Document:

FORM OF REMARKETING AGREEMENT

 

EXHIBIT 4.4

REMARKETING AGREEMENT

, 2003

MORGAN STANLEY & CO. INCORPORATED

1585 Broadway

New York, New York 10036

Ladies and Gentlemen:

               Morgan Stanley & Co. Incorporated is undertaking to remarket the 7.29%
notes due May 18, 2006 (the “Notes”), issued by PPL Capital Funding, Inc., a
Delaware corporation (“PPL Capital Funding”), and guaranteed PPL Corporation, a
Pennsylvania corporation (the “Company”).

               The Remarketing (as defined below) of the Notes is provided for in the
Pledge Agreement and the Purchase Contract Agreement (as defined below).

               Section 1.     Definitions.

               (a) Capitalized terms used and not defined in this Agreement shall have
the meanings set forth in the Purchase Contract Agreement, dated as of
         , 2003 (the “Purchase Contract Agreement”), between the Company and JPMorgan
Chase Bank, as Purchase Contract Agent (the “Purchase Contract Agent”),
Collateral Agent and Custodial Agent or, if not therein defined, in the Pledge
Agreement, dated as of                    , 2003, between JPMorgan Chase Bank, as
Collateral Agent, Securities Intermediary and Custodial Agent, and the Purchase
Contract Agent (the “Pledge Agreement”) or, if not therein defined, in the
Dealer Manager Agreement, dated as of                    , 2003, between the Company,
PPL Capital Funding and Morgan Stanley & Co. Incorporated.

               (b) As used in this Agreement, the following terms have the following
meanings:

               “Issuers” means the Company and PPL Capital Funding, collectively.

               “Morgan Stanley” means Morgan Stanley & Co. Incorporated.

               “New PEPS Units Agreements” means the Purchase Contracts, the Purchase
Contract Agreement and the Pledge Agreement, collectively.

               “Offering Materials” means the Prospectus and the preliminary remarketing
memorandum and final remarketing memorandum referred to in Section 5(j)(2), as
applicable.

 

 

               “Prospectus” means the prospectus relating to the Remarketed Notes, in the
form in which first filed, or transmitted for filing, with the Commission after
the effective date of the Registration Statement pursuant to Rule 424(b),
including the documents incorporated by reference therein as of the date of
such Prospectus; and any reference to any amendment or supplement to such
Prospectus shall be deemed to refer to and include any documents filed after
the date of such Prospectus, under the Exchange Act, and incorporated by
reference in such Prospectus.

               “Registration Statement” means the registration statement to be filed by
the Company with the Securities and Exchange Commission on Form S-3 (or other
appropriate form) under the Securities Act of 1933 in respect of the Remarketed
Notes, including all exhibits thereto and documents incorporated by reference
in such registration statement and any post-effective amendments thereto.

               
“Remarketed Notes” means the Notes, as the Purchase Contract Agent and the
Custodial Agent shall have notified the Remarketing Agent by 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” means the remarketing of the Remarketed Notes pursuant to
the Remarketing Procedures.

               “Remarketing Agent” shall have the meaning set forth in Section 2(a)
hereof.

               “Remarketing Procedures” means the procedures in connection with the
Remarketing of the Notes described in the Purchase Contract Agreement and the
Pledge Agreement, as the case may be.

               “Transaction Documents” means the Purchase Contract Agreement and the
Pledge Agreement, collectively.

               Section 2.     Appointment and Obligations of the Remarketing Agent.

               (a) The Company hereby appoints Morgan Stanley as exclusive remarketing
agent (the “Remarketing Agent”) and Morgan Stanley hereby accepts appointment:

		
	 	     (i) as the Reset Agent to determine in consultation with the
Company, in the manner provided for herein with respect to the Notes, the
Reset Rate that, in the opinion of the Reset Agent, will, when applied to
the Notes, enable the aggregate principal amount of the Remarketed Notes
to have an approximate aggregate value of 100.5% of the aggregate
principal amount of such Remarketed Notes, and provided that the

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	 	Company, by notice to the Reset Agent prior to the tenth Business Day preceding
the Purchase Contract Settlement Date shall, if applicable, limit the
Reset Rate so that it does not exceed the maximum rate permitted by
applicable law, and

		
	 	     (ii) as the exclusive Remarketing Agent (subject to the right of
Morgan Stanley to appoint additional remarketing agents hereunder as
described below), either as sole remarketing agent or as representative
of a group of remarketing agents appointed as described below (the
“Representative”), to remarket 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 Remarketed Notes.

In connection with the remarketing contemplated hereby, the Remarketing Agent
will enter into a Supplemental Remarketing Agreement (the “Supplemental
Remarketing Agreement”) with the Company and the Purchase Contract Agent, which
shall either be:

		
	 	     (i) substantially in the form attached hereto as Exhibit A
(with such changes as the Company and the Remarketing Agent may
agree upon, it being understood that changes may be necessary in
the provisions of the Supplemental Remarketing Agreement due to
changes in law or facts and circumstances or in the event that
Morgan Stanley is not the sole remarketing agent, and with such
further changes therein as the Remarketing Agent may reasonably
request); or

		
	 	     (ii) in such other form as the Remarketing Agent may
reasonably request, subject to the approval of the Company (such
approval not to be unreasonably withheld). Anything herein to the
contrary notwithstanding, to the extent that the parties hereto are
unable to agree on the form or substance of the Supplemental
Remarketing Agreement, Morgan Stanley shall not act as Remarketing
Agent or Reset Agent hereunder. The Company agrees that Morgan
Stanley shall have the right, on 15 Business Days’ notice to the
Company to appoint one or more additional remarketing agents so
long as any such additional remarketing agents shall be reasonably
acceptable to the Company. Upon any such appointment, the parties
shall enter into an appropriate amendment to this Agreement to
reflect the addition of any such remarketing agent.

               (b) Pursuant to the Supplemental Remarketing Agreement, the Remarketing
Agent will agree, subject to the terms and conditions set forth herein and
therein, to use its reasonable efforts to remarket, in its reasonable judgment
in consultation with the Company, 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 Remarketed Notes at a price of approximately
100.5% (but not less than 100%) of the aggregate principal amount of the
Remarketed Notes. After deducting the fee specified in Section 3 below, the
proceeds of such Remarketing shall be paid to the Collateral Agent and the
Custodial Agent in accordance with Section 5.7 of the Pledge Agreement and

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Section 5.03 of the Purchase Contract Agreement (each of which Sections are
incorporated herein by reference).

               (c) It is understood and agreed that neither the Remarketing Agent nor the
Reset Agent shall have any obligation whatsoever to purchase any Notes, whether
in the Remarketing or otherwise, and shall in no way be obligated to provide
funds to make payment upon tender of Notes for remarketing or to otherwise
expend or risk their own funds or incur or be exposed to financial liability in
the performance of their respective duties under this Agreement or the
Supplemental Remarketing Agreement, and, without limitation of the foregoing,
the Remarketing Agent shall not be deemed an underwriter of the remarketed
Notes. The Company and PPL Capital Funding shall not be obligated in any case
to provide funds to make payment upon tender of Notes for remarketing.

               Section 3.     Fees.

               In the event of a Successful Remarketing, the Remarketing Agent shall
retain as the Remarketing Fee an amount not exceeding 25 basis points (0.25%)
of the aggregate principal amount of the Remarketed Notes from any amount
received in connection with such Remarketing in excess of the aggregate
principal amount of such Remarketed Notes. In addition, the Reset Agent shall,
in the event of a Successful Remarketing, receive from the Company a reasonable
and customary fee (the “Reset Agent Fee”); provided, however, that if the
Remarketing Agent shall also act as the Reset Agent, then the Reset Agent shall
not be entitled to receive any such Reset Agent Fee. Payment of such Reset
Agent Fee shall be made by the Company on the Remarketing Closing Date (as
defined in Schedule I to the Supplemental Remarketing Agreement) at the
location and time specified in Schedule I to the Supplemental Remarketing
Agreement in immediately available funds or, upon the instructions of the Reset
Agent, by certified or official bank check or checks or by wire transfer.

               Section 4.     Representations and Warranties of the Company and PPL Capital
Funding.

               The Company and PPL Capital Funding jointly and severally represent and
warrant (i) on and as of the date hereof, (ii) on and as of the date the
Offering Materials are first distributed in connection with the Remarketing
(the “Commencement Date”), (iii) on and as of the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, and (iv) on and as
of the Purchase Contract Settlement Date that:

               (a) The Issuers meet the requirements for use of Form S-3 under the
Securities Act; the Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose have been instituted or threatened by the
Commission.

               (b) Each part of the Registration Statement, when such part became or
becomes effective, and the Prospectus and any amendment or supplement thereto,
on the date of filing thereof with the Commission and at the Remarketing
Closing Date conformed or will conform in all material respects with the
requirements of the Securities Act; each part of the Registration Statement,
when such part became or becomes effective, did not or will not contain an
untrue

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statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and the Offering Materials and any amendment or supplement thereto,
on the date of filing thereof with the Commission and on the Remarketing
Closing Date did not or will not include an untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
except that the representations and warranties set forth in this paragraph do
not apply to statements in or omissions from any such document in reliance
upon, and in conformity with, written information furnished to the Company by
the Representative, specifically for use in the Registration Statement, the
Offering Materials or any amendment or supplement thereto.

               (c) The documents incorporated by reference in the Registration Statement
or the Offering Materials, or any amendment or supplement thereto, when they
became effective under the Securities Act or were filed with the Commission
under the Securities Exchange Act of 1934 (the “Exchange Act”), as the case may
be, conformed in all material respects with the requirements of the Securities
Act of 1933 (the “Securities Act”) or the Exchange Act, as applicable, and any
further documents so filed and incorporated by reference in the Offering
Materials or any further amendment or supplement thereto, when such documents
become effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable.

               (d) The consolidated financial statements of the Company and its
subsidiaries, together with the related notes and schedules, set forth or
incorporated by reference in the Registration Statement and Offering Materials
comply as to form in all material respects with the applicable accounting
requirements of the Securities Act and the Exchange Act; such audited financial
statements have been prepared in all material respects in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and no material modifications
are required to be made to the unaudited interim financial statements for them
to be in conformity with generally accepted accounting principles.

               (e) Each of PPL Capital Funding and the Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation with corporate power and authority to enter into
and perform its obligations under this Agreement, the New PEPS Units
Agreements, the Indenture, the Notes and the Guarantee to the extent a party
thereto.

               (f) This Agreement has been duly and validly authorized, executed and
delivered by each of the Issuers.

               (g) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Offering Materials.

               (h) The shares of Common Stock outstanding prior to the issuance of the
Securities have been duly authorized and are validly issued, fully paid and
non-assessable, and are not subject to any preemptive or similar rights.

5

 

               (i) The shares of Common Stock to be issued and sold by the Company
pursuant to the settlement of the Purchase Contracts have been duly and validly
authorized and reserved for issuance; such shares of Common Stock, when issued
and delivered in accordance with the provisions of the New PEPS Units
Agreements, will be validly issued, fully paid and non-assessable; and the
issuance of such shares of Common Stock will not be subject to any preemptive
or similar rights.

               (j) The shares of Common Stock outstanding prior to the issuance of the
Securities are, and upon issuance of the shares of Common Stock to be issued
and sold by the Company pursuant to the settlement of the Purchase Contracts
will be, listed on the New York and Philadelphia Stock Exchanges.

               (k) The Securities (as defined in Schedule I to the Supplemental
Remarketing Agreement) and the New PEPS Units Agreements have been duly
authorized and, at the Exchange Date (as defined in the Dealer Manager
Agreement), will have been duly executed and delivered by the Company, and, as
of the Exchange Date, assuming due authorization, execution and delivery by
parties thereto other than the Company, the New PEPS Units Agreements will
constitute valid and binding agreements of the Company, enforceable in
accordance with their terms, except to the extent limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization or moratorium laws or by
other laws now or hereafter in effect relating to or affecting the enforcement
of creditors’ rights and by general equitable principles (regardless of whether
considered in a proceeding in equity or at law), an implied covenant of good
faith and fair dealing and consideration of public policy, and Federal or state
securities law limitations on indemnification and contribution (the
“Enforceability Exceptions”); provided, however, that upon the occurrence of a
Termination Event (as defined in the Purchase Contract Agreement), assuming
termination of the Purchase Contract Agreement has not been stayed, voided or
otherwise limited by order of any court or administrative agency pursuant to
the Securities Investor Protection Act of 1970 or any statute administered by
the Securities and Exchange Commission, Section 365(e)(1) of the United States
Bankruptcy Code (11 U.S.C. Sections 101-1330, as amended) and Section 541 of
the Bankruptcy Code should not substantively limit the provisions of Section
3.15 and 5.07 of the Purchase Contract Agreement and Section 5.4 of the Pledge
Agreement that require termination of the Purchase Contracts and release of the
Collateral Agent’s security interest in the Notes or the Treasury Securities
(as defined in the Purchase Contract Agreement); the Securities and the New
PEPS Units Agreements conform in all material respects to the descriptions
thereof contained in the Offering Materials.

               (l) The Remarketing Agreement (the “Remarketing Agreement”) has been duly
authorized by each of the Issuers and when executed and delivered by each of
the Issuers will constitute a valid and binding agreement of each of the
Issuers, enforceable in accordance with its terms, except to the extent limited
by the Enforceability Exceptions; and the Remarketing Agreement conforms in all
material respects to the description thereof in the Offering Materials.

               (m) The Notes have been duly authorized, executed and issued by PPL
Capital Funding and the Guarantee has been duly authorized by the Company and,
assuming due authentication of the Notes by the Indenture Trustee and upon
delivery of the Notes upon the exchange for the Company’s
outstanding 73⁄4%
Premium Equity Participating Security Units and in accordance with the
provisions of the Indenture, the Notes and the Guarantee will constitute

6

 

valid
and binding obligations of PPL Capital Funding and the Company, as applicable,
enforceable in accordance with their terms and, in the case of the Notes,
entitled to the benefits of the Indenture.

               (n) The Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended (the “Trust Indenture Act”).

               (o) None of the Issuers is an “investment company” within the meaning of
and subject to regulation under the Investment Company Act of 1940, as amended.

               (p) Since the respective dates as of which information is given in the
Registration Statement and the Offering Materials, except as otherwise stated
therein or contemplated thereby, there has been no event or occurrence that
would result in a material adverse change, or any development involving a
material adverse change, in the financial position or results of operations of
the Company and its subsidiaries considered as one enterprise.

               (q) The issue and sale of the Securities and the compliance by each Issuer
with all of the provisions of this Agreement, the New PEPS Units Agreement, the
Indenture, the Notes and the Guarantee to the extent a party thereto and the
consummation of the transactions contemplated herein and therein will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any constituent document of any Issuer or any
material agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it is bound except for such breaches or
defaults that would not in the aggregate have a material adverse effect on the
Issuers’ ability to perform their respective obligations under this Agreement,
the New PEPS Units Agreement, the Indenture, the Notes and the Guarantee to the
extent a party thereto.

               (r) The certificate delivered pursuant to paragraph (e) of Section 6
hereof and all other documents delivered by the Company or its representatives
in connection with the issuance and sale of the Remarketed Notes were on the
dates on which they were delivered, or will be on the dates on which they are
to be delivered, in all material respects true and complete.

               Section 5.     Covenants of the Company and PPL Capital Funding.

		
	 	Each of the Company and PPL Capital Funding covenants and agrees as
follows:
	 
	 	(a) (1) To prepare any Registration Statement or Prospectus, if
required in connection with the Remarketing, in a form approved by
the Remarketing Agent and to file any such prospectus pursuant to
the Securities Act of 1933 as amended (the “Act”) within the period
required by the Act and the rules and regulations thereunder;
	 
	 	     (2) to advise the Remarketing Agent, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Remarketing Agent with copies thereof;

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	 	     (3) to file promptly all reports and any definitive proxy or
information statements required to be filed with the Securities and
Exchange Commission (the “Commission”) pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Remarketed
Notes; and

		
	 	     (4) to advise the Remarketing Agent, promptly after it
receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of the
Prospectus, of the suspension of the qualification of any of the
Remarketed Notes for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or
for additional information, and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of
any Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal;

		
	 	     (b) To furnish promptly to the Remarketing Agent and to counsel to
the Remarketing Agent a conformed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and exhibits filed therewith;

		
	 	     (c) To furnish to the Remarketing Agent in New York City such copies
of the following documents as the Remarketing Agent shall reasonably
request: (1) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in each
case excluding exhibits); (2) the Prospectus and any amended or
supplemented Prospectus; and (3) any document incorporated by reference
in the Prospectus (excluding exhibits thereto); and, if the delivery of a
prospectus is required at any time in connection with the Remarketing and
if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus
or to file under the Exchange Act any document incorporated by reference
in the Prospectus in order to comply with the Securities Act or the
Exchange Act, to notify the Remarketing Agent and, upon its request, to
file such document and to prepare and furnish without charge to the
Remarketing Agent and to any dealer in securities as many copies as the
Remarketing Agent may from time to time reasonably request of an amended
or supplemented Prospectus which will correct such statement or omission
or effect such compliance;

		
	 	     (d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the
Remarketing Agent, be required by the Securities Act or requested by the
Commission;

8

 

		
	 	     (e) Prior to filing with the Commission (1) any amendment to the
Registration Statement or supplement to the Prospectus or (2) any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to furnish
a copy thereof to the Remarketing Agent and counsel to the Remarketing
Agent; and not to file any such amendment or supplement which shall be
reasonably disapproved by the Remarketing Agent promptly after reasonable
notice;

		
	 	     (f) As soon as practicable, but in no event later than eighteen
months, after the Effective Date of the Registration Statement, to make
“generally available to its security holders” an “earnings statement” of
the Company and its subsidiaries (which need not be audited) complying
with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158). The terms
“generally available to its security holders” and “earnings statement”
shall have the meanings set forth in Rule 158 of the Rules and
Regulations;

		
	 	     (g) To take such action as the Remarketing Agent may reasonably
request in order to qualify the Remarketed Notes for offer and sale under
the securities or “blue sky” laws of such jurisdictions as the
Remarketing Agent may reasonably request; provided that in no event shall
the Company be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction.; and

		
	 	     (h) To pay: (1) the costs incident to the preparation and printing
of the Registration Statement and Prospectus and any amendments or
supplements thereto; (2) the costs of distributing the Registration
Statement and Prospectus and any amendments or supplements thereto; (3)
the fees and expenses of qualifying the Remarketed Notes under the
securities laws of the several jurisdictions as provided in Section 5(g)
and of preparing, printing and distributing a Blue Sky Memorandum
(including related fees and expenses of counsel to the Remarketing
Agent); (4) all other costs and expenses incident to the performance of
the obligations of the Company, hereunder; and (5) the reasonable fees
and expenses of counsel to the Remarketing Agent in connection with its
duties hereunder;

		
	 	     (i) To 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, New PEPS Units and Treasury
Units 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, New PEPS Units or Treasury Units are held in global form by DTC,
to cause DTC to notify its participants); and

		
	 	     (j) 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 Company, 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

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	 	Notes under the Securities Act of 1933 as
otherwise contemplated by this Section 5 or to deliver a Prospectus in
connection with the Remarketing, to:

		
	 	     (1) 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

		
	 	     (2) 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 Company shall pay all expenses relating thereto.

               Section 6.     Conditions to the Remarketing Agent’s Obligations.

               The obligations of the Remarketing Agent hereunder are subject to the
following conditions:

		
	 	     (a) The Remarketing Agent is able to find a purchaser or purchasers
for Remarketed Notes at a price not less than 100% of the aggregate
principal amount of such Remarketed Notes thereof.

		
	 	     (b) The Purchase Contract Agent, the Collateral Agent, the Custodial
Agent and the Company shall have performed their respective obligations
in connection with the Remarketing pursuant to the Purchase Contract
Agreement, the Pledge Agreement, this Agreement and the Supplemental
Remarketing Agreement, including, without limitation, giving the
Remarketing Agent notice of the aggregate principal amount of the
Remarketed Notes by noon, New York City time, on the sixth Business Day
prior to the Purchase Contract Settlement Date and concurrently
delivering the Remarketed Notes to the Remarketing Agent.

		
	 	     (c) The Prospectus shall have been timely filed with the Commission;
no stop order suspending the effectiveness of the Registration Statement
or any part thereof or suspending the qualification of the Indenture
shall have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied with.

		
	 	     (d) The Remarketing Agent shall not have discovered and disclosed to
the Company prior to or on the Remarketing Date that the Prospectus, the
Registration Statement, or any amendment or supplement thereto contains
any untrue statement of a fact which, in the opinion of counsel for the
Remarketing Agent, is material or omits to

10

 

		
	 	state any fact which, in the
opinion of such counsel, is material and is required to be stated therein
or is necessary to make the statements therein not misleading.

		
	 	     (e) Since the respective dates as of which information is given in
the Prospectus (i) trading generally shall not have been suspended or
materially limited on or by, as the case may be, any of the New York
Stock Exchange, the Philadelphia Stock Exchange or the National
Association of Securities Dealers, Inc.; (ii) trading of any securities
of the Company shall not have been suspended on any exchange or in any
over-the-counter market; (iii) no material disruption in securities
settlement, payment or clearance services in the United States shall have
occurred; (iv) no moratorium on commercial banking activities shall have
been declared by Federal or New York State authorities; (v) there shall
not have occurred any change or any development involving or prospective
change not contemplated by the Registration Statement or Prospectus in or
affecting particularly the business or properties of the Company and its
subsidiaries considered as one enterprise; (vi) there shall not have
occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is
material and adverse and which, singly or together with any other event
specified in this clause or (vii) makes it, in the judgment of the
Remarketing Agent, impracticable to proceed with the Remarketing on the
terms and in the manner contemplated in the Prospectus.

		
	 	     (f) The representations and warranties of the Company and PPL
Capital Funding contained herein shall be true and correct in all
material respects on and as of the Remarketing Date, and each of the
Company and PPL Capital Funding shall have performed in all material
respects all covenants and agreements herein contained to be performed on
its part at or prior to the Remarketing Date.

		
	 	     (g) The Company shall have furnished to the Remarketing Agent a
certificate, dated the Remarketing Date, of the President or a Vice
President and a financial or accounting officer of the Company,
satisfactory to the Remarketing Agent, stating that to the best of their
knowledge after reasonable investigation: (1) no order suspending the
effectiveness of the Registration Statement or prohibiting the sale of
the Remarketed Notes is in effect, and no proceedings for such purpose
are pending before or, to the knowledge of such officers, threatened by
the Commission; (2) the representations and warranties of the Company and
PPL Capital Funding in Section 3 are true and correct on and as of the
Remarketing Date and each of the Company and PPL Capital Funding has
performed in all material respects all covenants and agreements contained
herein to be performed on its part at or prior to the Remarketing Date;
(3) the Registration Statement, as of its Effective Date did not contain
any untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and the Prospectus did not contain any
untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

		
	 	     (h) On the Remarketing Date, the Remarketing Agent shall have
received a letter addressed to the Remarketing Agent and dated such date,
in form and substance

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	 	satisfactory to the Remarketing Agent, of
PricewaterhouseCoopers LLP, or such other firm of nationally recognized
independent public accountants satisfactory to the Remarketing Agent,
containing statements and information of the type ordinarily included in
accountants’ “comfort letters” with respect to certain financial
information contained in the Prospectus.

		
	 	     (i) Simpson Thacher & Bartlett LLP, outside counsel to the Company,
Thomas D. Salus, Senior Counsel to the Company and PPL Capital Funding,
shall have furnished to the Remarketing Agent their opinion letters
addressed to the Remarketing Agent and dated the Remarketing Date, in
form and substance reasonably satisfactory to the Remarketing Agent
addressing such matters as are set forth in such counsels’ opinions
furnished pursuant to Sections 11(a)(ii) and 11(a)(i), respectively, of
the Dealer Manager Agreement dated                    , 2003 among the Company,
PPL Capital Funding and the Dealer Manager relating to the securities
being remarketed hereunder.

		
	 	     (j) Davis Polk & Wardwell, counsel for the Remarketing Agent, shall
have furnished to the Remarketing Agent its opinion, addressed to the
Remarketing Agent and dated the Remarketing Date, in form and substance
satisfactory to the Remarketing Agent.

               Section 7.     Indemnification and Contribution.

               (a) The Issuers agree that they will jointly and severally indemnify and
hold harmless the Remarketing Agent and each person, if any, who controls the
Remarketing Agent within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act, against any and all loss, expense, claim,
damage or liability to which, jointly or severally, the Remarketing Agent or
such controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, expense, claim, damage or liability (or
actions in respect thereof) arises out of or is based upon any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, any related preliminary prospectus, or any amendment
or supplement to any thereof, or arises out of or is based upon the omission or
alleged omission to state therein any material fact required to be stated
therein or necessary to make the statements therein not misleading; and, except
as hereinafter in this Section provided, PPL Capital Funding and the Company
agree to reimburse the Remarketing Agent and each person who controls the
Remarketing Agent as aforesaid for any reasonable legal or other expenses as
incurred by the Remarketing Agent or such controlling person in connection with
investigating or defending any such loss, expense, claim, damage or liability;
provided, however, that the Issuers shall not be liable in any such case to the
extent that any such loss, expense, claim, damage or liability arises out of or
is based on an untrue statement or alleged untrue statement or omission or
alleged omission made in any such document in reliance upon, and in conformity
with, written information furnished to the Company by the Representative
expressly for use in any such document or arises out of, or is based on,
statements in or omissions from that part of the Registration Statement which
shall constitute the T-1; provided further, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of the Remarketing Agent from whom the person asserting any such
losses, expenses, claims, damages or liabilities purchased Securities in the
Remarketing, or any person controlling the Remarketing Agent, if a copy of the
Prospectus (as then amended or

12

 

supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
the Remarketing Agent to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Securities to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities, unless such failure is the result of noncompliance by
the Company with Section 7(a) hereof.

               (b) The Remarketing Agent agrees that it will indemnify and hold harmless
the Issuers, their officers, trustees and directors, and each of them, and each
person, if any, who controls any Issuer within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act, against any loss, expense,
claim, damage or liability to which it or they may become subject, under the
Securities Act or otherwise, insofar as such loss, expense, claim, damage or
liability (or actions in respect thereof) arises out of or is based on any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, any related preliminary prospectus,
or any amendment or supplement to any thereof, or arises out of or is based
upon the omission or alleged omission to state therein any material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, and only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in any such documents in reliance upon, and in conformity with,
written information furnished to the Company by the Representative, expressly
for use in any such document and, except as hereinafter in this Section
provided, the Remarketing Agent agrees to reimburse the Issuers, their
officers, trustees and directors, and each of them, and each person, if any,
who controls any Issuer within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act, for any reasonable legal or other expenses
incurred by it or them in connection with investigating or defending any such
loss, expense, claim, damage or liability.

               (c) Upon receipt of notice of the commencement of any action against an
indemnified party, the indemnified party shall, with reasonable promptness, if
a claim in respect thereof is to be made against an indemnifying party under
its agreement contained in this Section 7, notify such indemnifying party in
writing of the commencement thereof; but the omission so to notify an
indemnifying party shall not relieve it from any liability which it may have to
the indemnified party otherwise than under its agreement contained in this
Section 7. In the case of any such notice to an indemnifying party, it shall
be entitled to participate at its own expense in the defense, or if it so
elects, to assume the defense, of any such action, but, if it elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the indemnified party and to any other indemnifying party,
defendant in the suit, and the indemnifying party shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
indemnified party has reasonably concluded (based on advice of counsel) that
there may be legal defenses available to it or other indemnified parties that
are different from or in addition to those available to the indemnifying party.
It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any

13

 

local counsel) for
all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
Morgan Stanley & Co. Incorporated, in the case of parties indemnified pursuant
to Section 7(a), and by the Company, in the case of parties indemnified
pursuant to Section 7(b). No indemnifying party shall be liable in the event
of any settlement of any such action effected without its consent except as
provided in Section 7(e) hereof. Each indemnified party agrees promptly to
notify each indemnifying party of the commencement of any litigation or
proceedings against it in connection with the issue and sale of the Securities.

               (d) If the Remarketing Agent or person entitled to indemnification by the
terms of subsection (a) of this Section 7 shall have given notice to any Issuer
of a claim in respect thereof pursuant to Section 7(c) hereunder, and if such
claim for indemnification is thereafter held by a court to be unavailable for
any reason other than by reason of the terms of this Section 7 or if such claim
is unavailable under controlling precedent, the Remarketing Agent or person
shall be entitled to contribution from the Issuers to liabilities and expenses,
except to the extent that contribution is not permitted under Section 11(f) of
the Securities Act. In determining the amount of contribution to which the
Remarketing Agent or person is entitled, there shall be considered the relative
benefits received by the Remarketing Agent or person and the Issuers from the
offering of the Securities that were the subject of the claim for
indemnification (taking into account the portion of the proceeds of the
offering realized by each), the Remarketing Agent’s or person’s and the
Issuers’ knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and prevent any
statement or omission, and any other equitable considerations appropriate under
the circumstances. The Issuers and the Remarketing Agent agree that it would
not be equitable if the amount of such contribution were determined by pro rata
or per capita allocation.

               (e) No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 7 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party and all liability
arising out of such litigation, investigation, proceeding or claim, and (ii)
does not include a statement as to or an admission of fault, culpability or the
failure to act by or on behalf of any indemnified party.

               (f) The indemnity and contribution provided for in this Section 7 and the
representations and warranties of the Issuers and the Remarketing Agent set
forth in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the Remarketing
Agent or any person controlling the Remarketing Agent, the Issuers, their
directors, trustees or officers or any person controlling any of them, (ii)
acceptance of any Securities and payment therefor under this Agreement, and
(iii) any termination of this Agreement.

14

 

               Section 8.     Resignation and Removal of the Remarketing Agent.

               The Remarketing Agent may resign and be discharged from its duties and
obligations hereunder, and the Company may remove the Remarketing Agent, by
giving 60 days’ prior written notice, in the case of a resignation, to the
Company, the Purchase Contract Agent, the Custodial Agent, the Collateral Agent
and the Indenture Trustee and, in the case of a removal, the removed
Remarketing Agent, the Purchase Contract Agent, the Custodial Agent, the
Collateral Agent and the Indenture Trustee; provided, however, that:

		
	 	         (a) the Company may not remove the Remarketing Agent unless (1) the
Remarketing Agent becomes involved as a debtor in a bankruptcy,
insolvency or similar proceeding, (2) the Remarketing Agent shall not be
among the 15 underwriters with the largest volume underwritten in
dollars, on a lead or co-managed basis, of U.S. domestic debt securities
during the twelve-month period ended as of the last calendar quarter
preceding the Remarketing Date, (3) the Remarketing Agent shall be
subject to one or more legal restrictions preventing the performance of
its obligations hereunder, or (4) the Remarketing Agent shall determine
that (i) the Company has not met its obligation under Section 6(c) or
(ii) using its reasonable efforts, the Remarketing Agent would be unable
to consummate the Remarketing on the terms and in the manner contemplated
in the Prospectus;

		
	 	         (b) the Remarketing Agent may not resign without reasonable cause;
and

		
	 	         (c) no such resignation nor any such removal shall become effective
until the Company shall have appointed (with notice to the Purchase
Contract Agent, the Custodial Agent, the Collateral Agent and the
Indenture Trustee) at least one nationally recognized broker-dealer as
successor Remarketing Agent and such successor Remarketing Agent shall
have entered into a remarketing agreement with the Company and PPL
Capital Funding, in which it shall have agreed to conduct the Remarketing
in accordance with the Remarketing Procedures in all material respects.

In any such case, the Company will use its reasonable efforts to appoint a
successor Remarketing Agent and enter into such a remarketing agreement with
such person as soon as reasonably practicable. The provisions of Sections 7
and 8 shall survive the resignation or removal of any Remarketing Agent
pursuant to this Agreement.

               Section 9.     Dealing in the Remarketed Notes.

               The Remarketing Agent, when acting as a Remarketing Agent or in its
individual or any other capacity, may, to the extent permitted by law, buy,
sell, hold and deal in any of the Remarketed Notes. The Remarketing Agent may
exercise any vote or join in any action which any beneficial owner of
Remarketed Notes may be entitled to exercise with like effect as if it did not
act in any capacity hereunder. The Remarketing Agent, in its individual
capacity, either as principal or agent, may also engage in or have an interest
in any financial or other transaction with the Company as freely as if it did
not act in any capacity hereunder.

15

 

               Section 10.     Remarketing Agent’s Performance; Duty of Care.

               The duties and obligations of the Remarketing Agent shall be determined
solely by the express provisions of this Agreement, the Pledge Agreement and
the Purchase Contract Agreement. No implied covenants or obligations of or
against the Remarketing Agent shall be read into this Agreement, the Pledge
Agreement or the Purchase Contract Agreement. In the absence of bad faith on
the part of the Remarketing Agent, the Remarketing Agent may conclusively rely
upon any document furnished to it, as to the truth of the statements expressed
in any of such documents. The Remarketing Agent shall be protected in acting
upon any document or communication reasonably believed by it to have been
signed, presented or made by the proper party or parties except as otherwise
set forth herein. The Remarketing Agent, acting under this Agreement, shall
incur no liability to the Company or to any holder of Remarketed Notes in its
individual capacity or as Remarketing Agent for any action or failure to act,
on its part in connection with a Remarketing or otherwise, except if such
liability is judicially determined to have resulted from its failure to comply
with the material terms of this Agreement or the gross negligence or willful
misconduct on its part.

               Section 11.     Termination.

               This Agreement shall terminate as to the Remarketing Agent on the
effective date of the resignation or removal of the Remarketing Agent pursuant
to Section 8. In addition, this Agreement may be terminated (a) by the Company
or PPL Capital Funding, as the case may be, by notifying the Remarketing Agent
at any time before the time when the Remarketed Notes are first generally
offered by the Remarketing Agent to dealers by letter or telegram, or (b) by
the Remarketing Agent by notifying the Company and PPL Capital Funding at or
prior to 10:00 a.m. (New York City time) ten business days prior to the
Purchase Contract Settlement Date by letter or telegram if any of the
conditions described in Section 6 are not satisfied.

               If this Agreement is terminated pursuant to any of the provisions hereof,
except as otherwise provided herein, the Company shall not be under any
liability to the Remarketing Agent and the Remarketing Agent shall not be under
any liability to the Company, except that (a) if this Agreement is terminated
by the Remarketing Agent because of any failure or refusal on the part of the
Company to comply with the terms or to fulfill any of the conditions of this
Agreement, the Company will reimburse the Remarking Agent for all of its
out-of-pocket expenses (including the fees and disbursements of its counsel)
reasonably incurred by it, and (b) if the Remarketing Agent failed or refused
to purchase the Remarketed Notes hereunder, without some reason sufficient
hereunder to justify the cancellation or termination of if obligations
hereunder, the Remarketing Agent shall not be relieved of liability to the
Company for damages occasioned by its default.

16

 

               Section 12.     Notices.

               All statements, requests, notices and agreements hereunder shall be in
writing, and:

		
	 	         (a) if to the Remarketing Agent, shall be delivered or sent by mail,
telex or facsimile transmission to Morgan Stanley & Co. Incorporated,
1585 Broadway, New York, New York 10036, Attention: David Sun (Fax:
212-761-0358);

		
	 	         (b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to Two North Ninth Street, Allentown, Pennsylvania
18101-1179, Attention: Treasurer (Fax: 610-774-5106);

		
	 	         (c) if to PPL Capital Funding, shall be delivered or sent by mail,
telex or facsimile transmission to Two North Ninth Street, Allentown,
Pennsylvania 18101-1179, Attention: Treasurer (Fax: 610-774-5106).

		
	 	         (d) if to the Purchase Contract Agent, Custodial Agent, Collateral
Agent or Indenture Trustee, shall be delivered or sent by mail, telex or
facsimile transmission to JPMorgan Chase Bank, 4 New York Plaza, New
York, New York 10004, Attention: Institutional Trust Services (Fax:
212-623-6216).

Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.

               Section 13.     Persons Entitled to Benefit of Agreement.

               This Agreement shall inure to the benefit of and be binding upon the
Remarketing Agent, the Company, PPL Capital Funding, the Purchase Contract
Agent and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(a) the representations, warranties, indemnities and agreements of the Company
and PPL Capital Funding contained in this Agreement shall also be deemed to be
for the benefit of the Remarketing Agent and the person or persons, if any, who
control the Remarketing Agent within the meaning of Section 15 of the
Securities Act and (b) the indemnity agreement of the Remarketing Agent
contained in Section 7(b) of this Agreement shall be deemed to be for the
benefit of the Company’s and PPL Capital Funding’s directors and officers who
sign the Registration Statement and any person controlling the Company or PPL
Capital Funding within the meaning of Section 15 of the Securities Act.
Nothing contained in this Agreement is intended or shall be construed to give
any person, other than the persons referred to herein, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.

               Section 14.     Survival.

               The respective indemnities, representations, warranties and agreements of
the Company and PPL Capital Funding and the Remarketing Agent contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the

17

 

Remarketing and shall remain in full force and
effect, regardless of any investigation made by or on behalf of any of them or
any person controlling any of them.

               Section 15.     Governing Law.

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

               Section 16.     Counterparts.

               This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original but all such counterparts shall together constitute
one and the same instrument.

               Section 17.     Headings.

               The headings herein are inserted for convenience of reference only and are
not intended to be part of, or to affect the meaning or interpretation of, this
Agreement.

If the foregoing correctly sets forth the agreement between the Company, PPL
Capital Funding and the Remarketing Agent, please indicate your acceptance in
the space provided for that purpose below.

[SIGNATURES ON THE FOLLOWING PAGE]

18

 

	 	 	 	 	 
	 	 	Very truly yours,
	 	 	 
	 	 	PPL CORPORATION
	 	 	 
	 	 	
By:
	 	

	 	 	 	 	Name:
	 	 	 	 	Title:

	 	 	 	 	 
	 	 	PPL CAPITAL FUNDING, INC.
	 	 	 
	 	 	
By:
	 	

	 	 	 	 	Name:
	 	 	 	 	Title:

Accepted:

MORGAN STANLEY & CO. INCORPORATED

	 	 	 
	By:	 	

	 	 	
Name:
	 	 	
Title:

JPMORGAN CHASE BANK,

not individually but solely as Purchase

Contract Agent and as attorney-in-fact

of the holders from time to time of the

New PEPS Units

	 	 	 
	By:	 	

	 	 	
Name:
	 	 	
Title:

19

 

Exhibit A to

Remarketing Agreement

Form of Supplemental Remarketing Agreement

               Supplemental Remarketing Agreement dated                      among PPL
Corporation, a Pennsylvania corporation (the “Company”), PPL Capital Funding,
Inc. (“PPL Capital Funding”), Morgan Stanley & Co. Incorporated (the
“Remarketing Agent”), and JPMorgan Chase Bank, as Purchase Contract Agent and
attorney-in-fact for the Holders of the New PEPS Units (as such terms are
defined in the Purchase Contract Agreement referred to in Schedule I hereto).

               NOW, THEREFORE, for and in consideration of the covenants herein made, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

          1.  Definitions. Capitalized terms used and not defined in this Agreement
shall have the meanings assigned to them in the Remarketing Agreement dated as
of                    , 2003 (the “Remarketing Agreement”) among the Company, PPL
Capital Funding, the Purchase Contract Agent and Morgan Stanley & Co.
Incorporated or, if not defined in the Remarketing Agreement, the meanings
assigned to them in the Purchase Contract Agreement (as defined in Schedule I
hereto).

          2.  Registration Statement and Prospectus. The Company and PPL Capital
Funding have filed with the Commission, and there has become effective, a
registration statement on Form S-3, including a prospectus, relating to the
Securities (as such term is defined on Schedule I hereto). Such Registration
Statement, as amended, and including the information deemed to be a part
thereof pursuant to Rule 430A under the Act, and the documents incorporated or
deemed to be incorporated by reference therein, are hereinafter called,
collectively, the “Registration Statement”; [the related preliminary prospectus
dated            , including the documents incorporated or deemed to be
incorporated by reference therein, [and preliminary prospectus supplement dated
        ] are hereinafter called, [collectively] the “preliminary
prospectus”;] and the related prospectus dated         , including the
documents incorporated or deemed to be incorporated by reference therein, [and
prospectus supplement dated      ] are hereinafter called, [collectively,]
the “Prospectus.” The Company and PPL Capital Funding have provided copies of
the Registration Statement [, the preliminary prospectus] and the Prospectus to
the Remarketing Agent, and hereby consents to the use of the [preliminary
prospectus] and the Prospectus in connection with the remarketing of the
Securities. [In the event that a Registration Statement is not required,
insert the following: The Company and PPL Capital Funding have provided to the
Remarketing Agent, for use in connection with remarketing of the Securities (as
such term is defined on Schedule I hereto), a [preliminary remarketing
memorandum and] remarketing memorandum and [describe other materials, if any].
Such remarketing memorandum (including the documents incorporated or deemed to
be incorporated by reference therein, [and] [describe other materials] are
hereinafter called, collectively, the “Prospectus,” [and such preliminary
marketing memorandum (including the documents incorporated or deemed to be
incorporated by reference therein) is hereinafter called a “preliminary
prospectus”)]. The Company and PPL Capital Funding hereby consent to the use of
the Prospectus [and the preliminary prospectus] in connection with the
remarketing of the Securities.] All references in this Agreement to amendments
or supplements to the Registration Statement [the preliminary prospectus] or
the Prospectus shall be deemed to mean and include the

A-1 

 

filing of any document
under the Exchange Act, which is incorporated or deemed to be incorporated by
reference in the Registration Statement [,the preliminary prospectus] or the
Prospectus, as the case may be.

          3.  Provisions Incorporated by Reference.

               (a)     Subject to Section 3(b) hereof, the provisions of the Dealer Manager
Agreement (other than Section 6, Section 7, Section 8, Section 10 and Section
11 thereof) are incorporated herein by reference, mutatis mutandis, and the
Company and PPL Capital Funding hereby make the representations and warranties,
and agrees to comply with the covenants and obligations, set forth in the
provisions of the Dealer Manager Agreement incorporated by reference herein, as
modified by the provisions of Section 3(b) hereof.

               (b)     With respect to the provisions of the Dealer Manager Agreement
incorporated herein, for the purposes hereof, (i) all references therein to the
“Dealer Manager” or “Dealer Managers” shall be deemed to refer to the
Remarketing Agent; (ii) all references therein to the “New PEPS Units” shall be
deemed to refer to the Securities as defined herein; (iii) all references
therein to the “Commencement Date” shall be deemed to refer to the Remarketing
Date specified in Schedule I hereto; (iv) all references therein to the
“Registration Statement” or the “Prospectus” shall be deemed to refer to the
Registration Statement or the Prospectus, respectively, as defined herein; (v)
all references therein to this “Agreement,” the “Dealer Manager Agreement,”
“hereof,” “herein” and all references of similar import, shall be deemed to
mean and refer to this Supplemental Remarketing Agreement; (vi) all references
therein to “the date hereof,” “the date of this Agreement” and all similar
references shall be deemed to refer to the date of this Supplemental
Remarketing Agreement; (vii) all references therein to any “Exchange Date”
shall be to the Remarketing Closing Date; and (viii) [other changes].

          4.  Remarketing. Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth or incorporated by
reference herein and in the Remarketing Agreement, the Remarketing Agent agrees
to use its reasonable efforts to remarket, in the manner set forth in Section
2(b) of the Remarketing Agreement, the aggregate principal amount of Securities
set forth in Schedule I hereto at a purchase price of approximately 100.5% (but
not less than 100%) of the aggregate principal amount of the Securities. In
connection therewith, the registered holder or holders thereof agree, in the
manner specified in Section 5 hereof, to pay to the Remarketing Agent a
Remarketing Fee equal to an amount not exceeding 25 basis points (0.25%) of
such aggregate principal amount, payable by deduction from any amount received
in connection from such Remarketing in excess of the aggregate principal amount
of the Securities. As more fully provided in Section 2(c) of the Remarketing
Agreement (which is incorporated by reference herein), the Remarketing Agent is
not obligated to purchase any Securities in the remarketing or otherwise, and
neither the Company nor the Remarketing Agent shall be obligated in any case to
provide funds to make payment upon tender of Securities for remarketing.

     5.  Delivery and Payment. Delivery of payment for the remarketed
Securities by the purchasers thereof identified by the Remarketing Agent and
payment of the Remarketing Fee shall be made on the Remarketing Closing Date at
the location and time specified in Schedule I

A-2 

 

hereto (or such later date not
later than five Business Days after such date as the Remarketing Agent shall
designate), which date and time may be postponed by agreement between the
Remarketing Agent and the Company and PPL Capital Funding. Delivery of the
remarketed Securities and payment of the Remarketing Fee shall be made to the
Remarketing Agent against payment by the respective purchasers of the
remarketed Securities of the consideration therefor as specified herein, which
consideration shall be paid to the Collateral Agent or the Custodial Agent, as
the case may be, for the account of the persons entitled thereto by certified
or official bank check or checks drawn on or by a New York Clearing House bank
and payable in immediately available funds or in immediately available funds by
wire transfer to an account or accounts designated by the Collateral Agent or
the Custodial Agent, as the case may be.

               If the Securities are not represented by a Global Security held by or on
behalf of The Depository Trust Company, certificates for the Securities shall
be registered in such names and denominations as the Remarketing Agent may
request not less than one full Business Day in advance of the Remarketing
Closing Date, and the Company, the Collateral Agent and the registered holder
or holders thereof agree to have such certificates available for inspection,
packaging and checking by the Remarketing Agent in New York, New York not later
than 1:00 p.m. on the Business Day prior to the Remarketing Closing Date.

          6.  Notices. Unless otherwise specified, any notices, requests, consents
or other communications given or made hereunder or pursuant hereto shall be
made in writing or transmitted by any standard form of telecommunication,
including telephone or telecopy, and confirmed in writing. All written notices
and confirmations of notices by telecommunication shall be deemed to have been
validly given or made when delivered or mailed, by registered or certified
mail, return receipt requested and postage prepaid. All such notices, requests,
consents or other communications shall be addressed as follows: if to the
Company, to Two North Ninth Street, Allentown, Pennsylvania 18101-1179,
Attention: Treasurer, with a copy to Simpson Thacher & Bartlett LLP, 425
Lexington Avenue, New York, NY 10017, Attention: Vincent Pagano Jr.; if to the
Remarketing Agent, to Morgan Stanley & Co. Incorporated, at 1585 Broadway, New
York, NY 10036, Attention: David Sun, with a copy to Davis Polk
& Wardwell, [     
], New York, NY [      ],
Attention: [     ]; and if to the
Purchase Contract Agent, to JPMorgan Chase Bank, [4 New York Plaza, New York,
NY 10004], Attention: [Institutional Trust Services], or to such other address
as any of the above shall specify to the other in writing.

          7.  Conditions to Obligations of Remarketing Agent. Anything herein to the
contrary notwithstanding, the parties hereto agree that the obligations of the
Remarketing Agent under this Agreement are subject to the satisfaction, on the
Remarketing Closing Date, of the conditions incorporated by reference herein
from Section 6 of the Dealer Manager Agreement as modified by Section 6 under
the Remarketing Agreement (including, without limitation, the delivery of
opinions of counsel, officers’ certificates and accountants’ comfort letters as
reasonably requested by the Remarketing Agent and in form and substance
reasonably satisfactory to the Remarketing Agent, the accuracy as of the
Remarketing Closing Date of the representations and warranties of the Company
and PPL Capital Funding included and incorporated by reference herein and the
performance by the Company and PPL Capital Funding of their obligations under
the Remarketing Agreement and this Agreement as and when required hereby and
thereby). In addition, anything herein to the contrary notwithstanding, this
Agreement may be terminated by the Remarketing Agent, by notice to the Company
and PPL

A-3 

 

Capital Funding at any time prior to the time of settlement on the
Remarketing Closing Date, if any of the events or conditions set forth in
Section 6 of the Dealer Manager Agreement, as modified by Section 11 of the
Remarketing Agreement, shall have occurred or shall exist.

          8.  Indemnity and Contribution. Anything herein to the contrary
notwithstanding, the Remarketing Agent shall be entitled to indemnity and
contribution on the terms and conditions set forth in the Remarketing
Agreement.

A-4 

 

               If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, PPL Capital Funding and the Remarketing Agent.

	 	 	 	 	 
	 	 	Very truly yours,
	 	 	 	 	 
	 	 	PPL CORPORATION
	 	 	 	 	 
	 	 	
By:
	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	PPL CAPITAL FUNDING, INC.
	 	 	 	 	 
	 	 	
By:
	 	

	 	 	 	 	Name:
	 	 	 	 	Title:

CONFIRMED AND ACCEPTED:

MORGAN STANLEY & CO. INCORPORATED

	 	 	 
	By:	 	
 
	 	 	

	 	 	
Authorized Signatory

[Add other Remarketing Agents, if any]

	 	 	 
	By:	 	
 
	 	 	

	 	 	
Name:
	 	 	
Title:

JPMORGAN CHASE BANK,

not individually but solely as Purchase

Contract Agent and as attorney-in-fact

of the holders from time to time of the

New PEPS Units

	 	 	 
	By:	 	
 
	 	 	

	 	 	
Name:
	 	 	
Title:

A-5 

 

SCHEDULE I

Securities subject to the remarketing: 7.29% Notes due 2006 of PPL Capital
Funding, Inc. (the “Securities”).

Purchase Contract Agreement, dated as of                    , 2003
        (the “Purchase Contract Agreement”) by and between PPL Corporation, a Pennsylvania corporation, and JPMorgan Chase Bank, a New York banking corporation.

Pledge Agreement dated as of                    , 2003 (the “Pledge Agreement”)
by and between PPL Corporation, a Pennsylvania corporation and JPMorgan
Chase Bank.

Aggregate Principal Amount of Securities:

$

Dealer Manager Agreement, dated                    , 2003 (the “Dealer Manager
Agreement”)
among PPL Corporation, PPL Capital Funding, Inc. and Morgan Stanley & Co.
Incorporated.

Remarketing Closing Date, Time and Location:

A-6FORM 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.

 

 

	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	 	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
	 	 	24	 
	 	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 August 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 August 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 November 18, 2003, February 18, 2004 and May 18, 2004 (each, an
“Interest Payment Date”) to the

5

 

Person in whose name such Note, or any Predecessor Security, is registered
at the close of business on the Regular Record Date for such interest
installment; provided, however, that following the Purchase Contract Settlement
Date, interest will be payable 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.

7

 

     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:

8

 

		
	 	     (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.

9

 

     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

11

 

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.

13

 

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 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.

14

 

     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 the Purchase Contract
Settlement Date (the “Put Exercise Date”), by delivering to the Trustee prior
to 5:00 p.m., New York City time, on or prior to the second Business Day before
the Put Exercise Date a Put Notice substantially in the form contained in the
form of Note attached hereto as Exhibit A.

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

     (d)  If there is no Successful Remarketing on May 11, 2004, the Guarantor
will cause a notice of the failure of Remarketing of the Notes to be published
before 9:00 a.m., New York City time, on May 12, 2004 and another Remarketing
will be attempted on that day. If there has not been a Successful Remarketing
on May 12, 2004, the Guarantor will cause a notice of the failure of
Remarketing of the Notes to be published before 9:00 a.m., New York City time,
on May 13, 2004 and another Remarketing will be attempted on that day. If there
has not been a Successful Remarketing on May 13, 2004, the Guarantor will cause
a notice of the failure of Remarketing of the Notes to be published before 9:00
a.m., New York City time, on May 14, 2004. 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.

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 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.

24

 

     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 August 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 November 18, 2003, 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 May 18, 2004 (the “Put Exercise
Date”), by notifying the Trustee on or prior to the second Business Day before
the Put Exercise Date.

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

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

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

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

	 	 	 
	Dated:	 	 
	 	 	PPL CAPITAL FUNDING, INC.
	 	 	 
	 	 	By:
	 	 	

	Attest:	 	 
	 
	
	 

A-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:	 	 
	 	 	 	 	

	Dated:	 	 	 	Authorized Officer

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
August         , 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, stockbrokers, 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	 	 	Signature of
	 	 	of Note evidenced by	 	 	of Note evidenced	 	 	the [Global	 	 	authorized
	 	 	the [Global	 	 	by the [Global	 	 	Certificate] [Pledged	 	 	officer of Trustee
	 	 	Certificate] [Pledged	 	 	Certificate] [Pledged	 	 	Note] following such	 	 	or Custodial
	Date	 	Note]	 	 	Note]	 	 	decrease or increase	 	 	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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