A

                     [FORM OF FACE OF GLOBAL 2008 SECURITY]

                           [If the Global 2008 Security is a Restricted
Security, insert the following legend - THIS SECURITY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH YORKSHIRE POWER GROUP
LIMITED (THE "GUARANTOR"), YORKSHIRE POWER FINANCE LIMITED (THE "ISSUER") OR ANY
AFFILIATE OF THE GUARANTOR OR THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF THIS SECURITY) (OR SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY
RULE 144(k), OR ANY SUCCESSORY PROVISION THEREOF, UNDER THE SECURITIES ACT) (THE
"RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE GUARANTOR OR THE ISSUER,
(B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO THE OFFERS AND SALES TO NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE GUARANTOR'S, THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE
THAT A CERTIFICATE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE
AS TO COMPLIANCE WITH CERTAIN CONDITIONS TO TRANSFER, THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE OR SUCH EARLIER TIME AS DETERMINED BY THE ISSUER IN ACCORDANCE WITH
APPLICABLE LAW.

                                       A-1

<PAGE>

                  EACH HOLDER BY ITS ACCEPTANCE OF THIS SECURITY SHALL BE DEEMED
TO HAVE AGREED TO BE BOUND BY THE PROVISIONS OF THE REGISTRATION RIGHTS
AGREEMENT.]

                  THIS SECURITY IS A GLOBAL BEARER SECURITY WITHIN THE MEANING
OF THE INDENTURE HEREINAFTER REFERRED TO AND IS HELD BY A BOOK-ENTRY DEPOSITARY.
THIS SECURITY IS EXCHANGEABLE FOR SECURITIES HELD BY A PERSON OTHER THAN THE
BOOK-ENTRY DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.

                  UNLESS THIS GLOBAL BEARER SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE BOOK-ENTRY DEPOSITARY TO THE ISSUER OR ITS
AGENT FOR EXCHANGE OR PAYMENT, AND ANY DEFINITIVE REGISTERED SECURITY IS ISSUED
IN THE NAME OR NAMES AS DIRECTED IN WRITING BY THE BOOK-ENTRY DEPOSITARY, ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE BEARER HEREOF, THE BOOK-ENTRY DEPOSITARY, HAS AN
INTEREST HEREIN.

                         YORKSHIRE POWER FINANCE LIMITED
               6.496% [Series A] [Series B] Senior Notes due 2008

No. _____________                                        $_____________________
                                                         CUSIP No._____________

                  YORKSHIRE POWER FINANCE LIMITED, a limited liability company
incorporated under the laws of the Cayman Islands (herein called "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to the bearer upon
surrender hereof, the principal sum of _____________ Dollars* on ______________,
and to pay  interest  thereon  from  _______________,  or from the  most  recent
Interest  Payment  Date to which  interest has been paid or duly  provided  for,
semi-annually  on  ___________________  and  ____________________  in each  year
commencing  _______________,  199_ at the rate per annum  provided  in the title
hereof,  until the  principal  hereto  is paid or made  available  for  payment;
[provided, however, that if an Event Date (as defined in the Registration Rights
Agreement) occurs, interest will accrue on this Security at a rate of 6.746% per
annum from and  including the day  following  the  applicable  Event Date to and
including the date on which the event that has resulted in  Additional  Interest
(as defined in the Registration  Rights Agreement) being required to be paid has
been cured  pursuant to the terms of the  Registration  Rights  Agreement.]  The
interest so payable,  and punctually  paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture,  be paid to the bearer on such

-----------------------
*Reference is made to Schedule A attached hereto with respect to decreases and
increases in the Aggregate principal amount of Securities evidenced by this
certificate.

                                       A-2
<PAGE>

Interest Payment Date. Any such interest not so punctually paid or duly provided
for will  forthwith  cease to be payable to the bearer on such Interest  Payment
Date  and  may be paid to the  bearer  hereof  at the  time of  payment  of such
Defaulted  Interest  or be  paid at any  time in any  other  lawful  manner  not
inconsistent  with the  requirements  of any  securities  exchange  on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.

                  All payments in respect of this Security and all payments made
pursuant to the Guarantee of this Security shall be made in immediately
available funds at or through the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York, and for so long
as this Security shall be listed on the Luxembourg Stock Exchange, in
Luxembourg, in such coin or currency of the United States of America as at the
time of payment is legal tender for the payment of public and private debt.

                  All payments of principal of, and premium, if any, and
interest in respect of this Security and all payments made pursuant to the
Guarantee of this Security shall be made free and clear of, and without
withholding or deduction for or on account of any present or future taxes,
duties, assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by or within a Taxing Jurisdiction or by or
within any political subdivision thereof or any authority therein or thereof
having power to tax ("Gross-Up Taxes"), unless such withholding or deduction is
required by law, in the event of any such withholding or deduction, the Company
shall pay to the Holder such additional amounts ("Additional Amounts") as will
result in the payment to such Holder of the amount that would otherwise have
been due to such Holder in the absence of such withholding or deduction, except
that no such Additional Amounts shall be payable:

                  (a) to, or to a Person on behalf of, a Holder who is liable
         for such Gross-Up Taxes in respect of this Security or the Guarantee of
         this Security by reason of such Holder or beneficial owner having some
         connection with the relevant Taxing Jurisdiction (including being a
         citizen or resident or national of, or carrying on a business or
         maintaining a permanent establishment in, or being physically present
         in, such Taxing Jurisdiction) other than the mere holding of this
         Security or the receipt of principal of, and premium, if any, and
         interest in respect thereof or in respect of the Guarantee of this
         Security;

                  (b) to, or to a Person on behalf of, a Holder who represents
         this Security (where presentation is required) for payment more than 30
         days after the Relevant Date except to the extent that the Holder would
         have been entitled to such Additional Amounts on presenting this
         Security for payment on the last day of such period of 30 days;

                  (c) to, or to a Person on behalf of, a Holder who presents a
         Security (where presentation is required) in a Taxing Jurisdiction;

                  (d) to, or to a Person on behalf of, a Holder who would not be
         liable or subject to the withholding or deduction by making a
         declaration of nonresidence or similar claim for exemption to the
         relevant tax authority; or

                                       A-3

<PAGE>

                  (e) to, or to a Person on behalf of, a Holder of a definitive
         Registered Security issued pursuant to the request of owners of
         interests representing a majority in outstanding principal amount in
         the Book-Entry Interest following and during the continuance of an
         Event of Default if such Holder (or any predecessor Holder) was one of
         such owners requesting that definitive Registered Securities be so
         issued.

                  Such Additional Amounts will also not be payable where, had
the beneficial owner of the Security (or any interest therein) been the Holder
of the Security, he would not have been entitled to payment of Additional
Amounts by reason of any one or more of clauses (a) through (e) above. If the
Company or the Guarantor, as applicable, shall determine that Additional Amounts
will not be payable because of the immediately preceding sentence, the Company
or the Guarantor, as applicable, will inform such Holder promptly after making
such determination setting forth the reason(s) therefore.

                  "Relevant Date" means whichever is the later of (i) the day on
which such payment first becomes due and (ii) if the full amount payable has not
been received in The City of New York by the Trustee or the Holder on or prior
to such due date, the date on which, the full amount having been so received,
notice to that effect shall have been given to the Holder in accordance with
this Indenture.

                  References to principal of, and premium or interest in respect
of, this Security or payments under the Guarantee of this Security shall be
deemed to include to any Additional Amounts which may be payable as set forth in
the Indenture or in this Security.

                  The Company shall furnish to the Trustee the official receipts
(or a certified copy of the official receipts) evidencing payment of Gross-Up
Taxes, Copies of such receipts shall be made available to the Holder of this
Security upon request.

                  So long as the Securities of this series are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so
require, notices to Holders of Securities of this series will be published in a
leading newspaper having general circulation in Luxembourg (which is expected to
be the Luxembourg Wort).

                  REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
SECURITY SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

                  Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.

                                       A-4

<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this instrument to
be duly  executed by an authorized signatory of the Company.

                                          YORKSHIRE POWER FINANCE LIMITED

                                          By:
                                             ----------------------------------
                                             Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Securities of the series designated herein
and referred to in the within-mentioned Indenture.

                                           THE BANK OF NEW YORK,
                                           As Trustee

                                           By:
                                              ---------------------------------
                                              Authorized Signatory

Dated:

                                       A-5
<PAGE>

                           [Form of Reverse Security]

                         YORKSHIRE POWER FINANCE LIMITED
               6.496% [Series A] [Series B] Senior Note due 2008

                  This security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture dated as of February 1, 1998 (herein called
the "Original Indenture"), among the Company, Yorkshire Power Group Limited, as
guarantor (the "Guarantor"), The Bank of New York, as trustee, principal paying
agent, registrar and transfer agent (herein called the "Trustee", which term
includes any successor trustee under the Indenture), and Banque Generale du
Luxembourg, S.A., as paying and transfer agent (the "Paying and Transfer
Agent"), as supplemented by the Second Supplemental Indenture, dated as of
February 25, 1998 (together with the Original Indenture and any other
supplements thereto, the "Indenture"), among the Company, the Guarantor, the
Trustee and the Paying and Transfer Agent to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Guarantor, the Trustee, the Paying and Transfer Agent and the Holders of the
Securities and of the terms upon which the Securities are, and are to be
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $300,000,000.

                  The Securities of this series will be redeemable in whole or
in part, at the option of the Company at any time, at a redemption price equal
to the greater of (i) 100% of the principal amount of the Securities of this
series being redeemed and (ii) the sum of the present values of the remaining
scheduled payments of principal of and interest on the Securities of this series
being redeemed (excluding the portion of any such interest accrued to the date
of redemption) discounted (for the purpose of determining present value) to the
date of redemption on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at a discount rate equal to the Treasury Yield plus twenty
(20) basis points, plus, in either case, accrued interest thereon to the date of
redemption.

                  "Treasury Yield" means, with respect to any redemption date,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.

                  "Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of such Securities of this series to be
redeemed that would be utilized at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of the Securities of this series.

                  "Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
on the third Business Day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the Federal

                                       A-6
<PAGE>

Reserve Bank of New York and designated "Composite 3:30 p.m. Quotations for US
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, the Reference
Treasury Dealer Quotation for such redemption date.

                  "Independent Investment Banker" means an independent
investment banking institution of national standing appointed by the Company and
reasonably acceptable to the Trustee.

                  "Reference Treasury Dealer Quotation" means, with respect to
the Reference Treasury Dealer and any redemption date, the average, as
determined by the Company, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount
and quoted in writing to the Company by such Reference Treasury Dealer at 5:00
p.m. on the third Business Day preceding such redemption date).

                  "Reference Treasury Dealer" means a primary United States
government securities dealer in New York City appointed by the Company and
reasonably acceptable to the Trustee.

                  Notice of redemption shall be given as provided in the
Indenture not less than 30 days nor more than 60 days prior to the date fixed
for redemption.

                  If fewer than all the Securities of this series are to be
redeemed, selection of Securities of this series for redemption will be made by
the Trustee in any manner the Trustee deems fair and appropriate and that
complies with applicable legal and securities exchange requirements.

                  Unless the Company defaults in payment of the redemption
price, from and after the redemption date, the Securities of this series or
portions thereof call for redemption will cease to bear interest, and the
Holders thereof will have no right in respect to such Securities of this series
except the right to receive the redemption price thereof.

                  In the event of redemption of this Security in part only, a
new Security of this series and of like tenor for the unredeemed portion hereof
will be issued to the Holder hereof upon the cancellation hereof.

                  The Indenture contains provisions for defeasance of (a) the
entire indebtedness of this Security and (b) certain restrictive covenants upon
compliance by the Company with certain conditions set forth therein.

                  In the Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. At any time after such declaration of acceleration
with respect to Securities of any series has been made, but before a judgment or
decree for payment of money has been obtained by the Trustee as provided in the
Indenture, if all Events of Default with respect to Securities of this series
have been cured or waived (other than the non-payment of principal of the

                                       A-7
<PAGE>

Securities which has become due solely by reason of such declaration of
acceleration) then such declaration of acceleration and its consequences shall
be automatically annulled and rescinded.

                  The Securities of this Series are subject to redemption in
whole but not in part upon not less than 30 nor more than 60 days notice given
as provided in the Indenture, at a price equal to the outstanding principal
amount thereof, together with Additional Amounts, if any, and accrued interest,
if any, to the Redemption Date if, (a) the Company or the Guarantor satisfies
the Trustee prior to the giving of such notice that it has or will become
obligated to pay Additional Amounts as a result of either (i) any change in, or
amendment to, the laws or regulations of a Taxing Jurisdiction, or any change in
the application or interpretation of such laws or regulations, which change or
amendment becomes effective on or after February 19, 1998, or (ii) the issuance
of Definitive Registered 2008 Securities pursuant to any of clauses (a), (b), or
(d) of the third following paragraph and (b) such obligation cannot be avoided
by the Company or the Guarantor taking reasonable measures available to it,
subject, as provided in the Indenture, to the delivery by the Company or the
Guarantor of an Officers' Certificate stating that such obligation to pay
Additional Amounts cannot be avoided by the Company or the Guarantor taking
reasonable measures available to it.

                  The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the Indenture or any
supplemental indenture or the rights and obligations of the Company and the
rights of the Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Securities at the
time Outstanding of all series to be affected (voting as a class). The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issues upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not such consent or waiver is made upon this Security.

                  No reference herein in the Indentures and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, and
premium, if any, and interest in respect of this Security and all payments made
pursuant to the Guarantee of this Security at the times, place, and rate, and in
the coin or currency, herein prescribed.

                  This Security shall be exchangeable, in whole or in the case
of clause (d) below, in part as provided in the Indenture, for Definitive
Registered 2008 Securities registered in the names of Persons other than the
Book-Entry Depositary with respect to such series or its nominee only as
provided in this paragraph. This Security shall be so exchangeable if (a) DTC
notifies the Company and the Book-Entry Depositary that it is unwilling or
unable to continue to hold the Book-Entry Interests or at any time ceases to be
a "clearing agency" registered as such under the Exchange Act and in either
case, a successor is not appointed by the Company within 120 days, (b) the
Book-Entry Depositary for the Securities of this series notifies the Company
that it is unwilling or unable to continue as Book-Entry Depositary with respect

                                       A-8
<PAGE>

to this Security and no successor is appointed within 120 days, (c) the Company
executes and delivers to the Trustee an Officers' Certificate providing that
this Security shall be so exchangeable, (d) there shall have occurred and be
continuing an Event of Default with respect to the Securities of this series or
(e) while this Security is subject to the transfer restrictions set forth in the
Restricted Securities Legend hereon, the Book-Entry Interests cease to be
eligible for DTC services because this Security is neither (i) rated in one of
the top four categories by a nationally recognized statistical rating
organization nor (ii) included within a self-regulatory organization system
approved by the Commission for the reporting of quotations and trade information
of securities eligible for trade pursuant to Rule 144A, such as the PORTAL
system. Securities so issued in exchange for this Security shall be of the same
series, having the same interest rate, if any, and maturity and having the same
terms as this Security, in authorized denominations and in the aggregate having
the same principal amount as this security and registered in such names as the
Book-Entry Depositary for this Security shall direct.

                  The bearer of this Security shall be treated as the owner of
it for all purposes, subject to the terms of the Indenture. As provided in the
Indenture and subject to certain limitations therein set forth, Securities of
this series are exchangeable for a like aggregate principal amount of Securities
of this series and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.

                  No service charge shall be made for any such exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.

                  When a successor assumes all the obligations of is predecessor
under the Securities of this series and the Indenture in accordance with the
terms of the Indenture, the predecessor will be released from those obligations.

                  The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledge of Securities of this series and
may otherwise deal with the Company, the Guarantor or their respective
Affiliates as if it were not the Trustee.

                  No stockholder, director, officer, employee, incorporator, or
Affiliate of the Company or the Guarantor under the Securities of this series or
the Indenture or for any claim based on, in respect of or by reason of, such
obligations of their creation. Each Holder of the Securities of this series by
accepting Securities this series waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Securities of this series.

                  This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.

                  Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company will cause CUSIP numbers

                                       A-9
<PAGE>

to be printed on the Securities of this series as a convenience to the Holders
of the Securities of this series. No representation is made as to the accuracy
of such numbers as printed on the Securities of this series and reliance may be
placed only on the other identification numbers printed hereon.

                  This Security shall be governed by and construed in accordance
with the laws of the State of New York.

                  All terms used in this Security which are defined in the
Indenture shall have the meaning assigned to them in the Indenture.

                                    GUARANTEE

                  FOR VALUE RECEIVED, YORKSHIRE POWER GROUP LIMITED, a private
limited company duly incorporated and existing under the laws of England and
Wales (the "Guarantor", which term includes any successor Person under the
Indenture referred to in the Security on which this notation is endorsed),
hereby fully and unconditionally guarantees to the Holder of the accompanying
Security issued by Yorkshire Power Finance Limited (the "Company"), pursuant to
the terms of the Guarantee contained in Article Fourteen of the Indenture, the
due and punctual payment of the principal of, and premium, if any, and interest
in respect to this Security (and any Additional Amounts payable in respect
thereof), when and as of the same shall become due and payable, whether at
Stated Maturity, by declaration of acceleration, call for redemption or
otherwise, in accordance with the terms of this Security and the Indenture, in
case of the failure of the Company punctually to pay any such principal,
premium, if any, or interest, the Guarantor hereby agrees to cause any such
payment to be made punctually when and as the same shall become due and payable
as if such payment were made by the Company.

                  The obligations of the Guarantor to the Holders of the
Securities and to the Trustee pursuant to the Guarantee and the Indenture are
expressly set forth in Article Fourteen of the Indenture, and reference is
hereby made to such Article and Indenture for the precise terms of the
Guarantee.

                       THIS GUARANTEE SHALL BE GOVERNED BY
                AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
                               STATE OF NEW YORK

                  The Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Security upon which this notation
of the Guarantee is endorsed shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.

                                         YORKSHIRE POWER FINANCE LIMITED

                                          By:
                                             ----------------------------------
                                             Authorized Signatory

                                       A-10
<PAGE>

                                                                     SCHEDULE A

                             SCHEDULE OF ADJUSTMENTS

                  The initial aggregate principal amount of Securities evidenced
by the Certificate to which this Schedule is attached is _______________. The
notations on the following table evidence decreases and increases in the
aggregate amount of Securities evidenced by such Certificate.

                                           Aggregate
                                           Principal
              Decrease in   Increase in    Amount of
               Aggregate     Aggregate     Securities
               Principal     Principal   Remaining After     Notation by
   Date of     Amount of     Amount of   Such Decrease or     Security
 Adjustment   Securities    Securities      Increase         Registrar
-----------   -----------   -----------  -----------------   ------------
-----------   -----------   -----------  -----------------   ------------

                                       A-11
<PAGE>

                                                                      EXHIBIT B

              [FORM OF FACE OF DEFINITIVE REGISTERED 2008 SECURITY]

      [If the Definitive Registered 2008 Security is a Restricted Security,
    insert the Restricted Securities Legend set forth in Exhibit A hereto.]

                         YORKSHIRE POWER FINANCE LIMITED
               6.496% [Series A] [Series B] Senior Notes due 2008

No.____________                                            $____________________
                                                           CUSIP No.: __________

                  YORKSHIRE POWER FINANCE LIMITED, a limited liability company
incorporated under the laws of the Cayman Islands (herein called the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to [name of registered
owner] or its registered assigns, the principal sum of __________ Dollars on
_____________, and to pay interest thereon from __________, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, semi-annually on __________ and __________ in each year, commencing
__________ 199_, at the rate per annum provided in the title hereof, until the
principal hereof is paid or made available for payment (provided, however, that
if an Event Date (as defined in the Registration Rights Agreement) occurs,
interest will accrue on this Security at a rate of ___% per annum from and
including the day following the applicable Event Date to and including the date
on which the event that has resulted in Additional Interest (as defined in the
Registration Rights Agreement) being required to be paid has been cured pursuant
to the terms of the Registration Rights Agreement). The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the fifteenth date
(whether or not a Business Day) immediately preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Person in whose name this Security (or one
or more Predecessor Securities) is registered on such Regular Record Date and
may be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of the Securities in this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice may be required by such exchange, all as more fully
provided in said Indenture.

                  All payments in respect to this Security and all payments made
pursuant to the Guarantee of this Security shall be made at the office or agency
of the Company maintained for that purpose in the Borough of Manhattan, the City

                                      B-1
<PAGE>

of New York, and for so long as this Security shall be listed on the Luxembourg
Stock Exchange, in such coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private debt;
provided, however, that at the option of the Company, payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register.

                  All payments of principal of, premium, if any, and interest in
respect of this Security and all payments made pursuant to the Guarantee of this
Security shall be made free and clear of, and without withholding or deduction
for or on account of any present or future taxes, duties, assessments or
governmental charges of whatever nature imposed, levied, collected, withheld or
assessed by or within a Taxing Jurisdiction or by or within any political
subdivision thereof or any authority therein or thereof having power to tax
("Gross-Up Taxes"), unless such withholding or deduction is required by the law.
In the event of such withholding or deduction, the Company shall pay to the
Holder such additional amounts ("Additional Amounts") as will result in the
payment to such Holder of the amount that would otherwise have been due to such
Holder in the absence of such withholding or deduction, except that no such
Additional Amounts shall be payable:

                  (a) to, or to a Person on behalf of, a Holder who is liable
         for such Gross-Up Taxes in respect of this Security or the Guarantee of
         this Security by reason of such Holder having some connection with the
         relevant Taxing Jurisdiction (including a citizen or resident or
         national of, or carrying on a business or maintaining a permanent
         establishment in, or being physically present in, such Taxing
         Jurisdiction) other than the mere holding of this Security or the
         receipt of principal of, premium, if any, and interest in respect
         thereof or in respect of the Guarantee of this Security;

                  (b) to, or to a Person on behalf of, a Holder who presents
         this Security (where presentation is required) for payment more than 30
         days after the Relevant Date except to the extent that the Holder would
         have been entitled to such Additional Amounts on presenting this
         Security for payments on the last day of such period of 30 days;

                  (c) to, or to a Person on behalf of, a Holder who presents a
         Security (where presentation is required) in a Taxing Jurisdiction;

                  (d) to, or to a Person on behalf of, a Holder who would not be
         liable or subject to the withholding or deduction by making a
         declaration of nonresidence or similar claim for exemption to the
         relevant tax authority; or

                  (e) to, or to a Person on behalf of, a Holder of a definitive
         Registered Security issued pursuant to the request of owners of
         interests representing a majority in outstanding principal amount in
         the Book-Entry Interest following and during the continuance of an
         Event of Default if such Holder (or any predecessor Holder) was one of
         such owners requesting that definitive Registered Securities be so
         issued.

                                      B-2

<PAGE>

                  Such Additional Amounts will also not be payable where, had
the beneficial owner of the Security (or any interest therein) been the Holder
of the Security, he would not have been entitled to payment of Additional
Amounts by reason of any one or more of clauses (a) through (e) above. If the
Company or the Guarantor, as applicable, shall determine that Additional Amounts
will not be payable because of the immediately preceding sentence, the Company
or the Guarantor, as applicable, will inform such Holder promptly after making
such determination setting forth the reason(s) therefore.

                  "Relevant Date" means whichever is the later of (i) the day on
which such payment first becomes due and (ii) if the full amount payable has not
been received in The City of New York by the Trustee or the Holder on or prior
to such due date, the date on which, the full amount having been so received,
notice to that effect shall have been given to the Holder in accordance with
this Indenture.

                  References to principal of, and premium or interest in respect
of, this Security or payments under the Guarantee of this Security shall be
deemed to include to any Additional Amounts which may be payable as set forth in
the Indenture or in this Security.

                  The Company shall furnish to the Trustee the official receipts
(or a certified copy of the official receipts) evidencing payment of Gross-Up
Taxes, Copies of such receipts shall be made available to the Holder of this
Security upon request.

                  So long as the Securities of this series are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so
require, notices to Holders of Securities of this series will be published in a
leading newspaper having general circulation in Luxembourg (which is expected to
be the Luxembourg Wort).

                  REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
SECURITY SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

                  Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.

                  IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed by an authorized signatory of the Company.

                                        YORKSHIRE POWER FINANCE LIMITED

                                        By:
                                           ------------------------------------
                                             [Title]

                                      B-3
<PAGE>

                          CERTIFICATE OF AUTHENTICATION

                  This is one of the Securities of the series designated herein
and referred to in the within-mentioned Indenture.

                                   THE BANK OF NEW YORK,
                                   As Trustee

                                   By:
                                      -----------------------------------------
                                       Authorized Signatory

Dated:

                                      B-4
<PAGE>

                          [Form of Reverse of Security]

                         YORKSHIRE POWER FINANCE LIMITED
                ___% [Series A] [Series B} Senior Notes due 2008

                  This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of February 1, 1998 (herein call the
"Original Indenture"), among the Company, Yorkshire Power Group Limited, as
guarantor (the "Guarantor"), The Bank of New York, as trustee, principal paying
agent, registrar and transfer agent (herein call the "Trustee", which term
includes any successor trustee under the Indenture), and Banque Generale du
Luxembourg S.A., as paying and transfer agent (the "Paying and Transfer Agent"),
as supplemented by the Second Supplemental Indenture, dated as of February 25,
1998 (together with the Original Indenture and any other supplements thereto,
the "Indenture") among the Company, the Guarantor, the Trustee, and the Paying
and Transfer Agent to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Guarantor, the
Trustee, the Paying and Transfer Agent and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $300,000,000.

                  The Securities of this series will be redeemable in whole or
in part, at the option of the Company at any time, at a redemption price equal
to the greater of (i) 100% of the principal amount of the Securities of this
series being redeemed and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest on the Securities of this series
being redeemed (excluding the portion of any such interest accrued to the date
of redemption) discount (for the purpose of determining present value) to the
date of redemption on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at a discount rate equal to the Treasury Yield plus twenty
(20) basis points, plus, in either case, accrued interest to the date of
redemption.

                  "Treasury Yield" means, with respect to any redemption date,
the rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date.

                  "Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of such Securities of this series to be
redeemed that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the remaining term of the Securities of this series.

                  "Comparable Treasury Price" means, with respect to any
redemption date, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage amount) on the third
Business Day preceding such redemption date, as set forth in the daily

                                      B-5
<PAGE>

statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotation for US Government
Securities" or (ii) if such release (or any successor release) is not published
or does not contain such prices on such Business Day, the Reference Treasury
Dealer Quotation for such redemption date.

                  "Independent Investment Banker" means an independent
investment banking institution of national standing appointed by the Company and
reasonably acceptable to the Trustee.

                  "Reference Treasury Dealer Quotations" means, with respect to
the Reference Treasury Dealer and any redemption date, the average, as
determined by the Company, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount
and quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00
p.m. on the third Business Day preceding such redemption date).

                  "Reference Treasury Dealer" means a primary US government
securities dealer in New York City appointed by the Company and reasonably
acceptable to the Trustee.

                  Notice of redemption shall be given as provided in the
Indenture not less than 30 days nor more than 60 days prior to the date fixed
for redemption.

                  If fewer than all the Securities of this series are to be
redeemed, selection of Securities for redemption will be made by the Trustee in
any manner the Trustee deems fair and appropriate and that complies with
applicable legal and securities exchange requirements.

                  Unless the Company defaults in payment of the redemption
price, from and after the redemption date, the Securities of this series or
portions thereof called for redemption will cease to bear interest, and the
Holders thereof will have no right in respect to such Securities of this series
except the right to receive the redemption price thereof.

                  In the event of redemption of this security in part only, a
new Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.

                  The Indenture contains provisions for defeasance of (a) the
entire indebtedness of this Security and (b) certain restrictive covenants upon
compliance by the Company with certain conditions set forth therein.

                  In the Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. At any time after each declaration of acceleration
with respect to Securities of any series has been made, but before a judgment or
decree for payment of money has been obtained by the Trustee as provided in the
Indenture, if all Events of Default with respect to Securities of this series
have been cured or waived (other than the nonpayment of principal of the
Securities which has become due solely by reason of such declaration of
acceleration) then such declaration of acceleration and its consequences shall
be automatically annulled and rescinded.

                                     B-6

<PAGE>

                  The Securities of this series are subject to redemption upon
not less than 30 nor more than 60 days' notice to the Holders of Securities by
first-class mail, at a price equal to the outstanding principal amount thereof,
together with Additional Amounts, if any, and accrued interest, if any, to the
redemption date if (a) the Company satisfies the Trustees prior to the giving of
such notice that it has or will become obligated to pay Additional Amounts as a
result of either (i) any changes in, or amendments to, the laws or regulations
of a Taxing Jurisdiction, or any changes in the application or interpretation of
such laws or regulations, which change or amendment becomes effective on or
after February 19, 1998, or (ii) the issuance of definitive Registered
Securities as a result of (A) DTC having notified the Company and the Book-Entry
Depositary that it was unwilling or unable to continue to hold the Book-Entry
Interest or at any time ceasing to be a "clearing agency" registered as such
under the Securities Exchange Act of 1934 and, in either case, a successor is
not being appointed by the Company within 120 days; (B) the Book-Entry
Depositary for the Securities of this series having notified the Company that it
was unwilling or unable to continue as Book-Entry Depositary with respect to the
Securities of this series and no successor Book-Entry Depositary having been
appointed by the Company within 120 days or (C) an Event of Default with respect
to the Securities of this series having occurred and being continuing and a
Holder, in such circumstance, having requested in writing that a Global Bearer
Security of this series be exchanged for one or more definitive Registered
Securities and (b) such obligation cannot be avoided by the Company taking
reasonable measures available to it, subject, as provided in the Indenture, to
the delivery by the Company of an Officers Certificate that such obligation
referred to in (a) cannot be avoided by the Company taking reasonable measures
available to it.

                  The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the Indenture or any
supplemental indenture or the rights and obligations of the Company and the
rights of the Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Securities at the
time Outstanding of all series to be affected (voting as a class). The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the securities of such series, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the Holder
of this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
or transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

                  No references herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, premium,
if any, and interest, in respect of this Security and all payments made pursuant
to the Guarantee of this Security at the time, place and rate, and in the coin
or currency, herein prescribed.

                  As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of

                                      B-7
<PAGE>

transfer at the office or agency of the Company in any place where the principal
of, premium, if any, and interest, if any, on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

                  The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.

                  No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

                  Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee, and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

                  When a successor assumes all the obligations of its
predecessor under the Securities of this series and the Indenture in accordance
with the terms of the Indenture, the predecessor will be released from those
obligations.

                  The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledge of Securities of this series and
may otherwise deal with the Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.

                  No stockholder, director, officer, employee, incorporator or
Affiliate of the Company shall have any liability or any obligation of the
Company under the Securities of this series or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of the Securities of this series by accepting a Security of this
series waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Securities of this series.

                  This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.

                  Customary abbreviations may be used in the name of the Holder
of a Securities of this series or an assignee, such as TEN COM (=tenants in
common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with
rights of survivorship and not as tenants in common), CUST (=custodian), and
U/G/M/A (=Uniform Gifts to Minors Act).

                                      B-8

<PAGE>

                  Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company will cause CUSIP numbers
to be printed on the Securities of this series as a convenience to the Holders
of the Securities of this series. No representation is made as to the accuracy
of such numbers as printed on the Securities of this series and reliance may be
placed only on the other identification numbers printed hereon.

                  This Security shall be governed by and construed in accordance
with the laws of the State of New York.

                  All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

                                    GUARANTEE

                  FOR VALUE RECEIVED, YORKSHIRE POWER GROUP LIMITED, a company
duly incorporated and existing under the laws of England and Wales (the
"Guarantor", which term includes any successor Person under the Indenture
referred to in the Security on which this notation is endorsed), hereby fully
and unconditionally guarantees to the Holder of the accompanying Security issued
by Yorkshire Power Finance Limited (the "Company"), pursuant to the terms of the
Guarantee contained in Article Fourteen of the Indenture, the due and punctual
payment of the principal of, premium, if any, and interest in respect of this
Security (and any Additional Amounts payable in respect thereof), when and as
the same shall become due and payable, whether at Stated Maturity, by
declaration of acceleration, call for redemption or otherwise, in accordance
with the terms of this Security and the Indenture. In case of the failure of the
Company punctually to pay any such principal, premium, if any, or interest, the
Guarantor hereby agrees to cause any such payment to be made punctually when and
as the same shall become due and payable as if such payment were made by the
Company.

                  The obligations of the Guarantor to the Holders of the
Securities and to the Trustee pursuant to the Guarantee and the Indenture are
expressly set forth in Article Fourteen of the Indenture, and reference is
hereby made to such Article and Indenture for the precise terms of the
Guarantee.

                  THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                  The Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Security upon which this notation
of the Guarantee is endorsed shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.

                                         YORKSHIRE POWER GROUP LIMITED

                                          By:
                                             ----------------------------------
                                             Authorized Signatory

                                      B-9

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