Document:

EXHIBIT 10.80

                                 TRUST AGREEMENT

                                      among

                          YORKSHIRE POWER GROUP LIMITED

                                       and

                                YPG HOLDINGS LLC,

                            as Administrative Party,

                                       and

                              THE BANK OF NEW YORK,

                                   as Trustee

                          Dated as of February 1, 2000

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                                TABLE OF CONTENTS

                                                                           Page

ARTICLE I Definitions and Assumptions.........................................2

    SECTION 1.1.    Definitions...............................................2
    SECTION 1.2.    Rules of Construction....................................12

ARTICLE II Declaration of Trust; Issuance of Certificates....................12

    SECTION 2.1.    Creation and Declaration of Trust;
                    Purchase of Interests....................................12
    SECTION 2.2.    Representations and Warranties...........................13
    SECTION 2.3.    Breach of Representation, Warranty or Covenant...........15
    SECTION 2.4.    Agreement to Authenticate and Deliver Certificates.......15

ARTICLE III Administration of Trust 15

    SECTION 3.1.    Administration of Trust..................................15
    SECTION 3.2.    Receipt of Trust Asset Payments..........................15
    SECTION 3.3.    Certificate Account......................................16
    SECTION 3.4.    Realization Upon Defaulted Notes.........................17
    SECTION 3.5     Access to Certain Documentation..........................18
    SECTION 3.6.    Expenses of Trust........................................18
    SECTION 3.7.    No Merger or Consolidation of Trust......................18
    SECTION 3.8.    Exchange Rate Agency Agreement...........................18

ARTICLE IV Distributions and Reports to Certificateholders; Transfer of
                    Certificates.............................................18

    SECTION 4.1.    Distributions............................................18
    SECTION 4.2.    Final Distributions......................................20
    SECTION 4.3.    Reports to Certificateholders............................21
    SECTION 4.4.    Compliance with Withholding Requirements; Tax
                    Treatment and Reporting..................................21
    SECTION 4.5.    Transfer of Certificates.................................22
    SECTION 4.6.    Rule 144A Information....................................23

ARTICLE V Security Forms.....................................................23

    SECTION 5.1.    Forms Generally..........................................23
    SECTION 5.2.    Restricted Legend........................................24

                                       i
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ARTICLE VI The Certificates..................................................26

    SECTION 6.1.    Designation; Certificate Principal Amount and
                    Denominations............................................26
    SECTION 6.2.    Execution, Authentication and Delivery...................26
    SECTION 6.3.    Registration; Registration of Transfer and Exchange......27
    SECTION 6.4.    Mutilated, Destroyed, Lost or Stolen Certificates........29
    SECTION 6.5.    Distribution of Available Funds..........................30
    SECTION 6.6.    Persons Deemed Owners....................................30
    SECTION 6.7.    Cancellation.............................................31
    SECTION 6.8.    Global Securities........................................31
    SECTION 6.9.    Notices to Depository....................................33
    SECTION 6.10.   Conditions of Authentication and Delivery................33
    SECTION 6.11.   Appointment of Paying Agent..............................33
    SECTION 6.12.   Authenticating Agent.....................................34
    SECTION 6.13.   Remedies.................................................35

ARTICLE VII Yorkshire Group and the Administrative Party.....................36

    SECTION 7.1.    Liability of Yorkshire Group.............................36
    SECTION 7.2.    Limitation on Liability of Yorkshire Group...............36
    SECTION 7.3.    Ownership of Administration Certificate..................36
    SECTION 7.4.    Transfer of Administration Certificate...................37
    SECTION 7.5.    No Economic Interest in the Trust........................37
    SECTION 7.6.    Certain Duties and Responsibilities......................38

ARTICLE VIII Concerning the Currency Swap, the Call Option and the Early
                    Redemption Right.........................................38

    SECTION 8.1.    Currency Swap and Call Option............................38
    SECTION 8.2.    Obligations to the Callholder............................39
    SECTION 8.3.    Early Redemption Right...................................39

ARTICLE IX Concerning the Trustee............................................40

    SECTION 9.1.    Duties of Trustee; Notice of Defaults....................40
    SECTION 9.2.    Certain Matters Affecting the Trustee....................41
    SECTION 9.3.    Trustee Not Liable for Recitals in Certificates
                    or Trust Assets..........................................42
    SECTION 9.4.    Trustee May Own Certificates.............................42
    SECTION 9.5.    Trustee's Fees and Expenses; Indemnification.............42
    SECTION 9.6.    Eligibility Requirements for Trustee.....................43
    SECTION 9.7.    Resignation or Removal of the Trustee....................43
    SECTION 9.8.    Successor Trustee........................................44
    SECTION 9.9.    Merger or Consolidation of Trustee.......................44
    SECTION 9.10.   Appointment of Office or Agency..........................45
    SECTION 9.11.   Representations and Warranties of Trustee................45
    SECTION 9.12.   Limitation of Powers and Duties..........................45

                                       ii

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ARTICLE X Termination........................................................47

    SECTION 10.1.   Termination..............................................47

ARTICLE XI Miscellaneous Provisions..........................................47

    SECTION 11.1.   Amendment................................................47
    SECTION 11.2.   Counterparts.............................................48
    SECTION 11.3.   Limitation on Rights of Certificateholders...............49
    SECTION 11.4.   Governing Law............................................49
    SECTION 11.5.   Jurisdiction.............................................50
    SECTION 11.6.   Notices..................................................50
    SECTION 11.7.   Severability of Provisions...............................51
    SECTION 11.8.   Notice to Rating Agencies................................51
    SECTION 11.9.   Non-petition Covenant....................................51
    SECTION 11.10.  Article and Section References...........................52
    SECTION 11.11.  Compliance Certificates and Opinions, etc................52

Exhibit A - Form of Certificate
Exhibit B - Form of Confirmation for Call Option
Exhibit C - Form of Confirmation for Currency Swap
Exhibit D - Form of Notice of Payment Default by the Swap Counterparty
            under the Currency Swap Exhibit E - Form of Notice of Payment
            Default by the Callholder under the Call Option Exhibit F -
            Form of Administration Certificate

                                      iii
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58

                  TRUST AGREEMENT dated as of February 1, 2000, among Yorkshire
Power Group Limited, a private limited company incorporated under the laws of
England and Wales ("Yorkshire Group"), YPG Holdings LLC, a limited liability
company formed under the laws of the State of Delaware ("YPG Holdings"), as
holder of the Administration Certificate (the "Administrative Party"), and The
Bank of New York, a banking corporation duly organized and existing under the
laws of New York, as trustee (the "Trustee").

                               W I T N E S S E T H

                  WHEREAS, Yorkshire Group, YPG Holdings and the Trustee have
duly authorized the execution and delivery of this Agreement to create and
establish a new trust to be known as the Yorkshire Power Pass-Through Asset
Trust 2000-1 and trust certificates to be issued thereby, which certificates
shall be known as the 8.25% Pass-Through Asset Trust Securities Due February 15,
2005 (the "Certificates"), and Yorkshire Group, YPG Holdings and the Trustee
shall herein specify certain terms and conditions in respect thereof.

                  WHEREAS, the Certificates shall have an aggregate Initial
Certificate Principal Balance of $250,000,000 and shall entitle the holders
thereof (the "Holders") to distributions thereon to the extent of (i)
collections on (pound)155,000,000 principal amount of Reset Senior Notes Due
February 15, 2020 issued by Yorkshire Power Finance 2 Limited, a private company
with limited liability incorporated under the laws of the Cayman Islands
("Yorkshire Finance"), which are fully and unconditionally guaranteed by
Yorkshire Group (the "Notes"), (ii) Dollar Swap Payments by the Swap
Counterparty with respect to the Currency Swap received by the Trustee and (iii)
any other funds contained in the Certificate Account to the extent set forth
herein.

                  WHEREAS, pursuant to the terms of this Agreement, the Trust
shall issue to YPG Holdings an administration certificate which bestows on the
holder thereof certain administrative and appointment powers in the Trust (the
"Administration Certificate").

                  WHEREAS, all representations, covenants and agreements made
herein by each of Yorkshire Group, YPG Holdings and the Trustee are for the
benefit and security of the Certificateholders.

                  NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each party, for the
benefit of the other parties and for the benefit of the Certificateholders,
hereby agrees as follows:

                                       1
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                                    ARTICLE I

                           Definitions and Assumptions

                  SECTION 1.1. Definitions. Except as otherwise specified herein
or as text may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Agreement.

                  "Administrative Party": The holder from time to time of the
Administration Certificate, which shall be a direct or indirect wholly owned
subsidiary of Yorkshire Group (or successor thereto as permitted pursuant to the
Indenture) that is not resident in the United Kingdom for purposes of United
Kingdom taxation and that is organized under the laws of any State. As of the
date of this Agreement, the Administrative Party is YPG Holdings.

                  "Administration Certificate": As defined in the Preamble and a
form of which is attached hereto as Exhibit F.

                  "Affiliate": With respect to any specified Person, 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.

                  "Agreement": This Agreement and all modifications or amend-
ments hereof, including the terms of the Certificates.

                  "Applicable Procedures": As defined in Section 5.2(b).

                  "Authentication Agent": As defined in Section 6.12.

                  "Available Funds": For any Distribution Date, the aggregate
amount deposited in the Certificate Account since the last Distribution Date
with respect to (a) for so long as the Notes are denominated in Pounds Sterling
and no Swap Termination Event has occurred, any Dollar Swap Payment or other US
Dollar amount paid by the Swap Counterparty to the Trustee under the Currency
Swap, (b) if a Swap Termination Event (other than as a result of a Conversion
Event or an Optional Tax Redemption) has occurred, the semi-annual interest
payments on the Notes and payments on or in respect of the principal of the
Notes made by Yorkshire Finance thereunder or, if applicable, Yorkshire Group
under the Guarantee and received by the Trustee in respect of the Interest or,
if applicable, any Swap Termination Payment (subject to Section 6.13) or Unpaid
Amounts, (c) if a Conversion Event has occurred, the semi-annual interest
payments on the Notes and payments on or in respect of the principal of the
Notes made by Yorkshire Finance thereunder or, if applicable, Yorkshire Group
under the Guarantee and received by the Trustee in respect of the Interest or,
if applicable, any Unpaid Amounts, (d) all Option Proceeds and (e) all
Liquidation Proceeds.

                                       2

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                  "Book-Entry Depositary": The Bank of New York, or its nominee
or the custodian of either, until a successor Person shall have become such
pursuant to Section 3.08 of the Deposit Agreement, and thereafter "Book-Entry
Depositary" shall mean such successor Person or its nominee or the custodian of
either.

                  "Book-Entry Interests": With respect to the Notes, one or more
certificateless depositary interests in the Global Notes which together shall at
all times, unless and until Definitive Notes are issued in respect of the Notes,
represent the right to receive 100% of the principal, premium (if any), interest
and additional amounts (if any) of the Notes, which are initially issued to the
Depository or its nominee (registered in the name of the Depository or its
nominee) by the Book-Entry Depositary.

                  "Business Day": With respect to (i) the Call Option, as
defined therein, (ii) the Currency Swap, as defined therein, (iii) the Notes, as
defined in the Indenture and (iv) this Trust Agreement, each day which is not a
Saturday, Sunday or a day on which banking institutions and foreign exchange
markets in New York and London are authorized or obligated by law to remain
closed.

                  "Call Exercise Date": January 10, 2005, or if such date is not
a Business Day, the next preceding Business Day.

                  "Call Option": The Confirmation, dated February 9, 2000,
between the Trustee and the Callholder, pursuant to the ISDA Master Agreement
providing a call option to the Callholder, the form of such confirmation is
substantially in the form attached hereto as Exhibit B.

                  "Call Price": An amount equal to 100% of the principal amount
of the Notes.

                  "Callholder": UBS AG, London Branch, or any permitted assignee
thereof.

                  "Certificateholder" or "Holder": With respect to any
Outstanding Certificate, the Person in whose name a Certificate is registered in
the Certificate Register on the applicable Record Date.

                  "Certificate Account": As defined in Section 3.3.

                  "Certificate Owner": A beneficial owner of a Certificate
represented by a Global Security.

                  "Certificate Principal Amount": $250,000,000.

                  "Certificate Principal Balance": With respect to an
Outstanding Certificate, as determined at any time, the maximum amount that the
Holder thereof is entitled to receive as distributions of principal.

                  "Certificate Register" and "Certificate Registrar": As defined
in Section 6.3.

                                       3

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                  "Certificates": The 8.25% Pass-Through Asset Trust Securities
Due February 15, 2005 issued by the Trust and authorized by, and authenticated
and delivered under, this Agreement.

                  "Clearstream, Luxembourg": Clearstream Banking, societe
anonyme (or any successor securities clearing agency).

                  "Closing Date": February 16, 2000.

                  "Code": The US Internal Revenue Code of 1986, as amended, and
Treasury Regulations promulgated thereunder.

                  "Commission": The US Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act or, if at any time
after the execution and delivery of this Agreement such Commission is not
existing and performing the duties now assigned to it, then the body then
performing such duties.

                  "Company Order" or "Company Request": A written order or
request, respectively, signed in the name of the Administrative Party by any two
of its Chairman, President or any Vice President and delivered to the Trustee.

                  "Conversion Event": The declaration, at any time prior to the
Settlement Date, of the principal amount of the Notes to be due and payable
immediately in accordance with Section 502 of the Indenture as a result of the
occurrence of an Event of Default thereunder.

                  "Corporate Trust Office": The office of the Trustee at which
its corporate trust business shall be principally administered.

                  "Currency Swap": The Confirmation, dated February 9, 2000,
between the Swap Counterparty and the Trustee, pursuant to the ISDA Master
Agreement providing for a Sterling to US Dollar swap, the form of such
confirmation is substantially in the form annexed hereto as Exhibit C.

                  "DCR": Duff & Phelps Credit Rating Company, or its successors.

                  "Definitive Certificates": As defined in Section 6.8.

                  "Deposit Agreement": The Deposit Agreement dated as of
February 1, 2000 between The Bank of New York, as Book-Entry Depositary, and
Yorkshire Finance.

                  "Depository": The Depository Trust Company.

                  "Distribution Dates": Each February 15 and August 15,
commencing August 15, 2000, through and including the Final Distribution Date.

                                       4

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                  "Dollar" or "$" or "USD" or "US Dollar": Such currency of the
United States as at the time of payment is legal tender for the payment of
public and private debts.

                  "Dollar Distribution": A semi-annual US Dollar payment
calculated at an annual interest rate of 8.25% on the basis a 360-day year
consisting of twelve months of 30-days each, due on the Certificate Principal
Amount.

                  "Dollar Swap Payment": A semi-annual US Dollar payment made by
the Swap Counterparty to the Trustee on behalf of the Certificateholders which
is calculated at an annual interest rate of 8.25% on the basis of a 360-day year
consisting of twelve months of 30-days each on a $250,000,000 aggregate notional
amount.

                  "Early Redemption Notice": As defined in Section 8.3.

                  "Early Redemption Right": The right of the holder of the Notes
to require Yorkshire Finance to redeem all but not less than all the Notes at a
redemption price payable in Pounds Sterling equal to 100% of the principal
amount thereof plus accrued but unpaid interest, if any, to such redemption date
on February 15, 2005, which right the parties hereto acknowledge that the
Trustee is required to direct the holder of the Notes to exercise pursuant to
Section 8.3 hereof.

                  "Eligible Account": Either (i) a segregated account maintained
with a US federal or State chartered depositary institution or trust company the
long-term unsecured debt obligations of which are rated by the Rating Agencies
the higher of (x) at least the then current long-term rating of the Notes and
(y) in one of its two highest long-term rating categories at the time any
amounts are held in deposit therein or (ii) a trust account maintained as a
segregated account and held by a US federal or State chartered depositary
institution or trust company in trust for the benefit of the Certificateholders;
provided, however, that such depositary institution or trust company has a
long-term rating in one of the four highest categories by the Rating Agencies.

                  "Eligible Expenses": All reasonable out of pocket expenses
incurred or made by the Trustee, including costs of collection, in addition to
the compensation agreed upon by Yorkshire Group and the Trustee for the
Trustee's services. Such expenses shall include the reasonable compensation,
expenses and disbursements of the Trustee's agents, counsel and experts, which
agents, counsel and experts shall, prior to the occurrence of an Event of
Default or an event which with the giving of notice or passing of time or both
would constitute an Event of Default, be agreed upon by Yorkshire Group and the
Trustee. Yorkshire Group shall pay such expenses.

                  "Euroclear": The Euroclear Clearance System (or any successor
securities clearing agency).

                  "Event of Default": An Event of Default under the Indenture.

                  "Exchange Act": The US Securities Exchange Act of 1934, as
amended.

                                       5

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                  "Executive Officer": With respect to any corporation, the
Chief Executive Qfficer, the Chief Operating Officer, the Chief Financial
Officer, the President, any Vice President, the Secretary, the Treasurer, any
Assistant Treasurer or any Assistant Secretary of such corporation.

                  "Final Distribution": Unless made earlier in the event of a
redemption of the Notes pursuant to their terms, the distribution by the Trustee
on the Final Distribution Date (i) of all Option Proceeds following an exercise
of the Call Option by the Callholder or an exercise of the Early Redemption
Right (and upon receipt by the Trust from the Swap Counterparty of US Dollars in
an amount equal to the Certificate Principal Amount pursuant to the Currency
Swap as a result of such exercise), as the case may be, or (ii) of all
Liquidation Proceeds received by the Trustee following a Trust Termination Event
and (iii) of all Dollar Swap Payments received by the Trustee, not previously
distributed pursuant to Section 4.1 hereof.

                  "Final Distribution Date": (i) February 15, 2005 in connection
with an exercise of the Call Option or the Early Redemption Right or (ii) the
Business Day following the receipt by the Trustee of the Liquidation Proceeds in
connection with a Trust Termination Event.

                  "Global Security": The Rule 144A Global Security or the
Regulation S Global Security.

                  "Guarantee": Yorkshire Group's full and unconditional
guarantee of the payment of principal of; premium (if any) and interest on the
Notes.

                  "Indenture": The Indenture dated as of February 1, 2000 among
Yorkshire Finance, Yorkshire Group and the Indenture Trustee, as to be supple-
mented by the Supplemental Indenture.

                  "Indenture Trustee": The Bank of New York, as indenture
trustee, principal paying agent, registrar and transfer agent under the
Indenture, or its successors.

                  "Initial Certificate Principal Balance": The aggregate
Certificate Principal Balance as of the Closing Date, which is $250,000,000.

                  "Initial Purchasers": Warburg Dillon Read LLC and Banc of
America Securities LLC.

                  "Interest": Beneficial interests in 100% of the Book-Entry
Interests, which will be shown on records maintained in book-entry form by the
Depository.

                  "ISDA Master Agreement": ISDA Master Agreement, dated as of
February 1, 2000, between UBS AG, London Branch and the Trustee, as supplemented
and amended by the Schedule thereto.

                  "Liquidation Proceeds": All amounts, property or proceeds
received by the Trustee in connection with a Trust Termination Event.

                  "Moody's": Moody's Investors Service, Inc., or its successors.

                                        6

<PAGE>

                  "Notes":(pound)155,000,000 principal amount of Yorkshire
Finance's Reset Senior Notes Due February 15, 2020, issued pursuant to the
 Indenture.

                  "Officer's Certificate": A certificate signed by, in the case
of the Administrative Party, the chairman, president or any vice president of
the Administrative Party and, in the case of the Trustee, a Responsible Officer.

                  "Opinion of Counsel": A written opinion of independent counsel
experienced in the matters to be opined on, who may be counsel for Yorkshire
Group, but not an employee thereof, who shall be reasonably acceptable to the
Trustee. Any Opinion of Counsel pertaining to US federal income tax matters may
rely on published rulings of the US Internal Revenue Service.

                  "Option Proceeds": All amounts received by the Trustee in
respect of an exercise of the Call Option by the Callholder or an exercise of
the Early Redemption Right by the Book-Entry Depositary at the direction of the
Trustee, as the case may be.

                  "Optional Tax Redemption": The right of Yorkshire Finance to
redeem the Notes upon the occurrence of certain events as described in Section
212(d) of the Supplemental Indenture.

                  "Outstanding": When used with respect to Certificates, means,
as of the date of determination, all Certificates theretofore authenticated and
delivered under this Agreement (including, as of such date, all Certificates
represented by Restricted Global Securities authenticated and delivered under
this Agreement), except:

                  (i) Certificates theretofore cancelled by the Certificate
         Registrar or delivered to the Certificate Registrar for cancellation;
         and

                  (ii) Certificates which have been issued pursuant to Section
         6.4 or in exchange for or in lieu of which other Certificates have been
         authenticated and delivered pursuant to this Agreement, unless proof
         satisfactory to the Trustee is presented that any such Certificates are
         held by a bona fide purchaser in whose hands such Certificates are
         valid obligations of the Trust;

provided, however, that in determining whether the holders of the required
percentage of the aggregate Voting Rights of the Certificates have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Certificates beneficially owned by Yorkshire Group, Yorkshire Finance, YPG
Holdings or any Affiliate thereof, shall be disregarded and deemed not to be
Outstanding, and the Voting Rights to which its Holder would otherwise be
entitled shall not be taken into account in determining whether the requisite
percentage of aggregate Voting Rights necessary to effect any such consent or
take any such action has been obtained, except that (a) in determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Certificates which the
Trustee actually knows to be so owned shall be so disregarded and (b) the
foregoing shall not apply at any time when all of the Outstanding Certificates
are owned by Yorkshire Group, Yorkshire Finance, YPG Holdings or an Affiliate
thereof. Certificates so owned that have been pledged in good faith may be

                                       7
<PAGE>

regarded as Outstanding if the pledgor establishes to the satisfaction of the
Trustee the pledgor's right so to act with respect to such Certificates and that
the pledgee is not Yorkshire Group, Yorkshire Finance, YPG Holdings or any
Affiliate thereof.

                  "Participant": A broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.

                  "Paying Agent": As defined in Section 6.11.

                  "Payment Date": The semi-annual dates on which payments will
be due on the Notes as provided therein, being the 15th day of each February and
August, with the first payment to occur on August 15, 2000.

                  "Permitted Investments": Direct obligations of or guaranteed
by the United Kingdom for the payment of which obligations or guarantee the full
faith and credit of the United Kingdom is pledged or overnight Pound Sterling
deposits in the London interbank market issued by any bank organized under the
laws of the US or any political subdivision thereof or under the laws of Canada,
Japan, Switzerland or any country that is a member of the European Union having
a rating at least equal to Aa2 by Moody's and AA by S&P.

                  "Person": Any legal person, including any individual,
corporation, partnership, limited liability company, joint venture, association,
joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof or any other entity of whatever nature.

                  "Pounds Sterling": Such currency of the United Kingdom as at
the time of payment is legal tender for the payment of public and private debts.

                  "Predecessor Certificate": With respect to any particular
Certificate, every previous Certificate evidencing all or a portion of the same
interest as that evidenced by such particular Certificate; and, for the purpose
of this definition, any Certificate authenticated and delivered under Section
6.4 in lieu of a mutilated, lost, destroyed or stolen Certificate shall be
deemed to evidence the same interest as such mutilated, lost, destroyed or
stolen Certificate.

                  "Proceeding": Any suit in equity, action at law or other
judicial or administrative proceeding.

                  "Purchase Agreement": The Purchase Agreement among Yorkshire
Group, Yorkshire Finance; the Trust and the Initial Purchasers, dated February
9, 2000.

                  "Qualified Institutional Buyer" or "QIB": A "qualified
institutional buyer" as defined in paragraph (a) of Rule 144A.

                  "Rating Agencies": DCR, Moody's and S&P.

                                       8

<PAGE>

                  "Rating Agency Condition": With respect to any action, that
each of the Rating Agencies shall have been given 10 days (or such shorter
period as may be acceptable to each Rating Agency) prior notice thereof and that
each of the Rating Agencies shall have notified Yorkshire Group and the Trustee
in writing that such action will not result in a reduction, withdrawal or
qualification of the then current rating of the Certificates.

                  "Record Date": With respect to any Distribution Date, the
close of business on the Business Day immediately preceding such Distribution
Date; provided, however, that no Record Date shall be applicable to
distributions to be made on the Final Distribution Date.

                  "Regulation S": Regulation S promulgated under the Securities
Act.

                  "Regulation S Global Security": As defined in Section 5.1.

                  "Required Percentage": Unless otherwise specified herein, a
majority of the aggregate Voting Rights of the Certificates.

                  "Required Percentage--Amendment": At least 66 2/3% of the
aggregate Voting Rights of the Certificates.

                  "Required Percentage--Direction of Trustee": A majority of the
aggregate Voting Rights of the Certificates.

                  "Required Percentage--Remedies": At least 66 2/3% of the
aggregate Voting Rights of the Certificates.

                  "Required Percentage--Waiver": At least 66 2/3% of the
aggregate Voting Rights of the Certificates.

                  "Responsible Officer": The chairman or any vice-chairman of
the board of directors, the chairman or any vice-chairman of the executive
committee of the board of directors, the chairman of the trust committee, the
president, any vice president, any assistant vice president, the treasurer, any
assistant treasurer, any trust officer, the controller or any assistant
controller 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.

                  "Rule 144": Rule 144 promulgated under the Securities Act.

                  "Rule 144A": Rule 144A promulgated under the Securities Act.

                  "Rule 144A Global Security": As defined in Section 5.1.

                  "Rule 144A Information": As defined in Section 4.6.

                                       9

<PAGE>

                  "S&P": Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, or its successor.

                  "Securities Act": The US Securities Act of 1933, as amended.

                  "Settlement Date": February 15, 2005 or, if such day is not a
Business Day, the next succeeding Business Day.

                  "State": Any one of the fifty states of the United States or
the District of Columbia.

                  "Sterling Swap Payment": A semi-annual payment made by the
Trustee to the Swap Counterparty which is calculated to equal the Pound Sterling
semi-annual interest payment required to be made by Yorkshire Finance on the
Notes.

                  "Successor Certificate": Of any particular Certificate, every
Certificate issued after, and evidencing all or a portion of the same interest
as that evidenced by, such particular Certificate; and, for the purposes of this
definition, any Certificate authenticated and delivered under Section 6.4 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Certificate
shall be deemed to evidence the same interest as such mutilated, destroyed, lost
or stolen Certificate.

                  "Supplemental Indenture": The First Supplemental Indenture,
dated as of February 16, 2000, among Yorkshire Finance, Yorkshire Group and the
Indenture Trustee to the Indenture.

                  "Swap Counterparty": UBS AG, London Branch, or its successors.

                  "Swap Payment": Either of a Dollar Swap Payment or a Sterling
Swap Payment.

                  "Swap Termination Event" shall mean the termination of the
Currency Swap in accordance with its terms on February 15, 2005 (or, if such day
is not a Business Day, the next succeeding Business Day) unless earlier
terminated as a result of (a) the failure for 30 days by the Trustee to make a
Sterling Swap Payment thereunder, (b) the failure by the Swap Counterparty to
make a Dollar Swap Payment thereunder or such failure is not remedied on or
before the third Business Day after notice of such failure is given by the
Trustee to the Swap Counterparty, (c) the occurrence of a Conversion Event, (d)
the occurrence of a redemption date for the Notes as a result of an Optional Tax
Redemption, (e) the commencement of insolvency, conservatorship or receivership
proceedings in respect of the Trust or (f) certain other events as described in
the Currency Swap.

                  "Swap Termination Payment": Following a Swap Termination Event
(other than as a result of a Conversion Event or an Optional Tax Redemption),
payment of the amount, if any, due to the Trustee calculated as provided in the
Currency Swap.

                  "Trust": Yorkshire Power Pass-Through Asset Trust 2000-1, the
trust created hereby and to be administered hereunder for the benefit of the
Certificateholders, the corpus of which consists of the Trust Assets.

                                       10

<PAGE>

                  "Trust Assets": (i) the Interest and the rights of the
Trustee, as the holder of the Interest, under the Deposit Agreement, (ii) the
rights of the Trustee under the Call Option, (iii) the rights of the Trustee
under the Currency Swap and (iv) except as otherwise provided by Section 3.3,
any funds on deposit in the Certificate Account, together with, in each case,
any payments received by the Trustee in connection with any such assets.

                  "Trust Termination Event": The first to occur of (a) the
discharge by Yorkshire Finance and Yorkshire Group of all of their obligations
in respect of the Notes and the Guarantee following a Conversion Event, either
by (i) payment in full of all amounts thereby due and payable under the Notes
and the Guarantee or (ii) payment of a lesser amount which all
Certificateholders agree shall be a complete satisfaction and discharge of
Yorkshire Finance's and Yorkshire Group's obligations in respect of the Notes
and the Guarantee or (b) the final adjudication or settlement of all claims in
respect of the Notes and the Guarantee following a bankruptcy, reorganization or
similar proceeding of Yorkshire Finance or Yorkshire Group or (c) the occurrence
of a redemption date for the Notes as a result of an Optional Tax Redemption.

                  "Trustee": The Bank of New York or any co-trustee appointed
pursuant to Section 9.8, until a successor Person shall have become the Trustee
pursuant to the applicable provisions of this Agreement, and thereafter
"Trustee" shall mean such successor Person.

                  "UK Tax Resident": Any person who is resident or ordinarily
resident in the United Kingdom for United Kingdom tax purposes.

                  "Uniform Commercial Code": The Uniform Commercial Code as in
effect in the relevant jurisdiction.

                  "United States" or "US": The United States of America
(including the States), its territories, its possessions and other areas subject
to its jurisdiction.

                  "Unpaid Amounts": Shall have the meaning set forth in the
Currency Swap.

                  "Voting Rights": Each Certificate shall have the right to one
vote for each $1,000 of the Certificate Principal Balance thereof.

                  "Yorkshire Finance": Yorkshire Power Finance 2 Limited, a
private company with limited liability incorporated under the laws of the Cayman
Islands.

                  "Yorkshire Group": Yorkshire Power Group Limited, a private
limited company incorporated under the laws of England and Wales.

                  "YPG Holdings": YPG Holdings LLC, a limited liability company
formed under the laws of the State of Delaware.

                  SECTION 1.2. Rules of Construction. Unless the context
otherwise requires:

                  (i) a term has the meaning assigned to it;

                                       11

<PAGE>

                  (ii) an accounting term not otherwise defined has the meaning
         assigned to it in accordance with generally accepted accounting
         principles as in effect in the United States from time to time;

                  (iii) "or" is not exclusive;

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

                  (v) "including" means including without limitation; and

                  (vi) words in the singular include the plural and words in the
         plural include the singular.

                                   ARTICLE II

                 Declaration of Trust: Issuance of Certificates

                  SECTION 2.1. Creation and Declaration of Trust: Purchase of
         Interests.

                  (a) Pursuant to the terms of this Agreement, a business trust
         to be known as "Yorkshire Power Pass-Through Asset Trust 2000-1" is
         hereby created.

                  (b) Concurrently with the execution and delivery hereof, the
         Trustee shall enter into the Purchase Agreement. Pursuant to the
         Purchase Agreement, on the Closing Date, the Trustee shall (i) issue
         the Certificates, each Certificate representing an undivided beneficial
         interest in the Trust Assets, to or as requested by the Initial
         Purchasers, (ii) instruct the Depository to register the Interest in
         the name of the Trustee, on behalf of and for the benefit of the
         Certificateholders, in consideration for the net proceeds received by
         the Trust from the issue of the Certificates and the Call Option, (iii)
         grant the Call Option to the Callholder, on behalf of and for the
         benefit of the Certificateholders, and (iv) enter into the Currency
         Swap on behalf of and for the benefit of the Certificateholders. The
         Trust Assets shall be held by the Trustee for the benefit of the
         Certificateholders.

                  (c) In connection with the establishment of the Trust, and for
         the consideration stated in the Purchase Agreement, which the Trustee
         shall cause to be remitted to Yorkshire Finance (or an agent on behalf
         of Yorkshire Finance) on the Closing Date, Yorkshire Finance shall, not
         later than the Closing Date, issue the Notes to the Book-Entry
         Depositary and instruct the Book-Entry Depositary to, not later than
         the Closing Date, issue the Book-Entry Interests to the Depository or
         its nominee (registered in the name of the Depository or its nominee).
         The bearer security representing the Notes shall be held by the
         Book-Entry Depositary.

                                       12

<PAGE>

                  (d) The Trustee hereby (i) accepts the trusts created
         hereunder in accordance with the provisions of this Agreement but
         subject to the Trustee's obligation, as and when the same may arise, to
         make any payment or other distributions of Trust Assets as may be
         required pursuant to this Agreement and the Certificates and (ii)
         agrees to perform the duties herein required and that any failure to
         receive reimbursement of Eligible Expenses under Section 9.5 hereof
         shall not release the Trustee from its duties herein or therein.

                  SECTION 2.2. Representations and Warranties. (a) Yorkshire
Group hereby represents and warrants to the Trustee that as of the Closing Date:

                  (i) Yorkshire Group has been duly incorporated and is validly
         existing as a private limited company under the laws of England and
         Wales;

                  (ii) This Agreement has been duly authorized by Yorkshire
         Group and has been duly executed and delivered by Yorkshire Group, and,
         assuming due authorization, execution and delivery of this Agreement by
         the other parties hereto, this Agreement will constitute a valid and
         binding obligation of Yorkshire Group, enforceable against it in
         accordance with its terms except as may be limited by bankruptcy,
         insolvency, or other similar laws affecting the enforcement of
         creditors' rights in general and except as the availability of the
         remedy of specific performance is subject to general principles of
         equity (regardless of whether such remedy is sought in a proceeding in
         equity or at law) and to an implied covenant of good faith and fair
         dealing; and

                  (iii) The execution, delivery and performance by Yorkshire
         Group of this Agreement and the consummation by Yorkshire Group of the
         transactions contemplated herein and compliance by Yorkshire Group with
         its respective obligations hereunder shall have been duly authorized by
         all necessary action (corporate or otherwise) on the part of Yorkshire
         Group and do not and will not result in any violation of the charter or
         bylaws of Yorkshire Group and do not and will not conflict with, or
         result in a breach of any of the terms or provisions of, or constitute
         a default under, or result in the creation or imposition of any lien,
         charge or encumbrance upon any property or assets of Yorkshire Group
         under (A) any contract, indenture, mortgage, loan agreement, note,
         lease or other agreement or instrument to which Yorkshire Group is a
         party or by which it may be bound or to which any of its properties may
         be subject (except for conflicts, breaches or defaults which would not,
         individually or in the aggregate, be materially adverse to Yorkshire
         Group or materially adverse to the transactions contemplated by this
         Agreement), (B) any existing applicable law, rule, regulation,
         judgment, order or decree of any government, governmental
         instrumentality or court, domestic or foreign, or any regulatory body
         or administrative agency or other governmental body having jurisdiction
         over Yorkshire Group or any of its properties (except for conflicts
         which would not, individually or in the aggregate, be materially
         adverse to Yorkshire Group or materially adverse to the transactions
         contemplated by this Agreement), or (C) the PES License (as defined in
         Yorkshire Group's Annual Report on Form 10-K for the fiscal year ended
         March 31, 1999 filed with the Commission under the Exchange Act).

                                       13

<PAGE>

                  (b) YPG Holdings hereby represents and warrants to the Trustee
that as of the Closing Date:

                  (i) YPG Holdings has been duly formed and is validly existing
         as a limited liability company under the laws of the State of Delaware;

                  (ii) This Agreement has been duly authorized by YPG Holdings
         and has been duly executed and delivered by YPG Holdings, and, assuming
         due authorization, execution and delivery of this Agreement by the
         other parties hereto, this Agreement will constitute a valid and
         binding obligation of YPG Holdings, enforceable against it in
         accordance with its terms, except as may be limited by bankruptcy,
         insolvency, or other similar laws affecting the enforcement of
         creditors' rights in general and except as the availability of the
         remedy of specific performance is subject to general principles of
         equity (regardless of whether such remedy is sought in a proceeding in
         equity or at law) and by an implied covenant of good faith and fair
         dealing; and

                  (iii) The execution, delivery and performance by YPG Holdings
         of this Agreement and the consummation by YPG Holdings of the
         transactions contemplated herein and compliance by YPG Holdings with
         its respective obligations hereunder shall have been duly authorized by
         all necessary action (limited liability company or otherwise) on the
         part of YPG Holdings and do not and will not result in any violation of
         the operating agreement or other organizational document of YPG
         Holdings and do not and will not conflict with, or result in a breach
         of any of the terms or provisions of, or constitute a default under, or
         result in the creation or imposition of any lien, charge or encumbrance
         upon any property or assets of YPG Holdings under (A) any contract,
         indenture, mortgage, loan agreement, note, lease or other agreement or
         instrument to which YPG Holdings is a party or by which it may be bound
         or to which any of its properties may be subject (except for conflicts,
         breaches or defaults which would not, individually or in the aggregate,
         be materially adverse to YPG Holdings or materially adverse to the
         transactions contemplated by this Agreement) or (B) any existing
         applicable law, rule, regulation, judgment, order or decree of any
         government, governmental instrumentality or court, domestic or foreign,
         or any regulatory body or administrative agency or other governmental
         body having jurisdiction over YPG Holdings or any of its properties
         (except for conflicts which would not, individually or in the
         aggregate, be materially adverse to YPG Holdings or materially adverse
         to the transactions contemplated by this Agreement).

                  (c) It is understood and agreed that the representations and
warranties  set  forth  in  this  Section  2.2  shall  survive  delivery  of the
respective  documents  to the  Trustee  and shall  inure to the  benefit  of the
Trustee on behalf of the Certificateholders.

                  Upon discovery by either Yorkshire Group, the Administrative
Party or the Trustee of a breach of any of the foregoing representations and
warranties which materially and adversely affects the interests of the
Certificateholders, the party discovering such breach shall give prompt written
notice thereof to the other parties.

                                       14

<PAGE>

                  SECTION 2.3. Breach of Representation. Warranty or Covenant.
Within 60 days of the earlier of discovery by Yorkshire Group or the
Administrative Party or receipt of notice by Yorkshire Group or the
Administrative Party of a breach of any of their respective representations or
warranties set forth in Section 2.2 that materially and adversely affects the
interests of the Certificateholders, such breaching party shall cure such breach
in all material respects.

                  SECTION 2.4. Agreement to Authenticate and Deliver
Certificates. Concurrently with the purchase by it of the Interest, the entering
into of the Currency Swap and the granting of the Call Option, the Trustee
hereby agrees and acknowledges that it will cause to be authenticated and
delivered to or upon the order of the Initial Purchasers, in exchange for the
consideration set forth in the Purchase Agreement, Certificates duly
authenticated by or on behalf of the Trustee in authorized denominations
evidencing ownership of the entire Trust, all in accordance with the terms and
subject to the conditions of Sections 6.2 and 6.10.

                                   ARTICLE III

                             Administration of Trust

                  SECTION 3.1. Administration of Trust.

                  (a) The Trustee shall administer the Trust Assets for the
benefit of the Certificateholders. Subject to Article IX hereof and the terms of
the Certificates, the Call Option and the Currency Swap, the Trustee shall have
full power and authority to do or cause to be done any and all things in
connection with such administration which it deems necessary to comply with the
terms of this Agreement.

                  (b) The duties of the Trustee shall be performed in accordance
with applicable local, State and US federal law.

                  SECTION 3.2. Receipt of Trust Asset Payments. The Trustee
shall receive and accept, for the benefit of Certificateholders, all payments
made under the Trust Assets in a manner consistent with the terms of this
Agreement and such Trust Assets.

                  SECTION 3.3. Certificate Account.

                  (a) The Trustee shall establish and maintain an Eligible
Account  held  in  trust  for  the  benefit  of  the   Certificateholders   (the
"Certificate Account").  The Trustee on behalf of such Certificateholders  shall
possess all right,  title and interest in all funds on deposit from time to time
in the Certificate Account and in all proceeds thereof.  The Certificate Account
shall be under the sole  dominion  and control of the Trustee for the benefit of
the  Certificateholders.  The Trustee  shall deposit or cause to be deposited in
the  Certificate  Account  promptly  (and in no event later than 11:00 a.m. (New
York City time) on the day of receipt of such  amounts)  all  amounts  collected
with respect to the Trust Assets, including:

                                       15

<PAGE>

                  (i) for so long as the Notes are denominated in Pounds
         Sterling and no Swap Termination Event has occurred, any Dollar Swap
         Payment or other US Dollar amount paid by the Swap Counterparty to the
         Trustee under the Currency Swap;

                  (ii) if a Swap Termination Event (other than as a result of a
         Conversion Event or an Optional Tax Redemption) has occurred, the
         semi-annual interest payments on the Notes and payments on or in
         respect of the principal of the Notes made by Yorkshire Finance
         thereunder or, if applicable, Yorkshire Group under the Guarantee and
         received by the Trustee in respect of the Interest or, if applicable,
         any Swap Termination Payment or Unpaid Amounts;

                  (iii) if a Conversion Event has occurred, the semi-annual
         interest payments on the Notes and payments of or in respect of the
         principal of the Notes made by Yorkshire Finance thereunder or, if
         applicable, Yorkshire Group under the Guarantee and received by the
         Trustee in respect of the Interest or, if applicable, any Unpaid
         Amounts;

                  (iv) all Option Proceeds; and

                  (v) all Liquidation Proceeds.

The Trustee shall withdraw or cause to be withdrawn from the Certificate
Account, on the date of payment therefor, all Sterling Swap Payments to be paid
by the Trustee to the Swap Counterparty.

                  The proceeds of the Call Price shall be invested in Permitted
Investments which shall mature no later than the Final Distribution Date and may
be so invested as directed by the Callholder. Any interest or investment income
received on the Call Price from the Business Day prior to the Settlement Date to
the Settlement Date deposited in the Certificate Account will not constitute
property of the Trust and shall not be available to Certificateholders. The
Trustee shall remit all such income to the Callholder on the Final Distribution
Date.

                  It is understood and agreed that payments in the nature of
prepayment or redemption penalties, late payment charges or assumption fees
which may be received by the Trustee shall be deposited by the Trustee in the
Certificate Account and shall not be retained by the Trustee for its own
account.

                  If, at any time, the Certificate Account ceases to be an
Eligible Account, the Trustee shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which the Rating Agency Condition
is met) establish a new Certificate Account meeting the conditions for an
Eligible Account and transfer any cash and any investments (as described in the
second preceding paragraph) on deposit in the Certificate Account to such new
Certificate Account and from the date such new Certificate Account is
established, it shall be the Certificate Account.

                  (b) The Trustee shall give notice to Yorkshire Group and the
Rating Agencies of any proposed change to the location of the Eligible Account
constituting the Certificate Account and shall not effect such change unless the
Rating Agency Condition is satisfied.

                                       16

<PAGE>

                  (c) As provided in the Currency Swap, on each February 15 and
August 15 (or, the immediately succeeding Business Day, if such February 15 or
August 15 is not a Business Day), commencing August 15, 2000, the Swap
Counterparty will pay a Dollar Swap Payment to the Trustee and the Trustee will
pay a Sterling Swap Payment to the Swap Counterparty. Following a Swap
Termination Event under the Currency Swap, the Currency Swap will terminate and
no further scheduled payments will be owed by the Trustee or the Swap
Counterparty under the Currency Swap (it being understood that any unpaid Dollar
Swap Payment or other US Dollar amount owing by the Swap Counterparty at the
time of such Swap Termination Event shall remain due and owing and that, in the
case of a Swap Termination Event (other than as a result of a Conversion Event
or an Optional Tax Redemption), the Trustee on behalf of the Certificateholders
shall have a claim against the Swap Counterparty for any Swap Termination
Payment).

                  (d) Upon the occurrence of a Conversion Event, the Notes shall
in accordance with the terms of the Indenture automatically become US Dollar
denominated Notes with a principal amount equal to the Certificate Principal
Amount, effective from the date of the preceding interest payment date with
respect to the Notes, with an annual interest rate of 8.25% until the Final
Distribution Date, payable on February 15 and August 15 of each year. Upon such
conversion, all distributions on the Certificates shall be payable from amounts
paid by Yorkshire Finance under the Notes or, if applicable, Yorkshire Group
under the Guarantee and received by the Trustee in respect of the Interest or,
if applicable, any Unpaid Amounts.

                  SECTION 3.4. Realization Union Defaulted Notes. Subject to the
provisions of Article IX hereof, the Trustee, on behalf of the
Certificateholders, shall take such reasonable steps as are necessary to receive
payment or to permit recovery with respect to the Interest; provided, however,
that if, notwithstanding the Trustee's efforts, payment has not been made on the
Interest and an Event of Default has occurred, the Trustee's sole obligation in
respect of the Interest shall be to undertake the procedures set forth in
Section 6.13 hereof.

                  SECTION 3.5. Access to Certain Documentation. The Trustee
shall provide to any US federal, State or local regulatory authority that may
exercise authority over any Certificateholder or Certificate Owners or to any
United Kingdom or Cayman Island tax authority access to the documentation
regarding the Trust Assets required by applicable laws and regulations. Such
access shall be afforded without charge, but only upon reasonable request and
during normal business hours at the offices of the Trustee designated by such
regulatory authorities. In addition, access to the documentation regarding the
Trust Assets will be provided to any Certificateholder or Certificate Owner upon
reasonable request during normal business hours at the Corporate Trust Office at
the expense of the Certificateholder or Certificate Owner requesting such
access. Additionally, the Trustee shall provide at the request of any
Certificateholder without charge to such Certificateholder the name and address
of each Certificateholder as recorded in the Certificate Register for purposes
of contacting the other Certificateholders with respect to their rights
hereunder or for the purposes of effecting purchases or sales of the
Certificates, subject to the transfer restrictions set forth herein. Yorkshire
Group shall assist the Trustee in fulfilling any such request.

                  SECTION 3.6. Expenses of Trust. Yorkshire Group hereby agrees
to pay to each Person to whom the Trust becomes indebted or liable the full

                                       17
<PAGE>

amount, when and as due, of any indebtedness, expenses or liabilities of the
Trust, other than under the Certificates, the Currency Swap or the Call Option.

                  SECTION 3.7. No Merger or Consolidation of Trust. The Trust
may not merge with or into, convert into, consolidate or amalgamate with or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any other Person.

                  SECTION 3.8. Exchange Rate Agency Agreement. The Trust will
appoint the Trustee as the agent under an exchange rate agency agreement, and
will enter into such an agreement with the Trustee, provided that such agreement
shall have such terms and provisions as are reasonably acceptable to the
Trustee, promptly upon the occurrence of any event that, with the passage of
time or the giving of notice or both, would constitute, and in no event later
than the occurrence of, a Swap Termination Event (other than a Conversion Event
or an Optional Tax Redemption).

                                   ARTICLE IV

    Distributions and Reports to Certificateholders: Transfer of Certificates

                  SECTION 4.1. Distributions.

                  (a) On each Distribution Date, the Trustee shall distribute to
the Certificateholders, to the extent of Available Funds, if any, the Dollar
Distribution; provided, however, that if any such date is not a Business Day,
the Trustee shall make such distribution on the next succeeding Business Day;
provided, further, that if the Trustee has not received a Dollar Swap Payment or
other US Dollar amount owed by the swap Counterparty to the Trustee under the
Currency Swap by 11:00 a.m. (New York City time) on such Distribution Date (or,
if such Distribution Date occurs on or after a Conversion Event, if the Trustee
has not received any payment owed on the Interest by 11:00 a.m. (New York City
time) on such Distribution Date), or by 11:00 a.m. (New York City time) on any
Business Day succeeding such Distribution Date, as applicable, the Trustee shall
upon receipt of such funds make such distribution no later than the next
succeeding Business Day (and no additional amounts shall accrue on the
Certificates or be owed to Certificateholders as a result of any such delay);
and provided, further, that, on each Distribution Date occurring on or after a
Swap Termination Event (other than as a result of a Conversion Event or an
Optional Tax Redemption), the Trustee shall distribute to the
Certificateholders, to the extent of Available Funds, if any, a semi-annual
Pounds Sterling payment calculated at an annual interest rate as described in
the indenture on the basis of a 365 or 366-day, as applicable, year and the
actual number of days elapsed due on the principal amount of the Notes (subject
to the provisos set forth above). Any funds held by the Trustee hereunder as a
result of a delay shall be held uninvested and without liability for interest
thereon.

                  (b) Dollar Distributions or Pounds Sterling distributions, as
the case may be, to the Certificateholders with respect to each Distribution
Date will be made to the Certificateholders of record on the related Record Date
(except as otherwise provided in Section 10.1 hereof in respect of the Final
Distribution).

                                       18

<PAGE>

                  (c) All Dollar Distributions or Pounds Sterling distributions,
as the case may be, to Certificateholders shall be allocated pro rata among the
Certificateholders based on the respective principal balance of the Certificates
held by each such Certificateholder as of the Record Date with respect to such
Distribution Date.

                  (d) Subject to Section 4.1(a) and Section 4.2, the Trustee
will pay in immediately available funds on each Distribution Date all amounts
payable to each Certificateholder with respect to any Certificate held by such
Certificateholder or its nominee (without the necessity for any presentation or
surrender thereof or any notation of such payment thereon) in the manner and at
the address as each Certificateholder may from time to time direct the Trustee
in writing fifteen days prior to such Distribution Date requesting that such
payment will be so made and designating the bank account to which such payment
shall be made. The Trustee shall be entitled to rely on the last instruction
delivered by the Certificateholder pursuant to this Section 4.1(d) unless a new
instruction is delivered at least fifteen days prior to a Distribution Date.

                  (e) The rights of the Certificateholders to receive Dollar
Distributions or Pounds Sterling distributions, as the case may be, in respect
of the Certificates, and all interests of the Certificateholders in such Dollar
Distributions or Pounds Sterling distributions, as the case may be, shall be as
set forth herein. The Trustee shall in no way be responsible or liable to the
Certificateholders nor shall any Certificateholder in any way be responsible or
liable to any other Certificateholder in respect of amounts previously
distributed on the Certificates based on their respective Certificate Principal
Balances.

                  SECTION 4.2. Final Distributions.

                  (a) On the Final Distribution Date, the Trustee shall
distribute  to  Certificateholders  (in addition to the Dollar  Distribution  or
Pounds Sterling distribution, as the case may be, as provided in Section 4.1) an
amount equal to the Option Proceeds or the Liquidation Proceeds, as the case may
be, plus any other amount  received in respect of the Currency Swap on the Final
Distribution  Date,  plus any additional  amounts  remaining in the  Certificate
Account on the Final Distribution Date after the payment of amounts, if any, due
to the Callholder pursuant to Section 3.3 hereof provided, however, if the Final
Distribution   Date  is  not  a  Business  Day,  the  Trustee  shall  make  such
distribution on the next succeeding Business Day; and provided, further, that if
the Trustee has not received  such amounts by 11:00 a.m.  (New York City time in
the case of  Dollars,  and London  time in the case of Pounds  Sterling)  on any
Business   Day,  the  Trustee  shall  upon  receipt  of  such  funds  make  such
distribution no later than the next  succeeding  Business Day (and no additional
amounts shall accrue on the Certificates or be owed to  Certificateholders  as a
result of any such delay).

                  (b) Except as otherwise provided in Article X, the Final
Distribution shall be made to the Certificateholders  only upon the presentation
and surrender of such  Certificates at a designated office of the Trustee in New
York City or such other  office of the Trustee as may be specified in the notice
referred to in Section 11.6.

                                       19

<PAGE>

                  (c) Except as otherwise provided in Article X, in connection
with the Final Distribution, no later than 30 days preceding the Final
Distribution Date, the Trustee shall give notice to each Certificateholder:

                  (i) of the date that the Trustee expects that the Final
         Distribution will be made but only upon presentation and surrender of
         Certificates at the Corporate Trust Office or such other office of the
         Trustee specified in such notice;

                  (ii) of the expected amount of the Final Distribution for each
         Certificate per initial $100,000 Certificate Principal Balance; and

                  (iii) that the Record Date otherwise applicable to the Final
         Distribution is not applicable and distributions will be made to
         Certificateholders only upon presentation and surrender of the
         Certificate or Certificates of each such Certificateholder at the
         Corporate Trust Office or such other specified office or agency of the
         Trustee.

                  (d) Any funds not distributed to a Certificateholder on the
Final  Distribution  Date  because of the failure of such  Certificateholder  to
tender its  Certificate or  Certificates  shall,  on such date, be set aside and
held  in   trust   and   credited   to  the   account   of  such   non-tendering
Certificateholder.  If any  Certificates  as to  which  notice  has  been  given
pursuant to this Section 4.2 shall not have been  surrendered  for  cancellation
within six months after the date  specified in such  notice,  the Trustee  shall
give a  second  notice  to the  remaining  non-tendering  Certificateholders  to
surrender  their  Certificates  for  cancellation  in order to receive the Final
Distribution  with respect  thereto.  If within one year after the second notice
all such Certificates shall not have been surrendered for cancellation,  subject
to  applicable  laws with  respect to escheat of funds,  such  amounts  shall be
discharged  from the  Trust  and be paid by the  Trustee  to the  Administrative
Party; and such  Certificateholder  shall  thereafter,  as an unsecured  general
creditor, look only to the Administrative Party for payment thereof (but only to
the  extent  of the  amounts  so  paid  to the  Administrative  Party),  and all
liability  of the Trustee  with  respect to such trust  moneys  shall  thereupon
cease. Upon receipt of such amounts from the Trustee,  the Administrative  Party
shall set up a non-interest  bearing trust account containing such funds for the
benefit of such  Certificateholders.  The costs and expenses of maintaining  the
funds in trust  shall be paid from the assets  remaining  in trust.  No interest
shall  accrue on or be payable to any  Certificateholder  on any amount  held in
trust  as  a  result  of  such  Certificateholder's  failure  to  surrender  its
Certificate or  Certificates  for the Final  Distribution  in respect thereto in
accordance with this Section 4.2.

                  SECTION 4.3. Reports to Certificateholders. On the Business
Day following each Distribution Date, the Trustee shall forward or cause to be
forwarded to Yorkshire Group and each Certificateholder, a statement setting
forth the amount of the distribution on such Distribution Date to
Certificateholders allocable to principal of and interest on the Notes and the
amount of aggregate unpaid interest accrued on the Notes as of such Distribution
Date. Such amounts shall be expressed as a US Dollar amount per minimum
denomination of Certificates or for such other specified portion thereof. Within
the prescribed period of time for tax reporting purposes after the end of each
calendar year during the term of this Agreement, the Trustee shall furnish (or
cause to be furnished), to each person who at any time during such calendar year
shall have been a holder of record of Certificates and received any payment

                                       20
<PAGE>

thereon, a statement containing such information as may be required by the Code
and applicable US Treasury Department regulations to enable such
Certificateholder to prepare its US federal income tax returns and as shall have
been provided to the Trustee by the Administrative Party, except as to the
amounts of payments made to holders of record of Certificates.

                  SECTION 4.4. Compliance with Withholding Requirements: Tax
Treatment and Reporting.

                  (a) Notwithstanding any other provision of this Agreement to
the contrary, the Trustee shall comply with all US federal withholding
requirements respecting distributions to Certificateholders that the Trustee
reasonably believes are applicable under the Code (including any requirements to
withhold at reduced rates upon receipt of appropriate US federal tax forms). The
consent of Certificateholders or beneficial owners of Certificates shall not be
required for such withholding. In the event the Trustee does withhold any amount
from distributions to any Certificateholders pursuant to US federal withholding
requirements, the Trustee shall indicate in the statement required pursuant to
Section 4.3 the amount so withheld.

                  (b) The Trustee shall (i) use all reasonable efforts to ensure
that neither it nor the Trust becomes a UK Tax Resident, (ii) maintain (or cause
to be maintained) the books of the Trust on a calendar year basis using the
accrual method of accounting, (iii) pursuant to instructions from the
Administrative Party, file such tax returns relating to the Trust and make such
elections as may from time to time be required or appropriate under any
applicable State or US federal statute or rule or regulation thereunder so as to
maintain the Trust's characterization as a grantor trust for US federal income
tax purposes, (iv) cause such tax returns to be signed in the manner required by
law, and (v) collect and pay over (or cause to be collected and paid over) to
the appropriate governmental authority any withholding tax as described in and
in accordance with Section 4.4(a) with respect to income or distributions to
Certificateholders.

                  SECTION 4.5. Transfer of Certificates.

                  (a) General. A Certificateholder may, in any transaction or
series of transactions, directly or indirectly (each of the following, a
"transfer"), (i) sell, assign or otherwise in any manner dispose of all or any
part of its interest in any Certificate issued to it, whether by act, deed,
merger or otherwise, or (ii) mortgage, pledge or create a lien or security
interest in such beneficial interest, in each case, only if such transfer
satisfies the conditions set forth in this Section 4.5. No purported transfer of
any interest in any Certificate or any portion thereof which is not made in
accordance with this Section 4.5 shall be given effect by or be binding upon the
Trust or the Trustee and any such purported transfer shall be null and void ab
initio and vest in the transferee no rights against the Trust or the Trustee.

                  (b) Conditions to Transfer. Subject to the requirements
contained in Articles V and VI hereof, a Certificateholder may sell or otherwise
transfer a Certificate or its beneficial interest in a Certificate only (A)(i)
to the Trust, (ii) pursuant to a registration statement which has been declared
effective under the Securities Act, (iii) for so long as the Certificates are
eligible for resale pursuant to Rule 144A, to a person it reasonably believes is
a QIB that purchases for its own account or for the account of a QIB to whom
notice is given that the transfer is being made in reliance on Rule 1 44A, (iv)

                                       21

<PAGE>

pursuant to offers and sales to non-US persons that occur outside the US within
the meaning of Regulation S or (v) pursuant to any other available exemption
from the registration requirements of the Securities Act and (B) to a person who
is not a UK Tax Resident.

                  (c) Invalid Transfers. If the Trustee or the Certificate
Registrar determines that (i) a transfer or attempted or purported transfer of
any interest in any Certificate was consummated in reliance on an incorrect form
or certification from the transferee or purported transferee, (ii) a transferee
failed to deliver to the Trustee or the Certificate Registrar any form or
certificate required to be delivered hereunder or (iii) the holder of any
interest in a Certificate is in breach of any representation or agreement set
forth in any certificate or any deemed representation or agreement of such
holder, the Certificate Registrar will not register such attempted or purported
transfer and if a transfer has been registered, such transfer shall be
absolutely null and void ab initio and vest no rights in the purported
transferee (such purported transferee, a "Disqualified Transferee") and the last
preceding Holder of such Certificate that was not a Disqualified Transferee
shall be restored to all rights as a Holder thereof retroactively to the date of
transfer of such Certificate by such Holder, except as to any payments made to
such transferee prior to receipt by the Trustee of notice or other evidence that
such transferee was a Disqualified Transferee.

                  In addition, the Trustee may require that the interest in the
Certificate purported to be transferred to a Disqualified Transferee be
transferred to any Person (other than YPG Holdings or one of its Affiliates)
designated by YPG Holdings at a price determined by YPG Holdings based upon its
estimation of the prevailing price of such interest and each Certificateholder,
by acceptance of an interest in a Certificate, authorizes the Trustee to take
such action. In any case, neither the Trustee nor the Certificate Registrar will
be held responsible for any losses that may be incurred as a result of any
required transfer under this Section 4.5(c).

                  Notwithstanding anything contained herein to the contrary,
neither the Trustee nor the Certificate Registrar shall be responsible for
ascertaining whether or not any transfer complies with the registration
provisions of or exemptions from, or is otherwise not subject to the provisions
of, the Securities Act or applicable state securities law; provided that if a
certificate is specifically required to be delivered to the Trustee or the
Certificate Registrar by a purchaser or transferee of a Certificate, the Trustee
or the Certificate Registrar shall be under a duty to examine the same to
determine whether it conforms to the requirements of this Agreement and shall
promptly notify the party delivering the same if such certificate does not
conform.

                  SECTION 4.6. Rule 144A Information. At any time when the Trust
is not subject to Section 13 or 15(d) of the Exchange Act, upon the request of
any Certificateholder and provided that Yorkshire Group shall have complied with
the succeeding sentence, the Trust shall promptly furnish to such
Certificateholder or to a prospective purchaser of a Certificate designated by
such Certificateholder, as the case may be, the information required to be
delivered pursuant to paragraph (d)(4) of Rule 144A in order to permit
compliance by such Certificateholder with Rule 144A in connection with the
resale of such Certificate by such Certificateholder. Yorkshire Group will
provide to the Trust, in a timely manner, the information required to be
delivered by the Trust under this Section 4.6.

                                       22

<PAGE>

                                    ARTICLE V

                                 Security Forms

                  SECTION 5.1. Forms Generally. The Certificates and the
Trustee's certificates of authentication thereof shall be in substantially the
forms set forth in Exhibit A, with such appropriate legends, insertions,
omissions, substitutions and other variations as are required or permitted by
this Agreement, and may have such letters, numbers or 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 officers executing such
Certificates, as evidenced by their execution of the Certificates.

                  Certificates offered and sold in their initial distribution in
reliance on Rule 144A shall be issued in the form of one or more Restricted
Global Securities (collectively, and, together with their Successor
Certificates, the "Rule 144A Global Security"). Certificates offered and sold in
their initial distribution in reliance on Regulation S shall be issued in the
form of one or more Regulation S Global Securities (collectively, and, together
with their Successor Certificates, the "Regulation S Global Security"). Each of
the Rule 144A Global Security and the Regulation S Global Security shall be in
fully registered form without interest coupons, substantially in the form of
Certificate set forth in Exhibit A, with such applicable legends as are provided
for in Sections 5.2 and 6.8(a), except as otherwise permitted herein, and
initially shall be registered in the name of the Depository or its nominee and
deposited with The Bank of New York, as custodian for the Depository, at the
corporate trust business office of The Bank of New York, duly executed by the
Trust and authenticated by the Trustee as hereinafter provided, for credit by
the Depository to the respective accounts of beneficial owners of the
Certificates represented thereby (or such other accounts as they may direct).

                  SECTION 5.2. Restricted Legend.

                  (a) All Certificates initially issued hereunder shall, upon
issuance, bear the applicable legends as are provided in Section 5.2(c) and such
legends shall not be removed except as set forth in Section 5.2(b) or unless the
Trustee determines otherwise based upon a Company Order (which shall state that
such Certificate may be issued without such legend in accordance with applicable
law) delivered to the Trustee (and the Certificate Registrar, if other than the
Trustee).

                  (b) Unless with respect to the whole or any portion of any
Certificate that bears or is required to bear the applicable legends as are
provided in Section 5.2(c) the Trustee determines otherwise as provided in
Section 5.2(a), such legends shall be removed by the Trustee (i) in the case of
the Rule 144A Global Security or any Definitive Certificate issued in exchange
for an interest therein, upon presentation thereof by the Certificateholder to
the Trustee at any time on or after the occurrence of the "Resale Restriction
Termination Date" specified in such legends and (ii) in the case of the
Regulation S Global Security or any Definitive Certificate issued in exchange
for an interest therein, upon presentation thereof by the Certificateholder to
the Trustee at any time on or after the expiration of the "distribution
compliance period" (within the meaning of Regulation S). If a holder of a

                                       23
<PAGE>

beneficial interest in the 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 the Regulation S Global Security, or if a
holder of a beneficial interest in the 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 the Rule 144A Global Security,
upon receipt by the Trustee of (A) written instructions given in accordance with
the rules and procedures of the Depository (together with, as applicable, the
rules and procedures of Euroclear and Clearstream, Luxembourg, the "Applicable
Procedures") from the applicable Participant directing the Trustee to cause to
be credited to another account of a Participant a beneficial interest in the
Regulation S Global Security or the Rule 144A Global Security (as the case may
be) equal to that of the beneficial interest in the Rule 144A Global security or
the 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 Euroclear or
Clearstream, Luxembourg (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
Yorkshire Group, YPG Holdings, the Trust 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 the Rule 144A Global
Security, and increase or reduce (as the case may be) the principal amount of
the Regulation S Global Security, in each case by an amount equal to the
principal amount of the beneficial interest in the Rule 144A Global Security or
the Regulation S Global Security (as the case may be) to be so transferred, as
evidenced as provided in Section 6.8(c) and (2) instruct the Depository to
credit and debit such beneficial interests to the respective accounts specified
in the instructions referred to above.

                  (c) Each Certificate initially issued hereunder shall, upon
issuance, bear the following legends:

                  THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS CERTIFICATE 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, SUCH REGISTRATION.

                  THIS CERTIFICATE MAY NOT BE PURCHASED, ACQUIRED OR HELD BY, OR
SOLD OR OTHERWISE TRANSFERRED TO, ANY PERSON WHO IS RESIDENT OR ORDINARILY
RESIDENT IN THE UNITED KINGDOM FOR TAX PURPOSES (A "UK TAX-RESIDENT"). ANY
PURPORTED TRANSFER TO A UK TAX-RESIDENT SHALL BE NULL AND VOID AND OF NO EFFECT.

                  THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES
TO OFFER, SELL OR OTHERWISE TRANSFER THIS CERTIFICATE, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE
OF THE TRUST WAS THE OWNER OF THIS CERTIFICATE (OR ANY PREDECESSOR OF THIS
CERTIFICATE) OR THE EXPIRATION OF SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY

                                       24
<PAGE>

RULE 144(k), OR ANY SUCCESSOR PROVISION THEREOF, UNDER THE SECURITIES ACT, ONLY
(A) TO THE TRUST, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS CERTIFICATE
IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT 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 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 RIGHT OF THE
TRUST, YORKSHIRE POWER FINANCE 2 LIMITED, YORKSHIRE POWER GROUP LIMITED AND THE
TRUSTEE PRIOR TO SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E)
ABOVE 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 AS TO COMPLIANCE WITH CERTAIN CONDITIONS TO
TRANSFER IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. 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 TRUST IN ACCORDANCE
WITH APPLICABLE LAW.

                                   ARTICLE VI

                                The Certificates

                  SECTION 6.1. Designation: Certificate Principal Amount and
Denominations. There is hereby created a series of trust certificates to be
issued pursuant to this Agreement to be known as" 8.25% Pass-Through Asset Trust
Securities Due February 15, 2005". The Certificates shall be issued in the form
of one or more Global Securities as set forth in Section 6.8 hereof. Except as
provided in Section 6.4, the maximum Certificate Principal Balance that may be
authenticated and delivered under this Agreement is $250,000,000. The
Certificates are issuable in minimum denominations of $100,000 and in integral
multiples of $1,000 in excess thereof.

                  SECTION 6.2. Execution, Authentication and Delivery.

                  (a) The Certificates shall be executed by the Trustee, on
behalf of the Trust. The signature may be manual or facsimile. Certificates
bearing the manual or facsimile signature of individuals who were at any time
the proper officers of the Trustee shall be binding, notwithstanding that such
individuals or any of them have ceased to bold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates.

                                       25

<PAGE>

                  (b) The Certificates that are executed, authenticated and
delivered by the Trustee to or upon the Company Order on the Closing Date shall
be dated the Closing Date. All other Certificates that are executed and
authenticated after the Closing Date for any other purpose under the Agreement
shall be dated the date of their authentication. Except as provided in Section
6.4, the Certificates shall all be originally issued on the Closing Date.

                  (c) No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in one of the
forms provided for herein executed by the Trustee by the manual signature of one
of its authorized signatories, and such certificate upon any Certificate shall
be conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder and is entitled to the benefits of
this Agreement.

                  SECTION 6.3. Registration: Registration of Transfer and
Exchange.
                  (a) The Trustee shall cause to be kept in the Corporate Trust
Office (which shall be outside the United Kingdom) a register for Certificates
(the registers maintained in such office and in any other office or agency of
the Trustee in New York, New York being herein sometimes collectively referred
to as the "Certificate Register") in which a transfer agent and registrar (which
may be the Trustee) (the "Certificate Registrar") shall provide for the
registration of the Certificates and the registration of transfers and exchanges
of the Certificates. The Trustee is hereby initially appointed Certificate
Registrar for the purpose of registering the Certificates and transfers and
exchanges of Certificates as herein provided; provided, however, that the
Trustee may appoint one or more co-Certificate Registrars. Upon any resignation
of any Certificate Registrar, the Administrative Party shall promptly appoint a
successor or, in the absence of such appointment, arrange for an Affiliate of
the Administrative Party to assume the duties of Certificate Registrar;
provided, however, that such Certificate Registrar shall remain at all times
outside the United Kingdom.

                  (b) If a Person other than the Trustee is appointed by the
Administrative Party as Certificate Registrar, the Administrative Party will
give the Trustee prompt written notice of the appointment of a Certificate
Registrar and of the location, and any change in the location, of the
Certificate Register, and the Trustee shall have the right to rely upon a
certificate executed on behalf of the Certificate Registrar by an Executive
Officer thereof as to the names and addresses of the Holders of the Certificates
and the principal amounts and numbers of such Certificates.

                  (c) Every Certificate presented or surrendered for
registration of transfer or exchange shall (if so required by Yorkshire Group,
the Trustee or the Certificate Registrar) be duly endorsed, or be accompanied by
a written instrument of transfer in form satisfactory to Yorkshire Group, the
Trustee and the Certificate Registrar, duly executed, by the Holder thereof or
his attorney duly authorized in writing, with such signature guaranteed by a
brokerage firm or financial institution that is a member of a Securities
Approved Medallion Programs such as the Securities Transfer Agents Medallion
Program (STAMP), the Stock Exchange Medallion Program (SEMP) or the New York
Stock Exchange Inc. Medallion Signature Program (MSP).

                                       26

<PAGE>

                  (d) Upon surrender for registration of transfer of any
Certificate at the office or agency of the Trustee and subject to Section 4.5
and Article V, if the requirements of Section 8-401(a) of the Uniform Commercial
Code are met to the satisfaction of Yorkshire Group, the Trustee shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of any authorized
denominations, of a like aggregate Certificate Principal Balance.

                  (e) At the option of the Holder, Certificates (other than the
Global Securities) may be exchanged for other Certificates of any authorized
denomination or denominations of like tenor and aggregate Certificate Principal
Balance and bearing the applicable legends set forth in Section 5.2(c) upon
surrender of the Certificates to be exchanged at the office or agency of the
Trustee maintained for such purpose.

                  (f) Whenever any Certificates are so surrendered for exchange,
the Trust shall execute, authenticate and deliver the Certificates that the
Holder making the exchange is entitled to receive.

                  (g) If at any time the Depository for the Certificates
notifies Yorkshire Group that it is unwilling or unable to continue as
Depository for the Certificates or if at any time the Depository for the
Certificates shall no longer be eligible under Section 6.8(b), the
Administrative Party shall appoint a successor Depository (which is neither a UK
Tax Resident nor acting out of a United Kingdom branch or agency for the
purposes of this transaction) with respect to the Certificates. If a successor
Depository for the Certificates is not appointed by the Administrative Party
within 120 days after Yorkshire Group receives such notice or becomes aware of
such ineligibility, the Trustee will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of Definitive Certificates,
will authenticate and deliver Definitive Certificates in an aggregate
Certificate Principal Balance equal to the aggregate Certificate Principal
Balance of the Global Security or Securities representing Certificates in
exchange for such Global Security or Securities.

                  (h) Upon surrender to the Trustee of a Global Security by the
Depository, accompanied by registration instructions, the Trustee shall execute
and the Trustee shall authenticate the Definitive Certificates in accordance
with the instructions of the Depository. None of the Administrative Party,
Yorkshire Group, the Certificate Registrar or the Trustee shall be liable for
any delay in delivery of the Company Order and may conclusively rely on, and
shall be protected in relying on, the Company Order. Upon the issuance of
Definitive Certificates, the Trustee shall recognize the holders of the
Definitive Certificates as Holders.

                  (i) Upon the exchange of a Global Security for Definitive
Certificates, such Global Security shall be cancelled by the Trustee. Definitive
Certificates issued in exchange for a Global Security pursuant to this Section
6.3 shall be registered in such names and in such authorized denominations as
the Depository for such Global Security, pursuant to instructions from its
Participants, any indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Certificates to the Persons in whose
names such Certificates are so registered.

                  (j) All Certificates issued upon any registration of transfer
or exchange of Certificates shall constitute complete and indefeasible evidence

                                       27
<PAGE>

of ownership in the Trust related to such Certificates and be entitled to the
same benefits under this Agreement as the Certificates surrendered upon such
registration of transfer or exchange.

                  (k) No service charge shall be made to a Holder for any
registration of transfer or exchange of Certificates, but Yorkshire Group 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 Certificates, other than exchanges pursuant to Section 6.3 not
involving any transfer.

                  SECTION 6.4. Mutilated, Destroyed, Lost or Stolen
Certificates.

                  (a) If (i) any mutilated Certificate is presented to the
Trustee or (ii) Yorkshire Group and the Trustee receive (A) evidence to their
satisfaction of the mutilation, destruction, loss or theft of any Certificate
and (B) such security or indemnity as they may require to hold each of them and
any Paying Agent harmless, and neither Yorkshire Group, the Administrative Party
nor the Trustee receives notice that such Certificate has been acquired by a
bona fide purchaser, then the Trustee shall execute and the Trustee, upon
receipt of a Company Order, shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate a new
Certificate of like tenor, form, terms and principal amount, bearing a number
not contemporaneously Outstanding.

                  (b) If after the delivery of a replacement Certificate in
respect of a mutilated, destroyed, lost or stolen Certificate, a bona fide
purchaser of the original Certificate in lieu of which such replacement
Certificate was issued presents for payment such original Certificate, the
Trustee shall be entitled to recover such replacement Certificate (or such
distribution in respect of that Certificate) from the Person to whom it was
delivered or any Person taking such replacement Certificate from such Person to
whom such replacement Certificate was delivered or any assignee of such Person,
except a bona fide purchaser, and shall be entitled to recover upon any security
or indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the Trustee in connection therewith.

                  (c) Upon the issuance of any new Certificate under this
Section 6.4, Yorkshire Group may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in respect
thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith.

                  (d) Every new Certificate issued pursuant to this Section 6.4
shall constitute complete and indefeasible evidence of ownership in the Trust,
its income and assets whether or not the mutilated, destroyed, lost or stolen
Certificate shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Agreement equally and proportionately with any and all
other Certificates duly issued hereunder.

                  (e) The provisions of this Section 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 Certificates.

                                       28

<PAGE>

                  SECTION 6.5. Distribution of Available Funds.

                  (a) Available Funds to be distributed to the Holder of any
Certificate that are payable and are punctually paid or duly provided for on any
Distribution Date shall be distributed to the Person in whose name such
Certificate (or one or more Predecessor Certificates) is registered at the close
of business on the related Record Date notwithstanding the cancellation of such
Certificate upon any transfer or exchange subsequent to such related Record
Date. The distribution of Available Funds to Certificateholders shall be made at
the Corporate Trust Office or, at the option of the Trustee, by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Certificate Register or by wire transfer to an account designated by the Holder.

                  (b) Subject to the foregoing provisions of this Section 6.5,
each Certificate delivered under this Agreement upon transfer of or in exchange
for or in lieu of any other Certificate shall carry the rights to receive
distributions of Available Funds that were carried by such other Certificate.

                  (c) With respect to any computations or calculations to be
made under this Agreement and the Certificates, except as otherwise provided,
(i) all percentages resulting from any calculation of accrued interest will be
rounded, if necessary, to the nearest 1/100,000 of 1% (.0000001), with five
one-millionths of a percentage point rounded downward, and (ii) all currency
amounts will be rounded to the nearest one-hundredth of a unit (with .005 of a
unit being rounded downward).

                  SECTION 6.6. Persons Deemed Owners.

                  (a) The Administrative Party, Yorkshire Group, the Trustee and
any agent of the Administrative Party, Yorkshire Group or the Trustee may treat
the Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions of Available Funds on
such Certificate and for all other purposes whatsoever, whether or not such
Certificate be overdue, and neither the Administrative Party, Yorkshire Group or
the Trustee, nor any agent of the Administrative Party, Yorkshire Group or the
Trustee shall be affected by notice to the contrary. All distributions made to
any Holder, or upon his order, shall be valid, and, to the extent of the sum or
sums paid, effectual to satisfy and discharge the liability for moneys
distributable upon such Certificate.

                  (b) Neither the Administrative Party, Yorkshire Group, the
Certificate Registrar, the Trustee nor any of their agents will have any
responsibility or liability for any aspect of the records relating to or
distributions made on account of beneficial ownership interests in a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

                  SECTION 6.7. Cancellation. All Certificates surrendered for
payment, redemption, transfer or exchange shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by it. No Certificates shall be authenticated in lieu of or in
exchange for any Certificates cancelled as provided in this Section 6.7, except
as expressly permitted by this Agreement. All cancelled Certificates may be held

                                       29
<PAGE>

or disposed of by the Trustee in accordance with its standard retention or
disposal policy as in effect at the time unless Yorkshire Group shall direct by
Company Order that they be returned to it; provided, however, that such Company
Order is timely and the Certificates have not been previously disposed of by the
Trustee. The Trustee shall certify to Yorkshire Group that surrendered
Certificates have been duly cancelled and retained or destroyed, as the case may
be.

                  SECTION 6.8. Global Securities.

                  (a) The Certificates shall be registered Certificates and will
be represented by one or more Global  Securities  issued in accordance with this
Section 6.8 and Article V and initially registered in the name of Cede & Co., as
nominee of The  Depository  Trust  Company.  The Trustee  shall  execute and the
Trustee shall  authenticate  and deliver one or more Global  Securities that (i)
shall represent an aggregate initial Certificate  Principal Balance equal to the
aggregate initial Certificate Principal Balance of the Certificates,  (ii) shall
be delivered by the Trustee to the  Depository  or pursuant to the  Depository's
instruction and (iii) shall bear a legend substantially to the following effect:
"Unless  and  until it is  exchanged  in whole for the  individual  Certificates
represented  hereby,  this Global  Security may not be  transferred  except as a
whole by the  Depository  to a nominee of the  Depository or by a nominee of the
Depository to a successor  nominee or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository."

                  (b) No Holder of a Certificate will receive a Definitive
Certificate   representing   such  Holders   interest  in  such  Certificate  or
Certificates,  except as provided in Section  6.3 and Section  6.13.  Unless and
until definitive,  fully registered Certificates (the "Definitive Certificates")
have been issued to Holders pursuant to Section 6.3 or Section 6.13:

                  (i) the provisions of this Section 6.8 shall be in full force
         and effect;

                  ii) the Certificate Registrar and the Trustee shall be
         entitled to deal with the Depository for all purposes of this Agreement
         (including the distribution of Available Funds with respect to the
         Certificates and the giving of instructions or directions hereunder) as
         the sole Holder of the Certificates, and shall have no obligation to
         the Certificate Owners;

                  (iii) to the extent that the provisions of this Section 6.8
         conflict with any other provisions of this Agreement other than Section
         3.5, the provisions of this Section 6.8 shall control;

                  (iv) the rights of Certificate Owners shall be exercised only
         through the Depository and shall be limited to those established by law
         and agreements between such Certificate Owners and the Depository or
         its Participants; and

                  (v) whenever this Agreement requires or permits actions to be
         taken based upon instructions or directions of Holders of Certificates
         evidencing a specified percentage of the aggregate Voting Rights, the
         Depository shall be deemed to represent such percentage only to the
         extent that it has received written instructions to such effect from
         Certificate Owners or Participants in the Depository's system owning or
         representing, respectively, such required percentage of the beneficial
         interests in the Certificates and has delivered such instructions to
         the Trustee.

                                       30

<PAGE>

                  (c) The Depository must, at all times while it serves as
Depository, be a clearing agency registered under the Exchange Act and any other
applicable statute or regulation.

                  (d) If any Global Security is to be exchanged for other
Certificates  or cancelled in whole,  it shall be surrendered by or on behalf of
the  Depository or its nominee to the Trustee,  as  Certificate  Registrar,  for
exchange or  cancellation  as provided in this  Article VI or, if the Trustee is
acting as custodian for the  Depository or its nominee (or is party to a similar
arrangement) with respect to such Global Security,  the principal amount thereof
shall be reduced to reflect that either all or none of the Certificates  will be
held as a Global  Security after giving effect to such exchange or transfer,  as
the case may be, in each case by means of an appropriate  adjustment made on the
records of the Trustee,  whereupon the Trustee shall  instruct the Depository or
its authorized  representative to make a corresponding adjustment to its records
(including  by crediting or debiting any  Participant's  account as necessary to
reflect any  transfer or exchange of a beneficial  interest  pursuant to Section
5.2(b)). Upon any such surrender or adjustment of a Global Security, the Trustee
shall, subject to this Section 6.8 and as otherwise provided in this Article VI,
authenticate and deliver any  Certificates  issuable in exchange for such Global
Security  to or upon  the  order  of,  and  registered  in such  names as may be
directed by, the Depository or its authorized  representative  in writing.  Upon
the  request of the  Trustee in  connection  with the  occurrence  of any of the
events  specified in Section 6.3 or 6 13,  Yorkshire  Group shall  promptly make
available to the Trustee a reasonable supply of Certificates that are not in the
form of Global Securities. The Trustee shall be entitled to rely upon any order,
direction or request of the Depository or its authorized representative which is
given or made pursuant to this Article VI.

                  (e) Every Certificate authenticated and delivered upon
registration  of  transfer  of,  or in  exchange  for or in lieu  of,  a  Global
Security,  shall be authenticated  and delivered in the form of, and shall be, a
Global  Security,  unless such Certificate is registered in the name of a Person
other than the Depository or a nominee thereof.

                  (f) Subject to the provisions in the applicable legends
required by Section 5.2(c) above,  the  registered  Holder may grant proxies and
otherwise authorize any Person,  including Participants and Persons who may hold
interests  in  Participants,  to take any action that such Holder is entitled to
take under this Agreement.

                  (g) Neither Participants nor any other Persons on whose behalf
Participants  may act shall have any rights under this Agreement with respect to
any Global  Security held on their behalf by the  Depository or under the Global
Security,  and  the  Depository  may be  treated  by the  Administrative  Party,
Yorkshire  Group,  the  Trustee  and  any  agent  of the  Administrative  Party,
Yorkshire Group or the Trustee as the absolute owner of such Global Security for
all purposes whatsoever.

                  SECTION 6.9. Notices to Depository. Whenever a notice or other
communication to the Certificate Owners represented by one or more Global
Securities is required under this Agreement, unless and until Definitive

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<PAGE>

Certificates shall have been issued to such Certificate Owners pursuant to
Section 6.3, the Trustee shall give all such notices and communications
specified herein to be given to Certificate Owners to the Depository, and shall
have no obligation to the Certificate Owners.

                  SECTION 6.10. Conditions of Authentication and Delivery. The
Administrative Party shall deliver Certificates to the Trustee, and the Trustee
shall execute on behalf of the Trust and authenticate and deliver such
Certificates, shall purchase the Interest and shall execute and deliver the Call
Option, the Currency Swap and other closing documents in connection with the
issue of the Certificates, upon receipt of a Company Order.

                  SECTION 6.11. Appointment of Paying Agent. The Trustee may
appoint one or more paying agents (which shall not be a UK Tax Resident nor act
out of a branch or agency in the United Kingdom for the purposes of this
transaction) (each, a "Paying Agent") with respect to the Certificates. Any such
Paying Agent shall be authorized to make distributions to Certificateholders
from the Certificate Account and shall report the amounts of such distributions
to the Trustee. Any Paying Agent shall have the revocable power to withdraw
funds from the Certificate Account for the purpose of making the distributions
referred to above. The Trustee may revoke such power and remove the Paying Agent
if the Trustee determines in its sole discretion that the Paying Agent shall
have failed to perform its obligations under this Agreement in any material
respect. The Paying Agent shall initially be the Trustee and any co-paying agent
(which shall not be a UK Tax Resident nor act out of a branch or agency in the
United Kingdom for the purposes of this transaction) chosen by the
Administrative Party and acceptable to the Trustee. Any Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the Trustee
and the Administrative Party. In the event that the Trustee shall no longer be
the Paying Agent, the Trustee shall appoint a successor or additional Paying
Agent (which shall not be a UK Tax Resident nor act out of a branch or agency in
the United Kingdom for the purposes of this transaction). Any such successor or
additional Paying Agent must be approved by the Administrative Party, whose
approval shall not be unreasonably withheld or delayed. The Trustee shall cause
each successor Paying Agent or additional Paying Agent to execute and deliver to
the Trustee an instrument in which such successor or additional Paying Agent
shall agree with the Trustee that it will hold all sums, if any, held by it for
distribution to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be distributed to such
Certificateholders. The Paying Agent shall return all unclaimed funds to the
Trustee and upon removal shall also return all funds in its possession to the
Trustee. The provisions of Sections 9.1, 9.2, 9.3 and 9.5 shall apply to the
Trustee also in its role as Paying Agent, for so long as the Trustee shall act
as Paying Agent and, to the extent applicable, to any other Paying Agent
appointed hereunder. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
Notwithstanding anything contained herein to the contrary, the appointment of a
Paying Agent pursuant to this Section 6.11 shall not release the Trustee from
the duties, obligations, responsibilities or liabilities arising under this
Agreement other than with respect to funds paid to such Paying Agent.

                  SECTION 6.12. Authentication Agent.

                  (a) The Trustee may appoint one or more Authenticating Agents
(which shall not be a UK Tax Resident nor act out of a branch or agency in the

                                       32
<PAGE>

United Kingdom for the purposes of this transaction) (each, an "Authenticating
Agent") with respect to the Certificates which shall be authorized to act on
behalf of the Trustee in authenticating such Certificates outside the United
Kingdom in connection with the issuance, delivery and registration of transfer
or exchange of such Certificates. Whenever reference is made in this Agreement
to the authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be acceptable to the
Administrative Party. Notwithstanding anything contained herein to the contrary,
the appointment of an Authenticating Agent pursuant to this Section 6.12 shall
not release the Trustee from the duties, obligations, responsibilities or
liabilities arising under this Agreement.

                  (b) Any institution succeeding to the corporate agency
business of any Authenticating Agent shall continue to be an Authenticating
Agent without the execution or filing of any power or any further act on the
part of the Trustee or such Authenticating Agent; provided, however that such
institution shall not be a UK Tax Resident nor act out of a branch or agency in
the United Kingdom for the purposes of this transaction. An Authenticating Agent
may at any time resign by giving notice of resignation to the Trustee and to the
Administrative Party. The Trustee may at any time terminate the agency of an
Authenticating Agent by giving notice of termination to such Authenticating
Agent and to the Administrative Party. Upon receiving such a notice of resigna-
tion or upon such a termination, or in case at any time an Authenticating Agent
shall cease to be acceptable to the Trustee or the Administrative Party, the
Trustee promptly may appoint a successor Authenticating Agent. 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 acceptable to the Administrative
Party and it shall not be a UK Tax Resident nor act out of a branch or agency in
the United Kingdom for the purposes of this transaction. The Trustee agrees to
pay to each Authenticating Agent from time to time reasonable compensation for
its services under this Section 6.12. The provisions of Section 9.1, 9.2 and 9.3
shall be applicable to any Authenticating Agent.

                  (c) Pursuant to an appointment made under this Section 6.12,
the Certificates may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternate certificate of authentication in substantially
the following form:

                                       33

<PAGE>

                  This is one of the Certificates described in the Trust
Agreement referred to herein.

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

                                       -----------------------------------------
                                       as Authenticating Agent
                                       for the Trustee

                                       by

                                       -----------------------------------------
                                       Authorized Signatory

                  SECTION 6.13. Remedies. Following the occurrence of an Event
of Default, or a payment default by the Swap Counterparty under the Currency
Swap or upon a Swap Termination Event, the Trustee shall, within five Business
Days of obtaining knowledge of such Event of Default, default or Swap
Termination Event, mail a notice of such Event of Default, default or Swap
Termination Event to each Certificateholder of record as of the date the Trustee
obtained such knowledge. The Trustee shall request instructions from
Certificateholders as to what actions to take or cause to be taken or remedies
to exercise or cause to be exercised under the Notes or the Currency Swap,
including any actions or remedies with respect to, in the case of a payment
default by the Swap Counterparty under the Currency Swap, any unpaid Dollar Swap
Payment or other US Dollar amount owing by the Swap Counterparty under the
Currency Swap and, in the case of a Swap Termination Event (other than as a
result of a Conversion Event or an Optional Tax Redemption), any claim against
the Swap Counterparty for any Swap Termination Payment and whether or not such
Swap Termination Payment shall constitute Available Funds. The Trustee shall
take or cause to be taken such actions or exercise or cause to be exercised such
remedies as are permitted under the Notes or the Currency Swap and as
Certificateholders holding the Required percentage shall direct in writing;
provided, however, that the Trustee shall only authorize the issuance of
Definitive Certificates upon the affirmative vote of the Required percentage;
provided, further, that Definitive Certificates representing 100% of the
outstanding principal balance of the Certificates shall be issued if any
Definitive Certificates are issued; and provided, further, that the Trustee may
not sell, liquidate or otherwise dispose of the interest other than in
connection with a Trust Termination Event; and provided, further, the Trustee
shall be under no obligation to take any action at the request, order or
direction of Certificateholders unless such Certificateholders have offered the
Trustee reasonable security or indemnity. The Trustee shall have no liability
for any failure to act resulting from the Certificateholders' late return of, or
failure to return, directions requested by the Trustee from the
Certificateholders.

                                       34

<PAGE>

                                   ARTICLE VII

                  Yorkshire Group and the Administrative Party

                  SECTION 7.1. Liability of Yorkshire Group. Yorkshire Group
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed by this Agreement.

                  SECTION 7.2. Limitation on Liability of Yorkshire Group.
Neither Yorkshire Group nor any of the directors, officers, employees or agents
of Yorkshire Group shall be under any liability to the Trust or the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect Yorkshire Group or any
such person against any breach of warranties, representations or covenants made
herein, or against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder.

                  Yorkshire Group shall not be under any obligation to appear
in, prosecute or defend any legal action unless such action is related to its
respective duties under this Agreement and, in its opinion, does not involve it
in any expense or liability; provided, however, that Yorkshire Group may in its
discretion undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights and duties of the parties hereto
and the interests of the Certificateholders hereunder.

                  SECTION 7.3. Ownership of Administration Certificate. The
Administrative Party has acquired, and will continue to retain, except as
described below, ownership of the Administration Certificate. To the fullest
extent permitted by law, any attempted transfer of the Administration
Certificate, except for transfers by operation of law or to a successor
Administrative Party at the request of Yorkshire Group pursuant to Section 7.4,
shall be void. The Administration Certificate shall contain a legend. stating
"THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE TRUST AGREEMENT
REFERRED TO HEREIN".

                  SECTION 7.4. Transfer of Administration Certificate. Upon a
transfer of the Administration Certificate in accordance with Section 7.3:

                  (a) The Administrative Party surrendering the Administration
Certificate (the "Surrendering Party") (or its duly authorized attorney) shall
surrender such certificate at the Corporate Trust Office along with a written
instrument of surrender, in form satisfactory to the Trustee and the Certificate
Registrar, duly executed by the Surrendering Party. Thereupon, the Surrendering
Party shall cease to be the Administrative Party. The surrendered Administration
Certificate shall be canceled and subsequently disposed of by the Certificate
Registrar in accordance with its customary practice; and

                  (b) Immediately upon such surrender, (i) the Trustee, on
behalf of the Trust, shall execute and deliver in the name of the successor
Administrative Party a new Administration Certificate dated the date of delivery

                                       35
<PAGE>

and (ii) the successor Administrative Party shall evidence its acceptance by
executing the new Administration Certificate and taking possession thereof.
Thereupon, such entity shall be deemed to be the Administrative Party.

                  Subject to Section 9.5, no service charge shall be made for
any registration of transfer or surrender of the Administration Certificate.

                  SECTION 7.5. No Economic Interest in the Trust.

                  (a) The Administrative Party, by virtue of its possession of
the  Administration  Certificate,  has  a  beneficial  interest  in  the  Trust;
provided,  however,  that the  Administrative  Party,  solely  by  virtue of its
possession  of the  Administration  Certificate,  shall not be a trustee  of the
Trust nor shall it have an undivided  beneficial interest in the property of the
Trust nor shall it be entitled  to any  financial  or  monetary  Interest in the
Trust,  including,  but not limited to, any  distribution,  any amounts  paid on
liquidation  or  termination  of the Trust,  or any  entitlement to the Notes or
payments thereon.

                  (b) Possession of the Administration Certificate does not:

                  (i) entitle the Administrative Party to income or assets of
         the Trust;

                  (ii) impose upon the Administrative Party any obligation as
         trustee with respect to the Trust or

                  (iii) impose upon the Administrative Party any obligation to
         act as a fiduciary (to the fullest extent of the law) with respect to
         the Trust or the Certificates.

                  SECTION 7.6. Certain Duties and Responsibilities. The rights,
duties and responsibilities of the Administrative Party shall be only as
provided by the Administration Certificate and this Trust Agreement.
Notwithstanding the foregoing, no provision of the Administration Certificate or
this Trust Agreement shall require the Administrative Party to expend any of its
own funds in the performance of its duties as Administrative Party. Whether or
not therein expressly so provided, every provision of the Administration
Certificate and this Trust Agreement relating to the conduct of the
Administrative Party shall be subject to the provisions of this Section.

                                  ARTICLE VIII

  Concerning the Currency Swap, the Call Option and the Early Redemption Right

                  SECTION 8.1. Currency Swap and Call Option.

                  (a) Concurrently with the issue of the Certificates, the
Trustee shall execute the Currency Swap and the Call Option. The Trustee shall
perform the Trust's obligations under the Currency Swap and the Call Option in
accordance with their respective terms.

                                       36

<PAGE>

                  (b) The Trustee shall be permitted, without the consent of
Certificateholders, to enter into any amendment to the Currency Swap or the Call
Option, in accordance with the terms thereof, to cure any ambiguity in, or to
correct or supplement any provision of, the Currency Swap or the Call Option;
provided that (a) the Trustee has received an Opinion of Counsel to the effect
that such amendment (i) will not materially adversely affect the interests of
the Certificateholders and (ii) will not alter the status of the Trust as a
grantor trust for US federal income tax purposes or make the Trust resident in
the United Kingdom for United Kingdom tax purposes; provided, however, that
counsel giving such opinion may conclusively rely upon an Officer's Certificate
of Yorkshire Group with respect to the absence of any materially adverse effects
of a non-legal nature. In the event the Trustee receives any other request from
the Swap Counterparty or the Callholder, as the case may be, for approval of any
consent relating to or waiver or other modification of the Currency Swap or the
Call Option, the Trustee shall promptly deliver notice of such proposed consent,
waiver or modification to each Certificateholder and shall request from the
Certificateholders instructions as to whether or not to give or execute such
consent, waiver or modification. Upon the direction of Holders of Certificates
evidencing not less than the Required Percentage-Direction of Trustee of the
aggregate Voting Rights of the Certificates, the Trustee shall enter into such
consent, waiver or other modification of the Currency Swap or the Call Option;
provided that the Trustee shall have received an Opinion of Counsel to the
effect that such consent, waiver or other modification will not alter the status
of the Trust as a grantor trust for US federal income tax purposes or make the
Trust a UK Tax Resident; and provided further, that the Trustee shall not enter
into any such consent, waiver or other modification if the Trustee determines
(based upon advice of counsel upon which advice the Trustee may conclusively
rely) that such consent, waiver or other modification would, in the case of the
Currency Swap, alter the date on which any Dollar Swap Payments or other Dollar
payments are to be made thereunder or alter the amount thereof and, in the case
of the Call Option, alter the date on which the Call Option is exercisable or
the amount payable upon exercise of the Call Option.

                  (c) Notwithstanding Section 8.1(b), the Trustee shall not
enter into any amendment to, or give or execute any consent relating to or
waiver or other modification of, the Currency Swap or the Call Option unless the
Rating Agency Condition is satisfied.

                  SECTION 8.2 Obligations to the Callholder.

                  (a) Upon the exercise of the Call Option in accordance with
its terms, the Trustee shall deliver or cause to be delivered the Interest upon
the written direction of the Callholder, by 10:00 a.m. (New York City time) on
the Settlement Date, provided that the Trustee shall have received notice of the
exercise thereof from the Callholder on or prior to the Call Exercise Date in
accordance with the terms of the Call Option and shall have received from the
Callholder an amount, in immediately available funds in a form acceptable to the
Trustee, equal to the Call Price for the Interest, by 2:00 p.m. (London time) on
the Business Day prior to the Settlement Date.

                  (b) Upon receipt of the Call Price pursuant to Section 8.2(a),
the Trustee shall include any such amount in Available Funds with respect to the
Final Distribution (other than any interest received on the Call Price from the
Business Day prior to the Settlement Date to the Settlement Date, which interest
shall be payable to the Callholder).

                                       37

<PAGE>

                  SECTION 8.3. Early Redemption Right.

                  (a) If the Trustee fails to receive notice from the Callholder
in accordance with the Call Option on or prior to 4:00 p.m. (New York City time)
on the Call Exercise Date that it intends to exercise the Call Option, the
Trustee, on behalf of the Certificateholders, shall, immediately thereafter,
instruct the Book-Entry Depositary to give irrevocable written notice to
Yorkshire Finance (the "Early Redemption Notice") that the Book-Entry Depositary
will exercise the Early Redemption Right on the Settlement Date in accordance
with the terms of the Notes and the Indenture.

                  (b) Subject to prior compliance with Section 8.3(a), the Early
Redemption Right shall be exercised by the Book-Entry Depositary at the
direction of the Trustee by delivery of the Notes to Yorkshire Finance at the
time and in the manner specified in the Notes, together with such other
documents as may be required by, and by satisfying such other applicable terms
of, the Notes.

                  (c) Notwithstanding any other term of this Agreement, if the
Callholder exercises the Call Option in accordance with the terms thereof but
fails to make payment in full thereon by 2:00 p.m. (London time) on the Business
Day preceding the Settlement Date, the Trustee, on behalf of the Trust, shall,
immediately upon notice of or the occurrence of such default by the Callholder,
instruct the Book-Entry Depositary to give irrevocable written notice to
Yorkshire Finance that the Book-Entry Depositary intends to exercise the Early
Redemption Right on the Settlement Date in accordance with the terms of the
Notes. In such event, the Early Redemption Right shall then be exercised by the
Book-Entry Depositary at the direction of the Trustee by surrender of the Notes
to Yorkshire Finance at the time and in the manner specified in the Notes,
together with such other documents as may be required by, and by satisfying any
other applicable terms of, the Notes.

                                   ARTICLE IX

                             Concerning the Trustee

                  SECTION 9.1. Duties of Trustee: Notice of Defaults.

                  (a) The Trustee, prior to the occurrence of an Event of
Default and after the curing or waiver of all such  Events of Default  which may
have  occurred,  undertakes  to perform  such duties and only such duties as are
specifically set forth in this Agreement, the Currency Swap and the Call Option.
During the period an Event of Default shall have occurred and be continuing, the
Trustee  shall  exercise  such of the  rights  and  powers  vested in it by this
Agreement, and shall use the same degree of care and skill in their exercise, as
a prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.  Any  permissive  right of the Trustee  enumerated in
this  Agreement  shall not be construed  as a duty.  In the event of any payment
default by the Swap  Counterparty  under the Currency  Swap,  the Trustee  shall
provide a notice to the Swap Counterparty of such default in the form of Exhibit
D, and the Currency  Swap shall  terminate on the third  Business Day  following
such default unless it is remedied before such date. In the event of any payment
default by the  Callholder  under the Call Option,  the Trustee  shall provide a

                                       38
<PAGE>

notice to the  Callholder of such default in the form of Exhibit E, and the Call
Option shall immediately terminate.

                  (b) The Trustee, upon receipt of all resolutions,
certificates,   statements,   opinions,  reports,  documents,  orders  or  other
instruments  furnished  to the  Trustee  which are  specifically  required to be
furnished  pursuant to any  provision of this  Agreement,  shall examine them in
good faith to determine  whether they conform on their face to the  requirements
of this  Agreement.  If any such  instrument  is  found  not to  conform  to the
requirements of this  Agreement,  the Trustee shall take such action as it deems
appropriate  to have the  instrument  corrected,  and if the  instrument  is not
corrected to the Trustee's satisfaction, the Trustee will provide notice thereof
to Yorkshire Group and Certificateholders.

                  (c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own misconduct; provided, however, that:

                  (i) the Trustee shall not be personally liable with respect to
         any action taken, suffered or omitted to be taken by it in good faith
         in accordance with the direction of Holders of the Required Percentage
         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 Agreement;

                  (ii) except for actions expressly authorized by this
         Agreement, the Trustee shall take no actions reasonably likely to
         impair the interests of the Trust in any Trust Asset now existing or
         hereafter acquired or to impair the value of any Trust Asset now
         existing or hereafter acquired;

                  (iii) except as expressly provided in this Agreement, the
         Trustee shall have no power to vary the corpus of the Trust including
         by (A) accepting any substitute obligation or asset for a Trust Asset
         initially assigned to the Trustee under Section 2.1, (B) adding any
         other investment, obligation or security to the Trust or (C)
         withdrawing from the Trust any Trust Assets; and

                  (iv) in the event that the Paying Agent or the Certificate
         Registrar shall fail to perform any obligation, duty or agreement in
         the manner or on the day required to be performed by the Paying Agent
         or Certificate Registrar, as the case may be, under this Agreement, the
         Trustee shall be obligated promptly upon its knowledge thereof to
         perform such obligation, duty or agreement in the manner so required.

                  SECTION 9.2. Certain Matters Affecting the Trustee.

                  (a) Except as otherwise provided in Section 9.1:

                  (i) the Trustee may request and rely upon and shall be
         protected in acting or refraining from acting upon any resolution,
         Officer's Certificate, certificate of auditors or any other

                                       39
<PAGE>

         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, appraisal, bond or other paper or document reasonably
         believed by it to be genuine and to have been signed or presented by
         the proper party or parties;

                  (ii) the Trustee may consult with counsel of its selection and
         any advice of such counsel or any Opinion of Counsel shall be full and
         complete authorization and protection in respect of any action taken or
         suffered or omitted by it hereunder in good faith and in accordance
         with such advice or Opinion of Counsel;

                  (iii) the Trustee shall be under no obligation to exercise any
         of the trusts or powers vested in it by this Agreement or to institute,
         conduct or defend any litigation hereunder or in relation hereto, at
         the request, order or direction of any of the Certificateholders,
         pursuant to the provisions of this Agreement, unless such
         Certificateholders shall have offered to the Trustee reasonable
         security or indemnity against the costs, expenses and liabilities which
         may be incurred therein or thereby; provided, however, that nothing
         contained herein shall relieve the Trustee of the obligations, upon the
         occurrence of an Event of Default (which has not been cured or waived),
         to exercise such of the rights and powers vested in it by this
         Agreement, and to use the same degree of care and skill in their
         exercise as a prudent person would exercise or use under the
         circumstances in the conduct of such person's own affairs;

                  (iv) the Trustee shall not be personally liable for any action
         taken, suffered or omitted by it in good faith and believed by it to be
         authorized or within the discretion or rights or powers conferred upon
         it by this Agreement;

                  (v) 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, consent,
         order, appraisal, approval, bond or other paper or document believed by
         it to be genuine, unless requested in writing to do so by Holders of
         the Required Percentage; provided, however, that if the payment within
         a reasonable time to the Trustee of the costs, expenses or liabilities
         likely by it in the making of such investigation is, in the opinion of
         the Trustee, not reasonably assured to the Trustee by the security
         afforded to it by -the terms of this Agreement, the Trustee may require
         reasonable indemnity against such expense or liability as a condition
         to taking any such action; and

                  (vi) 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 or a custodian.

                  (b) All rights of action under this Agreement or under any of
the Certificates,  enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other Proceeding  relating  thereto,  and any such Proceeding  instituted by the
Trustee  shall be brought in its name for the benefit of all the Holders of such
Certificates, subject to the provisions of this Agreement.

                  SECTION 9.3. Trustee Not Liable for Recitals in Certificates
or Trust Assets. The Trustee assumes no responsibility for the correctness of
the recitals contained herein and in the Certificates or in any document issued
in connection with the sale of the Certificates (other than the Trustee's
signature and authentication on the Certificates). Except as set forth in

                                       40
<PAGE>

Section 9.11, the Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement or of the Certificates (other
Trustee's signature and authentication on the Certificates) or of any Trust
Asset or related document

                  SECTION 9.4. Trustee May Own Certificates. The Trustee in its
individual capacity or any other capacity may become the owner or pledgee of
Certificates arid may transact business with the other parties hereto with the
same rights it would have if it were not Trustee.

                  SECTION 9.5. Trustee's Fees and Expenses; Indemnification.

                  (a) The Trustee shall be paid by Yorkshire Group as
compensation for its services hereunder such fees as have been separately agreed
upon from time to time by Yorkshire Group and the Trustee, and the Trustee shall
be entitled to be reimbursed by Yorkshire Group for its reasonable expenses
hereunder, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Trustee may reasonably
employ in connection with the exercise and performance of its rights and its
duties hereunder and any investigation in connection therewith.

                  (b) Yorkshire Group shall indemnify and hold harmless the
Trustee, Paying Agent and the Certificate Registrar against any loss, liability
or expense incurred in connection with any action relating to or arising out of
this Agreement, the Certificates, the Call Option, the Currency Swap, the Early
Redemption Right, the Purchase Agreement, as applicable, or the acceptance of
the trust created hereby or the performance of the duties of the Trustee, the
Paying Agent or the Certificate Registrar hereunder except to the extent that
such loss, liability or expense (i) is due to willful misfeasance, bad faith or
negligence of the Trustee, the Paying Agent or the Certificate Registrar or (ii)
relates to the payment obligations under the Certificates, the Currency Swap or
the Call Option.

                  (c) The provisions of this Section 9.5 shall survive the
resignation or removal of the Trustee, and the termination of this Agreement and
the Trust.

                  SECTION 9.6. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a corporation or an association which is not an
Affiliate of Yorkshire Group (but may have normal banking relationships with
Yorkshire Group and its Affiliates) organized and doing business under the laws
of any State or the United States, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by US federal or State
authority. If such corporation or association publishes reports of conditions at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 9.6
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of conditions so published. Such corporation or association must be rated
in one of the four highest rating categories by the Rating Agencies and must not
be a UK Tax Resident nor acting for the purposes of this transaction out of a
branch, office or agency in the United Kingdom.

                                       41

<PAGE>

                  SECTION 9.7. Resignation or Removal of the Trustee.

                  (a) The Trustee may at any time resign and be discharged from
any trust hereby created by giving written notice thereof to Yorkshire Group,
the Rating Agencies and to all Certificateholders. Upon receiving notice of
resignation, the Administrative Party shall promptly appoint a successor trustee
by written instrument, in duplicate, which instrument shall be delivered to the
resigning Trustee and to the successor trustee. A copy of such instrument shall
be delivered to such Certificateholders by the Administrative Party. If no such
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.

                  (b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.6 and shall fail to resign after
written request therefor by the Administrative Party, or if at any time the
Trustee shall become incapable of acting, or shall be adjudged 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 the Administrative Party may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, which instrument shall be
delivered to the Trustee so removed and to the successor trustee. A copy of such
instrument shall be delivered to the Certificateholders, if any, by the
Administrative Party.

                  (c) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this Section 9.7
shall not become effective until acceptance of appointment by the successor
trustee as provided in Section 9.8.

                  SECTION 9.8. Successor Trustee.

                  (a) Any successor trustee appointed as provided in Section 9.7
shall execute, acknowledge and deliver to the Administrative Party and to its
predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Trust Assets, documents and statements held by it hereunder, and
Yorkshire Group and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations. No successor trustee shall accept
appointment as provided in this Section 9.8 unless at the time of such
acceptance such successor trustee shall be eligible under the provisions of
Section 9.6.

                  (b) Upon acceptance of appointment by a successor trustee as
provided in this Section 9.8, the Administrative Party shall transmit notice of
the succession of such trustee hereunder to all Holders of Certificates and to
the Rating Agencies in the manner provided in Section 11.6.

                                       42

<PAGE>

                  SECTION 9.9. Merger or Consolidation of Trustee. Any
corporation or association into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation or association resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation or association succeeding to the business of the
Trustee, or any corporation or association purchasing all, or substantially all,
of the corporate trust business of the Trustee shall be the successor of the
Trustee hereunder, provided such corporation or association shall be eligible
under the provisions of Section 9.6, without the execution or filing of any
instrument or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.

                  SECTION 9.10. Appointment of Office or Agency. The Trustee
shall appoint an office or agency in The City of New York where the Certificates
may be surrendered for registration of transfer or exchange, and presented for
the Final Distribution with respect thereto, and where notices and demands to or
upon the Trustee in respect of the Certificates and this Agreement may be
served. The Trustee initially appoints its Corporate Trust Office for such
purpose.

                  SECTION 9.11. Representations and Warranties of Trustee. The
Trustee represents and warrants that:

                  (i) the Trustee is duly organized, validly existing and in
         good standing under the laws of its jurisdiction of incorporation or
         association;

                  (ii) neither the execution, the delivery or performance by the
         Trustee of this Agreement, nor the consummation by it of the
         transactions contemplated hereby nor compliance by it with any of the
         terms or provisions hereof will violate its charter documents or
         by-laws;

                  (iii) the Trustee has full power, authority and right to
         execute, deliver and perform its duties and obligations as set forth
         herein, has taken all necessary action to authorize the execution,
         delivery and performance by it of this Agreement and has satisfied all
         of the eligibility requirements set forth in Section 9.6;

                  (iv) this Agreement has been duly executed and delivered by
         the Trustee and constitutes the legal, valid and binding obligation of
         the Trustee, enforceable in accordance with its terms, except as
         enforcement may be limited by applicable bankruptcy, insolvency,
         reorganization, moratorium or similar laws affecting the rights of
         creditors generally and general principles of equity (regardless of
         whether such enforceability is considered in a proceeding in equity or
         at law); and

                  (v) the execution, delivery and performance by the Trustee of
         this Agreement shall not require the authorization, consent or approval
         of, the giving of notice to, the filing or registration with, or the
         taking of any other action in respect of, any governmental authority or
         agency regulating the banking and corporate trust activities of the
         Trustee.

                                       43

<PAGE>

                  SECTION 9.12. Limitation of Powers and Duties.

                  (a) The Trustee shall administer the Trust and the Trust
Assets solely as specified herein.

                  (b) The Trust is constituted solely for the purpose of
acquiring and holding the Trust Assets. The Trustee is not authorized to acquire
any other investments or engage in any activities not authorized herein, and, in
particular, the Trustee is not authorized (i) to sell, assign, transfer,
exchange, pledge, set-off or otherwise dispose of any of the Notes, once
acquired, or interests therein, including to Certificateholders (except pursuant
to the Call Option, the Early Redemption Right and Section 4.2) or (ii) to do
anything that would alter the status of the Trust as a grantor trust for US
federal income tax purposes or which would make the Trust or the Trustee a UK
Tax Resident or which would lead to either the Trust or the Trustee acting out
of a United Kingdom branch or agency for the purposes of this transaction.

                  (c) The Trustee, as a holder of the Interest, has the right to
direct the Depository as holder of the Book-Entry Interests to vote and give
consents and waivers in respect of the Notes and enforce such other rights of a
holder of the Notes except as otherwise limited by this Agreement. In the event
that the Trustee receives a request from the Depository with respect to the
Interest, for the Trustee's consent to any amendment, modification or waiver of
the Notes or the Interest, or any document hereunder, or relating thereto, or
receives any other solicitation for any action with respect to the Notes or the
Interest, the Trustee shall within five Business Days mail a notice of such
proposed amendment, modification, waiver or solicitation to each
Certificateholder as of the date of such request. The Trustee shall request
instructions from the Certificateholders as to what action to take in response
to such request. Except as otherwise provided herein, the Trustee shall consent
or vote, or refrain from consenting or voting, in the same proportion (based on
the Certificate Principal Balances) as the Certificates of the Trust were
actually voted or not voted by the Holders thereof as of the date determined by
the Trustee prior to the date such vote or consent is required; provided,
however, that, notwithstanding anything to the contrary in this Agreement, the
Trustee shall at no time vote in favor of or consent to any matter (i) unless
such vote or consent would not, based on an Opinion of Counsel, alter the status
of the Trust as a grantor trust for US federal income tax purposes or make the
Trust or the Trustee a UK Tax Resident or lead to the Trust or the Trustee
acting out of a United Kingdom branch or agency for purposes of this
transaction, (ii) which would alter the amount of any payment on the Notes,
other than in connection with a Trust Termination Event or (iii) which would
result in the exchange or substitution of any Notes pursuant to a plan for the
refunding or refinancing of such Notes, except during the continuation of an
Event of Default, or which would otherwise result in a sale or exchange of
Certificates for US federal income tax purposes and, in each case, other than in
connection with a Trust Termination Event. The Trustee shall have no liability
for any failure to act resulting from the Certificateholders' late return of, or
failure to return, directions requested by the Trustee from the
Certificateholders.

                  (d) Notwithstanding any provision of this Agreement to the
contrary, for purposes of any security or indemnity against the costs, expenses
and liabilities the Trustee may incur by reason of any action undertaken at the
direction of the Certificateholders, which the Trustee may require from the
Certificateholders prior to taking any such action, an unsecured indemnity

                                       44
<PAGE>

agreement of a Certificateholder or any of its Affiliates, if acceptable to the
Trustee, shall be deemed sufficient to satisfy such security or indemnity
requirement.

                                    ARTICLE X

                                   Termination

                  SECTION 10.1. Termination.

                  (a) Upon presentation and surrender of the Certificates by the
Certificateholders on the Final Distribution Date, the Trustee shall distribute
to each Holder presenting and surrendering its Certificates the amounts
distributable to such Holder in accordance with Sections 4.1 and 4.2 in respect
of the Certificates so presented and surrendered. Any funds not distributed on
the Final Distribution Date shall be set aside and held in trust for the benefit
of Certificateholders not presenting and surrendering their Certificates in the
aforesaid manner, and shall be disposed of in accordance with Section 4.2(d).

                  (b) The Trust and the respective obligations and
responsibilities under this Agreement of the Administrative Party and Yorkshire
Group and, except as otherwise provided herein, the Trustee shall terminate upon
the completion of the Final Distribution; provided, however, that in no event
shall the trust created hereby continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Joseph P. Kennedy, the late
ambassador of the United States to the Court of St. James, living on the date
hereof.

                                   ARTICLE XI

                            Miscellaneous Provisions

                  SECTION 11.1. Amendment.

                  (a) This Agreement may be amended or modified from time to
time by the Administrative Party and the Trustee without notice to or the
consent of any of the Certificateholders for any of the following purposes: (i)
to cure any ambiguity or to correct or supplement any provision herein which may
be defective or inconsistent with any other provision herein or in the Currency
Swap or in the Call Option; (ii) to add any security interest for the benefit of
any Certificateholders; (iii) to add to the covenants, restrictions or
obligations of Yorkshire Group, the Administrative Party or the Trustee for the
benefit of the Certificateholders; (iv) to add, change or eliminate any other
provisions with respect to matters or questions arising under this Agreement, so
long as (x) any such amendment described in clauses (i) through (iv) above will
not, as evidenced by an Opinion of Counsel, affect the status of the Trust as a
"grantor trust" or result in a sale or exchange of any Certificate for US
federal income tax purposes or make the Trust or the Trustee a UK Tax Resident
or lead to the Trust or the Trustee acting out of a United Kingdom branch or
agency for the purposes of this transaction and (y) the Rating Agency Condition
has been satisfied; (v) to comply with any requirements imposed by the Code; or
(vi) to evidence and provide for the acceptance of appointment hereunder by a

                                       45
<PAGE>

successor Trustee or to add or change any of the provisions of this Agreement as
shall be necessary to provide for or facilitate the administration of the trust
hereunder.

                  (b) Without limiting the generality of the foregoing, this
Agreement may also be modified or amended from time to time by Yorkshire Group,
the Administrative Party and the Trustee with the consent of the Holders of
Certificates representing the Required Percentage-Amendment for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such modification or
amendment shall, without the consent of each affected Certificateholder, (i)
reduce in any manner the amount of payments received on the Trust Assets or
otherwise adversely affect in any material respect the interests of the
Certificateholder or (ii) reduce the percentage of aggregate Voting Rights
required to modify or amend this Agreement and provided, further that Yorkshire
Group shall furnish to the Trustee an Opinion of Counsel stating that, in the
opinion of such counsel, any such modification or amendment would not alter the
status of the Trust as a "grantor trust" for US federal income tax purposes or
make the Trust or the Trustee a UK Tax Resident or lead to the Trust or the
Trustee acting out of a United Kingdom branch or agency for the purposes of this
transaction.

                  (c) In addition to and notwithstanding anything to the
contrary in this Agreement, the Trustee shall not enter into any modification or
amendment of this Agreement that would (i) adversely affect in any material
respect the interests of the Callholder in the Interest without the consent of
the Callholder or (ii) alter the date on which the Call Option is exercisable or
the amount payable as a result of the exercise of the Call Option without the
consent of the Callholder; provided, however, that the Trustee shall not enter
into any modification or amendment of this Agreement unless such modification or
amendment would not, based on an Opinion of Counsel, alter the status of the
Trust as a "grantor trust" or result in a sale or exchange of any Certificates
for US federal income tax purposes or make the Trust or the Trustee a UK Tax
Resident or lead to the Trust or the Trustee acting out of a United Kingdom
branch or agency for the purposes of this transaction.

                  (d) Promptly after the execution of any such amendment or
modification, the Trustee shall furnish a copy of such amendment or modification
without charge to each Certificateholder and Yorkshire Group shall furnish a
copy of such amendment or modification to the Rating Agencies. It shall not be
necessary to obtain the consent of Certificateholders under this Section 11.1 to
approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe.

                  SECTION 11.2. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.

                  SECTION 11.3. Limitation on Rights of Certificateholders.

                                       46

<PAGE>

                  (a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.

                  (b) No Certificateholder shall have any right to vote (except
as expressly provided for herein) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.

                  (c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement or any
Certificate, unless such Holder previously shall have given to the Trustee a
written notice of breach and of the continuance thereof and unless also the
Holders of Certificates evidencing not less than the Required
Percentage-Remedies shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee, for 15 days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding. It is understood and agreed that the Trustee shall
not be obligated to make any investigation of matters arising under this
Agreement, the Call Option or the Currency Swap or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order or
direction of any Certificateholders unless such Certificateholders have offered
to the Trustee the reasonable indemnity referred to above. It is further
understood and agreed, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of the Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 11.3, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.

                  SECTION 11.4. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed entirely therein without reference to
such State's principles of conflicts of law to the extent that the application
of the laws of another jurisdiction would be required thereby, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.

                  SECTION 11.5. Jurisdiction.

                                       47

<PAGE>

                  (a) Yorkshire Group agrees that any legal suit, action or
proceeding against Yorkshire Group brought by the Trustee arising out of or
based upon this Agreement may be instituted in any State or US federal court in
the Borough of Manhattan, The City of New York, and waives any objection which
it may now or hereafter have to the laying of venue of any such proceeding and,
until the satisfaction and discharge of this Agreement hereof, irrevocably
submits to the nonexclusive jurisdiction of such courts in any suit, action or
proceeding.

                  (b) Yorkshire Group has appointed CT Corporation System at 111
Eighth Avenue, New York, New York 10011, as its authorized agent (the
"Authorized Agent") upon whom process may be served in any legal suit, action or
proceeding arising out of or based upon this Agreement which may be instituted
in the Supreme Court of New York, New York County or the United States District
Court for the Southern District of New York by the Trustee, and expressly
accepts the nonexclusive jurisdiction of any such court in respect of any such
action. Such appointment shall be irrevocable. Service of process upon the
Authorized Agent shall be deemed, in every respect, effective service of process
upon Yorkshire Group. Notwithstanding the foregoing, any action based on this
Agreement may be instituted by the Trustee in any competent court in England.

                  (c) To the extent that Yorkshire Group 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),
Yorkshire Group irrevocably agrees with respect to any matter arising under this
Agreement, not to claim, and irrevocably waives, such immunity to the full
extent permitted by the laws of such jurisdiction.

                  SECTION 11.6. Notices.

                  (a) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when received if personally
delivered or mailed by first class mail, postage prepaid or by express delivery
service or by certified mail, return receipt requested or delivered by facsimile
foll6wed by delivery by mail or delivered in any other manner specified herein,
(i) in the case of Yorkshire Group, to Wetherby Road, Scarcroft, Leeds, LS 14
3H5, United Kingdom; Attention: Roger Dickinson, facsimile number:
011-44-113-289-5549; (ii) in the case of the Administrative Party, to YPG
Holdings c/o AEP Resources, Inc., 1 Riverside Plaza, Columbus, Ohio 43215;
Attention: Corporate Finance Director, facsimile number: 614-223-2807; and (iii)
in the case of the Trustee, to 101 Barclay Street, New York, New York, 10286,
Attention: Ming J. Shiang, facsimile number: 212-815-5595 or such other address
as may hereafter be furnished to Yorkshire Group in writing by the Trustee.

                  (b) For purposes of delivering notices to the Rating Agencies
under Section 11.8 or otherwise, such notices shall be mailed or delivered as
provided in Section 11.8 to: Standard & Poor's, 26 Broadway (15th Floor), New
York, New York 10004; DCR, 17 State Street (12th Floor), New York, New York
10004; and Moody's Investors Service, Inc., 99 Church Street, New York, New York
10007; or such other address as the Rating Agencies may designate in writing to
the parties hereto.

                                       48

<PAGE>

                  (c) Notwithstanding any provision of this Agreement to the
contrary, the Trustee shall deliver all notices or reports required to be
delivered to or by the Trustee or Yorkshire Group to the Certificateholders
without charge to such Certificateholders.

                  (d) Any notice required to be provided to a Holder shall be
given by first class mail, postage prepaid, at the last address of such Holder
as shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given when mailed, whether or not the Certificateholder receives such notice.

                  SECTION 11.7. Severability of Provisions. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed enforceable to the extent permitted, and if not so
permitted, shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.

                  SECTION 11.8. Notice to Rating Agencies. The Trustee shall use
its best efforts promptly to provide notice to the Rating Agencies with respect
to each of the following of which it has actual knowledge:

                  (i) any modification or amendment to this Agreement;

                  (ii) the resignation or termination of the Trustee;

                  (iii) the final payment to Holders of the Certificates; and

                  (iv) any change in the location of the Certificate Account.

In addition, the Trustee shall promptly furnish to each of the Rating Agencies
copies of each report to Certificateholders described in Section 4.3 or
otherwise. Any such notice pursuant to this Section 11.8 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to each of the
Rating Agencies at the address specified in Section 11.6.

                  SECTION 11.9. Non-petition Covenant. Notwithstanding any prior
termination of this Agreement, each of the Trustee, any Authenticating Agent,
any Paying Agent, Yorkshire Group and the Administrative Party agrees that it
shall not, until the date which is one year and one day after the Final
Distribution Date acquiesce, petition or otherwise invoke or cause the Trust to
invoke the process of the United States of America, any State or other political
subdivision thereof or any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government for the
purpose of commencing or sustaining a case by or against the Trust under a
Federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official

                                       49
<PAGE>

of the Trust or all or any part of the property or assets of the Trust or
ordering the winding up or liquidation of the affairs of the Trust.

                  SECTION 11.10. Article and Section References. All article and
section references used in this Agreement, unless otherwise provided, are to
articles and sections in this Agreement.

                  SECTION 11.11. Compliance Certificates and Opinions. etc.

                  (a) Upon any application or request by the Administrative
Party to the Trustee to take any action under any  provision of this  Agreement,
the  Administrative  Party  shall  furnish  to the  Trustee:  (i)  an  Officer's
Certificate stating that all conditions precedent,  if any, provided for in this
Agreement  relating to the proposed  action have been complied with, and (ii) 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  Agreement,  no  additional
certificate  or opinion need be  furnished.  Every  certificate  or opinion with
respect  to  compliance  with a  condition  or  covenant  provided  for in  this
Agreement shall include:

                  (i) a statement that each signatory of such certificate or
         opinion has read or has caused to be read such covenant or condition
         and the definitions herein relating thereto;

                  (ii) 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;

                  (iii) a statement that, in the judgement of each such
         signatory, such signatory has made such examination or investigation as
         is necessary to enable such signatory to express an informed opinion as
         to whether or not such covenant or condition has been complied with;
         and

                  (iv) a statement as to whether, in the opinion of each such
         signatory, such condition or covenant has been complied with.

                  IN WITNESS WHEREOF, Yorkshire Group, the Administrative Party
and the Trustee have caused their names to be signed hereto by their respective
officers thereunto duly authorized, in each case as of the day and year first
above written.

                                       50

<PAGE>

                                            YORKSHIRE POWER GROUP LIMITED

                                            By:  /s/ A. A. Pena
                                                 -----------------
                                                 Name:  A. A. Pena
                                                 Title: Chief Financial Officer

                                            YPG HOLDINGS LLC,
                                            as Administrative Party

                                            By:  /s/ A. A. Pena
                                                 ---------------------
                                                 Name:  A. A. Pena
                                                 Title: Chairman

                                            THE BANK OF NEW YORK,
                                            as Trustee

                                            By:________________________________
                                                 Name:
                                                 Title:

                                       51
<PAGE>

                                                                     Exhibit A

NUMBER                                                              $__________
R-_______                                                 CUSIP NO. ___________

                  THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS OF THE UNITED STATES. 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 OF
THE UNITED STATES. THIS SECURITY MAY NOT BE PURCHASED, ACQUIRED OR HELD BY, OR
OTHERWISE SOLD OR TRANSFERRED TO, ANY PERSON WHO IS RESIDENT OR ORDINARILY
RESIDENT IN THE UNITED KINGDOM FOR UNITED KINGDOM TAX PURPOSES (A "UK
TAX-RESIDENT"). ANY PURPORTED TRANSFER TO A UK TAX-RESIDENT SHALL BE NULL AND
VOID AND OF NO EFFECT. 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 PASS-THROUGH ASSET TRUST 2000-1 (THE "TRUST")
OR ANY AFFILIATE OF THE TRUST WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF THE SECURITY) OR THE EXPIRATION OF SUCH SHORTER PERIOD AS MAY BE PRESCRIBED
BY RULE 144(k), OR ANY SUCCESSOR PROVISION THEREOF, UNDER THE SECURITIES ACT
(THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE TRUST, (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 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 RIGHT OF THE TRUST, YORKSHIRE POWER FINANCE 2 LIMITED, YORKSHIRE
POWER GROUP LIMITED AND THE TRUSTEE PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(i) PURSUANT TO CLAUSE (D) OR (E) ABOVE 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 AS TO
COMPLIANCE WITH CERTAIN CONDITIONS TO TRANSFER IS COMPLETED AND DELIVERED BY THE

                                       52
<PAGE>

TRANSFEROR TO THE TRUSTEE. 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 TRUST IN ACCORDANCE WITH APPLICABLE LAW.

                  THIS CERTIFICATE REPRESENTS A FRACTIONAL UNDIVIDED INTEREST IN
THE TRUST, ITS INCOME AND ASSETS AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, AND IS NOT GUARANTEED BY YORKSHIRE POWER FINANCE 2 LIMITED,
YORKSHIRE POWER GROUP LIMITED, THE ADMINISTRATIVE PARTY OR THE TRUSTEE OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE TRUST ASSETS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY PERSON.

                  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE
TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

                 YORKSHIRE POWER PASS-THROUGH ASSET TRUST 2000-1

                  ___% PASS-THROUGH ASSET TRUST SECURITIES DUE

                                FEBRUARY__, 2005

evidencing a fractional undivided beneficial ownership interest in the Trust, as
defined below, the property of which consists principally of 100% of the
beneficial interests (the "interest") in the certificateless book-entry
interests (the "Book-Entry Interests") issued by The Bank of New York, as
book-entry depositary (the "Book-Entry Depositary"), representing (pound) ______
principal amount of Reset Senior Notes Due February __, 2020 (collectively, the
"Notes") of Yorkshire Power Finance 2 Limited, a private company with limited
liability incorporated under the laws of the Cayman Islands ("Yorkshire
Finance"). The Notes are fully and unconditionally guaranteed (the "Guarantee")
by Yorkshire Power Group Limited ("Yorkshire Group"). The Interest has been
purchased by the Trust with the proceeds of the sale of the Certificates and the
Call Option (each as defined herein).

                  THIS CERTIFIES THAT ____________ is the registered owner of a
nonassessable, fully-paid, fractional undivided interest in Yorkshire Power
Pass-Through Asset Trust 2000-1 (including its income and assets) formed by
Yorkshire Group equal to a Certificate Principal Balance of $_____, as such
amount may be adjusted on the records of the Holder and the Trustee. Under the

                                       53
<PAGE>

Trust Agreement, there will be distributed on the ______ day of each February
and August, or if such day is not a Business Day, the next succeeding Business
Day, commencing August __, 2000 through and including the Settlement Date (each
a "Distribution Date"), to the extent of Available Funds (as defined herein), an
amount equal to the US Dollar distribution which will be equal to the amount
then payable by _________ (the "Swap Counterparty") to the Trustee under the
Currency Swap Agreement, dated February __, 2000, between the Trustee and the
Swap Counterparty (the "Currency Swap") and any other amounts remaining in the
Certificate Account on such Distribution Date. On the Final Distribution Date,
there will be distributed, to the extent of Available Funds, all distributions
received from or in respect of the Trust Assets.

                  The Trust was created pursuant to a Trust Agreement dated as
of February 1, 2000 (the "Trust Agreement"), among Yorkshire Group, the
Administrative Party and The Bank of New York, a New York corporation, not in
its individual capacity but solely as Trustee (the "Trustee"). This Certificate
does not purport to summarize the Trust Agreement and reference is hereby made
to the Trust Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and obligations of the Trustee with respect hereto. This Certificate is
issued under and is subject to the terms, provisions and conditions of the Trust
Agreement, to which Trust Agreement the Holder of this Certificate by virtue of
the acceptance hereof assents and by which such Holder is bound. A copy of the
Trust Agreement may be obtained from the Trustee by written request sent to the
Corporate Trust Office or from Yorkshire Group by written request sent to
Yorkshire Group. Capitalized terms used but not defined herein have the meanings
assigned to them in the Trust Agreement.

                  This Certificate is one of the duly authorized Certificates
designated as " % Pass-Through Asset Trust Securities Due February __, 2005"
(herein called the "Certificates"). Concurrently with the issuance of the
Certificates, the Trustee will issue an option (the "Call Option") that
represents the right to purchase the Interest in whole but not in part on
February __, 2005 at the call price specified in the Call Option. If the holder
of the Call Option does not give irrevocable prior written notice of its intent
to exercise the Call Option or falls to fulfill its payment obligations
thereunder in accordance with the terms of the Call Option, the Trustee shall
direct The Bank of New York, as Book-Entry Depositary to exercise the Early
Redemption Right (as defined in the Trust Agreement) and Yorkshire Finance shall
he obligated to redeem the Notes at a price equal to the unpaid principal amount
thereof on February __, 2005. The property of the Trust consists of the
Interest, the aggregate amount deposited in the Certificate Account since the
last Distribution Date or, in the case of the first Distribution Date, since the
date of the initial issuance of the Certificates, and (a) for so long as the
Notes are denominated in Pounds Sterling and no Swap Termination Event has
occurred, any Dollar Swap Payment or other US Dollar amount paid by the Swap
Counterparty to the Trustee under the Currency Swap, (b) if a Swap Termination
Event (other than as a result of a Conversion Event or an Optional Tax
Redemption) has occurred, the semi-annual interest payments on the Notes and
payments on or in respect of the principal of the Notes made by Yorkshire
Finance thereunder or, if applicable, Yorkshire Group under the Guarantee and
received by the Trustee in respect of the Interest or, if applicable, any Swap
Termination Payment (subject to Section 6.13 of the Trust Agreement) or Unpaid
Amounts, (c) if a Conversion Event has occurred, the semi-annual interest
payments on the Notes and payments on or in respect of the principal of the
Notes made by Yorkshire Finance thereunder or, if applicable, Yorkshire Group
under the Guarantee and received by the Trustee in respect of the Interest or,

                                       54
<PAGE>

if applicable, any Unpaid Amounts, (d) all Option Proceeds and (e) all
Liquidation Proceeds (the "Available Funds").

                  Subject to the terms and conditions of the Trust Agreement and
the Call Option (including the availability of funds for distributions) and
until the obligation created by the Trust Agreement shall have terminated in
accordance therewith, distributions will be made on each Distribution Date to
the Person in whose name this Certificate is registered on the applicable Record
Date, in an amount equal to such Certificateholder's fractional undivided
interest in the amount required to be distributed to the Holders of the
Certificates on such Distribution Date. If any payment by the Swap Counterparty
with respect to the Currency Swap or a payment due on any February ___ or August
___ with respect to the Interest is not made to the Trustee by the designated
times specified in the Trust Agreement on the date such payment is due, or if
such payment is not made on the due date, the Trustee will upon receipt of such
funds make such distribution on the next Business Day (and no additional amounts
of interest shall accrue on the Certificates or be owed to Certificateholders as
a result of any such delay).

                  Distributions made on this Certificate will be made as
provided in the Trust Agreement by the Trustee by wire transfer in immediately
available funds, without the presentation or surrender of this Certificate or
the making of any notation hereon. Except as otherwise provided in the Trust
Agreement and notwithstanding the above, the Final Distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency maintained for that purpose by the Trustee in the Borough of
Manhattan, the City of New York.

                  Reference is hereby made to the further provisions of this
Certificate 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 or on behalf of the Trustee, by manual signature, this Certificate
shall not entitle the holder hereof to any benefit under the Trust Agreement or
be valid for any purpose.

                  THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                                       55
<PAGE>

                  IN WITNESS WHEREOF, the Trust has caused this Certificate to
be duly executed as of the date set forth below.

                                         YORKSHIRE POWER
                                         PASS-THROUGH ASSET TRUST
                                         2000-1, by The Bank of New
                                         York, not in its individual
                                         capacity but solely as
                                         Trustee

                                         ---------------------------------
                                         Authorized Officer

Dated:__________

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

                  This is one of the Certificates described in the Trust
Agreement referred to herein.

                                         THE BANK OF NEW YORK, as Trustee

                                         By:_______________________________
                                                 Authorized Signatory
                                         or

                                         as Authenticating Agent for the Trustee

                                         By:_______________________________
                                                 Authorized Signatory

                                       56
<PAGE>

                         (REVERSE OF TRUST CERTIFICATE)

                  The Certificates are limited in right of distribution to
certain payments and collections as provided in the Trust Agreement, all as more
specifically set forth herein and in the Trust Agreement. The registered Holder
hereof, by its acceptance hereof, agrees that it will look solely to payments
under the Interest and the Currency Swap for distributions hereunder.

                  Subject to the next paragraph and to certain exceptions
provided in the Trust Agreement, the Trust Agreement permits the amendment
thereof and the modification of the rights and obligations of Yorkshire Group
and the Trustee and the rights of the Certificateholders under the Trust
Agreement at any time by the Administrative Party and the Trustee with the
consent of the Holders of Certificates evidencing not less than 66 2/3% of the
aggregate Voting Rights of Outstanding Certificates subject to certain
provisions set forth in the Trust Agreement. Any such consent by the Holder of
this Certificate (or any predecessor Certificate) shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in an exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Trust Agreement also permits the modification or amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.

                  The Certificates are issuable in fully registered form only in
minimum original principal amounts of $100,000 and integral multiples of $1,000
in excess thereof. As provided in the Trust Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same principal amount, class, original issue date and
maturity, in authorized denominations as requested by the Holder surrendering
the same.

                  As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Trustee in the Borough of Manhattan, the City of New York, duly endorsed
by or accompanied by an assignment in the form below and by such other documents
as required by the Trust Agreement, and thereupon one or more new Certificates
of the same class in authorized denominations evidencing the same principal
amount will be issued to the designated transferee or transferees. The
Certificate Registrar appointed under the Trust Agreement is The Bank of New
York.

                  No service charge will be made for any registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.

                  The Administrative Party, Yorkshire Group and the Trustee and
any agent thereof may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Administrative
Party, Yorkshire Group, the Trustee, nor any such agent shall be affected by any
notice to the contrary.

                                       57

<PAGE>

                  The Trust and the obligations of Yorkshire Group and the
Trustee created by the Trust Agreement with respect to the Certificates shall
terminate upon the distribution by the Trustee on the Final Distribution Date of
(i) all Option Proceeds following an exercise of the Call Option by the
Callholder or an exercise of the Early Redemption Right (and upon receipt by the
Trust from the Swap Counterparty of US Dollars in an amount equal to the
Certificate Principal Amount as a result of such exercise), as the case may be,
or (ii) all Liquidation Proceeds received by the Trustee following a Trust
Termination Event, as the case may be or (iii) all Dollar Distributions or
Pounds Sterling distributions, as the case may be, received by the Trustee, not
previously distributed pursuant to Section 4.1 of the Trust Agreement, whichever
event described in clause (i), (ii) or (iii) above shall be the first to occur;
provided, however, that in no event shall the Trust continue beyond the
expiration of 2l years from the death of the last survivor of the descendants of
Joseph P. Kennedy, the late Ambassador of the United States to the Court of St.
James, living on the date hereof.

                                       58
<PAGE>

                                   ASSIGNMENT

                  FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto

PLEASE INSERT SOCIAL SECURITY OR
TAXPAYER IDENTIFICATION OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

(Please print or type name and address, including postal zip code, of assignee)

the within Certificate, and all rights thereunder, hereby irrevocably
constituting  and appointing

Attorney to transfer said Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.

Dated:

*Signature Guaranteed;

*

* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Certificate Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

                                       59EXHIBIT 10.81

                           DATED 27TH SEPTEMBER; 2001

                          NORTHERN ELECTRIC FINANCE plc

                                     - and -

                              NORTHERN ELECTRIC plc

                                     - and -

                     NORTHERN ELECTRIC DISTRIBUTION LIMITED

                                     - and -

                   THE LAW DEBENTURE TRUST CORPORATION p.l.c.

                          FIRST SUPPLEMENTAL TRUST DEED

                  modifying and restating the provisions of the
                   Master Trust Deed dated 16th October, 1995
                                constituting the
                               (pound)100,000,000
                    8.625 per cent. Guaranteed Bonds due 2005
                                     and the
                               (pound)100,000,000
                    8.875 per cent. Guaranteed Bonds due 2020
                        of Northern Electric Finance plc

                                  ALLEN & OVERY
                                     London

<PAGE>

THIS FIRST SUPPLEMENTAL TRUST DEED is made on 27th September, 2001 BETWEEN:

(1)      NORTHERN ELECTRIC FINANCE plc whose registered office is at Carliol
         House, Market Street, Newcastle-Upon-Tyne NEl 6NE (the "Company" or the
         "Issuer");

(2)      NORTHERN ELECTRIC plc whose registered office is at Carliol House,
         Market Street, Newcastle-Upon-Tyne NE1 6NE ("NE");

(3)      NORTHERN ELECTRIC DISTRIBUTION LIMITED whose registered office is at
         Carliol House, Market Street, Newcastle-Upon-Tyne NEl 6NE ("NEDL" and,
         together with NE, the "Guarantors" and each a "Guarantor"); and

(4)      THE LAW DEBENTURE TRUST CORPORATION p.l.c. whose registered office is
         at Fifth Floor, 100 Wood Street, London EC2V 7EX (the "Trustee", which
         expression shall, where the context so admits, include all persons for
         the time being the trustee or trustees of these presents).

WHEREAS:

(A)      This First Supplemental Trust Deed is supplemental to the Master Trust
         Deed dated 16th October, 1995 (hereinafter called the "Master Trust
         Deed") made between the Issuer, NE and the Trustee and constituting the
         (pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005 and the
         (pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020 of the
         Issuer (together, the "Bonds").

(B)      The Issuer wishes to make certain modifications to the terms and
         conditions of the Bonds (the "Conditions") and to the Master Trust Deed
         to reflect:

         (i)      the requirement of the Utilities Act 2000 that the supply of
                  electricity and distribution of electricity be performed by
                  separate corporate entities; and

         (ii)     the splitting of the PBS Licence into an electricity supply
                  licence (which will be held by Northern Electric & Gas 2
                  Limited ("NEAG2L")) and an electricity distribution licence
                  (which will be held by NEDL, a wholly-owned subsidiary of NE),
                  such licences to be issued to NEAG2L and NEDL on 1st October,
                  2001 or whatever alternative date is notified to the Guarantor
                  by the Secretary of State for Trade and Industry (the
                  "Effective Date");

         together with certain other modifications in connection therewith.

(C)      By virtue of Clause 15.1 of the Master Trust Deed the Trustee may agree
         without the consent of the Bondholders or the Couponholders to any
         modification to these presents (save as provided therein) which in its
         opinion is not materially prejudicial to the interests of the
         Bondholders.

<PAGE>

(D)      NE has requested the Trustee to concur in making the modifications to
         the Conditions and the provisions of the Master Trust Deed referred to
         in Recital (B) above.

(E)      The Trustee being of the opinion that the modifications referred to in
         recital (B) above will not be materially prejudicial to the interests
         of the Bondholders, has concurred with the Issuer and NE that the
         Conditions and the Master Trust Deed should be modified in the manner
         hereinafter appearing.

NOW THIS FIRST SUPPLEMENTAL TRUST DEED WITNESSES AND IT IS HEREBY DECLARED AS
FOLLOWS:

1.       DEFINITIONS

Subject as hereinafter provided and unless there is anything in the subject or
context inconsistent therewith all words and expressions defined in the Master
Trust Deed shall have the same meanings in this First Supplemental Trust Deed.

2.       GUARANTEE

(A)      With effect on and from the Effective  Date,  NEDL hereby  irrevocably
         and unconditionally  guarantees to the Trustee, on a joint and several
         basis with NE,  the due and  punctual  payment  by the  Company of all
         moneys  payable from time to time in respect of the Original Bonds and
         the Original Coupons  (including,  without prejudice to the generality
         of the foregoing, all additional amounts payable pursuant to Condition
         8) and all other moneys payable from time to time under or pursuant to
         these  presents on the terms of Clause 3 of the Master  Trust Deed (as
         modified  as  provided  in  Clause 3 below)  and  accordingly  all the
         provisions of Clause 3 of the Master Trust Deed (as so modified) shall
         have effect as though such provisions were herein set forth.

(B)      NEDL hereby covenants with the Trustee that, with effect on and from
         the Effective Date, it will comply with and perform and observe all of
         the provisions of the Master Trust Deed (as modified as provided in
         Clause 3 below) and these presents which are expressed to be binding on
         it (including those which may subsequently be determined to be illegal,
         invalid or unenforceable for any reason).

(C)      NE hereby confirms and acknowledges that with effect on and from the
         Effective Date it is jointly and severally liable with NEDL in respect
         of its obligations under Clause 3 of the Master Trust Deed.

3.       MODIFICATIONS TO THE CONDITIONS AND THE MASTER TRUST DEED

Save for the purposes (where necessary) of construing the provisions of this
First Supplemental Trust Deed, with effect on and from the Effective Date:

<PAGE>

(i)      the Master Trust Deed (including the Conditions) is hereby modified in
         such manner as would result in the Master Trust Deed being in the form
         set out in the Schedule hereto; and

(ii)     the provisions of the Master Trust Deed shall cease to have effect and
         in lieu thereof the provisions of the Master Trust Deed (being in the
         form set out in the Schedule hereto) shall have effect.

4.       ORIGINAL BOND CERTIFICATES

With effect on and from the Effective Date, the Certificates and Coupons in
respect of the Original Bonds (which shall not be called in for replacement)
shall be deemed to be modified in such manner as would result in the
Certificates and Coupons in respect of the Original Bonds being in the form set
out in Parts I and III of Schedule I (in the case of the Original Bonds 2005)
and in Parts I and III of Schedule 3 (in the case of the Original Bonds 2020) to
the Master Trust Deed set out in the Schedule hereto.

5. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

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

6. NOTICE TO BONDHOLDERS

The Company covenants with the Trustee that not later than 14 days after the
Effective Date it will give notice to the Bondholders of the modifications
contained herein in a form previously approved by the Trustee.

7.       GENERAL

(i)      The Master Trust Deed and this First Supplemental Trust Deed shall
         henceforth be read and construed as one Trust Deed.

(ii)     A memorandum of this First Supplemental Trust Deed shall be endorsed by
         the Trustee on the original of the Master Trust Deed and by the Company
         and NE on their duplicates thereof.

(iii)    This First Supplemental Trust Deed may be executed in counterparts,
         each of which, taken together, shall constitute one and the same First
         Supplemental Trust Deed and any party may enter into this First
         Supplemental Trust Deed by executing a counterpart.

(iv)     The Company shall procure that for so long as any of the Bonds remains
         outstanding each of the Agents shall make available at its specified
         office for inspection by Original Bondholders copies of this First
         Supplemental Trust Deed.

<PAGE>

         IN WITNESS whereof this First Supplemental Trust Deed has been executed
         as a deed by the Company, NE, NEDL and the Trustee and delivered on the
         date first stated on page 1 above.

<PAGE>

                                    SCHEDULE

                 FORM OF MODIFIED AND RESTATED MASTER TRUST DEED

                            DATED 16th October, 1995

                          NORTHERN ELECTRIC FINANCE plc

                              NORTHERN ELECTRIC plc

                     NORTHERN ELECTRIC DISTRIBUTION LIMITED

                                       and

                   THE LAW DEBENTURE TRUST CORPORATION p.l.c.

                                MASTER TRUST DEED

                                  constituting
                       (pound)100,000,000 8.625 per cent.
                            Guaranteed Bonds due 2005
                                       and
                       (pound)100,000,000 8.875 per cent.
                            Guaranteed Bonds due 2020
                     with power to issue further securities

<PAGE>

                                    CONTENTS

Clause                                                                     Page

1.  Interpretation............................................................1
2.  Amounts of Original Bonds and covenant to pay.............................7
3.  Guarantee.................................................................9
4.  Forms of Original Bonds and Original Coupons.............................11
5.  Stamp duties and ........................................................12
6.  Further Bonds............................................................13
7.  Application of moneys received by Trustee................................14
8.  Covenants to comply with provisions......................................15
9.  Covenants................................................................16
10. Remuneration and indemnification of Trustee..............................19
11. Provisions supplemental to Trustee Act 1925..............................21
12. Trustee liable for breach of trust.......................................25
13. Waiver, proof of default, consents and Trustee's power to apply to Court.25
14. Trustee not precluded from entering into contracts.......................26
15. Modification and substitution............................................26
16. Appointment, retirement and removal of Trustee...........................29
17. Couponholders............................................................30
18. Communications...........................................................30
19. Powers in addition.......................................................31
20. Severability.............................................................31
21. Execution................................................................32
22. Counterparts.............................................................32
23. Governing law............................................................32
24. Contracts (Rights of Third Parties) Act 1999.............................32

Schedules
1. Part I - Form of individual Certificate for Original Bonds 2005...........33
   Part II - Form of Original Global Bonds 2005..............................35
   Part III - Form of Original Coupon 2005...................................42
2. Terms and Conditions of Original Bonds 2005...............................44
3. Part I - Form of individual Certificate for Original Bonds 2020...........62
   Part II - Form of Original Global Bond 2020...............................64
   Part III - Form of Original Coupon 2020...................................71
   Part IV - Form of Original Talon 2020.....................................73
4. Terms and Conditions of Original Bonds 2020...............................75
5. Provisions for Meetings of Bondholders....................................93

<PAGE>

THIS TRUST DEED is made on 16th October, 1995 BETWEEN:

(1)      NORTHERN ELECTRIC FINANCE plc whose registered office is at Carliol
         House, Market Street, Newcastle-Upon-Tyne NEl 6NE (the "Company" or the
         "Issuer");

(2)      NORTHERN ELECTRIC plc whose registered office is at Carliol House,
         Market Street, Newcastle-Upon-Tyne NEl 6NE ("NE");

(3)      NORTHERN ELECTRIC DISTRIBUTION LIMITED whose registered office is at
         Carliol House, Market Street, Newcastle-Upon-Tyne NE 1 6NE ("NEDL" and,
         together with NE, the "Guarantors" and each a "Guarantor"); and

(4)      THE LAW DEBENTURE TRUST CORPORATION p.l.c. whose registered office is
         at Fifth Floor, 100 Wood Street, London EC2V 7EX (the "Trustee", which
         expression shall, where the context so admits, include all persons for
         the time being the trustee or trustees of these presents).

WHEREAS:

(A)      The Company, incorporated in England and Wales with registered number
         3070482, has by resolution of its Board of Directors passed on 9th
         October, 1995 authorised the issue of (pound)100,000,000 8.625 per
         cent. Guaranteed Bonds due 2005 and (pound)100,000,000 8.875 per cent.
         Guaranteed Bonds due 2020 to be constituted by these presents.

(B)      NE, incorporated in England and Wales with registered number 2366942,
         by resolution of a duly authorised committee of its Board of Directors
         passed on 9th October, 1995 resolved to give its guarantee in relation
         to the said Bonds upon and subject to the terms and conditions of these
         presents.

(C)      NEDL, incorporated in England and Wales with registered number 2906593,
         by a resolution of its Board of Directors passed on 26th September,
         2001 resolved to give its guarantee in relation to the said Bonds upon
         and subject to the terms and conditions of these presents.

(D)      The Trustee has agreed to act as trustee of these presents on and
         subject to the terms and conditions set out in these presents.

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

1.       INTERPRETATION

1.1      Definitions

         In these presents, unless the context otherwise requires, the following
         expressions shall have the following meanings:

                                       1

<PAGE>

         "Agency Agreement" means, in relation to the Original Bonds 2005, the
         Paying Agency Agreement dated 16th October, 1995 between the Company,
         NE, the Trustee, the Principal Paying Agent and the other Paying Agents
         whereby the Agents were appointed in respect of the Original Bonds
         2005, in relation to the Original Bonds 2020, the Paying Agency
         Agreement dated 16th October, 1995 between the Company, NE, the
         Trustee, the Principal Paying Agent and the other Paying Agents whereby
         the Agents were appointed in respect of the Original Bonds 2020 and, in
         relation to any Further Bonds, the agreement appointing, on terms
         previously approved in writing by the Trustee, the Principal Paying
         Agent and the other Paying Agents and/or any other Agent in respect of
         such Further Bonds and, in relation to the relevant Bonds, includes any
         agreement (whether made pursuant to another agreement or otherwise)
         appointing, on terms previously approved in writing by the Trustee, a
         further or another Agent and any other agreement for the time being in
         force, the terms of which shall have been previously approved in
         writing by the Trustee, relating to the duties of any Agent or amending
         or modifying any of such agreements;

         "Agents" means, in relation to the Original Bonds, the Principal Paying
         Agent and the other Paying Agents or, as the context requires, any of
         them and, in relation to any Further Bonds, any Principal Paying Agent
         and other Paying Agents and other agent approved by the Trustee
         appointed under the Agency Agreement in respect of such Further Bonds
         or, as the context requires, any of them;

         "Auditors" means the auditors for the time being of the Company or
         either Guarantor (as the case may require) or, if there shall be joint
         auditors, any one or more of such auditors or, in the event of their
         being unable or unwilling to carry out any action requested of them
         pursuant to these presents, such other chartered accountant or firm of
         chartered accountants as may be nominated by the Company or the
         relevant Guarantor (as the case may require) with the prior written
         approval of the Trustee or, in default of such nomination and approval,
         nominated by the Trustee after consultation with the Company or the
         relevant Guarantor (as the case may require) where such consultation is
         not prejudicial to the interests of the Bondholders for the purpose;

         "Bondholder" and, in relation to a Bond, "holder" means the bearer of
         that Bond;

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

         "Certificate" means a certificate in definitive form representing a
         Bond including any Global Bond and includes any replacement certificate
         in definitive form issued pursuant to the relevant Conditions;

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

         "Conditions" means, in relation to the Original Bonds 2005, the terms
         and conditions set out in Schedule 2 and, in relation to the Original

                                       2
<PAGE>

         Bonds 2020, the terms and conditions set out in Schedule 4 or, in
         either case, the terms and conditions for the time being endorsed on
         the Original Bonds as the same may from time to time be modified in
         accordance with these presents and references in these presents to a
         particular numbered Condition shall, in relation to the Original Bonds,
         be construed accordingly and, in relation to any Further Bonds, the
         terms and conditions for the time being endorsed on such Further Bonds
         and references in these presents to a particular numbered Condition
         shall, in relation to any Further Bonds, unless either referring
         specifically to a particular numbered Condition of such Further Bonds
         or the context otherwise requires, be construed as a reference to the
         provisions (if any) in the Conditions thereof which corresponds to the
         provisions of the particular numbered Condition of the Original Bonds;

         "Couponholder" and, in relation to a Coupon, "holder" means the bearer
         of a Coupon;

         "Coupons" means the Original Coupons and/or, as the context may
         require, the bearer interest coupons for the time being relating to any
         Further Bonds or, as the context may require, a specific number of them
         and includes any replacement coupons issued pursuant to the relevant
         Conditions and, where the context so permits, the Talons (if any);

         "Couponholder" means, in relation to a Coupon, the bearer of a Coupon;

         "Distribution Licence" has the meaning set out in Condition 3;

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

         "Event of Default" means any of the events described in paragraphs (a)
         to (i) (inclusive) of Condition 10 which, in the case of the events
         described in paragraphs (b), (c), (d), (e), (f), (g), (h) and (i) of
         such Condition, shall have been certified in writing by the Trustee to
         be in its opinion materially prejudicial to the interests of the
         Bondholders;

         "Extraordinary Resolution" has the meaning set out in paragraph 21 of
         Schedule 5;

         "Further Bonds" means any further bonds or notes or similar securities
         issued in accordance with the provisions of Clause 6 and constituted by
         a deed supplemental to this Master Trust Deed or, as the context may
         require, a specific number of them and includes the Certificates
         representing the same including any relevant Global Bond;

         "Global Bond" means the Original Global Bond 2005 and/or, as the
         context may require, the Original Global Bond 2020 and/or, as the
         context may require, any other global Bond Certificate in definitive
         form representing Further Bonds or any of them;

         "issue" includes allot and vice versa;

         "London Stock Exchange" means the London Stock Exchange plc;

                                       3

<PAGE>

         "Original Bonds" means the Original Bonds 2005 and/or, as the context
         may require, the Original Bonds 2020;

         "Original Bonds 2005" means the Bonds in bearer form comprising the
         (pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005
         constituted by these presents and for the time being outstanding or, as
         the context may require, a specific number of them and includes the
         Certificates representing the same including the Original Global Bond
         2005;

         "Original Bonds 2020" means the Bonds in bearer form comprising the
         (pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020
         constituted by these presents and for the time being outstanding or, as
         the context may require, a specific number of them and includes the
         Certificates representing the same including the Original Global Bond
         2020;

         "Original Bondholders" means the holders for the time being of the
         Original Bonds;

         "Original Coupons" means the Original Coupons 2005 and/or, as the
         context may require, the Original Coupons 2020;

         "Original Coupons 2005" means the Coupons relating to the Original
         Bonds 2005;

         "Original Coupons 2020" means the Coupons relating to the Original
         Bonds 2020;

         "Original Couponholders" means the holders for the time being of the
         Original Coupons;

         "Original Global Bond" means the Original Global Bond 2005 and/or, as
         the context may require, the Original Global Bond 2020;

         "Original Global Bond 2005" means the single temporary global Bond
         Certificate in definitive form in respect of the Original Bonds 2005;

         "Original Global Bond 2020" means the single temporary global Bond
         Certificate in definitive form in respect of the Original Bonds 2020;

         "Original Talons 2020" means the Talons relating to the Original Bonds
         2020;

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

         (a)      those which have been redeemed and cancelled in accordance
                  with the Conditions;

         (b)      those in respect of which the date for redemption in
                  accordance with the Conditions has occurred and the redemption
                  moneys (including all interest accrued on such Bonds to the
                  date for such redemption and any interest payable under
                  Condition 4 after such date) have been duly paid to the
                  relevant Bondholder (or to a person on behalf of such
                  Bondholder) or to the Trustee or to the Principal Paying Agent
                  as provided in the proviso to Clause 2.3 and remain available

                                       4
<PAGE>

                  for payment against presentation and surrender of Bonds and/or
                  Coupons, as the case may be;

         (c)      those which have become void or in respect of which claims
                  have become prescribed under Condition 9;

         (d)      those mutilated or defaced Bonds which have been surrendered
                  and cancelled in exchange for replacement Bonds pursuant to
                  Condition 13;

         (e)      (for the purpose only of determining how many Bonds are
                  outstanding and without prejudice to their status for any
                  other purpose) those Bonds which are alleged to have been
                  lost, stolen or destroyed and in respect of which replacement
                  Bonds have been issued pursuant to Condition 13;

         (f)      those which have been purchased and cancelled as provided in
                  Condition 6;

         (g)      the Global Bond to the extent that it shall have been
                  exchanged for individual Bonds,

         provided that for the purposes of:

         (i)      ascertaining the right to attend and vote at any meeting of
                  the Bondholders;

         (ii)     the determination of how many Bonds are outstanding for the
                  purposes of Clause 8.2 and Conditions 7(D), 10, 11 and 15 and
                  Schedule 5;

         (iii)    the exercise of any discretion, power or authority which the
                  Trustee is required, expressly or impliedly, to exercise in or
                  by reference to the interests of the Bondholders or, as the
                  case may be, any of them; and

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

         those Bonds (if any) which are beneficially held by, or are held on
         behalf of, the Company or either Guarantor or any of the Subsidiaries
         and not yet cancelled shall (unless and until cancelled or, as the case
         may be, ceasing to be so held) be deemed not to remain outstanding;

         "Paying Agents" means, in relation to the Original Bonds, the several
         institutions (including the Principal Paying Agent) at their respective
         specified offices referred to in the Conditions and, in relation to any
         Further Bonds, such institutions at their respective specified offices
         as shall be appointed under the Agency Agreement as Paying Agents in
         respect of such Further Bonds by or on behalf of the Company with the
         prior written approval of the Trustee or, in any case, such other
         institutions at their respective specified offices as may from time to
         time be appointed under the Agency Agreement as Paying Agents in
         respect of the relevant Bonds by or on behalf of the Company with the
         prior written approval of the Trustee;

         "Potential Event of Default" means an event or circumstance which would
         with the giving of notice and/or lapse of time and/or the issuing of a
         certificate and/or the fulfillment of any other requirement provided
         for in Condition 10 become an Event of Default;

         "Principal Paying Agent" means, in relation to the Original Bonds,
         Barclays Bank PLC at its specified office in its capacity as Principal
         Paying Agent in respect of the Original Bonds and, in relation to any
         Further Bonds, such institution at its specified office as shall be
         appointed under the Agency Agreement as the Principal Paying Agent in
         respect of such Further Bonds by or on behalf of the Company with the
         prior written approval of the Trustee or, in any case, such other
         institution at its specified office as may from time to time be
         appointed under the Agency Agreement as Principal Paying Agent in

                                       5

<PAGE>

         respect of the relevant Bonds by or on behalf of the Company with the
         prior written approval of the Trustee;

         "specified office" means, in relation to any Agent, either the office
         identified with its name at the end of the Conditions or any other
         office approved by the Trustee and notified to the Bondholders pursuant
         to Clause 9.1(k); "Subsidiary" means a subsidiary for the time being of
         the Company or either Guarantor;

         "Talons" means the Original Talons 2020 and/or, as the context may
         require, the talons relating to, and exchangeable in accordance with
         the provisions therein contained for further Coupons relating to, any
         relevant Further Bonds or, as the context may require, a specific
         number of them and includes any replacement talons issued pursuant to
         the relevant Conditions;

         "these presents" means this Master Trust Deed, including its Schedules,
         as altered from time to time, and any other document executed in
         accordance with or pursuant to this Master Trust Deed, as so altered,
         and expressed to be supplemental to this Master Trust Deed and includes
         the Bonds, the Coupons and the Conditions; and

         "trust corporation" means a corporation entitled by rules made under
         the Public Trustee Act 1906 or entitled pursuant to any other
         legislation applicable to a trustee in any jurisdiction other than
         England to carry out the functions of a custodian trustee.

1.2      Construction of certain references

         Unless otherwise provided in these presents, references in these
         presents to:

         (a)      costs, charges, remuneration or expenses shall include any
                  value added tax, turnover tax or similar tax charged in
                  respect thereof and legal fees and expenses on a full
                  indemnity basis;

                                       6
<PAGE>

         (b)      "sterling" and "(pound)" shall be construed as references to
                  the lawful currency for the time being of the United Kingdom;

         (c)      the expressions "subsidiary" and "holding company" have the
                  respective meanings ascribed thereto by the Companies Act
                  1985;

         (d)      any action, remedy or method of judicial proceedings for the
                  enforcement of rights of creditors shall include, in respect
                  of any jurisdiction other than England, references to such
                  action, remedy or method of judicial proceedings for the
                  enforcement of rights of creditors available or appropriate in
                  such jurisdiction as shall most nearly approximate thereto;

         (e)      words denoting the singular number only shall include the
                  plural number and vice versa;

         (f)      words denoting one gender only shall include the other
                  genders;

         (g)      words denoting persons only shall include firms and
                  corporations and vice versa;

         (h)      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 such modification or re-enactment;

         (i)      any document shall be deemed also to refer to any amendment
                  thereto;

         (j)      Schedules and Clauses shall be construed as references to
                  Schedules to, and to Clauses of, this Trust Deed respectively;

         (k)      the carrying out of the trusts of these presents includes the
                  exercise of the functions of the Trustee under these presents
                  and the exercise of the powers, authorities and discretions
                  vested in the Trustee (or any agent or delegate or
                  sub-delegate) by, under or pursuant to these presents;

         (l)      taking proceedings against the Company and/or a Guarantor
                  shall be deemed to include references to proving in the
                  winding-up of the Company and/or a Guarantor;

         (m)      principal or principal amount of and/or interest in respect of
                  the Bonds shall include any premium and other additional
                  amounts which may be payable under Condition 6(B) or 8 or (in
                  the case of Condition 8) under any obligations undertaken in
                  addition thereto or in substitution therefor pursuant to these
                  presents; and

         (n)      Bonds 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

                                       7
<PAGE>

                  Exchange's market for listed securities and all references in
                  these presents to "listing" or "listed" shall include
                  references to "quotation" and "quoted", respectively.

1.3      Definitions in Conditions

         Words and expressions defined in the Conditions and not otherwise
         defined in the main body of any other document comprised in these
         presents shall when used in these presents have the meanings given to
         them in the Conditions.

1.4      Headings

         Headings shall be ignored in construing these presents.

1.5      Schedules

         The Schedules to any document comprised in these presents form part of
         these presents and shall have effect accordingly.

1.6      Enforceability

         If at any time any provision of these presents is or becomes illegal,
         invalid or unenforceable in any respect under the law of any
         jurisdiction, neither the legality, validity or enforceability of the
         remaining provisions of these presents nor the legality, validity or
         enforceability of such provision under the law of any other
         jurisdiction shall in any way be affected or impaired thereby.

2.       AMOUNTS OF ORIGINAL BONDS AND COVENANT TO PAY

2.1      Amounts of Original Bonds

         The aggregate principal amount of the Original Bonds 2005 is limited to
         (pound)100,000,000. The aggregate principal amount of the Original
         Bonds 2020 is limited to (pound)100,000,000.

2.2      Original Bonds separate series

         The Original Bonds 2005 and the Original Bonds 2020 shall be separate
         series and the provisions of Clauses 1.1 (to the extent applicable),
         2.3, 2.4, 2.5, 2.6, 3, 4.3, 4.4, 4.5 and of Clauses 5 to 23 (inclusive)
         and Schedule 5 shall apply mutatis mutandis separately and
         independently to the Original Bonds 2005 and the Original Bonds 2020
         and shall be construed accordingly.

2.3      Covenant to pay

         The Company will by 11.00 a.m. (London time) on any date when the
         Original Bonds or any of them become due to be redeemed or, if the due

                                       8
<PAGE>

         date is not a Business Day in London, on the immediately following
         Business Day in London unconditionally pay to or to the order of the
         Trustee in sterling in immediately available funds in London (or such
         other place as the Trustee and the Company may agree in writing) the
         principal amount of the Original Bonds becoming due for redemption on
         that date and will (subject to the Conditions) up to and including the
         date of such payment (both before and after judgment) unconditionally
         so pay to or to the order of the Trustee in sterling in immediately
         available funds in London (or such other place as the Trustee and the
         Company may agree in writing) interest on the principal amount of the
         Original Bonds outstanding as set out in the Conditions, provided that:

         (a)      every payment of any such principal amount and/or interest
                  made to or to the order of the Principal Paying Agent as
                  provided in the Agency Agreement shall, to such extent,
                  satisfy the applicable such obligation except to the extent
                  that there is failure in the subsequent payment of such
                  principal amount and/or interest (as the case may be) to the
                  relevant Original Bondholders or Original Couponholders (as
                  the case may be);

         (b)      in the  case  of any  payment  of  principal  amount  and/or
                  interest  made after the due date  therefor or following the
                  application of Condition 10, the principal amount in respect
                  of which the  payment  thereof  or of the  interest  thereon
                  shall  have been so made  shall  continue  to bear  interest
                  until the day the full amount due has been received by or to
                  the order of the Trustee or by the Principal Paying Agent as
                  provided in the Agency  Agreement  and notice to that effect
                  has been given to the  Original  Bondholders  if required in
                  accordance  with  Clause  9.1(i),  except to the extent that
                  there is failure in the subsequent payment of such principal
                  amount and/or  interest (as the case may be) to the relevant
                  Original Bondholders or Original  Couponholders (as the case
                  may be),  and so that a full  amount  due shall be deemed to
                  have been  received by or to the order of the Trustee on the
                  day when by 11.00 a.m.  (London time) such amount shall have
                  been so received in sterling in immediately  available funds
                  in  London  (or  such  other  place as the  Trustee  and the
                  Company may agree in writing); and

         (c)      in the event that on the occasion for redemption or purchase
                  of any Original Bond falling to be redeemed or, as the case
                  may be, purchased payment of any principal amount and/or
                  interest due in respect of that Original Bond is improperly
                  withheld or refused, the principal amount in respect of which
                  the payment thereof or of the interest thereon shall have been
                  so improperly withheld or refused will continue to bear
                  interest as aforesaid up to and including the date on which
                  such payment is deemed to have been received by the Trustee as
                  provided in paragraph (b) of this proviso.

         The Trustee will hold the benefit of this covenant on trust for the
         Original Bondholders and Original Couponholders.

2.4      Discharge

                                       9

<PAGE>

         Subject to Clause 2.5, any payment to be made in respect of the Bonds
         or the Coupons by the Company, either Guarantor or the Trustee may be
         made as provided in the Conditions and any payment so made will
         (subject to Clause 2.5) to such extent be a good discharge to the
         Company, the relevant Guarantor or the Trustee, as the case may be.

2.5      Payment after default

         At any time after a Potential Event of Default has occurred and whilst
         the same is subsisting or after an Event of Default has occurred and is
         continuing the Trustee may:

         (a)      by notice in writing to the Company, the Guarantors and the
                  Agents require the Agents, until notified by the Trustee to
                  the contrary, so far as permitted by any applicable law:

                  (i)    to act  thereafter as Agents of the Trustee in relation
                         to  payments  to be made by or on behalf of the Trustee
                         under  these  presents  on  the  terms  of  the  Agency
                         Agreement (with  consequential  amendments as necessary
                         and  save  that  the   Trustee's   liability   for  the
                         indemnification,    remuneration    and    all    other
                         out-of-pocket expenses of the Agents will be limited to
                         the  amounts  for the time being held by the Trustee in
                         respect  of the Bonds on the  terms of these  presents)
                         and  thereafter  to hold all Bonds and  Coupons and all
                         moneys,  documents  and records held by them in respect
                         of Bonds  and  Coupons  to the  order  of the  Trustee;
                         and/or

                  (ii)   to  deliver  all  Bonds  and  Coupons  and all  moneys,
                         documents  and  records  held by them in respect of the
                         Bonds and  Coupons  to the  Trustee  or as the  Trustee
                         directs in such notice, provided that such notice shall
                         be  deemed  not to apply to any  documents  or  records
                         which the  relevant  Agent is obliged not to release by
                         any law or regulation; and

         (b)      by notice in writing to the Company and the Guarantors require
                  each of them to make all subsequent payments in respect of the
                  Bonds and the Coupons to or to the order of the Trustee and
                  not to the Principal Paying Agent.

         If the Potential Event of Default in respect of which the Trustee has
         given notice in writing to the Company, the Guarantors and the Agents
         as aforesaid shall cease to subsist and provided that:

         (i)      no other Potential Event of Default shall have occurred and be
                  subsisting or be about to occur; or

         (ii)     no Event of Default shall have occurred and be continuing or
                  be about to occur; or

10

<PAGE>

         (iii)    the Bonds shall not have been declared immediately due and
                  repayable,

         the Trustee shall by notice in writing to the Company, the Guarantors
         and the Agents require the Agents to cease acting forthwith as the
         Agents of the Trustee.

         The provisions of this Clause 2.5 may apply on any number of occasions.

2.6      Ranking of obligations

         The Company hereby covenants with the Trustee that the obligations of
         the Company in respect of the Bonds and the Coupons constitute direct,
         unconditional and, subject to Condition 3, unsecured obligations of the
         Company and that the Bonds and the Coupons rank and will rank pari
         passu and rateably without any preference or priority among themselves
         and, subject to Condition 3, rank and will rank pari passu with all
         other outstanding unsecured and unsubordinated obligations of the
         Company, present and future, but, in the event of the insolvency of the
         Company, only to the extent permitted by applicable laws relating to
         creditors' rights.

3.       GUARANTEE

3.1      Guarantor's liability

         The Guarantors hereby irrevocably and unconditionally guarantee on a
         joint and several basis to the Trustee the due and punctual payment by
         the Company of all moneys payable from time to time in respect of the
         Original Bonds and the Original Coupons (including, without prejudice
         to the generality of the foregoing, all additional amounts payable
         pursuant to Condition 8) and all other moneys payable from time to time
         under or pursuant to these presents as follows:

         (a)   if and whenever the Company  shall make default in the payment of
               any such moneys,  the  Guarantors  shall  forthwith  upon written
               demand therefor by the Trustee  irrevocably  and  unconditionally
               pay to or to the order of the Trustee in  sterling  the amount in
               respect of which such  default  has been made and any  payment so
               made  shall to such  extent  cure  such  default  by the  Company
               subject as provided in Clauses 2.3,  2.4 and 2.5, the  provisions
               of which Clauses shall apply mutatis mutandis to such payment;

         (b)   as a separate and independent  stipulation  each Guarantor agrees
               that  any  such  moneys  which  may not be  recoverable  from the
               Company  by  reason  of  any  legal  limitation,   disability  or
               incapacity on or of the Company or any other fact or circumstance
               shall  nevertheless  be recoverable  from the Guarantor as though
               the same had been  incurred by the  Guarantor  and the  Guarantor
               were the sole and principal  debtor in respect  thereof and shall
               be paid by the Guarantor  forthwith upon written demand  therefor
               by  the  Trustee.  The  Guarantors  shall  not be  exonerated  or
               discharged  from  liability  by time  being  given,  or any other
               indulgence or  concession  being  granted,  to the Company by the

                                       11
<PAGE>

               Trustee  or  by  the   Original   Bondholders   or  the  Original
               Couponholders  or any of them or by anything  done by the Trustee
               in  exercise  of  any  of  the  trusts,  powers,  authorities  or
               discretions  vested in it by these  presents or by anything which
               the Original  Bondholders  or the Original  Couponholders  or the
               Trustee  or any of them may do or omit or neglect to do or by any
               other  dealing  or thing  which,  but for this  provision,  might
               operate to  exonerate  or  discharge  the  Guarantors  from their
               obligations  hereunder.  It is further  agreed as a separate  and
               independent  stipulation  that any sums of money which may not be
               recoverable  from a  Guarantor  on  the  footing  of a  guarantee
               whether  by  reason of any legal  limitation,  disability  or any
               other  fact or  circumstances  and  whether  or not  known to the
               Trustee or the Original Bondholders or the Original Couponholders
               or any of  them  shall  nevertheless  be  recoverable  from  such
               Guarantor  as sole or  principal  debtor in respect  thereof  and
               shall be paid by such  Guarantor  to the Trustee  forthwith  upon
               written demand therefor by the Trustee;

          (c)  this guarantee  shall be a continuing  guarantee and  accordingly
               shall remain in operation until all such moneys have been paid or
               satisfied  in  full  and  shall  be in  addition  to  and  not in
               substitution  for, and shall not be affected by, any other rights
               which the Trustee or the  Original  Bondholders  or the  Original
               Couponholders or any of them may have under or by virtue of these
               presents and may be enforced without first having recourse to any
               such rights and without taking any steps or  proceedings  against
               the Company;

          (d)  the  Trustee  may  from  time to time  make  any  arrangement  or
               compromise  with either  Guarantor in relation to this  guarantee
               which the Trustee may think fit;

          (e)  prior to the  liquidation of the Company,  the  Guarantors  shall
               not,  without the prior  written  consent of the Trustee,  at any
               time after default has been made by the Company in the payment of
               any such  moneys and so long as any moneys  payable  from time to
               time by a Guarantor in respect of such  defaulted  moneys  remain
               unpaid,  exercise  in  respect  of any  amounts  paid  under this
               guarantee any right of subrogation, indemnity or reimbursement or
               any other right or remedy  which a Guarantor  may have in respect
               of or as a result of such payment;

          (f)  in the event of the  liquidation  of the  Company,  if any moneys
               shall then be payable by a Guarantor under this  guarantee,  each
               Guarantor  will,  until all such moneys payable from time to time
               in respect of the Original Bonds and the Original Coupons and all
               other moneys payable from time to time under or pursuant to these
               presents  have  been  paid in full  hold the  benefit  of all its
               claims  against  the  Company  upon  Trust to pay the same to the
               Trustee and shall  prove for such claims  against the Company and
               each Guarantor hereby  irrevocably  authorises the Company to pay
               to the Trustee,  to the extent that all such moneys  payable from
               time to time in respect of the  Original  Bonds and the  Original
               Coupons and all other moneys  payable  under or pursuant to these
               presents  shall  not have been paid in full,  all  moneys  due in
               respect of such claims;

                                       12

<PAGE>

          (g)  if any payment received by the Trustee or any Original Bondholder
               or Original  Couponholder pursuant to the provisions hereof shall
               be avoided  under any laws  relating to  bankruptcy,  insolvency,
               corporate  reorganisation  or other similar events,  such payment
               shall not be  considered as having  discharged or diminished  the
               liability of the Guarantors, and this guarantee shall continue to
               apply as if such payment had at all times  remained  owing by the
               Company and the  Guarantors  shall  indemnify the Trustee and the
               Original  Bondholders  and  Original   Couponholders  in  respect
               thereof.

3.2      No payments by Company

         If any moneys shall become payable by a Guarantor under the guarantee,
         the Company shall not (save in the event of the liquidation of the
         Company), so long as such moneys remain unpaid, pay any moneys for the
         time being due by the Company to either Guarantor.

3.3      Consents and authorisations

         If at any time any authorisation or approval becomes necessary to
         permit either Guarantor to pay any moneys payable from time to time in
         respect of the Original Bonds or the Original Coupons or under or
         pursuant to these presents in accordance with the terms of these
         presents as a result of any change in, any change in the official
         application of, or any amendment to, the laws or regulations of the
         United Kingdom, the relevant Guarantor shall forthwith apply for the
         necessary authorisation and approval and shall provide copies of such
         application as soon as reasonably practicable to the Trustee. The
         relevant Guarantor shall provide copies of such authorisation and
         approval to the Trustee as soon as they are obtained.

3.4      Application of moneys received by Trustee

         Any amount from time to time received by the Trustee under this
         guarantee shall be applied by the Trustee in accordance with the
         provisions of Clause 7.

3.5      Nature of obligations

         Each Guarantor hereby covenants with the Trustee that the obligations
         of each Guarantor under this guarantee constitute direct, unconditional
         and, subject to Condition 3, unsecured obligations of such Guarantor
         and, subject to Condition 3, rank and will rank pari passu with all
         other outstanding unsecured and unsubordinated obligations of such
         Guarantor, present and future but, in the event of the insolvency of
         the relevant Guarantor, only to the extent permitted by applicable laws
         relating to creditors' rights.

4.       FORMS OF ORIGINAL BONDS AND ORIGINAL COUPONS

4.1      Original Global Bond

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         The Original Bonds 2005 were initially represented by the Original
         Global Bond 2005 and the Original Bonds 2020 were initially represented
         by the Original Global Bond 2020, each in the principal amount of
         (pound)100,000,000 and each of which was exchangeable for relevant
         individual Original Bonds (serially numbered) in denominations of
         (pound)1,000, (pound)10,000 and (pound)100,000 each with Coupons
         attached as set out in the relevant Original Global Bond. The Company
         issued each Original Global Bond to a bank depositary common to both
         Euroclear and Clearstream, Luxembourg on terms that such depositary
         shall hold the same for the account of the persons who would otherwise
         be entitled to receive the Original Bonds (as notified to such
         depositary by the Principal Paying Agent) and the successors in title
         to such persons as appearing in the records of Euroclear and
         Clearstream, Luxembourg for the time being. The Company issued the
         relevant Original Bonds in exchange for the relevant Original Global
         Bond in accordance with the provisions thereof. Pending exchange of an
         Original Global Bond, its holder was deemed to be the holder of the
         relevant individual Original Bonds and Original Coupons for all
         purposes.

4.2      Original Bonds and Original Coupons

         The Certificates representing the Original Bonds and the Original
         Coupons are security printed in accordance with the applicable stock
         exchange requirements. The individual Certificates representing
         Original Bonds 2005, the Original Global Bond 2005 and the Original
         Coupons 2005 are in or substantially in the respective forms set out in
         Parts I, II and III of Schedule 1 and the Original Bonds 2005 are
         endorsed with the Conditions set out in Schedule 2. The individual
         Certificates representing Original Bonds 2020, the Original Global Bond
         2020, the Original Coupons 2020 and the Original Talons 2020 are in or
         substantially in the respective forms set out in Parts I, II, III and
         IV of Schedule 3 and the Original Bonds 2020 are endorsed with the
         Conditions set out in Schedule 4. Title to the Original Bonds and the
         Original Coupons shall pass by delivery.

4.3      Signature

         Each Original Global Bond and individual Certificate representing
         Original Bonds and Original Coupon is or will be signed manually or in
         facsimile by two Directors of the Company and two Directors of NE and
         is or will be authenticated by or on behalf of the Principal Paying
         Agent. The Company and NE may use the facsimile signature of any person
         who was at the date of this Master Trust Deed a Director of the Company
         or NE respectively even if at the time of issue of any Original Global
         Bond, individual Certificate representing Original Bonds or Original
         Coupon he no longer holds such office. An Original Global Bond, an
         individual Certificate representing Original Bonds or an Original
         Coupon which is not so executed and authenticated shall not be valid
         for any purpose. Each Original Global Bond and individual Certificate
         representing Original Bonds and Original Coupon which shall be so
         executed and authenticated shall represent valid binding and
         enforceable obligations of the Company and of each Guarantor.

4.4      Issue

14

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         Issue and delivery of the Original Bonds was complete on the issue and
         delivery of the relevant Original Global Bond to the depositary
         referred to in Clause 4.1 (or its representative) by, or at the order
         of, the Company and NE.

4.5      Bondholder deemed to be absolute owner

         The Company, each Guarantor, the Trustee and the Agents may (to the
         fullest extent permitted by applicable laws) deem and treat the holder
         of any Bond and the holder of any Coupon as the absolute owner of such
         Bond or such Coupon, as the case may be, for all purposes (whether or
         not such Bond or such Coupon shall be overdue and notwithstanding any
         notice of ownership or writing thereon or any notice of previous loss
         or theft thereof), and the Company, each Guarantor, the Trustee and the
         Agents shall not be affected by any notice or other matter to the
         contrary, and shall not be liable to anyone for so treating such
         holder. 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 upon such Bond or Coupon, as the case
         may be.

5.       STAMP DUTIES AND TAXES

5.1      Stamp duties

         The Company (failing which the Guarantors) will pay any capital, stamp,
         issue, registration, documentary and other similar taxes and duties and
         all costs and expenses, including interest and penalties, payable in
         the United Kingdom, Belgium and Luxembourg in respect of the creation,
         constitution, issue and original offering of the Bonds and the Coupons,
         and the execution and delivery of these presents. The Company (failing
         which the Guarantors) will also indemnify the Trustee, the Bondholders
         and the Couponholders from and against all stamp, issue, registration,
         documentary and other taxes and duties paid by any of them in any
         jurisdiction in relation to which the liability to pay arises directly
         as a result of any action taken by or on behalf of the Trustee or, as
         the case may be (where entitled under Condition 11 to do so), the
         Bondholders or the Couponholders to enforce the obligations of the
         Company or either Guarantor under these presents.

5.2      Change of taxing jurisdiction

         If the Company and/or either Guarantor becomes subject generally to the
         taxing jurisdiction of any territory or any political sub-division or
         authority of or in that territory having power to tax other than or in
         addition to the United Kingdom or any political sub-division or
         authority of or in the United Kingdom, the Company and each Guarantor
         will (unless the Trustee otherwise agrees) give to the Trustee an
         undertaking in form and manner satisfactory to the Trustee in terms
         corresponding to the terms of Condition 8 with the substitution for,
         or, where applicable, the addition to, the references in that Condition
         to the United Kingdom of references to that other or additional
         territory or political sub-division or authority to the taxing

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<PAGE>

         jurisdiction of which the Company and/or the relevant Guarantor (as the
         case may be) has become so subject and in such event these presents
         will be read accordingly.

6.       FURTHER BONDS

6.1      Liberty to create

         The Company may from time to time without the consent of the
         Bondholders or Couponholders create and issue further bonds or notes or
         similar securities, in bearer or registered form, ranking pari passu
         with the Original Bonds and either having the same terms and conditions
         as the Original Bonds in all respects (or in all respects except for
         the amount of the first payment of interest thereon) or upon such terms
         and conditions as to interest, conversion, premium, redemption and
         otherwise as the Directors of the Company may at the time of issue
         thereof determine. Any such further bonds having the same terms and
         conditions as the Original Bonds in all respects or which after the
         first payment of interest will have the same such terms and conditions
         shall (if applicable, after such first payment of interest) be
         consolidated and form a single series with the Original Bonds and any
         Further Bonds forming a single series with the Original Bonds.

6.2      Means of constitution

         Any Further Bonds created and issued pursuant to Clause 6.1 so as to
         form either immediately or after the first payment of interest a single
         series with the Original Bonds or Further Bonds of any series shall be
         constituted by a deed supplemental to these presents and any other
         further bonds, notes or similar securities created and issued pursuant
         to Clause 6.1 may, with the consent of the Trustee, be so constituted.
         The Company and each Guarantor shall prior to the issue of Further
         Bonds execute and deliver to the Trustee a deed supplemental to these
         presents (if applicable duly stamped or denoted) and containing a
         covenant by the Company in the form mutatis mutandis of Clause 2.3, and
         a guarantee by each Guarantor in the form mutatis mutandis of Clause 3,
         in relation to the principal amount of and interest in respect of such
         Further Bonds and such other provisions (corresponding to any of the
         provisions contained in these presents) as the Trustee shall require.

6.3      Noting of supplemental deeds

         A memorandum of every such supplemental deed shall be endorsed by the
         Trustee on this Master Trust Deed and by the Company and each Guarantor
         on each duplicate of this Master Trust Deed.

6.4      Notice of further issues
         Whenever it is proposed to create and issue any Further Bonds, the
         Company shall give to the Trustee not less than seven days' notice in
         writing of its intention to do so, stating the amount of Further Bonds
         proposed to be created and issued.

6.5      Separate series

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<PAGE>

         Any Further Bonds not forming a single series with the Original Bonds
         or Further Bonds 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 Clauses 1.1 (to
         the extent applicable), 2.4, 2.5, 2.6, 4.3, 4.4, 4.5, 5 and 6.2 and of
         Clauses 7 to 23 (inclusive) and Schedule 5 shall apply (if at all)
         mutatis mutandis separately and independently to the Bonds of each
         series and shall be construed accordingly.

7.       APPLICATION OF MONEYS RECEIVED BY TRUSTEE

7.1      Declaration of trust

         All moneys received by the Trustee under or pursuant to these presents
         will, regardless of any appropriation of all or part of them by the
         Company or, in respect of amounts received from a Guarantor, the
         relevant Guarantor, be held by the Trustee upon trust to apply them
         (subject to Clause 7.2):

         (a)      first, in payment or satisfaction of all costs, charges,
                  expenses and liabilities properly incurred in or about the
                  exercise of powers conferred on the Trustee by these presents
                  or otherwise in relation to these presents and payments made
                  by the Trustee under any of the provisions contained in these
                  presents and of all remuneration payable to the Trustee under
                  these presents with interest thereon (as provided in Clause
                  10.4) and in payment or satisfaction of all amounts payable
                  pursuant to these presents to any attorney, manager, agent,
                  delegate or other person appointed by or under these presents;

         (b)      secondly, in payment of any principal and interest and all
                  other sums owing in respect of the Bonds and the Coupons pari
                  passu and rateably; and

         (c)      thirdly, in payment of the balance (if any) to the Company for
                  itself or, in respect of amounts received from a Guarantor,
                  the relevant Guarantor for itself.

         Without prejudice to this Clause 7.1, if the Trustee holds any moneys
         which represent principal or interest or other sums in respect of Bonds
         or Coupons which have become void or in respect of which claims have
         become prescribed under Condition 9, the Trustee will hold such moneys
         upon the above trusts.

7.2      Accumulation

         If the amount of the moneys at any time available for payment in
         respect of the Bonds under Clause 7.1 is less than 10 per cent. of the
         principal amount of the Bonds then outstanding, the Trustee may, at its
         discretion, invest such moneys in accordance with the provisions of
         Clause 7.3. The Trustee may retain such investments and accumulate the
         resulting income until the investments and the accumulations, together
         with any other funds for the time being under the control of the
         Trustee and available for such payment, amount to at least 10 per cent.
         of the principal amount of the Bonds then outstanding and then such
         investments, accumulations and funds (after deduction of any applicable

                                       17
<PAGE>

         taxes or provisions made therefor) will be applied as specified in
         Clause 7.1.

7.3      Investment

         Any moneys which under the trusts herein contained ought to or may be
         invested by the Trustee may be invested in the name or under the
         control of the Trustee in any of the investments for the time being
         authorised by English law for the investment by trustees of trust
         moneys or in any other investments, whether similar to the aforesaid or
         not, which may be selected by the Trustee or by placing the same on
         deposit in the name or under the control of the Trustee with such bank
         or other financial institution as the Trustee may, in its absolute
         discretion, think fit and the Trustee may at any time vary or transpose
         any of such investments for or into other such investments and shall
         not be responsible for any loss occasioned thereby whether by
         depreciation in value or otherwise.

8.       COVENANTS TO COMPLY WITH PROVISIONS

8.1      Compliance with these presents

         Each of them the Company and the Guarantors hereby 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
         (including those which may subsequently be determined to be illegal,
         invalid or unenforceable for any reason). The Trustee shall be entitled
         to enforce the obligations of the Company and each Guarantor under
         these presents.

8.2      When Trustee required to act

         The Trustee is hereby authorised and it is declared that the Trustee
         shall be entitled to assume without enquiry (in the absence of express
         written notice to the Trustee from the Company or a Guarantor, as the
         case may be, to the contrary) that the Company and the Guarantors are
         duly performing and observing all covenants and provisions contained in
         these presents and on their respective parts to be performed and
         observed. Notwithstanding knowledge by or notice to the Trustee of any
         breach of any such covenant or provision it shall be in the discretion
         of the Trustee whether or not to take any action or proceedings to
         enforce the performance thereof and the Trustee shall not be bound to
         enforce the same or any of the covenants or provisions of these
         presents unless and until in any of such cases (but subject to
         Condition 10) the Trustee is required to do so by an Extraordinary
         Resolution or in writing by the holders of not less than one-quarter
         part in principal amount of the Bonds for the time being outstanding,
         and then only if the Trustee shall be indemnified to its satisfaction
         against all actions, proceedings, costs, claims and demands to which it
         may render itself liable and all costs, charges, damages and expenses
         which it may incur by so doing. Only the Trustee may enforce the
         provisions of these presents. No Bondholder or Couponholder shall be
         entitled to proceed directly against the Company unless the Trustee
         having become bound as aforesaid to take proceedings fails so to do
         within a reasonable period and such failure shall be continuing.

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<PAGE>

9.       COVENANTS

9.1      So long as any Bond is  outstanding,  the Company  will and each
         Guarantor  will procure that the Company will:

         (a)   Carry on and conduct its affairs in an efficient  manner and keep
               books of account;  at all times carry on and conduct its affairs,
               and procure that each of the Subsidiaries carries on and conducts
               its  affairs,  in a proper and  efficient  manner  and keep,  and
               procure  that each of the  Subsidiaries  keeps,  proper  books of
               account  and,  at any time  after the  occurrence  of an Event of
               Default or a  Potential  Event of Default or if the  Trustee  has
               reasonable  grounds to believe that any such event has  occurred,
               so far as permitted by applicable  law,  allow,  and procure that
               each of the  Subsidiaries  will  allow,  the  Trustee  and anyone
               appointed  by  it  to  whom  the  Company   and/or  the  relevant
               Subsidiary  has no  reasonable  objection  access to the books of
               account   of  the   Company   and/or  the   relevant   Subsidiary
               respectively  at all  reasonable  times  during  normal  business
               hours;

          (b)  Notice of  security  interests:  notify  the  Trustee  in writing
               immediately  upon becoming aware that the provisions of Condition
               3 shall have become  applicable by reason of any  encumbrance  or
               security  interest  referred  to therein  being  created or being
               permitted to subsist or arising;

          (c)  Notice  of  Event of  Default:  notify  the  Trustee  in  writing
               immediately upon becoming aware of the occurrence of any Event of
               Default or Potential Event of Default;

          (d)  Information:  so far as permitted by applicable  law, give to the
               Trustee such  information  and assistance as it requires to carry
               out the trusts of these presents;

          (e)  Financial  statements  etc.:  send to the  Trustee  two copies or
               translations, in each case in the English language, of:

               (i)       all accounts,  financial  statements and reports for or
                         in respect of any annual,  half-yearly  or other period
                         in respect of which any account, financial statement or
                         report  is  prepared  by the  Company  for issue to its
                         shareholders,  together with any report of the Auditors
                         thereon,  as  soon  as  practicable,  and in any  event
                         within six months, after the last day of such period;

                (ii)     all notices, statements,  circulars and other documents
                         issued,  sent or given to  holders  of the shares or of
                         any other  securities  of the  Company  (other than the
                         Bonds) or of any of the Subsidiaries, and which, in the
                         opinion of the Trustee,  have a material bearing on the
                         interests of the  Bondholders,  when such documents are
                         issued, sent or given to such holders; and

                                       19

<PAGE>

                (iii)    all notices, statements,  circulars and other documents
                         issued,   sent  or  given  to  Bondholders   when  such
                         documents are issued,  sent or given to Bondholders and
                         prior  thereto,  in  the  case  of  any  such  document
                         addressed  to  Bondholders,  send  to the  Trustee  two
                         copies of the form of such  document  at least 48 hours
                         prior to publication,

                and so that:

                 (a)     if  and to  the  extent  that  any  account,  financial
                         statement  or report  referred to in  paragraph  (i) of
                         this Clause 9.1(e) shall not be prepared or adjusted on
                         a basis  consistent  with  that  used for the  relevant
                         preceding  period,  that  fact  shall be stated in such
                         account, financial statement or report (as the case may
                         be);

                  (b)    any  document  referred to in  paragraph  (iii) in this
                         Clause 9.1(e) addressed to Bondholders shall be issued,
                         sent or given in a form previously  approved in writing
                         by the Trustee (such approval, unless so expressed, not
                         to  constitute  approval for the purposes of section 57
                         of the  Financial  Services Act 1986 of any such notice
                         which  is  an  investment   advertisement  (as  therein
                         defined)); and

                  (c)    any  notice,  statement,  circular  and other  document
                         issued,  sent  or  given  to  Bondholders  shall  be so
                         issued, sent or given in accordance with Condition 14;

         (f)      Certificates of Directors:  send to the Trustee,  within ten
                  days  after a  request  by the  Trustee  therefor  and  also
                  (without the necessity  for any such demand)  promptly or in
                  any event  within 14 days of its  annual  audited  financial
                  statements being issued to its  shareholders,  a certificate
                  signed  by two of its  Directors  certifying  to the  effect
                  that, having made all reasonable  enquiries,  in the opinion
                  of  the   persons   so   certifying   as  at  a  date   (the
                  "Certification  Date"), being not more than five days before
                  the  date  of  the  certificate,  no  Event  of  Default  or
                  Potential  Event of Default had  occurred  since the date of
                  this Master Trust Deed or, if later, the Certification  Date
                  of the last such  certificate (if any) and, if such an event
                  had occurred, giving details of it;

         (g)      Reports of Auditors: procure that the Auditors furnish to the
                  Trustee such reports and information as the Trustee may
                  request in connection with any calculation or matter arising
                  under these presents;

         (h)      Further acts: so far as permitted by applicable law, do all
                  such further things as may be necessary in the opinion of the
                  Trustee to give effect to these presents and to enable the
                  Trustee to carry out the trusts of these presents;

         (i)      Notice of late payment: forthwith after a request by the
                  Trustee give notice to the Bondholders of any unconditional

                                       20
<PAGE>

                  payment to the Trustee or the Principal Paying Agent of any
                  sum due in respect of the Bonds or Coupons made after the due
                  date for such payment;

         (j)      Listing of Bonds: use all reasonable  endeavours to maintain
                  at its expense a listing or  quotation  for the Bonds on the
                  London Stock Exchange  and/or on any other stock exchange or
                  securities  market  on which  the  Bonds  shall for the time
                  being be listed or quoted, provided that if, notwithstanding
                  such  endeavours,  it is unable to do so or if the terms and
                  conditions  subject to which such  listing or  quotation  is
                  maintained are agreed by the Trustee in writing to be unduly
                  onerous  (whether by reason of expense or otherwise) and the
                  Trustee is satisfied  that the interests of the  Bondholders
                  would not be thereby materially prejudiced, the Company will
                  instead use all reasonable endeavours to obtain and maintain
                  at its expense a listing or quotation  for the Bonds on such
                  other stock  exchange or  securities  market as it may (with
                  the prior written  approval of the Trustee)  decide and will
                  promptly  give  notice  (in a form  previously  approved  in
                  writing by the Trustee) to the  Bondholders of any delisting
                  or  listing  or grant  or loss of  quotation  for the  Bonds
                  occurring  hereafter  (other than the initial listing on the
                  London Stock Exchange);

         (k)      Change in Agents: give not less than 14 days' prior notice to
                  the Bondholders of any appointment or resignation or removal
                  of any Agent or of any change by any Agent of its specified
                  office, in each case occurring after the date of this Master
                  Trust Deed, and not make any such appointment or removal
                  without the prior written approval of the Trustee;

         (l)      Bonds held by the Company etc.: send to the Trustee as soon as
                  practicable after being so requested by the Trustee a
                  certificate signed by two Directors of the Company setting out
                  the total number of Bonds which, at the date of such
                  certificate, were held by or on behalf of the Company and each
                  of its Subsidiaries respectively and which had not been
                  cancelled;

         (m)      Early redemption: give prior written notice to the Trustee of
                  any proposed redemption pursuant to Condition 6(B) or (C) and,
                  if it gives notice to Bondholders of its intention to redeem
                  any Bonds pursuant to Condition 6(B), make selections by lot
                  (if appropriate) and redeem Bonds accordingly;

         (n)      Agency Agreement: comply with and perform all its obligations
                  under the Agency Agreement, use all reasonable endeavours to
                  procure that each of the Agents complies with and performs its
                  obligations thereunder, not take any steps to prevent
                  compliance by the Agent in accordance with the terms of the
                  Agency Agreement and not amend or modify the Agency Agreement
                  without the prior written consent of the Trustee;

         (o)      Availability of information: make available for inspection at
                  the specified offices of the Agents copies of the accounts,
                  financial statements and reports referred to in Clause 9.1(d)
                  as from the date of issue thereof to the Company's
                  shareholders;

                                       21
<PAGE>

         (p)      Clearstream, Luxembourg and Euroclear: use all reasonable
                  endeavours to provide assistance to Clearstream, Luxembourg
                  and/or Euroclear (as the case may be) in the issuance of any
                  certificate or other document requested by the Trustee under
                  Clause 11(q) as soon as practicable after such request;

         (q)      Filings: duly and punctually comply with or procure that there
                  is complied with all filing, reporting and similar
                  requirements required in accordance with applicable English
                  law and regulations from time to time relating in any manner
                  whatsoever to the Bonds, and deliver to the Trustee two copies
                  of all orders, directions and notices given or made to the
                  Company by the London Stock Exchange and any other stock
                  exchange or securities market on which the Bonds shall for the
                  time being be listed or quoted (other than of a purely
                  procedural, routine or technical nature) together, if
                  applicable, with English language translations thereof;

         (r)      Principal Subsidiaries: give to the Trustee within 14 days of
                  its annual audited financial statements being issued to its
                  shareholders and also within 14 days of a request by the
                  Trustee, either a certificate by the Auditors listing the
                  Principal Subsidiaries which, as at the last day of the latest
                  completed financial year of the Company or as at the date
                  specified in such request, were the consolidated Principal
                  Subsidiaries or, if the Company has no such Principal
                  Subsidiaries, a certificate to that effect signed by two
                  Directors of the Company.

9.2      Covenants by the Guarantors

         Each Guarantor hereby covenants with the Trustee in the terms of
         Clauses 9.1(a), (b), (c), (d), (e), (f), (g), (h), (k), (l), (n), (o),
         (p), (q) and (r) as if references to the Company therein were
         references to such Guarantor. So long as any Bond is outstanding NEDL
         will send to the Trustee a certificate of NEDL signed by two of its
         Directors:

         (a)      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

         (b)      specifying any higher figure determined by the Gas and
                  Electricity Markets Authority as is mentioned in Condition 10,
                  such certificate to be provided within five days of the Gas
                  and Electricity Markets Authority determining such figure by
                  notice in writing to the Secretary of State for Trade and
                  Industry (or any successor) and NEDL.

10.      REMUMERATION AND INDEMNIFICATION OF TRUSTEE

10.1     Normal remuneration

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<PAGE>

         So long as any Bond is outstanding the Company (failing which the
         Guarantors) will pay to the Trustee by way of remuneration for its
         services as Trustee such sum as may from time to time be agreed between
         them. Such remuneration will accrue from day to day from the date of
         this Trust Deed until the trusts of these presents shall be finally
         wound up and shall be payable on such dates as shall be agreed between
         the Company and the Trustee. Upon the issue of any Further Bonds, the
         rate of remuneration in force immediately prior thereto shall be
         increased by such amount, and as from such date, as shall be agreed
         between the Company and the Trustee.

10.2     Extra remuneration

         At any time after the occurrence of an Event of Default or a Potential
         Event of Default or if the Trustee finds it expedient in the interests
         of Bondholders or necessary, or if the Trustee is requested by the
         Company or either Guarantor to undertake duties which the Trustee and
         the Company or the Guarantor (as the case may be) agree to be of an
         exceptional nature or otherwise outside the scope of the normal duties
         of the Trustee under these presents, the Company (failing which the
         Guarantors) will pay such additional remuneration as may be agreed
         between the Company and the Trustee or, failing agreement as to any of
         the matters in this Clause 10.2 (or as to such sums referred to in
         Clause 10.1), as determined by a merchant or investment bank in London
         of international repute selected by the Trustee and approved by the
         Company or, failing such approval, nominated on the application by the
         Trustee by the President for the time being of The Law Society of
         England and Wales. In making its determination such merchant or
         investment bank shall act as an expert and not as an arbitrator and its
         determination of such matter shall, in the absence of manifest error,
         be conclusive and binding on the Company, the Guarantors, the Trustee,
         the Bondholders and the Couponholders. The expenses involved in
         appointing such merchant or investment bank and the fees and expenses
         of the merchant or investment bank shall be paid by the Company
         (failing which by the Guarantors).

10.3     Expenses

         The Company (failing which by the Guarantors) will also pay or
         discharge on a full indemnity basis (in priority to any payment to the
         Bondholders and the Couponholders) all costs, charges, liabilities and
         expenses properly incurred by the Trustee in relation to the
         preparation and execution of these presents and the carrying out of the
         trusts of these presents and the exercise of the powers, authorities
         and discretions vested in the Trustee by or pursuant to these presents,
         including, but not limited to, legal and travelling expenses and any
         stamp, issue, registration, documentary or other taxes or duties paid
         by the Trustee in connection with any legal proceedings brought or
         contemplated by the Trustee against the Company or either Guarantor for
         enforcing any obligation under these presents.

10.4     Payment of expenses

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<PAGE>

         All such costs, charges, liabilities and expenses incurred by the
         Trustee and payments made referred to in Clause 10 will be payable or
         reimbursable by the Company (failing which the Guarantors) on a full
         indemnity basis within 14 days of demand by the Trustee and:

         (i)      in the case of payments made by the Trustee prior to such
                  demand will carry interest from the date on which the demand
                  is made at the rate of 2 per cent. per annum over the base
                  rate for the time being of Barclays Bank PLC; and

         (ii)     in all other cases will carry interest at such rate from 30
                  days after the date on which the demand is made or where the
                  demand properly specifies that payment is to be made on an
                  earlier date from such earlier date.

10.5     Indemnity

         The Company (failing which the Guarantors) will indemnify the Trustee
         (in priority to any payment to the Bondholders and the Couponholders)
         in respect of all liabilities and expenses properly incurred by the
         Trustee in the carrying out of the trusts of these presents or by
         anyone appointed by the Trustee or to whom any of the functions of the
         Trustee may be delegated by the Trustee in such carrying out of the
         trusts of these presents and against any loss, liability, cost, claim,
         action, demand or expense (including, but not limited to, all costs,
         charges and expenses paid or incurred in disputing or defending any of
         the foregoing) which the Trustee or any such person may properly incur
         or which may be made against the Trustee or any such person, arising
         out of or in relation to or in connection with the appointment of the
         Trustee or any such person and any thing done or omitted by the Trustee
         in such carrying out of the trusts of these presents or by any such
         person under or pursuant to such delegation, provided that such
         indemnity shall not extend to any such loss, liability, cost, claim,
         action, demand or expense incurred or suffered by any agent or delegate
         appointed by the Trustee in the event of negligence or willful default
         of such agent or delegate. The Trustee may retain and pay out of any
         moneys in its hands arising from the carrying out of the trusts of, or
         otherwise trusts under, these presents all sums necessary to effect
         such indemnity and also the remuneration of the Trustee as herein
         before provided.

10.6     Value added tax

         The Company (failing which the Guarantors) shall pay to the Trustee (in
         priority to any payment to the Bondholders and the Couponholders) an
         amount equal to any value added tax or similar tax chargeable in
         respect of any payment to be made to the Trustee under these presents.

10.7     Provisions continuing

         The provisions of Clauses 10.3 to 10.6 (inclusive) will continue in
         full force and effect in relation to the Trustee even if it may have
         ceased to be Trustee.

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10.8     Apportionment

         The Trustee shall be entitled in its absolute discretion to determine
         in respect of which series of Bonds any costs, charges, liabilities and
         expenses incurred under or pursuant to these presents have been
         incurred or to allocate any such costs, charges, liabilities and
         expenses between the Original Bonds and any Further Bonds of any
         series.

11.      PROVISIONS SUPPLEMENTAL TO TRUSTEE ACT 1925

         By way of supplement to the Trustee Act 1925 it is expressly declared
         in the terms of the following provisions of this Clause 11:

         (a)      Advice

                  The Trustee may in carrying out the trusts of these presents
                  act on the opinion or advice of, or information obtained from,
                  any accountant, lawyer, valuer, surveyor, broker, auctioneer
                  or other expert, whether obtained by the Company, either
                  Guarantor or the Trustee, and will not be responsible to
                  anyone for any loss occasioned by so acting. Any such opinion,
                  advice or information may be sent or obtained by letter,
                  telephone, telex or facsimile or cable transmission and the
                  Trustee will not be liable to anyone for acting in good faith
                  on any opinion, advice or information purporting to be
                  conveyed by such means even if it contains some error or is
                  not authentic.

         (b)      Notification of execution

                  The Trustee need not notify anyone of the execution of these
                  presents.

         (c)      Resolutions of Bondholders

                  The Trustee will not be responsible for having acted in good
                  faith upon a resolution purporting to have been passed at a
                  meeting of Bondholders (in respect of which minutes have been
                  made and signed) even though it may later be found that there
                  was a defect in the constitution of such meeting or in the
                  procedures thereat or in the signing of such resolution or
                  that such resolution was not valid or binding upon the
                  Bondholders or Couponholders for any reason whatsoever.

         (d)      Certificate signed by Directors

                  The Trustee may call for and may accept as sufficient evidence
                  of any fact or matter or the expediency of any act a
                  certificate signed by two Directors of the Company or of
                  either Guarantor certifying to the effect that, having made
                  all reasonable enquiries, in the opinion of the persons so
                  certifying such fact or matter is as stated in the certificate
                  or such act is expedient and in any such case and in the case
                  of any certificate given under Clause 9.1(f) or 15.2(a)(iv)
                  the Trustee may rely absolutely on such certificate and need

                                       25
<PAGE>

                  not call for any further evidence and will not be responsible
                  for any loss that may be occasioned by it not calling for
                  further evidence or by it acting on any such certificate.

         (e)      Deposit of documents

                  The Trustee may deposit these presents and any other documents
                  in any part of the world with any banker or banking company or
                  entity the business of which includes undertaking the safe
                  custody of documents or with any lawyer or firm of lawyers
                  believed by it to be of good repute, may at its discretion
                  make any such arrangements as it thinks fit for allowing the
                  Company or the Guarantors access to, or its solicitors or
                  auditors access to or possession of, such documents and the
                  Trustee shall not be responsible for or required to insure
                  against loss, liability, claim, action, demand or expense
                  incurred in connection with any such deposit, access or
                  provision and may pay all sums to be paid on account of or in
                  respect of any such deposit, provided that, unless in the
                  opinion of the Trustee it is required in connection with the
                  enforcement of any obligation of the Company or a Guarantor
                  under these presents or otherwise in connection with the
                  carrying out of the trusts of these presents or unless it
                  comprises the holding or placing of such documents in the
                  United Kingdom, the Trustee may not take any such action if a
                  liability to stamp duty or other duties or taxes would thereby
                  arise.

         (f)      Discretion of Trustee

                  Save as otherwise expressly provided in these presents, the
                  Trustee will have absolute and uncontrolled discretion as to
                  the exercise of the powers, authorities and discretions
                  conferred on, and the functions of, the Trustee under these
                  presents, will not be responsible to anyone for any loss,
                  liability, cost, claim, action, demand, expenses or
                  inconvenience which may result from their exercise or
                  non-exercise and any such exercise or non-exercise shall, as
                  between the Trustee and the Bondholders and the Couponholders,
                  be conclusive and binding on the Bondholders and the
                  Couponholders.

         (g)      Agents

                  The Trustee may, in the carrying out of the trusts of these
                  presents, instead of acting personally, employ and pay an
                  agent believed by it to be of good repute, whether or not a
                  lawyer or other professional person, to transact or conduct,
                  or concur in transacting or conducting, any business and to do
                  or concur in doing any acts required to be done by the Trustee
                  in carrying out of the trusts of these presents (including the
                  receipt and payment of money) and any Trustee 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 (including matters which ought to or should
                  have been attended to in person by a trustee not being engaged
                  in any trade or profession) 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

                                       26
<PAGE>

                  matters arising in connection with these presents. The Trustee
                  shall not be responsible to anyone for any misconduct or
                  omission or default on the part of any such agent so employed
                  by it or be bound to supervise the proceedings or acts of any
                  such agent.

         (h)      Delegation

                  The Trustee may, in the execution and exercise of all or any
                  of the trusts, powers, authorities and discretions vested in
                  it by these presents and the Conditions, act by responsible
                  officers or a responsible officer for the time being of the
                  Trustee, and the Trustee may also whenever it thinks it
                  expedient in the interests of the Bondholders, whether by
                  power of attorney or otherwise, and after such consultation
                  (if any) with the Company and the Guarantors as the Trustee
                  may consider to be practicable, delegate to any person or
                  fluctuating body of persons all or any of the trusts, powers,
                  authorities and discretions vested in it by these presents and
                  the Conditions and any such delegation may be made upon such
                  terms and conditions and subject to such regulations
                  (including power to sub-delegate) as the Trustee may think fit
                  and provided that the Trustee shall have exercised reasonable
                  care in the selection of such delegate, it shall not be bound
                  to supervise the proceedings and shall not in any way or to
                  any extent be responsible for any loss incurred by any
                  misconduct or default on the part of such delegate or
                  sub-delegate. The Trustee shall give prompt notice to the
                  Company and the Guarantors of the appointment (and termination
                  thereof) of any delegate as aforesaid and shall procure that
                  any delegate shall also give prompt notice to the Company and
                  the Guarantors of any sub-delegate. Notwithstanding the above,
                  the Trustee may not delegate the right to give written notice
                  to the Company that the Bonds are immediately due and
                  repayable unless prior to such delegation the Trustee provides
                  to the Company and the Guarantors confirmation in writing that
                  the Trustee has been advised by its legal advisers that it
                  should delegate the right (with or without any other rights,
                  trusts, powers, authorities and discretions) to another person
                  or fluctuating body of persons because of a conflict of
                  interest or possible conflict of interest and/or other similar
                  circumstances which the Trustee might face, or be subjected
                  to, as the trustee of these presents if it were not to
                  delegate that right.

         (i)      Forged Bonds

                  The Trustee will not be liable to the Company, either
                  Guarantor or any Bondholder or Couponholder by reason of
                  having accepted as valid or not having rejected any
                  Certificate, Coupon or other document relating to any Bond
                  purporting to be such and later found to be forged or not
                  authentic.

         (j)      Confidentiality

                  Unless ordered to do so by a court of competent jurisdiction,
                  the Trustee shall not be required to disclose to any
                  Bondholder or Couponholder any confidential, financial, price

                                       27
<PAGE>

                  sensitive or other information made available to the Trustee
                  by the Company or either Guarantor or any of the Subsidiaries
                  and no Bondholder or Couponholder shall be entitled to take
                  any action to obtain from the Trustee any such information
                  (and for this purpose any unpublished accounts and other
                  unpublished financial information of or concerning the
                  Company, either Guarantor or any of the Subsidiaries shall be
                  considered to be confidential).

         (k)      Determinations conclusive

                  As between itself and the Bondholders and Couponholders, the
                  Trustee shall have power to determine all questions and doubts
                  arising in relation to any of the provisions of these
                  presents. Every such determination, whether made upon such a
                  question actually raised or implied in the acts or proceedings
                  of the Trustee, shall be conclusive in the absence of manifest
                  error and shall bind the Trustee, the Bondholders, the
                  Couponholders and all other persons interested under these
                  presents.

         (1)      Currency conversion

                  Where it is necessary or desirable to convert any sum from one
                  currency to another, it shall (unless otherwise provided under
                  these presents or required by law) be converted at such rate
                  or rates, in accordance with such method and as at such date
                  as may be specified by the Trustee but having regard to
                  current rates of exchange, if available. Any rate, method and
                  date so specified will be binding on the Company, the
                  Guarantors, the Bondholders and the Couponholders.

         (m)      Events of Default and other events

                  The Trustee may determine whether or not a default in the
                  performance or observance by the Company or either Guarantor
                  of any of their respective obligations is in its opinion
                  capable of remedy and/or whether or not any event is in its
                  opinion materially prejudicial to the interests of the
                  Bondholders or has a material adverse effect on the Company's
                  or either Guarantor's ability to perform or to comply with any
                  of its obligations under these presents. Any such
                  determination will be conclusive and binding upon the Company,
                  the Guarantors, the Bondholders and the Couponholders.
                  Notwithstanding the foregoing provisions of this Clause
                  11.1(m) or any other provisions of these presents, the Trustee
                  shall not be bound to take any steps to ascertain whether or
                  not any Event of Default or Potential Event of Default,
                  Negative Rating Event, 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, Restructuring Event or any other such event has
                  occurred and that each of the Company and each Guarantor is
                  observing and performing all its obligations under these
                  presents.

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<PAGE>

         (n)      Payment for and delivery of Bonds

                  The Trustee will not be responsible for the receipt or
                  application by the Company of the proceeds of the issue of the
                  Bonds, the exchange of interests in the Global Bond for
                  individual Bonds or the delivery of individual Bonds to the
                  persons entitled to them.

         (o)      Bonds held by the Company etc.

                  In the absence of knowledge or express notice to the contrary,
                  the Trustee may assume without enquiry that no Bonds or
                  Coupons are for the time being held by or on behalf of the
                  Company, either Guarantor or any of the Subsidiaries and that
                  none of such companies has any beneficial interest therein.

         (p)      Interests of Bondholders

                  In connection with the carrying out of the trusts of these
                  presents (including, but not limited to, those in relation to
                  any proposed modification, waiver or authorisation of any
                  breach or proposed breach of any of the Conditions or any of
                  the provisions of these presents or any proposed substitution
                  in accordance with Clause 15), the Trustee shall have regard
                  to the interests of the Bondholders as a class and in
                  particular, but without prejudice to the generality of the
                  foregoing, shall not have regard to the consequences of such
                  exercise for individual Bondholders 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 or
                  otherwise to the tax consequences thereof and the Trustee
                  shall not be entitled to require, nor shall any Bondholder or
                  Couponholder be entitled to claim, from the Company, either
                  Guarantor, the Trustee or any other person any indemnification
                  or payment of or in respect of any tax arising in consequence
                  of any such exercise upon individual Bondholders or
                  Couponholders except to the extent provided for in Condition 8
                  and/or in any undertaking given in addition thereto or in
                  substitution therefor pursuant to these presents.

         (q)      Clearstream, Luxembourg and Euroclear

                  The Trustee may call for any certificate or other document to
                  be issued by Clearstream, Luxembourg or Euroclear as to the
                  principal amount of Bonds represented by a Global Bond
                  standing to the account of any person. Any such certificate or
                  other document shall be conclusive and binding for all
                  purposes. The Trustee shall not be liable to any person by
                  reason of having accepted as valid or not having rejected any
                  certificate or other document to such effect purporting to be
                  issued by Clearstream, Luxembourg or Euroclear and
                  subsequently found to be forged or not authentic.

                                       29

<PAGE>

12.      TRUSTEE LIABLE FOR BREACH OF TRUST

         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
         the Trustee any powers, authorities or discretions, exempt the Trustee
         from, or indemnify it against, any liability which by virtue of any
         rule of law would otherwise attach to it in respect of any breach of
         trust of which it may be guilty.

13.      WAIVER, PROOF OF DEFAULT, CONSENTS AND TRUSTEE'S POWER TO APPLY TO
COURT

13.1     Waiver

         The Trustee may, without the consent of the Bondholders or
         Couponholders and without prejudice to its rights in respect of any
         subsequent breach, Potential Event of Default or Event of Default, from
         time to time and at any time, if in its opinion the interests of the
         Bondholders will not be materially prejudiced thereby, waive or
         authorise, on such terms and conditions as seem expedient to it
         (including with retrospective effect) any breach or proposed breach by
         the Company or either Guarantor of any of the provisions of these
         presents or determine that any Event of Default or Potential Event of
         Default will not be treated as such, provided that the Trustee will not
         exercise any of the powers conferred on it by this Clause 13.1 in
         contravention of any express direction given by an Extraordinary
         Resolution or by a request made pursuant to Condition 11, but no such
         direction or request will affect any previous waiver, authorisation or
         determination. Any such waiver, authorisation or determination will be
         binding on the Bondholders and the Couponholders and, if, but only if,
         the Trustee so requires, will be notified to the Bondholders in
         accordance with Condition 14 by the Company or the relevant Guarantor
         as soon as practicable.

13.2     Proof of default

         If it is proved that as regards any specified Bond or Coupon the
         Company or a Guarantor has made default in paying any sum due to the
         relevant Bondholder or Couponholder, such proof will (unless the
         contrary be proved) be sufficient evidence that the same default has
         been made as regards all other Bonds or (as the case may be) Coupons
         which are then payable.

13.3     Consents

         Where under these presents provision is made for the giving of any
         consent or the exercise of any discretion by the Trustee, any such
         consent may be given and any such discretion may be exercised on such
         terms and conditions (if any) as the Trustee may think fit and may be
         given or exercised with retrospective effect. The Company and each
         Guarantor, as applicable, shall observe and perform any such terms and
         conditions and the Trustee may at any time waive or agree a variation
         in such terms and conditions.

                                       30

<PAGE>

13.4     Trustees' power to apply to Court

         The Trustee may at any time apply to the Court for an order that the
         powers and the carrying out of the trusts of these presents be
         exercised or carried into execution under the direction of the Court
         and for any other order in relation to the execution and administration
         of the powers and the carrying out of the trusts of these presents as
         the Trustee shall deem expedient and it may assent to or approve any
         application to the Court made at the instance of any of the Bondholders
         and shall be indemnified by the Company or, failing which, the
         Guarantors against all the costs, charges and expenses incurred by and
         in relation to any such application or proceedings.

14.      TRUSTEE NOT PRECLUDED FROM ENTERING INTO CONTRACTS

         Neither the Trustee nor any director, officer or employee of a
         corporation acting as a Trustee, whether acting for itself or in any
         other capacity, will be precluded in any way from becoming the owner
         of, or acquiring any interest in, or holding, or disposing of, any Bond
         or Coupon or any shares or securities of the Company, either Guarantor,
         any Subsidiary or any associated companies thereof with the same rights
         as it would have had if the Trustee or such person were not the Trustee
         or connected with the Trustee or from entering into or being interested
         in any contracts or transactions or arrangements with the Company,
         either Guarantor, any Subsidiary or any associated companies thereof or
         from acting on, or as depositary or agent for, any committee or body of
         holders of any securities of the Company, either Guarantor, any
         Subsidiary or any associated companies thereof and the Trustee will be
         entitled to retain, and will not be liable to anyone to account for,
         any profit, share of brokerage, commission, remuneration or other
         benefit made or received in connection therewith.

15.      MODIIFICATION AND SUBSTITUTION

15.1     Modification

         The Trustee may agree, without the consent of the Bondholders or the
         Couponholders, to any modification to these presents which in its
         opinion is of a formal, minor or technical nature or which is made to
         correct a manifest error. The Trustee may also so agree to any
         modification to these presents which in its opinion is not materially
         prejudicial to the interests of the Bondholders, but so that such power
         shall not extend to any such modification as is mentioned in the
         proviso to paragraph 19 of Schedule 5. Any such modification as is
         permitted by this Clause 15.1 shall be binding upon the Bondholders and
         the Couponholders and, unless the Trustee otherwise agrees, will be
         notified by the Company to the Bondholders in accordance with Condition
         14 as soon as practicable.

15.2     Substitution

(a)      The Trustee may, without the consent of the Bondholders or the
         Couponholders, but so as to bind the Bondholders and the Couponholders,
         agree with the Company and the Guarantors to the substitution of NEDL
         or any Subsidiary or holding company of NEDL or any subsidiary of such

                                       31
<PAGE>

         holding company (the "Substituted Obligor") in place of the Company (or
         of any previous substitute under this Clause 15.2, 15.3) as the
         principal debtor under these presents, provided that:

         (i)      the Trustee is satisfied that such substitution is not
                  materially prejudicial to the interests of the Bondholders;

         (ii)     a trust deed is executed  or some other form of  undertaking
                  is  given by the  Substituted  Obligor  and  each  Guarantor
                  (other than a Guarantor which is the Substituted Obligor) to
                  the  Trustee,  in a  form  and  manner  satisfactory  to the
                  Trustee,  agreeing  to be bound  or,  as the case may be, to
                  continue  to be bound by the  provisions  of these  presents
                  binding  on  the  Company  or,  as  the  case  may  be,  the
                  Guarantors  with  any  consequential  amendments  which  the
                  Trustee may deem  appropriate as fully as if the Substituted
                  Obligor had been named in these  presents  as the  principal
                  debtor  in  place  of  the  Company  (or  of  any   previous
                  substitute  under this Clause 15.2) and the guarantee of the
                  Guarantors  in these  presents  had been  given  accordingly
                  (other than by a Guarantor which is the Substituted  Obligor
                  or by NEDL if NEDL has transferred the Distribution  Licence
                  to the Substituted Obligor);

         (iii)    where the  Substituted  Obligor is subject  generally to the
                  taxing  jurisdiction  of  any  territory  or  any  political
                  sub-division or any authority of or in that territory having
                  power to tax (for  the  purpose  of this  Clause  15.2,  the
                  "Substituted  Territory")  other than or in  addition to any
                  territory  to the  taxing  jurisdiction  of which (or to any
                  such political sub-division or authority of or in which) the
                  Company (or any previous  substitute under this Clause 15.2)
                  is subject  generally  (for the purpose of this Clause 15.2,
                  the  "Existing  Territory"),  the  Substituted  Obligor will
                  (unless the Trustee otherwise agrees) give to the Trustee an
                  undertaking in form and manner  satisfactory  to the Trustee
                  in terms  corresponding to the terms of Condition 8 with the
                  substitution for or, where applicable,  the addition to, the
                  references  in that  Condition to the Existing  Territory of
                  references  to the  Substituted  Territory and in such event
                  these presents will be read accordingly;

         (iv)     if any two of the directors or other officers acceptable to
                  the Trustee of the Substituted Obligor certify to the Trustee
                  to the effect that, having made all reasonable enquiries, in
                  the opinion of the persons so certifying the Substituted
                  Obligor will be solvent immediately after such substitution,
                  the Trustee may rely absolutely on such certificate and need
                  not have regard to the financial condition, profits or
                  prospects of the Substituted Obligor or compare them with
                  those of the Company (or any previous substitute under this
                  Clause 15.2) or call for any further evidence and the
                  provisions of Clause 11(d) shall apply; and

         (v)      the Company, the Guarantors (and any previous substitute under
                  Clause 15.3) and the Substituted Obligor (and any previous
                  substitute under this Clause 15.2) comply with such other
                  requirements as the Trustee may direct in the interests of the
                  Bondholders.

                                       32

<PAGE>

         In the case of such substitution, the Trustee may agree, without the
         consent of the Bondholders or the Couponholders, to a change of law
         governing these presents provided that such change would not, in the
         opinion of the Trustee, be materially prejudicial to the interests of
         the Bondholders. Any such substitution as is permitted by this Clause
         15.2 shall be binding upon the Bondholders and the Couponholders.

(b)      Release of existing obligor

         Any such agreement by the Trustee pursuant to this Clause 15.2 will, if
         so expressed but subject to Clause 15.2(a)(v), operate to release the
         Company (or any such previous substitute) from any or all of its
         obligations under these presents. Not later than 14 days after the
         execution of any such documents and after compliance with such
         requirements, notice of the substitution will be given by the
         Substituted Obligor to the Bondholders in accordance with Condition 14
         as soon as practicable.

(c)      Completion of substitution

         Up on the execution of such documents and compliance with such
         requirements, the Substituted Obligor will be deemed to be named in
         these presents as the principal debtor in place of the Company (or of
         any previous substitute under this Clause 15.2) and these presents will
         be deemed to be modified in such manner as shall be necessary to give
         effect to the substitution.

15.3     Substitution:

(a)      The Trustee may, without the consent of the Bondholders or the
         Couponholders, but so as to bind the Bondholders and the Couponholders,
         agree with the Company and the Guarantors to the substitution of any
         Subsidiary or holding company of NEDL or any subsidiary of such holding
         company (the "Substituted Guarantor") in place of NEDL (or of any
         previous substitute under this Clause 15.2, 15.3) as guarantor of the
         obligations of the Company (or any previous substitute under Clause
         15.2) under these presents guaranteed by the Guarantors (or if any
         previous substitute under this Clause 15.3) under these presents,
         provided that:

         (i)      the Trustee is satisfied that such substitution is not
                  materially prejudicial to the interests of the Bondholders;

         (ii)     the Distribution Licence is transferred to the Substituted
                  Guarantor;

         (iii)    a trust deed is executed or some other form of undertaking is
                  given by the Substituted Guarantor to the Trustee, in a form
                  and manner satisfactory to the Trustee, agreeing to be bound
                  by the provisions of these presents binding on the Guarantors
                  with any consequential amendments which the Trustee may deem
                  appropriate as fully as if the Substituted Guarantor had been
                  named in these presents as guarantor of such obligations of

                                       33
<PAGE>

                  the Company (or of any previous substitute under Clause 15.2)
                  in place of NEDL (or of any previous substitute under this
                  Clause 15.3);

         (iv)     where the Substituted  Guarantor is subject generally to the
                  taxing  jurisdiction  of  any  territory  or  any  political
                  sub-division or any authority of or in that territory having
                  power to tax (for  the  purpose  of this  Clause  15.3,  the
                  "Substituted  Territory")  other than or in  addition to any
                  territory  to the  taxing  jurisdiction  of which (or to any
                  such  political  sub-division  or  authority of or in which)
                  NEDL (or any previous  substitute under this Clause 15.3) is
                  subject  generally (for the purpose of this Clause 15.3, the
                  "Existing   Territory"),   the  Substituted  Guarantor  will
                  (unless the Trustee otherwise agrees) give to the Trustee an
                  undertaking in form and manner  satisfactory  to the Trustee
                  in terms  corresponding to the terms of Condition 8 with the
                  substitution for or, where applicable,  the addition to, the
                  references  in that  Condition to the Existing  Territory of
                  references  to the  Substituted  Territory and in such event
                  these presents will be read accordingly;

         (v)      if any two of the directors or other officers acceptable to
                  the Trustee of the Substituted Guarantor certify to the
                  Trustee to the effect that, having made all reasonable
                  enquiries, in the opinion of the persons so certifying the
                  Substituted Guarantor will be solvent immediately after such
                  substitution, the Trustee may rely absolutely on such
                  certificate and need not have regard to the financial
                  condition, profits or prospects of the Substituted Guarantor
                  or compare them with those of NEDL (or of any previous
                  substitute under this Clause 15.3) or call for any further
                  evidence and the provisions of Clause 11.1(d) shall apply; and

         (vi)     the Company (and any previous substitute under Clause 15.2),
                  the Guarantors and the Substituted Guarantor (and any previous
                  substitute under this Clause 15.3) comply with such other
                  requirements as the Trustee may direct in the interests of the
                  Bondholders.

         In the case of such substitution, the Trustee may agree, without the
         consent of the Bondholders or the Couponholders, to a change of law
         governing these presents provided that such change would not, in the
         opinion of the Trustee, be materially prejudicial to the interests of
         the Bondholders. Any such substitution as is permitted by this Clause
         15.3 shall be binding upon the Bondholders and the Couponholders.

(b)      Release of existing obligor

         Any such agreement by the Trustee pursuant to this Clause 15.3 will, if
         so expressed but subject to Clause 15.3(a)(vi), operate to release NEDL
         (or any such previous substitute) from any or all of its obligations
         under these presents. Not later than 14 days after the execution of any
         such documents and after compliance with such requirements, notice of
         the substitution will be given by the Substituted Guarantor to the
         Bondholders in accordance with Condition 14 as soon as practicable.

(c)      Completion of substitution

                                       34

<PAGE>

         Upon the execution of such documents and compliance with such
         requirements, the Substituted Guarantor will be deemed to be named in
         these presents as a guarantor of the obligations aforesaid of the
         Company (or of any previous substitute under Clause 15.2) in place of
         NEDL (or of any previous substitute under this Clause 15.3) and these
         presents will be deemed to be modified in such manner as shall be
         necessary to give effect to the substitution.

16.      APPOINTMENT, RETIREMENT AND REMOVAL OF TRUSTEE

16.1     Appointment

         The Company will have the power of appointing a new Trustee but no
         person will be so appointed unless previously approved by an
         Extraordinary Resolution. A trust corporation will at all times be a
         Trustee and may be the sole Trustee. Any appointment of a new Trustee
         will be notified by the Company to the Bondholders and to the Agents as
         soon as practicable.

16.2     Retirement and removal

         Any Trustee may retire at any time on giving not less than three
         months' notice in writing to the Company without giving any reason and
         without being responsible for any costs occasioned by such retirement
         and the Bondholders may by Extraordinary Resolution remove any Trustee
         provided that the retirement or removal of any sole Trustee or sole
         trust corporation will not become effective until a trust corporation
         is appointed as successor Trustee. If a sole Trustee or sole trust
         corporation gives notice of retirement or an Extraordinary Resolution
         is passed for its removal under this Clause 16.2, it will use all
         reasonable endeavours to procure that another trust corporation be
         appointed as Trustee. Any replacement or retirement of a Trustee will
         be notified by the Company to the Bondholders and to the Agents as soon
         as practicable.

16.3     Co-Trustees

         The Trustee may, notwithstanding the provisions of Clause 16.1, by
         notice in writing to the Company and the Guarantors (but without the
         need for the consent of the Company, the Guarantors, the Bondholders or
         the Couponholders) appoint any person to act as an additional Trustee
         jointly with the Trustee:

         (a)      if the Trustee considers such appointment to be in the
                  interests of the Bondholders;

         (b)      for the purpose of conforming with any legal requirement,
                  restriction or condition in any jurisdiction in which any
                  particular act is to be performed; or

                                       37

<PAGE>

         (c)      for the purpose 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 Company or either Guarantor.

         Subject to the provisions of these presents the Trustee may confer on
         any person so appointed such functions as it thinks fit. The Trustee
         may by notice in writing to the Company, the Guarantors and such person
         remove any person so appointed. At the request of the Trustee, the
         Company and the Guarantors will forthwith execute and do all such
         documents, acts and things as may be required to perfect such
         appointment or removal and the Company and each Guarantor hereby
         irrevocably appoints the Trustee to be its attorney in its name and on
         its behalf to do so. Any appointment or removal of any such additional
         Trustee shall be notified by the Company or the Guarantors to the
         Bondholders and to the Agents as soon as practicable.

16.4     Competence of a majority of Trustees

         If there are more than two Trustees, the majority of such Trustees will
         (provided such majority includes a trust corporation) be competent to
         carry out all or any of the Trustee's functions.

17.      COUPONHOLDERS

17.1     Notices

         Neither the Trustee, the Company nor either Guarantor need give any
         notice to the Couponholders for any purpose under these presents and
         the Couponbolders will be deemed to have notice of the contents of any
         notice given to the Bondholders.

17.2     Bondholders assumed to hold Coupons

         Even if it has express notice to the contrary, whenever the Trustee is
         required to exercise any of its functions, powers, authorities or
         discretions by reference to the interests of the Bondholders, the
         Trustee shall assume that each Bondholder is the holder of all Coupons
         relating to each Bond of which he is the bearer.

18.      COMMUNICATIONS

         Any notice, confirmation, demand, certificate or other document given,
         made or served, or required to be given, made or served, under these
         presents shall be in the English language and shall be given, made or
         served by letter delivered personally or by facsimile transmission:

                                       36
<PAGE>

         (a)      in the case of the Company, to it at:

                  Carliol House
                  Market Street
                  Newcastle-Upon-Tyne NEl 6NE

                  Fax no:           0191 210 2081

                  Attention:        The Finance Director

         (b)      in the case of NE, to it at:

                  Carliol House
                  Market Street
                  Newcastle-Upon-Tyne NEl 6NE

                  Fax no:           0191 210 2081

                  Attention:        The Finance Director

         (c)      in the case of NEDL, to it at:

                  Carliol House
                  Market Street
                  Newcastle-Upon-Tyne NEl 6NE

                  Fax no:           0191 210 2081

                  Attention:        The Finance Director

         (d)      in the case of the Trustee, to it at:

                  Fifth Floor
                  100 Wood Street
                  London EC2V 7EX

                  Fax no:           020 7606 0643

                  Attention:        The Secretary

         or, in each case, to such other address or facsimile number as shall
         have been notified (in accordance with this Clause 18) to the other
         parties.

         Any such communication will take effect, in the case of delivery, at
         the time of delivery or, in the case of facsimile transmission, at the
         time of dispatch.

                                       37
<PAGE>

         Any communication not by letter shall be confirmed by letter but
         failure to send or receive the letter of confirmation shall not
         invalidate the original communication.

19.      POWERS IN ADDITION

         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 Bonds or
         Coupons.

20.      SEVERABILITY

         Notwithstanding that any provision of these presents may prove to be
         illegal or unenforceable, the remaining provisions of these presents
         shall continue in full force and effect.

21.      EXECUTION

         Each of the parties to this Master Trust Deed intends it to be a deed,
         and agrees to execute and deliver it as a deed. The signature or
         sealing of this Master Trust Deed by or on behalf of a party shall
         constitute an authority to the solicitors, or an agent or employee of
         the solicitors, acting for that party in connection with this Master
         Trust Deed to deliver it as a deed on behalf of that party.

22.      COUNTERPARTS

         These presents may be executed in counterparts, and the counterparts
         together shall constitute one deed.

23.      GOVERNING LAW

         These presents shall be governed by and construed in accordance with
         English law.

24.      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 Master Trust Deed has been executed as a deed the day
and year first above written.

                                       38
<PAGE>

                                   SCHEDULE 1

                                     PART I

             FORM OF INDIVIDUAL CERTIFICATE FOR ORIGINAL BONDS 2005

On the front:
         ISIN:                      Serial No:                         Cert No:

                          NORTHERN ELECTRIC FINANCE plc
    (Incorporated with limited liability in England and Wales - No. 3070482)

          (pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005

     guaranteed as to principal and interest on a joint and several basis by

                              NORTHERN ELECTRIC plc
    (Incorporated with limited liability in England and Wales - No. 2366942)

                                       and

                     NORTHERN ELECTRIC DISTRIBUTION LIMITED
    (Incorporated with limited liability in England and Wales - No. 2906593)

The Bonds in respect of which this Certificate is issued are in bearer form and
form part of the series designated as specified in the title (the "Bonds") of
Northern Electric Finance plc (the "Issuer") constituted by a Master Trust Deed
dated 16th October, 1995 between the Issuer, Northern Electric plc ("NE" and,
together with Northern Electric Distribution Limited, the "Guarantors") and The
Law Debenture Trust Corporation p.l.c. as the Trustee (the "Trust Deed", which
expression includes all deeds supplemental to such Trust Deed). The Bonds are
subject to, and have the benefit of, the Trust Deed and the Terms and Conditions
(the "Conditions") set out on the reverse hereof.

The Issuer for value received hereby promises to pay to the bearer of this
Certificate the principal amount of (pound)[l,000/10,000/100,000] [(One/Ten/One
Hundred)] Thousand pounds sterling on 16th October, 2005 or on such earlier date
as such principal amount may become payable in accordance with the Conditions
and the Trust Deed together with interest thereon and any other moneys payable
in respect of the Bonds in accordance with the Conditions and the Trust Deed.

The Bonds are guaranteed as to principal and interest by the Guarantors on the
terms of the Trust Deed.

                                       39

<PAGE>

This Certificate shall not be valid or become obligatory for any purpose until
signed on behalf of the Issuer and the Guarantor and authenticated by or on
behalf of the Principal Paying Agent.

Dated

In witness whereof the Issuer and NE have caused this Certificate to be signed
in facsimile on their respective behalves.

Northern Electric Finance plc                Northern Electric plc

By:                                          By:
         Director                                       Director

By:                                          By:
         Director                                       Director

Certificate of Authentication

This Certificate is authenticated by or on behalf of the Principal Paying Agent.

By:
         Authorised Signatory

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.

[NEITHER THE ISSUER NOR THE GUARANTORS HAVE BEEN OR WILL BE REGISTERED AS AN
"INVESTMENT COMPANY" UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940.]

On the back:

                              Terms and Conditions

                                Details of Agents

                                       40
<PAGE>

                                   SCHEDULE 1

                                     PART II

                        FORM OF ORIGINAL GLOBAL BOND 2005

                                                                           ISIN:

                          NORTHERN ELECTRIC FINANCE plc

    (Incorporated with limited liability in England and Wales - No. 3070482)

          (pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005

                   guaranteed as to principal and interest by

                              NORTHERN ELECTRIC plc

    (Incorporated with limited liability in England and Wales - No. 2366942)

                        TEMPORARY GLOBAL BOND CERTIFICATE

The Bonds in respect of which this temporary Global Bond Certificate is issued
are in bearer form and comprise the series of Bonds designated as specified in
the title (the "Bonds") of Northern Electric Finance plc (the "Issuer")
constituted by a Master Trust Deed dated 16th October, 1995 between the Issuer,
Northern Electric plc (the "Guarantor") and The Law Debenture Trust Corporation
p.l.c. as the Trustee (the "Trust Deed", which expression includes all deeds
supplemental to such Trust Deed). The Bonds are subject to, and have the benefit
of, the Trust Deed including the Terms and Conditions set out on the reverse
hereof.

The Issuer for value received hereby promises to pay to the bearer of this
Certificate the principal amount of (pound)100,000,000 (or such lesser or
greater amount as is duly endorsed in the third column of Schedule A to this
Certificate) on 16th October, 2005 or on such earlier date as such principal
amount may become payable in accordance with the Trust Deed together with
interest thereon and any other moneys payable in respect of the Bonds in
accordance with the Trust Deed.

The Bonds are guaranteed as to principal and interest by the Guarantor on the
terms of the Trust Deed.

This temporary Global Bond Certificate is exchangeable for individual
Certificates representing Bonds in bearer form with Coupons attached. The Issuer
hereby irrevocably undertakes to deliver individual Certificates representing
Bonds in exchange for this temporary Global Bond Certificate on and after 26th
November, 1995 (the "Exchange Date").

                                       41

<PAGE>

On or after the Exchange Date this temporary Global Bond Certificate may be
exchanged in whole or in part for individual Certificates representing Bonds in
an aggregate principal amount not exceeding the principal amount of this
temporary Global Bond by the submission of this temporary Global Bond
Certificate to the Principal Paying Agent together with a certificate from Cedel
Bank, societe anonyme ("Cedel") or Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System ("Euroclear") substantially
to the following effect:

                                       42
<PAGE>

                         CERTIFICATE OF CLEARING SYSTEM

                          NORTHERN ELECTRIC FINANCE plc

   (pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005 (the "Bonds")

                               Common Code: ISIN:

This is to certify that, based solely on certificates 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
in the form set out in the temporary Global Bond Certificate representing Bonds
(the form of which is set out in Part II of Schedule 1 to the Master Trust Deed
constituting the Bonds) as of the date hereof [ ] principal amount of the Bonds
(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
are (a) foreign branches of United States financial institutions (as defined in
U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial institutions")
purchasing for their own account or for resale, or (b) United States persons who
acquired the Bonds through foreign branches of United States financial
institutions and who hold the Bonds 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
l.163-5(c)(2)(i)(D)(7)), and to the further effect that United States or foreign
financial institutions described in (iii) above (whether or not also described
in (i) or (ii) above) have certified that they have not acquired the Bonds for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.

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 Bonds represented by the temporary Global Bond Certificate
excepted in such certificates 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 Organisation with respect to any portion
of the part submitted herewith 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 certificate is required in connection with certain tax
laws of the United States. In connection therewith, if administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate to any interested party in such proceedings.

Dated:                              *

                                       43

<PAGE>

                                Yours faithfully,

                          [Cedel Bank, societe anonyme]

                                       or

                                       44
<PAGE>

                   [MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
                                Brussels office,
                      as operator of the Euroclear System]

                          By:

*To be dated no earlier than the Exchange Date.

Any person appearing in the records maintained by Cedel or Euroclear as entitled
to any interest in Bonds represented by this temporary Global Bond Certificate
shall be entitled to require the exchange of this temporary Global Bond
Certificate for (an) individual Certificate(s) representing such Bonds in bearer
form by delivering or causing to be delivered to Cedel or Euroclear a
certificate in substantially the following form (copies of which certificate
will be available at the office of Cedel in Luxembourg and Euroclear in Brussels
and at the specified office of each of the Paying Agents):

                   "CERTIFICATE OF CLEARING SYSTEM PARTICIPANT

                          NORTHERN ELECTRIC FINANCE plc

   (pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005 (the "Bonds")

                               Common Code: ISIN:

To:      [Cedel Bank,  societe anonyme] [Morgan  Guaranty Trust Company of New
         York,  Brussels office,  as operator of the Euroclear System]

This is to certify that, as of the date hereof, and except as set forth below,
the Bonds held by you for our account (i) are 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) are owned by United States persons that are (a) foreign branches
of United States financial institutions (as defined in U.S. Treasury Regulations
Section 1.165-12(c)(1)(v)) ("financial institutions") purchasing for their own
account or for resale, or (b) United States persons who acquired the Bonds
through foreign branches of United States financial institutions and who hold
the Bonds 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 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 in addition, if an owner of Bonds is a United States or foreign financial
institution described in (iii) above (whether or not also described in (i) or
(ii) above), this is to certify further that such financial institution has not
acquired the Bonds for purposes of resale directly or indirectly to a United
States person or to a person within the United States or its possessions.

                                       45

<PAGE>

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.

We undertake to advise you promptly by tested telex on or prior to that date on
which you intend to submit your certificate relating to the Bonds held by you
for our account in accordance with your documented 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 certificate applies as of such date.

This certificate excepts and does not relate to [     ] principal amount of the
Bonds in respect of which we are not able to certify and as to which we
understand exchange and delivery of individual Certificates representing Bonds
(or, if relevant, exercise of any rights or collection of any interest) cannot
be made until we do so certify.

<PAGE>

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

Dated:                              *

By:

         [Name of person giving certificate] as, or as
         agent for, the beneficial owner(s) of the
         Bonds in respect of which this certificate is issued.

*        To be dated no earlier than the fifteenth day prior to the Exchange
         Date."

Until the exchange of this temporary Global Bond Certificate for individual
Certificates representing Bonds pursuant to the foregoing provisions, no person
as aforesaid shall (except as stated herein) be entitled to receive any payment
by way of principal or interest in respect of the Bonds represented by this
temporary Global Bond Certificate (unless, upon due presentation of this
temporary Global Bond Certificate for exchange, delivery of any individual
Certificate representing Bonds shall be improperly withheld or refused) or to
receive (an) individual Certificate(s) representing Bonds which he would
otherwise be entitled to receive.

Upon any exchange of this temporary Global Bond Certificate for individual
Certificates representing Bonds the portion of the principal amount represented
by this temporary Global Bond Certificate in respect of which such exchange
shall be effected shall be endorsed by the Principal Paying Agent on the
Schedule of exchanges for individual Certificates hereon, whereupon the

                                       46
<PAGE>

principal amount represented by this temporary Global Bond Certificate shall be
reduced for all purposes by the amount of such portion.

Subject to the second preceding paragraph, no provisions of this temporary
Global Bond Certificate shall alter or impair the obligation of the Issuer to
pay the principal and interest in respect of the Bonds when due in accordance
with the Trust Deed or the obligations of the Guarantor under the Trust Deed.

This temporary Global Bond Certificate is governed by and shall be construed in
accordance with English law.

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

Dated:

In witness whereof the Issuer and the Guarantor have caused this temporary
Global Bond Certificate to be signed in facsimile on their respective behalves.

Northern Electric Finance plc                  Northern Electric plc

By:                                            By:
         Director                                       Director

By:                                            By:
         Director                                       Director

Certificate of Authentication

This temporary Global Bond Certificate is authenticated by or on behalf of the
Principal Paying Agent.

By:
         Authorized Signatory

                                       47

<PAGE>

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 UNITED STATES INTERNAL REVENUE
CODE.

[NEITHER THE ISSUER NOR THE GUARANTOR HAS BEEN OR WILL BE REGISTERED AS AN
"INVESTMENT COMPANY" UNDER THE U.S. INVESTMENT COMPANY ACT OF 1940.]

                                       48
<PAGE>

                Schedule of exchanges for individual Certificates

The principal amount of the Bonds represented by this temporary Global Bond
Certificate has been reduced as a result of the issue of individual Certificates
representing Bonds in respect of a portion of such principal amount in exchange
as follows:

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

                           Amount of decrease                 Principal amount of
                           in principal amount                Bonds represented by
                           of Bonds represented               Global Bond               Notation made by or
                           by Global Bond                     Certificate following     on behalf of Principal
Date of exchange           Certificate                        such decrease             Paying Agent
</TABLE>

                                       49
<PAGE>

                            Schedule of interest paid

Date of payment             Amount of interest                Notation made

                                       50
<PAGE>

                                   SCHEDULE 1

                                    PART III

                          FORM OF ORIGINAL COUPON 2005

On the front:
         ISIN:                      Serial No:                    Coupon No:

                          NORTHERN ELECTRIC FINANCE plc
    (Incorporated with limited liability in England and Wales - No. 3070482)

          (pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005
     guaranteed as to principal and interest on a joint and several basis by

                              NORTHERN ELECTRIC plc
    (Incorporated with limited liability in England and Wales - No. 2366942)

                                       and

                     NORTHERN ELECTRIC DISTRIBUTION LIMITED
    (Incorporated with limited liability in England and Wales - No. 2906593)

               Coupon for [ ] due on 199[6/7/8/9/2000/1/2/3/4/5].

This Coupon relates to interest payable on (pound)[l,000/l0,000/l00,000]
[(One/Ten/One Hundred Thousand)] principal amount of the Bonds designated as
specified in the title (the "Bonds") of Northern Electric Finance plc (the
"Issuer") constituted by a Master Trust Deed dated 16th October, 1995 between
the Issuer, Northern Electric plc ("NE" and, together with Northern Electric
Distribution Limited, the "Guarantors") and The Law Debenture Trust Corporation
p.l.c. as the Trustee (the "Trust Deed", which expression includes all deeds
supplemental to such Trust Deed).

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

Such interest is guaranteed by the Guarantors.

This Coupon is negotiable separately from the Bonds to which this Coupon
relates.

                                       51

<PAGE>

This Coupon shall not be valid or become obligatory for any purpose until signed
on behalf of the Company and authenticated by or on behalf of the Principal
Paying Agent.

Dated:

In witness whereof the Company and NE have caused this Coupon to be signed in
facsimile on their respective behalves.

Northern Electric Finance plc                Northern Electric plc

By:                                          By:
         Director                                       Director

By:                                          By:
         Director                                       Director

Certificate of Authentication

This Coupon is authenticated by or on behalf of the Principal Paying Agent

By:
         Authorized Signatory

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 UNITED STATES INTERNAL REVENUE
CODE.

[NEITHER THE ISSUER NOR THE GUARANTORS HAVE BEEN OR WILL BE REGISTERED AS AN
"INVESTMENT COMPANY" UNDER THE U.S. INVESTMENT COMPANY ACT OF 1940.]

On the back:

                            Details of Paying Agents

                                       52
<PAGE>

                                   SCHEDULE 2

                        TERMS AND CONDITIONS OF THE BONDS

         The (pound)100,000,000 8.625 per cent. Guaranteed Bonds due 2005 (the
"Bonds", which expression shall in these Terms and Conditions, unless the
context otherwise requires, include any further bonds issued pursuant to
Condition 17 and forming a single series with the Bonds) of Northern Electric
Finance plc (the "Issuer") are constituted by a master trust deed dated 16th
October, 1995 made between the Issuer, Northern Electric plc ("NE") and The Law
Debenture Trust Corporation p.l.c. (the "Trustee", which expression shall
include all persons for the time being the trustee or trustees under the Trust
Deed (as defined below)) as trustee for the holders of the Bonds (the
"Bondholders") as modified and restated by a first supplemental trust deed dated
27th September, 2001 made between the Issuer, NE, Northern Electric Distribution
Limited ("NEDL" and, together with NE, the "Guarantors" and each a "Guarantor")
and the Trustee (together, the "Trust Deed", which expression shall wherever the
context so admits include any other deed supplemental thereto). The issue of the
Bonds was authorised by a resolution of the board of directors of the Issuer
passed on 9th October, 1995. The giving of the guarantee by NE was authorised by
a written resolution of the board of directors of NE passed on 14th September,
1995 appointing a committee of the board for the purposes of the giving of the
guarantee and by a resolution of such duly appointed committee of the board of
directors of NE passed on 9th October, 1995. The giving of the guarantee by NEDL
was authorised by a resolution of the board of directors of NEDL passed on 26th
September, 2001. The Bonds are 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. Copies of the Trust Deed and of an agency agreement dated 16th
October, 1995 (the "Agency Agreement") made between the Issuer, NE, Barclays
Bank PLC, as principal paying agent (the "Principal Paying Agent", 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 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") at the registered office for the time being
of the Trustee, being at Fifth Floor, 100 Wood Street, London EC2V 7EX and at
the specified office of each of the Paying Agents. The Bondholders and the
Couponholders are entitled to the benefit of, and 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 with Coupons attached on
issue. Title to the Bonds and to the Coupons will pass by delivery. Bonds of one
denomination may not be exchanged for Bonds of another denomination.

         The Issuer, each Guarantor, any Paying Agent and the Trustee may (to
the fullest extent permitted by applicable laws) deem and treat the holder of
any Bond and the holder of any Coupon as the absolute owner thereof for all

                                       53
<PAGE>

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.       Status and Guarantee

         The Bonds and the Coupons are direct, unconditional and, subject to the
provisions of Condition 3, unsecured obligations of the Issuer and, 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 of the
Issuer, only to the extent permitted by applicable laws relating to creditors'
rights.

         The Guarantors have, in the Trust Deed, unconditionally and irrevocably
guaranteed on a joint and several basis the due and punctual payment of the
principal of and interest on the Bonds as and when the same shall become due and
payable together with any additional amounts payable pursuant to Condition 8 and
all other moneys payable under the Trust Deed. The obligations of each Guarantor
under the terms of its guarantee constitute direct, unconditional and, subject
to the provisions of Condition 3, unsecured obligations of such Guarantor and
such obligations rank and will rank pari passu with all other outstanding
unsecured and unsubordinated obligations of the relevant Guarantor, present and
future, but, in the event of insolvency of the relevant Guarantor, only to the
extent permitted by applicable laws relating to creditors' rights.

3.       Negative Pledge

         So long as any of the Bonds remains outstanding (as defined in the
Trust Deed) each of the Issuer and each Guarantor will ensure that no Relevant
Indebtedness of the Issuer, either Guarantor or any Distribution Subsidiary (as
defined below) or of any other person and no guarantee by the Issuer, either
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, either Guarantor or any Distribution Subsidiary
unless the Issuer or the relevant Guarantor, as the case may be, shall, before
or at the same time as the creation of the Security Interest, take any and all
action necessary to ensure that:

         (a)      all amounts payable by the Issuer under the Bonds, the Coupons
                  and the Trust Deed or, as the case may be, the obligations of
                  the relevant Guarantor under its guarantee referred to in
                  Condition 2 are secured to the satisfaction of the Trustee
                  equally and rateably with the Relevant Indebtedness or
                  guarantee of Relevant Indebtedness, as the case may be, by
                  such Security Interest; or

         (b)      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, as the
                  case may be, in respect of the obligations of the relevant
                  Guarantor under its guarantee referred to in Condition 2

                                       54
<PAGE>

                  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, either 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, either 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 in respect of the Bonds, the Coupons and the Trust
Deed or, as the case may be, the obligations of the relevant Guarantor under the
said guarantee as aforesaid) where such Relevant Indebtedness has an initial
maturity falling not earlier than 31st December, 2005 and is of a maximum
aggregate amount outstanding at any time not exceeding the greater of
(pound)20,000,000 and 20 per cent. of the Consolidated Tangible Net Worth (as
defined below).

         For the purposes of these Terms and Conditions:

         (a)      "Consolidated Tangible Net Worth" at any particular time the
                  aggregate of the amount paid up on NE's issued share capital
                  and the consolidated distributable and non-distributable
                  reserves of the Group (as shown in the most recently published
                  audited consolidated financial statements of the Group),
                  after:

                  (i)      deducting the total of any debit balance on the
                           profit and loss account and the book value of any
                           intangible assets including but not limited to
                           goodwill; and

                  (ii)     excluding any minority interests in Subsidiary
                           Undertakings;

                  but adjusted as may be necessary in respect of any variation
                  in the paid-up share capital or share premium account of the
                  Group 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.

                  A report by the Auditors (as defined in the Trust Deed) as to
                  the amount of the Consolidated Tangible Net Worth at any given
                  time shall, in the absence of manifest error, be conclusive
                  and binding on all parties.

         (b)      "Distribution License" means either the distribution licence
                  granted to NEDL under section 6(l)(c) of the Electricity Act
                  1989 as amended by section 30 of the Utilities Act 2000 or the
                  public electricity supply licence of NE having effect as if it
                  were a distribution licence granted to NEDL under section
                  6(l)(c) of the Electricity Act 1989 as amended by section 30
                  of the Utilities Act 2000, as appropriate.

         (c)      "Distribution Subsidiary" means any Subsidiary of NE which
                  holds a Distribution License granted under Section 6(l)(c) of
                  the Electricity Act 1989 as amended by the Utilities Act 2000;

                                       55

<PAGE>

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

                  (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 and

                  (iii)    which has been designated as such by the Issuer or
                           either Guarantor by written notice to the Trustee,
                           provided that the Issuer or either Guarantor, as the
                           case may be, 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 NE, NEDL, the Issuer and the Subsidiary
                  Undertakings of NE;

         (f)      "Project Finance Indebtedness" means any present or future
                  indebtedness (whether being principal, premium, interest or
                  other amounts) to finance a project:

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

                  (ii)     in respect of which recourse to any member of the
                           Group for the repayment or payment of any sum
                           relating to such indebtedness is limited to:

                           (1)      the assets of a single purpose company
                                    (other than a Distribution Subsidiary) the
                                    principal assets and business of which are
                                    constituted by such project and which was
                                    established for the purpose of incurring
                                    such indebtedness; or

                           (2)      the assets of the project and the rights,
                                    revenues and insurance proceeds derived
                                    therefrom or related thereto,

                  with no recourse to any other assets of the Group (other than
                  those of an Excluded Subsidiary);

         (g)      "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

                                       56
<PAGE>

                  of the person issuing the same are quoted, listed or
                  ordinarily dealt in on any stock exchange or recognized
                  over-the-counter or other securities market, but shall not in
                  any event include Project Finance Indebtedness;

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

         (i)      "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 NE, 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

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

4.       Interest

         The Bonds bear interest from (and including) 16th October, 1995 at the
rate of 8.625 per cent. per annum, payable annually in arrear on 16th October in
each year (each an "Interest Payment Date").

         Each 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 and, in the case of an incomplete month,
the number of days elapsed.

5.       Payments

         Payments of principal in respect of each Bond will only be made against
presentation and surrender (or, in the case of part payment only, endorsement)
of the relevant Bond at the specified office of any of the Paying Agents.
Payments of interest due on the Bonds 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 at the specified office of any of the
Paying Agents. Each such payment will be made at the specified office of any
Paying Agent, at the option of the holder, by sterling cheque drawn on a branch
of, or by transfer to a sterling account maintained by the payee with, a bank in
the City of London, subject in all cases to any applicable fiscal or other laws
and regulations, but without prejudice to the provisions of Condition 8.

         Each Bond must be presented for payment together with all unmatured
Coupons appertaining thereto failing which the full amount of any missing

                                       57
<PAGE>

unmatured Coupon (or, in the case of payment not being made in full, that
proportion of the full amount of the missing unmatured Coupons which the amount
so paid bears to the total amount due) appertaining thereto 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 such missing Coupon at any time before the
expiry of 10 years after the Relevant Date (as defined in Condition 8) in
respect of the relevant Bond (whether or not such Coupon would otherwise have
become void pursuant to Condition 9), or, if later, five years after the date on
which such Coupon would have become due, but not thereafter.

         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 9):

         (a)  is or falls after the relevant due date but, if the due date is
              not or was not a Business Day in the City of 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 at which the Bond or Coupon is presented for payment
              and, in the case of payment by transfer to a sterling account in
              the City of London as referred to above, in the City of London.

         "Business Day" means, in relation to any place, a day (other than a
Saturday or Sunday) on which commercial banks and foreign exchange markets
settle payments in that place.

         When making payments to Bondholders or Couponholders, fractions of one
penny will be rounded down to the nearest whole penny.

         The names of the initial Paying Agents and their initial 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 separate European cities
previously approved in writing 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 such termination or appointment and of any
changes in the specified offices of the Paying Agents will be given to the
Bondholders promptly by the Issuer in accordance with Condition 14.

6.       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 16th
October, 2005.

         (B)      The Issuer may, at any time, having given notice to the
                  Bondholders in accordance with this Condition 6(B) (which
                  notice shall be irrevocable), redeem the Bonds in whole or in

                                       58
<PAGE>

                  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)      their principal amount; 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 1/2 per cent.  Treasury  Stock  2005 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 Barclays  Bank PLC (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 previously
approve in writing.

         In the case of a redemption of all of the Bonds pursuant to this
Condition 6(B), notice will be given to the Bondholders by the Issuer in
accordance with Condition 14 once not less than 30 nor more than 60 days before
the date fixed for redemption and will specify the date fixed for redemption and
the redemption price.

         In the case of a partial redemption of Bonds, Bonds to be redeemed will
be selected individually by lot in such place as the Trustee may previously
approve in writing and in such manner as the Trustee shall deem to be
appropriate and fair without involving any part of a Bond, not more than 65 days
before the date fixed for redemption. In the case of a partial redemption of the
Bonds pursuant to this Condition 6(B), notice will be so given to the
Bondholders by the Issuer in accordance with Condition 14 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, 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 Bonds which will be outstanding after the partial
redemption. In addition the second such notice will specify the serial numbers
of the Bonds called for redemption.

         Upon the expiry of any such notice as is referred to in this Condition
6(B), the Issuer shall be bound to redeem the Bonds to which the notice refers
at the relevant redemption price at the date of such redemption together with
interest accrued to but excluding such date.

                                       59

<PAGE>

         (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 10th October, 1995, the Issuer has
or will become obliged to pay additional amounts as provided or referred to in
Condition 8 (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 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)), 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 14
(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 6(B) prior to any notice being given under this Condition 6(C)) but
not some only, at their principal amount together with interest (if any) accrued
to (but excluding) 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
would be required to pay such additional amounts were a payment in respect of
the Bonds then due.

         Upon expiry of any such notice as is referred to in this Condition 6(C)
(and subject as provided above), the Issuer shall be bound to redeem all the
Bonds at their principal amount together with interest accrued to (but
excluding) the redemption date.

         (D) The Issuer, either Guarantor or any of their respective
Subsidiaries may at any time purchase Bonds together with unmatured Coupons in
any manner and at any price in the open market or by private treaty. If
purchases are made by tender, tenders must be available to all Bondholders
alike. Bonds purchased by the Issuer, either Guarantor or any of their
respective Subsidiaries may be held or reissued or resold or surrendered for
cancellation.

         (E) All Bonds which are redeemed will forthwith be cancelled (together
with all relative unmatured Coupons attached to or surrendered with the Bonds)
and may not be reissued or resold.

         (F) While any Bonds are held by the Issuer, either Guarantor or any of
their respective Subsidiaries, such Bonds shall not entitle the holder to vote
at, or to be counted in the quorum for, any meeting of Bondholders and, for the
purposes of the provisions of the Trust Deed concerning meetings of Bondholders,
will not be regarded as being in issue.

7.       Redemption at the Option of Bondholders

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

60

<PAGE>

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

                  (ii)     "Investment Grade Rating" means a rating of at least
                           investment grade BBB- in the case of Standard &
                           Poor's Rating Services, a division of the McGraw-Hill
                           Companies Inc. and Baa3 in the case of Moody's
                           Investors Services Limited or their respective
                           equivalents for the time being;

                  (iii)    "Negative Certification" means a certificate given in
                           writing to the Trustee by an independent financial
                           adviser that a Restructuring Event will be or is, in
                           its opinion, materially prejudicial to the interests
                           of the Bondholders;

                  (iv)     A  "Negative  Rating  Event"  shall be  deemed  to
                           have occurred if (X) NEDL 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 NEDL (or of any Subsidiary of
                           NEDL (including,  without limitation, the Issuer) and
                           which is guaranteed on an unsecured and
                           unsubordinated   basis  by  NEDL)   having  an
                           initial maturity of five years or more from a Rating
                           Agency or (Y) if NEDL does so seek and use such
                           endeavours but it is unable, as a result of such
                           Restructuring  Event, to obtain  the  Investment
                           Grade  Rating  (and,  in  this definition, "seek"
                           shall include procuring the relevant Subsidiary to
                           seek);

                  (v)      A "Put Event" occurs on the date of the last to occur
                           of all of the following (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;

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

                  (vii)    Following a Restructuring Event, a "Rating Downgrade"
                           shall be deemed to have occurred in respect of that
                           Restructuring Event if the then current rating

                                       61
<PAGE>

                           assigned to the Rated Securities by any Rating Agency
                           (whether provided by a Rating Agency at the
                           invitation of NEDL or by its own volition) is
                           withdrawn or reduced from the Investment Grade Rating
                           or, if the Rating Agency shall then have already
                           rated the Rated Securities below the Investment Grade
                           Rating, the rating is lowered one full rating
                           category;

                  (viii)   "Rated Securities" means the Bonds, if at any time
                           and for so long as they shall have a rating from a
                           Rating Agency, and otherwise any other unsecured and
                           unsubordinated debt of NEDL (or of any Subsidiary of
                           NEDL (including, without limitation, the Issuer) and
                           which is guaranteed on an unsecured and
                           unsubordinated basis by NEDL) having an initial
                           maturity of five years or more which is rated by a
                           Rating Agency;

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

                           (A)      (aa) The Gas and Electricity  Markets
                                    Authority (which expression shall in these
                                    Terms and Conditions  include any  other
                                    competent  authority)  (or  any  successor)
                                    giving the Issuer  written  notice of
                                    revocation of the Distribution Licence (bb)
                                    NEDL 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 NEDL or a  wholly-owned
                                    Subsidiary  of NEDL (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  previously  approve
                                    in writing (such  approval  not  to be
                                    unreasonably  withheld  or delayed) or
                                    becomes  the  principal  debtor  under the
                                    Bonds in accordance with Condition 12; 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 the Effective Date (as defined in the
                                    First Supplemental Trust Deed) unless the
                                    modified terms and conditions are certified
                                    by two directors of NEDL to be not
                                    materially less favourable to the business
                                    of NEDL; 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

                                       62
<PAGE>

                                    State for Trade and  Industry  (or any
                                    successor)  and/or  the Gas and Electricity
                                    Markets Authority (or any successor) under
                                    Section 3A of the  Electricity Act 1989 (as
                                    amended) as in force on the Effective Date,
                                    unless two directors of NEDL  certify  that
                                    such  removal,   qualification  or amendment
                                    does not have a materially  adverse effect
                                    on the financial condition of NEDL.

                  (x)      "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

                           (B)      if at the time a Restructuring Event occurs
                                    there are no Rated Securities, the period
                                    starting from and including the day on which
                                    that Restructuring Event occurs and ending
                                    on the day 90 days following the later of
                                    (aa) the date on which NEDL shall seek to
                                    obtain a rating pursuant to Condition
                                    7(A)(iv) 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 NEDL in respect of that Restructuring
                                    Event; and

                  (xi)     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 made as provided in Condition 7 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  circumstances 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 in
accordance with the Trust Deed to the contrary the Trustee may assume that no
Restructuring Event, Negative Rating Event or other such event has occurred.

     (B)  If,  at any  time  while  any  of the  Bonds  remains  outstanding,  a
Restructuring  Event  occurs  and prior to the  commencement  of or  during  the
Restructuring  Period an independent  financial  adviser shall have certified in
writing to the Trustee that such  Restructuring  Event will not be or is not, in
its opinion,  materially  prejudicial to the interests of the  Bondholders,  the
following  provisions of this Condition 7 shall cease to have any further effect
in relation to such Restructuring Event.

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<PAGE>

     (C)  If,  at any  time  while  any  of the  Bonds  remains  outstanding,  a
          Restructuring Event occurs and (subject to Condition 7(B)):

          (X)   within the Restructuring Period, either:

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

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

          (Y) an independent financial adviser shall have given a Negative
              Certification,

then, unless at any time the Issuer shall have given a notice in respect of his
Bond under Condition 6(B) or under Condition 6(C), in each case expiring prior
to the Put Date (as defined below) each Bondholder shall have the option (the
"Put Option") to require the Issuer or, failing the Issuer, either Guarantor, to
redeem or, at the option of the Issuer or the relevant Guarantor, as applicable,
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.

         A Restructuring Event shall be deemed not to be materially prejudicial
to the interests of the Bondholders if, notwithstanding the occurrence of the
Rating Downgrade, the rating assigned to the Rated Securities by any Rating
Agency (as defined below) is subsequently increased to the Investment Grade
Rating prior to any Negative Certification being given.

         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
Guarantors, the Bondholders and the Couponholders.

         (D) Promptly upon the Issuer or either Guarantor becoming aware that a
Put Event has occurred, and in any event not later than 14 days after the
occurrence of a Put Event, the Issuer or the relevant Guarantor 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 14 specifying the nature of the Put
Event, and the procedure for exercising the Put Option.

         (E) To exercise the Put Option in respect of his Bond the Bondholder
must deliver such Bond to the specified office of any Paying Agent, on a day
which is a Business Day (as defined in Condition 5) in the City of London and in
the place of such specified office falling within the period (the "Put Period")
commencing on the date the Put Event Notice is given and expiring 45 days
thereafter 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

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<PAGE>

Paying Agent (a "Put Notice") and in which the Bondholder may specify a bank
account complying with the requirements of Condition 5 to which payment is to be
made under this Condition 7. Each Bond must 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 the full
amount 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 5 against presentation and surrender (or, in the case of part payment
only, endorsement) of such missing Coupon at any time before the expiry of 10
years after the Relevant Date (as defined in Condition 8) in respect of the
relevant Bond (whether or not the Coupon would otherwise have become void
pursuant to Condition 9) 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 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, but 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 5. A Put Notice, once given,
shall be irrevocable. For the purposes of Conditions 1, 9, 10, 11, 13, and 15
and for certain other purposes specified in the Trust Deed, receipts issued
pursuant to this Condition 7 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 such Bond has been
previously redeemed or purchased in accordance with these Terms and Conditions.

8.       Taxation

         All payments in respect of the Bonds and the Coupons by the Issuer or,
as the case may be, either 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 Guarantors 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, the 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)      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.

         As used herein, "Relevant Date" means the date on which the payment
first becomes due but, if the 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 14.

         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 8 or under any undertakings given in addition
to, or in substitution for, this Condition 8 pursuant to the Trust Deed.

9.       Prescription

         Bonds and Coupons will become void unless presented for payment within
periods of 10 years and five years respectively from the Relevant Date in
respect of the Bonds or, as the case may be, the Coupons, subject to the
provisions of Condition 5.

10.      Events of Default

         The Trustee at its discretion may, and if so requested in writing by
the holders of at least one-quarter in principal amount of the 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), (d), (e), (f), (g), (h) and (i) below, only if the
Trustee shall have certified in writing to the Issuer that such event is, in its
opinion, materially prejudicial to the interests of the Bondholders and subject
in each case to the Trustee being indemnified by, or on behalf of, Bondholders
to its satisfaction), give notice to the Issuer and the Guarantors 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 7 days or more in the
                  payment of any principal or the purchase price due in respect
                  of any Bond pursuant to Condition 7 or 14 days or more in the
                  payment of any interest due in respect of the Bonds or any of
                  them; or

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<PAGE>

         (b)      if the Issuer or NEDL 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 30
                  days (or such longer period as the Trustee may in its absolute
                  discretion permit) next following the service by the Trustee
                  on the Issuer or NEDL, as the case may be, of notice requiring
                  the same to be remedied; or

         (c)      if (i) any  other  indebtedness  for  borrowed  money of the
                  Issuer,  NEDL or any  Principal  Subsidiary  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,  NEDL  or any
                  Principal  Subsidiary falls 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,  NEDL  or  any  Principal  Subsidiary  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 two per cent. of the  Consolidated  Tangible Net
                  Worth,  and for the  purposes  of  this  sub-paragraph  (c),
                  "indebtedness  for  borrowed  money" shall  exclude  Project
                  Finance Indebtedness; or

         (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 or NEDL, 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 any order shall be made by any competent court or any
                  resolution shall be passed for the winding up or dissolution
                  of a Principal Subsidiary, save for the purposes of
                  amalgamation, merger, consolidation, reorganisation,
                  reconstruction or other similar arrangement (i) not involving
                  or arising out of the insolvency of such Principal Subsidiary
                  and under which all the surplus assets of such Principal
                  Subsidiary are transferred to NEDL or any of its other
                  Subsidiaries or (ii) the terms of which have previously been
                  approved in writing by the Trustee or by an Extraordinary
                  Resolution of the Bondholders; or

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<PAGE>

         (f)      if the Issuer, NEDL or any Principal  Subsidiary shall cease
                  to carry  on the  whole or  substantially  the  whole of its
                  business,   save  in  each   case   for  the   purposes   of
                  amalgamation,    merger,   consolidation,    reorganisation,
                  reconstruction   or  other  similar   arrangement   (i)  not
                  involving  or arising out of the  insolvency  of the Issuer,
                  NEDL or such  Principal  Subsidiary  and under  which all or
                  substantially  all of its assets are  transferred to NEDL or
                  any of its other  Subsidiaries  or (ii)  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, NEDL or a Principal  Subsidiary
                  on an arm's length basis or (iii) where the transferee is or
                  immediately   upon  such   transfer   becomes  a   Principal
                  Subsidiary or (iv) the terms of which have  previously  been
                  approved  in writing by the  Trustee or by an  Extraordinary
                  Resolution of the  Bondholders,  provided that if NEDL 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 none of  exceptions  (i) to (iii)  shall
                  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  substitution  for NEDL in
                  form and  substance  acceptable to the Trustee in respect of
                  the  obligations of the Issuer under the Bonds and the Trust
                  Deed; or

         (g)      if the Issuer, NEDL or any Principal Subsidiary 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 1 of the Insolvency Act 1986; or

         (h)      if a receiver, administrative receiver, administrator or other
                  similar official shall be appointed in relation to the Issuer,
                  NEDL or any Principal Subsidiary or in relation to the whole
                  or a substantial part of the undertaking or assets of any of
                  them or a distress, execution or other process shall be levied
                  or enforced upon or sued out against, or an encumbrancer shall
                  take possession of, the whole or a substantial part of the
                  assets of any of them and in any of the foregoing cases it or
                  he shall not be paid out or discharged within 60 days (or such
                  longer period as the Trustee may in its absolute discretion
                  permit); or

         (i)      if the Issuer ceases to be a wholly-owned Subsidiary of NEDL
                  or if NEDL ceases to have the right to appoint or remove a
                  majority of the board of directors of the Issuer.

         For the purposes of sub-paragraph (g) 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 may from time to time determine by notice in writing to NEDL.

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<PAGE>

         Neither the Issuer, NEDL nor any Principal Subsidiary shall be deemed
to be unable to pay its debts for the purposes of sub-paragraph (g) above if any
such demand as is mentioned in Section 123(1)(a) of the Insolvency Act 1986 is
being contested in good faith by the Issuer, NEDL or the relevant Principal
Subsidiary, as the case may be, 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 10.

For the purposes of these Terms and Conditions

         (a)      a "Principal Subsidiary" at any time shall mean a Subsidiary
                  of the Issuer or NEDL (not being any Subsidiary of the Issuer
                  or NEDL whose only indebtedness for borrowed money is Project
                  Finance Indebtedness):

                  (A)      whose (i) net profits before tax or (ii) gross assets
                           represent 15 per cent. or more of the consolidated
                           net profits before tax of NEDL and its Subsidiaries
                           (the "NEDL Group") or consolidated gross assets of
                           the NEDL Group respectively in each case as
                           calculated by reference to the then latest audited
                           financial statements of such Subsidiary (consolidated
                           in the case of a company which itself has
                           Subsidiaries and which, in the normal course,
                           prepares consolidated accounts) and the then latest
                           audited consolidated financial statements of the NEDL
                           Group; or

                  (B)      to which is transferred all or substantially all of
                           the business, undertaking and assets of a Subsidiary
                           of the Issuer or NEDL which immediately prior to such
                           transfer is a Principal Subsidiary, whereupon the
                           transferor Subsidiary shall immediately cease to be a
                           Principal Subsidiary and the transferee Subsidiary
                           shall immediately become a Principal Subsidiary under
                           the provisions of this sub-paragraph (B) (but without
                           prejudice to the provisions of sub-paragraph (A)
                           above);

                  all as more fully defined in the Trust Deed.

                  A report by the Auditors that in their opinion a Subsidiary of
                  the Issuer or NEDL is or is not or was or was not at any
                  particular time or throughout any specified period a Principal
                  Subsidiary shall, in the absence of manifest error, be
                  conclusive and binding on the Guarantors, the Issuer, the
                  Trustee, the Bondholders and the Couponholders; and

         (b)      "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 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.

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<PAGE>

11.      Enforcement

         The Trustee may at any time, at its discretion and without notice, take
such proceedings against the Issuer or either 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 either Guarantor unless the Trustee, having become bound so to
proceed, fails so to do within a reasonable period and such failure shall be
continuing.

12.      Substitution

         The Trustee may, without the consent of the Bondholders or
Couponholders, agree with the Issuer and the Guarantors to the substitution in
place of the Issuer (or of any previous substitute under this Condition) as the
principal debtor under the Bonds, the Coupons and the Trust Deed of NEDL or any
Subsidiary or holding company (as defined in section 736 of the Companies Act
1985) of NEDL or any Subsidiary of such holding company, subject to (a) the
Bonds continuing to be unconditionally and irrevocably guaranteed by the
Guarantors (save where NE or, as the case may be, NEDL itself has been
substituted for the Issuer (or any previous substitute) or where NEDL has
transferred the Distribution Licence to the substituted party), (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.

         The Trustee may, without the consent of the Bondholders or
Couponholders, agree with the Issuer and the Guarantors to the substitution in
place of NEDL (or of any previous substitute under this Condition) as guarantor
of the obligations of the Issuer (or of any previous substitute under this
Condition) guaranteed by NEDL under the Bonds, the Coupons and the Trust Deed of
any Subsidiary or holding company (as defined in section 736 of the Companies
Act 1985) of NEDL or any subsidiary of such holding company, subject to (a) the
Distribution Licence having been previously transferred to the substituted
party; (b) the Trustee bring 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.

13.      Replacement of Bonds and Coupons

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

14.      Notices

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<PAGE>

         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
previously approving in writing. 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 previously approve in writing.

         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 14.

15.      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 or
voted thereat, 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 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, either
Guarantor, the Trustee or any other person any indemnification or payment in
respect of any tax consequences of any such exercise upon individual Bondholders

                                       71
<PAGE>

or Couponholders except to the extent already provided for in Condition 8 and/or
any undertaking given in addition to, or in substitution for, Condition 8
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 14.

16.      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.

17.      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 prior written 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.

18.      Governing Law

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

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<PAGE>

                             PRINCIPAL PAYING AGENT

                                Barclays Bank PLC
                            BGSS Depositary Services
                                  8 Angel Court
                               Throgmorton Street
                                 London EC2R 7HT

                               OTHER PAYING AGENT

                     Banque Internationale a Luxembourg S.A.
                                 69 route d'Esch
                                L-1470 Luxembourg

                                       73
<PAGE>

                                   SCHEDULE 3

                                     PART I

             FORM OF INDIVIDUAL CERTIFICATE FOR ORIGINAL BONDS 2020

On the front:                       Serial No:                      Cert No:
         ISIN:

                          NORTHERN ELECTRIC FINANCE plc
    (Incorporated with limited liability in England and Wales - No. 3070482)

          (pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020

     guaranteed as to principal and interest on a joint and several basis by

                              NORTHERN ELECTRIC plc
     (Incorporated with limited liability in England and Wales - No.2366942)

                                       and

                     NORTHERN ELECTRIC DISTRIBUTION LIMITED

    (Incorporated with limited liability in England and Wales - No. 2906593)

The Bonds in respect of which this Certificate is issued are in bearer form and
form part of the series designated as specified in the title (the "Bonds") of
Northern Electric Finance plc (the "Issuer") constituted by a Master Trust Deed
dated 16th October, 1995 between the Issuer, Northern Electric plc ("NE" and,
together with Northern Electric Distribution Limited, the "Guarantors") and The
Law Debenture Trust Corporation p.l.c. as the Trustee (the "Trust Deed", which
expression includes all deeds supplemental to such Trust Deed). The Bonds are
subject to, and have the benefit of, the Trust Deed and the Terms and Conditions
(the "Conditions") set out on the reverse hereof.

The Issuer for value received hereby promises to pay to the bearer of this
Certificate the principal amount of (pound)[l,000/10,000/l00,000] [(One/Ten/One
Hundred)] Thousand pounds sterling on 16th October, 2005 or on such earlier date
as such principal amount may become payable in accordance with the Conditions
and the Trust Deed together with interest thereon and any other moneys payable
in respect of the Bonds in accordance with the Conditions and the Trust Deed.

The Bonds are guaranteed as to principal and interest by the Guarantors on the
terms of the Trust Deed.

This Certificate shall not be valid or become obligatory for any purpose until
signed on behalf of the Issuer and the Guarantor and authenticated by or on
behalf of the Principal Paying Agent.

                                       74

<PAGE>

Dated:

In witness whereof the Issuer and NE have caused this Certificate to be signed
in facsimile on their respective behalves.

Northern Electric Finance plc                 Northern Electric plc

By:                                           By:
         Director                                       Director

By:                                           By:
         Director                                       Director

This Certificate is authenticated by or on behalf of the Principal Paying Agent.

By:
         Authorised Signatory

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.

[NEITHER THE ISSUER NOR THE GUARANTORS HAVE BEEN OR WILL BE REGISTERED AS AN
"INVESTMENT COMPANY" UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940.]

On the back:

                              Terms and Conditions

                                Details of Agents

                                       75
<PAGE>

                                   SCHEDULE 3

                                     PART II

                        FORM OF ORIGINAL GLOBAL BOND 2020

                                                                         ISIN:

                          NORTHERN ELECTRIC FINANCE plc
    (Incorporated with limited liability in England and Wales - No. 3070482)

          (pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020

                   guaranteed as to principal and interest by

                              NORTHERN ELECTRIC plc

    (Incorporated with limited liability in England and Wales - No. 2366942)

                        TEMPORARY GLOBAL BOND CERTIFICATE

The Bonds in respect of which this temporary Global Bond Certificate is issued
are in bearer form and comprise the series of Bonds designated as specified in
the title (the "Bonds") of Northern Electric Finance plc (the "Issuer")
constituted by a Master Trust Deed dated 16th October, 1995 between the Issuer,
Northern Electric plc (the "Guarantor") and The Law Debenture Trust Corporation
p.l.c. as the Trustee (the "Trust Deed", which expression includes all deeds
supplemental to such Trust Deed). The Bonds are subject to, and have the benefit
of, the Trust Deed including the Terms and Conditions set out on the reverse
hereof.

The Issuer for value received hereby promises to pay to the bearer of this
Certificate the principal amount of (pound)100,000,000 (or such lesser or
greater amount as is duly endorsed in the third column of Schedule A to this
Certificate) on 16th October, 2005 or on such earlier date as such principal
amount may become payable in accordance with the Trust Deed together with
interest thereon and any other moneys payable in respect of the Bonds in
accordance with the Trust Deed.

The Bonds are guaranteed as to principal and interest by the Guarantor on the
terms of the Trust Deed.

This temporary Global Bond Certificate is exchangeable for individual
Certificates representing Bonds in bearer form with Coupons attached. The Issuer
hereby irrevocably undertakes to deliver individual Certificates representing
Bonds in exchange for this temporary Global Bond Certificate on and after 26th
November, 1995 (the "Exchange Date").

                                       76

<PAGE>

On or after the Exchange Date this temporary Global Bond Certificate may be
exchanged in whole or in part for individual Certificates representing Bonds in
an aggregate principal amount not exceeding the principal amount of this
temporary Global Bond Certificate by the submission of this temporary Global
Bond Certificate to the Principal Paying Agent together with a Certificate from
Cedel Bank, societe anonyme ("Cedel") or Morgan Guaranty Trust Company of New
York, Brussels office as operator of the Euroclear System ("Euroclear")
substantially to the following effect:

                                       77
<PAGE>

                         CERTIFICATE OF CLEARING SYSTEM

                          NORTHERN ELECTRIC FINANCE plc

   (pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020 (the "Bonds")

       Common Code:                                                  ISIN:

This is to certify that, based solely on certificates 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
in the form set out in the temporary Global Bond Certificate representing Bonds
(the form of which is set out in Part II of Schedule 3 to the Master Trust Deed
constituting the Bonds), as of the date hereof [ ] principal amount of the Bonds
(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
are (a) 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) United States persons who
acquired the Bonds through foreign branches of United States financial
institutions and who hold the Bonds 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 (iii) above (whether or not also described
in (i) or (ii) above) have certified that they have not acquired the Bonds for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.

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 Bonds represented by the temporary Global Bond Certificate
excepted in such certificates 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 Organisation with respect to any portion
of the part submitted herewith 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.

                                       78

<PAGE>

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

Dated:          *

                                Yours faithfully,

                          [Cedel Bank, societe anonyme]

                                       79
<PAGE>

                                       or

                   [MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
                                Brussels office,
                      as operator of the Euroclear System]

                              By:

*      To be dated no earlier than the Exchange Date.

Any person appearing in the records maintained by Cedel or Euroclear as entitled
to any interest in Bonds represented by this temporary Global Bond Certificate
shall be entitled to require the exchange of this temporary Global Bond
Certificate for (an) individual Certificate(s) representing such Bonds in bearer
form by delivering or causing to be delivered to Cedel or Euroclear a
certificate in substantially the following form (copies of which certificate
will be available at the office of Cedel in Luxembourg and Euroclear in Brussels
and at the specified office of each of the Paying Agents):

                   "CERTIFICATE OF CLEARING SYSTEM PARTICIPANT

                          NORTHERN ELECTRIC FINANCE plc

   (pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020 (the "Bonds")

                  Common Code:                                         ISIN:

To:      [Cedel Bank,  societe anonyme] [Morgan  Guaranty Trust Company of New
         York,  Brussels office,  as operator of the Euroclear System]

This is to certify that, as of the date hereof, and except as set forth below,
the Bonds held by you for our account (i) are 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) are owned by United States persons that are (a) 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) United States persons who acquired the Bonds
through foreign branches of United States financial institutions and who hold
the Bonds 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

                                       80
<PAGE>

amended, and the regulations thereunder), or (iii) are 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 in addition, if an owner of Bonds is a United States or foreign financial
institution described in (iii) above (whether or not also described in (i) or
(ii) above), this is to certify further that such financial institution has not
acquired the Bonds for purposes of resale directly or indirectly to a United
States person or to a person within the United States or its possessions.

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.

We undertake to advise you promptly by tested telex on or prior to that date on
which you intend to submit your certificate relating to the Bonds held by you
for our account in accordance with your documented 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 certificate applies as of such date.

This certificate excepts and does not relate to [ ] principal amount of the
Bonds in respect of which we are not able to certify and as to which we
understand exchange and delivery of individual Certificates representing Bonds
(or, if relevant, exercise of any rights or collection of any interest) cannot
be made until we do so certify.

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

Dated:                              *

By:
         [Name of person giving certificate] as, or as
         agent for, the beneficial owner(s) of the
         Bonds in respect of which this certificate is issued.

*        To be dated no earlier than the fifteenth day prior to the Exchange
         Date."

Until the exchange of this temporary Global Bond Certificate for individual
Certificates representing Bonds pursuant to the foregoing provisions, no person
as aforesaid shall (except as stated herein) be entitled to receive any payment
by way of principal or interest in respect of the Bonds represented by this
temporary Global Bond Certificate (unless, upon due presentation of this
temporary Global Bond Certificate for exchange, delivery of any individual

                                       81
<PAGE>

Certificate representing Bonds shall be improperly withheld or refused) or to
receive (an) individual Certificate(s) representing Bonds which he would
otherwise be entitled to receive.

Upon any exchange of this temporary Global Bond Certificate for individual
Certificates representing Bonds the portion of the principal amount represented
by this temporary Global Bond Certificate in respect of which such exchange
shall be effected shall be endorsed by the Principal Paying Agent on the
Schedule of exchanges for individual Certificates hereon, whereupon the
principal amount represented by this temporary Global Bond Certificate shall be
reduced for all purposes by the amount of such portion.

Subject to the second preceding paragraph, no provisions of this temporary
Global Bond Certificate shall alter or impair the obligation of the Issuer to
pay the principal and interest in respect of the Bonds when due in accordance
with the Trust Deed or the obligations of the Guarantor under the Trust Deed.

This temporary Global Bond Certificate is governed by and shall be construed in
accordance with English law.

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

Dated:

In witness whereof the Issuer and the Guarantor have caused this temporary
Global Bond Certificate to be signed in facsimile on their respective behalves.

Northern Electric Finance plc                     Northern Electric plc

By:                                               By:
         Director                                           Director

By:                                               By:
         Director                                           Director

Certificate of Authentication

This temporary Global Bond Certificate is authenticated by or on behalf of the
Principal Paying Agent.

                                       82
<PAGE>

By:
         Authorised Signatory

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 UNITED STATES INTERNAL REVENUE
CODE.

[NEITHER THE ISSUER NOR THE GUARANTOR HAS BEEN OR WILL BE REGISTERED AS AN
"INVESTMENT COMPANY" UNDER THE U.S. INVESTMENT COMPANY ACT OF 1940.]

                                       83
<PAGE>

                Schedule of exchanges for individual Certificates

The principal amount of the Bonds represented by this temporary Global Bond
Certificate has been reduced as a result of the issue of individual Certificates
representing Bonds in respect of a portion of such principal amount in exchange
as follows:

          Amount of decrease     Principal amount of
          in principal amount    Bonds represented by
          of Bond represented    Global Bond              Notation made by or
Date of   by Global Bond         Certificate following    on behalf of Principal
exchange  Certificate            such decrease            Paying Agent

                                       84

<PAGE>

                            Schedule of interest paid

Date of payment             Amount of interest                  Notation made

                                       85
<PAGE>

                                   SCHEDULE 3

                                    PART III

                          FORM OF ORIGINAL COUPON 2020

On the front:
         ISIN:                      Serial No:                      Coupon No:

                          NORTHERN ELECTRIC FINANCE plc
    (Incorporated with limited liability in England and Wales - No. 3070482)

          (pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020

     guaranteed as to principal and interest on a joint and several basis by

                              NORTHERN ELECTRIC plc
    (Incorporated with limited liability in England and Wales - No. 2366942)

                                       and

                     NORTHERN ELECTRIC DISTRIBUTION LIMITED
    (Incorporated with limited liability in England and Wales - No. 2906593)

Coupon for [         ]due on      199[6/7/8/9/2000/1/2/3/4/5/6/7/8/9/10/1l/
12/13/14/15/16/17/18/19/20].

This Coupon relates to interest payable on (pound)[1,000/l0,000/l00,000]
[(One/Ten/One Hundred Thousand)] principal amount of the Bonds designated as
specified in the title (the "Bonds") of Northern Electric Finance plc (the
"Issuer") constituted by a Master Trust Deed dated 16th October, 1995 between
the Issuer, Northern Electric plc ("NE" and, together with Northern Electric
Distribution Limited, the "Guarantors") and The Law Debenture Trust Corporation
p.l.c. as the Trustee (the "Trust Deed", which expression includes all deeds
supplemental to such Trust Deed).

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

Such interest is guaranteed by the Guarantors.

                                       86

<PAGE>

This Coupon is negotiable separately from the Bonds to which this Coupon
relates.

This Coupon shall not be valid or become obligatory for any purpose until signed
on behalf of the Company and authenticated by or on behalf of the Principal
Paying Agent.

Dated:

In witness whereof the Company and NE have caused this Coupon to be signed in
facsimile on their respective behalves.

Northern Electric Finance plc                    Northern Electric plc

By:                                              By:
         Director                                            Director

By:                                              By:
         Director                                            Director

Certificate of Authentication

This Coupon is authenticated by or on behalf of the Principal Paying Agent

By:
         Authorised Signatory

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 UNITED STATES INTERNAL REVENUE
CODE.

[NEITHER THE ISSUER NOR THE GUARANTORS HAVE BEEN OR WILL BE REGISTERED AS AN
"INVESTMENT COMPANY" UNDER THE U.S. INVESTMENT COMPANY ACT OF 1940.]

On the back:

                            Details of Paying Agents

                                       87
<PAGE>

                                   SCHEDULE 3

                                     PART IV

                           FORM OF ORIGINAL TALON 2020

On the front:

                          NORTHERN ELECTRIC FINANCE plc
    (Incorporated with limited liability in England and Wales - No. 3070482)

          (pound)100,000,000 8.875 per cent. Guaranteed Bonds due 2020

     guaranteed as to principal and interest on a joint and several basis by

                              NORTHERN ELECTRIC plc
    (Incorporated with limited liability in England and Wales - No. 2366942)

                                       and

                     NORTHERN ELECTRIC DISTRIBUTION LIMITED
    (Incorporated with limited liability in England and Wales - No. 2906593)

    Talon relating to(pound)[1,000/10,000/100,000] principal amount of Bonds

On and after ____________, 200_ further Coupons 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.

If the Bond to which this Talon appertains shall become due and payable or shall
have been redeemed or cancelled before the date for presentation of this Talon,
this Talon shall be void and no further Coupons will be issued in respect
thereof.

This Talon shall not be valid or become obligatory for any purpose until signed
on behalf of the Company and the Guarantors and authenticated by or on behalf of
the Principal Paying Agent.

Dated:

In witness whereof the Company and NE have caused this Talon to be signed in
facsimile on their respective behalves.

                                       88

<PAGE>

Northern Electric Finance plc                      Northern Electric plc

By:                                                By:
         Director                                             Director

By:                                                By:
         Director                                             Director

Certificate of Authentication

This Talon is authenticated by or on behalf of the Principal Paying Agent

By:
         Authorised Signatory

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 UNITED STATES INTERNAL REVENUE
CODE.

[NEITHER THE ISSUER NOR THE GUARANTORS HAVE BEEN OR WILL BE REGISTERED AS AN
"INVESTMENT COMPANY" UNDER THE U.S. INVESTMENT COMPANY ACT OF 1940.]

On the back:

                            Details of Paying Agents

                                       89
<PAGE>

                                   SCHEDULE 4

                        TERMS AND CONDITIONS OF THE BONDS

The (pound)100,000,000 8.875 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 17
and forming a single series with the Bonds) of Northern Electric Finance plc
(the "Issuer") are constituted by a master trust deed dated 16th October, 1995
made between the Issuer, Northern Electric plc ("NE") and The Law Debenture
Trust Corporation plc (the "Trustee", which expression shall include all persons
for the time being the trustee or trustees under the Trust Deed (as defined
below)) as trustee for the holders of the Bonds (the "Bondholders") as modified
and restated by a first supplemental trust deed dated 27th September, 2001 made
between the Issuer, NE, Northern Electric Distribution Limited ("NEDL" and,
together with NE, the "Guarantors" and each a "Guarantor") and the Trustee
(together, the "Trust Deed", which expression shall wherever the context so
admits include any other deed supplemental thereto). The issue of the Bonds was
authorised by a resolution of the board of directors of the Issuer passed on 9th
October, 1995. The giving of the guarantee by NE was authorised by a written
resolution of the board of directors of NE passed on 14th September, 1995
appointing a committee of the board for the purposes of the giving of the
guarantee and by a resolution of such duly appointed committee of the board of
directors of NE passed on 9th October, 1995. The giving of the guarantee by NEDL
was authorised by a written resolution of the board of directors of NEDL passed
on 26th September, 2001. The Bonds are 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. Copies of the Trust Deed and of an agency
agreement dated 16th October, 1995 (the "Agency Agreement") made between the
Issuer, NE, Barclays Bank PLC, as principal paying agent (the "Principal Paying
Agent", 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 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") at the registered office
for the time being of the Trustee, being at Fifth Floor, 100 Wood Street, London
EC2V 7EX and at the specified office of each of the Paying Agents. The
Bondholders and the Couponholders are entitled to the benefit of, and 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)10,000and (pound)100,000 each with Coupons and one Talon
for further Coupons (a "Talon") attached on issue. Title to the Bonds and to the
Coupons will pass by delivery. Bonds of one denomination may not be exchanged
for Bonds of another denomination.

         The Issuer, each Guarantor, any Paying Agent and the Trustee may (to
the fullest extent permitted by applicable laws) deem and treat the holder of
any Bond and the holder of any Coupon as the absolute owner thereof for all
purposes (whether or not the Bond or Coupon shall be overdue and notwithstanding

                                       90
<PAGE>

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.       Status and Guarantee

         The Bonds and the Coupons are direct, unconditional and, subject to the
provisions of Condition 3, unsecured obligations of the Issuer and, 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 of the
Issuer, only to the extent permitted by applicable laws relating to creditors'
rights.

         The Guarantors have, in the Trust Deed, unconditionally and irrevocably
guaranteed on a joint and several basis the due and punctual payment of the
principal of and interest on the Bonds as and when the same shall become due and
payable together with any additional amounts payable pursuant to Condition 8 and
all other moneys payable under the Trust Deed. The obligations of each Guarantor
under the terms of its guarantee constitute direct, unconditional and, subject
to the provisions of Condition 3, unsecured obligations of such Guarantor and
such obligations rank and will rank pari passu with all other outstanding
unsecured and unsubordinated obligations of the relevant Guarantor, present and
future, but, in the event of insolvency of the relevant Guarantor, only to the
extent permitted by applicable laws relating to creditors' rights.

3.       Negative Pledge

         So long as any of the Bonds remains outstanding (as defined in the
Trust Deed) each of the Issuer and each Guarantor will ensure that no Relevant
Indebtedness of the Issuer, either Guarantor or any Distribution Subsidiary (as
defined below) or of any other person and no guarantee by the Issuer, either
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, either Guarantor or any Distribution Subsidiary
unless the Issuer or the relevant Guarantor, as the case may be, shall, before
or at the same time as the creation of the Security Interest, take any and all
action necessary to ensure that:

         (a)      all amounts payable by the Issuer under the Bonds, the Coupons
                  and the Trust Deed or, as the case may be, the obligations of
                  the relevant Guarantor under its guarantee referred to in
                  Condition 2 are secured to the satisfaction of the Trustee
                  equally and rateably with the Relevant Indebtedness or
                  guarantee of Relevant Indebtedness, as the case may be, by
                  such Security Interest; or

         (b)      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, as the
                  case may be, in respect of the obligations of the relevant
                  Guarantor under its guarantee referred to in Condition 2
                  either (i) as the Trustee shall in its absolute discretion

                                       91
<PAGE>

                  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, either 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, either 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 in respect of the Bonds, the Coupons and the Trust
Deed or, as the case may be, the obligations of the relevant Guarantor under the
said guarantee as aforesaid) where such Relevant Indebtedness has an initial
maturity falling not earlier than 31st December, 2005 and is of a maximum
aggregate amount outstanding at any time not exceeding the greater of
(pound)20,000,000 and 20 per cent. of the Consolidated Tangible Net Worth (as
defined below).

         For the purposes of these Terms and Conditions:

         (a)      "Consolidated Tangible Net Worth" at any particular time the
                  aggregate of the amount paid up on NE's issued share capital
                  and the consolidated distributable and non-distributable
                  reserves of the Group (as shown in the most recently published
                  audited consolidated financial statements of the Group),
                  after:

                  (i)      deducting the total of any debit balance on the
                           profit and loss account and the book value of any
                           intangible assets including but not limited to
                           goodwill; and

                  (ii)     excluding any minority interests in Subsidiary
                           Undertakings;

                  but adjusted as may be necessary in respect of any variation
                  in the paid-up share capital or share premium account of the
                  Group 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.

                  A report by the Auditors (as defined in the Trust Deed) as to
                  the amount of the Consolidated Tangible Net Worth at any given
                  time shall, in the absence of manifest error, be conclusive
                  and binding on all parties.

         (b)      "Distribution Licence" means either the distribution licence
                  granted to NEDL under section 6(l)(c) of the Electricity Act
                  1989 as amended by section 30 of the Utilities Act 2000 or the
                  public electricity supply licence of NE having effect as if it
                  were a distribution licence granted to NEDL under section
                  6(1)(c) of the Electricity Act 1989 as amended by section 30
                  of the Utilities Act 2000, as appropriate.

                                       92
         (c)      "Distribution Subsidiary" means any Subsidiary of NE which
                  holds a Distribution Licence granted under Section 6(1)(c) of
                  the Electricity Act 1989 as amended by the Utilities Act 2000;

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

                  (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; and

                  (iii)    which has been designated as such by the Issuer or
                           either Guarantor by written notice to the Trustee,
                           provided that the Issuer or either Guarantor, as the
                           case may be, 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 NE, NEDL, the Issuer and the Subsidiary
                  Undertakings of NE;

         (f)      "Project Finance Indebtedness" means any present or future
                  indebtedness (whether being principal, premium, interest or
                  other amounts) to finance a project:

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

                  (ii)     in respect of which recourse to any member of the
                           Group for the repayment or payment of any sum
                           relating to such indebtedness is limited to:

                           (1)      the assets of a single purpose company
                                    (other than a Distribution Subsidiary) the
                                    principal assets and business of which are
                                    constituted by such project and which was
                                    established for the purpose of incurring
                                    such indebtedness; or

                           (2)      the assets of the project and the rights,
                                    revenues and insurance proceeds derived
                                    therefrom or related thereto,

                  with no recourse to any other assets of the Group (other than
                  those of an Excluded Subsidiary);

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<PAGE>

         (g)      "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 not in
                  any event include Project Finance Indebtedness;

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

         (i)      "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 NE, 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

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

4.       Interest

         The Bonds bear interest from (and including) 16th October, 1995 at the
rate of 8.875 per cent. per annum, payable annually in arrear on 16th October in
each year (each an "Interest Payment Date").

         Each 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 and, in the case of an incomplete month,
the number of days elapsed.

5.       Payments and exchange of Talons

         Payments of principal in respect of each Bond will only be made against
presentation and surrender (or, in the case of part payment only, endorsement)
of the relevant Bond at the specified office of any of the Paying Agents.
Payments of interest due on the Bonds 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 at the specified office of any of the
Paying Agents. Each such payment will be made at the specified office of any
Paying Agent, at the option of the holder, by sterling cheque drawn on a branch

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of, or by transfer to a sterling account maintained by the payee with, a bank in
the City of London, subject in all cases to any applicable fiscal or other laws
and regulations, but without prejudice to the provisions of Condition 8.

         Each Bond must be presented for payment together with all unmatured
Coupons appertaining thereto failing which the full amount of any missing
unmatured Coupon (or, in the case of payment not being made in full, that
proportion of the full amount of the missing unmatured Coupons which the amount
so paid bears to the total amount due) appertaining thereto 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 such missing Coupon at any time before the
expiry of 10 years after the Relevant Date (as defined in Condition 8) in
respect of the relevant Bond (whether or not such Coupon would otherwise have
become void pursuant to Condition 9), or, if later, five years after the date on
which such Coupon would have become due, but not thereafter.

         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 9):

         (a)      is or falls after the relevant due date but, if the due date
                  is not or was not a Business Day in the City of 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 at which the Bond or Coupon is presented for
                  payment and, in the case of payment by transfer to a sterling
                  account in the City of London as referred to above, in the
                  City of London.

         "Business Day" means, in relation to any place, a day (other than a
Saturday or Sunday) on which commercial banks and foreign exchange markets
settle payments in that place.

         When making payments to Bondholders or Couponholders, fractions of one
penny will be rounded down to the nearest whole penny.

         On and after the Interest Payment Date on which the final Coupon
comprised in any Coupon sheet relating to a Bond matures, the Talon comprised in
the Coupon Sheet relating to a Bond 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 9. Each Talon
shall, for the purposes of these Terms and Conditions, be deemed to mature on
the Interest Payment Date on which the final Coupon comprised in the relative
Coupon sheet relating to the relevant Bond matures.

         The names of the initial Paying Agents and their initial 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

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additional or other Paying Agents provided that it will at all times maintain at
least two Paying Agents having specified offices in separate European cities
previously approved in writing 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 such termination or appointment and of any
changes in the specified offices of the Paying Agents will be given to the
Bondholders promptly by the Issuer in accordance with Condition 14.

6.       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
16th October, 2020.

         (B)    The Issuer may, at any time, having given notice to the
Bondholders in accordance with this Condition 6(B) (which notice shall be
irrevocable), redeem the Bonds in whole or in part (but if in part, in integral
multiples of (pound)l,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)     their principal amount; 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  Barclays   Bank  PLC  (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 previously
approve in writing.

         In the case of a redemption of all of the Bonds pursuant to this
Condition 6(B), notice will be given to the Bondholders by the Issuer in
accordance with Condition 14 once not less than 30 nor more than 60 days before
the date fixed for redemption and will specify the date fixed for redemption and
the redemption price.

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<PAGE>

         In the case of a partial redemption of Bonds, Bonds to be redeemed will
be selected individually by lot in such place as the Trustee may previously
approve in writing and in such manner as the Trustee shall deem to be
appropriate and fair without involving any part of a Bond, not more than 65 days
before the date fixed for redemption. In the case of a partial redemption of the
Bonds pursuant to this Condition 6(B), notice will be so given to the
Bondholders by the Issuer in accordance with Condition 14 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, 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 Bonds which will be outstanding after the partial
redemption. In addition the second such notice will specify the serial numbers
of the Bonds called for redemption.

         Upon the expiry of any such notice as is referred to in this Condition
6(B), the Issuer shall be bound to redeem the Bonds to which the notice refers
at the relevant redemption price 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 10th October, 1995, the Issuer has
or will become obliged to pay additional amounts as provided or referred to in
Condition 8 (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 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)), 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 14
(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 6(B) prior to any notice being given under this Condition 6(C)) but
not some only, at their principal amount together with interest (if any) accrued
to (but excluding) 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
would be required to pay such additional amounts were a payment in respect of
the Bonds then due.

         Upon expiry of any such notice as is referred to in this Condition 6(C)
(and subject as provided above), the Issuer shall be bound to redeem all the
Bonds at their principal amount together with interest accrued to (but
excluding) the redemption date.

         (D) The Issuer, either Guarantor or any of their respective
Subsidiaries may at any time purchase Bonds together with unmatured Coupons and

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<PAGE>

Talons in any manner and at any price in the open market or by private treaty.
If purchases are made by tender, tenders must be available to all Bondholders
alike. Bonds purchased by the Issuer, either Guarantor or any of their
respective Subsidiaries may be held or reissued or resold or surrendered for
cancellation.

         (E) All Bonds which are redeemed will forthwith be cancelled (together
with all relative unmatured Coupons and Talons attached to or surrendered with
the Bonds) and may not be reissued or resold.

         (F) While any Bonds are held by the Issuer, either Guarantor or any of
their respective Subsidiaries, such Bonds shall not entitle the holder to vote
at, or to be counted in the quorum for, any meeting of Bondholders and, for the
purposes of the provisions of the Trust Deed concerning meetings of Bondholders,
will not be regarded as being in issue.

7.       Redemption at the Option of Bondholders

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

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

                  (ii)     "Investment Grade Rating" means a rating of at least
                           investment grade BBB- in the case of Standard &
                           Poor's Rating Services, a division of the McGraw-Hill
                           Companies Inc. and Baa3 in the case of Moody's
                           Investors Services Limited or their respective
                           equivalents for the time being;

                  (iii)    "Negative Certification" means a certificate given in
                           writing to the Trustee by an independent financial
                           adviser that a Restructuring Event will be or is, in
                           its opinion, materially prejudicial to the interests
                           of the Bondholders;

                  (iv)     A  "Negative  Rating  Event"  shall be  deemed  to
                           have occurred if (X) NEDL 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 NEDL (or of any Subsidiary of
                           NEDL (including,  without limitation, the Issuer) and
                           which is guaranteed on an unsecured and
                           unsubordinated   basis  by  NEDL)   having  an
                           initial maturity of five years or more from a Rating
                           Agency or (Y) if NEDL does so seek and use such
                           endeavours but it is unable, as a result of such
                           Restructuring  Event, to obtain  the  Investment
                           Grade  Rating  (and,  in  this definition, "seek"
                           shall include procuring the relevant Subsidiary to
                           seek);

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<PAGE>

                  (v)      A "Put Event" occurs on the date of the last to occur
                           of all of the following (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;

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

                  (vii)    Following a Restructuring Event, a "Rating Downgrade"
                           shall be deemed to have occurred in respect of that
                           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 NEDL or by its own volition) is
                           withdrawn or reduced from the Investment Grade Rating
                           or, if the Rating Agency shall then have already
                           rated the Rated Securities below the Investment Grade
                           Rating, the rating is lowered one full rating
                           category;

                  (viii)   "Rated Securities" means the Bonds, if at any time
                           and for so long as they shall have a rating from a
                           Rating Agency, and otherwise any other unsecured and
                           unsubordinated debt of NEDL (or of any Subsidiary of
                           NEDL (including, without limitation, the Issuer) and
                           which is guaranteed on an unsecured and
                           unsubordinated basis by NEDL) having an initial
                           maturity of five years or more which is rated by a
                           Rating Agency;

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

                          (A)       (aa) The Gas and Electricity  Markets
                                    Authority which expression shall in these
                                    Terms and Conditions  include any  other
                                    competent  authority)  (or  any  successor)
                                    giving the Issuer  written  notice of
                                    revocation of the Distribution Licence (bb)
                                    NEDL 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 NEDL or a
                                    wholly-owned  Subsidiary  of NEDL (the
                                    "Relevant  Subsidiary")  and in the  case of
                                    such Relevant Subsidiary at the time of such
                                    grant it either executes in favour of the

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<PAGE>

                                    Trustee an unconditional  and irrevocable
                                    guarantee  in respect of the Bonds in such
                                    form as the Trustee may  previously  approve
                                    in writing (such approval  not  to be
                                    unreasonably  withheld  or delayed)
                                    or becomes  the  principal  debtor under the
                                    Bonds in accordance with Condition 12; 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 the Effective Date (as defined in the
                                    First Supplemental Trust Deed) unless the
                                    modified terms and conditions are certified
                                    by two directors of NEDL to be not
                                    materially less favourable to the business
                                    of NEDL; 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 3Aof the  Electricity  Act 1989 (as
                                    amended) as in force on the Effective Date,
                                    unless two directors of NEDL  certify  that
                                    such  removal,   qualification  or amendment
                                    does not have a materially  adverse effect
                                    on the financial condition of NEDL.

                  (x)     "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

                          (B)       if at the time a Restructuring Event occurs
                                    there are no Rated Securities, the period
                                    starting from and including the day on which
                                    that Restructuring Event occurs and ending
                                    on the day 90 days following the later of
                                    (aa) the date on which NEDL shall seek to
                                    obtain a rating pursuant to Condition
                                    7(A)(iv) 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 NEDL in respect of that Restructuring
                                    Event; and

                  (xi)    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 made as provided in Condition 7 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  circumstances comprised  in

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<PAGE>

                          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 in
accordance with the Trust Deed to the contrary the Trustee may assume that no
Restructuring Event, Negative Rating Event or other such event has occurred.

         (B)    If, at any time while any of the Bonds remains outstanding, a
Restructuring Event occurs and prior to the commencement of or during the
Restructuring Period an independent financial adviser shall have certified in
writing to the Trustee that such Restructuring Event will not be or is not, in
its opinion, materially prejudicial to the interests of the Bondholders, the
following provisions of this Condition 7 shall cease to have any further effect
in relation to such Restructuring Event.

         (C)    If, at any time while any of the Bonds remains outstanding, a
Restructuring Event occurs and (subject to Condition 7(B)):

                (X)     within the Restructuring Period, either:

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

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

                (Y)     an independent financial adviser shall have given a
                        Negative Certification,

then, unless at any time the Issuer shall have given a notice in respect of his
Bond under Condition 6(B) or under Condition 6(C), in each case expiring prior
to the Put Date (as defined below) each Bondholder shall have the option (the
"Put Option") to require the Issuer or, failing the Issuer, either Guarantor, to
redeem or, at the option of the Issuer or the relevant Guarantor, as applicable,
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.

         A Restructuring Event shall be deemed not to be materially prejudicial
to the interests of the Bondholders if, notwithstanding the occurrence of the
Rating Downgrade, the rating assigned to the Rated Securities by any Rating
Agency (as defined below) is subsequently increased to the Investment Grade
Rating prior to any Negative Certification being given.

         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

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of manifest error, be conclusive and binding on the Trustee, the Issuer, the
Guarantors, the Bondholders and the Couponholders.

         (D)    Promptly upon the Issuer or either Guarantor becoming aware that
a Put Event has occurred, and in any event not later than 14 days after the
occurrence of a Put Event, the Issuer or the relevant Guarantor 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 14 specifying the nature of the Put
Event, and the procedure for exercising the Put Option.

         (E)    To exercise the Put Option in respect of his Bond the Bondholder
must deliver such Bond to the specified office of any Paying Agent, on a day
which is a Business Day (as defined in Condition 5) in the City of London and in
the place of such specified office falling within the period (the "Put Period")
commencing on the date the Put Event Notice is given and expiring 45 days
thereafter 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 Bondholder may specify a bank
account complying with the requirements of Condition 5 to which payment is to be
made under this Condition 7. Each Bond must 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 the full
amount 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 5 against presentation and surrender (or, in the case of part payment
only, endorsement) of such missing Coupon at any time before the expiry of 10
years after the Relevant Date (as defined in Condition 8) in respect of the
relevant Bond (whether or not the Coupon would otherwise have become void
pursuant to Condition 9) 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 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, but 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 5. A Put Notice, once given,
shall be irrevocable. For the purposes of Conditions 1, 9, 10, 11, 13, and 15
and for certain other purposes specified in the Trust Deed, receipts issued
pursuant to this Condition 7 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 such Bond has been
previously redeemed or purchased in accordance with these Terms and Conditions.

8.       Taxation

         All payments in respect of the Bonds and the Coupons by the Issuer or,
as the case may be, either 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

                                      102
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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 Guarantors 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, the 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)      presented for payment in the United Kingdom; or

         (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.

         As used herein, "Relevant Date" means the date on which the payment
first becomes due but, if the 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 14.

         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 8 or under any undertakings given in addition
to, or in substitution for, this Condition 8 pursuant to the Trust Deed.

9.       Prescription

         Bonds and Coupons (which for this purpose shall not include Talons)
will become void unless presented for payment within periods of 10 years and
five years respectively from the Relevant Date in respect of the Bonds or, as
the case may be, the Coupons, subject to the provisions of Condition 5. 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 5.

10.      Events of Default

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         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), (d), (e), (f), (g), (h) and (i) below, only if the
Trustee shall have certified in writing to the Issuer that such event is, in its
opinion, materially prejudicial to the interests of the Bondholders and subject
in each case to the Trustee being indemnified by, or on behalf of, Bondholders
to its satisfaction), give notice to the Issuer and the Guarantors 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 7 days or more in the
                  payment of any principal or the purchase price due in respect
                  of any Bond pursuant to Condition 7 or 14 days or more in the
                  payment of any interest due in respect of the Bonds or any of
                  them; or

         (b)      if the Issuer or NEDL 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 30
                  days (or such longer period as the Trustee may in its absolute
                  discretion permit) next following the service by the Trustee
                  on the Issuer or NEDL, as the case may be, of notice requiring
                  the same to be remedied; or

         (c)      if (i) any  other  indebtedness  for  borrowed  money of the
                  Issuer,  NEDL or any  Principal  Subsidiary  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,  NEDL  or any
                  Principal  Subsidiary falls 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,  NIEDL  or any  Principal  Subsidiary  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

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                  Trustee) or two per cent. of the  Consolidated  Tangible Net
                  Worth,  and for the  purposes  of  this  sub-paragraph  (c),
                  "indebtedness  for  borrowed  money" shall  exclude  Project
                  Finance Indebtedness; or

         (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 or NEDL, 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 any order shall be made by any competent court or any
                  resolution shall be passed for the winding up or dissolution
                  of a Principal Subsidiary, save for the purposes of
                  amalgamation, merger, consolidation, reorganisation,
                  reconstruction or other similar arrangement (i) not involving
                  or arising out of the insolvency of such Principal Subsidiary
                  and under which all the surplus assets of such Principal
                  Subsidiary are transferred to NIEDL or any of its other
                  Subsidiaries or (ii) the terms of which have previously been
                  approved in writing by the Trustee or by an Extraordinary
                  Resolution of the Bondholders; or

         (f)      if the Issuer, NEDL or any Principal  Subsidiary shall cease
                  to carry  on the  whole or  substantially  the  whole of its
                  business,   save  in  each   case   for  the   purposes   of
                  amalgamation,    merger,   consolidation,    reorganisation,
                  reconstruction   or  other  similar   arrangement   (i)  not
                  involving  or arising out of the  insolvency  of the Issuer,
                  NEDL or such  Principal  Subsidiary  and under  which all or
                  substantially  all of its assets are  transferred to NEDL or
                  any of its other  Subsidiaries  or (ii)  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, NEDL or a Principal  Subsidiary
                  on an arm's length basis or (iii) where the transferee is or
                  immediately   upon  such   transfer   becomes  a   Principal
                  Subsidiary or (iv) the terms of which have  previously  been
                  approved  in writing by the  Trustee or by an  Extraordinary
                  Resolution of the  Bondholders,  provided that if NEDL 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 none of  exceptions  (i) to (iii)  shall
                  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  substitution  for NEDE in
                  form and  substance  acceptable to the Trustee in respect of
                  the  obligations of the Issuer under the Bonds and the Trust
                  Deed; or

         (g)      if the Issuer, NEDL or any Principal Subsidiary 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 1 of the Insolvency Act 1986; or

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<PAGE>

         (h)      if a receiver, administrative receiver, administrator or other
                  similar official shall be appointed in relation to the Issuer,
                  NEDL or any Principal Subsidiary or in relation to the whole
                  or a substantial part of the undertaking or assets of any of
                  them or a distress, execution or other process shall be levied
                  or enforced upon or sued out against, or an encumbrancer shall
                  take possession of, the whole or a substantial part of the
                  assets of any of them and in any of the foregoing cases it or
                  he shall not be paid out or discharged within 60 days (or such
                  longer period as the Trustee may in its absolute discretion
                  permit); or

         (i)      if the Issuer ceases to be a wholly-owned Subsidiary of NEDL
                  or if NEDL ceases to have the right to appoint or remove a
                  majority of the board of directors of the Issuer.

         For the purposes of sub-paragraph (g) 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 may from time to time determine by notice in writing to NEDL.

         Neither the Issuer, NEDL nor any Principal Subsidiary shall be deemed
to be unable to pay its debts for the purposes of sub-paragraph (g) above if any
such demand as is mentioned in Section 123(1)(a) of the Insolvency Act 1986 is
being contested in good faith by the Issuer, NEDL or the relevant Principal
Subsidiary, as the case may be, 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 10.

For the purposes of these Terms and Conditions:

         (a)      a "Principal Subsidiary" at any time shall mean a Subsidiary
                  of the Issuer or NEDL (not being any Subsidiary of the Issuer
                  or NEDL whose only indebtedness for borrowed money is Project
                  Finance Indebtedness):

                  (A)      whose (i) net profits before tax or (ii) gross assets
                           represent 15 per cent. or more of the consolidated
                           net profits before tax of NEDL and its Subsidiaries
                           (the "NEDL Group") or consolidated gross assets of
                           the NEDL Group respectively in each case as
                           calculated by reference to the then latest audited
                           financial statements of such Subsidiary (consolidated
                           in the case of a company which itself has
                           Subsidiaries and which, in the normal course,
                           prepares consolidated accounts) and the then latest
                           audited consolidated financial statements of the NEDL
                           Group; or

                  (B)      to which is transferred all or substantially all of
                           the business, undertaking and assets of a Subsidiary
                           of the Issuer or NEDL which immediately prior to such
                           transfer is a Principal Subsidiary, whereupon the
                           transferor Subsidiary shall immediately cease to be a
                           Principal Subsidiary and the transferee Subsidiary
                           shall immediately become a Principal Subsidiary under

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<PAGE>

                           the provisions of this sub-paragraph (B) (but without
                           prejudice to the provisions of sub-paragraph (A)
                           above);

                  all as more fully defined in the Trust Deed.

                  A report by the Auditors that in their opinion a Subsidiary of
                  the Issuer or NEDL is or is not or was or was not at any
                  particular time or throughout any specified period a Principal
                  Subsidiary shall, in the absence of manifest error, be
                  conclusive and binding on the Guarantors, the Issuer, the
                  Trustee, the Bondholders and the Couponholders; and

         (b)      "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 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.

11.      Enforcement

         The Trustee may at any time, at its discretion and without notice, take
such proceedings against the Issuer or either 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 either Guarantor unless the Trustee, having become bound so to
proceed, fails so to do within a reasonable period and such failure shall be
continuing.

12.      Substitution

         The Trustee may, without the consent of the Bondholders or
Couponholders, agree with the Issuer and the Guarantors to the substitution in
place of the Issuer (or of any previous substitute under this Condition) as the
principal debtor under the Bonds, the Coupons and the Trust Deed of NEDL or any
Subsidiary or holding company (as defined in section 736 of the Companies Act
1985) of NEDL or any Subsidiary of such holding company, subject to (a) the
Bonds continuing to be unconditionally and irrevocably guaranteed by the
Guarantors (save where NE or, as the case may be, NEDL itself has been
substituted for the Issuer (or any previous substitute) or where NEDL has
transferred the Distribution Licence to the substituted party), (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.

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<PAGE>

         The Trustee may, without the consent of the Bondholders or
Couponholders, agree with the Issuer and the Guarantors to the substitution in
place of NEDL (or of any previous substitute under this Condition) as guarantor
of the obligations of the Issuer (or of any previous substitute under this
Condition) guaranteed by NEDL under the Bonds, the Coupons and the Trust Deed of
any Subsidiary or holding company (as defined in section 736 of the Companies
Act 1985) of NEDL or any subsidiary of such holding company, subject to (a) the
Distribution Licence having been previously transferred to the substituted
party; (b) the Trustee bring 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.

13.      Replacement of Bonds and Coupons

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

14.      Notices

         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
previously approve in writing. 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 previously approve in writing.

         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 14.

15.      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

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binding on all Bondholders, whether or not they are present at the meeting or
voted thereat, 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 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, either
Guarantor, 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 8 and/or
any undertaking given in addition to, or in substitution for, Condition 8
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 14.

16.      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.

17.      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 prior written consent of the Trustee), be constituted by a

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<PAGE>

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.

18.      Governing Law

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

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<PAGE>

                             PRINCIPAL PAYING AGENT

                                Barclays Bank PLC
                            BGSS Depositary Services
                                  8 Angel Court
                               Throgmorton Street
                                 London EC2R 7HT

                               OTHER PAYING AGENT

                     Banque Internationale a Luxembourg S.A.
                                 69 route d'Esch
                                L-1470 Luxembourg

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<PAGE>

                                   SCHEDULE 5

                     PROVISIONS FOR MEETINGS OF BONDHOLDERS

1.       The following expressions shall have the following meanings:

         "voting certificate" means a certificate in the English language issued
         by a Paying Agent and dated in which it is stated:

         (a)      that on that date Bonds (not being Bonds 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 adjournment of such meeting) bearing specified serial
                  numbers were deposited with such Paying Agent (or to its order
                  at a bank or other depositary) and that such Bonds will not be
                  released until the earlier of:

                  (i)      the conclusion of the meeting specified in such
                           certificate or any adjournment of it whichever is the
                           later; and

                  (ii)     the surrender of the certificate to the Paying Agent
                           which issued it; and

         (b)      that its bearer is entitled to attend and vote at such meeting
                  or any adjournment of it in respect of the Bonds represented
                  by such certificate;

         "block voting instruction" means a document in the English language
         issued by a Paying Agent and dated in which:

         (a)      it is certified that Bonds (not being Bonds in respect of
                  which a voting certificate has been issued and is outstanding
                  in respect of the meeting specified in such block voting
                  instruction or any adjournment of it) have been deposited with
                  such Paying Agent (or to its order at a bank or other
                  depositary) and that such Bonds will not be released until the
                  earlier of:

                  (i)      the conclusion of the meeting specified in such
                           document or any adjournment of it whichever is the
                           later; and

                  (ii)     the surrender, not less than 48 hours before the time
                           fixed for such meeting or adjournment, of the receipt
                           for each such deposited Bond which is to be released
                           to the Paying Agent which issued it and the
                           notification of such surrender by such Paying Agent
                           to the Company;

         (b)      it is certified that each depositor of such Bonds or a duly
                  authorised agent on his behalf has instructed such Paying
                  Agent that the votes attributable to his Bonds so deposited
                  should be cast in a particular way in relation to each
                  resolution to be put to such meeting or any adjournment of it

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<PAGE>

                  and that all such instructions are, during the period of 48
                  hours before the time fixed for such meeting or adjourned
                  meeting, neither revocable nor subject to amendment;

         (c)      the total number and the serial numbers of the Bonds so
                  deposited are listed, distinguishing with regard to each such
                  resolution between those in respect of which instructions have
                  been so given (i) to vote for, and (ii) to vote against, the
                  resolution; and

         (d)      any person named in such document (a "proxy") is authorised
                  and instructed by such Paying Agent to vote in respect of the
                  Bonds so listed in accordance with the instructions referred
                  to in sub-paragraph (c) above as set out in such document.

2.       A holder of a Bond may obtain a voting  certificate  from a Paying
         Agent or require a Paying Agent to issue a block voting  instruction
         by  depositing his Bond with such  Paying  Agent not later  than 48
         hours  before the time fixed for any meeting.  Voting  certificates and
         block voting  instructions shall be valid until the relevant Bonds are
         released  pursuant to paragraph 1 of this Schedule and until then the
         holder of any such voting certificate or (as  the  case  may  be)  the
         proxy  named  in any  such  block  voting instruction  shall,  for all
         purposes  in  connection  with any meeting or proposed meeting of
         Bondholders, be deemed to be the holder of the Bonds to which such
         voting certificate or block voting  instruction  relates and the Paying
         Agent  with  which (or to the order of which)  such Bonds have been
         deposited  shall be deemed for such  purposes not to be the holder of
         those Bonds.

3.       Each of the Company and the Trustee at any time may, and the Trustee
         (subject to its being indemnified to its satisfaction against all costs
         and expenses thereby occasioned) upon a request in writing of
         Bondholders holding not less than one-tenth in principal amount of the
         Bonds for the time being outstanding shall, convene a meeting of
         Bondholders. Whenever any such party is about to convene any such
         meeting it shall forthwith give notice in writing to the other parties
         of the day, time and place of the meeting and of the nature of the
         business to be transacted at it. Every such meeting shall be held at
         such time and place as the Trustee may previously approve in writing.

4.       At least 21 days' notice (exclusive of the day on which the notice is
         given and of the day on which the meeting is held) specifying the day,
         time and place of meeting shall be given to the Bondholders. A copy of
         the notice shall in all cases be given by the party convening the
         meeting to the other parties. Such notice shall also specify, unless in
         any particular case the Trustee otherwise agrees, the nature of the
         resolutions to be proposed and shall include a statement to the effect
         that Bonds may be deposited with (or to the order of) any Paying Agent
         for the purpose of obtaining voting certificates or appointing proxies
         not later than 48 hours before the time fixed for the meeting.

5.       A person (who may, but need not, be a Bondholder) nominated in writing
         by the Trustee may take the chair at every such meeting but if no such
         nomination is made or if at any meeting the person nominated shall not
         be present within 15 minutes after the time fixed for the meeting the

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<PAGE>

         Bondholders present shall choose one of their number to be chairman,
         failing which the Company or, failing which, a Guarantor may appoint a
         chairman. The chairman of an adjourned meeting need not be the same
         person as was chairman of the original meeting.

6.       At any such meeting any one or more persons  present in person holding
         Bonds  or  voting   certificates  or  being  proxies  and  holding  or
         representing  in the  aggregate  not less than one- tenth in principal
         amount of the Bonds 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 business.  The quorum at any
         such meeting for passing an Extraordinary Resolution shall (subject as
         provided below) be one or more persons present in person holding Bonds
         or voting certificates or being proxies and holding or representing in
         the  aggregate a clear  majority in principal  amount of the Bonds for
         the time being outstanding,  provided that at any meeting the business
         of which includes the consideration of an Extraordinary  Resolution to
         effect any of the matters  specified in the proviso to paragraph 19 of
         this  Schedule  the  quorum  shall be one or more  persons  present in
         person  holding  Bonds or voting  certificates  or being  proxies  and
         holding or  representing  in the aggregate not less than two-thirds in
         principal amount of the Bonds for the time being outstanding.

7.       If within 15 minutes from the time fixed for any such meeting a quorum
         is not present the meeting shall,  if convened upon the requisition of
         Bondholders,  be dissolved. In any other case it shall stand adjourned
         (unless the Company and the Trustee  agree that it be  dissolved)  for
         such period, not being less than 14 days nor more than 42 days, and to
         such  place,  as may be decided  by the  chairman.  At such  adjourned
         meeting one or more persons  present in person holding Bonds or voting
         certificates  or being proxies  (whatever the principal  amount of the
         Bonds so held or  represented)  shall  form a quorum  and may pass any
         resolution  and decide upon all matters which could properly have been
         dealt with at the meeting from which the adjournment  took place had a
         quorum been present at such  meeting,  provided  that at any adjourned
         meeting  the  business  of  which  includes  the  consideration  of an
         Extraordinary  Resolution to effect any of the modifications specified
         in the proviso to paragraph 19 the quorum shall be one or more persons
         present  in  person  holding  Bonds or  voting  certificates  or being
         proxies and holding or  representing  in the  aggregate  not less than
         one-third  in  principal  amount  of the  Bonds  for  the  time  being
         outstanding.

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

9.       At least 10 days' notice of any meeting adjourned through want of a
         quorum shall be given in the same manner as for an original meeting and
         such notice shall state the quorum required at such adjourned meeting.
         It shall not, however, otherwise be necessary to give any notice of an
         adjourned meeting.

                                      114

<PAGE>

10.      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) which he may have as a
         Bondholder or as a holder of a voting certificate or as a proxy.

11.      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 Company, a
         Guarantor, the Trustee or by one or more persons holding one or more
         Bonds or voting certificates or being proxies and holding or
         representing in the aggregate not less than one-fiftieth in principal
         amount of the Bonds for the time being outstanding, a declaration by
         the chairman that a resolution has been carried or carried by a
         particular majority or lost or not carried by any 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.

12.      If at any meeting a poll is so demanded, it shall be taken in such
         manner and (subject as provided below) either at once or after such 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 continuation of the meeting for the
         transaction of any business other than the question on which the poll
         has been demanded.

13.      Any poll demanded at any meeting on the election of a chairman or on
         any question of adjournment shall be taken at the meeting without
         adjournment.

14.      The Company, each Guarantor and the Trustee (through their respective
         representatives) and their respective financial and legal advisers may
         attend and speak at any meeting of Bondholders. No one else may attend
         at any meeting of Bondholders or join with others in requesting the
         convening of such a meeting unless he is the holder of a Bond or a
         voting certificate or is a proxy.

15.      At any meeting on a show of hands every person who is present in person
         and who produces a Certificate in respect of a Bond or a voting
         certificate shall have one vote and on a poll every such person and
         every person present in person who is a proxy shall have one vote in
         respect of each such principal amount as is equal to the lowest common
         denomination of the Bonds forming a particular series. Without
         prejudice to the obligations of proxies named in any block voting
         instruction, 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.

16.      The proxy named in any block voting instruction need not be a
         Bondholder.

17.      Each block voting  instruction  shall be  deposited at the  registered
         office of the  Company,  or at such other place as the  Trustee  shall
         designate or approve, not less than 24 hours before the time appointed
         for holding the meeting or adjourned  meeting at which the proxy named
         in the block  voting  instruction  proposes to vote and in default the

                                      115
<PAGE>

         block  voting  instructions  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 such block  voting  instruction  and, if required by the Trustee,
         proof  satisfactory  to the Trustee of its due  execution on behalf of
         the  relevant  Paying  Agent  shall be  produced  by the  proxy at 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 proxy named in any such block voting instruction.

18.      Any vote given in accordance with the terms of a block voting
         instruction shall be valid even if the block voting instruction or any
         of the Bondholders instructions pursuant to which it was executed has
         been previously revoked or amended, provided that no intimation in
         writing of such revocation or amendment shall have been received from
         the relevant Paying Agent by the Company or the Trustee at its
         registered office or by the chairman of the meeting in each case not
         less than 24 hours before the time fixed for the meeting or adjourned
         meeting at which the block voting instruction is used.

19.      A meeting of Bondholders shall, subject to the Conditions, in addition
         to the powers given above, but without prejudice to any powers
         conferred on other persons by these presents, have power exercisable by
         Extraordinary Resolution:

         (a)      to sanction any proposal by the Company or either Guarantor
                  for any modification, abrogation, variation or compromise of,
                  or arrangement in respect of, the rights of the Bondholders
                  and/or the Couponholders against the Company or either
                  Guarantor or against any of its property whether such rights
                  shall arise under these presents or otherwise;

         (b)      to sanction any scheme or proposal for the exchange,
                  substitution or sale of the Bonds for, or the conversion of
                  the Bonds into, or the cancellation of the Bonds in
                  consideration of, shares, stock, notes, bonds, debentures,
                  debenture stock and/or other obligations and/or securities of
                  the Company, either Guarantor or any other body corporate
                  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, notes, bonds, debentures, debenture stock
                  and/or other obligations and/or securities as aforesaid and
                  partly for or into or in consideration of cash;

         (c)      to assent to any modification of these presents which shall be
                  proposed by the Company, either Guarantor or the Trustee;

         (d)      to authorise anyone to concur in and do all such things as may
                  be necessary to carry out and give effect to any Extraordinary
                  Resolution;

         (e)      to give any authority, direction or sanction which under these
                  presents is required to be given by Extraordinary Resolution;

         (f)      to appoint any persons (whether Bondholders or not) as a
                  committee or committees to represent the interests of the

                                      116
<PAGE>

                  Bondholders and to confer upon such committee or committees
                  any powers or discretions which the Bondholders could
                  themselves exercise by Extraordinary Resolution;

         (g)      to approve a person proposed to be appointed as a new Trustee
                  and to remove any Trustee;

         (h)      to approve the substitution of any entity for the Company (or
                  any previous substitute) as principal debtor under these
                  presents;

         (i)      to approve the substitution of any entity for either Guarantor
                  (or any previous substitute) as guarantor under these
                  presents; and

         (j)      to discharge or exonerate the Trustee from any liability in
                  respect of any act or omission for which it may become
                  responsible under these presents,

         provided that the special quorum provisions contained in the proviso to
         paragraph 6 of this Schedule and, in the case of an adjourned meeting,
         in the proviso to paragraph 7 of this Schedule shall apply in relation
         to any Extraordinary Resolution for the purpose of paragraph 19(b) or
         (h) of this Schedule or for the purpose of making any modification to
         the provisions contained in these presents which would have the effect
         of:

         (i)      postponing the maturity of the Bonds or the dates on which
                  interest is payable in respect of the Bonds; or

         (ii)     modifying the status of the Bonds; or

         (iii)    reducing or cancelling the principal amount of, or interest
                  on, or other amounts in respect of or reducing the rate of
                  interest on, the Bonds; or

         (iv)     changing the currency of payment of the Bonds; or

         (v)      modifying the provisions contained in this Schedule concerning
                  the quorum required at any meeting of Bondholders or the
                  majority required to pass an Extraordinary Resolution; or

         (vi)     amending this proviso.

20.      An Extraordinary Resolution passed at a meeting of Bondholders duly
         convened and held in accordance with these presents shall be binding
         upon all the Bondholders, whether or not present at such meeting and
         whether or not they vote in favour, and upon all the Couponholders and
         each of the Bondholders and Couponholders shall be bound to give effect
         to it accordingly. The passing of any such resolution shall be
         conclusive evidence that the circumstances of such resolution justify
         the passing of it. The Company shall give notice of the passing of an
         Extraordinary Resolution to Bondholders within 14 days but failure to
         do so shall not invalidate the resolution.

                                      117

<PAGE>

21.      The expression "Extraordinary Resolution" means a resolution passed at
         a meeting of Bondholders duly convened and held in accordance with
         these presents by a majority consisting of not less than three-quarters
         of the votes cast.

22.      Minutes of all resolutions and proceedings at every such meeting shall
         be made and  entered in the books to be from time to time  provided at
         the  expense of the  Company  for that  purpose by the  Company or the
         Trustee  and any such  minutes,  if  purporting  to be  signed  by the
         chairman  of the  meeting at which  such  resolutions  were  passed or
         proceedings  transacted  or by the  chairman  of the  next  succeeding
         meeting of  Bondholders,  shall be conclusive  evidence of the matters
         contained  in them and until the contrary is proved every such meeting
         in respect of the  proceedings  of which minutes have been so made and
         signed  shall be deemed to have  been duly  convened  and held and all
         resolutions  passed or proceedings  transacted at it to have been duly
         passed and transacted.

23.      Subject to all other provisions contained in these presents the Trustee
         may without the consent of the Bondholders prescribe such further
         regulations regarding the holding of meetings of Bondholders and
         attendance and voting at them as the Trustee may in its sole discretion
         determine, including in particular (but without prejudice to the
         generality of the foregoing) such regulations and requirements as the
         Trustee thinks reasonable:

         (a)      so as to satisfy itself that persons who purport to
                  requisition a meeting in accordance with paragraph 3 of this
                  Schedule or who purport to make any requisition to the Trustee
                  in accordance with these presents are in fact Bondholders; and

         (b)      as to the form of voting certificates or block voting
                  instructions to be issued pursuant to paragraph 1 of this
                  Schedule so as to satisfy itself that persons who purport to
                  attend or vote at any meeting of Bondholders are entitled to
                  do so in accordance with these presents.

24.      (a)      If and whenever the Company shall have issued and have
                  outstanding any Bonds which are not  identical  and do not
                  form one single  series then those Bonds which are in all
                  respects  identical  shall be deemed to  constitute  a
                  separate  series  of the  Bonds  and 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 one series only of the Bonds shall be deemed
                           to have been duly passed if passed at a separate
                           meeting of the holders of the Bonds of that series;

                  (ii)     a resolution which in the opinion of the Trustee
                           affects more than one series of the Bonds but does
                           not give rise to a conflict of interest between the
                           holders of Bonds 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 Bonds of all
                           the series so affected;

                                      118

<PAGE>

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

                  (iv)     to all such meetings as aforesaid all the preceding
                           provisions of this Schedule shall mutatis mutandis
                           apply as though references therein to Bonds and
                           holders were references to the Bonds of the series or
                           group of series in question and to the holders of
                           such Bonds respectively.

         (b)      If the Company  shall have issued and have  outstanding  (a)
                  Bonds which are not denominated in sterling or (b) more than
                  one series of Bonds denominated in sterling but in differing
                  denominations,  the following provisions shall apply. In the
                  case of any  meeting  of  holders  of Bonds of more than one
                  currency the principal  amount of such Bonds not denominated
                  in sterling  shall (i) for the  purposes  of  paragraph 3 of
                  this Schedule be the equivalent in sterling at the spot rate
                  of a bank nominated by the Trustee for the conversion of the
                  relevant currency or currencies into sterling on the seventh
                  dealing day (being a day (other than a Saturday or a Sunday)
                  on  which  banks in  London  are  open  for  normal  banking
                  business)  prior to the day on which the  request in writing
                  is  received  by the  Trustee  and (ii) for the  purposes of
                  paragraphs  6,  7, 11 and 15 of this  Schedule  (whether  in
                  respect of the meeting, or any adjourned such meeting or any
                  poll  resulting  therefrom)  be  the  equivalent  in  pounds
                  sterling  at such spot rate on the  seventh  dealing day (as
                  defined  above)  prior  to the day of such  meeting  or,  if
                  applicable,  the taking of such poll. In such circumstances,
                  and where separate  series of Bonds  denominated in sterling
                  but of different  denominations  are to be treated  together
                  for the purposes of this  Schedule,  on any poll each person
                  present shall have one vote for every  complete one pound of
                  Bonds (converted as above) which he holds.

25.      Nothing in these presents shall prevent any of the proxies named in any
         block voting instruction or form of proxy from being a director,
         managing director, officer or representative of, or otherwise connected
         with, the Company, either Guarantor, the Subsidiaries or any of their
         respective holding and associated companies.

                                      119
<PAGE>

THE COMMON SEAL of                 )
NORTHERN ELECTRIC FINANCE plc      )
was hereunto affixed               )
in the presence of:                )

_________________
Director

_________________
Secretary

THE COMMON SEAL of                 )
NORTHERN ELECTRIC plc              )
was hereunto affixed               )
in the presence of:                )

_________________
Director

_________________
Secretary

THE COMMON SEAL of                 )
NORTHERN ELECTRIC DISTRIBUTION     )
LIMITED was hereto affixed         )
in the presence of:                )

_________________
Director

_________________
Secretary

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

_________________
Director

_________________
Assistant Trust Manager

                                      120
<PAGE>

EXECUTED as a deed by                   )
NORTHERN ELECTRIC FINANCE plc           )        /s/ director
acting by                               )
and                                     )        /s/ director/secretary

EXECUTED as a deed by                   )
NORTHERN ELECTRIC plc                   )        /s/ director
acting by                               )
and                                     )        /s/ director/secretary

EXECUTED as a deed by                   )
NORTHERN ELECTRIC DISTRIBUTION LIMITED  )        /s/ director
acting by                               )
and                                     )        /s/ director/secretary

THE COMMON SEAL of                      )
THE LAW DEBENTURE TRUST                 )
CORPORATION p.l.c.                      )       [seal]
was affixed to this deed                )
in the presence of                      )

/s/ Director

/s/ Authorised Signature

                                      121

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