**EXHIBIT 4.51**

** **

 

 

**Supplemental Indenture**

 

Dated September 1, 2002

 

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KENTUCKY UTILITIESCOMPANY

 

TO

 

U.S. BANK NATIONALASSOCIATIONAND RICHARD PROKOSCH,AS TRUSTEES

 

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(SUPPLEMENTAL TO THEINDENTURE OF MORTGAGE OR DEED OF TRUST DATEDMAY 1, 1947, AS AMENDED, HERETOFORE EXECUTED BY KENTUCKY UTILITIESCOMPANY TO CONTINENTAL ILLINOIS NATIONAL BANK AND TRUST COMPANYOF CHICAGO AND EDMOND B. STOFFT, AS TRUSTEES.)

 

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(PROVIDINGFOR FIRST MORTGAGE BONDS,POLLUTION CONTROL SERIES NO. 16DUE OCTOBER 1, 2032)

 

 

 

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THIS SUPPLEMENTAL INDENTURE, dated September 1, 2002, made and enteredinto by and between KENTUCKY UTILITIES COMPANY, a corporation organized andexisting under the laws of the Commonwealths of Kentucky and Virginia(hereinafter commonly referred to as the “Company”), and U.S. BANK NATIONALASSOCIATION, a national banking association having its office or place ofbusiness in the City of Chicago, Cook County, State of Illinois, formerly namedFirst Trust of Illinois, National Association, successor to Bank of AmericaIllinois, formerly named Continental Bank, National Association and ContinentalIllinois National Bank and Trust Company of Chicago (hereinafter commonlyreferred to as the “Trustee”), and Richard Prokosch (successor Co-Trustee), ofthe City of St. Paul, County of Ramsey, State of Minnesota, as Trustees underthe Indenture of Mortgage or Deed of Trust dated May 1, 1947, as modified andamended by the several indentures supplemental thereto heretofore executed byand between the Company and the Trustees from time to time under said Indentureof Mortgage or Deed of Trust; said Indenture of Mortgage or Deed of Trust, asso modified and amended, being hereinafter commonly referred to as the“Indenture”; and said Trustees under the Indenture being hereinafter commonlyreferred to as the “Trustees” or the “Trustees under the Indenture”;Witnesseth:

 

WHEREAS, the Company, by resolution of its Board of Directors or thePricing Committee thereof duly adopted, has determined to issue forthwith anadditional series of its bonds to be secured by the Indenture, as herebymodified and amended, such bonds to be known and designated as First MortgageBonds, Pollution Control Series No. 16 (hereinafter sometimes referred to asthe “bonds of Series No. 16” or the “bonds of said Series”), and to beauthorized, authenticated and issued only as registered bonds without coupons;and

 

WHEREAS, the County of Carroll in the Commonwealth ofKentucky (the “County”) has agreed to issue $96,000,000 in principal amount ofits Pollution Control Revenue Bonds, 2002 Series C (Kentucky Utilities CompanyProject) (the “Revenue Bonds”), which will be issued pursuant to the provisionsof the Indenture of Trust dated as of July 1, 2002 (the “County Indenture”),between the County and Deutsche Bank Trust Company Americas, as Trustee, PayingAgent and Bond Registrar (said Trustee or any successor trustee under theCounty Indenture dated as of July 1, 2002, hereinafter mentioned, beinghereinafter referred to as the “County Trustee”); and

 

WHEREAS, the proceeds of theRevenue Bonds (other than any accrued interest, if any, thereon) will be loanedby the County to the Company pursuant to the provisions of the Loan Agreement,dated as of July 1, 2002, between the County and the Company (the “Agreement”),to pay and discharge $96,000,000 in outstanding principal amount of“County of Carroll, Kentucky, Collateralized Pollution Control Revenue Bonds,(Kentucky Utilities Company Project), 1992 Series A” (the “RefundedBonds”) on or prior to the date of issuance of the Revenue Bonds.  The Refunded Bonds were issued to refinancethe cost of construction of certainair, solid waste and water pollution control facilities at the Ghent GeneratingStation of the Company, which facilitiesare hereinafter sometimes referred to as the “Project,” which

 

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Project is located in the Countyand which Project is more fully described in Exhibit A to the Agreement; and

 

WHEREAS, payments by the Company under and pursuant tothe Agreement have been assigned by the County to the County Trustee in orderto secure the payment of the Revenue Bonds; and in order to further secure thepayment of the Revenue Bonds, the Company desires to issue its bonds of SeriesNo. 16 to the County Trustee as provided in the Agreement; and

 

WHEREAS, the Company desires, in accordance with the provisions ofArticle I, Section 6(e) of Article II and Article XVI of the Indenture, toexecute this supplemental indenture for the purpose of creating and authorizingits bonds of Series No. 16 and modifyingor amending certain provisions of the Indenture in the particulars and to theextent hereinafter in this supplemental indenture specifically provided; and

 

WHEREAS, the execution and delivery by the Company of this supplementalindenture have been duly authorized by the Board of Directors of the Company orthe Pricing Committee thereof, and the Company has requested, and herebyrequests, the Trustees to enter into and join with the Company in the executionand delivery of this supplemental indenture; and

 

WHEREAS, the bonds of Series No. 16are to be authorized, authenticated and issued only in the form of registeredbonds without coupons, and each of such bonds shall be substantially in thefollowing form, to wit:

 

(Form of face of bond of Series No. 16)

 

This bond is nontransferable except as may be requiredto effect a transfer to any successor trustee under the Indenture of Trustdated as of July 1, 2002, hereinafter referred to.

 
| No.                        |   | $                        |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

 

Kentucky UtilitiesCompanyFirst Mortgage Bond, Pollution Control Series No. 16Due October 1, 2032

 

Kentucky Utilities Company, a Kentucky and Virginia corporation(hereinafter referred to as the “Company”), for value received, hereby promisesto pay to Deutsche Bank Trust Company Americas, as Trustee under the Indentureof Trust (the “County Indenture”) dated July 1, 2002, from the County ofCarroll, Kentucky, (the “County”) to Deutsche Bank Trust Company Americas orany successor trustee under the County Indenture (the “County Trustee”), theprincipal sum of Ninety-Six Million Dollars on the Demand Redemption Date,as hereinafter defined, and to pay on the Demand Redemption Date to the CountyTrustee interest on said sum from the Initial Interest Accrual Date, as hereinafterdefined, to the Demand Redemption Date, at the interest rate or ratesdetermined for the “Interest Rate Mode” (as described in Section 2.02 of theCounty Indenture) applicable to the Revenue Bonds referred to on the reversehereof as

 

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selected from time to time by the Company, subject tothe provisions hereinafter set forth in the event of a rescission of aRedemption Demand, as hereinafter defined. Both the principal of and the interest on this bond shall be payable atthe office or agency of the Company in Chicago, Illinois, in any coin orcurrency of the United States of America which at the time of payment is legaltender for public and private debts.

 

The provisions of this bond are continued on the reverse side hereofand such continued provisions shall have the same effect, for all purposes, asthough fully set forth at this place. This bond shall not be valid or become obligatory for any purpose unlessand until it shall have been authenticated by the execution by the Trustee orits successor in trust under the Indenture of the Trustee’s Certificateendorsed hereon.

 

IN WITNESS WHEREOF, Kentucky Utilities Company has caused this bond tobe executed in its name by the manual or facsimile signature of its Presidentor one of its Vice-Presidents, and its corporate seal or a facsimile thereof tobe hereto affixed or imprinted hereon and attested by the manual or facsimilesignature of its Secretary or one of its Assistant Secretaries.

 
| Dated as of |                        |
|-------------|-----------------------------|
|        |                        |
|        | Kentucky  Utilities Company |
|        |                        |   |
|        | By                          |   |
|        |                        | *Vice  President* |
|        |                        |   |
|        |                        |   |
| Attest:     |                        |   |
|        |                        |   |
|        |                        |   |   |
| *Secretary* |                        |   |   |

 

(Form of reverse side ofbond of Series No. 16)

 

This bond is one of the bonds of the Company issued and to be issuedfrom time to time under and in accordance with and all secured by the indentureof mortgage or deed of trust dated May 1, 1947, executed and delivered by theCompany to U.S. Bank National Association, successor to Bank of AmericaIllinois (formerly Continental Bank, National Association and formerlyContinental Illinois National Bank and Trust Company of Chicago and hereinafterreferred to as the “Trustee”) and Edmond B. Stofft, as Trustees, and theindentures supplemental thereto heretofore executed and delivered by theCompany to the Trustees under said indenture of mortgage, including theindenture supplemental thereto dated September 1, 2002, executed and deliveredby the Company to said U.S. Bank National Association and Richard Prokosch(successor Co-Trustee), as Trustees (collectively the “Trustees”), prior to theauthentication of this bond (said indenture of mortgage and said supplementalindentures being hereinafter referred to, collectively, as the“Indenture”).  Reference to the Indentureand to all supplemental indentures, if any, hereafter executed pursuant to theIndenture is hereby made for a description of the property mortgaged andpledged, the nature and extent of the security and the rights of the holdersand registered owners of said bonds and of the Trustees and of the Company inrespect

 

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of such security. By the terms of the Indenture the bonds to be secured thereby areissuable in series which may vary as to date, amount, date of maturity, rate ofinterest, redemption provisions, medium of payment and in other respects as inthe Indenture provided.

 

This bond is one of a series of bonds of the Company issued under theIndenture and designated as First Mortgage Bonds, Pollution Control Series No.16 (hereinafter called the “bonds of Series No. 16” or the “bonds of saidSeries”).  The bonds of Series No. 16have been issued to the County Trustee under the County Indenture to securepayment of the Pollution Control Revenue Bonds, 2002 Series C (KentuckyUtilities Company Project) (the “Revenue Bonds”), issued by the County underthe County Indenture, the proceeds of which (other than any accrued interestthereon) have been loaned to the Company pursuant to the provisions of the LoanAgreement dated as of July 1, 2002 (the “Agreement”), between the Company andthe County.

 

Except as provided in the next succeeding paragraph, in the event of adefault under Section 9.1 of the Agreement or in the event of a default in thepayment of the principal of, premium, if any, or interest (and such default inthe payment of interest continues for the full grace period, if any, permittedby the County Indenture and the Revenue Bonds) on the Revenue Bonds, whether atmaturity, by tender for purchase, by acceleration, by sinking fund, redemptionor otherwise, as and when the same becomes due, the bonds of Series No. 16shall be redeemable in whole upon receipt by the Trustee of a written demand(hereinafter called a “Redemption Demand”) from the County Trustee stating thatthere has been such a default, stating that it is acting pursuant to theauthorization granted by Section 9.02(c) of the County Indenture, specifyingthe last date to which interest on the Revenue Bonds has been paid (such datebeing hereinafter referred to as the “Initial Interest Accrual Date”) anddemanding redemption of the bonds of Series No. 16.  The Trustee shall, within 10 days after receiving such RedemptionDemand, mail a copy thereof to the Company marked to indicate the date of itsreceipt by the Trustee.  Promptly uponreceipt by the Company of such copy of a Redemption Demand, the Company shallfix a date on which it will redeem the bonds of Series No. 16 so demanded to beredeemed (hereinafter called the “Demand Redemption Date”).  Notice of the date fixed as and for theDemand Redemption Date shall be mailed by the Company to the Trustee at least30 days prior to such Demand Redemption Date. The date to be fixed by the Company as and for the Demand Redemption Datemay be any date up to and including the earlier of (i) the 120th day afterreceipt by the Trustee of the Redemption Demand or (ii) October 1, 2032,provided that if the Trustee shall not have received such notice fixing theDemand Redemption Date within 90 days after receipt by it of the RedemptionDemand, the Demand Redemption Date shall be deemed to be the earlier of (i) the120th day after receipt by the Trustee of the Redemption Demand or (ii) October1, 2032.  The Trustee shall mail noticeof the Demand Redemption Date (such notice being hereinafter called the “DemandRedemption Notice”) to the County Trustee not more than 10 nor less than fivedays prior to the Demand Redemption Date. Notwithstanding the foregoing, if a default to which this paragraph isapplicable is existing on October 1, 2032, such date shall be deemed to be theDemand Redemption Date without further action (including actions specified inthis paragraph) by the County Trustee, the Trustee or the Company.  The bonds of Series No. 16 shall be redeemedby the Company on the Demand Redemption Date, upon surrender thereof by theCounty Trustee to the Trustee, at a redemption price equal to the principalamount thereof plus accrued interest thereon at the rate or rates then 

 

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applicable to the Revenue Bonds or determined underthe provisions of the County Indenture from the Initial Interest Accrual Dateto the Demand Redemption Date.  If aRedemption Demand is rescinded by the County Trustee by written notice to theTrustee prior to the Demand Redemption Date, no Demand Redemption Notice shallbe given, or, if already given, shall be automatically annulled, and intereston the bonds of Series No. 16 shall cease to accrue, all interest accruedthereon shall be automatically rescinded and cancelled and the Company shallnot be obligated to make any payments of principal of or interest on the bondsof said Series; but no such rescission shall extend to or affect any subsequentdefault or impair any right consequent thereon.

 

In the event that all of the bonds outstanding under the Indentureshall have become immediately due and payable, whether by declaration orotherwise, and such acceleration shall not have been annulled, the bonds ofSeries No. 16 shall bear interest at the rate or rates applicable to theRevenue Bonds from the Initial Interest Accrual Date, as specified in a writtennotice to the Trustee from the County Trustee, and the principal of andinterest on the bonds of said Series from the Initial Interest Accrual Dateshall be payable in accordance with the provisions of Article X of theIndenture.

 

Upon payment of the principal of and premium, if any, and interest onthe Revenue Bonds, whether at maturity or prior to maturity by redemption orotherwise, and the surrender thereof to and cancellation thereof by the CountyTrustee (other than any Revenue Bond that was cancelled by the County Trusteeand for which one or more other Revenue Bonds were delivered and authenticatedpursuant to the County Indenture in lieu of or in exchange or substitution forsuch cancelled Revenue Bond), or upon provision for the payment thereof havingbeen made in accordance with the County Indenture, bonds of Series No. 16 in aprincipal amount equal to the principal amount of the Revenue Bonds sosurrendered and cancelled or for the provision for which payment has been madeshall be deemed fully paid and the obligations of the Company thereunder shallbe terminated, and such bonds of Series No. 16 shall be surrendered by theCounty Trustee to the Trustee and shall be cancelled by the Trustee.  From and after the Release Date (as definedbelow), the bonds of Series No. 16 shall be deemed fully paid, satisfied anddischarged and the obligations of the Company hereunder and thereunder shall beterminated.  The Release Date shall bethe date that the Bond Insurer (as such term is defined in the CountyIndenture), at the request of the Company, consents to the release of the bondsof this Series, as security for the Revenue Bonds, provided that in no eventshall that date be later than the date as of which all bonds issued under theIndenture prior to the date of initial issuance of this bond (and excludingbonds of Series No. 11, 12, 13, 14, 15 and 16 have been retired throughpayment, redemption or otherwise (including those bonds “deemed to be paid”within the meaning of that term as used in Article XII of the Indenture) at,before or after the maturity thereof. On the Release Date, the bonds of Series No. 16 shall be surrendered bythe County Trustee to the Trustee whereupon the bonds of Series No. 16 sosurrendered shall be cancelled by the Trustee.

 

No recourse shall be had for the payment of the principal of orinterest on this bond, or for any claim based hereon, or otherwise in respecthereof or of the Indenture or any indenture supplemental thereto, to or againstany incorporator, stockholder, officer or director, past, present or future, ofthe Company, or of any predecessor or successor corporation, either directly orthrough the Company or such predecessor or successor corporation, under anyconstitution or

 

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statute or rule of law, or by the enforcement of anyassessment or penalty, or otherwise, all such liability of incorporators, stockholders,directors and officers being waived and released by the registered owner hereofby the acceptance of this bond and being likewise waived and released by theterms of the Indenture.

 

This bond is nontransferable except as may be required to effect atransfer to any successor trustee under the County Indenture.  Any such transfer may be made by theregistered owner hereof, in person or by attorney duly authorized, at theprincipal office or place of business of the Trustee under the Indenture, uponthe surrender and cancellation of this bond and the payment of any stamp tax orother governmental charge, and upon any such transfer a new registered bond orbonds without coupons, of the same series and for the same aggregate principalamount, will be issued to the transferee in exchange herefor.

 

AND WHEREAS, there is to be endorsed on each of the bonds of Series No.16 (whether in temporary or definitive form) a certificate of the Trusteesubstantially in the following form, to-wit:

 

Trustee’s Certificate

 

This bond is one of the bonds of the series designated therein,described in the within mentioned Indenture.

 
|   | U.S.  Bank National Association |
|--------|---------------------------------|
|   | *as Trustee*                    |
|   |                            |
|   | By                              |   |
|   |                            | *Authorized  Officer* |

 

NOW, THEREFORE, in consideration of the premises and of the sum of OneDollar ($1.00) duly paid by the Trustee to the Company, and of other good andvaluable considerations, the receipt whereof is hereby acknowledged, and forthe purpose of further assuring to the Trustees under the Indenture their titleto, or lien upon, the property hereinafter described, under and pursuant to theterms of the Indenture and for the purpose of further securing the due andpunctual payment of the principal of and interest and the premium, if any, onall bonds which have been heretofore or shall be hereafter issued under theIndenture and indentures supplemental thereto and which shall be at any timeoutstanding thereunder and secured thereby, and for the purpose of securing thefaithful performance and observance of all the covenants and conditions setforth in the Indenture and/or in any indenture supplemental thereto, theCompany has given, granted, bargained, sold, transferred, assigned, pledged,mortgaged, warranted the title to and conveyed, and by these presents doesgive, grant, bargain, sell, transfer, assign, pledge, mortgage, warrant thetitle to and convey unto U.S. BANK NATIONAL ASSOCIATION AND RICHARD PROKOSCH,as Trustees under the Indenture as therein provided, and the successors in thetrusts thereby created, and to their assigns, all the right, title and interestof the Company in and to any and all premises, plants, property, leases andleaseholds, franchises, permits, rights and powers, of every kind anddescription, real and personal (1) which have been acquired by the

 

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Company through construction, purchase, consolidationor merger, or otherwise, and which at the date hereof are owned by the Company,and (2) which shall be acquired by the Company, through construction, purchase,consolidation, merger, or otherwise, on or subsequent to the date hereof,together, in each case, with the rents, issues, products and profits therefrom,*excepting, however, and there is hereby expressly reservedand excluded from the lien and effect of the Indenture and of this supplementalindenture,*all right, title and interest of the Company, now owned,or hereinafter acquired, in and to (a) all cash, bonds, shares of stock,obligations and other securities not deposited with the Trustee or Trusteesunder the Indenture, and (b) all accounts and bills receivable, judgments(other than for the recovery of real property or establishing a lien or chargethereon or right therein) and choses in action not specifically assigned to andpledged with the Trustee or Trustees under the Indenture, and (c) all lamps andsupplies, machinery, appliances, goods, wares, merchandise, commodities,equipment, apparatus, materials and/or supplies acquired or held by the Companyfor sale, lease, rental or consumption in the ordinary course of business, and(d) the last day of each of the demised terms created by any lease of propertyleased to the Company and under each and every renewal of any such lease, thelast day of each and every such demised term being hereby expressly reserved toand by the Company, and (e) all gas, oil, ore, copper and other minerals now orhereafter existing upon, within or under any real estate of the Company subjectto, or hereby subjected to, the lien of the Indenture.

 

To Have And ToHoldall said property, right and interests hereinabove described orreferred to and conveyed, assigned, pledged or mortgaged, or intended to beconveyed, assigned, pledged or mortgaged, together with the rents, issues,products and profits therefrom unto said U.S. BANK NATIONAL ASSOCIATION ANDRICHARD PROKOSCH, as Trustees under the Indenture, as hereby modified andamended, and unto their successor or successors in trust forever, But In Trust Nevertheless, upon the trusts, for the purposes andsubject to all the terms, conditions, provisions and restrictions of theIndenture, as hereby modified and amended.

 

And upon the considerations and for the purposes aforesaid, and inorder to provide, pursuant to the terms of the Indenture, for the issuanceunder the Indenture, as hereby modified and amended, of bonds of Series No. 16and to fix the terms, provisions and characteristics of the bonds of saidSeries, and to modify and amend the Indenture in the particulars and to theextent hereinafter in this supplemental indenture specifically provided, theCompany hereby covenants and agrees with the Trustees as follows:

 

ARTICLE I.

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## Section1.  A series of bonds issuable under theIndenture, as hereby modified and amended, and to be known and designated as“First Mortgage Bonds, Pollution Control Series No. 16 ‘‘ (hereinaftersometimes referred to as the “bonds of Series No. 16” or the “bonds of saidSeries”), and which shall be executed, authenticated and issued only in theform of registered bonds without coupons, in denominations of $5,000 andintegral multiples thereof, is hereby created and authorized.  The bonds of said Series shall be payable asprovided in Section 3 of this Article and shall be substantially in the formthereof hereinbefore recited.  Each bondof said Series shall be issued to and registered in the name of the CountyTrustee and shall be nontransferable except as required to effect any transferof bonds of said Series to any successor

 

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## trustee under theCounty Indenture.  Each bond of saidSeries shall be dated as of the date of issuance of the Revenue Bonds.

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## Section2.  The bonds of Series No. 16 shallbear interest, and the principal thereof and interest thereon shall be payable,only to the extent and in the manner provided in Section 3 of thisArticle.  The bonds of said Series shallmature on October 1, 2032.  The bonds ofsaid Series shall be payable, both as to principal and interest, at the officeor agency of the Company in Chicago, Illinois in any coin or currency of theUnited States of America which at the time of payment is legal tender forpublic and private debts.

 

The bonds of said Series shall be deemed fully paid, and theobligations of the Company thereunder shall be terminated, to the extent and inthe manner provided in Section 4 of this Article.

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## Section3.  (a)  Except as provided in paragraph (b) of thisSection 3, in the event of a default under Section 9.1 of the Agreement or inthe event of a default in the payment of the principal of, premium, if any, orinterest (and such default in the payment of interest continues for the fullgrace period, if any, permitted by the County Indenture and the Revenue Bonds)on the Revenue Bonds, whether at maturity, by tender for purchase, byacceleration, by sinking fund, redemption or otherwise, as and when the samebecomes due, the bonds of Series No. 16 shall be redeemable in whole uponreceipt by the Trustee of a written demand (hereinafter in this Article calleda “Redemption Demand”) from the County Trustee stating that there has been sucha default, stating that it is acting pursuant to the authorization granted bySection 9.02(c) of the County Indenture, specifying the last date to whichinterest on the Revenue Bonds has been paid (such date being hereinafterreferred to in this Article as the “Initial Interest Accrual Date”) anddemanding redemption of the bonds of Series No. 16.  The Trustee shall, within 10 days after receiving such RedemptionDemand, mail a copy thereof to the Company marked to indicate the date of itsreceipt by the Trustee.  Promptly uponreceipt by the Company of such copy of a Redemption Demand, the Company shallfix a date on which it will redeem the bonds of Series No. 16 so demanded to beredeemed (hereinafter in this Article called the “Demand RedemptionDate”).  Notice of the date fixed as andfor the Demand Redemption Date shall be mailed by the Company to the Trustee atleast 30 days prior to such Demand Redemption Date.  The date to be fixed by the Company as and for the DemandRedemption Date may be any date up to and including the earlier of (i) the120th day after receipt by the Trustee of the Redemption Demand or (ii) October1, 2032, provided that if the Trustee shall not have received such notice fixingthe Demand Redemption Date within 90 days after receipt by it of the RedemptionDemand, the Demand Redemption Date shall be deemed to be the earlier of (i) the120th day after receipt by the Trustee of the Redemption Demand or (ii) October1, 2032.  The Trustee shall mail noticeof the Demand Redemption Date (such notice being hereinafter in this Articlecalled the “Demand Redemption Notice”) to the County Trustee not more than 10nor less than five days prior to the Demand Redemption Date.  Notwithstanding the foregoing, if a defaultto which this paragraph is applicable is existing on October 1, 2032, such dateshall be deemed to be the Demand Redemption Date without further action(including actions specified in this paragraph) by the County Trustee, theTrustee or the Company.  The bonds ofSeries No. 16 shall be redeemed by the Company on the Demand Redemption Date,upon surrender thereof by the County Trustee to the Trustee, at a redemptionprice equal to the principal amount thereof, plus accrued interest

 

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## thereon at therate or rates then applicable to the Revenue Bonds or determined under theprovisions of the County Indenture from the Initial Interest Accrual Date tothe Demand Redemption Date.  If aRedemption Demand is rescinded by the County Trustee by written notice to theTrustee prior to the Demand Redemption Date, no Demand Redemption Notice shallbe given, or, if already given, shall be automatically annulled, and intereston the bonds of Series No. 16 shall cease to accrue, all interest accruedthereon shall be automatically rescinded and cancelled and the Company shallnot be obligated to make any payments of principal of or interest on the bondsof this Series; but no such rescission shall extend to or affect any subsequentdefault or impair any right consequent thereon.

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### (b)           In the event thatall of the bonds outstanding under the Indenture shall have become immediatelydue and payable, whether by declaration or otherwise, and such accelerationshall not have been annulled, the bonds of Series No. 16 shall bear interest atthe rate or rates applicable to the Revenue Bonds from the Initial InterestAccrual Date, as specified in a written notice to the Trustee from the CountyTrustee, and the principal of and interest on the bonds of said Series from theInitial Interest Accrual Date shall be payable in accordance with theprovisions of Article X of the Indenture.

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### (c)           Anything hereincontained to the contrary notwithstanding, the Trustee is not authorized totake any action pursuant to a Redemption Demand or a rescission thereof or awritten notice required by paragraph (b) of this Section 3, and such RedemptionDemand, rescission or notice shall be of no force or effect, unless it is executedin the name of the County Trustee by one of its Vice-Presidents.

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## Section4.  Upon payment of the principal of andpremium, if any, and interest on the Revenue Bonds, whether at maturity orprior to maturity by redemption or otherwise, and the surrender thereof to andcancellation thereof by the County Trustee, or upon provision for the paymentthereof having been made in accordance with Article VIII of the CountyIndenture, bonds of Series No. 16 in a principal amount equal to the principalamount of the Revenue Bonds so surrendered and cancelled shall be surrenderedby the County Trustee to the Trustee, whereupon the bonds of said Series sosurrendered shall be deemed fully paid and the obligations of the Companythereunder shall be terminated, and such bonds of said Series shall becancelled and destroyed by the Trustee by shredding, compacting or othersuitable means and a certificate of such cancellation and destruction shall bedelivered to the Company.  From andafter the Release Date (as defined below), the bonds of Series No. 16 shall bedeemed fully paid, satisfied and discharged and the obligations of the Companyhereunder and thereunder shall be terminated. The Release Date shall be the date that the Bond Insurer (as such termis defined in the County Indenture), at the request of the Company, consents tothe release of the bonds of this Series, as security for the Revenue Bonds,provided that in no event shall that date be later than the date as of which all bonds issued under the Indenture prior to thedate of initial issuance of the bonds of said Series (and excluding bonds ofsaid Series and First Mortgage Bonds, Pollution Control Series No. 11, No. 12,No. 13, No. 14 and No. 15) have been retired through payment, redemptionor otherwise (including those Bonds “deemed to be paid” within the meaning ofthat term used in Article XII of the Indenture) at, before or after thematurity thereof.  On the Release Date,the bonds of said Series shall be surrendered by the County Trustee to theTrustee whereupon the bonds of Series No. 16 so surrendered shall be cancelledby the Trustee.

 

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ARTICLE II.

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## Section1.  The bonds of Series No. 16 shall beexecuted on behalf of the Company and sealed with the corporate seal of theCompany, all in the manner provided in or permitted by Section 6 of Article Iof the Indenture, as follows:

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#### (a)           bonds of said Series executed onbehalf of the Company by its President or a Vice-President and by its Secretaryor an Assistant Secretary may be so executed by the manual or facsimilesignature of such President or Vice-President and of such Secretary orAssistant Secretary, as the case may be, of the Company, or of any person orpersons who shall have been such officer or officers, as the case may be, ofthe Company on or subsequent to the date of this supplemental indenture,notwithstanding that he or they may have ceased to be such officer or officersof the Company at the time of the actual execution, authentication, issue ordelivery of any of such bonds, and any such manual or facsimile signature orsignatures of such officer or officers of the Company, as above provided, onany such bonds shall constitute execution of such bonds on behalf of theCompany by such officer or officers of the Company for the purposes of theIndenture, as hereby modified and amended, and shall be valid and effective forall purposes, *provided*that all bonds of said Series shall always beexecuted on behalf of the Company by the manual or facsimile signature of itsPresident or a Vice-President and of its Secretary or an Assistant Secretary,as above provided, *and provided, further,*that none of suchbonds shall be executed on behalf of the Company by the manual or facsimilesignature of the same officer or person acting in more than one capacity; and

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#### (b)           such corporate seal of the Companymay be facsimile, and the bonds of said Series on which such facsimile seal ofthe Company shall be affixed, impressed, imprinted or reproduced shall be deemedto be sealed with the corporate seal of the Company for the purposes of theIndenture as hereby modified and amended, and such facsimile seal shall bevalid and effective for all purposes.

 

ARTICLE III.

 

Section 10 of Article III of the Indenture is hereby further amended toprovide that the Company agrees to observe and comply with the provisions ofsaid section as so amended hereby so long as the bonds of Series No. 16 areoutstanding.  The bonds outstanding onthe date hereof to which said Section 10 applies are No. 8, Series P, Series Q,Nos. 9, 10 and 11, Series R, Series S, and Nos. 12, 13, 14 and 15.

 

No covenant to provide a maintenance and renewal fund is made inrespect of the bonds of Series No. 16. The absence of such a covenant shall not, however, limit the right ofthe Company to use, apply or certify bonds of Series No. 16 to comply with, orto satisfy its obligations under, any provision of the Indenture (including,without limitation, the provisions of Section 1 of Article VII of the Indenture).

 

The bonds of Series No. 16 are intended to be used as collateral forand to secure payment of the Revenue Bonds, as hereinabove provided, and,accordingly, the bonds of Series

 

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No. 16 shall be dated as of the date of issuance ofthe Revenue Bonds and shall bear interest from the Initial Interest AccrualDate, as hereinabove provided, notwithstanding anything to the contrarycontained in the Indenture with respect to the dating of bonds and the datefrom which interest on bonds shall accrue.

 

ARTICLE IV.

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## Section1.  Capitalized terms used in thisArticle IV and not otherwise defined in this Indenture shall have the meaningsset forth in the County Indenture.

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## Section2.  Subsequent to the issuance of theRevenue Bonds, the Company shall not be required to establish compliance withthe net earnings requirements of Section 5 of Article II of the Indenture inconnection with any Conversion of Interest Rate Mode on the Revenue Bonds orany change in length of Long Term Rate Period. So long as the Revenue Bonds operate in any Interest Rate Mode otherthan the Long Term Rate where the Long Term Rate Period ends on the day priorto the final maturity of the Revenue Bonds, the Company shall include, for purposesof any required calculation of such net earnings requirement (as suchrequirement shall then be in effect), interest on the bonds of said Series atan annual rate of 14%.  If at any timethe interest rate on the Revenue Bonds is a Long Term Rate where the Long TermRate Period ends on the day prior to the final maturity of the Revenue Bonds,the Company may include, for purposes of any calculation of such net earningsrequirement, interest on the bonds of said Series at the Long Term Rate thenborne by the Revenue Bonds.

 

ARTICLE V.

##  

## Section1.  The provisions of this supplementalindenture shall be effective from and after the execution hereof; and theIndenture, as hereby modified and amended, shall remain in full force andeffect.

##  

## Section2.  Each holder or registered owner of abond of any series not now outstanding which shall be authenticated by theTrustee and issued by the Company under the Indenture (as hereby amended)subsequent to the execution of this supplemental indenture and of any couponpertaining to any such bond, by the acquisition, holding or ownership of suchbond and coupon, thereby consents and agrees to, and shall be bound by, theprovisions of this supplemental indenture.

##  

## Section3.  Each reference in the Indenture, orin this supplemental indenture, to any article, section, term or provision ofthe Indenture shall mean and be deemed to refer to such article, section, termor provision of the Indenture, as hereby modified and amended, except where thecontext otherwise indicates.

##  

## Section4.  All the covenants, provisions,stipulations and agreements in this supplemental indenture contained are andshall be for the sole and exclusive benefit of the parties hereto, theirsuccessors and assigns, and of the holders and registered owners from time totime of the bonds and of the coupons issued and outstanding from time to timeunder and secured by the Indenture, as hereby modified and amended.

 

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This supplemental indenture has been executed in a number of identicalcounterparts, each of which so executed shall be deemed to be an original.

 

At the time of the execution of this supplemental indenture, theaggregate principal amount of all indebtedness outstanding, or to beoutstanding, under and secured by the Indenture, as hereby modified and amended, is $580,830,000, consisting of andrepresented by First Mortgage Bonds, Pollution Control Series No. 8, Series P,Series Q, Pollution Control Series No. 9 and 10, Series R, Series S and SeriesNo. 11, No. 12, No. 13, No. 14, No. 15 and No. 16 of the Company, as follows:

 
| **Series** |   | **Interest  Rate** |   | **Maturity Date**  |   | **Principal  Amount** |   |
|------------|--------|--------------------|--------|--------------------|--------|-----------------------|--------|
| No. 8      |   | 7.45               |   | September 15, 2016 |   | 96,000,000            | (a)    |
| P          |   | 7.92               |   | May 15, 2007       |   | 53,000,000            |   |
|       |   | 8.55               |   | May 15, 2027       |   | 33,000,000            |   |
| Q          |   | 6.32               |   | June 15, 2003      |   | 62,000,000            |   |
| No. 9      |   | 5 3⁄4           |   | December 1, 2023   |   | 50,000,000            |   |
| No. 10     |   | Variable           |   | November l, 2024   |   | 54,000,000            |   |
| R          |   | 7.55               |   | June 1, 2025       |   | 50,000,000            |   |
| S          |   | 5.99               |   | January 15, 2006   |   | 36,000,000            |   |
| No. 11     |   | Variable           |   | May 1, 2023        |   | 12,900,000            |   |
| No. 12     |   | Variable           |   | February 1, 2032   |   | 20,930,000            |   |
| No. 13     |   | Variable           |   | February 1, 2032   |   | 2,400,000             |   |
| No. 14     |   | Variable           |   | February 1, 2032   |   | 7,200,000             |   |
| No. 15     |   | Variable           |   | February 1, 2032   |   | 7,400,000             |   |
| No. 16     |   | Variable           |   | October 1, 2032    |   | 96,000,000            | (b)    |

 

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(a)                        To be paid and discharged not more than 90 daysafter issuance of Pollution Control Series No. 16

 

(b)                       To be presently issued by the Company under theIndenture, as hereby modified and amended.

 

All of said bonds of Series P, Series Q, Series R and Series S,respectively, were sold by the Company to, and upon the issue thereof wereowned and held by, the corporations and partnerships whose names and residencesare stated in the Supplemental Indentures dated

 

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May 15, 1992, June 15, 1993, June 1, 1995 andJanuary 15, 1996, respectively, executed by the Company to the Trustees undersaid Indenture as heretofore modified and amended.

 

All of said bonds of Series No. 8 were heretofore issued and deliveredby the Company to, and upon the issuance thereof were held by, First SecurityNational Bank and Trust Company, One First Security Plaza, Lexington, FayetteCounty, Kentucky 40507, as trustee (now succeeded by Bank One, Kentucky, N.A.).

 

All of said bonds of Series No. 9, and Series No. 10 were heretoforeissued and delivered by the Company to, and upon the issuance thereof were heldby, Bank One, Kentucky, N.A., 201 East Main Street, Lexington, Fayette County,Kentucky 40507, as trustee.

 

All of said bonds of Series No. 11 were heretofore issued and deliveredby the Company to, and upon the issuance thereof were held by, The Bank of NewYork, 101 Barclay Street, 21st Floor, New York, New York 10286.

 

All of said bonds of Series No. 12, No. 13, No. 14 and No. 15,respectively, were heretofore issued and delivered by the Company to, and uponthe issuance thereof were held by, Deutsche Bank Trust Company Americas,Corporate Trust & Agency Services, c/o DB Services New Jersey, Inc., 100Plaza One, 6th Floor, Jersey City, New Jersey 07310, as trustee.

 

The Ninety-Six Million Dollars ($96,000,000) in principal amount ofbonds of Series No. 16 proposed to be issued by the Company under the Indentureas hereby modified and amended, are to be issued and delivered by the Companyto, and upon the issuance thereof held by, Deutsche Bank Trust CompanyAmericas, Corporate Trust & Agency Services, c/o DB Services New Jersey,Inc., 100 Plaza One, 6th Floor, Jersey City, New Jersey 07310, as CountyTrustee.

 

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IN WITNESS WHEREOF, said Kentucky Utilities Company has caused thisinstrument to be executed in its corporate name by its President,Vice-President or its Treasurer and its corporate seal to be hereunto affixedand to be attested and countersigned by its Executive Vice President, GeneralCounsel and Corporate Secretary, and said U.S. Bank National Association, forthe purpose of entering into and joining with the Company in the execution of thissupplemental indenture, has caused this instrument to be executed in itscorporate name by one of its Assistant Vice-Presidents and to be attested byone of its                       ,and said Richard Prokosch for the purpose of entering into and joining with theCompany in the execution of this supplemental indenture, has signed thisinstrument; all as of the day and year first above written.

 
|    | KENTUCKY UTILITIES COMPANY                                                          |
|---------|-------------------------------------------------------------------------------------|
|    |                                                                                |
|    |                                                                                |
|    |                                                                                |
|    | By:                                                                                 |   |   |
|    |                                                                                | Daniel K. Arbough*Treasurer* |   |
|    |                                                                                |
|    |                                                                                |
| Attest: |                                                                                |   |   |
|    | John R. McCall*Executive Vice President,  General Counsel and**Corporate Secretary* |   |   |
|    | (Corporate Seal)                                                                    |
|    |                                                                                |
|    | U.S. Bank National  Association                                                     |
|    |                                                                                |
|    |                                                                                |
|    | By:                                                                                 |   |   |
|    |                                                                                | Julie Eddington*Assistant  Vice**President* |   |
|    |                                                                                |
|    |                                                                                |
| Attest: |                                                                                |   |   |
|    |                                                                                |   |   |
|    |                                                                                |   |   |
|    |                                                                                |   |   |
|    |                                                                                |
|    |                                                                                |
|    | By:                                                                                 |   |   |
|    |                                                                                | RICHARD PROKOSCH |   |
|         |                                                                                     |  |  |  |  |  |

 

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| Commonwealth of Kentucky | } | SS:    |
|--------------------------|---|--------|
|                     | } |   |
| County of Jefferson      | } |   |

 

I,                         ,a Notary Public in and for said County in the Commonwealth aforesaid, do herebycertify that Daniel K. Arbough, Treasurer of Kentucky Utilities Company, aKentucky and Virginia corporation, and John R. McCall, Executive VicePresident, General Counsel and Corporate Secretary of said corporation, who areboth personally known to me to be the same persons whose names are subscribedto the foregoing instrument as such officers of said corporation, and who areboth personally known to me to be such officers, appeared before me this day inperson and severally acknowledged before me that they signed, sealed and deliveredsaid instrument as their free and voluntary act as such officers, and as thefree and voluntary act and deed of said corporation, for the uses and purposestherein set forth; and said Daniel K. Arbough, upon oath, acknowledged himselfto be Treasurer of said corporation and that, as such officer, being authorizedso to do, he executed said instrument for the purposes therein contained, bysigning the name of said corporation thereto by himself as such officer.

 

Given under my hand and official seal this          day of              ,2002.

 
|            |                                                                                                                                                              |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            | *Notary Public*                                                                                                                                                   |
|            |                                                                                                                                                              |
|            | My commission  expires:                        |
|            |                                                                                                                                                              |
|            |                                                                                                                                                              |
| (Notarial Seal) |                                                                                                                                                              |

 

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| State of Minnesota | } | SS:    |
|--------------------|---|--------|
|               | } |   |
| County of Ramsey   | } |   |

 

I,                                              ,a Notary Public in and for said County in the State aforesaid, do herebycertify that:

 

(a)           Julie Eddington, anAssistant Vice President of U.S. Bank National Association, a national bankingassociation, and Frank Leslie, a Vice President of said corporation, who areboth personally known to me to be the same persons whose names are subscribedto the foregoing instrument as such Assistant Vice President and Vice Presidentof said corporation, and who are both personally known to me to be suchofficers, appeared before me this day in person and severally acknowledgedbefore me that they signed and delivered said instrument as their free andvoluntary act as such officers, and as the free and voluntary act and deed ofsaid corporation, for the uses and purposes therein set forth; and said JulieEddington upon oath, acknowledged herself to be an Assistant Vice President ofsaid corporation and that, as such officer, being authorized so to do, sheexecuted said instrument for the purposes therein contained, by signing thename of said corporation thereto by herself as such officer; and

 

(b)           Richard Prokosch,personally known to me to be the same person described in, and whose name issubscribed to, the foregoing instrument, appeared before me this day in personand acknowledged before me that he executed, signed and delivered saidinstrument as his free and voluntary act and deed, for the uses and purposestherein set forth.

 

Given under myhand and official seal this           day of               ,2002.

 
|   |                   |
|--------|------------------------|
|   | *Notary Public*        |
|   |                   |
|   | My commission expires: |   |
|   |                   |
|   |                   |
|   | (Notarial Seal)        |
|   |                   |

 

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| This instrument prepared by: |   |
|------------------------------|--------|
|                         |   |   |
|                         |   |   |
| James Dimas, Esq.            |   |
| 220 West Main Street         |   |
| Louisville, Kentucky 40202   |   |

 

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