<PAGE>   1
                                                                [EXECUTION COPY]

                                                                    EXHIBIT 4.10




                      TRUST SECURITIES GUARANTEE AGREEMENT


                                      Among


                                 PPL Corporation
                                 (as Guarantor)


                                       and


                            The Chase Manhattan Bank
                             (as Guarantee Trustee)


                     Relating to PPL Capital Funding Trust I


                             dated as of May 9, 2001


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







<PAGE>   2





                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                       Page
                                                                                       ----
<S>                                                                                      <C>
ARTICLE I DEFINITIONS.....................................................................1

SECTION 1.01    Definitions...............................................................1

ARTICLE II TRUST INDENTURE ACT............................................................4

SECTION 2.01    Trust Indenture Act; Application..........................................4
SECTION 2.02    Lists of Holders of Trust Securities......................................4
SECTION 2.03    Reports by the Guarantee Trustee..........................................4
SECTION 2.04    Periodic Reports to Guarantee Trustee.....................................4
SECTION 2.05    Evidence of Compliance with Conditions Precedent..........................4
SECTION 2.06    Events of Default; Waiver.................................................5
SECTION 2.07    Event of Default; Notice..................................................5
SECTION 2.08    Conflicting Interests under Agreement and Subordinated Indenture..........5

ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE................................5

SECTION 3.01    Powers and Duties of the Guarantee Trustee................................5
SECTION 3.02    Certain Rights of Guarantee Trustee.......................................7
SECTION 3.03    Not Responsible for Recitals or Issuance of Guarantee.....................9

ARTICLE IV GUARANTEE TRUSTEE..............................................................9

SECTION 4.01    Guarantee Trustee; Eligibility............................................9
SECTION 4.02    Compensation, Reimbursement and Indemnity.................................9
SECTION 4.03    Appointment, Removal and Resignation of Guarantee Trustee................10

ARTICLE V GUARANTEE......................................................................10

SECTION 5.01    Guarantee................................................................10
SECTION 5.02    Waiver of Notice and Demand..............................................11
SECTION 5.03    Obligations Not Affected.................................................11
SECTION 5.04    Rights of Holders........................................................12
SECTION 5.05    Guarantee of Payment.....................................................12
SECTION 5.06    Subrogation..............................................................12
SECTION 5.07    Independent Obligations..................................................12

ARTICLE VI limitation of transactions; SUBORDINATION.....................................13

SECTION 6.01    Limitation of Transactions...............................................13
SECTION 6.02    Subordination............................................................13

ARTICLE VII TERMINATION..................................................................14
</TABLE>





                                       (i)
<PAGE>   3

<TABLE>
<S>                                                                                     <C>
SECTION 7.01    Termination..............................................................14

ARTICLE VIII MISCELLANEOUS...............................................................14

SECTION 8.01    Successors and Assigns...................................................14
SECTION 8.02    Amendments...............................................................14
SECTION 8.03    Notices..................................................................14
SECTION 8.04    Benefit..................................................................15
SECTION 8.05    Interpretation...........................................................15
SECTION 8.06    Governing Law............................................................16
SECTION 8.07    Counterparts.............................................................16
</TABLE>



                                      (ii)



<PAGE>   4





                                    CROSS-REFERENCE TABLE*
                                    ---------------------



<TABLE>
<CAPTION>
Section of                                                                      Section of
Trust Indenture Act                                                             Guarantee
of 1939, as amended                                                             Agreement
-------------------                                                             ---------
<S>                                                                             <C>
310(a)..........................................................................4.01(a)
310(b)..........................................................................4.01(c), 2.08
310(c)..........................................................................Inapplicable
311(a)..........................................................................2.02(b)
311(b)..........................................................................2.02(b)
311(c)..........................................................................Inapplicable
312(a)..........................................................................2.02(a)
312(b)..........................................................................2.02(b)
313.............................................................................2.03
314(a)..........................................................................2.04
314(b)..........................................................................Inapplicable
314(c)..........................................................................2.05
314(d)..........................................................................Inapplicable
314(e)..........................................................................1.01, 2.05, 3.02
314(f)..........................................................................2.01
315(a)..........................................................................3.01, 3.02
315(b)..........................................................................2.07
315(c)..........................................................................3.01
315(d)..........................................................................3.01(c)
316(a)..........................................................................5.04, 2.06
316(b)..........................................................................5.03
316(c)..........................................................................8.02
317(a)..........................................................................Inapplicable
317(b)..........................................................................Inapplicable
318(a)..........................................................................2.01(b)
318(b)..........................................................................2.01
318(c)..........................................................................2.01(a)
</TABLE>

-------------
*   This Cross-Reference Table does not constitute part of the Guarantee
    Agreement and shall not affect the interpretation of any of its terms or
    provisions.



                                      (iii)



<PAGE>   5


                      TRUST SECURITIES GUARANTEE AGREEMENT

               This TRUST SECURITIES GUARANTEE AGREEMENT ("Guarantee
Agreement"), dated as of May 9, 2001, is executed and delivered by PPL
Corporation, a Pennsylvania corporation (the "Guarantor"), and The Chase
Manhattan Bank, as trustee (the "Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Trust Securities (as
defined herein) of PPL Capital Funding Trust I, a Delaware statutory business
trust (the "Issuer").

               WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of May 9, 2001 among the Trustees named therein,
PPL Corporation, as Depositor and Guarantor and the several Holders (as defined
therein), the Issuer may issue up to $575,000,000 aggregate Liquidation Amount
of its 7.29% Preferred Trust Securities (the "Preferred Trust Securities"), of
which $500,000,000 aggregate Liquidation Amount is being issued as of the date
hereof, and up to $17,783,506 aggregate Liquidation Amount of its Common Trust
Securities, of which $15,463,918 aggregate Liquidation Amount is being issued as
of the date hereof (the "Common Trust Securities", and together with the
Preferred Trust Securities, the "Trust Securities") representing undivided
beneficial interests in the assets of the Issuer and having the terms set forth
in the Trust Agreement. Up to the remaining $75,000,000 aggregate Liquidation
Amount of Preferred Trust Securities and up to $2,319,588 aggregate Liquidation
Amount of its Common Trust Securities may be issued by the Trust by and to the
extent the over-allotment option granted by the Trust and the Guarantor pursuant
to the Underwriting Agreement is exercised by the Underwriters named in the
Underwriting Agreement;

               WHEREAS, the Trust Securities are to be issued by the Issuer to
PPL Corporation in exchange for the $515,463,918principal amount of Subordinated
Notes (as defined in the Trust Agreement) of PPL Capital Funding, Inc. (the
"Subordinated Notes Issuer"), which Subordinated Notes will be deposited with
The Chase Manhattan Bank, as Property Trustee under the Trust Agreement, as
trust assets, and then PPL Corporation will sell the Preferred Trust Securities
to the public; and

               WHEREAS, as an incentive for Holders to purchase Preferred Trust
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein;

               NOW, THEREFORE, in consideration of the purchase of Subordinated
Notes, which purchase the Guarantor hereby agrees shall benefit the Guarantor,
the Guarantor executes and delivers this Guarantee Agreement for the benefit of
the Holders from time to time.

                                   ARTICLE I

                                  DEFINITIONS

               SECTION 1.01  DEFINITIONS. As used in this Guarantee Agreement,
the terms set forth below shall, unless the context otherwise requires, have the
following meanings.





<PAGE>   6

Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.

               "Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement; provided,
however, that, except with respect to a default in payment of any Guarantee
Payments, the Guarantor shall have received notice of default from the Guarantee
Trustee or any Holder (with a copy to the Guarantee Trustee) and shall not have
cured such default within 90 days after receipt of such notice.

               "Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Trust Securities, to the
extent not paid or made by or on behalf of the Issuer: (i) any accumulated and
unpaid Distributions that are required to be paid on such Trust Securities but
only if and to the extent that the Property Trustee has available in the Payment
Account funds sufficient to make such payment at such time, (ii) the redemption
price (the "Redemption Price"), and all accumulated and unpaid Distributions to
the date of redemption, with respect to the Trust Securities called for
redemption by the Issuer but only if and to the extent that the Property Trustee
has available in the Payment Account funds sufficient to make such payment,
(iii) upon a voluntary or involuntary dissolution, winding-up or termination of
the Issuer (other than in connection with the distribution of Subordinated Notes
to the Holders in exchange for Trust Securities as provided in the Trust
Agreement or upon a redemption of all of the Trust Securities upon maturity or
redemption of the Subordinated Notes as provided in the Trust Agreement), the
lesser of (a) the aggregate of the Liquidation Amount of all Trust Securities
and all accumulated and unpaid Distributions on the Trust Securities to the date
of payment but only if and to the extent that the Property Trustee has available
in the Payment Account funds sufficient to make such payment at such time, and
(b) the amount of assets of the Issuer remaining legally available for
distribution to Holders in liquidation of the Issuer after satisfaction of
liabilities to creditors of the Issuer as required by applicable law (in either
case, the "Liquidation Distribution").

               "Guarantee Trustee" means The Chase Manhattan Bank, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.

               "Holder" means a Person in whose name a Trust Security or Trust
Securities is registered in the Securities Register; provided, however, that in
determining whether the holders of the requisite percentage of Trust Securities
have given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.

               "Majority in Liquidation Amount" means a vote by Holders voting
together as a single class, or as the context may require, a vote by Holders of
outstanding Trust Securities or the Holders of outstanding Common Trust
Securities, voting separately as a class, of more than 50% of the aggregate
Liquidation Amount of all then outstanding Trust Securities of the relevant
class.

               "Officer's Certificate" means a certificate signed by the
Chairman or a Vice Chairman of the Board of Directors, the President, any Vice
President, the Treasurer, or any Assistant Treasurer of the Guarantor, and
delivered to the Guarantee Trustee. Any Officer's





                                      -2-
<PAGE>   7

Certificate or Opinion of Counsel delivered with respect to compliance with a
condition or covenant provided for in this Guarantee Agreement shall include:

                      (a)    a statement that the officer or counsel signing
               the Officer's Certificate or the Opinion of Counsel has read the
               covenant or condition and the definitions relating thereto;

                      (b)    a brief statement of the nature and scope of the
               examination or investigation undertaken by each officer in
               rendering the Officer's Certificate or the Opinion of Counsel;

                      (c)    a statement that each such officer or counsel has
               made such examination or investigation as, in such officer's or
               counsel's opinion, is necessary to enable such officer or
               counsel to express an informed opinion as to whether or not
               such covenant or condition has been complied with; and

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

               "Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Guarantee Trustee or the Guarantor or an Affiliate of the
Guarantor, or an employee or any thereof, who shall be acceptable to the
Guarantee Trustee.

               "Preferred Trust Security" shall have the meaning set forth in
the Recitals to this Agreement.

               "Responsible Officer" means, with respect to the Guarantee
Trustee, any officer in the Corporate Trust Department of the Guarantee Trustee
with direct responsibility for the administration of this Guarantee Agreement
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.

               "Subordinated Indenture" means the Indenture dated as of May 9,
2001, among the Guarantor, the Subordinated Notes Issuer and The Chase Manhattan
Bank, as trustee, pursuant to which the Subordinated Notes are issued, together
with any indenture supplemental thereto.

               "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.

               "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.





                                      -3-




<PAGE>   8

                                   ARTICLE II

                               TRUST INDENTURE ACT

               SECTION 2.01  TRUST INDENTURE ACT; APPLICATION. (a) This
Guarantee Agreement is subject to the provisions of the Trust Indenture Act that
are required or deemed to be part of this Guarantee Agreement and shall, to the
extent applicable, be governed by such provisions; and

               (b)    if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.

               SECTION 2.02  LISTS OF HOLDERS OF TRUST SECURITIES. (a) The
Guarantor and Subordinated Notes Issuer shall furnish or cause to be furnished
to the Guarantee Trustee (a) semiannually, not later than June 30 and December
31 in each year, and (b) at such other times as the Guarantee Trustee may
request in writing, a list of the names and addresses of the Holders ("List of
Holders") and the Guarantee Trustee shall preserve such information and similar
information received by it in any other capacity and afford to the Holders
access to information so preserved by it, all to such extent, if any, and in
such manner as shall be required by the Trust Indenture Act, provided that, the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Guarantee Trustee by the Guarantor. The Guarantee Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.

               (b)    The Guarantee Trustee shall comply with its obligations
under Section 311(a) of the Trust Indenture Act, subject to the provisions of
Section 311(b) of the Trust Indenture Act, and Section 312(b) of the Trust
Indenture Act.

               SECTION 2.03  REPORTS BY THE GUARANTEE TRUSTEE. No later than
July 15 after each May 15 of each year, commencing May 15, 2002 the Guarantee
Trustee shall provide to the Holders such reports, if any, as are required by
Section 313(a) of the Trust Indenture Act in the form and in the manner provided
by Section 313(a) of the Trust Indenture Act. Any such report shall be dated as
of the next preceding May 15th. The Guarantee Trustee shall also comply with the
other requirements of Section 313 of the Trust Indenture Act.

               SECTION 2.04  PERIODIC REPORTS TO GUARANTEE TRUSTEE. The
Guarantor shall provide to the Guarantee Trustee, the Securities and Exchange
Commission and the Holders such documents, reports and information, if any, as
required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314(a)(4) of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act, provided that such compliance certificate shall be delivered
annually on or before 90 days of the end of each fiscal year of the Issuer,
beginning in 2002.

               SECTION 2.05  EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent provided for in this Guarantee Agreement as and to
the extent required by






                                      -4-
<PAGE>   9

Section 314(c) of the Trust Indenture Act. Any certificate or opinion required
to be given by an officer pursuant to Section 314(c) of the Trust Indenture Act
may be given in the form of an Officer's Certificate.

               SECTION 2.06  EVENTS OF DEFAULT; WAIVER. (a) The Holders of a
Majority in Liquidation Amount may, by vote, on behalf of the Holders, waive any
past Event of Default and its consequences. Upon such waiver, any such Event of
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Guarantee Agreement, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.

               (b)    The right of any Holder to receive payment of the
Guarantee Payments in accordance with this Guarantee Agreement, or to institute
suit for the enforcement of any such payment, shall not be impaired without the
consent of each such Holder.

               SECTION 2.07  EVENT OF DEFAULT; NOTICE. (a) The Guarantee
Trustee shall, within 90 days after the occurrence of an Event of Default,
transmit by mail, first class postage prepaid, to the Holders, a notice of such
Event of Default known to the Guarantee Trustee, unless such default shall have
been cured or waived before the giving of such notice, provided that, except in
the case of a default in the payment of a Guarantee Payment, the Guarantee
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
or Responsible Officers of the Guarantee Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders.

               (b)    The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee Trustee shall have
received written notice, or a Responsible Officer of the Guarantee Trustee shall
have received written notice, in each case from the Guarantor or a Holder, of
such Event of Default.

               SECTION 2.08  CONFLICTING INTERESTS UNDER AGREEMENT AND
SUBORDINATED INDENTURE. The Trust Agreement, the Subordinated Indenture and the
securities of any series issued thereunder shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.

                                  ARTICLE III

                POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

               SECTION 3.01  POWERS AND DUTIES OF THE GUARANTEE TRUSTEE. (a)
This Guarantee Agreement shall be held by the Guarantee Trustee for the benefit
of the Holders, and the Guarantee Trustee shall not transfer this Guarantee
Agreement or any rights hereunder to any Person except a Holder exercising his
or her rights pursuant to Section 5.04 or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, and such
vesting and cessation of title





                                      -5-
<PAGE>   10

shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.

               (b)    The Guarantee Trustee, prior to the occurrence of any
Event of Default and after the curing or waiving of all Events of Default that
may have occurred, shall undertake to perform such duties and only such duties
as are specifically set forth in this Guarantee Agreement, and no implied
covenants or obligations shall be read into this Guarantee Agreement against the
Guarantee Trustee. In case an Event of Default has occurred (that has not been
cured or waived pursuant to Section 2.06), the Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Guarantee Agreement, and use
the same degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.

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

                      (i)    prior to the occurrence of any Event of Default
               and after the curing or waiving of all such Events of Default
               that may have occurred:

                             (A)     the duties and obligations of the Guarantee
                      Trustee shall be determined solely by the express
                      provisions of this Guarantee Agreement, and the Guarantee
                      Trustee shall not be liable except for the performance of
                      such duties and obligations as are specifically set forth
                      in this Guarantee Agreement; and

                             (B)     in the absence of bad faith on the part of
                      the Guarantee Trustee, the Guarantee Trustee may
                      conclusively rely, as to the truth of the statements and
                      the correctness of the opinions expressed therein, upon
                      any certificates or opinions furnished to the Guarantee
                      Trustee and conforming to the requirements of this
                      Guarantee Agreement; but in the case of any such
                      certificates or opinions that by any provision hereof or
                      of the Trust Indenture Act are specifically required to
                      be furnished to the Guarantee Trustee, the Guarantee
                      Trustee shall be under a duty to examine the same to
                      determine whether or not they conform to the requirements
                      of this Guarantee Agreement;

                      (ii)   the Guarantee Trustee shall not be liable for any
               error of judgment made in good faith by a Responsible Officer of
               the Guarantee Trustee, unless it shall be proved that the
               Guarantee Trustee was negligent in ascertaining the pertinent
               facts upon which such judgment was made;

                      (iii)  the Guarantee Trustee shall not be liable with
               respect to any action taken or omitted to be taken by it in good
               faith in accordance with the direction of the Holders of a
               Majority in Liquidation Amount to the time, method and place of
               conducting any proceeding for any remedy available to the
               Guarantee Trustee, or





                                      -6-
<PAGE>   11


               exercising any trust or power conferred upon the Guarantee
               Trustee under this Guarantee Agreement; and

                      (iv)   no provision of this Guarantee Agreement shall
               require the Guarantee Trustee to expend or risk its own funds or
               otherwise incur any financial liability in the performance of
               any of its duties hereunder, or in the exercise of any of its
               rights or powers, if the Guarantee Trustee shall have reasonable
               grounds for believing that the repayment of such funds or
               liability is not reasonably assured to it under the terms of
               this Guarantee Agreement or adequate indemnity, reasonably
               satisfactory to the Guarantee Trustee, against such risk or
               liability is not reasonably assured to it.

               (d)    This Guarantee Agreement and all moneys received by the
Guarantee Trustee in respect of the Guarantee Payment will not be subject to any
right, charge, security interest, lien or claim of any kind in favor of or for
the benefit of, the Guarantee Trustee or its agents or their creditors.

               SECTION 3.02  CERTAIN RIGHTS OF GUARANTEE TRUSTEE. (a) Subject
to the provisions of Section 3.01:

                      (i)    the Guarantee Trustee may rely and shall be fully
               protected in acting or refraining from acting upon any
               resolution, certificate, statement, instrument, opinion, report,
               notice, request, direction, consent, order, bond, debenture,
               note, other evidence of indebtedness or other paper or document
               reasonably believed by it to be genuine and to have been signed,
               sent or presented by the proper party or parties;

                      (ii)   any direction or act of the Guarantor contemplated
               by this Guarantee Agreement shall be sufficiently evidenced by an
               Officer's Certificate, or as otherwise expressly provided herein;

                      (iii)  whenever, in the administration of this Guarantee
               Agreement, the guarantee Trustee shall deem it desirable that a
               matter be proved or established before taking, suffering or
               omitting to take any action hereunder, the Guarantee Trustee
               (unless other evidence is herein specifically prescribed) may,
               in the absence of bad faith on its part, request and rely upon
               an Officer's Certificate which, upon receipt of such request
               from the Guarantee Trustee, shall be promptly delivered by the
               Guarantor;

                      (iv)   the Guarantee Trustee may consult with counsel of
               its choice, and the written advice or Opinion of Counsel with
               respect to legal matters shall be full and complete
               authorization and protection in respect of any action taken,
               suffered or omitted by it hereunder in good faith and in
               accordance with such advice or opinion; such counsel may be
               counsel to the Guarantee Trustee, the Guarantor or any of its
               Affiliates and may include any of its employees; the Guarantee
               Trustee shall have the right at any time to seek instructions
               concerning the administration of this Guarantee Agreement from
               any court of competent jurisdiction;





                                      -7-
<PAGE>   12

                      (v)    the Guarantee Trustee shall be under no obligation
               to exercise any of the rights or powers vested in it by this
               Guarantee Agreement at the request or direction of any Holder,
               unless such Holder shall have provided to the Guarantee Trustee
               such adequate security and indemnity as would satisfy a
               reasonable person in the position of the Guarantee Trustee,
               against the costs, expenses (including attorneys' fees and
               expenses) and liabilities that might be incurred by it in
               complying with such request or direction, including such
               reasonable advances as may be requested by the Guarantee
               Trustee; provided that, nothing contained in this Section
               3.02(a)(v) shall be taken to relieve the Guarantee Trustee, upon
               the occurrence and continuance of an Event of Default, of its
               obligation under the last sentence of Section 3.01(b) to
               exercise the rights and powers vested in it by this Guarantee
               Agreement;

                      (vi)   the Guarantee Trustee shall not be bound to make
               any investigation into the facts or matters stated in any
               resolution, certificate, statement, instrument, opinion, report,
               notice, request, direction, consent, order, bond, debenture,
               note, other evidence of indebtedness or other paper or document,
               but the Guarantee Trustee, in its discretion, may make such
               further inquiry or investigation into such facts or matters as
               it may see fit;

                      (vii)  the Guarantee Trustee may execute any of the
               trusts or powers hereunder or perform any duties hereunder
               either directly or by or through agents or attorneys, and the
               Guarantee Trustee shall not be responsible for any misconduct
               or negligence on the part of any such agent or attorney
               appointed with due care by it hereunder;

                      (viii) whenever in the administration of this Guarantee
               Agreement the Guarantee Trustee shall deem it desirable to
               receive instructions with respect to enforcing any remedy or
               right or taking any other action hereunder, the Guarantee
               Trustee (1) may request instructions from the Holders of a
               Majority in Liquidation Amount, (2) may refrain from enforcing
               such remedy or right or taking such other action until such
               instructions are received, and (3) shall be protected in
               relying on or acting in accordance with such instructions;

                      (ix)   the Guarantee Trustee shall have no duty to see to
               any recording, filing or registration of any instrument
               (including any financing or continuation statement or any tax or
               securities form) (or any rerecording, refiling or
               re-registration thereof); and

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

               (b)    No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be





                                      -8-
<PAGE>   13

illegal, or in which the Guarantee Trustee shall be unqualified or incompetent
in accordance with applicable law, to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive power or
authority available to the Guarantee Trustee shall be construed to be a duty to
act in accordance with such power or authority.

               SECTION 3.03  NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
GUARANTEE. The recitals contained in this Guarantee Agreement shall be taken as
the statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee Agreement.

                                   ARTICLE IV

                                GUARANTEE TRUSTEE

               SECTION 4.01  GUARANTEE TRUSTEE; ELIGIBILITY. (a) There shall at
all times be a Guarantee Trustee which shall:

                      (i)    not be an Affiliate of the Guarantor; and

                      (ii)   be a corporation organized and doing business
               under the laws of the United States of America or any State or
               Territory thereof or of the District of Columbia, or a
               corporation or Person permitted by the Securities and Exchange
               Commission to act as an institutional trustee under the Trust
               Indenture Act, authorized under such laws to exercise corporate
               trust powers, having a combined capital and surplus of at least
               50 million U.S. dollars ($50,000,000), and subject to
               supervision or examination by Federal, State, Territorial or
               District of Columbia authority.  If such corporation publishes
               reports of condition at least annually, pursuant to law or to
               the requirements of the supervising or examining authority
               referred to above, then, for the purposes of this Section
               4.01(a)(ii), the combined capital and surplus of such
               corporation shall be deemed to be its combined capital and
               surplus as set forth in its most recent report of condition so
               published.

               (b)    If at any time the Guarantee Trustee shall cease to be
          eligible to so act under Section 4.01(a), the Guarantee Trustee
          shall immediately resign in the manner and with the effect set out
          in Section 4.03(c).

               (c)    If the Guarantee Trustee has or shall acquire any
          "conflicting interest" within the meaning of Section 310(b) of the
          Trust Indenture Act, the Guarantee Trustee and Guarantor shall in
          all respects comply with the provisions of Section 310(b) of the
          Trust Indenture Act.

               SECTION 4.02  COMPENSATION, REIMBURSEMENT AND INDEMNITY. The
Guarantor agrees to pay to the Guarantee Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust), to reimburse the Guarantee Trustee upon request
for all reasonable expenses, disbursements and advances (including the
reasonable fees and expenses of its attorneys and agents) incurred or made by
the Guarantee






                                      -9-
<PAGE>   14

Trustee in accordance with any provision of this Guarantee Agreement and to
indemnify each of the Guarantee Trustee and any predecessor Guarantee Trustee
for, and to hold it harmless against, any and all loss, damage, claim, liability
or expense, including taxes (other than taxes based upon the income of the
Guarantee Trustee) incurred without negligence, willful misconduct or bad faith
on its part, arising out of or in connection with the acceptance of the trusts
created by, or the administration of, this Guarantee Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligations of the Guarantor under this Section shall survive the
resignation or removal of the Guarantee Trustee and the termination of this
Guarantee Agreement and the resignation or removal of the Guarantee Trustee.

               SECTION 4.03  APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE
TRUSTEE. (a) Subject to Section 4.03(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.

               (b)    The Guarantee Trustee shall not be removed until a
Successor Guarantee Trustee has been appointed by the Guarantor and has accepted
such appointment by written instrument executed by such Successor Guarantee
Trustee and delivered to the Guarantor.

               (c)    The Guarantee Trustee appointed to office shall hold
office until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.

               (d)    If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.02 within 30
days after delivery to the Guarantor of an instrument of resignation or removal,
the Guarantee Trustee resigning or being removed may petition any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.

               (e)    No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.

                                   ARTICLE V

                                   GUARANTEE

               SECTION 5.01  GUARANTEE. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by or on behalf of the Issuer),
as and when due, regardless of any defense, right of set-off or counterclaim
which the Issuer may have or assert. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the






                                      -10-
<PAGE>   15

Guarantor to the Holders, or to the Guarantee Trustee for remittance to the
Holders, or by causing the Issuer to pay such amounts to the Holders.

               SECTION 5.02  WAIVER OF NOTICE AND DEMAND. The Guarantor hereby
waives notice of acceptance of this Guarantee Agreement and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Guarantee Trustee, Issuer or any other
Person before proceeding against the Guarantor, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.

               SECTION 5.03  OBLIGATIONS NOT AFFECTED. The obligation of the
Guarantor to make the Guarantee Payments under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:

               (a)    the release or waiver, by operation of law or otherwise,
        of the performance or observance by the Issuer of any express or
        implied agreement, covenant, term or condition relating to the Trust
        Securities to be performed or observed by the Issuer;

               (b)    the extension of time for the payment by the Issuer of
        all or any portion of the Distributions, Redemption Price, Liquidation
        Distribution or any other sums payable under the terms of the Trust
        Securities or the extension of time for the performance of any other
        obligation under, arising out of, or in connection with, the Trust
        Securities (other than an extension of time for payment of
        Distributions, Redemption Price, Liquidation Distribution or other sum
        payable that results from the extension of any interest payment period
        on the Subordinated Notes permitted by the Subordinated Indenture);

               (c)    any failure, omission, delay or lack of diligence on the
        part of the Holders to enforce, assert or exercise any right, privilege,
        power or remedy conferred on the Holders pursuant to the terms of the
        Trust Securities, or any action on the part of the Issuer granting
        indulgence or extension of any kind;

               (d)    the voluntary or involuntary liquidation, dissolution,
        sale of any collateral, receivership, insolvency, bankruptcy,
        assignment for the benefit of creditors, reorganization, arrangement,
        composition or readjustment of debt of, or other similar proceedings
        affecting, the Issuer or any of the assets of the Issuer;

               (e)    any invalidity of, or defect or deficiency in, the Trust
        Securities;

               (f)    the settlement or compromise of any obligation guaranteed
        hereby or hereby incurred; or

               (g)    any other circumstance whatsoever that might otherwise
        constitute a legal or equitable discharge or defense of a guarantor, it
        being the intent of this Section 5.03 that the obligations of the
        Guarantor hereunder shall be absolute and unconditional under any and
        all circumstances.






                                      -11-
<PAGE>   16

There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.

               SECTION 5.04  RIGHTS OF HOLDERS. The Guarantor expressly
acknowledges that: (i) this Guarantee Agreement will be deposited with the
Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee
Trustee has the right to enforce this Guarantee Agreement on behalf of the
Holders; (iii) the Holders of a Majority in Liquidation Amount have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee Agreement or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement, provided, however, that, subject to Section 3.01, the
Guarantee Trustee shall have the right to decline to follow any such direction
if the Guarantee Trustee being advised by counsel determines that the action so
directed may not lawfully be taken, or if the Guarantee Trustee in good faith
shall, by a Responsible Officer or Officers of the Guarantee Trustee, determine
that the proceedings so directed would be illegal or involve it in personal
liability or be unduly prejudicial to the rights of Holders not party to such
direction, and provided further that nothing in this Trust Agreement shall
impair the right of the Guarantee Trustee to take any action deemed proper by
the Guarantee Trustee which is not inconsistent with such direction; and (iv)
any Holder may enforce this Guarantee Agreement, or institute a legal proceeding
directly against the Guarantor to enforce the Guarantee Trustee's rights under
this Guarantee Agreement without first instituting a legal proceeding against
the Issuer, the Guarantee Trustee, or any other Person.

               SECTION 5.05  GUARANTEE OF PAYMENT. This Guarantee Agreement
creates a guarantee of payment and not of collection. This Guarantee Agreement
will not be discharged except by payment of the Guarantee Payments in full
(without duplication) or upon the distribution of Subordinated Notes as provided
in the Trust Agreement.

               SECTION 5.06  SUBROGATION. The Guarantor shall be subrogated to
all, if any, rights of the Holders against the Issuer in respect of any amounts
paid to the Holders by the Guarantor under this Guarantee Agreement; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts of Guarantee Payments are due
and unpaid under this Guarantee Agreement. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.

               SECTION 5.07  INDEPENDENT OBLIGATIONS. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of the Issuer
with respect to the Trust Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03.





                                      -12-
<PAGE>   17

                                   ARTICLE VI

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

               SECTION 6.01  LIMITATION OF TRANSACTIONS. (a) As long as any
Trust Securities issued by the Trust remain outstanding and, either the
Guarantor is in default on its Guarantee Payments or other payment obligations
under this Guarantee Agreement, or any Event of Default under the Trust
Agreement has occurred and is continuing, then the Guarantor shall not:

               (i)    declare or pay any dividends or distributions on, or
        redeem, purchase, acquire or make a liquidation payment with respect
        to, any of its capital stock; or

               (ii)   make any payment of principal, interest or premium, if
        any, on or repay, repurchase or redeem any debt securities that rank
        equally with or junior in interest to the Subordinated Notes of the
        Subordinated Notes Issuer or make any guarantee payments with respect
        to any guarantee by it of the debt of any subsidiary of the Guarantor
        if such guarantee ranks equally with or junior in interest to the
        Subordinated Notes Issuer's Subordinated Notes.

               (b)  Clauses (i) and (ii) are subject to the following
        exceptions for or as a result of:

               (i)    the declaration of dividends in connection with the
        implementation of a stockholders' rights plan or the redemption or
        repurchase of any such rights pursuant thereto;

               (ii)   a reclassification of the Guarantor's capital stock or
        exchange or conversion of one class or a series of the Guarantor's
        capital stock for or into another class or series of the Guarantor's
        capital stock;

               (iii)  the purchase of fractional interests in shares of the
        Guarantor's capital stock pursuant to the conversion or exchange
        provisions of such capital stock or the security being converted or
        exchanged;

               (iv)   the declaration of dividends or distributions in the
        Guarantor's capital stock; and

               (v)    payments under this Guarantee Agreement related to the
        Trust Securities.

               SECTION 6.02  SUBORDINATION. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Guarantor, including the guarantee of the Subordinated Notes, except those made
pari passu or subordinate by their terms, (ii) pari passu with the most senior
preferred or preference stock now or hereafter issued by the Guarantor and with
any guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any Affiliate of the Guarantor, and (iii)
senior to all common stock of the Guarantor. When a Trust Enforcement Event (as
defined in the Trust Agreement) occurs and is continuing, the rights of holders
of the Common Trust Securities to receive Guarantee Payments







                                      -13-
<PAGE>   18

will be subordinated to the rights to payment of holders of Trust Securities to
receive Guarantee Payments. Each Person, by virtue of having become a Holder of
a Security, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Guarantee Agreement, the Trust Agreement and the
Subordinated Indenture.

                                  ARTICLE VII

                                  TERMINATION

               SECTION 7.01  TERMINATION. This Guarantee Agreement shall
terminate and be of no further force and effect upon: (i) full payment of the
Redemption Price of all Trust Securities, and all accumulated and unpaid
Distributions to the date of redemption, (ii) the distribution of Subordinated
Notes to Holders in exchange for all of the Trust Securities, or (iii) full
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid with respect
to Trust Securities or under this Guarantee Agreement.

                                  ARTICLE VIII

                                  MISCELLANEOUS

               SECTION 8.01  SUCCESSORS AND ASSIGNS. All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Trust Securities then outstanding.
Except in connection with a consolidation, merger or sale involving the
Guarantor that is permitted under Article Eleven of the Subordinated Indenture
and pursuant to which the assignee agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder.

               SECTION 8.02  AMENDMENTS. This Guarantee Agreement may be
amended only by an instrument in writing entered into by the Guarantor and the
Guarantee Trustee. Except with respect to any changes which do not materially
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than a majority in aggregate Liquidation
Amount of all the outstanding Trust Securities. Any such consent shall be deemed
to be on behalf of the holders of all the Trust Securities. The provisions of
Article VI of the Trust Agreement concerning meetings or consents of Holders
shall apply to the giving of such approval.

               SECTION 8.03  NOTICES. Any notice, request or other
communication  required or permitted to be given hereunder shall be in writing,
duly signed by the party giving such notice, and delivered, telecopied or mailed
by first class mail as follows:

               (a)    if given to the Guarantor, to the address set forth below
        or such other address or facsimile number or to the attention of such
        other Person as the Guarantor may give notice of to the Guarantee
        Trustee and the Holders of the Trust Securities:






                                      -14-
<PAGE>   19

                      PPL Corporation
                      Two North Ninth Street
                      Allentown, Pennsylvania  18101-1179
                      Facsimile No:  610-774-5106
                      Attention:  Treasurer

               (b)    if given to the Issuer, in care of the Administrative
        Trustees, at the Issuer's (and the Administrative Trustees') address
        set forth below or such other address or facsimile number or to the
        attention of such other Person as the Administrative Trustees on behalf
        of the Issuer may give notice of to the Guarantee Trustee and the
        Holders:

                      PPL Capital Funding Trust I
                      c/o PPL Corporation
                      Two North Ninth Street
                      Allentown, Pennsylvania  18101-1179
                      Facsimile No:  610-774-5100
                      Attention:  Administrative Trustees

               (c)    if given to the Guarantee Trustee, to the address set
        forth below or such other address or facsimile number or to the
        attention of such other Person as the Guarantee Trustee may give notice
        of to the Guarantor and the Holders of the Trust Securities:

                      The Chase Manhattan Bank
                      450 West 33rd Street, 15th Floor
                      New York, New York 10001
                      Facsimile No: 212-946-8177
                      Attention: Institutional Trust Services

               (d)    if given to any Holder, at the address set forth on the
        books and records of the Issuer.

               All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.

               SECTION 8.04  BENEFIT. This Guarantee Agreement is solely for
the benefit of the Holders and, subject to Section 3.01(a), is not separately
transferable from the Trust Securities.

               SECTION 8.05  INTERPRETATION. In this Guarantee Agreement,
unless the context otherwise requires:

               (a)    a term defined anywhere in this Guarantee Agreement has
        the same meaning throughout;







                                      -15-
<PAGE>   20

               (b)    all references to "the Guarantee Agreement" or "this
        Guarantee Agreement" are to this Guarantee Agreement as modified,
        supplemented or amended from time to time;

               (c)    all references in this Guarantee Agreement to Articles
        and Sections are to Articles and Sections of this Guarantee Agreement
        unless otherwise specified;

               (d)    a term defined in the Trust Indenture Act has the same
        meaning when used in this Guarantee Agreement unless otherwise defined
        in this Guarantee Agreement or unless the context otherwise requires;

               (e)    a reference to the singular includes the plural and vice
        versa; and

               (f)    the masculine, feminine or neuter genders used herein
        shall include the masculine, feminine and neuter genders.

               SECTION 8.06  GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

               SECTION 8.07  COUNTERPARTS.

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








                                      -16-
<PAGE>   21

               THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.

                        PPL CORPORATION,
                           As Guarantor


                        By:  /s/ James E. Abel
                             ---------------------------------------------
                             Name:  James E. Abel
                             Title:   Vice President-Finance and Treasurer



                        THE CHASE MANHATTAN BANK,
                           as Guarantee Trustee


                        By:  /s/ Annette M. Marsula
                             ---------------------------------------------
                             Name:  Annette M. Marsula
                             Title:   Vice President






                                      -17