Document:

Exhibit 10.2
                                                                    ------------

                 FIRST AMENDMENT OF PURCHASE AND SALE AGREEMENT

     THIS FIRST AMENDMENT OF PURCHASE AND SALE AGREEMENT  (this  "Amendment") is
made as of this 14th day of August,  2003,  by and between  ELEC  COMMUNICATIONS
CORP.,  a New  York  corporation  having  an  address  at 543 Main  Street,  New
Rochelle, New York 10801 (hereinafter called "Seller") and BLUEGILL REALTY, LLC,
a New York limited  liability  company,  have an office at 250 West 30th Street,
New York, New York 10001(hereinafter called "Buyer").

                               W I T N E S S E T H
                               -------------------

     WHEREAS:

     a. Buyer and Seller have  heretofore  entered into an Agreement of Purchase
and Sale dated as of June 2, 2003 (the  "Contract"),  pursuant  to which  Seller
agreed to sell and Buyer  agreed  to  purchase  the  building  and  improvements
located at 543 Main Street,  New Rochelle,  New York (the  "Property")  upon and
subject to all of the terms,  covenants and conditions as are more  particularly
described in the Contract.

     b. Buyer has previously  delivered the Extension  Notice  extending the Due
Diligence Period until August 31, 2003.

     c. The parties hereto desire to modify the Contract in certain  respects to
provide  for,   among  other  things,   (i)  the  creation  of  a   post-closing
Environmental  Escrow  (as  hereinafter  defined)  for the  payment  of  certain
environmental  testing and remediation costs with respect to underground storage
tanks;   (ii)  the  confirmation  of  the  satisfaction  of  the  Due  Diligence
Conditions, the Special Conditions and the financing contingency, subject to the
post-closing  testing and remediation of the USTs; and (iii) the delivery of the
Vacate Notice.

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:

     1. All capitalized terms used herein which are not otherwise defined herein
shall have the respective meanings ascribed to them in the Contract.

     2.  Subject to the terms and  conditions  of this  Amendment,  Buyer hereby
exercises  its right to require  Seller to vacate the  Property  pursuant to the
provisions  of Section 3.5 of the  Contract  (the  "Vacate  Notice"),  and Buyer
acknowledges  that all conditions under Sections 3, 5 and 6 of the Contract have
been satisfied or waived.  The parties  acknowledge  that the Closing Date shall
occur on October 8, 2003, or sooner in the event that the parties can agree upon
a mutually acceptable date.

     3. Buyer and Seller hereby acknowledge that Seller shall have no obligation
to remove any  asbestos-containing  material ("ACM") located in the Building and
Buyer shall not be entitled to any adjustment to the Purchase Price by reason of
the presence of any ACM.

     4. Buyer and Seller hereby acknowledge that certain testing and remediation
activities  as  hereinafter  described  in this  Section 4 with  respect  to the
existing  underground  storage  tank  ("UST")  located on the  Property  will be
performed  by Buyer prior to or  subsequent

<PAGE>

to the Closing (the "Tank Removal Activities").  Seller hereby acknowledges that
it shall  immediately  cease the  performance of any testing and/or  remediation
activities with respect to the UST. For the purposes  hereof,  the "Tank Removal
Activities" shall include,  but not be limited to the following i)Remove UST(s);
ii) Remove any and all supply and return lines; iii) Remove any and all existing
fill and vent lines; iv) Remove and dispose of contaminated soil associated with
the tank removal;  v)Pump and dispose of  contaminated  ground water  associated
with the tank  removal;  and vi) Test to determine if UST abandoned or any other
USTs in use on-site.

     5. In consideration of Buyer's  performance of the Tank Removal Activities,
Seller and Buyer hereby  direct  Escrow Agent to retain the sum of $100,000 (the
"Environmental  Escrow") in the escrow  account  subsequent to the Closing.  The
Environmental  Escrow shall be held and applied  subject to the following  terms
and conditions:

     (i)  Prior to or promptly  after the  Closing,  Buyer  shall  prepare a bid
          package for the  performance of the Tank Removal  Activities and shall
          deliver a copy of same to Seller.

     (ii) Buyer shall obtain three (3) bids from qualified licensed  contractors
          for the performance of the Tank Removal Activities.  Seller shall have
          the right to designate one licensed contractor who shall be invited to
          submit a bid for the performance of the Tank Removal Activities.

     (iii)Buyer,  at its sole  discretion,  shall  select the winning  bidder to
          perform the Tank Removal  Activities,  it being  understood that Buyer
          shall be under no  obligation to select the lowest  bidder,  and Buyer
          shall contract with such bidder for the work.

     (iv) Buyer  shall be  entitled to  reimbursement  of all costs  incurred in
          connection with the Tank Removal  Activities in an amount equal to the
          lesser of the bid  accepted  by the Buyer or the  average of the three
          (3) qualified  bids received for the Tank Removal  Activities  (or the
          lesser number of bids actually  received)  plus the cost of any change
          orders, provided the aggregate change order costs shall not exceed 20%
          of the original contract price.

     (v)  Buyer shall submit monthly requisitions to Escrow Agent with a copy to
          Seller  requesting   payment  of  monies  due  for  the  Tank  Removal
          Activities,  and Escrow Agent shall promptly  reimburse Buyer for such
          costs.  It is understood that Escrow Agent has no  responsibility  for
          review and approval or verification of any requisitions.

     6. In the event that the results of the Tank  Removal  Activities  indicate
that Buyer will be required to install an extraction system as determined by the
applicable  governmental  agency(ies) having  jurisdiction  thereof,  the Escrow
Agent shall promptly release any unapplied portion of the  Environmental  Escrow
to Buyer after payment of all unbilled costs and Seller  thereupon shall have no
further  obligations or liabilities with respect to the Tank Removal  Activities
from and after the Closing Date.

                                      -2-

<PAGE>

     7. In the event the results of the Tank Removal Activities as determined by
Buyer's  environmental  consultant  indicate  that  no  further  remediation  is
required  or  recommended  under  applicable  governmental  requirements,  or in
connection  with the  construction of the purported  improvements,  Escrow Agent
upon request from Seller,  shall promptly  release any unapplied  portion of the
Environmental  Escrow after payment of unreimbursed  costs to Seller, and Seller
shall  have no  further  obligations  or  liabilities  with  respect to the Tank
Removal Activities on the Property from and after the Closing Date.

     8.  Seller  agrees to  cooperate  with Buyer,  at the expense of Buyer,  in
completing and filing any application permits or other documents as requested by
Buyer prior to Closing to expedite the performance of Buyer's  demolition of the
Building and  construction  of the new  multi-family  building on the  Property,
including,  but not limited to, any asbestos  abatement,  demolition  permits or
tank removal  permits,  provided  however,  that Seller shall not be required to
take any action  that  adversely  affects the rights,  duties,  liabilities  and
immunities of Seller under the Contract.

     In consideration of Seller's  agreement to cooperate with Buyer pursuant to
this  Section  8,  Buyer  hereby  agrees to  indemnify  Seller  and its  agents,
employees,  officers,  directors and shareholders  for, and to hold each of them
harmless  against,  any loss,  liability or expense  incurred by any such person
arising out of or in  connection  with any action taken by Seller at the request
of Buyer pursuant to this Section 8, including the reasonable costs and expenses
of defending  itself  against any claim or liability in the  performance of such
actions.

     9. Except as modified by this  Amendment,  the Contract and all  covenants,
agreements,  terms and conditions  thereof shall remain in full force and effect
and are hereby in all respects ratified and confirmed.

     10. The  covenants,  agreements,  terms and  conditions  contained  in this
Amendment  shall bind and inure to the benefit of the  parties  hereto and their
respective successors assigns.

     11. The Amendment may be executed in  counterparts  by the parties  hereto,
each of which shall be  considered  an original,  and all of which  counterparts
together shall constitute one and the same instrument.  Facsimile  signatures of
this Amendment shall be deemed legal and binding upon the parties hereto.

     12. This Amendment may not be changed  orally,  but only by an agreement in
writing  signed by the party  against whom  enforcement  of any waiver,  change,
modification or discharge is sought.

                                      -3-
<PAGE>

     IN WITNESS  WHEREOF,  the parties hereto have executed this Amendment as of
the day and year first above written.

                                       ELEC COMMUNICATIONS CORP., Seller

                                       By:    /s/  Paul H. Riss
                                           -------------------------------------
                                                Name:   Paul H. Riss
                                                Title:  Chief Executive Officer
                                                Date:   August 14, 2003

                                       BLUEGILL REALTY, LLC, Buyer

                                       By:      /s/ Geoffrey J. Weir
                                           -------------------------
                                                Name:   Geoffrey J. Weir
                                                Title:  Principal
                                                Date:   August   14, 2003

The  undersigned  hereby  agrees to be bound by the  provisions  of  Paragraph 5
herein in its capacity as Escrow Agent

ANDERSON & ROTTENBERG, P.C.

        By: /s/ Charles S. Rich
            --------------------------
        Name:   Charles S. Rich
        Title:  Partner

                                      -4-FORM OF SUPPLEMENTAL INDENTURE NO. 5

 

EXHIBIT 4.10

PPL CAPITAL FUNDING, INC.,

Issuer

and

PPL CORPORATION,

Guarantor

to

JPMORGAN CHASE BANK,

Trustee

SUPPLEMENTAL INDENTURE NUMBER 5

Dated as of
                           , 2003

Supplemental to the Indenture

dated as of November 1, 1997

Notes due May 18, 2006

 

 

TABLE OF CONTENTS1

	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	ARTICLE ONE NOTES DUE MAY 18, 2006
	 	 	1	 
	 	Section 1.01 Establishment
	 	 	1	 
	 	Section 1.02 Definitions
	 	 	2	 
	 	Section 1.03 Ranking of the Notes
	 	 	5	 
	 	Section 1.04 Stated Maturity; Payment of Principal and Interest
	 	 	5	 
	 	Section 1.05 Form; Denominations
	 	 	6	 
	 	Section 1.06 Global Notes
	 	 	7	 
	 	Section 1.07 Paying Agents; Transfer Agents; Place of Payment
	 	 	7	 
	 	Section 1.08 Trust Indenture Act
	 	 	8	 
	ARTICLE TWO SUBORDINATION OF NOTES
	 	 	8	 
	 	Section 2.01 Notes Subordinate to Senior Indebtedness of the Corporation
	 	 	8	 
	 	Section 2.02 Payment Over of Proceeds of Notes
	 	 	8	 
	 	Section 2.03 Disputes with Holders of Certain Senior Indebtedness
of the Corporation
	 	 	10	 
	 	Section 2.04 Subrogation
	 	 	10	 
	 	Section 2.05 Obligation of the Corporation Unconditional
	 	 	11	 
	 	Section 2.06 Priority of Senior Indebtedness of the Corporation Upon Maturity
	 	 	11	 
	 	Section 2.07 Trustee as Holder of Senior Indebtedness of the Corporation
	 	 	12	 
	 	Section 2.08 Notice to Trustee to Effectuate Subordination
	 	 	12	 
	 	Section 2.09 Modification, Extension, etc. of Senior Indebtedness of the
Corporation
	 	 	12	 
	 	Section 2.10 Trustee Has No Fiduciary Duty to Holders of Senior
Indebtedness of the Corporation
	 	 	13	 
	 	Section 2.11 Paying Agents Other Than the Trustee
	 	 	13	 
	 	Section 2.12 Rights of Holders of Senior Indebtedness of the
Corporation Not Impaired
	 	 	13	 

	1	 	 This Table of Contents does not constitute part of the Indenture or have any
bearing upon the interpretation of any of its terms and provisions.

 

 

	 	 	 	 	 	 
	 	Section 2.13 Effect of Subordination Provisions; Termination
	 	 	13	 
	ARTICLE THREE FORM OF GUARANTEE
	 	 	14	 
	ARTICLE FOUR REMARKETING
	 	 	21	 
	 	Section 4.01 Remarketing; Payment of Purchase Price
	 	 	21	 
	 	Section 4.02 Failed Final Remarketing
	 	 	23	 
	ARTICLE FIVE MISCELLANEOUS PROVISIONS
	 	 	24	 
	 	Section 5.01 Recitals by Corporation
	 	 	24	 
	 	Section 5.02 Ratification and Incorporation of Original Indenture
	 	 	25	 
	 	Section 5.03 Executed in Counterparts
	 	 	25	 
	ARTICLE SIX TAX TREATMENT; ERISA
	 	 	25	 
	 	Section 6.01 Tax Agreements
	 	 	25	 
	 	Section 6.02 ERISA Agreements
	 	 	25	 

A-3

 

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

W I T N E S S E T H :

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

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

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

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

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

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

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

ARTICLE ONE

NOTES DUE MAY 18, 2006

     Section 1.01 Establishment

     There is hereby established a new series of Securities to be issued under
the Indenture, to be designated as the Corporation’s Notes due May 18, 2006
(the “Notes”).

 

 

     There are to be authenticated and delivered an aggregate principal amount
equal to $           of Notes and no further Notes shall be authenticated and
delivered except as provided by Section 304, 305, 306 or 1206 of the Original
Indenture. The Notes may be issued pursuant to a Company Order delivered to
the Trustee for the authentication and delivery of Notes pursuant to Section
303 of the Original Indenture. The Notes shall be issued in fully registered
form without coupons.

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

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

     Section 1.02 Definitions

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

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

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

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

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

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

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

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Coupon Rate” shall have the meaning set forth in Section 1.04.

     “Custodial Agent” shall have the meaning set forth in the Pledge
Agreement.

2

 

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

     “DTC” means The Depository Trust Company.

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

     “Failed Final Remarketing” shall have the meaning set forth in Section
4.02.

     “Global Notes” shall have the meaning set forth in Section 1.06.

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

     “Indenture” shall have the meaning set forth in the Recitals.

     “Interest Payment Date” shall have the meaning set forth in Section 1.04(b).

     “Notes” shall have the meaning specified in Section 1.01.

     “Original Indenture” shall have the meaning set forth in the Recitals.

     “Original Issue Date” means                    , 2003.

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

     “Pledge Agreement” means the Pledge Agreement dated as of , 2003 among PPL
Corporation and JPMorgan Chase Bank, as collateral agent (the “Collateral
Agent”), custodial agent, securities intermediary, purchase contract agent and
attorney-in-fact.

     “Pledged Notes” shall have the meaning set forth in the Pledge Agreement.

     “Purchase Contract” shall have the meaning set forth in the Purchase
Contract Agreement.

     “Purchase Contract Agent” means the “Agent” under the Purchase Contract
Agreement.

     “Purchase Contract Agreement” means the Purchase Contract Agreement dated
as of
                       , 2003, between PPL Corporation and JPMorgan Chase Bank, as purchase
contract agent, collateral agent and custodial agent.

     “Purchase Contract Settlement Date” means May 18, 2004.

3

 

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

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

     “Remarketing” shall have the meaning set forth in Section 4.01(b).

     “Remarketing Agent” means Morgan Stanley & Co. Incorporated, as
remarketing agent under the Remarketing Agreement, or any successor remarketing
agent appointed in accordance therewith.

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

     “Reset Rate” means the interest rate per annum (to be determined by the
Reset Agent), rounded to the nearest one-thousandth (0.001) of one percent per
annum, equal to the interest rate that the Notes should bear in order for the
aggregate principal amount of the Remarketed Notes to have an approximate
aggregate market value of 100.5% of the aggregate principal amount of such
Remarketed Notes; provided, however, that the Reset Rate shall not exceed the
maximum rate permitted by applicable law.

     “Senior Indebtedness,” when used with respect to the Corporation or the
Guarantor for purposes of the Indenture prior to May 18, 2004, means all
obligations (other than non-recourse obligations) of, or guaranteed or assumed
by, the Corporation or the Guarantor, as the case may be, for borrowed money,
including both senior and subordinated indebtedness for borrowed money (other
than the Notes prior to May 18, 2004 and other than securities issued under the
Subordinated Indenture dated as of May 9, 2001 (the “Subordinated Indenture”),
among the Corporation, the Guarantor and the Trustee and the Guarantor’s
guarantee thereof), or for the payment of money relating to any lease which is
capitalized on the consolidated balance sheet of the Corporation or the
Guarantor, as the case may be, and its subsidiaries in accordance with
generally accepted accounting principles as in effect from time to time, or
evidenced by bonds,

4

 

 debentures, notes or other similar instruments, and in each case,
amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligations, whether existing as of the date of the Indenture
or subsequently incurred by the Corporation or the Guarantor, as the case may
be, unless, in the case of any particular indebtedness, renewal, extension or
refunding, the instrument creating or evidencing the same or the assumption or
guarantee of the same expressly provides that such indebtedness, renewal,
extension or refunding is not superior in right of payment to or is pari passu
with the Notes prior to May 18, 2004 or the Guarantee prior to May 18, 2004, as
the case may be; provided that the Guarantor’s obligations under the trust
preferred securities guarantee shall not be deemed to be Senior Indebtedness of
the Guarantor (as specified in the documents governing such trust preferred
securities), and provided further that Senior Indebtedness shall not include
(i) any obligation of the Corporation to any of its subsidiaries or (ii) trade
accounts payable or accrued liabilities arising in the ordinary course of
business or (iii) any obligations to an employee.

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

     “Stated Maturity” shall have the meaning set forth in Section 1.04(a).

     “Successful Remarketing” shall have the meaning set forth in Section 4.01(b).

     Section 1.03 Ranking of the Notes

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

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

     Section 1.04 Stated Maturity; Payment of Principal and Interest

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

     (b)  Each Note will bear interest (i) at the rate of 7.29% per year (the
“Coupon Rate”) from November 18, 2003 through and including the day immediately
preceding May 18, 2004 and (ii)(A) in the case of a Successful Remarketing, at
the Reset Rate on and after the Purchase Contract Settlement Date and (B) in
the case of a Failed Final Remarketing, at the Coupon Rate on and after the
Purchase Contract Settlement Date, until the principal thereof is paid or duly
made available for payment. Interest will be payable, initially, quarterly in
arrears on February 18, 2004 and May 18, 2004 (each, an “Interest Payment
Date”) to the Person in whose name

5

 

 such Note, or any Predecessor Security, is registered at the close of
business on the Regular Record Date for such interest installment; provided,
however, that following the Purchase Contract Settlement Date, interest will be
payable semi-annually in arrears on May 18 and November 18 of each year,
commencing November 18, 2004, and such dates shall then be the “Interest
Payment Dates.”

     (c)  The amount of interest payable on the Notes for any period will be
computed (1) for any full quarterly or semi-annual period, as applicable, on
the basis of a 360-day year of twelve 30-day months and (2) for any period
shorter than a full quarterly or semi-annual period, as applicable, on the
basis of a 30-day month and, for any period less than a month, on the basis of
the actual number of days elapsed per 30-day month. In the event that any date
on which interest is payable on the Notes is not a Business Day, then payment
of the interest payable on that date will be made on the next day that is a
Business Day (and without any interest or other payment in respect of any such
delay).

     (d)  Payment of principal and interest on the Notes shall be made in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. Principal and interest
on the Notes will be payable, at the office or agency of the Corporation
maintained for such purpose as described in Section 1.07 below; provided,
however, that payment of interest may be made at the option of the Corporation
(i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire transfer at such
place and to such account at a banking institution in the United States as may
be designated in writing to the Trustee at least 16 days prior to the date for
payment by the Person entitled thereto. Payments of principal of and interest
on Global Notes shall be made by wire transfer of immediately available funds
to the Holder of such Global Notes; provided, that, in the case of payments of
principal, such Global Notes are first surrendered to the Paying Agent.

     Section 1.05 Form; Denominations

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

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

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

6

 

     Section 1.06 Global Notes

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

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

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

     Section 1.07 Paying Agents; Transfer Agents; Place of Payment

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

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     Section 1.08 Trust Indenture Act

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

ARTICLE TWO

SUBORDINATION OF NOTES

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

     Section 2.01 Notes Subordinate to Senior Indebtedness of the Corporation.

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

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

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

     Section 2.02 Payment Over of Proceeds of Notes.

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

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	 	     (1) the holders of all Senior Indebtedness of the Corporation shall
first be entitled to receive payment of the full amount due thereon, or
provision shall be made for such payment in money or money’s worth,
before the Holders of any of the Notes are entitled to receive a payment
on account of the principal or interest on the indebtedness evidenced by
the Securities, including, without limitation, any payments made pursuant
to Articles Four and Five of the Original Indenture;
	 
	 	     (2) any payment by, or distribution of assets of, the Corporation of
any kind or character, whether in cash, property or securities, to which
any Holder or the Trustee would be entitled except for the provisions of
this Article, shall be paid or delivered by the Person making such
payment or distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of such Senior
Indebtedness of the Corporation or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Indebtedness of the
Corporation may have been issued, ratably according to the aggregate
amounts remaining unpaid on account of such Senior Indebtedness of the
Corporation held or represented by each, to the extent necessary to make
payment in full of all Senior Indebtedness of the Corporation remaining
unpaid after giving effect to any concurrent payment or distribution (or
provision therefor) to the holders of such Senior Indebtedness of the
Corporation, before any payment or distribution is made to the Holders of
the indebtedness evidenced by the Notes or to the Trustee under the
Indenture; and
	 
	 	     (3) in the event that, notwithstanding the foregoing, any payment
by, or distribution of assets of, the Corporation of any kind or
character, whether in cash, property or securities, in respect of
principal or interest on the Notes or in connection with any repurchase
by the Corporation of the Notes, shall be received by the Trustee or any
Holder before all Senior Indebtedness of the Corporation is paid in full,
or provision is made for such payment in money or money’s worth, such
payment or distribution in respect of principal or interest on the Notes
or in connection with any repurchase by the Corporation of the Notes
shall be paid over to the holders of such Senior Indebtedness of the
Corporation or their representative or representatives or to the trustee
or trustees under any indenture under which any instruments evidencing
any such Senior Indebtedness of the Corporation may have been issued,
ratably as aforesaid, for application to the payment of all Senior
Indebtedness of the Corporation remaining unpaid until all such Senior
Indebtedness of the Corporation shall have been paid in full, after
giving effect to any concurrent payment or distribution (or provision
therefor) to the holders of such Senior Indebtedness of the Corporation.

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

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

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

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

     Section 2.04 Subrogation.

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

10

 

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

     Section 2.05 Obligation of the Corporation Unconditional.

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

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

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

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

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

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

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

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

     Section 2.08 Notice to Trustee to Effectuate Subordination.

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

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

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

12

 

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

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

     Section 2.11 Paying Agents Other Than the Trustee.

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

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

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

     Section 2.13 Effect of Subordination Provisions; Termination.

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

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

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ARTICLE THREE

FORM OF GUARANTEE

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

[FORM OF GUARANTEE]

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

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

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

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

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

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

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

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

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

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

15

 

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

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

		
	 	     (1) the holders of all Senior Indebtedness of the Guarantor shall
first be entitled to receive payment of the full amount due thereon, or
provision shall be made for such payment in money or money’s worth,
before the Holders of any of the Notes are entitled to receive a payment
on account of the Guarantee of the principal or interest on the
indebtedness evidenced by the Notes, including, without limitation, any
payments made pursuant to Articles Four and Five of the Original
Indenture;
	 
	 	     (2) any payment by, or distribution of assets of, the Guarantor of
any kind or character, whether in cash, property or securities, to which
any Holder or the Trustee would be entitled except for the provisions of
this Guarantee, shall be paid or delivered by the Person making such
payment or distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of such Senior
Indebtedness of the Guarantor or their representative or representatives
or to the trustee or trustees under any indenture under which any
instruments evidencing any of such Senior Indebtedness of the Guarantor
may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of such Senior Indebtedness of the Guarantor
held or represented by each, to the extent necessary to make payment in
full of all Senior Indebtedness of the Guarantor remaining unpaid after
giving effect to any concurrent payment or distribution (or provision
therefor) to the holders of such Senior Indebtedness of the Guarantor,
before any payment or distribution is made to the Holders of the
indebtedness evidenced by the Notes or to the Trustee under the Guarantee
and the Indenture; and
	 
	 	     (3) in the event that, notwithstanding the foregoing, any payment
by, or distribution of assets of, the Guarantor of any kind or character,
whether in cash, property

16

 

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

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

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

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

17

 

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

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

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

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

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

18

 

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

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

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

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

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

19

 

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

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

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

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

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

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

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

20

 

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

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

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

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

	 	 	 	 	 
	 	 	PPL CORPORATION
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

[END OF FORM]

ARTICLE FOUR

REMARKETING

     Section 4.01 Remarketing; Payment of Purchase Price

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

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

21

 

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

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

22

 

Corporation of the aggregate principal
amount of the Separate Notes to be remarketed and will deliver to the
Remarketing Agent for remarketing all Separate Notes delivered to the Custodial
Agent pursuant to Section 5.7(c) of the Pledge Agreement and not withdrawn
pursuant to the terms in Section 5.7(c) of the Pledge Agreement prior to such
date. After deducting the Remarketing Fee to the extent permitted under the
terms of the Remarketing Agreement, the Remarketing Agent will remit to the
Custodial Agent the remaining portion of the proceeds derived from a Successful
Remarketing of the Separate Notes for the benefit of such Holders. In the
event of a Failed Final Remarketing, the Remarketing Agent will promptly return
such Separate Notes to the Custodial Agent for redelivery to such Holders.

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

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

		
	 	     (i) use its reasonable efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things necessary,
proper and advisable to permit and effectuate the offer and sale of
the Notes in connection with the Remarketing hereunder without
registration under the Securities Act of 1933 pursuant to an
exemption therefrom, if available, including the exemption afforded
by Rule 144A promulgated under the Securities Act of 1933 by the
Securities and Exchange Commission, and
	 
	 	     (ii) if requested by the Remarketing Agent, furnish a current
preliminary remarketing memorandum and a current final remarketing
memorandum (in such quantities as the Remarketing Agent may
reasonably request) to be used by the Remarketing Agent in the
Remarketing hereunder by a date that is not later than fifteen
Business Days prior to the Purchase Contract Settlement Date (or
such earlier date as the Remarketing Agent may reasonably request).
The Guarantor shall pay all expenses relating thereto.

     Section 4.02 Failed Final Remarketing.

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

     (b)  Holders of Notes that are not pledged to the Corporation and remain
outstanding after a Failed Final Remarketing will have the right to put their
Notes in whole or in part to the

23

 

Corporation for an amount equal to the
principal amount of their Notes being put, plus accrued and unpaid interest, on
a date which is no earlier than 30 days and no later than 60 days from May 18,
2004 (the “Put Exercise Date”), by delivering to the Trustee prior to the Put
Exercise Date a Put Notice substantially in the form contained in the form of
Note attached hereto as Exhibit A.

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

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

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

ARTICLE FIVE

MISCELLANEOUS PROVISIONS

     Section 5.01 Recitals by Corporation

     The recitals in this Supplemental Indenture are made by the Corporation
and the Guarantor only and not by the Trustee, and all of the provisions
contained in the Original

24

 

 Indenture in respect of the rights, privileges,
immunities, powers and duties of the Trustee shall be applicable in respect of
the Notes and this Supplemental Indenture as fully and with like effect as if
set forth herein full and the Trustee makes no representations as to the
validity or sufficiency of this Supplemental Indenture.

     Section 5.02 Ratification and Incorporation of Original Indenture

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

     Section 5.03 Executed in Counterparts

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

ARTICLE SIX

TAX TREATMENT; ERISA

     Section 6.01 Tax Agreements

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

     Section 6.02 ERISA Agreements

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

25

 

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

	 	 	 	 	 
	 	 	PPL CAPITAL FUNDING, INC.
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	Attest:	 	 	 	Title:
	 	 	 	 	 
	
	 	 	 	 
	 	 	 	 	 
	 	 	PPL CORPORATION
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	Attest:	 	 	 	Title:
	 	 	 	 	 
	
	 	 	 	 
	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, as Trustee
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	Attest:	 	 	 	Title:
	 	 	 	 	 
	
	 	 	 	 

26

 

EXHIBIT A

(Form of Face of Note)

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

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

CUSIP No.

$

No.

PPL FUNDING CAPITAL, INC.

NOTES DUE MAY 18, 2006

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

	*	 	Insert in Global Notes and Pledged Notes

A-1

 

7.29% per year (the “Coupon Rate”) from November
18, 2003 through and including the day immediately preceding May 18, 2004 and
(ii)(A) in the case of a Successful Remarketing, at the Reset Rate on and after
the Purchase Contract Settlement Date and (B) in the case of a Failed Final
Remarketing, at the Coupon Rate on and after the Purchase Contract Settlement
Date, until the principal thereof is paid or duly made available for payment.
Interest will be payable, initially, quarterly in arrears on February 18, 2004
and May 18, 2004 (each, an “Interest Payment Date”) to the Person in whose name
this Note, or any Predecessor Security, is registered at the close of business
on the Regular Record Date for such interest installment; provided, however,
that following the Purchase Contract Settlement Date, interest will be payable
semi-annually in arrears on May 18 and November 18 of each year, commencing
November 18, 2004, and such dates shall then be the “Interest Payment Dates.”

     The amount of interest payable on this Note for any period will be
computed (1) for any full quarterly or semi-annual period, as applicable, on
the basis of a 360-day year of twelve 30-day months and (2) for any period
shorter than a full quarterly or semi-annual period, as applicable, on the
basis of a 30-day month and, for any period less than a month, on the basis of
the actual number of days elapsed per 30-day month. In the event that any date
on which interest is payable on the Notes is not a Business Day, then payment
of the interest payable on that date will be made on the next day that is a
Business Day (and without any interest or other payment in respect of any
delay). The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest installment which shall be, (1) with respect to any Interest
Payment Date for the Notes when represented by a Global Note, the Business Day
immediately preceding such Interest Payment Date and (2) with respect to any
Interest Payment Date for the Notes when held in certificated form, the 15th
day (whether or not a Business Day) prior to such Interest Payment Date. Any
such interest installment not punctually paid or duly provided for on any
Interest Payment Date shall forthwith cease to be payable to the Holders at the
close of business on such Regular Record Date and may be paid to the Person in
whose name this Note is registered at the close of business on a Special Record
Date to be fixed by the Trustee for the payment of such Defaulted Interest,
notice whereof shall be given to the Holders of the Notes not less than 10 days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities
exchange, if any, on which the Notes shall be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the Indenture.
The principal and the interest on this Note shall be payable at the office or
agency of the Corporation maintained for that purpose in the Borough of
Manhattan, The City of New York, in any coin or currency of the United States
of America that at the time of payment is legal tender for payment of public
and private debts; provided, however, that payment of interest may be made at
the option of the Corporation (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or (ii)
by wire transfer at such place and to such account at a banking institution in
the United States as may be designated in writing to the Trustee at least
sixteen (16) days prior to the date for payment by the Person entitled thereto.

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

A-2

 

 indebtedness, subordinate and junior in right of
payment to all of the Corporation’s Senior Indebtedness.

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

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

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

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

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

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

	 	 	 	 
	Dated:	 	 	 	 
	 	 	 	 	 
	 	 	PPL CAPITAL FUNDING, INC.
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	

	 	 	 	 	 
	Attest:	 	 	 	 
	 	 	 	 	 
	
	 	 	 	 

A-3

 

CERTIFICATE OF AUTHENTICATION

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

	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, as Trustee
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Authorized Officer
	Dated:	 	 	 	 

A-4

 

(Form of Reverse of Note)

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

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

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

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

A-5

 

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

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

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

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

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

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

A-6

 

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

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

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

[Insert Form of Guarantee]

A-7

 

ABBREVIATIONS

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

	 	 	 	 	 	 	 	 	 
	TEN COM — as tenants in common	 	
UNIF GIFT MIN ACT —
	 	 	 	Custodian	 	 
	 	 	 	 	

	 	 	 	

	 	 	 	 	(Cust)
	 	 	 	(Minor)

	 	 	 	 	 
	TEN ENT — as tenants by the entireties	 	
Under Uniform Gifts to Minors Act	 	 
	 	 	 	 	

	 	 	 	 	(State)
	 	 	 	 	 
	JT TEN — as joint tenants with rights of
survivorship and not as tenants in
common	 	 	 	 

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

 

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto ____________ 

(please insert Social Security or other identifying number of assignee)

 

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

 

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

 

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

	 	 	 	 	 
	Dated:	 	 	 	 
	 	 	

	 	

	 	 	 	 	

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

	 	 	 
	 	Signature Guarantee:	 
	 	 	

A-8

 

SIGNATURE GUARANTEE

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

A-9

 

PUT NOTICE

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

 

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

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

	 	 	 	 	 
	Date:	 	 	Signature:	 
	 	
	 	 	

	 	 	 	    
(sign exactly as name appears on the other side of the Note)

	 	 
	Signature Guarantee:	 
	 	

	 	
(Signature must be guaranteed)

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

A-10

 

[TO BE ATTACHED TO GLOBAL CERTIFICATES AND PLEDGED NOTES]

SCHEDULE OF INCREASES OR DECREASES

The following increases or decreases in this [Global Certificate][Pledged Note]

have been made:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 	 	Amount of decrease	 	Amount of increase	 	Principal amount of	 	 	 	 
	 	 	in principal amount	 	in principal amount	 	Note evidenced by	 	 	 	 
	 	 	of Note evidenced by	 	of Note evidenced	 	the [Global	 	Signature of
	 	 	the
[Global	 	by the
[Global	 	Certificate] [Pledged	 	authorized officer
	 	 	Certificate] [Pledged	 	Certificate] [Pledged	 	Note] following such	 	of Trustee or
	Date	 	Note]	 	Note]	 	decrease or increase	 	Custodial Agent
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

A-11

 

EXHIBIT B

CERTIFICATE OF AUTHENTICATION

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

	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, as Trustee
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Authorized Officer

B-1

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