<PAGE>
                                                                    EXHIBIT 4.10



                           PPL CAPITAL FUNDING, INC.,
                                     ISSUER

                                       AND

                                PPL CORPORATION,
                                    GUARANTOR

                                       TO

                              JPMORGAN CHASE BANK,
                                     TRUSTEE

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

                         SUPPLEMENTAL INDENTURE NUMBER 5

                          DATED AS OF           , 2003

                          SUPPLEMENTAL TO THE INDENTURE
                          DATED AS OF NOVEMBER 1, 1997

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

                             NOTES DUE MAY 18, 2006

                                 ---------------
<PAGE>
                              TABLE OF CONTENTS(1)

<TABLE>
<CAPTION>
                                                                                                                                Page
                                                                                                                                ----
<S>                                                                                                                             <C>
ARTICLE ONE   NOTES DUE MAY 18, 2006..........................................................................................     1

            Section 1.01   Establishment......................................................................................     1

            Section 1.02   Definitions........................................................................................     2

            Section 1.03   Ranking of the Notes...............................................................................     6

            Section 1.04   Stated Maturity; Payment of Principal and Interest.................................................     7

            Section 1.05   Form; Denominations................................................................................     8

            Section 1.06   Global Notes.......................................................................................     9

            Section 1.07   Paying Agents; Transfer Agents; Place of Payment...................................................     9

            Section 1.08   Trust Indenture Act................................................................................    10

ARTICLE TWO   SUBORDINATION OF NOTES..........................................................................................    10

            Section 2.01   Notes Subordinate to Senior Indebtedness of the Corporation........................................    10

            Section 2.02   Payment Over of Proceeds of Notes..................................................................    10

            Section 2.03   Disputes with Holders of Certain Senior Indebtedness of the Corporation............................    12

            Section 2.04   Subrogation........................................................................................    12

            Section 2.05   Obligation of the Corporation Unconditional........................................................    13

            Section 2.06   Priority of Senior Indebtedness of the Corporation Upon Maturity...................................    13

            Section 2.07   Trustee as Holder of Senior Indebtedness of the Corporation........................................    14

            Section 2.08   Notice to Trustee to Effectuate Subordination......................................................    14

            Section 2.09   Modification, Extension, etc. of Senior Indebtedness of the Corporation............................    14

            Section 2.10   Trustee Has No Fiduciary Duty to Holders of Senior Indebtedness of the Corporation.................    15

            Section 2.11   Paying Agents Other Than the Trustee...............................................................    15

            Section 2.12   Rights of Holders of Senior Indebtedness of the Corporation Not Impaired...........................    15
</TABLE>

----------

(1)   This Table of Contents does not constitute part of the Indenture or have
      any bearing upon the interpretation of any of its terms and provisions.
<PAGE>
<TABLE>
<S>                                                                                                                             <C>
            Section 2.13   Effect of Subordination Provisions; Termination....................................................    15

ARTICLE THREE   FORM OF GUARANTEE.............................................................................................    16

ARTICLE FOUR   REMARKETING....................................................................................................    23

            Section 4.01   Remarketing; Payment of Purchase Price.............................................................    23

            Section 4.02   Failed Final Remarketing...........................................................................    25

ARTICLE FIVE   MISCELLANEOUS PROVISIONS.......................................................................................    26

            Section 5.01   Recitals by Corporation............................................................................    26

            Section 5.02   Ratification and Incorporation of Original Indenture...............................................    27

            Section 5.03   Executed in Counterparts...........................................................................    27

ARTICLE SIX   TAX TREATMENT; ERISA............................................................................................    27

            Section 6.01   Tax Agreements.....................................................................................    27

            Section 6.02   ERISA Agreements...................................................................................    27
</TABLE>


                                      A-3
<PAGE>
      THIS SUPPLEMENTAL INDENTURE NUMBER 5 (the "SUPPLEMENTAL INDENTURE") is
made as of       , 2003, by and between PPL CAPITAL FUNDING, INC. (formerly
known as PP&L Capital Funding, Inc.) a corporation duly organized and existing
under the laws of the state of Delaware, having its principal office at Two
North Ninth Street Allentown, Pennsylvania, 18101 (herein called the
"CORPORATION"), PPL CORPORATION (formerly known as PP&L Resources, Inc.), a
corporation duly organized and existing under the laws of the Commonwealth of
Pennsylvania (herein called the "GUARANTOR"), and JPMORGAN CHASE BANK (formerly
known as The Chase Manhattan Bank), a New York banking corporation, as Trustee
(herein called the "TRUSTEE").

                              W I T N E S S E T H :

      WHEREAS, the Corporation has heretofore entered into an Indenture, dated
as of November 1, 1997 (the "ORIGINAL INDENTURE") with The Chase Manhattan Bank,
as Trustee;

      WHEREAS, the Original Indenture is incorporated herein by this reference
and the Indenture, as amended and supplemented to the date hereof, including by
this Supplemental Indenture Number 5, is herein called the "INDENTURE;"

      WHEREAS, under the Indenture, a new series of Securities may at any time
be established in accordance with the provisions of the Indenture and the terms
of such series may be described by a supplemental indenture executed by the
Corporation, the Guarantor and the Trustee;

      WHEREAS, the Corporation proposes to create under the Indenture a new
series of Securities;

      WHEREAS, additional Securities of other series hereafter established,
except as may be limited in the Indenture as at the time supplemented and
modified, may be issued from time to time pursuant to the Indenture as at the
time supplemented and modified; and

      WHEREAS, all conditions necessary to authorize the execution and delivery
of this Supplemental Indenture and to make it a valid and binding obligation of
the Corporation and the Guarantor have been done or performed.

      NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:

                                  ARTICLE ONE
                             NOTES DUE MAY 18, 2006

      Section 1.01 Establishment

      There is hereby established a new series of Securities to be issued under
the Indenture, to be designated as the Corporation's Notes due May 18, 2006 (the
"NOTES").
<PAGE>
      There are to be authenticated and delivered an aggregate principal amount
equal to $       of Notes and no further Notes shall be authenticated and
delivered except as provided by Section 304, 305, 306 or 1206 of the Original
Indenture. The Notes may be issued pursuant to a Company Order delivered to the
Trustee for the authentication and delivery of Notes pursuant to Section 303 of
the Original Indenture. The Notes shall be issued in fully registered form
without coupons.

      The Notes shall be in substantially the form set out in Exhibit A hereto,
and the form of the Trustee's Certificate of Authentication for the Notes shall
be in substantially the form set forth in Exhibit B hereto.

      Each Note shall be dated the date of authentication thereof and shall bear
interest from November 18, 2003 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for.

      Section 1.02 Definitions

      The following defined terms used herein shall, unless the context
otherwise requires, have the meanings specified below. Capitalized terms used
herein for which no definition is provided herein shall have the meanings set
forth in the Original Indenture.

      (a) The following terms have the meanings given to them in the Purchase
Contract Agreement:

                  (i) Cash Settlement; (ii) Collateral Account; (iii) New PEPS
            Units; (iv) Purchase Price; (v) Securities Intermediary; and (vi)
            Treasury Units.

      (b) The following terms have the meanings given to them in this Section
1.02(b):

      "3-MONTH LIBOR" means the rate determined in accordance with the following
provisions:

            (a) the rate for deposits in United States dollars having a maturity
      of three months, commencing on the applicable Interest Reset Date, that
      appears on the Designated LIBOR Page as of 11:00 A.M., London time, on the
      preceding Interest Determination Date. If no such rate so appears, 3-month
      LIBOR on such Interest Determination Date will be determined in accordance
      with the provisions described in clause (b) below.

            (b) With respect to an Interest Determination Date on which no such
      rate appears on the Designated LIBOR Page as specified in clause (a)
      above, the Calculation Agent will request the principal London offices of
      each of four major reference banks (which may include affiliates of the
      Remarketing Agent, the Trustee or the Calculation Agent) in the London
      interbank market, as selected by the Calculation Agent, to provide the
      Calculation Agent with its offered quotation for deposits in United States
      dollars for the period of three months, commencing on the applicable
      Interest Reset Date, to prime banks in the London interbank market at
      approximately 11:00 A.M., London time, on such Interest Determination Date
      and in a principal amount that is representative for a


                                       2
<PAGE>
      single transaction in United States dollars in such market at such time.
      If at least two such quotations are so provided, then 3-month LIBOR on
      such Interest Determination Date will be the arithmetic mean of such
      quotations. If fewer than two such quotations are so provided, then
      3-month LIBOR on such Interest Determination Date will be the arithmetic
      mean of the rates quoted at approximately 11:00 A.M., New York City time,
      on such Interest Determination Date by three major banks (which may
      include affiliates of the Remarketing Agent, the Trustee or the
      Calculation Agent) in The City of New York selected by the Calculation
      Agent for loans in United States dollars to leading European banks, having
      a three month maturity and in a principal amount that is representative
      for a single transaction in United States dollars in such market at such
      time; provided, however, that if the banks so selected by the Calculation
      Agent are not quoting as mentioned in this sentence, 3-month LIBOR
      determined as of such Interest Determination Date will be 3-month LIBOR in
      effect on such Interest Determination Date, or if no such 3-month LIBOR is
      then in effect, the interest rate on the Notes will be the rate in effect
      on such Interest Determination Date.

      "BANKRUPTCY CODE" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.

      "BUSINESS DAY" means any day other than a Saturday or Sunday or a day on
which banking institutions in New York City are authorized or required by law or
executive order to remain closed or a day on which the Trustee is closed for
business; provided that, in connection with a Remarketing and following a
Successful Remarketing, such day for the purposes of determining 3-month LIBOR
is also a London Business Day.

      "CALCULATION AGENT" means JPMorgan Chase Bank, or any successor
Calculation Agent appointed by the Corporation; provided, however, that for the
initial interest rate reset on May 18, 2004, the Calculation Agent shall be the
Remarketing Agent.

      "CLEARING AGENCY" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act that is acting as a Depositary with
respect to the Notes and in whose name, or in the name of a nominee of that
organization, shall be registered a Global Note and which shall undertake to
effect book entry transfers and pledges of the Notes.

      "CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.

      "CODE" means the Internal Revenue Code of 1986, as amended.

      "COUPON RATE" shall have the meaning set forth in Section 1.04.

      "CUSTODIAL AGENT" shall have the meaning set forth in the Pledge
Agreement.

      "DEPOSITARY" means a clearing agency registered under the Exchange Act
that is designated to act as Depositary for the Notes as contemplated by
Sections 1.05 and 1.06.


                                       3
<PAGE>
      "DESIGNATED LIBOR PAGE" means the display designated as "Page 3750" on
Moneyline Telerate, Inc., or such other page as may replace Page 3750 or such
service or any successor service or services as may be nominated by the British
Bankers' Association for the purpose of displaying the London interbank rates of
major banks for United States dollars.

      "DTC" means The Depository Trust Company.

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

      "FAILED FINAL REMARKETING" shall have the meaning set forth in Section
4.02.

      "GLOBAL NOTES" shall have the meaning set forth in Section 1.06.

      "GUARANTOR" means the Person named as "Guarantor" in the first paragraph
of this Supplemental Indenture until a successor Person shall have become such
pursuant to the applicable provisions of the Original Indenture, and thereafter
Guarantor shall include such successor Person.

      "INDENTURE" shall have the meaning set forth in the Recitals.

      "INTEREST DETERMINATION DATE" means the second London Business Day
immediately preceding the applicable Interest Reset Date; provided, however,
that for the initial interest rate reset on May 18, 2004, the Interest
Determination Date means the second London Business Day immediately preceding
each date of Remarketing if there is a Successful Remarketing on such date.

      "INTEREST PAYMENT DATE" shall have the meaning set forth in Section
1.04(b).

      "INTEREST RESET DATE" shall have the meaning set forth in Section 1.04(e).

      "LONDON BUSINESS DAY" means a day on which dealings in deposits in United
States dollars are transacted in the London interbank market.

      "NOTES" shall have the meaning specified in Section 1.01.

      "ORIGINAL INDENTURE" shall have the meaning set forth in the Recitals.

      "ORIGINAL ISSUE DATE" means                     , 2003.

      "PLAN" means any employee benefit plan that is subject to Title I of
ERISA, plan, individual retirement account or other arrangement that is subject
to Section 4975 of the Code or any Similar Law, and any entity whose underlying
assets are considered to include "plan assets" of any such plan, account or
arrangement.

      "PLEDGE AGREEMENT" means the Pledge Agreement dated as of
, 2003 among PPL Corporation and JPMorgan Chase Bank, as collateral agent (the
"COLLATERAL AGENT"), custodial agent, securities intermediary, purchase contract
agent and attorney-in-fact.

      "PLEDGED NOTES" shall have the meaning set forth in the Pledge Agreement.


                                       4
<PAGE>
      "PURCHASE CONTRACT" shall have the meaning set forth in the Purchase
Contract Agreement.

      "PURCHASE CONTRACT AGENT" means the "Agent" under the Purchase Contract
Agreement.

      "PURCHASE CONTRACT AGREEMENT" means the Purchase Contract Agreement dated
as of       , 2003, between PPL Corporation and JPMorgan Chase Bank, as purchase
contract agent, collateral agent and custodial agent.

      "PURCHASE CONTRACT SETTLEMENT DATE" means May 18, 2004.

      "REGULAR RECORD DATE" means, (1) with respect to any Interest Payment Date
for the Notes when represented by a Global Note, the Business Day immediately
preceding such Interest Payment Date and (2) with respect to any Interest
Payment Date for the Notes when held in certificated form, the 15th day (whether
or not a Business Day) prior to such Interest Payment Date.

      "REMARKETED NOTES" means the Notes, as the Purchase Contract Agent and the
Custodial Agent shall have notified the Remarketing Agent prior to noon, New
York City time, on the sixth Business Day immediately preceding the Purchase
Contract Settlement Date (i) of the holders electing to have their Notes
remarketed, and (ii) of the holders of New PEPS Units who have not settled early
the related Purchase Contracts and have failed to notify the Purchase Contract
Agent, on or prior to the seventh Business Day immediately preceding the
Purchase Contract Settlement Date, of their intention to settle the related
Purchase Contracts through Cash Settlement, or have so notified the Purchase
Contract Agent, but failed to deliver sufficient cash to the Purchase Contract
Agent on or prior to the sixth Business Day preceding the Purchase Contract
Settlement Date.

      "REMARKETING" shall have the meaning set forth in Section 4.01(b).

      "REMARKETING AGENT" means Morgan Stanley & Co. Incorporated, as
remarketing agent under the Remarketing Agreement, or any successor remarketing
agent appointed in accordance therewith.

      "REMARKETING AGREEMENT" means the Remarketing Agreement dated as of
         , 2003, among the Guarantor, the Corporation, Morgan Stanley & Co.
Incorporated, in its capacity as Remarketing Agent, and JPMorgan Chase Bank, as
purchase contract agent and attorney-in-fact, which term shall include any
supplemental remarketing agreement among such parties entered into in connection
therewith, or any replacement remarketing agreement entered into in accordance
with such Remarketing Agreement.

      "RESET RATE" means 3-month LIBOR plus the Spread; provided, however, that
the Reset Rate shall not exceed the maximum rate permitted by applicable law.
For the avoidance of doubt, the Spread will be fixed once determined by the
Remarketing Agent in a Successful Remarketing.


                                       5
<PAGE>
      "SENIOR INDEBTEDNESS," when used with respect to the Corporation or the
Guarantor for purposes of the Indenture prior to May 18, 2004, means all
obligations (other than non-recourse obligations) of, or guaranteed or assumed
by, the Corporation or the Guarantor, as the case may be, for borrowed money,
including both senior and subordinated indebtedness for borrowed money (other
than the Notes prior to May 18, 2004 and other than securities issued under the
Subordinated Indenture dated as of May 9, 2001 (the "SUBORDINATED INDENTURE"),
among the Corporation, the Guarantor and the Trustee and the Guarantor's
guarantee thereof), or for the payment of money relating to any lease which is
capitalized on the consolidated balance sheet of the Corporation or the
Guarantor, as the case may be, and its subsidiaries in accordance with generally
accepted accounting principles as in effect from time to time, or evidenced by
bonds, debentures, notes or other similar instruments, and in each case,
amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligations, whether existing as of the date of the Indenture or
subsequently incurred by the Corporation or the Guarantor, as the case may be,
unless, in the case of any particular indebtedness, renewal, extension or
refunding, the instrument creating or evidencing the same or the assumption or
guarantee of the same expressly provides that such indebtedness, renewal,
extension or refunding is not superior in right of payment to or is pari passu
with the Notes prior to May 18, 2004 or the Guarantee prior to May 18, 2004, as
the case may be; provided that the Guarantor's obligations under the trust
preferred securities guarantee shall not be deemed to be Senior Indebtedness of
the Guarantor (as specified in the documents governing such trust preferred
securities), and provided further that Senior Indebtedness shall not include (i)
any obligation of the Corporation to any of its subsidiaries or (ii) trade
accounts payable or accrued liabilities arising in the ordinary course of
business or (iii) any obligations to an employee.

      "SIMILAR LAW" means any federal, state, local, non-U.S. or other law or
regulation that is similar to any of the provisions contained in Title I of
ERISA or Section 4975 of the Code.

      "SPREAD" means the number of basis points (one one-hundredth of a
percentage point) to be added to 3-month LIBOR that the Remarketing Agent
determines is required for a Successful Remarketing.

      "STATED MATURITY" shall have the meaning set forth in Section 1.04(a).

      "SUCCESSFUL REMARKETING" shall have the meaning set forth in Section
4.01(b).

      Section 1.03 Ranking of the Notes

      From the Original Issue Date until May 18, 2004, the Notes will be the
Corporation's direct, unsecured obligations and will rank without preference or
priority among themselves and equally with all of the Corporation's existing and
future unsecured and subordinated indebtedness, subordinate and junior in right
of payment to all of the Corporation's Senior Indebtedness.

      On and after May 18, 2004, the Notes will become the Corporation's direct,
unsecured obligations and will rank without preference or priority among
themselves and equally with all of the Corporation's existing and future
unsecured and unsubordinated indebtedness (including


                                       6
<PAGE>
ranking equally with all prior unsubordinated Securities issued pursuant to the
Original Indenture), senior in right of payment to all of the Corporation's
subordinated indebtedness.

      Section 1.04 Stated Maturity; Payment of Principal and Interest

      (a) The date upon which the principal of the Notes shall become due and
payable at final maturity, together with any accrued and unpaid interest, is May
18, 2006 (the "STATED MATURITY").

      (b) Each Note will bear interest (i) at the rate of 7.29% per year (the
"COUPON RATE") from November 18, 2003 through and including the day immediately
preceding May 18, 2004 and (ii)(A) in the case of a Successful Remarketing, at
the Reset Rate on and after the Purchase Contract Settlement Date and (B) in the
case of a Failed Final Remarketing, at the Coupon Rate on and after the Purchase
Contract Settlement Date, until the principal thereof is paid or duly made
available for payment. Interest will be payable, initially, quarterly in arrears
on February 18, 2004 and May 18, 2004 (each, an "INTEREST PAYMENT DATE") to the
Person in whose name such Note, or any Predecessor Security, is registered at
the close of business on the Regular Record Date for such interest installment;
provided, however, that following the Purchase Contract Settlement Date,
interest will be payable following a Successful Remarketing, quarterly in
arrears on February 18, May 18, August 18 and November 18 of each year, or if
there is no Successful Remarketing, semi-annually in arrears on May 18 and
November 18 of each year commencing November 18, 2004, and such dates shall then
be the "Interest Payment Dates."

      (c) The amount of interest payable on the Notes for any period will be
computed (1) for any full quarterly or semi-annual period, as applicable, on the
basis of a 360-day year of twelve 30-day months and (2) for any period shorter
than a full quarterly or semi-annual period, as applicable, on the basis of a
30-day month and, for any period less than a month, on the basis of the actual
number of days elapsed per 30-day month; provided that, following a Successful
Remarketing, the amount of interest for each day the Notes are outstanding will
be calculated by dividing the interest rate in effect for that day by 360 and
multiplying the result by the principal amount of the notes. In the event that
any date on which interest is payable on the Notes is not a Business Day, then
payment of the interest payable on that date will be made on the next day that
is a Business Day (and without any interest or other payment in respect of any
such delay); provided, that after a Successful Remarketing, if an Interest
Payment Date (other than at Stated Maturity) would fall on a day that is not a
Business Day, such Interest Payment Date shall be the following day that is a
Business Day, except that if such next day is in a different month, then that
Interest Payment Date will be the immediately preceding day that is a Business
Day; provided, further, that if the Stated Maturity shall fall on a day that is
not a Business Day, the interest due on such day shall be paid on the following
day that is a Business Day (and without any interest or other payment in respect
of such delay).

      (d) Payment of principal and interest on the Notes shall be made in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. Principal and interest on
the Notes will be payable, at the office or agency of the Corporation maintained
for such purpose as described in Section 1.07 below; provided, however, that
payment of interest may be made at the option of the Corporation (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security


                                       7
<PAGE>
Register or (ii) by wire transfer at such place and to such account at a banking
institution in the United States as may be designated in writing to the Trustee
at least 16 days prior to the date for payment by the Person entitled thereto.
Payments of principal of and interest on Global Notes shall be made by wire
transfer of immediately available funds to the Holder of such Global Notes;
provided, that, in the case of payments of principal, such Global Notes are
first surrendered to the Paying Agent.

      (e) Following a Successful Remarketing and commencing on August 18, 2004,
the Reset Rate, as determined by the Calculation Agent on the applicable
Interest Determination Date, shall be reset quarterly on February 18, May 18,
August 18 and November 18 of each year (each, an "Interest Reset Date").
Following a Successful Remarketing and upon request of any Holder, the
Calculation Agent will disclose to such Holder the Reset Rate then in effect
and, if determined, the Reset Rate that will become effective as a result of a
determination made for the next succeeding Interest Reset Date. The Calculation
Agent shall determine each applicable Reset Rate in accordance with the
definition of the term "3-month LIBOR". The Calculation Agent's determination of
any Reset Rate will be conclusive and binding in the absence of any manifest
error. The interest rate on the Notes in effect for the period from and
including May 18, 2004 to and excluding August 18, 2004 shall be determined by
the Calculation Agent on the applicable Interest Determination Date. If any
Interest Reset Date would otherwise be a day that is not a Business Day, such
Interest Reset Date shall be postponed to the next succeeding day that is a
Business Day. After a Successful Remarketing, the interest rate in effect after
May 18, 2004 or on any Interest Reset Date will be the applicable Reset Rate as
reset on May 18, 2004 or on such Interest Reset Date, as the case may be, and
the interest rate applicable to any other day is the interest rate in effect on
May 18, 2004 or the immediately preceding Interest Reset Date, as the case may
be.

      Section 1.05 Form; Denominations

      Except as provided in Section 1.06, the Notes shall be issued in fully
registered definitive form without interest coupons, bearing identical terms.

      The Notes may be issued, in whole or in part, in global form and, if
issued in global form, the Depositary shall be The Depository Trust Company or
such other Depositary as the Corporation may from time to time designate.

      The Notes shall be issuable in denominations of $1,000 and any integral
multiples thereof except that an interest in a Note held as part of one New PEPS
Unit represents a 1/40, or 2.5%, undivided beneficial ownership interest in a
$1,000 principal amount of a Note; provided, however, that upon release by the
Collateral Agent of Notes underlying the beneficial ownership interest in the
Notes pledged to secure the New PEPS Units holders' obligations under the
related Purchase Contracts (other than any release of the Notes in connection
with the creation of Treasury Units, an early settlement with separate cash, an
early settlement upon a cash merger, a notice to settle with cash or a
remarketing, as described in Sections 3.13, 5.08, 5.05(b)(2), 5.03(b) and
5.03(c), respectively, of the Purchase Contract Agreement) the Notes will be
issuable in denominations of $25 principal amount and integral multiples
thereof.


                                       8
<PAGE>
      Section 1.06 Global Notes

      Any Notes that are no longer part of New PEPS Units will be issued
initially in the form of one or more Global Notes (the "GLOBAL NOTES")
registered in the name of the Depositary or its nominee. Unless and until they
are exchanged for Notes in definitive registered form, such Global Notes may be
transferred, in whole but not in part, only to the Clearing Agency or a nominee
of the Clearing Agency, or to a successor Clearing Agency selected or approved
by the Corporation or to a nominee of such successor Clearing Agency.

      If at any time (i) the Depositary notifies the Corporation that it is
unwilling or unable to continue as Depositary for the Global Notes and no
successor Depositary has been appointed within 90 days after this notice, (ii)
the Depositary at any time ceases to be a Clearing Agency registered under the
Exchange Act when the Depositary is required to be so registered to act as the
Depositary and no successor Depositary has been appointed within 90 days after
the Corporation learns that the Depositary has ceased to be so registered, or
(iii) the Corporation, in its sole discretion, determines that it will no longer
have the Notes represented by Global Notes, the Corporation will execute, and
subject to Article Three of the Original Indenture, the Trustee, upon receipt of
a Company Order therefor, will authenticate and deliver the Notes in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Note or
Notes in exchange for such Global Senior or Notes. Upon exchange of the Global
Note or Notes for such Notes in definitive registered form without coupons, in
authorized denominations, the Global Note or Notes shall be cancelled by the
Trustee. Such Notes in definitive registered form issued in exchange for the
Global Note or Notes shall be registered in such names and in such authorized
denominations as the Clearing Agency, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Securities to the Clearing Agency for delivery to the Persons
in whose names such Securities are so registered.

      None of the Corporation, the Guarantor, the Trustee or any agent of the
Corporation, the Guarantor or the Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of a Global Note or maintaining, supervising
or reviewing any records relating to such beneficial ownership interest.

      Section 1.07 Paying Agents; Transfer Agents; Place of Payment

      The Paying Agent for the Notes shall initially be the Trustee, and the
Place of Payment for the Notes shall initially be the Corporate Trust Office,
which as of the date hereof for such purpose is located at 4 New York Plaza, New
York, New York 10004. The Trustee shall also serve as Security Registrar for the
purpose of registering Notes and transfers or exchanges of Notes. The
Corporation may from time to time designate one or more additional offices or
agencies where Notes may be presented or surrendered for payment or may be
surrendered for registration of transfer or exchange in accordance with Section
602 of the Original Indenture; provided, that the Corporation shall at all times
maintain a Paying Agent and an office or agency where Notes may be surrendered
for registration of transfer or exchange, in each case in the Borough of
Manhattan, The City of New York.


                                       9
<PAGE>
      Section 1.08 Trust Indenture Act

      The Subordinated Indenture is hereby excluded from the operation of the
proviso to Section 310(b)(i) of the Trust Indenture Act.

                                  ARTICLE TWO

                             SUBORDINATION OF NOTES

      From the Original Issue Date to, but excluding, May 18, 2004, the
following provisions shall apply:

      Section 2.01 Notes Subordinate to Senior Indebtedness of the Corporation.

      The Corporation, for itself, its successors and assigns, covenants and
agrees, and each Holder of the Notes, by its acceptance thereof, likewise
covenants and agrees, that the payment of the principal and interest, if any, on
each and all of the Notes is hereby expressly subordinated and subject to the
extent and in the manner set forth in this Article, in right of payment to the
prior payment in full of all Senior Indebtedness of the Corporation.

      Each Holder of the Notes, by its acceptance thereof, authorizes and
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article, and
appoints the Trustee its attorney-in-fact for any and all such purposes.

      The Notes are not superior in right of payment to, and rank pari passu
with, the securities issued under the Subordinated Indenture.

      Section 2.02 Payment Over of Proceeds of Notes.

      In the event (a) of any insolvency or bankruptcy proceedings or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Corporation or a substantial part of its property, or of any
proceedings for liquidation, dissolution or other winding up of the Corporation,
whether or not involving insolvency or bankruptcy, or (b) subject to the
provisions of Section 2.03, that (i) a default shall have occurred with respect
to the payment of principal of or interest on or other monetary amounts due and
payable on any Senior Indebtedness of the Corporation, or (ii) there shall have
occurred a default (other than a default in the payment of principal or interest
or other monetary amounts due and payable) in respect of any Senior Indebtedness
of the Corporation, as defined therein or in the instrument under which the same
is outstanding, permitting the holder or holders thereof to accelerate the
maturity thereof (with notice or lapse of time, or both), and such default shall
have continued beyond the period of grace, if any, in respect thereof, and, in
the cases of subclauses (i) and (ii) of this clause (b), such default shall not
have been cured or waived or shall not have ceased to exist, or (c) that the
principal of and accrued interest on the Notes shall have been declared due and
payable pursuant to Section 801 of the Original Indenture and such declaration
shall not have been rescinded and annulled as provided in Section 802 of the
Original Indenture, then:


                                       10
<PAGE>
            (1)   the holders of all Senior Indebtedness of the Corporation
      shall first be entitled to receive payment of the full amount due thereon,
      or provision shall be made for such payment in money or money's worth,
      before the Holders of any of the Notes are entitled to receive a payment
      on account of the principal or interest on the indebtedness evidenced by
      the Securities, including, without limitation, any payments made pursuant
      to Articles Four and Five of the Original Indenture;

            (2)   any payment by, or distribution of assets of, the Corporation
      of any kind or character, whether in cash, property or securities, to
      which any Holder or the Trustee would be entitled except for the
      provisions of this Article, shall be paid or delivered by the Person
      making such payment or distribution, whether a trustee in bankruptcy, a
      receiver or liquidating trustee or otherwise, directly to the holders of
      such Senior Indebtedness of the Corporation or their representative or
      representatives or to the trustee or trustees under any indenture under
      which any instruments evidencing any of such Senior Indebtedness of the
      Corporation may have been issued, ratably according to the aggregate
      amounts remaining unpaid on account of such Senior Indebtedness of the
      Corporation held or represented by each, to the extent necessary to make
      payment in full of all Senior Indebtedness of the Corporation remaining
      unpaid after giving effect to any concurrent payment or distribution (or
      provision therefor) to the holders of such Senior Indebtedness of the
      Corporation, before any payment or distribution is made to the Holders of
      the indebtedness evidenced by the Notes or to the Trustee under the
      Indenture; and

            (3)   in the event that, notwithstanding the foregoing, any payment
      by, or distribution of assets of, the Corporation of any kind or
      character, whether in cash, property or securities, in respect of
      principal or interest on the Notes or in connection with any repurchase by
      the Corporation of the Notes, shall be received by the Trustee or any
      Holder before all Senior Indebtedness of the Corporation is paid in full,
      or provision is made for such payment in money or money's worth, such
      payment or distribution in respect of principal or interest on the Notes
      or in connection with any repurchase by the Corporation of the Notes shall
      be paid over to the holders of such Senior Indebtedness of the Corporation
      or their representative or representatives or to the trustee or trustees
      under any indenture under which any instruments evidencing any such Senior
      Indebtedness of the Corporation may have been issued, ratably as
      aforesaid, for application to the payment of all Senior Indebtedness of
      the Corporation remaining unpaid until all such Senior Indebtedness of the
      Corporation shall have been paid in full, after giving effect to any
      concurrent payment or distribution (or provision therefor) to the holders
      of such Senior Indebtedness of the Corporation.

      Notwithstanding the foregoing, at any time after the 123rd day following
the date of deposit of cash or Eligible Obligations pursuant to Section 701 or
702 of the Original Indenture (provided all conditions set out in such Section
shall have been satisfied), the funds so deposited and any interest thereon will
not be subject to any rights of holders of Senior Indebtedness of the
Corporation including, without limitation, those arising under this Article;
provided that no event described in clauses (e) and (f) of Section 801 of the
Original Indenture with respect to the Corporation has occurred during such
123-day period.


                                       11
<PAGE>
      For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Corporation as
reorganized or readjusted, or securities of the Corporation or any other
corporation provided for by a plan or reorganization or readjustment which are
subordinate in right of payment to all Senior Indebtedness of the Corporation
which may at the time be outstanding to the same extent as, or to a greater
extent than, the Notes are so subordinated as provided in this Article. The
consolidation of the Corporation with, or the merger of the Corporation into,
another corporation or the liquidation or dissolution of the Corporation
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article Eleven of the Original Indenture shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section 2.02 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article Eleven of the Original Indenture. Nothing in Section 2.01 or in this
Section 2.02 shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 907 of the Original Indenture.

      Section 2.03 Disputes with Holders of Certain Senior Indebtedness of the
Corporation.

      Any failure by the Corporation to make any payment on or perform any other
obligation in respect of Senior Indebtedness of the Corporation, other than any
indebtedness incurred by the Corporation or assumed or guaranteed, directly or
indirectly, by the Corporation for money borrowed (or any deferral, renewal,
extension or refunding thereof) or any other obligation as to which the
provisions of this Section shall have been waived by the Corporation in the
instrument or instruments by which the Corporation incurred, assumed, guaranteed
or otherwise created such indebtedness or obligation, shall not be deemed a
default under clause (b) of Section 2.02 if (i) the Corporation shall be
disputing its obligation to make such payment or perform such obligation and
(ii) either (A) no final judgment relating to such dispute shall have been
issued against the Corporation which is in full force and effect and is not
subject to further review, including a judgment that has become final by reason
of the expiration of the time within which a party may seek further appeal or
review, or (B) in the event that a judgment that is subject to further review or
appeal has been issued, the Corporation shall in good faith be prosecuting an
appeal or other proceeding for review and a stay or execution shall have been
obtained pending such appeal or review.

      Section 2.04 Subrogation.

      Senior Indebtedness of the Corporation shall not be deemed to have been
paid in full unless the holders thereof shall have received cash (or securities
or other property satisfactory to such holders) in full payment of such Senior
Indebtedness of the Corporation then outstanding. Upon the payment in full of
all Senior Indebtedness of the Corporation, the rights of the Holders of the
Notes shall be subrogated to the rights of the holders of Senior Indebtedness of
the Corporation to receive any further payments or distributions of cash,
property or securities of the Corporation applicable to the holders of the
Senior Indebtedness of the Corporation until all amounts owing on the Notes
shall be paid in full; and such payments or distributions of cash, property or
securities received by the Holders of the Notes, by reason of such subrogation,
which otherwise would be paid or distributed to the holders of such Senior
Indebtedness of the Corporation shall, as between the Corporation, its creditors
other than the holders of Senior


                                       12
<PAGE>
Indebtedness of the Corporation, and the Holders, be deemed to be a payment by
the Corporation to or on account of Senior Indebtedness of the Corporation, it
being understood that the provisions of this Article are and are intended solely
for the purpose of defining the relative rights of the Holders, on the one hand,
and the holders of the Senior Indebtedness of the Corporation, on the other
hand.

      Section 2.05 Obligation of the Corporation Unconditional.

      Nothing contained in this Article or elsewhere in the Indenture or in the
Notes is intended to or shall impair, as among the Corporation, its creditors
other than the holders of Senior Indebtedness of the Corporation and the
Holders, the obligation of the Corporation, which is absolute and unconditional,
to pay to the Holders the principal and interest on the Notes as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the Holders and creditors of the
Corporation other than the holders of Senior Indebtedness of the Corporation,
nor shall anything herein or therein prevent the Trustee or any Holder from
exercising all remedies otherwise permitted by applicable law upon default under
the Indenture, subject to the rights, if any, under this Article of the holders
of Senior Indebtedness of the Corporation in respect of cash, property or
securities of the Corporation received upon the exercise of any such remedy.

      Upon any payment or distribution of assets or securities of the
Corporation referred to in this Article, the Trustee and the Holders shall be
entitled to rely upon any order or decree of a court of competent jurisdiction
in which such dissolution, winding up, liquidation or reorganization proceedings
are pending for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Indebtedness of the Corporation
and other indebtedness of the Corporation, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon, and all other facts
pertinent thereto or to this Article.

      The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself to be a holder of Senior Indebtedness of
the Corporation (or a representative of such holder or a trustee under any
indenture under which any instruments evidencing any such Senior Indebtedness of
the Corporation may have been issued) to establish that such notice has been
given by a holder of such Senior Indebtedness of the Corporation or such
representative or trustee on behalf of such holder. In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any Person as a holder of Senior Indebtedness of the Corporation
to participate in any payment or distribution pursuant to this Article, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of the
Corporation held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
right of such Person under this Article, and, if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment or distribution.

      Section 2.06 Priority of Senior Indebtedness of the Corporation Upon
Maturity.

      Upon the maturity of the principal of any Senior Indebtedness of the
Corporation by lapse of time, acceleration or otherwise, all matured principal
of Senior Indebtedness of the


                                       13
<PAGE>
Corporation and interest and premium, if any, thereon shall first be paid in
full before any payment of principal or interest, if any, is made upon the Notes
or before any Notes can be acquired by the Corporation.

      Section 2.07 Trustee as Holder of Senior Indebtedness of the Corporation.

      The Trustee shall be entitled to all rights set forth in this Article with
respect to any Senior Indebtedness of the Corporation at any time held by it, to
the same extent as any other holder of Senior Indebtedness of the Corporation.
Nothing in this Article shall deprive the Trustee of any of its rights as such
holder.

      Section 2.08 Notice to Trustee to Effectuate Subordination.

      Notwithstanding the provisions of this Article or any other provision of
the Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts which would prohibit the making of any payment of moneys to or by
the Trustee unless and until the Trustee shall have received written notice
thereof from the Corporation, from a Holder or from a holder of any Senior
Indebtedness of the Corporation or from any representative or representatives of
such holder or any trustee or trustees under any indenture under which any
instruments evidencing any such Senior Indebtedness of the Corporation may have
been issued and, prior to the receipt of any such written notice, the Trustee
shall be entitled, subject to Section 901 of the Original Indenture, in all
respects to assume that no such facts exist; provided, however, that, if prior
to the fifth Business Day preceding the date upon which by the terms hereof any
such moneys may become payable for any purpose, or in the event of the execution
of an instrument pursuant to Section 701 or 702 of the Original Indenture
acknowledging that Notes or portions thereof are deemed to have been paid for
all purposes of the Indenture, acknowledging that the entire indebtedness of the
Corporation in respect thereof has been satisfied and discharged or
acknowledging satisfaction and discharge of the Indenture, then if prior to the
second Business Day preceding the date of such execution, the Trustee shall not
have received with respect to such moneys the notice provided for in this
Section, then, anything herein contained to the contrary notwithstanding, the
Trustee may, in its discretion, receive such moneys and/or apply the same to the
purpose for which they were received, and shall not be affected by any notice to
the contrary, which may be received by it on or after such date; provided,
however, that no such application shall affect the obligations under this
Article of the persons receiving such moneys from the Trustee.

      Section 2.09 Modification, Extension, etc. of Senior Indebtedness of the
Corporation.

      The holders of Senior Indebtedness of the Corporation may, without
affecting in any manner the subordination of the payment of the principal and
interest, if any, on the Notes, at any time or from time to time and in their
absolute discretion, agree with the Corporation to change the manner, place or
terms of payment, change or extend the time of payment of, or renew or alter,
any Senior Indebtedness of the Corporation, or amend or supplement any
instrument pursuant to which any Senior Indebtedness of the Corporation is
issued, or exercise or refrain from exercising any other of their rights under
the Senior Indebtedness of the Corporation including, without limitation, the
waiver of default thereunder, all without notice to or assent from the Holders
or the Trustee.


                                       14
<PAGE>
      Section 2.10 Trustee Has No Fiduciary Duty to Holders of Senior
Indebtedness of the Corporation.

      With respect to the holders of Senior Indebtedness of the Corporation, the
Trustee undertakes to perform or to observe only such of its covenants and
objectives as are specifically set forth in the Indenture, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness of
the Corporation shall be read into the Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness of the Corporation, and shall not be liable to any such holders if
it shall mistakenly pay over or deliver to the Holders or the Corporation or any
other Person, money or assets to which any holders of Senior Indebtedness of the
Corporation shall be entitled by virtue of this Article or otherwise.

      Section 2.11 Paying Agents Other Than the Trustee.

      In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Corporation and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Sections 2.07, 2.08 and 2.10 shall not apply to the Corporation if
it acts as Paying Agent.

      Section 2.12 Rights of Holders of Senior Indebtedness of the Corporation
Not Impaired.

      No right of any present or future holder of Senior Indebtedness of the
Corporation to enforce the subordination herein shall at any time or in any way
be prejudiced or impaired by any act or failure to act on the part of the
Corporation or by any noncompliance by the Corporation with the terms,
provisions and covenants of the Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.

      Section 2.13 Effect of Subordination Provisions; Termination.

      Notwithstanding anything contained herein to the contrary, other than as
provided in the immediately succeeding sentence, all the provisions of the
Indenture shall be subject to the provisions of this Article, so far as the same
may be applicable thereto.

      Notwithstanding anything contained herein to the contrary, the provisions
of this Article Two shall be of no further effect, and the Notes shall no longer
be subordinated in right of payment to the prior payment of Senior Indebtedness
of the Corporation on or after May 18, 2004.


                                       15
<PAGE>
                                 ARTICLE THREE

                                FORM OF GUARANTEE

      The Guarantee to be endorsed on the Notes shall be in substantially the
form set forth below:

                               [FORM OF GUARANTEE]

      PPL Corporation (formerly called PP&L Resources, Inc.), a corporation
organized under the laws of the Commonwealth of Pennsylvania (the "GUARANTOR",
which term includes any successor under the Indenture, dated as of November 1,
1997 (the "ORIGINAL INDENTURE") with JPMorgan Chase Bank (formerly known as the
Chase Manhattan Bank), as Trustee, as amended and supplemented, including the
Supplemental Indenture Number 5 dated , 2003 (the "INDENTURE"), which is
referred to in the Note upon which this Guarantee is endorsed), for value
received, hereby fully and unconditionally guarantees to the Holder of the Note
upon which this Guarantee is endorsed, the due and punctual payment of the
principal and interest, if any, on such Note when and as the same shall become
due and payable, whether at the Stated Maturity, by declaration of acceleration,
or otherwise, in accordance with the terms of such Note and of the Indenture. In
case of the failure of PPL Capital Funding, Inc. (formerly called PP&L Capital
Funding, Inc.), a corporation organized under the laws of the State of Delaware
(the "CORPORATION", which term includes any successor under the Indenture),
punctually to make any such payment, the Guarantor hereby agrees to cause such
payment to be made punctually when and as the same shall become due and payable,
whether at the Stated Maturity or by declaration of acceleration, or otherwise,
and as if such payment were made by the Corporation.

      From                    , 2003 until May 18, 2004, the Guarantee will be
the Guarantor's unsecured obligation and will rank without preference or
priority equally with all of the Guarantor's existing and future unsecured and
subordinated indebtedness, subordinate and junior in right of payment to all of
the Guarantor's Senior Indebtedness.

      On and after May 18, 2004, the Guarantee will become the Guarantor's
unsecured obligation and will rank without preference or priority equally with
all of the Guarantor's existing and future unsecured and unsubordinated
indebtedness (including ranking equally with all prior unsubordinated Securities
issued pursuant to the Original Indenture), senior in right of payment to all of
the Guarantor's subordinated indebtedness.

      The Guarantor hereby agrees that its obligations hereunder shall be
absolute and unconditional irrespective of, and shall be unaffected by, any
invalidity, irregularity or unenforceability of such Note or the Indenture, any
failure to enforce the provisions of such Note or the Indenture, or any waiver,
modification or indulgence granted to the Corporation with respect thereto, by
the Holder of such Note or the Trustee or any other circumstance which may
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor; provided, however, that notwithstanding the foregoing, no such
waiver, modification or indulgence shall, without the consent of the Guarantor,
increase the principal amount of such Note, or increase the interest rate
thereon or change the Stated Maturity thereof.


                                       16
<PAGE>
      The Guarantor hereby waives the benefits of diligence, presentment, demand
for payment, any requirement that the Trustee or the Holder of such Note exhaust
any right or take any action against the Corporation or any other Person, filing
of claims with a court in the event of insolvency or bankruptcy of the
Corporation, any right to require a proceeding first against the Corporation,
protest or notice with respect to such Note or the indebtedness evidenced
thereby and all demands whatsoever, and covenants that this Guarantee will not
be discharged in respect of such Note except by complete performance of the
obligations contained in such Note and in this Guarantee. This Guarantee shall
constitute a guaranty of payment and not of collection. The Guarantor hereby
agrees that, in the event of a default in payment of principal or interest, if
any, on such Note, whether at its Stated Maturity, by declaration of
acceleration, or otherwise, legal proceedings may be instituted by the Trustee
on behalf of, or by, the Holder of such Note, subject to the terms and
conditions set forth in the Indenture, directly against the Guarantor to enforce
this Guarantee without first proceeding against the Corporation.

      The obligations of the Guarantor hereunder with respect to such Note shall
be continuing and irrevocable until the date upon which the entire principal and
interest, if any, on such Note has been, or has been deemed pursuant to the
provisions of Article Seven of the Original Indenture to have been, paid in full
or otherwise discharged.

      The Guarantor shall be subrogated to all rights of the Holder of such Note
upon which this Guarantee is endorsed against the Corporation in respect of any
amounts paid by the Guarantor on account of such Note pursuant to the provisions
of this Guarantee or the Indenture; provided, however, that the Guarantor shall
not be entitled to enforce or to receive any payments arising out of, or based
upon, such right of subrogation until the principal and interest, if any, on all
Notes issued under the Indenture shall have been paid in full.

      This Guarantee shall remain in full force and effect and continue
notwithstanding any petition filed by or against the Corporation for liquidation
or reorganization, the Corporation becoming insolvent or making an assignment
for the benefit of creditors or a receiver or trustee being appointed for all or
any significant part of the Corporation's assets, and shall, to the fullest
extent permitted by law, continue to be effective or reinstated, as the case may
be, if at any time payment of the Note upon which this Guarantee is endorsed,
is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by the Holder of such Note, whether as a
"voidable preference," "fraudulent transfer," or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned on such Note, such
Note shall, to the fullest extent permitted by law, be reinstated and deemed
paid only by such amount paid and not so rescinded, reduced, restored or
returned.

      From the Original Issue Date to, but excluding, May 18, 2004, the
following provisions shall apply:

      1. The Guarantor, for itself, its successors and assigns, covenants and
agrees, and each Holder of the Notes, by its acceptance thereof, likewise
covenants and agrees, that the payment under the Guarantee of the principal and
interest, if any, on each and all of the Notes is hereby expressly subordinated
and subject to the extent and in the manner set forth herein, in right of
payment to the prior payment in full of all Senior Indebtedness of the
Guarantor.


                                       17

<PAGE>


         2. Each Holder of the Notes, by its acceptance thereof, authorizes and
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Guarantee, and
appoints the Trustee its attorney-in-fact for any and all such purposes.

         3. In the event (a) of any insolvency or bankruptcy proceedings or any
receivership, liquidation, reorganization or other similar proceedings in
respect of the Guarantor or a substantial part of its property, or of any
proceedings for liquidation, dissolution or other winding up of the Guarantor,
whether or not involving insolvency or bankruptcy, or (b) subject to the
provisions of paragraph 6 below, that (i) a default shall have occurred with
respect to the payment of principal or interest on or other monetary amounts due
and payable on any Senior Indebtedness of the Guarantor, or (ii) there shall
have occurred a default (other than a default in the payment of principal or
interest or other monetary amounts due and payable) in respect of any Senior
Indebtedness of the Guarantor, as defined therein or in the instrument under
which the same is outstanding, permitting the holder or holders thereof to
accelerate the maturity thereof (with notice or lapse of time, or both), and
such default shall have continued beyond the period of grace, if any, in respect
thereof, and, in the cases of subclauses (i) and (ii) of this clause (b), such
default shall not have been cured or waived or shall not have ceased to exist,
or (c) that the principal and accrued interest on the Notes shall have been
declared due and payable pursuant to Section 801 of the Original Indenture and
such declaration shall not have been rescinded and annulled as provided in
Section 802 in the Original Indenture, then:

                  (1) the holders of all Senior Indebtedness of the Guarantor
         shall first be entitled to receive payment of the full amount due
         thereon, or provision shall be made for such payment in money or
         money's worth, before the Holders of any of the Notes are entitled to
         receive a payment on account of the Guarantee of the principal or
         interest on the indebtedness evidenced by the Notes, including, without
         limitation, any payments made pursuant to Articles Four and Five of the
         Original Indenture;

                  (2) any payment by, or distribution of assets of, the
         Guarantor of any kind or character, whether in cash, property or
         securities, to which any Holder or the Trustee would be entitled except
         for the provisions of this Guarantee, shall be paid or delivered by the
         Person making such payment or distribution, whether a trustee in
         bankruptcy, a receiver or liquidating trustee or otherwise, directly to
         the holders of such Senior Indebtedness of the Guarantor or their
         representative or representatives or to the trustee or trustees under
         any indenture under which any instruments evidencing any of such Senior
         Indebtedness of the Guarantor may have been issued, ratably according
         to the aggregate amounts remaining unpaid on account of such Senior
         Indebtedness of the Guarantor held or represented by each, to the
         extent necessary to make payment in full of all Senior Indebtedness of
         the Guarantor remaining unpaid after giving effect to any concurrent
         payment or distribution (or provision therefor) to the holders of such
         Senior Indebtedness of the Guarantor, before any payment or
         distribution is made to the Holders of the indebtedness evidenced by
         the Notes or to the Trustee under the Guarantee and the Indenture; and

                  (3) in the event that, notwithstanding the foregoing, any
         payment by, or distribution of assets of, the Guarantor of any kind or
         character, whether in cash, property


                                       18
<PAGE>
         or securities, in respect of principal or interest on the Notes or in
         connection with any repurchase by the Guarantor of the Notes, shall be
         received by the Trustee or any Holder before all Senior Indebtedness of
         the Guarantor is paid in full, or provision is made for such payment in
         money or money's worth, such payment or distribution in respect of
         principal or interest on the Notes or in connection with any repurchase
         by the Guarantor of the Notes shall be paid over to the holders of such
         Senior Indebtedness of the Guarantor or their representative or
         representatives or to the trustee or trustees under any indenture under
         which any instruments evidencing any such Senior Indebtedness of the
         Guarantor may have been issued, ratably as aforesaid, for application
         to the payment of all Senior Indebtedness of the Guarantor remaining
         unpaid until all such Senior Indebtedness of the Guarantor shall have
         been paid in full, after giving effect to any concurrent payment or
         distribution (or provision therefor) to the holders of such Senior
         Indebtedness of the Guarantor.

         4. Notwithstanding the foregoing, at any time after the 123rd day
following the date of deposit of cash or Eligible Obligations pursuant to
Section 701 or 702 of the Original Indenture (provided all conditions set out in
such Section shall have been satisfied), the funds so deposited and any interest
thereon will not be subject to any rights of holders of Senior Indebtedness of
the Guarantor including, without limitation, those arising under this Guarantee;
provided that no event described in clauses (e) and (f) of Section 801 of the
Original Indenture with respect to the Guarantor has occurred during such
123-day period.

         5. For purposes of this Guarantee only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Guarantor as
reorganized or readjusted, or securities of the Guarantor or any other
corporation provided for by a plan or reorganization or readjustment which are
subordinate in right of payment to all Senior Indebtedness of the Guarantor
which may at the time be outstanding to the same extent as, or to a greater
extent than, the Guarantee of the Notes are so subordinated as provided in this
Guarantee. The consolidation of the Guarantor with, or the merger of the
Guarantor into, another corporation or the liquidation or dissolution of the
Guarantor following the conveyance or transfer of its property as an entirety,
or substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article Eleven of the Original Indenture shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of paragraphs 3, 4 and 5 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article Eleven of the Original Indenture. Nothing in paragraphs 1 and 2 above
or in paragraphs 3, 4 and 5 above shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 907 in the Original Indenture.

         6. Any failure by the Guarantor to make any payment on or perform any
other obligation in respect of Senior Indebtedness of the Guarantor, other than
any indebtedness incurred by the Guarantor or assumed or guaranteed, directly or
indirectly, by the Guarantor for money borrowed (or any deferral, renewal,
extension or refunding thereof) or any other obligation as to which the
provisions of this paragraph shall have been waived by the Guarantor in the
instrument or instruments by which the Guarantor incurred, assumed, guaranteed
or otherwise created such indebtedness or obligation, shall not be deemed a
default under clause (b) of paragraph 3 above if (i) the Guarantor shall be
disputing its obligation to make such payment or perform such obligation and
(ii) either (A) no final judgment relating to such dispute shall have been
issued


                                       19
<PAGE>
against the Guarantor which is in full force and effect and is not subject to
further review, including a judgment that has become final by reason of the
expiration of the time within which a party may seek further appeal or review,
or (B) in the event that a judgment that is subject to further review or appeal
has been issued, the Guarantor shall in good faith be prosecuting an appeal or
other proceeding for review and a stay or execution shall have been obtained
pending such appeal or review.

         7. Senior Indebtedness of the Guarantor shall not be deemed to have
been paid in full unless the holders thereof shall have received cash (or
securities or other property satisfactory to such holders) in full payment of
such Senior Indebtedness of the Guarantor then outstanding. Upon the payment in
full of all Senior Indebtedness of the Guarantor, the rights of the Holders of
the Notes shall be subrogated to the rights of the holders of Senior
Indebtedness of the Guarantor to receive any further payments or distributions
of cash, property or securities of the Guarantor applicable to the holders of
the Senior Indebtedness of the Guarantor until all amounts owing on the Notes
shall be paid in full; and such payments or distributions of cash, property or
securities received by the Holders of the Notes, by reason of such subrogation,
which otherwise would be paid or distributed to the holders of such Senior
Indebtedness of the Guarantor shall, as between the Guarantor, its creditors
other than the holders of Senior Indebtedness of the Guarantor, and the Holders,
be deemed to be a payment by the Guarantor to or on account of Senior
Indebtedness of the Guarantor, it being understood that the provisions of this
Guarantee are and are intended solely for the purpose of defining the relative
rights of the Holders, on the one hand, and the holders of the Senior
Indebtedness of the Guarantor, on the other hand.

         8. Nothing contained in this Guarantee or elsewhere in the Indenture or
in the Guarantee is intended to or shall impair, as among the Guarantor, its
creditors other than the holders of Senior Indebtedness of the Guarantor and the
Holders, the obligation of the Guarantor, which is absolute and unconditional,
to pay to the Holders, pursuant to the terms of the Guarantee, the principal and
interest on the Notes as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders and creditors of the Guarantor other than the holders of
Senior Indebtedness of the Guarantor, nor shall anything herein or therein
prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under the Indenture, subject to the
rights, if any, under this Guarantee of the holders of Senior Indebtedness of
the Guarantor in respect of cash, property or securities of the Guarantor
received upon the exercise of any such remedy.

         9. Upon any payment or distribution of assets or securities of the
Guarantor referred to in this Guarantee, the Trustee and the Holders shall be
entitled to rely upon any order or decree of a court of competent jurisdiction
in which such dissolution, winding up, liquidation or reorganization proceedings
are pending for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Indebtedness of the Guarantor
and other indebtedness of the Guarantor, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon, and all other facts pertinent
thereto or to this Guarantee.

         10. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Guarantor (or a representative of such holder or a trustee
under any indenture under which any instruments evidencing any such Senior
Indebtedness of the Guarantor may have been issued) to establish


                                       20
<PAGE>
that such notice has been given by a holder of such Senior Indebtedness of the
Guarantor or such representative or trustee on behalf of such holder. In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness of the Guarantor to participate in any payment or distribution
pursuant to this Guarantee, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness of the Guarantor held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the right of such Person under this Guarantee, and, if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment or distribution.

         11. Upon the maturity of the principal of any Senior Indebtedness of
the Guarantor by lapse of time, acceleration or otherwise, all matured principal
of Senior Indebtedness of the Guarantor and interest, if any, thereon shall
first be paid in full before any payment of principal or interest, if any, is
made upon the Notes under the Guarantee.

         12. The Trustee shall be entitled to all rights set forth in this
Guarantee with respect to any Senior Indebtedness of the Guarantor at any time
held by it, to the same extent as any other holder of Senior Indebtedness of the
Guarantor. Nothing in this Guarantee shall deprive the Trustee of any of its
rights as such holder.

         13. Notwithstanding the provisions of this Guarantee or any other
provision of the Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
moneys to or by the Trustee unless and until the Trustee shall have received
written notice thereof from the Guarantor, from a Holder or from a holder of any
Senior Indebtedness of the Guarantor or from any representative or
representatives of such holder or any trustee or trustees under any indenture
under which any instruments evidencing any such Senior Indebtedness of the
Guarantor may have been issued and, prior to the receipt of any such written
notice, the Trustee shall be entitled, subject to Section 901 of the Original
Indenture, in all respects to assume that no such facts exist; provided,
however, that, if prior to the fifth Business Day preceding the date upon which
by the terms hereof any such moneys may become payable for any purpose, or in
the event of the execution of an instrument pursuant to Section 701 or 702 of
the Original Indenture acknowledging that Notes or portions thereof are deemed
to have been paid for all purposes of the Indenture, acknowledging that the
entire indebtedness of the Corporation in respect thereof has been satisfied and
discharged or acknowledging satisfaction and discharge of the Indenture, then if
prior to the second Business Day preceding the date of such execution, the
Trustee shall not have received with respect to such moneys the notice provided
for in this Section, then, anything herein contained to the contrary
notwithstanding, the Trustee may, in its discretion, receive such moneys and/or
apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary, which may be received by it on or after
such date; provided, however, that no such application shall affect the
obligations under this Guarantee of the Persons receiving such moneys from the
Trustee.

         14. The holders of Senior Indebtedness of the Guarantor may, without
affecting in any manner the subordination of the payment of the principal and
interest, if any, on the Notes under the Guarantee, at any time or from time to
time and in their absolute discretion, agree with the


                                       21
<PAGE>
Guarantor to change the manner, place or terms of payment, change or extend the
time of payment of, or renew or alter, any Senior Indebtedness of the Guarantor,
or amend or supplement any instrument pursuant to which any Senior Indebtedness
of the Guarantor is issued, or exercise or refrain from exercising any other of
their rights under the Senior Indebtedness of the Guarantor including, without
limitation, the waiver of default thereunder, all without notice to or assent
from the Holders or the Trustee.

         15. With respect to the holders of Senior Indebtedness of the
Guarantor, the Trustee undertakes to perform or to observe only such of its
covenants and objectives as are specifically set forth in the Indenture, and no
implied covenants or obligations with respect to the holders of Senior
Indebtedness of the Guarantor shall be read into the Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Guarantor, and shall not be liable to any
such holders if it shall mistakenly pay over or deliver to the Holders or the
Guarantor or any other Person, money or assets to which any holders of Senior
Indebtedness of the Guarantor shall be entitled by virtue of this Guarantee or
otherwise.

         16. In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Guarantor and be then acting hereunder, the term
"Trustee" as used in this Guarantee shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Guarantee in addition to or in place of the Trustee;
provided, however, that paragraphs 12, 13 and 15 above shall not apply to the
Guarantor if it acts as Paying Agent.

         17. No right of any present or future holder of Senior Indebtedness of
the Guarantor to enforce the subordination herein shall at any time or in any
way be prejudiced or impaired by any act or failure to act on the part of the
Guarantor or by any noncompliance by the Guarantor with the terms, provisions
and covenants of the Indenture, regardless of any knowledge thereof any such
holder may have or be otherwise charged with.

         18. Notwithstanding anything contained herein to the contrary, other
than as provided in the immediately succeeding paragraph, all the provisions of
the Indenture shall be subject to the provisions of this Guarantee, so far as
the same may be applicable thereto.

         19. Notwithstanding anything contained herein to the contrary, the
provisions of this Guarantee shall be of no further effect, and the Guarantee
shall no longer be subordinated in right of payment to the prior payment of
Senior Indebtedness of the Guarantor, if the Guarantor shall have delivered to
the Trustee a notice to such effect. Any such notice delivered by the Guarantor
shall not be deemed to be a supplemental indenture for purposes of Article
Twelve of the Original Indenture.

         This Guarantee is not superior in right of payment to, and ranks pari
passu with, the guarantees of the securities issued under the Subordinated
Indenture.


                                       22
<PAGE>
         This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication of the Note upon which this Guarantee is
endorsed shall have been manually executed by or on behalf of the Trustee under
the Indenture.

         All terms used in this Guarantee which are defined in the Indenture
shall have the meanings assigned to them in such Indenture.

         This Guarantee shall be governed by, and construed in accordance with,
the laws of the State of New York.

         IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be
executed as of the date first written above.

                                            PPL CORPORATION



                                            By:______________________________


                                              [END OF FORM]

                                  ARTICLE FOUR

                                   REMARKETING

         Section 4.01 Remarketing; Payment of Purchase Price

         (a) The Corporation will notify, not later than seven nor more than 15
calendar days prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, Holders of Notes of the remarketing to take place on
the fifth Business Day immediately preceding the Purchase Contract Settlement
Date, and, if necessary, on the fourth Business Day immediately preceding the
Purchase Contract Settlement Date and, if necessary, on the third Business Day
immediately preceding the Purchase Contract Settlement Date (and, if such Notes
are held in global form by DTC, the Corporation will cause DTC to notify its
participants).

         (b) The Notes of holders of New PEPS Unit who have not notified the
Purchase Contract Agent of their intention to effect a Cash Settlement or have
failed to pay the Purchase Price to the Securities Intermediary will be sold by
the Remarketing Agent (the "REMARKETING") on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, and, if necessary, on the
fourth Business Day immediately preceding the Purchase Contract Settlement Date
and, if necessary, on the third Business Day immediately preceding the Purchase
Contract Settlement Date. The Purchase Contract Agent shall notify, by noon, New
York City time, on the sixth Business Day immediately preceding the Purchase
Contract Settlement Date, the Remarketing Agent, the Collateral Agent, the
Trustee and the Guarantor of the aggregate principal amount of Notes that are
part of New PEPS Units to be remarketed. Concurrently, the Collateral Agent,
pursuant to the terms of the Pledge Agreement, will present for remarketing



                                       23
<PAGE>
such Notes to the Remarketing Agent. Upon receipt of such notice from the
Purchase Contract Agent and such Notes from the Collateral Agent, the
Remarketing Agent will use its reasonable efforts to remarket the Remarketed
Notes, at a price of approximately 100.5% (but not less than 100%) of the
aggregate principal amount of such Remarketed Notes, on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date and, if the
remarketing on such date fails, on the fourth Business Day immediately preceding
the Purchase Contract Settlement Date and, if the remarketing on such date
fails, on the third Business Day immediately preceding the Purchase Contract
Settlement Date. If the Remarketing Agent is able to remarket the Remarketed
Notes at a price equal to or greater than 100% of the aggregate principal amount
of the Remarketed Notes (a "SUCCESSFUL REMARKETING"), the Remarketing Agent will
remit the entire amount of the proceeds derived from the Successful Remarketing
of the Notes that were components of New PEPS Units to the Collateral Agent;
provided, however, that the Remarketing Agent may deduct as the remarketing fee
("REMARKETING FEE"), an amount not exceeding 25 basis points (0.25%) of the
aggregate principal amount of the Remarketed Notes from any amount of the
proceeds of a Successful Remarketing in excess of the aggregate principal amount
of the Remarketed Notes. The portion of the proceeds equal to the aggregate
principal amount of the Remarketed Notes that were components of New PEPS Units
will automatically be applied by the Collateral Agent, in accordance with the
Pledge Agreement, to satisfy in full such New PEPS Units Holders' obligations to
pay the Purchase Price for the common stock under the related Purchase Contracts
on the Purchase Contract Settlement Date. Any proceeds in excess of those
required to pay the Purchase Price and the Remarketing Fee will be remitted to
the Purchase Contract Agent for payment to the holders of the related New PEPS
Units. Holders of the New PEPS Units whose Notes are so remarketed will not
otherwise be responsible for the payment of any Remarketing Fee in connection
therewith. Immediately following a Successful Remarketing, the Remarketing Agent
shall notify the Corporation, the Guarantor, the Calculation Agent and the
Trustee of the initial Reset Rate and the Spread. If, (i) in spite of using its
reasonable efforts, the Remarketing Agent cannot remarket the Remarketed Notes
(other than to the Guarantor), of such holders of New PEPS Units at a price not
less than 100% of the aggregate principal amount of the Remarketed Notes on or
before the third Business Day immediately preceding the Purchase Contract
Settlement Date or (ii) the remarketing has not occurred because a condition
precedent to the remarketing has not been fulfilled, the remarketing will be
deemed to have failed (a "FAILED FINAL REMARKETING") and in accordance with the
terms of the Pledge Agreement the Collateral Agent for the benefit of the
Guarantor will exercise its rights as a secured party with respect to such Notes
that are components of New PEPS Units including those actions specified in
paragraph (d) below.

         (c) Pursuant to the Remarketing Agreement and subject to the terms of
the Supplemental Remarketing Agreement, on or prior to the ninth Business Day
immediately preceding the Purchase Contract Settlement Date, Holders of Notes
that are not pledged pursuant to the Pledge Agreement ("SEPARATE NOTES") may
elect to have their Separate Notes remarketed by delivering their Separate
Notes, together with a notice of such election, substantially in the form of
Exhibit F to the Pledge Agreement, to the Custodial Agent. The Custodial Agent
shall hold such Separate Notes in an account separate from the Collateral
Account. A Holder of Separate Notes electing to have its Separate Notes
remarketed will also have the right to withdraw such election by written notice
to the Custodial Agent, substantially in the form of Exhibit G to the Pledge
Agreement, on or prior to the seventh Business Day immediately preceding the
Purchase Contract Settlement Date, upon receipt of which notice the Custodial
Agent shall return such


                                       24
<PAGE>
Separate Notes to such Holder. On the sixth Business Day immediately preceding
the Purchase Contract Settlement Date, the Custodial Agent shall notify the
Remarketing Agent and the Corporation of the aggregate principal amount of the
Separate Notes to be remarketed and will deliver to the Remarketing Agent for
remarketing all Separate Notes delivered to the Custodial Agent pursuant to
Section 5.7(c) of the Pledge Agreement and not withdrawn pursuant to the terms
in Section 5.7(c) of the Pledge Agreement prior to such date. After deducting
the Remarketing Fee to the extent permitted under the terms of the Remarketing
Agreement, the Remarketing Agent will remit to the Custodial Agent the remaining
portion of the proceeds derived from a Successful Remarketing of the Separate
Notes for the benefit of such Holders. In the event of a Failed Final
Remarketing, the Remarketing Agent will promptly return such Separate Notes to
the Custodial Agent for redelivery to such Holders.

     (d) With respect to Notes that are components of New PEPS Units and which
are subject to a Failed Final Remarketing, the Collateral Agent for the benefit
of the Corporation reserves all of its rights as a secured party with respect
thereto and, subject to applicable law, may, among other things, (i) retain the
Notes or (ii) sell the Notes in one or more public or private sales, each in
full satisfaction of the holders of New PEPS Units obligation's under the
Purchase Contracts.

     (e) If in connection with the Remarketing, it shall not be advisable, in
the view of counsel (which need not be an opinion) for each of the Remarketing
Agent and the Guarantor, under applicable law, regulations or interpretations in
effect as of the fifth, the fourth or the third Business Day immediately
preceding the Purchase Contract Settlement Date, as the case may be, to register
the offer and sale by the Remarketing Agent of the Notes under the Securities
Act of 1933 as otherwise contemplated by Section 5 of the Remarketing Agreement
or to deliver a Prospectus in connection with the Remarketing, the Guarantor
will:

                  (i) use its reasonable efforts to take, or cause to be taken,
         all action and to do, or cause to be done, all things necessary, proper
         and advisable to permit and effectuate the offer and sale of the Notes
         in connection with the Remarketing hereunder without registration under
         the Securities Act of 1933 pursuant to an exemption therefrom, if
         available, including the exemption afforded by Rule 144A promulgated
         under the Securities Act of 1933 by the Securities and Exchange
         Commission, and

                  (ii) if requested by the Remarketing Agent, furnish a current
         preliminary remarketing memorandum and a current final remarketing
         memorandum (in such quantities as the Remarketing Agent may reasonably
         request) to be used by the Remarketing Agent in the Remarketing
         hereunder by a date that is not later than fifteen Business Days prior
         to the Purchase Contract Settlement Date (or such earlier date as the
         Remarketing Agent may reasonably request). The Guarantor shall pay all
         expenses relating thereto.

         Section 4.02 Failed Final Remarketing.

         (a) If a Failed Final Remarketing occurs Holders of Notes that are not
part of a New PEPS Unit will retain possession of their Notes.


                                       25
<PAGE>
         (b) Holders of Notes that are not pledged to the Corporation and remain
outstanding after a Failed Final Remarketing will have the right to put their
Notes in whole or in part to the Corporation on a date to be determined by the
Corporation in its sole discretion that is no earlier than 30 days and no later
than 60 days from May 18, 2004 (the "PUT EXERCISE DATE"), for an amount to be
paid on the Put Exercise Date equal to the principal amount of their Notes being
put, plus accrued and unpaid interest, by delivering to the Trustee, prior to
5:00 p.m., New York City time, on or prior to the second Business Day before the
Put Exercise Date, a Put Notice substantially in the form contained in the form
of Note attached hereto as Exhibit A.

         (c) In addition to the events listed as Events of Default in Section
801 of the Original Indenture, it shall be an additional Event of Default with
respect to the Notes, if the Corporation defaults in the payment of an amount
equal to the principal amount of, plus accrued and unpaid interest on, any Note
following the exercise by the Holder of such Note of the put right established
pursuant to this Section.

         (d) If there is no Successful Remarketing on May 11, 2004, the
Guarantor will cause a notice of the failure of Remarketing of the Notes to be
published before 9:00 a.m., New York City time, on May 12, 2004 and another
Remarketing will be attempted on that day. If there has not been a Successful
Remarketing on May 12, 2004, the Guarantor will cause a notice of the failure of
Remarketing of the Notes to be published before 9:00 a.m., New York City time,
on May 13, 2004 and another Remarketing will be attempted on that day. If there
has not been a Successful Remarketing on May 13, 2004, the Guarantor will cause
a notice of the failure of Remarketing of the Notes to be published before 9:00
a.m., New York City time, on May 14, 2004 and, within 10 days of May 18, 2004,
will mail a notice to each Holder of Notes eligible to exercise the put right,
with a copy to the Trustee, stating the Put Exercise Date and the date by which
a Holder must provide the Trustee with notice of its election to exercise the
put right. Notices to be published under this paragraph will be validly
published by making a timely release to any appropriate news agency, including
Bloomberg Business News and the Dow Jones News Service, or by publication in a
daily newspaper in the English language of general circulation in The City of
New York, which is expected to be The Wall Street Journal.

         (e) The Corporation will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Indenture. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.02, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Indenture by virtue of any
conflict.

                                  ARTICLE FIVE

                            MISCELLANEOUS PROVISIONS

         Section 5.01 Recitals by Corporation


                                       26
<PAGE>
         The recitals in this Supplemental Indenture are made by the Corporation
and the Guarantor only and not by the Trustee, and all of the provisions
contained in the Original Indenture in respect of the rights, privileges,
immunities, powers and duties of the Trustee shall be applicable in respect of
the Notes and this Supplemental Indenture as fully and with like effect as if
set forth herein full and the Trustee makes no representations as to the
validity or sufficiency of this Supplemental Indenture.

         Section 5.02 Ratification and Incorporation of Original Indenture

         As supplemented hereby, the Original Indenture is in all respects
ratified and confirmed, and the Original Indenture and this Supplemental
Indenture shall be read, taken and construed as one and the same instrument.

         Section 5.03 Executed in Counterparts

         This Supplemental Indenture may be executed in several counterparts,
each of which shall be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument.

                                  ARTICLE SIX

                              TAX TREATMENT; ERISA

         Section 6.01 Tax Agreements

         The Corporation agrees, and by purchasing a beneficial ownership
interest in the Notes each Holder of the Notes will be deemed to have agreed,
for United States federal income tax purposes to treat the acquisition of a New
PEPS Unit as the acquisition of a unit consisting of a Purchase Contract and a
beneficial ownership interest in a Note issued by the Corporation and to treat
the Notes as indebtedness.

         Section 6.02 ERISA Agreements

         Each purchaser and any subsequent transferee of the New PEPS Units (or
any component security of such units), will be deemed to have represented and
warranted on each day from and including the date of its purchase of the New
PEPS Units (or any component security of such units) through and including the
date of the satisfaction of the obligation under the new purchase contract
and/or the disposition of any such New PEPS Unit (or any component security of
such unit) either (i) that no portion of the assets used by such purchaser or
subsequent transferee to acquire the New PEPS Units (or any component security
of such units) constitute the assets of any Plan or (ii) that the acquisition,
holding and the disposition of any New PEPS Unit (and any component security of
such unit) by such purchaser or subsequent transferee does not and will not
constitute a non-exempt prohibited transaction under ERISA or Section 4975 of
the Code or a violation of any applicable Similar Laws.


                                       27
<PAGE>
         IN WITNESS WHEREOF, each party hereto has caused this instrument to be
signed in its name and behalf by its duly authorized officers, all as of the day
and year first above written.

                                                PPL CAPITAL FUNDING, INC.


                                                By:
                                                   -----------------------------
                                                   Name:
Attest:                                            Title:

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


                                                PPL CORPORATION


                                                By:
                                                   -----------------------------
                                                   Name:
Attest:                                            Title:

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


                                                JPMORGAN CHASE BANK, as Trustee


                                                By:
                                                   -----------------------------
                                                   Name:
Attest:                                            Title:

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


                                       28
<PAGE>
                                    EXHIBIT A

                             (FORM OF FACE OF NOTE)

         If the Note is to be a Global Note, insert: THIS CERTIFICATE IS A
GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), OR A NOMINEE OF THE
DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF
THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REQUESTED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REGISTERED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

CUSIP No.

$

No.

                            PPL FUNDING CAPITAL, INC.
                             NOTES DUE MAY 18, 2006

         PPL Capital Funding, Inc., a Delaware corporation (the "CORPORATION,"
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received, hereby promises to pay to , or
registered assigns, the principal sum of DOLLARS ($ ), [or such other principal
amount as shall be set forth in the Schedule of Increases or Decreases attached
hereto]* on May 18, 2006 (such date is hereinafter referred to as the "STATED
MATURITY"). This Note will bear interest (i) at the rate of


-------------------
*  Insert in Global Notes and Pledged Notes


                                      A-1
<PAGE>
7.29% per year (the "COUPON RATE") from November 18, 2003 through and including
the day immediately preceding May 18, 2004 and (ii)(A) in the case of a
Successful Remarketing, at the Reset Rate on and after the Purchase Contract
Settlement Date and (B) in the case of a Failed Final Remarketing, at the Coupon
Rate on and after the Purchase Contract Settlement Date, until the principal
thereof is paid or duly made available for payment. Interest will be payable,
initially, quarterly in arrears on February 18, 2004 and May 18, 2004 (each, an
"INTEREST PAYMENT DATE") to the Person in whose name this Note, or any
Predecessor Security, is registered at the close of business on the Regular
Record Date for such interest installment; provided, however, that following the
Purchase Contract Settlement Date, interest will be payable following a
Successful Remarketing, quarterly in arrears on February 18, May 18, August 18
and November 18 of each year, or if there is no Successful Remarketing,
semi-annually in arrears on May 18 and November 18 of each year commencing
November 18, 2004, and such dates shall then be the "INTEREST PAYMENT DATES."

         The amount of interest payable on this Note for any period will be
computed (1) for any full quarterly or semi-annual period, as applicable, on the
basis of a 360-day year of twelve 30-day months and (2) for any period shorter
than a full quarterly or semi-annual period, as applicable, on the basis of a
30-day month and, for any period less than a month, on the basis of the actual
number of days elapsed per 30-day month; provided that, following a Successful
Remarketing, the amount of interest for each day the Notes are outstanding will
be calculated by dividing the interest rate in effect for that day by 360 and
multiplying the result by the principal amount of the notes. In the event that
any date on which interest is payable on the Notes is not a Business Day, then
payment of the interest payable on that date will be made on the next day that
is a Business Day (and without any interest or other payment in respect of any
delay); provided, that after a Successful Remarketing, if an Interest Payment
Date (other than at Stated Maturity) would fall on a day that is not a Business
Day, such Interest Payment Date shall be the following day that is a Business
Day, except that if such next day is in a different month, then that Interest
Payment Date will be the immediately preceding day that is a Business Day;
provided, further, that if the Stated Maturity shall fall on a day that is not a
Business Day, the interest due on such day shall be paid on the following day
that is a Business Day (and without any interest or other payment in respect of
such delay). The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest installment which shall be, (1) with respect to any Interest
Payment Date for the Notes when represented by a Global Note, the Business Day
immediately preceding such Interest Payment Date and (2) with respect to any
Interest Payment Date for the Notes when held in certificated form, the 15th day
(whether or not a Business Day) prior to such Interest Payment Date. Any such
interest installment not punctually paid or duly provided for on any Interest
Payment Date shall forthwith cease to be payable to the Holders at the close of
business on such Regular Record Date and may be paid to the Person in whose name
this Note is registered at the close of business on a Special Record Date to be
fixed by the Trustee for the payment of such Defaulted Interest, notice whereof
shall be given to the Holders of the Notes not less than 10 days prior to such
Special Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange, if any, on which
the Notes shall be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture. The principal and the
interest on this Note shall be payable at the office or agency of the
Corporation maintained for


                                      A-2
<PAGE>
that purpose in the Borough of Manhattan, The City of New York, in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Corporation (i) by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register or (ii) by wire transfer at such place and to such account at
a banking institution in the United States as may be designated in writing to
the Trustee at least sixteen (16) days prior to the date for payment by the
Person entitled thereto.

         The interest rate on the Notes, as determined by the Calculation Agent
on the applicable Interest Determination Date, will be reset in the case of a
Successful Remarketing, at the Reset Rate on and after the Purchase Contract
Settlement Date. If a Successful Remarketing occurs, the Reset Rate will be
equal to 3-month LIBOR plus a Spread; provided, however, that the Reset Rate
shall not exceed the maximum rate permitted by applicable law. The Reset Rate
shall then be reset quarterly on February 18, May 18, August 18 and November 18
of each year, commencing August 18, 2004 (each, an "Interest Reset Date").

         The interest rate on the Notes in effect for the period from and
including May 18, 2004 to and excluding August 18, 2004 shall be determined by
the Calculation Agent on the applicable Interest Determination Date. If any
Interest Reset Date would otherwise be a day that is not a Business Day, such
Interest Reset Date shall be postponed to the next succeeding day that is a
Business Day. After a Successful Remarketing, the interest rate in effect after
May 18, 2004 or on any Interest Reset Date will be the applicable Reset Rate as
reset on May 18, 2004 or on such Interest Reset Date, as the case may be, and
the interest rate applicable to any other day is the interest rate in effect on
May 18, 2004 or the immediately preceding Interest Reset Date, as the case may
be.

         JPMorgan Chase Bank, or any successor Calculation Agent appointed by
the Corporation, will be the Calculation Agent; provided, however, that for the
initial interest rate reset on May 18, 2004, the Calculation Agent shall be the
Remarketing Agent. Following a Successful Remarketing and upon request of any
Holder, the Calculation Agent will disclose to such Holder the Reset Rate then
in effect and, if determined, the Reset Rate that will become effective as a
result of a determination made for the next succeeding Interest Reset Date with
respect to such Note. The Calculation Agent shall determine each applicable
Reset Rate in accordance with the following provisions. The Calculation Agent's
determination of any interest rate will be conclusive and binding in the absence
of any manifest error.

          "3-month LIBOR" means the rate determined in accordance with the
following provisions:

                  (a) the rate for deposits in United States dollars having a
         maturity of three months, commencing on the applicable Interest Reset
         Date, that appears on the Designated LIBOR Page as of 11:00 A.M.,
         London time, on the preceding Interest Determination Date. If no such
         rate so appears, 3-month LIBOR on such Interest Determination Date will
         be determined in accordance with the provisions described in clause (b)
         below.


                                      A-3
<PAGE>
                  (b) With respect to an Interest Determination Date on which no
         such rate appears, on the Designated LIBOR Page as specified in clause
         (a) above, the Calculation Agent will request the principal London
         offices of each of four major reference banks (which may include
         affiliates of the Remarketing Agent, the Trustee or the Calculation
         Agent) in the London interbank market, as selected by the Calculation
         Agent, to provide the Calculation Agent with its offered quotation for
         deposits in United States dollars for the period of three months,
         commencing on the applicable Interest Reset Date, to prime banks in the
         London interbank market at approximately 11:00 A.M., London time, on
         such Interest Determination Date and in a principal amount that is
         representative for a single transaction in United States dollars in
         such market at such time. If at least two such quotations are so
         provided, then 3-month LIBOR on such Interest Determination Date will
         be the arithmetic mean of such quotations. If fewer than two such
         quotations are so provided, then 3-month LIBOR on such Interest
         Determination Date will be the arithmetic mean of the rates quoted at
         approximately 11:00 A.M., New York City time, on such Interest
         Determination Date by three major banks (which may include affiliates
         of the Remarketing Agent, the Trustee or the Calculation Agent) in The
         City of New York selected by the Calculation Agent for loans in United
         States dollars to leading European banks, having a three month maturity
         and in a principal amount that is representative for a single
         transaction in United States dollars in such market at such time;
         provided, however, that if the banks so selected by the Calculation
         Agent are not quoting as mentioned in this sentence, 3-month LIBOR
         determined as of such Interest Determination Date will be 3-month LIBOR
         in effect on such Interest Determination Date, or if no such 3-month
         LIBOR is then in effect, the interest rate on the Notes will be the
         rate in effect on such Interest Determination Date.

         "Designated LIBOR Page" means the display designated as "Page 3750" on
Moneyline Telerate, Inc., or such other page as may replace Page 3750 on such
service or any successor service or services as may be nominated by the British
Bankers' Association for the purpose of displaying the London interbank rates of
major banks for United States dollars.

         "Interest Determination Date" means the second London Business Day
immediately preceding the applicable Interest Reset Date; provided, however,
that for the initial interest rate reset on May 18, 2004, the Interest
Determination Date means the second London Business Day immediately preceding
each date of Remarketing if there is a Successful Remarketing on such date.

         "London Business Day" means a day on which dealings in deposits in
United States dollars are transacted in the London interbank market.

         "Spread" means the number of basis points (one one-hundredth of a
percentage point) to be added to 3-month LIBOR that the Remarketing Agent
determines is required for a Successful Remarketing.

         From the          , 2003 until May 18, 2004, the Notes will be the
Corporation's direct, unsecured obligations and will rank without preference or
priority among themselves and equally with all of the Corporation's existing and
future unsecured and subordinated



                                      A-4
<PAGE>
indebtedness, subordinate and junior in right of payment to all of the
Corporation's Senior Indebtedness.

         On and after May 18, 2004, the Notes will become the Corporation's
direct, unsecured obligations and will rank without preference or priority among
themselves and equally with all of the Corporation's existing and future
unsecured and unsubordinated indebtedness (including equal to all prior
unsubordinated Securities issued pursuant to the Indenture), senior in right of
payment to all of the Corporation's subordinated indebtedness.

         If a Successful Remarketing of the Notes has not occurred prior to or
on the third Business Day immediately preceding the Purchase Contract Settlement
Date, Holders of Notes that remain outstanding will have the right to put their
Notes to the Corporation for an amount equal to the principal amount of their
Notes, plus accrued and unpaid interest, on a date which is no earlier than 30
days and no later than 60 days from May 18, 2004 (the "PUT EXERCISE DATE"), by
notifying the Trustee on or prior to the second Business Day before the Put
Exercise Date.

         In addition to the events listed as Events of Default in Section 801 of
the Indenture, it shall be an additional Event of Default with respect to the
Notes, if the Corporation defaults in the payment of an amount equal to the
principal amount of, plus accrued and unpaid interest on, any Note following the
exercise by the Holder of such Note of the put right referred to in the
preceding paragraph.

         REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

         Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

         IN WITNESS WHEREOF, the Corporation has caused this instrument to be
duly executed under its corporate seal.

Dated:
                                            PPL CAPITAL FUNDING, INC.


                                            By:
                                               ---------------------------------

Attest:

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


                                      A-5
<PAGE>
                         CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

                                               JPMORGAN CHASE BANK, as Trustee


                                               By:
                                                  ------------------------------
                                                    Authorized Officer
Dated:


                                      A-6
<PAGE>
                            (FORM OF REVERSE OF NOTE)

         This Note is one of a duly authorized issue of Securities of the
Corporation (the "SECURITIES") issued and issuable in one or more series under
an Indenture, dated as of November 1, 1997 (such Indenture as originally
executed and delivered and as supplemented and amended from time to time
thereafter including by Supplemental Indenture Number 5 dated as of , 2003,
being herein called the "INDENTURE"), among the Corporation (formerly known as
PP&L Capital Funding, Inc.), PPL Corporation (formerly known as PP&L Ressources,
Inc.), as Guarantor (herein called the "GUARANTOR", which term includes any
successor under the Indenture), and JPMorgan Chase Bank (formerly known as The
Chase Manhattan Bank), as Trustee (herein called the "TRUSTEE", which term
includes any successor under the Indenture). This Security is one of the series
designated on the face hereof as Notes due May 18, 2006 (the "NOTES"). Such
series is limited in aggregate principal amount up to . Capitalized terms used
herein for which no definition is provided herein shall have the meanings set
forth in the Indenture.

         The Notes are not subject to a sinking fund provision and are not
redeemable prior to Stated Maturity.

         The Indenture permits, with certain exceptions as therein provided, the
Trustee to enter into one or more supplemental indentures for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, the Indenture with the consent of the Holders of not less than a
majority in aggregate principal amount of the Securities of all series then
Outstanding under the Indenture, considered as one class; provided, however,
that if there shall be Securities of more than one series Outstanding under the
Indenture and if a proposed supplemental indenture shall directly affect the
rights of the Holders of Securities of one or more, but less than all, of such
series, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all series so directly
affected, considered as one class, shall be required; and provided, further,
that if the Securities of any series shall have been issued in more than one
Tranche and if the proposed supplemental indenture shall directly affect the
rights of the Holders of Securities of one or more, but less than all, of such
Tranches, then the consent only of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of all Tranches so directly
affected, considered as one class, shall be required; and provided, further,
that the Indenture permits the Trustee to enter into one or more supplemental
indentures for limited purposes without the consent of any Holders of
Securities. The Indenture also contains provisions permitting the Holders of a
majority in principal amount of the Securities then Outstanding, on behalf of
the Holders of all Securities, to waive compliance by the Corporation with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange therefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Note.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Corporation, which
is absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency, herein prescribed.


                                      A-7
<PAGE>
         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Corporation for such purpose, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Corporation and the
Security Registrar and duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of this series,
of authorized denominations and of like tenor and for the same aggregate
principal amount, will be issued to the designated transferee or transferees. No
service charge shall be made for any such registration of transfer or exchange,
but the Corporation may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.

         As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes, the Holders of not less than 25% in principal amount of the Notes at the
time Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have received from the
Holders of a majority in principal amount of Notes at the time Outstanding a
direction inconsistent with such request and shall have failed to institute any
such proceeding for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Note for the enforcement of any payment of principal hereof or interest
hereon on or after the respective due dates expressed herein.

         The provisions for defeasance and covenant defeasance in the Indenture
shall not apply to the Notes.

         Prior to due presentment of this Note for registration of transfer, the
Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Note be overdue, and neither the Corporation,
the Trustee nor any such agent shall be affected by notice to the contrary.

         No recourse shall be had for the payment of the principal or the
interest on this Note, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture, against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Corporation or the Guarantor, as the case may be, subject to the provisions of
the Guarantee of the Notes, or of any successor corporations, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.

         The Notes shall be issuable in denominations of $1,000 and any integral
multiples thereof except that an interest in a Note held as part of one New PEPS
Unit represents a 1/40, or 2.5%, undivided beneficial ownership interest in a
$1,000 principal amount of a Note; provided, however, that upon release by the
Collateral Agent of Notes underlying the beneficial ownership


                                      A-8
<PAGE>
interest in the Notes pledged to secure the New PEPS Units holders' obligations
under the related Purchase Contracts (other than any release of the Notes in
connection with the creation of Treasury Units, an early settlement with
separate cash, an early settlement upon a cash merger, a notice to settle with
cash or a remarketing, as described in Sections 3.13, 5.08, 5.05(b)(2), 5.03(b)
and 5.03(c), respectively, of the Purchase Contract Agreement) the Notes will be
issuable in denominations of $25 principal amount and integral multiples
thereof. As provided in the Indenture and subject to the limitations therein set
forth, Notes are exchangeable for a like aggregate principal amount of Notes of
a different authorized denomination, as requested by the Holder surrendering the
same upon surrender of the Note or Notes to be exchanged at the office or agency
of the Corporation.

                  The Corporation agrees, and by purchasing a beneficial
ownership interest in the Notes each Holder of the Notes will be deemed to (i)
have agreed, for United States federal income tax purposes to treat the
acquisition of a New PEPS Unit as the acquisition of a unit consisting of a
Purchase Contract and a beneficial ownership interest in a Note issued by the
Corporation and to treat the Notes as indebtedness and (ii) to have represented
and warranted on each day from and including the date of its purchase of the New
PEPS Units (or any component security of such units) through and including the
date of the satisfaction of the obligation under the new purchase contract
and/or the disposition of any such New PEPS Unit (or any component security of
such unit) either (a) that no portion of the assets used by such purchaser or
subsequent transferee to acquire the New PEPS Units (or any component security
of such units) constitute the assets of any employee benefit plan that is
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), plan, individual retirement account or other arrangement that
is subject to Section 4975 of the Internal Revenue Code of 1986 as amended (the
"CODE") or provisions under any federal, state, local, non-U.S. or other laws or
regulations that are similar to such provisions of ERISA or the Code
(collectively, "SIMILAR LAWS"), or any entity whose underlying assets are
considered to include "plan assets" of any such plan, account or arrangement or
(b) that the acquisition, holding and the disposition of any New PEPS Unit (and
any component security of such unit) by such purchaser or subsequent transferee
does not and will not constitute a non-exempt prohibited transaction under ERISA
or Section 4975 of the Code or a violation of any applicable Similar Laws.

         This Note shall be governed by, and construed in accordance with, the
laws of the State of New York.

                           [Insert Form of Guarantee]


                                      A-9
<PAGE>
                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription on the fact
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM -- as tenants in common


UNIF GIFT MIN ACT --            Custodian
                     ----------           ----------
                       (Cust)               (Minor)


TEN ENT -- as tenants by the entireties

Under Uniform Gifts to Minors Act
                                  -----------
                                    (State)

JT TEN -- as joint tenants with rights of
              survivorship and not as tenants in
              common

Additional abbreviations may also be used though not on the above list.


--------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto_________
_________ (please insert Social Security or other identifying number of
assignee)



--------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF
ASSIGNEE


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


--------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing


--------------------------------------------------------------------------------
Agent to transfer said Security on the books of the Corporation, with full power
of substitution in the premises.

Dated:
       ------------------------           --------------------------------------

                                          --------------------------------------
                                          NOTICE: The signature to this
                                          assignment must correspond with
                                          the name as written upon the
                                          face of the within instrument
                                          in every particular without
                                          alteration or enlargement, or
                                          any change whatever.


                                          Signature Guarantee:
                                                               -----------------



                                      A-10
<PAGE>
                               SIGNATURE GUARANTEE

         Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Security Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Security Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.


                                      A-11
<PAGE>
                                   PUT NOTICE

         The undersigned elects have this Note (or portion thereof specified
below) purchased by the Corporation pursuant to the put right provided for in
Section 4.02(b) of Supplemental Indenture Number 5, payment of the principal
amount thereof together with accrued and unpaid interest to the Put Exercise
Date to be made to the undersigned at:

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

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

-----------------------------------------------------------------------------
         (Please print or typewrite name and address of the undersigned)


         If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the holder elects to have
repaid:                 ; and specify the denomination or denominations
(which shall not be less than the minimum authorized denomination) of the Notes
to be issued to the holder for the portion of the within Note not being repaid
(in the absence of any such specification, one such Note will be issued for the
portion not being repaid);                      .

Date:             Signature:
     ------------           ----------------------------------------------------
                             (sign exactly as name appears on the other side of
                              the Note)


Signature Guarantee:
                     -----------------------------------------------------------
                                      (Signature must be guaranteed)



The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrockers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
Securities and Exchange Commission Rule 17Ad-15.


                                      A-12
<PAGE>
           [TO BE ATTACHED TO GLOBAL CERTIFICATES AND PLEDGED NOTES]


                       SCHEDULE OF INCREASES OR DECREASES

                     THE FOLLOWING INCREASES OR DECREASES IN
                    THIS [GLOBAL CERTIFICATE][PLEDGED NOTE]
                                HAVE BEEN MADE:

<TABLE>
<CAPTION>
                                                                    PRINCIPAL AMOUNT OF NOTE
             AMOUNT OF DECREASE IN       AMOUNT OF INCREASE IN      EVIDENCED BY THE [GLOBAL        SIGNATURE OF
           PRINCIPAL AMOUNT OF NOTE     PRINCIPAL AMOUNT OF NOTE      CERTIFICATE][PLEDGED      AUTHORIZED OFFICER OF
           EVIDENCED BY THE [GLOBAL     EVIDENCED BY THE [GLOBAL      NOTE] FOLLOWING SUCH      TRUSTEE OR CUSTODIAL
 DATE     CERTIFICATE][PLEDGED NOTE]   CERTIFICATE][PLEDGED NOTE]     DECREASE OR INCREASE              AGENT
 ----     --------------------------   --------------------------     --------------------              -----
<S>       <C>                          <C>                          <C>                         <C>

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


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


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


                                      A-13
<PAGE>
                                    EXHIBIT B

                          CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

                                                JPMORGAN CHASE BANK, as Trustee


                                                By:
                                                    ----------------------------
                                                           Authorized Officer


                                      B-1