-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JNhJ2lTm5LyHE9/DncBnPX2wcO3D0oOW/+1w1ahbZyFlJwXPL8RCLrIhA2NnjfK3 e6PB1jYQBoFcZo061E8Syg== 0000950120-01-000020.txt : 20010130 0000950120-01-000020.hdr.sgml : 20010130 ACCESSION NUMBER: 0000950120-01-000020 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 32 FILED AS OF DATE: 20010129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PPL CORP CENTRAL INDEX KEY: 0000922224 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 232758192 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-54504 FILM NUMBER: 1517519 BUSINESS ADDRESS: STREET 1: TWO N NINTH ST CITY: ALLENTOWN STATE: PA ZIP: 18101 BUSINESS PHONE: 6107745151 MAIL ADDRESS: STREET 1: TWO N NINTH ST CITY: ALLENTOWN STATE: PA ZIP: 18101-1179 FORMER COMPANY: FORMER CONFORMED NAME: PP&L RESOURCES INC DATE OF NAME CHANGE: 19941123 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PP&L CAPITAL FUNDING INC CENTRAL INDEX KEY: 0001047459 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 232758192 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-54504-01 FILM NUMBER: 1517520 BUSINESS ADDRESS: STREET 1: TWO NORTH NINTH ST CITY: ALLENTOWN STATE: PA ZIP: 18101 BUSINESS PHONE: 6107745591 MAIL ADDRESS: STREET 1: TWO NORTH NINTH ST CITY: ALLENTOWN STATE: PA ZIP: 18101 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PP&L CAPITAL FUNDING TRUST I CENTRAL INDEX KEY: 0001095710 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-54504-02 FILM NUMBER: 1517521 BUSINESS ADDRESS: STREET 1: TWO NORTH NINTH ST CITY: ALLENTOWN STATE: PA ZIP: 18101 BUSINESS PHONE: 6107745591 MAIL ADDRESS: STREET 1: TWO NORTH NINTH ST CITY: ALLENTOWN STATE: PA ZIP: 18101 S-3 1 0001.txt FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 29, 2001 REGISTRATION NOS. , , AND --------- --------- --------- ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------- PPL CORPORATION PPL CAPITAL FUNDING, INC. (Exact name of registrant as specified (Exact name of registrant as specified in its charter) in its charter) PENNSYLVANIA DELAWARE (State or other jurisdiction of (State or other jurisdiction of incorporation or organization) incorporation or organization) 23-2758192 23-2926644 (I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.) TWO NORTH NINTH STREET TWO NORTH NINTH STREET ALLENTOWN, PENNSYLVANIA 18101-1179 ALLENTOWN, PENNSYLVANIA 18101-1179 (610) 774-5151 (610) 774-5151 (Address, including zip code, and (Address, including zip code, and telephone number, including area telephone number, including area code, of registrant's principal code, of registrant's principal executive offices) executive offices) PPL CAPITAL FUNDING TRUST I (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation or organization) 25-6746180 (I.R.S. Employer Identification No.) TWO NORTH NINTH STREET ALLENTOWN, PENNSYLVANIA 18101-1179 (610) 774-5151 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) JAMES E. ABEL VICE PRESIDENT-FINANCE AND TREASURER PPL CORPORATION TWO NORTH NINTH STREET ALLENTOWN, PENNSYLVANIA 18101-1179 (610) 774-5151 (Name, address, including zip code, and telephone number, including area code, of agent for service) ----------------- COPIES TO: CATHERINE C. HOOD ROBERT W. DOWNES THELEN REID & PRIEST LLP SULLIVAN & CROMWELL 40 WEST 57TH STREET 125 BROAD STREET NEW YORK, NEW YORK 10019 NEW YORK, NEW YORK 10004 (212) 603-2000 (212) 558-4000 ----------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the registration statement becomes effective, as determined by market and other conditions. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.[X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE =================================== ================ ================ =============== =============== PROPOSED PROPOSED MAXIMUM MAXIMUM TITLE OF EACH AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF CLASS OF SECURITIES BE PER OFFERING REGISTRATION TO BE REGISTERED REGISTERED(1) UNIT(1)(2)(3) PRICE(1)(2)(3) FEE - ----------------------------------- ---------------- ---------------- --------------- --------------- PPL Corporation Common Stock, par value $.01 per share........... - ----------------------------------- ---------------- ---------------- --------------- --------------- PPL Corporation Preferred Stock, par value $.01 per share....... - ----------------------------------- ---------------- ---------------- --------------- --------------- PPL Corporation Stock Purchase Contracts...................... - ----------------------------------- ---------------- ---------------- --------------- --------------- PPL Corporation Stock Purchase Units.......................... - ----------------------------------- ---------------- ---------------- --------------- --------------- PPL Capital Funding Debt Securities..................... - ----------------------------------- ---------------- ---------------- --------------- --------------- PPL Corporation Guarantees of PPL Capital Funding Debt Securities ("Guarantees")(4)... - ----------------------------------- ---------------- ---------------- --------------- --------------- PPL Capital Funding Trust I Preferred Trust Securities..... - ----------------------------------- ---------------- ---------------- --------------- --------------- PPL Corporation Guarantee ("Preferred Securities Guarantee") of PPL Capital Funding Trust I Preferred Trust Securities (4)........... - ----------------------------------- ---------------- ---------------- --------------- --------------- PPL Capital Funding Subordinated Debt Securities (4) ........... - ----------------------------------- ---------------- ---------------- --------------- --------------- PPL Corporation Subordinated Guarantees of PPL Capital Funding Subordinated Debt Securities ("Subordinated Guarantees")(4)................ - ----------------------------------- ---------------- ---------------- --------------- --------------- Total(5)....................... $800,000,000 100% $800,000,000 $200,000 =================================== ================ ================ =============== ===============
(1) There are being registered hereunder such presently indeterminate principal amount or number of (a) shares of Common Stock, Preferred Stock, Stock Purchase Contracts and Stock Purchase Units which may be sold from time to time by PPL Corporation, (b) Debt Securities which may be sold from time to time by PPL Capital Funding, Inc., and which will be guaranteed as to payment as set forth herein by PPL Corporation, (c) Preferred Trust Securities which may be sold from time to time by PPL Capital Funding Trust I, and which will be guaranteed as set forth hereunder by PPL Corporation, and (d) Subordinated Debt Securities which may be sold from time to time by PPL Capital Funding, and which will be guaranteed as to payment as set forth herein by PPL Corporation. In no event will the aggregate initial offering price of all Common Stock, Preferred Stock, Stock Purchase Contracts, Stock Purchase Units, Debt Securities, Preferred Trust Securities or Subordinated Debt Securities ("Securities") issued from time to time pursuant to this Registration Statement exceed $800,000,000. If any such securities are issued at an original issue discount, then the aggregate initial offering price as so discounted shall not exceed $800,000,000, notwithstanding that the stated principal amount of such securities may exceed such amount. In addition, there are being registered hereunder an indeterminate number of shares of Common Stock issuable by PPL Corporation upon settlement of the Stock Purchase Contracts or Stock Purchase Units or upon conversion of any other Securities. (2) Estimated solely for the purpose of determining the registration fee. The proposed maximum initial offering price per security will be determined, from time to time, by the registrants in connection with the issuance of the Securities, the Guarantees, the Preferred Securities Guarantee and the Subordinated Guarantees registered hereunder. (3) Exclusive of accrued interest or dividends, if any. (4) No separate consideration will be received for the Guarantees, the Preferred Securities Guarantee or the Subordinated Guarantees. Subordinated Debt Securities may be purchased by PPL Capital Funding Trust I with the proceeds of the sale of Preferred Trust Securities, in which case no separate consideration will be received for the Subordinated Debt Securities. THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ================================================================================ SUBJECT TO COMPLETION, DATED JANUARY 29, 2001 PROSPECTUS PPL CORPORATION PPL CAPITAL FUNDING, INC. PPL CAPITAL FUNDING TRUST I Two North Ninth Street Allentown, Pennsylvania 18101-1179 (610) 774-5151 $800,000,000 PPL CORPORATION COMMON STOCK, PREFERRED STOCK, STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS PPL CAPITAL FUNDING, INC. DEBT SECURITIES AND SUBORDINATED DEBT SECURITIES GUARANTEED AS TO PAYMENT AS DESCRIBED IN THIS PROSPECTUS BY PPL CORPORATION PPL CAPITAL FUNDING TRUST I PREFERRED TRUST SECURITIES GUARANTEED AS DESCRIBED IN THIS PROSPECTUS BY PPL CORPORATION We will provide the specific terms of these securities in supplements to this prospectus. You should read this prospectus and the supplements carefully before you invest. This prospectus may not be used to sell securities unless accompanied by a prospectus supplement. We may offer the securities directly or through underwriters or agents. The applicable prospectus supplement will describe the terms of any particular plan of distribution. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this prospectus is , 2001. ------- -- THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. TABLE OF CONTENTS PAGE ---- ABOUT THIS PROSPECTUS.........................................................2 WHERE YOU CAN FIND MORE INFORMATION...........................................3 PPL CORPORATION...............................................................5 PPL CAPITAL FUNDING...........................................................8 PPL CAPITAL FUNDING TRUST I...................................................8 USE OF PROCEEDS...............................................................8 RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS...........................................................9 DESCRIPTION OF PPL CORPORATION'S CAPITAL STOCK................................9 DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS.............11 DESCRIPTION OF THE DEBT SECURITIES...........................................12 DESCRIPTION OF THE TRUST SECURITIES..........................................22 DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE............................30 DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES..............................34 INFORMATION CONCERNING THE TRUSTEES..........................................48 EXPERTS......................................................................48 VALIDITY OF THE SECURITIES AND THE SECURITIES GUARANTEES.....................49 PLAN OF DISTRIBUTION.........................................................49 ABOUT THIS PROSPECTUS This prospectus is part of a registration statement that PPL Corporation, PPL Capital Funding, Inc. ("PPL Capital Funding") and PPL Capital Funding Trust I (the "Trust") filed with the Securities and Exchange Commission, or SEC, using a "shelf" registration process. Under this shelf process, we may, from time to time, sell combinations of the securities described in this prospectus in one or more offerings up to a total dollar amount of $800,000,000. This prospectus provides a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information described under "Where You Can Find More Information." We may use this prospectus to offer from time to time: (a) shares of PPL Corporation Common Stock, par value $.01 per share ("Common Stock"); (b) shares of PPL Corporation Preferred Stock, par value $.01 per share ("Preferred Stock"); (c) contracts to purchase shares of PPL Corporation Common Stock ("Stock Purchase Contracts"); and 2 (d) stock purchase units, each representing either (1) a Stock Purchase Contract or (2) a Stock Purchase Contract and debt securities or preferred trust securities of third parties (such as Debt Securities or Subordinated Debt Securities of PPL Capital Funding, Preferred Trust Securities of the Trust or United States Treasury securities) that are pledged to secure the stock purchase unit holders' obligations to purchase Common Stock under the Stock Purchase Contracts ("Stock Purchase Units"). We may also use this prospectus to offer from time to time: (a) PPL Capital Funding's unsecured and unsubordinated debt securities ("Debt Securities"); and (b) PPL Capital Funding's unsecured subordinated debt securities ("Subordinated Debt Securities"). PPL Corporation will unconditionally guarantee the payment of principal, premium and interest on the PPL Capital Funding Debt Securities and Subordinated Debt Securities as described below in "Description of the Debt Securities - PPL Corporation Guarantees" and "Description of the Subordinated Debt Securities - Subordinated Guarantees." We may also use this prospectus to offer from time to time the Trust's preferred trust securities ("Preferred Trust Securities"). PPL Corporation will guarantee the Trust's obligations under the Preferred Trust Securities as described below under "Description of the Preferred Securities Guarantee." We sometimes refer to the Common Stock, the Preferred Stock, the Stock Purchase Contracts, the Stock Purchase Units, the Debt Securities, the Subordinated Debt Securities and the Preferred Trust Securities collectively as the "Securities." In addition, we sometimes refer to PPL Corporation's guarantees of Debt Securities ("Guarantees"), guarantees of Subordinated Debt Securities ("Subordinated Guarantees"), and the guarantee of Preferred Trust Securities ("Preferred Securities Guarantee"), collectively as "Securities Guarantees." For more detailed information about the Securities and the Securities Guarantees, you can read the exhibits to the registration statement. Those exhibits have been either filed with the registration statement or incorporated by reference to earlier SEC filings listed in the registration statement. WHERE YOU CAN FIND MORE INFORMATION AVAILABLE INFORMATION PPL Corporation files reports, proxy statements and other information with the SEC. Information filed with the SEC by PPL Corporation can be inspected and copied at the Public Reference Room maintained by the SEC and at the following Regional Offices of the SEC: 3 Public Reference Room New York Regional Office Chicago Regional Office 450 Fifth Street, N.W. 7 World Trade Center Citicorp Center Room 1024 Suite 1300 500 West Madison Street Washington, D.C. 20549 New York, New York 10048 Suite 1400 Chicago, Illinois 60661-2551 You may also obtain copies of this information by mail from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates. Further information on the operation of the SEC's Public Reference Room in Washington, D.C. can be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet world wide web site that contains reports, proxy statements and other information about issuers, such as PPL Corporation, who file electronically with the Commission. The address of that site is http://www.sec.gov. PPL Corporation Common Stock is listed on the New York Stock Exchange ("NYSE") and the Philadelphia Stock Exchange (symbol: PPL), and reports, proxy statements and other information concerning PPL Corporation can also be inspected at the offices of the NYSE at 20 Broad Street, New York, New York 10005 and the Philadelphia Stock Exchange, 1900 Market Street, Philadelphia, Pennsylvania 19103. In addition, reports, proxy statements and other information concerning PPL Corporation can be inspected at its offices at Two North Ninth Street, Allentown, Pennsylvania 18101-1179. PPL Corporation maintains an Internet site at http://www.pplweb.com (which is not intended to be an active hyperlink herein) which contains information concerning PPL Corporation and its affiliates. The information at PPL Corporation's Internet site is not incorporated in this prospectus by reference, and you should not consider it a part of this prospectus. INCORPORATION BY REFERENCE The rules of the SEC allow us to "incorporate by reference" information into this prospectus, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede that information. This prospectus incorporates by reference the documents set forth below that have been previously filed with the SEC. These documents contain important information about PPL Corporation. SEC FILINGS (FILE NO. 1-11459) PERIOD/DATE ------------------------------ ----------- Annual Report on Form 10-K, Year ended December 31, 1999 as amended by Form 10-K/A, filed with the SEC on June 28, 2000 Quarters ended March 31, June 30 Quarterly Reports on Form 10-Q and September 30, 2000 January 28, February 14, May 26, Current Reports on Form 8-K June 2, June 15, July 5, July 14, July 31, August 1, August 23, October 20, October 26 and December 21, 2000 and January 26, 2001 PPL Corporation's Registration Statement on Form 8-B April 27, 1995 4 We are also incorporating by reference additional documents that PPL Corporation files with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), between the date of this prospectus and the termination of the offering of the Securities. In addition, we are also incorporating by reference any additional documents that PPL Corporation files with the SEC pursuant to these sections of the Exchange Act after the date of the filing of the registration statement containing this prospectus, and prior to the effectiveness of the registration statement. PPL Corporation will provide without charge to each person, including any beneficial owner, to whom a copy of this prospectus has been delivered, a copy of any and all of these filings. You may request a copy of these filings by writing or telephoning us at: PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18101-1179 Attention: Investor Services Department Telephone: 1-800-345-3085 We have not included or incorporated by reference any separate financial statements of PPL Capital Funding herein. We do not consider those financial statements to be material to holders of the Debt Securities or Subordinated Debt Securities because (1) PPL Capital Funding was formed for the primary purpose of providing financing for PPL Corporation and its subsidiaries, (2) PPL Capital Funding does not currently engage in any independent operations and (3) PPL Capital Funding does not currently plan to engage, in the future, in more than minimal independent operations. See "PPL Capital Funding." PPL Capital Funding has received a "no action" letter from the Staff of the SEC stating that the Staff would not raise any objection if PPL Capital Funding does not file periodic reports under Sections 13 and 15(d) of the Exchange Act. Accordingly, we do not expect PPL Capital Funding to file those reports. We have similarly not included or incorporated by reference any separate financial statements of the Trust herein. We do not consider those financial statements to be material to holders of the Preferred Trust Securities because (1) the Trust is a newly formed special purpose entity and has no operating history or independent operations, and (2) the Trust is not engaged in and does not propose to engage in any activity other than holding as trust assets the Subordinated Debt Securities of PPL Capital Funding and issuing the Preferred Trust Securities and the Common Trust Securities. We do not expect the Trust to file periodic reports under Sections 13 and 15(d) of the Exchange Act. PPL CORPORATION PPL Corporation is a holding company with headquarters in Allentown, Pennsylvania. Its principal subsidiaries include: o PPL Electric Utilities Corporation ("PPL Utilities"), which provides electricity delivery service in eastern and central Pennsylvania; o PPL Energy Funding Corporation ("Energy Funding"), a holding company for PPL Corporation's unregulated business; 5 o PPL EnergyPlus, LLC ("EnergyPlus"), which sells energy and energy services in deregulated markets; o PPL Generation, LLC ("PPL Generation"), which owns and operates all of PPL Corporation's U.S. generation facilities, including those generating facilities previously owned by PPL Utilities; o PPL Montana Holdings, LLC, which holds, through subsidiaries, investments in electricity generation and related assets in Montana; o PPL Montana, LLC, which generates electricity for wholesale and retail customers in Montana and the Northwest; o PPL Global, LLC ("PPL Global"), an international independent power company which develops and acquires U.S. and international energy projects and which owns international energy projects; o PPL Gas Utilities Corporation, which provides natural gas distribution, transmission and storage services and sells propane; o PPL Spectrum, Inc., which markets energy-related products and services; o PPL Capital Funding, which engages in financing for PPL Corporation and its subsidiaries; o H.T. Lyons, Inc., McClure Company, McCarl's Inc., Burns Mechanical, and Western Mass. Holdings, Inc., which are mechanical contracting and engineering firms; and o PPL Transition Bond Company, LLC (a special purpose subsidiary of PPL Utilities), formed to issue transition bonds under the Pennsylvania Electricity Generation and Customer Choice and Competition Act ("Customer Choice Act"). CORPORATE REALIGNMENT Prior to July 1, 2000, PPL Utilities had been an integrated public utility which engaged in the generation, transmission and distribution of electricity in its franchised territory in eastern and central Pennsylvania, and which also engaged in wholesale energy marketing in the United States and Canada. PPL Utilities also engaged in retail energy marketing in newly deregulated markets through EnergyPlus, which had been a wholly-owned subsidiary of PPL Utilities. As a result of federal and state legislation and regulatory initiatives, the electric utility industry, including PPL Utilities, has experienced and will continue to experience a significant increase in the level of competition in the energy supply market. At the federal level, the Energy Policy Act of 1992 created a new class of independent power producers to promote competition in the electric energy market for bulk power, and the Federal Power Act was amended to provide open access to electric transmission systems for wholesale transactions. In addition, the Customer Choice Act was enacted in Pennsylvania to restructure 6 the state's electric utility industry in order to create retail access to a competitive market for generation of electricity. On July 1, 2000, PPL Corporation and PPL Utilities completed a corporate realignment in order to effectively separate PPL Utilities' regulated transmission and distribution operations from its recently deregulated generation operations and better position the companies and their affiliates in the new competitive marketplace. As part of the corporate realignment, PPL Utilities transferred its generating assets to PPL Generation. PPL Utilities also transferred its wholesale energy marketing assets to EnergyPlus, and subsequently transferred its interest in EnergyPlus to Energy Funding. PPL Utilities retained its electric transmission and distribution businesses. PPL Global also transferred its U.S. electric generating subsidiaries to PPL Generation as part of the realignment; PPL Global retains its international electric generation and distribution assets, and will continue to acquire and develop power projects in the United States and internationally. The corporate realignment followed receipt of various regulatory approvals, including approvals of the Pennsylvania Public Utility Commission, the Federal Energy Regulatory Commission and the Nuclear Regulatory Commission. HOLDING COMPANY STRUCTURE PPL Corporation conducts its operations primarily through PPL Utilities and PPL Corporation's other wholly-owned subsidiaries, and substantially all of PPL Corporation's consolidated assets are held by PPL Utilities and these other subsidiaries. Accordingly, PPL Corporation's cash flow, its ability to pay dividends on its capital stock and its ability to meet its obligations under the Securities Guarantees are largely dependent upon the earnings of PPL Utilities and the other subsidiaries and the distribution or other payment of such earnings to PPL Corporation in the form of dividends, loans or advances or repayment of loans and advances from PPL Corporation. The subsidiaries are separate and distinct legal entities and have no obligation to pay any amounts due on any Securities (except for the Securities issued by such subsidiaries) or to make any funds available for such payment. Because PPL Corporation is a holding company, its obligations under the Securities Guarantees will be effectively subordinated to all existing and future liabilities of its subsidiaries. Therefore, PPL Corporation's rights and the rights of its shareholders and creditors, including rights of a holder of any Security under a Securities Guarantee, to participate in the assets of any subsidiary in the event that such a subsidiary is liquidated or reorganized, will be subject to the prior claims of such subsidiary's creditors. To the extent that PPL Corporation may itself be a creditor with recognized claims against any such subsidiary, PPL Corporation's claims would still be effectively subordinated to any security interest in, or mortgages or other liens on, the assets of the subsidiary and would be subordinated to any indebtedness or other liabilities of the subsidiary senior to that held by PPL Corporation. Although certain agreements to which PPL Corporation and its subsidiaries are parties limit the ability to incur additional indebtedness, PPL Corporation and its subsidiaries retain the ability to incur substantial additional indebtedness and other liabilities. The information above concerning PPL Corporation and its subsidiaries is only a summary and does not purport to be comprehensive. In addition, certain statements regarding PPL Corporation and its affiliates contained or incorporated by reference in this prospectus are "forward-looking statements" within the meaning of the securities laws. Although PPL Corporation believes that the expectations reflected in such statements are reasonable, it can give no assurance that such expectations will prove to have been correct. For additional information concerning PPL Corporation and its subsidiaries, including certain assumptions, risks and uncertainties involved in the 7 forward-looking statements contained or incorporated by reference in this prospectus, you should refer to the information described in "Where You Can Find More Information." PPL Corporation's offices are located at Two North Ninth Street, Allentown, Pennsylvania 18101-1179 and its telephone number is (610) 774-5151. PPL CAPITAL FUNDING PPL Capital Funding is a Delaware corporation and a wholly-owned subsidiary of PPL Corporation. PPL Capital Funding's primary business is to provide financing for the operations of PPL Corporation and its subsidiaries. PPL Capital Funding's offices are located at Two North Ninth Street, Allentown, Pennsylvania 18101-1179 and its telephone number is (610) 774-5151. PPL CAPITAL FUNDING TRUST I The Trust is a statutory business trust created under Delaware law under a trust agreement which is to be amended pursuant to an Amended and Restated Trust Agreement (as so amended, the "Trust Agreement") among PPL Corporation, The Chase Manhattan Bank as the Property Trustee, Chase Manhattan Bank USA, National Association, as Delaware Trustee and two employees of PPL Corporation as Administrative Trustees. The Trust exists only to issue and sell its Preferred Trust Securities and Common Trust Securities, to acquire and hold the Subordinated Debt Securities as trust assets and to engage in activities incidental to the foregoing. All of the Common Trust Securities will be owned by PPL Corporation. The Common Trust Securities will represent at least 3% of the total capital of the Trust. Payments will be made on the Common Trust Securities pro rata with the Preferred Trust Securities, except that the Common Trust Securities' right to payment will be subordinated to the rights of the Preferred Trust Securities if there is a default under the Trust Agreement resulting from an event of default under the Subordinated Indenture (as defined herein). The Trust has a term of approximately 40 years, but may dissolve earlier as provided in the Trust Agreement. The Trust's business and affairs will be conducted by its Administrative Trustees, as set forth in the Trust Agreement. The office of the Delaware Trustee in the State of Delaware is 1201 Market Street, 9th Floor, Wilmington, Delaware 19801. The Trust's offices are located at Two North Ninth Street, Allentown, PA 18101-1179, and the telephone number is (610) 774-5151. USE OF PROCEEDS Unless we indicate differently in the applicable prospectus supplement, the net proceeds from the sale of the Debt Securities, Subordinated Debt Securities and/or the Preferred Trust Securities will be loaned to PPL Corporation and/or its subsidiaries. PPL Corporation and/or its subsidiaries are expected to use the proceeds of such loans, and the proceeds of any other Securities, for general corporate purposes, including investing in unregulated business activities and reducing short-term debt incurred to provide interim financing for such purposes. 8 RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS The following table sets forth PPL Corporation's ratio of earnings to fixed charges and ratio of earnings to fixed charges and preferred dividends for the periods indicated:
Twelve Months Ended Year Ended December 31, ------------------------- --------------------------------------- September 30, 2000(a) 1999(a) 1998(a) 1997 1996 1995 --------------------- ------- ------- ---- ---- ---- Ratio of earnings to fixed charges................... 2.98 2.98 3.48 3.33 3.43 3.47 Ratio of earnings to fixed charges and preferred dividends (b)............. 2.76 2.72 3.12 2.94 2.88 2.92
(a) 2000, 1999 and 1998 net income excludes extraordinary items. For purposes of these ratios, earnings for the year ended December 31, 1998 exclude an extraordinary charge of $948 million (after tax) associated with PPL Utilities' restructuring proceedings before the Pennsylvania Public Utility Commission and the Federal Energy Regulatory Commission. See PPL Corporation's reports on file with the SEC pursuant to the Exchange Act as described under "Where You Can Find More Information" for more information. (b) Includes distributions on company-obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely company debentures. DESCRIPTION OF PPL CORPORATION'S CAPITAL STOCK The description below is a summary of certain provisions of PPL Corporation's capital stock. The Pennsylvania Business Corporation Law and the Restated Articles of Incorporation and By-laws of PPL Corporation determine the rights and privileges of holders of PPL Corporation's capital stock. We encourage you to read such documents, which have been filed with the SEC, and the Pennsylvania law for more information regarding such capital stock. AUTHORIZED CAPITAL The authorized capital stock of PPL Corporation consists of 390,000,000 shares of Common Stock, par value $.01 per share and 10,000,000 shares of Preferred Stock, par value $.01 per share. COMMON STOCK As of December 31, 2000, 145,041,342 shares of Common Stock were issued and outstanding. The outstanding Common Stock is, and the Common Stock offered hereby when issued and paid for will be, fully paid and non-assessable. Dividends. Dividends on the Common Stock will be paid if, when and as determined by the Board of Directors of PPL Corporation out of funds legally available for this purpose. The rate and timing of future dividends will depend upon the future earnings and financial condition of PPL Corporation and its 9 subsidiaries and upon other relevant factors affecting PPL Corporation's dividend policy which PPL Corporation cannot presently determine. As a practical matter, the ability of PPL Corporation to pay dividends will be governed by the ability of PPL Corporation's operating subsidiaries to pay dividends to PPL Corporation. To date, the funds required by PPL Corporation to enable it to pay dividends on its Common Stock have been derived predominantly from dividends paid by PPL Utilities to PPL Corporation. In the future, dividends from subsidiaries other than PPL Utilities will also be a source of funds for dividend payments by PPL Corporation. The subsidiaries' ability to pay dividends to PPL Corporation will be subject to the prior rights of the holders of such subsidiaries' outstanding debt and preferred securities, the availability of earnings and the needs of their businesses. See "PPL Corporation - Holding Company Structure." The restrictions on the payment of dividends contained in PPL Utilities' Amended and Restated Articles of Incorporation and in its first mortgage bond indenture do not currently limit the amount of regular quarterly dividends PPL Utilities pays on its common stock. Voting Rights. Holders of Common Stock are entitled to one vote for each share held by them on all matters presented to shareowners. Pursuant to PPL Corporation's Articles of Incorporation, the holders of Common Stock will not have cumulative voting rights in the election of directors. PPL Corporation's bylaws provide for a classified board of directors consisting of three classes as nearly equal in number as may be. Each class holds office until the third year following the election of such class, and no director may be removed except for cause upon a two-thirds vote of all outstanding shares. PPL Corporation's bylaws also provide for certain notice requirements for shareowner nominations and proposals at annual meetings and preclude shareowners from bringing business before any special meeting. PPL Corporation's Articles of Incorporation and certain provisions of Pennsylvania law would require a supermajority vote of holders or a majority vote of disinterested directors to approve certain business combinations and other major transactions involving PPL Corporation. Liquidation Rights. After satisfaction of the preferential liquidation rights of any Preferred Stock, the holders of the Common Stock are entitled to share, ratably, in the distribution of all remaining net assets. Preemptive and Other Rights. The holders of Common Stock do not have preemptive rights as to additional issues of Common Stock or conversion rights. The shares of Common Stock are not subject to redemption or to any further calls or assessments and are not entitled to the benefit of any sinking fund provisions. PREFERRED STOCK PPL Corporation's Board of Directors is authorized, without further shareowner action, to divide the Preferred Stock into one or more classes or series and to determine the designations, preferences, limitations and special rights of any class or series including, but not limited to, the following: (a) the rate of dividend, if any; (b) the rights, if any, of the holders of shares of the series upon voluntary or involuntary liquidation, dissolution or winding up of PPL Corporation; (c) the terms and conditions upon which shares may be converted into shares of other series or other capital stock, if issued with the privilege of conversion; 10 (d) the price at and the terms and conditions upon which shares may be redeemed; and (e) the voting rights, if any. No shares of Preferred Stock have been issued. The applicable prospectus supplement will describe the terms of any Preferred Stock. Unless otherwise provided in the applicable prospectus supplement, holders of Preferred Stock will not have any preemptive rights to subscribe for or purchase any additional shares of the capital stock of PPL Corporation, or other securities or other right or option to purchase shares of capital stock. CERTAIN TAX MATTERS In the opinion of counsel for PPL Corporation, the Common Stock and Preferred Stock are exempt from existing personal property taxes in Pennsylvania. LISTING The outstanding shares of Common Stock are, and the shares offered hereby will be, listed on the New York and Philadelphia Stock Exchanges. TRANSFER AGENTS AND REGISTRARS The Transfer Agents and Registrars for the Common Stock are PPL Utilities and Norwest Bank Minnesota, N.A., St. Paul, Minnesota. DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS PPL Corporation may issue Stock Purchase Contracts representing contracts obligating holders to purchase from PPL Corporation, and PPL Corporation to sell to the holders, a specified number of shares of Common Stock at a future date or dates. The price per share of Common Stock and number of shares of Common Stock may be fixed at the time the Stock Purchase Contracts are issued or may be determined by reference to a specific formula set forth in the Stock Purchase Contracts. The Stock Purchase Contracts may be issued separately or as a part of other Stock Purchase Units that consist of (a) a Stock Purchase Contract or (b) a Stock Purchase Contract and debt securities or preferred trust securities of third parties (including, but not limited to, Debt Securities, Subordinated Debt Securities, Preferred Trust Securities or United States Treasury securities), that would secure the holders' obligations to purchase the Common Stock under the Stock Purchase Contracts. The Stock Purchase Contracts may require PPL Corporation to make periodic payments to the holders of the Stock Purchase Units or vice-versa. These payments may be unsecured or prefunded on some basis. The Stock Purchase Contracts may require holders to secure their obligations thereunder in a specified manner. The applicable prospectus supplement will describe the terms of any Stock Purchase Contracts or Stock Purchase Units. 11 DESCRIPTION OF THE DEBT SECURITIES The following description sets forth certain general terms and provisions of PPL Capital Funding's unsecured debt securities, consisting of notes or debentures, that we may offer by this prospectus ("Debt Securities"). We will describe the particular terms of Debt Securities, and provisions that vary from those described below, in one or more prospectus supplements. We may issue the Debt Securities from time to time in the future in one or more series. We will issue the Debt Securities and the guarantee or guarantees of PPL Corporation relating thereto (the "Guarantee" or "Guarantees") under the Indenture, dated as of November 1, 1997 (as such indenture has been and may be supplemented, the "Indenture"), among PPL Capital Funding, PPL Corporation and The Chase Manhattan Bank, as trustee (the "Trustee"). The Indenture is filed as an exhibit to the registration statement. The Indenture and its associated documents contain the full legal text of the matters described in this section. Because this section is a summary, it does not describe every aspect of the Debt Securities or the Indenture. This summary is subject to and qualified in its entirety by reference to all the provisions of the Indenture, including definitions of certain terms used in the Indenture. We also include references in parentheses to certain sections of the Indenture. Whenever we refer to particular sections or defined terms of the Indenture in this prospectus or in a prospectus supplement, such sections or defined terms are incorporated by reference herein or in the prospectus supplement. This summary also is subject to and qualified by reference to the description of the particular terms of your securities described in the applicable prospectus supplement or supplements. The Indenture has been qualified under the Trust Indenture Act, and you should refer to the Trust Indenture Act for provisions that apply to the Debt Securities. GENERAL We may issue an unlimited amount of Debt Securities or other securities under the Indenture. The Debt Securities and all other debt securities issued previously or hereafter under the Indenture are collectively referred to herein as the "Indenture Securities." The Debt Securities will be unsecured and unsubordinated obligations of PPL Capital Funding, and by the Guarantees will be unconditionally guaranteed by PPL Corporation as to payment of principal and any interest and premium. See "--PPL Corporation Guarantees." Prior to the issuance of each series, certain aspects of the particular Debt Securities have to be specified in a supplemental indenture, in a board resolution of PPL Capital Funding, or in one or more officer's certificates of PPL Capital Funding pursuant to a supplemental indenture or a board resolution. We refer you to the applicable prospectus supplement(s) for a description of the following terms of the series of Debt Securities: (a) the title of such Debt Securities; (b) any limit upon the principal amount of such Debt Securities; (c) the date or dates on which principal will be payable or how to determine such dates; 12 (d) the rate or rates or method of determination of interest; the date from which interest will accrue; the dates on which interest will be payable ("Interest Payment Dates"); and any record dates for the interest payable on such Interest Payment Dates; (e) any obligation or option of PPL Capital Funding to redeem, purchase or repay Debt Securities, or any option of the Holder to require PPL Capital Funding to redeem or repurchase Debt Securities, and the terms and conditions upon which such Debt Securities will be redeemed, purchased or repaid; (f) the denominations in which such Debt Securities will be issuable (if other than denominations of $1,000 and any integral multiple thereof); (g) whether such Debt Securities are to be issued in whole or in part in the form of one or more global Debt Securities and, if so, the identity of the depositary for such global Debt Securities; and (h) any other terms of such Debt Securities. (See Section 301.) PPL CORPORATION GUARANTEES PPL Corporation will unconditionally guarantee the payment of principal of and any interest and premium on the Debt Securities, when due and payable, whether at the stated maturity date, by declaration of acceleration, call for redemption or otherwise, in accordance with the terms of such Debt Securities and the Indenture. The Guarantees will remain in effect until the entire principal of and any premium and interest on the Debt Securities has been paid in full or otherwise discharged in accordance with the provisions of the Indenture. (See Article Fourteen.) The Guarantees will be unsecured debt of PPL Corporation, not subordinated by their terms to any other obligations of PPL Corporation. See "PPL Corporation--Holding Company Structure," above, however, with regard to the effect of the holding company structure on the status of PPL Corporation's obligations compared to obligations of its subsidiaries. PAYMENT OF DEBT SECURITIES INTEREST Unless we indicate differently in a prospectus supplement, we will pay interest on each Debt Security on each Interest Payment Date by check mailed to the person in whose name such Debt Security is registered (the registered holder of any Indenture Security being called a "Holder" in this prospectus) as of the close of business on the regular record date relating to such Interest Payment Date, except that interest payable at maturity (whether at stated maturity, upon redemption or otherwise, "Maturity") will be paid to the person to whom principal is paid. However, if we default in paying interest on a Debt Security, we will pay defaulted interest in either of the two following ways: 13 (a) We will first propose to the Trustee a payment date for such defaulted interest. Next, the Trustee will choose a Special Record Date for determining which Holders are entitled to the payment. The Special Record Date will be between 10 and 15 days before the payment date we propose. Finally, we will pay such defaulted interest on the payment date to the Holder of the Debt Security as of the close of business on the Special Record Date. (b) Alternatively, we can propose to the Trustee any other lawful manner of payment that is consistent with the requirements of any securities exchange on which such Debt Securities are listed for trading. If the Trustee thinks the proposal is practicable, payment will be made as proposed. (See Section 307.) PRINCIPAL Unless we indicate differently in a prospectus supplement, we will pay principal of and any interest and premium on the Debt Securities at Maturity upon presentation of the Debt Securities at the office of The Chase Manhattan Bank in New York, New York, as our Paying Agent. Any other Paying Agent initially designated for the Debt Securities of a particular series will be named in the applicable prospectus supplement. In our discretion, we may change the place of payment on the Debt Securities, and may remove any Paying Agent and may appoint one or more additional Paying Agents (including PPL Capital Funding, PPL Corporation or any affiliate of either of them). (See Section 602.) FORM; TRANSFERS; EXCHANGES Unless otherwise indicated in a prospectus supplement, the Debt Securities will be issued: (a) only in fully registered form; (b) without interest coupons; and (c) in denominations that are integral multiples of $1,000. (See Section 302.) You may have your Debt Securities divided into Debt Securities of smaller denominations (of at least $1,000) or combined into Debt Securities of larger denominations, as long as the total principal amount is not changed. This is called an "exchange." You may exchange or transfer Debt Securities at the office of the Trustee. The Trustee acts as our agent for registering Debt Securities in the names of holders and transferring debt securities. We may appoint another agent or act as our own agent for this purpose. The entity performing the role of maintaining the list of registered holders is called the "Security Registrar." It will also perform transfers. In our discretion, we may change the place for registration of transfer of the Debt Securities and may remove and/or appoint one or more additional Security Registrars (including PPL Capital Funding, PPL Corporation or any affiliate of either of them). (See Sections 305 and 602.) 14 Except as otherwise provided in a prospectus supplement, there will be no service charge for any transfer or exchange of the Debt Securities, but you may be required to pay a sum sufficient to cover any tax or other governmental charge payable in connection therewith. We may block the transfer or exchange of (a) Debt Securities during a period of 15 days prior to giving any notice of redemption or (b) any Debt Security selected for redemption in whole or in part, except the unredeemed portion of any Debt Security being redeemed in part. (See Section 305.) REDEMPTION We will set forth any terms for the redemption of Debt Securities in a prospectus supplement. Unless we indicate differently in a prospectus supplement, and except with respect to Debt Securities redeemable at the option of the Holder, Debt Securities will be redeemable upon notice by mail between 30 and 60 days prior to the redemption date. If less than all of the Debt Securities of any series or any tranche thereof are to be redeemed, the Trustee will select the Debt Securities to be redeemed. In the absence of any provision for selection, the Trustee will choose a method of random selection as it deems fair and appropriate. (See Sections 403 and 404.) Debt Securities will cease to bear interest on the redemption date. PPL Capital Funding will pay the redemption price and any accrued interest once you surrender the Debt Security for redemption. (See Section 405.) If only part of a Debt Security is redeemed, the Trustee will deliver to you a new Debt Security of the same series for the remaining portion without charge. (Section 406.) We may make any redemption at the option of PPL Capital Funding conditional upon the receipt by the Paying Agent, on or prior to the date fixed for redemption, of money sufficient to pay the redemption price. If the Paying Agent has not received such money by the date fixed for redemption, PPL Capital Funding will not be required to redeem such Debt Securities. (See Section 404.) EVENTS OF DEFAULT An "Event of Default" occurs with respect to Indenture Securities of any series if (a) we do not pay any interest on any Indenture Securities of the applicable series within 30 days of the due date; (b) we do not pay principal or premium on any Indenture Securities of the applicable series on its due date; (c) we remain in breach of a covenant (excluding covenants solely applicable to a specific series) or warranty of the Indenture for 90 days after we receive a written notice of default stating we are in breach and requiring remedy of the breach; the notice must be sent by either the Trustee or Holders of 25% of the principal amount of Indenture Securities of the affected series; the Trustee or such Holders can agree to extend the 90-day period and such an agreement to extend will be automatically deemed to occur if we are diligently pursuing action to correct the default; (d) the Guarantees on any Indenture Securities of the applicable series (1) cease to be effective (except in accordance with their terms), 15 (2) are found in any judicial proceeding to be unenforceable or invalid, or (3) are denied or disaffirmed (except in accordance with their terms); (e) we file for bankruptcy or certain other events in bankruptcy, insolvency, receivership or reorganization occur; or (f) any other Event of Default specified in the prospectus supplement occurs. (See Section 801.) No Event of Default with respect to the Debt Securities necessarily constitutes an Event of Default with respect to the Indenture Securities of any other series issued under the Indenture. REMEDIES ACCELERATION ANY ONE SERIES. If an Event of Default occurs and is continuing with respect to any one series of Indenture Securities, then either the Trustee or the Holders of 25% in principal amount of the outstanding Indenture Securities of such series may declare the principal amount of all of the Indenture Securities of such series to be due and payable immediately. MORE THAN ONE SERIES. If an Event of Default occurs and is continuing with respect to more than one series of Indenture Securities, then either the Trustee or the Holders of 25% in aggregate principal amount of the outstanding Indenture Securities of all such series, considered as one class, may make such declaration of acceleration. Thus, if there is more than one series affected, the action by 25% in principal amount of the Indenture Securities of any particular series will not, in itself, be sufficient to make a declaration of acceleration. (See Section 802.) RESCISSION OF ACCELERATION After the declaration of acceleration has been made and before the Trustee has obtained a judgment or decree for payment of the money due, such declaration and its consequences will be rescinded and annulled, if (a) we pay or deposit with the Trustee a sum sufficient to pay (1) all overdue interest; (2) the principal of and any premium which have become due otherwise than by such declaration of acceleration and overdue interest thereon; (3) interest on overdue interest to the extent lawful; and (4) all amounts due to the Trustee under the Indenture; and 16 (b) all Events of Default, other than the nonpayment of the principal which has become due solely by such declaration of acceleration, have been cured or waived as provided in the Indenture. (See Section 802.) For more information as to waiver of defaults, see "--Waiver of Default and of Compliance" below. CONTROL BY HOLDERS; LIMITATIONS Subject to the Indenture, if an Event of Default with respect to the Indenture Securities of any one series occurs and is continuing, the Holders of a majority in principal amount of the outstanding Indenture Securities of that series will have the right to (a) direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or (b) exercise any trust or power conferred on the Trustee with respect to the Indenture Securities of such series. If an Event of Default is continuing with respect to more than one series of Indenture Securities, the Holders of a majority in aggregate principal amount of the outstanding Indenture Securities of all such series, considered as one class, will have the right to make such direction, and not the Holders of the Indenture Securities of any one of such series. These rights of Holders to make direction are subject to the following limitations: (a) the Holders' directions may not conflict with any law or the Indenture; and (b) the Holders' directions may not involve the Trustee in personal liability where the Trustee believes indemnity is not adequate. The Trustee may also take any other action it deems proper which is consistent with the Holders' direction. (See Sections 812 and 903.) In addition, the Indenture provides that no Holder of any Indenture Security will have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture for the appointment of a receiver or for any other remedy thereunder unless (a) that Holder has previously given the Trustee written notice of a continuing Event of Default; (b) the Holders of 25% in aggregate principal amount of the outstanding Indenture Securities of all affected series, considered as one class, have made written request to the Trustee to institute proceedings in respect of that Event of Default and have offered the Trustee reasonable indemnity against costs and liabilities incurred in complying with such request; and (c) for 60 days after receipt of such notice, the Trustee has failed to institute any such proceeding and no direction inconsistent with such request has been given to the Trustee during such 60-day period by the 17 Holders of a majority in aggregate principal amount of outstanding Indenture Securities of all affected series, considered as one class. Furthermore, no Holder will be entitled to institute any such action if and to the extent that such action would disturb or prejudice the rights of other Holders. (See Sections 807 and 903.) However, each Holder has an absolute and unconditional right to receive payment when due and to bring a suit to enforce that right. (See Sections 807 and 808.) NOTICE OF DEFAULT The Trustee is required to give the Holders of the Indenture Securities notice of any default under the Indenture to the extent required by the Trust Indenture Act, unless such default has been cured or waived; except that in the case of an Event of Default of the character specified above in clause (c) under "Events of Default," no such notice shall be given to such Holders until at least 75 days after the occurrence thereof. (See Section 902.) The Trust Indenture Act currently permits the Trustee to withhold notices of default (except for certain payment defaults) if the Trustee in good faith determines the withholding of such notice to be in the interests of the Holders. We will furnish the Trustee with an annual statement as to the compliance by PPL Capital Funding with the conditions and covenants in the Indenture. (See Section 605.) WAIVER OF DEFAULT AND OF COMPLIANCE The Holders of a majority in aggregate principal amount of the outstanding Indenture Securities of any series may waive, on behalf of the Holders of all Indenture Securities of such series, any past default under the Indenture, except a default in the payment of principal, premium or interest, or with respect to compliance with certain provisions of the Indenture that cannot be amended without the consent of the Holder of each outstanding Indenture Security. (See Section 813.) Compliance with certain covenants in the Indenture or otherwise provided with respect to Indenture Securities may be waived by the Holders of a majority in aggregate principal amount of the affected Indenture Securities, considered as one class. (See Section 606.) CONSOLIDATION, MERGER AND CONVEYANCE OF ASSETS AS AN ENTIRETY; NO FINANCIAL COVENANTS Subject to the provisions described in the next paragraph, each of PPL Capital Funding and PPL Corporation will preserve its corporate existence. (See Section 604.) PPL Capital Funding and PPL Corporation have each agreed not to consolidate with or merge into any other entity or convey, transfer or lease its properties and assets substantially as an entirety to any entity unless (a) the entity formed by such consolidation or into which PPL Capital Funding or PPL Corporation, as the case may be, is merged or the entity which acquires or which leases the property and assets of PPL Capital Funding or PPL Corporation, as the case may be, substantially as an entirety is an entity organized and existing under the laws of the United States of America or any State thereof or the District of 18 Columbia, and expressly assumes, by supplemental indenture, the due and punctual payment of the principal, premium and interest on all the outstanding Indenture Securities (or the Guarantees endorsed thereon, as the case may be) and the performance of all of the covenants of PPL Capital Funding or PPL Corporation, as the case may be, under the Indenture, and (b) immediately after giving effect to such transactions, no Event of Default, and no event which after notice or lapse of time or both would become an Event of Default, will have occurred and be continuing. (See Section 1101.) The Indenture does not prevent or restrict: (a) any consolidation or merger after the consummation of which PPL Capital Funding or PPL Corporation would be the surviving or resulting entity; or (b) any conveyance or other transfer, or lease, of any part of the properties of PPL Capital Funding or PPL Corporation which does not constitute the entirety, or substantially the entirety, thereof. (See Section 1103.) Neither the Indenture nor the Guarantee contains any financial or other similar restrictive covenants. MODIFICATION OF INDENTURE WITHOUT HOLDER CONSENT. Without the consent of any Holders of Indenture Securities, PPL Capital Funding, PPL Corporation and the Trustee may enter into one or more supplemental indentures for any of the following purposes: (a) to evidence the succession of another entity to PPL Capital Funding or PPL Corporation; or (b) to add one or more covenants of PPL Capital Funding or PPL Corporation or other provisions for the benefit of the Holders of all or any series or tranche of Indenture Securities, or to surrender any right or power conferred upon PPL Capital Funding or PPL Corporation; or (c) to add any additional Events of Default for all or any series of Indenture Securities; or (d) to change or eliminate any provision of the Indenture or to add any new provision to the Indenture that does not adversely affect the interests of the Holders; or (e) to provide security for the Indenture Securities of any series; or (f) to establish the form or terms of Indenture Securities of any series or tranche or any Guarantees as permitted by the Indenture; or (g) to provide for the issuance of bearer securities; or 19 (h) to evidence and provide for the acceptance of appointment of a separate or successor Trustee; or (i) to provide for the procedures required to permit the utilization of a noncertificated system of registration for any series or tranche of Indenture Securities; or (j) to change any place or places where (1) we may pay principal, premium and interest, (2) Indenture Securities may be surrendered for transfer or exchange, and (3) notices and demands to or upon PPL Capital Funding or PPL Corporation may be served; or (k) to cure any ambiguity, defect or inconsistency or to make any other changes that do not adversely affect the interests of the Holders in any material respect. If the Trust Indenture Act is amended after the date of the Indenture so as to require changes to the Indenture or so as to permit changes to, or the elimination of, provisions which, at the date of the Indenture or at any time thereafter, were required by the Trust Indenture Act to be contained in the Indenture, the Indenture will be deemed to have been amended so as to conform to such amendment or to effect such changes or elimination, and PPL Capital Funding, PPL Corporation and the Trustee may, without the consent of any Holders, enter into one or more supplemental indentures to effect or evidence such amendment. (See Section 1201.) WITH HOLDER CONSENT. Except as provided above, the consent of the Holders of at least a majority in aggregate principal amount of the Indenture Securities of all outstanding series, considered as one class, is generally required for the purpose of adding to, or changing or eliminating any of the provisions of, the Indenture pursuant to a supplemental indenture. However, if less than all of the series of outstanding Indenture Securities are directly affected by a proposed supplemental indenture, then such proposal only requires the consent of the Holders of a majority in aggregate principal amount of the outstanding Indenture Securities of all directly affected series, considered as one class. Moreover, if the Indenture Securities of any series have been issued in more than one tranche and if the proposed supplemental indenture directly affects the rights of the Holders of Indenture Securities of one or more, but less than all, of such tranches, then such proposal only requires the consent of the Holders of a majority in aggregate principal amount of the outstanding Indenture Securities of all directly affected tranches, considered as one class. However, no amendment or modification may, without the consent of the Holder of each outstanding Indenture Security directly affected thereby, (a) change the stated maturity of the principal or interest on any Indenture Security (other than pursuant to the terms thereof), or reduce the principal amount, interest or premium payable or change the currency in which any Indenture Security is payable, or impair the right to bring suit to enforce any payment; 20 (b) reduce the percentages of Holders whose consent is required for any supplemental indenture or waiver or reduce the requirements for quorum and voting under the Indenture; or (c) modify certain of the provisions in the Indenture relating to supplemental indentures and waivers of certain covenants and past defaults. A supplemental indenture which changes or eliminates any provision of the Indenture expressly included solely for the benefit of Holders of Indenture Securities of one or more particular series or tranches will be deemed not to affect the rights under the Indenture of the Holders of Indenture Securities of any other series or tranche. (See Section 1202.) MISCELLANEOUS PROVISIONS The Indenture provides that certain Indenture Securities, including those for which payment or redemption money has been deposited or set aside in trust as described under "--Satisfaction and Discharge" below, will not be deemed to be "outstanding" in determining whether the Holders of the requisite principal amount of the outstanding Indenture Securities have given or taken any demand, direction, consent or other action under the Indenture as of any date, or are present at a meeting of Holders for quorum purposes. (See Section 101.) PPL Capital Funding or PPL Corporation will be entitled to set any day as a record date for the purpose of determining the Holders of outstanding Indenture Securities of any series entitled to give or take any demand, direction, consent or other action under the Indenture, in the manner and subject to the limitations provided in the Indenture. In certain circumstances, the Trustee also will be entitled to set a record date for action by Holders. If such a record date is set for any action to be taken by Holders of particular Indenture Securities, such action may be taken only by persons who are Holders of such Indenture Securities on the record date. (See Section 104.) SATISFACTION AND DISCHARGE Any Indenture Securities or any portion will be deemed to have been paid for purposes of the Indenture, and at PPL Capital Funding's election, our entire indebtedness will be satisfied and discharged, if there shall have been irrevocably deposited with the Trustee or any Paying Agent (other than PPL Capital Funding or PPL Corporation), in trust: (a) money sufficient, or (b) in the case of a deposit made prior to the maturity of such Indenture Securities, non-redeemable Government Obligations (as defined in the Indenture) sufficient, or (c) a combination of (a) and (b), which in total are sufficient, to pay when due the principal of, and any premium, and interest due and to become due on such Indenture Securities or portions thereof on and prior to the maturity thereof. (See Section 701.) 21 The Indenture will be deemed satisfied and discharged when no Indenture Securities remain outstanding and when we have paid all other sums payable by us under the Indenture. (See Section 702.) All moneys we pay to the Trustee or any Paying Agent on Debt Securities which remain unclaimed at the end of two years after payments have become due will be paid to or upon the order of PPL Capital Funding. Thereafter, the Holder of such Debt Security may look only to us for payment thereof. (See Section 603.) RESIGNATION AND REMOVAL OF THE TRUSTEE; DEEMED RESIGNATION The Trustee may resign at any time by giving written notice thereof to us. The Trustee may also be removed by act of the Holders of a majority in principal amount of the then outstanding Indenture Securities of any series. No resignation or removal of the Trustee and no appointment of a successor trustee will become effective until the acceptance of appointment by a successor trustee in accordance with the requirements of the Indenture. Under certain circumstances, we may appoint a successor trustee and if the successor accepts, the Trustee will be deemed to have resigned. (See Section 910). GOVERNING LAW The Indenture, the Debt Securities and the Guarantees provide that they are to be governed by and construed in accordance with the laws of the State of New York. DESCRIPTION OF THE TRUST SECURITIES The Trust may issue Preferred Trust Securities and Common Trust Securities under the Trust Agreement. These Trust securities will represent undivided beneficial interests in the assets of the Trust. Selected provisions of the Trust Agreement are summarized below. This summary is not complete. The form of Trust Agreement was filed with the SEC and you should read the Trust Agreement for provisions that may be important to you. The Trust Agreement will be qualified as an indenture under the Trust Indenture Act. You should also refer to the Trust Indenture Act for provisions that apply to the Preferred Trust Securities. Wherever particular defined terms of the Trust Agreement are referred to, such defined terms are incorporated herein by reference. GENERAL The Preferred Trust Securities and Common Trust Securities issued by the Trust will be substantially the same except that, if there is an Event of Default under the Trust Agreement, as described below, that results from an Event of Default under the Subordinated Indenture, the rights of the holders of the Common Trust Securities to payment of distributions and upon liquidation or redemption will be subordinated to the rights of the holders of the Preferred Trust Securities. All of the Common Trust Securities of the Trust will be owned by PPL Corporation. 22 PPL Corporation will fully and unconditionally guarantee payments due on the Preferred Trust Securities through a combination of the following: (a) PPL Corporation's guarantee of PPL Capital Funding's obligations under the Subordinated Debt Securities (the "Subordinated Guarantee"); (b) the rights of holders of Preferred Trust Securities to enforce those obligations; (c) PPL Corporation's agreement to pay the expenses of the Trust; and (d) PPL Corporation's guarantee of payments due on the Preferred Trust Securities to the extent of the Trust's assets (the "Preferred Securities Guarantee"). The Trust will use the proceeds from the sale of the Preferred Trust Securities and Common Trust Securities to purchase Subordinated Debt Securities from PPL Capital Funding. The Subordinated Debt Securities will be guaranteed by PPL Corporation pursuant to the Subordinated Guarantee described below. The Subordinated Debt Securities will be held in trust for the benefit of holders of the Preferred Trust Securities and Common Trust Securities. A prospectus supplement relating to the Preferred Trust Securities will include specific terms of those securities and of the Subordinated Debt Securities. For a description of some specific terms that will affect both the Preferred Trust Securities and the Subordinated Debt Securities and your rights under each, see "Description of the Subordinated Debt Securities" below. DISTRIBUTIONS The only income of the Trust available for distribution to the holders of Preferred Trust Securities will be payments on the Subordinated Debt Securities. If neither PPL Capital Funding nor PPL Corporation makes interest payments on the Subordinated Debt Securities, the Trust will not have funds available to pay distributions on Preferred Trust Securities. The payment of distributions, if and to the extent the Trust has sufficient funds available for the payment of such distributions, is guaranteed on a limited basis by PPL Corporation as described under "Description of the Preferred Securities Guarantee." So long as no Event of Default under the Subordinated Indenture has occurred and is continuing, PPL Capital Funding may extend the interest payment period from time to time on the Subordinated Debt Securities for one or more periods. As a consequence, distributions on Preferred Trust Securities would be deferred during any such period. Interest would, however, continue to accrue. During any extended interest period, or for so long as an "Event of Default" under the Subordinated Indenture resulting from a payment default or any payment default under the Preferred Securities Guarantee has occurred and is continuing, PPL Corporation may not: (a) declare or pay any dividend or distribution on its capital stock, other than dividends paid in shares of capital stock of PPL Corporation; (b) redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock; 23 (c) pay any principal, interest or premium on, or repay, repurchase or redeem any debt securities that are equal or junior in right of payment with the Subordinated Guarantees; or (d) make any payments with respect to any guarantee of debt securities by PPL Corporation if such guarantee is equal or junior in right of payment to the Subordinated Guarantees. Before an extension period ends, PPL Capital Funding may further extend the interest payment period. No extension period as further extended may exceed 20 consecutive quarters. After any extension period and the payment of all amounts then due, PPL Capital Funding may select a new extended interest payment period. No interest period may be extended beyond the maturity of the Subordinated Debt Securities. REDEMPTION Whenever Subordinated Debt Securities are repaid, whether at maturity or earlier redemption, the Property Trustee will apply the proceeds to redeem a like amount of Preferred Trust Securities and Common Trust Securities. Preferred Trust Securities will be redeemed at the redemption price plus accrued and unpaid distributions with the proceeds from the contemporaneous redemption of Subordinated Debt Securities. Redemptions of the Preferred Trust Securities will be made on a redemption date only if the Trust has funds available for the payment of the redemption price plus accrued and unpaid distributions. Holders of Preferred Trust Securities will be given not less than 30 nor more than 60 days' notice of any redemption. On or before the redemption date, the Trust will irrevocably deposit with the paying agent for Preferred Trust Securities sufficient funds and will give the paying agent irrevocable instructions and authority to pay the redemption price plus accrued and unpaid distributions to the holders upon surrender of their Preferred Trust Securities. Distributions payable on or before a redemption date will be payable to the holders on the record date for the distribution payment. If notice is given and funds are deposited as required, then on the redemption date all rights of holders of the Preferred Trust Securities called for redemption will cease, except the right of the holders to receive the redemption price plus accrued and unpaid distributions, and the Preferred Trust Securities will cease to be outstanding. No interest will accrue on amounts payable on the redemption date. In the event that any date fixed for redemption of Preferred Trust Securities is not a business day, then payment will be made on the next business day, except that, if such business day falls in the next calendar year, then payment will be made on the immediately preceding business day. No interest will be payable because of any such delay. If payment of Preferred Trust Securities called for redemption is improperly withheld or refused and not paid either by the Trust or by PPL Corporation pursuant to the Preferred Securities Guarantee, distributions on such Preferred Trust Securities will continue to accrue to the date of payment. The actual payment date will be considered the date fixed for redemption for purposes of calculating the redemption price plus accrued and unpaid distributions. Subject to applicable law, including United States federal securities law, PPL Corporation or its affiliates may at any time and from time to time purchase outstanding Preferred Trust Securities by tender, in the open market or by private agreement. 24 If Preferred Trust Securities are partially redeemed on a redemption date, a corresponding percentage of the Common Trust Securities will be redeemed. The particular Preferred Trust Securities to be redeemed will be selected not more than 60 days prior to the redemption date by the Property Trustee by such method as the Property Trustee shall deem fair, taking into account the denominations in which they were issued. The Property Trustee will promptly notify the Preferred Trust Security registrar in writing of the Preferred Trust Securities selected for redemption and, where applicable, the partial amount to be redeemed. SUBORDINATION OF COMMON TRUST SECURITIES Payment of distributions on, and the redemption price, plus accrued and unpaid distributions, of, the Preferred Trust Securities and Common Trust Securities shall be made pro rata based on the liquidation preference amount of such securities. However, if on any distribution payment date or redemption date an event of default under the Trust Agreement resulting from an event of default under the Subordinated Indenture has occurred and is continuing, no payment on any Common Trust Security shall be made until all payments due on the Preferred Trust Securities have been made. In that case, funds available to the Property Trustee shall first be applied to the payment in full of all distributions on, or the redemption price plus accrued and unpaid distributions of, Preferred Trust Securities then due and payable. If an event of default under the Trust Agreement results from an event of default under the Subordinated Indenture, the holder of Common Trust Securities cannot take action with respect to the Trust Agreement default until the effect of all defaults with respect to Preferred Trust Securities has been cured, waived or otherwise eliminated. Until the event of default under the Trust Agreement with respect to Preferred Trust Securities has been cured, waived or otherwise eliminated, the Property Trustee shall, to the fullest extent permitted by law, act solely on behalf of the holders of Preferred Trust Securities and not the holders of the Common Trust Securities, and only holders of Preferred Trust Securities will have the right to direct the Property Trustee to act on their behalf. LIQUIDATION DISTRIBUTION UPON DISSOLUTION The Trust shall dissolve and shall be liquidated by the Property Trustee on the first to occur of: (a) the expiration of the term of the Trust; (b) the bankruptcy, dissolution or liquidation of PPL Corporation; (c) the redemption of all of the Preferred Trust Securities; (d) the entry of an order for dissolution of the Trust by a court of competent jurisdiction; and (e) the election of PPL Corporation at any time. If a dissolution of the Trust occurs, the Trust will be liquidated by the Property Trustee as expeditiously as the Property Trustee determines to be appropriate. If a dissolution of the Trust occurs other than by redemption of all the Preferred Trust Securities, the Property Trustee will provide for the satisfaction of liabilities of creditors, if any, and distribute to each holder of the Preferred Trust Securities and Common Trust Securities a proportionate amount of Subordinated Debt Securities. If a distribution of Subordinated Debt 25 Securities is determined by the Property Trustee not to be practical, holders will be entitled to receive, out of the assets of the Trust after adequate provision for the satisfaction of liabilities of creditors, if any, an amount equal to the aggregate liquidation preference of the Preferred Trust Securities plus accrued and unpaid distributions thereon to the date of payment. If this liquidation distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate liquidation distribution, then the amounts payable by the Trust on the Preferred Trust Securities shall be paid on a pro rata basis. PPL Corporation, as holder of the Common Trust Securities, will be entitled to receive distributions upon any dissolution pro rata with the holders of the Preferred Trust Securities, except that if an Event of Default (or event that, with the lapse of time or giving of notice, would become such an Event of Default) has occurred and is continuing under the Subordinated Indenture, the Preferred Trust Securities will have a preference over the Common Trust Securities. EVENTS OF DEFAULT; NOTICE Any one of the following events will be an event of default under the Trust Agreement whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body: (a) the occurrence of an Event of Default as described in the Subordinated Indenture; (b) default by the Trust in the payment of any distribution when it becomes due and payable, and continuation of that default for a period of 30 days; (c) default by the Trust in the payment of any redemption price, plus accrued and unpaid distributions, of any Preferred Trust Security or Common Trust Security when it becomes due and payable; (d) default in the performance, or breach, in any material respect, of any covenant or warranty of the trustees under the Trust Agreement which is not dealt with above, and the continuation of that default or breach for a period of 90 days after written notice to the Trust and PPL Corporation by the holders of Preferred Trust Securities having at least 25% of the total liquidation preference amount of the outstanding Preferred Trust Securities; or (e) the occurrence of certain events of bankruptcy or insolvency with respect to the Trust. Within 90 days after the occurrence of any event of default actually known to the Property Trustee, the Property Trustee shall transmit to the holders of Preferred Trust Securities, PPL Capital Funding, PPL Corporation and the Administrative Trustees notice of any such default, unless that default will have been cured or waived. A holder of Preferred Trust Securities may directly institute a proceeding to enforce payment when due directly to the holder of the Preferred Trust Securities of the principal of or interest on Subordinated Debt Securities having a principal amount equal to the aggregate liquidation preference amount of the holder's Preferred Trust Securities. The holders of Preferred Trust Securities have no other rights to exercise directly any other remedies available to the holder of the Subordinated Debt Securities unless the trustees under the Trust Agreement fail to do so. 26 REMOVAL OF TRUSTEES Unless an event of default under the Subordinated Indenture has occurred and is continuing, the holder of the Common Trust Securities may remove any trustee under the Trust Agreement at any time. If an event of default under the Subordinated Indenture has occurred and is continuing, the holders of a majority of the total liquidation preference amount of the outstanding Preferred Trust Securities may remove the Property Trustee or the Delaware Trustee, or both of them. The holder of the Common Trust Securities may remove any Administrative Trustee at any time. Any resignation or removal of a trustee under the Trust Agreement will take effect only on the acceptance of appointment by the successor trustee. Holders of Preferred Trust Securities will have no right to appoint or remove the Administrative Trustees of the Trust, who may be appointed, removed or replaced solely by PPL Corporation as the holder of the Common Trust Securities. VOTING RIGHTS Except as provided below and under "Description of the Preferred Securities Guarantee --Amendments and Assignments," and as otherwise required by law or the Trust Agreement, the holders of Preferred Trust Securities will have no voting rights. While Subordinated Debt Securities are held by the Property Trustee, the Property Trustee will not: (a) direct the time, method and place to conduct any proceeding for any remedy available to the Subordinated Indenture Trustee, or execute any trust or power conferred on the Subordinated Indenture Trustee with respect to the Subordinated Debt Securities; (b) waive any past default under the Subordinated Indenture; (c) exercise any right to rescind or annul a declaration that the principal of all the Subordinated Debt Securities will be due and payable; or (d) consent to any amendment, modification or termination of the Subordinated Indenture or the Subordinated Debt Securities, where that consent will be required; without, in each case, obtaining the prior approval of the holders of Preferred Trust Securities having at least a majority of the liquidation preference amount of all outstanding Preferred Trust Securities. Where a consent of each holder of Subordinated Debt Securities affected is required, no consent shall be given by the Property Trustee without the prior consent of each holder of the Preferred Trust Securities affected. The Trustees shall not revoke any action previously authorized or approved by a vote of the holders of Preferred Trust Securities, except pursuant to the subsequent vote of the holders of Preferred Trust Securities. If the Property Trustee fails to enforce its rights under the Subordinated Debt Securities or the Trust Agreement, a holder of the Preferred Trust Securities may institute a legal proceeding directly against PPL Capital Funding or PPL Corporation, as the case may be, to enforce the Property Trustee's rights under the Subordinated Debt Securities or the Trust Agreement without first instituting any legal proceeding against the Property Trustee or anyone else. The Property Trustee shall notify all holders of Preferred Trust Securities of any notice of default received from the Subordinated Indenture 27 Trustee. The Property Trustee shall not take any action approved by the consent of the holders without an opinion of counsel experienced in those matters to the effect that the Trust will be classified as a grantor trust and not as an association taxable as a corporation for United States federal income tax purposes on account of that action. Holders of Preferred Trust Securities may give any required approval at a meeting convened for such purpose or by written consent without prior notice. The Administrative Trustees will give notice of any meeting at which holders of Preferred Trust Securities are entitled to vote. No vote or consent of the holders of Preferred Trust Securities will be required for the Trust to redeem and cancel Preferred Trust Securities in accordance with the Trust Agreement. Notwithstanding that holders of Preferred Trust Securities are entitled to vote or consent under any of the circumstances described above, any Preferred Trust Securities that are owned by PPL Capital Funding, PPL Corporation or any affiliate of any of them, shall be treated as if they were not outstanding for purposes of such vote or consent. AMENDMENTS The Trust Agreement may be amended from time to time by a majority of the Administrative Trustees and PPL Corporation, without the consent of any holders of Preferred Trust Securities: (a) to cure any ambiguity, correct inconsistent provisions or make any other provisions with respect to matters or questions arising under the Trust Agreement; or (b) to change the name of the Trust; or (c) to modify, eliminate or add to any provisions of the Trust Agreement to the extent necessary to ensure that the Trust will not be classified for United States federal income tax purposes other than as a grantor trust (and not an association taxable as a corporation) at all times that any Preferred Trust Securities and Common Trust Securities are outstanding or to ensure the Trust's exemption from the status of an "investment company" under the Investment Company Act of 1940. No amendment described above may materially adversely affect the interests of any holder of Preferred Trust Securities and Common Trust Securities without such holder's consent. Any of the amendments of the Trust Agreement described in paragraph (a) above shall become effective when notice of the amendment is given to the holders of Preferred Trust Securities and Common Trust Securities. Except as provided below, any provision of the Trust Agreement may be amended by the Administrative Trustees and PPL Corporation with: (a) the consent of holders of Preferred Trust Securities and Common Trust Securities representing not less than a majority in aggregate liquidation preference amount of the Preferred Trust Securities and Common Trust Securities then outstanding; and (b) receipt by the trustees of an opinion of counsel to the effect that such amendment or the exercise of any power granted to the trustees in accordance with the amendment will not affect the Trust's status as a 28 grantor trust for federal income tax purposes or affect the Trust's exemption from status of an "investment company" under the Investment Company Act of 1940. Each affected holder of Preferred Trust Securities or Common Trust Securities must have consented to any amendment to the Trust Agreement that: (a) adversely changes the amount or timing of any distribution with respect to Preferred Trust Securities or Common Trust Securities or otherwise adversely affects the amount of any distribution required to be made in respect of Preferred Trust Securities and Common Trust Securities as of a specified date; or (b) restricts the right of a holder of Preferred Trust Securities or Common Trust Securities to institute suit for the enforcement of any such payment on or after that date. FORM, EXCHANGE AND TRANSFER Preferred Trust Securities may be exchanged for other Preferred Trust Securities in any authorized denomination and of like tenor and aggregate liquidation preference. Subject to the terms of the Trust Agreement, Preferred Trust Securities may be presented for exchange as provided above or for registration of transfer, duly endorsed or accompanied by a duly executed instrument of transfer, at the office of the Preferred Trust Security registrar. The Administrative Trustees may designate PPL Corporation or PPL Capital Funding or any affiliate of either of them as the Preferred Trust Security registrar. The Property Trustee will initially act as the Preferred Trust Security registrar and transfer agent. No service charge will be made for any registration of transfer or exchange of Preferred Trust Securities, but the Preferred Trust Security registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange. A transfer or exchange will be made when the Preferred Trust Security registrar and Administrative Trustees are satisfied with the documents of title and identity of the person making the request. The Administrative Trustees may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except that PPL Corporation will, or will cause the Preferred Trust Security registrar to, maintain an office or agency in The City of New York where Preferred Trust Securities may be transferred or exchanged. The Trust will not be required to (1) issue, register the transfer of, or exchange any Preferred Trust Securities during the 15 calendar days before the mailing of a notice of redemption of any Preferred Trust Securities called for redemption and ending at the close of business on the day the notice is mailed or (2) register the transfer of or exchange any Preferred Trust Securities so selected for redemption, in whole or in part, except the unredeemed portion of any Preferred Trust Securities being redeemed in part. PAYMENT OF PREFERRED TRUST SECURITIES AND PAYING AGENT Unless we indicate differently in a prospectus supplement, payments in respect of the Preferred Trust Securities will be made on the applicable distribution dates by check mailed to the address of the holder entitled thereto as such address appears on the Preferred Trust Security register. The paying agent shall initially be the Property Trustee and any co-paying agent chosen by 29 the Property Trustee and acceptable to the Administrative Trustees, PPL Capital Funding and PPL Corporation, which may be PPL Corporation or PPL Capital Funding. The paying agent may resign upon 30 days' written notice to the Administrative Trustees, the Property Trustee, PPL Capital Funding and PPL Corporation. In the event that the Property Trustee shall no longer be the paying agent, the Administrative Trustees shall appoint a successor, which shall be a bank, trust company or affiliate of PPL Corporation acceptable to the Property Trustee, PPL Capital Funding and PPL Corporation to act as paying agent. DUTIES OF THE TRUSTEES The Delaware Trustee will act as the resident trustee in the State of Delaware and will have no other significant duties. The Property Trustee will hold the Subordinated Debt Securities on behalf of the Trust and will maintain a payment account with respect to the Preferred Trust Securities and Common Trust Securities, and will also act as trustee under the Trust Agreement for the purposes of the Trust Indenture Act. The Administrative Trustees of the Trust are authorized and directed to conduct the affairs of the Trust and to operate the Trust so that (i) the Trust will not be deemed to be an "investment company" required to be registered under the Investment Company Act, (ii) the Trust will not be taxed as a corporation, (iii) the Trust will not be classified as other than a grantor trust for United States federal income tax purposes and (iv) the Subordinated Debt Securities will be treated as indebtedness of PPL Capital Funding for United States federal income tax purposes. In this regard, PPL Corporation and the Administrative Trustees are authorized to take any action, not inconsistent with applicable law, the certificate of trust or the Trust Agreement, that PPL Corporation and the Administrative Trustees determine in their discretion to be necessary or desirable for those purposes, as long as the action does not materially adversely affect the interests of the holders of the Preferred Trust Securities. MISCELLANEOUS Holders of the Preferred Trust Securities have no preemptive or similar rights. GOVERNING LAW The Trust Agreement, the Preferred Trust Securities and the Common Trust Securities provide that they are to be governed by and construed in accordance with the laws of the State of Delaware. DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE Selected provisions of the Preferred Securities Guarantee that PPL Corporation will execute and deliver for the benefit of the holders of the Preferred Trust Securities are summarized below. The summary is not complete. The form of Preferred Securities Guarantee was filed with the SEC and you should read the Preferred Securities Guarantee for provisions that may be important to you. The Preferred Securities Guarantee will be qualified as an indenture under the Trust Indenture Act. You should refer to the Trust Indenture Act for provisions that apply to the Preferred Securities Guarantee. Whenever particular defined terms of the Preferred Securities Guarantee are referred to, those defined terms are incorporated herein by reference. 30 The Chase Manhattan Bank will act as Guarantee Trustee under the Preferred Securities Guarantee. The Guarantee Trustee will hold the Preferred Securities Guarantee for the benefit of the holders of the Preferred Trust Securities. GENERAL PPL Corporation will irrevocably, fully and unconditionally agree to make the guarantee payments listed below in full to the holders of the Preferred Trust Securities if they are not made by the Trust, as and when due, regardless of any defense, right of set-off or counterclaim that the Trust may have or assert. The following payments will be subject to the Preferred Securities Guarantee (without duplication): (a) any accrued and unpaid distributions required to be paid on Preferred Trust Securities, to the extent the Trust has funds available therefor; (b) the redemption price, plus all accrued and unpaid distributions, for any Preferred Trust Securities called for redemption by the Trust, to the extent the Trust has funds available therefor; and (c) upon a voluntary or involuntary dissolution, winding-up or termination of the Trust (except in connection with the distribution of Subordinated Debt Securities to the holders in exchange for Preferred Trust Securities as provided in the Trust Agreement or upon a redemption of all of the Preferred Trust Securities upon maturity or redemption of the Subordinated Debt Securities as provided in the Trust Agreement), the lesser of: (1) the aggregate of the liquidation preference and all accrued and unpaid distributions on Preferred Trust Securities to the date of payment, to the extent the Trust has funds available therefor; and (2) the amount of assets of the Trust remaining available for distribution to holders of Preferred Trust Securities in liquidation of the Trust after satisfaction of liabilities to creditors of the Trust as required by applicable law. PPL Corporation's obligation to make a guarantee payment may be satisfied by direct payment of the required amounts by PPL Corporation to the holders of Preferred Trust Securities or by causing the Trust to pay such amounts to those holders. The Preferred Securities Guarantee will be a guarantee with respect to the Preferred Trust Securities, but will not apply to any payment of distributions if and to the extent that the Trust does not have funds available to make those payments. If neither PPL Capital Funding nor PPL Corporation makes interest payments on the Subordinated Debt Securities held by the Trust, the Trust will not have funds available to pay distributions on the Preferred Trust Securities. The Preferred Securities Guarantee will rank subordinate and junior in right of payment to all other liabilities of PPL Corporation (except those made pari passu or subordinate by their terms). The Preferred Securities Guarantee does not limit PPL Corporation from incurring or issuing additional debt, whether secured or unsecured, senior to or equal in right of payment to the Preferred Securities Guarantee in the future. 31 PPL Corporation will agree to provide funds to the Trust as needed to pay costs, expenses or liabilities of the Trust to parties other than holders of Preferred Trust Securities or Common Trust Securities. The Subordinated Debt Securities, the Subordinated Guarantees and the Preferred Securities Guarantee, together with the obligations of PPL Corporation with respect to the Preferred Trust Securities under the Subordinated Indenture, the Trust Agreement, the Preferred Securities Guarantee, including the agreement by PPL Corporation to pay expenses and obligations of the Trust to parties (other than holders of Preferred Trust Securities or Common Trust Securities), constitute a full and unconditional guarantee of the Preferred Trust Securities by PPL Corporation. No single document standing alone or operating in conjunction with fewer than all of the other documents constitutes that guarantee. It is only the combined operation of these documents that has the effect of providing a full and unconditional guarantee by PPL Corporation of the Preferred Trust Securities. AMENDMENTS AND ASSIGNMENT No consent of holders of Preferred Trust Securities is required for changes to the Preferred Securities Guarantee that do not materially adversely affect their rights. Other terms of the Preferred Securities Guarantee may be changed only with the prior approval of the holders of the Preferred Trust Securities having at least a majority of the liquidation preference amount of the outstanding Preferred Trust Securities. All guarantees and agreements contained in the Preferred Securities Guarantee will bind the successors, assigns, receivers, trustees and representatives of PPL Corporation and will inure to the benefit of the holders of the Preferred Trust Securities then outstanding. EVENTS OF DEFAULT An event of default under the Preferred Securities Guarantee will occur if PPL Corporation fails to perform any of its payment or other obligations under the Preferred Securities Guarantee and has not cured such failure within 90 days of receipt of notice thereof. The holders of the Preferred Trust Securities having a majority of the liquidation preference of the Preferred Trust Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee under the Preferred Securities Guarantee or to direct the exercise of any trust or power conferred upon the Guarantee Trustee under the Preferred Securities Guarantee. Any holder of the Preferred Trust Securities may enforce the Preferred Securities Guarantee, or institute a legal proceeding directly against PPL Corporation to enforce the Guarantee Trustee's rights under the Preferred Securities Guarantee without first instituting a legal proceeding against the Trust, the Guarantee Trustee or anyone else. PPL Corporation will be required to file an annual statement with the Guarantee Trustee as to its compliance with the Preferred Securities Guarantee. DUTIES OF THE GUARANTEE TRUSTEE The Guarantee Trustee will undertake to perform only those duties specifically set forth in the Preferred Securities Guarantee until a default occurs. After a default under the Preferred Securities Guarantee, the Guarantee Trustee must exercise the same degree of care in its duties as a prudent individual would exercise in the conduct of his or her own affairs. The Preferred Securities Guarantee Trustee is under no obligation to exercise any of the powers vested in it by the Preferred Securities Guarantee at the request of 32 any holder of the Preferred Trust Securities unless it is offered reasonable indemnity against the costs, expenses and liabilities that it might incur. TERMINATION OF THE PREFERRED SECURITIES GUARANTEE The Preferred Securities Guarantee will terminate and be of no further force and effect upon: (a) full payment of the redemption price, plus accrued and unpaid distributions, for all the Preferred Trust Securities; (b) the distribution of Subordinated Debt Securities to holders of the Preferred Trust Securities in exchange for all of the Preferred Trust Securities; or (c) full payment of the amounts payable upon liquidation of the Trust. The Preferred Securities Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of Preferred Trust Securities must restore payment of any sums paid under the Preferred Trust Securities or the Preferred Securities Guarantee. STATUS OF THE PREFERRED SECURITIES GUARANTEE The Preferred Securities Guarantee will be an unsecured obligation of PPL Corporation and will rank: (a) subordinate and junior in right of payment to all other liabilities of PPL Corporation, including the Subordinated Guarantees; (b) equal in right of payment with the most senior preferred or preference stock that may be issued by PPL Corporation and with any guarantee that may be entered into by PPL Corporation in respect of any preferred or preference stock of any affiliate of PPL Corporation; and (c) senior to PPL Corporation common stock. The Trust Agreement provides that by accepting Preferred Trust Securities, a holder agrees to the subordination provisions and other terms of the Preferred Securities Guarantee. The Preferred Securities Guarantee will be a guarantee of payment and not of collection, that is, the guaranteed party may institute a legal proceeding directly against PPL Corporation to enforce its rights under the Preferred Securities Guarantee without first instituting a legal proceeding against anyone else. Because PPL Corporation is a holding company that conducts all of its operations through subsidiaries, obligations under the Preferred Securities Guarantee, as obligations of a holding company, will generally have a position junior to claims of creditors and preferred stockholders of the subsidiaries of PPL Corporation. See "PPL Corporation - Holding Company Structure" above. 33 GOVERNING LAW The Preferred Securities Guarantee provides that it is to be governed by and construed in accordance with the laws of the State of New York. DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES The Subordinated Indenture and its associated documents contain the full legal text of the matters described in this section. Because this section is a summary, it does not describe every aspect of the Subordinated Debt Securities or the Subordinated Indenture. The form of the Subordinated Indenture has been filed with the SEC, and you should read the Subordinated Indenture for provisions that may be important to you. The Subordinated Indenture will be qualified under the Trust Indenture Act. You should refer to the Trust Indenture Act for provisions that apply to the Subordinated Debt Securities. This summary is subject to and qualified in its entirety by reference to all the provisions of the Subordinated Indenture, including definitions of certain terms used in the Subordinated Indenture. We also include references in parentheses to certain sections of the Subordinated Indenture. Whenever we refer to particular sections or defined terms of the Subordinated Indenture in this prospectus or in a prospectus supplement, such sections or defined terms are incorporated by reference herein or in the prospectus supplement. This summary also is subject to and qualified by reference to the description of the particular terms of your securities described in the applicable prospectus supplement or supplements. GENERAL The Subordinated Debt Securities, including any Subordinated Debt Securities which the Property Trustee will hold on behalf of the Trust as trust assets, will be issued under the Subordinated Indenture (the "Subordinated Indenture") among PPL Capital Funding, PPL Corporation and The Chase Manhattan Bank, as Trustee (the "Subordinated Indenture Trustee"). The Subordinated Indenture provides for the issuance from time to time of subordinated debt in an unlimited amount. The Subordinated Debt Securities and all other subordinated debt issued previously or hereafter under the Subordinated Indenture are collectively referred to as the "Subordinated Indenture Securities." Subordinated Debt Securities issued to the Trust will constitute a separate series under the Subordinated Indenture and will be limited in aggregate principal amount to the sum of the aggregate liquidation preference amount of the Preferred Trust Securities and the consideration paid by PPL Corporation for the Common Trust Securities. The Subordinated Debt Securities will be unsecured, subordinated obligations of PPL Capital Funding which rank junior to all of PPL Capital Funding's Senior Indebtedness (as defined herein). The Subordinated Debt Securities will be unconditionally guaranteed by PPL Corporation as to payment of principal, and any interest and premium pursuant to subordinated guarantees ("Subordinated Guarantees") of PPL Corporation which rank junior to all of PPL Corporation's Senior Indebtedness (as defined herein). See "-- Subordinated Guarantees." Prior to the issuance of each series, certain aspects of the particular securities have to be specified in a supplemental indenture, in a board resolution of PPL Capital Funding, or in one or more officer's certificates of PPL Capital Funding pursuant to a supplemental indenture or a board resolution. We refer you to the applicable prospectus supplement(s) for a description of the following terms of the series of Subordinated Debt Securities: 34 (a) the title of such Subordinated Debt Securities; (b) any limit upon the principal amount of such Subordinated Debt Securities; (c) the date or dates on which principal will be payable or how to determine such dates; (d) the rate or rates or method of determination of interest; the date from which interest will accrue; the dates on which interest will be payable ("Subordinated Debt Securities Interest Payment Dates"); and any record dates for the interest payable on such Subordinated Debt Securities Interest Payment Dates; (e) any obligation or option of PPL Capital Funding to redeem, purchase or repay Subordinated Debt Securities, or any option of the Holder to require PPL Capital Funding to redeem or repurchase Subordinated Debt Securities, and the terms and conditions upon which such Subordinated Debt Securities will be redeemed, purchased or repaid; (f) the denominations in which such Subordinated Debt Securities will be issuable (if other than denominations of $25 and any integral multiple thereof); (g) whether such Subordinated Debt Securities are to be issued in whole or in part in the form of one or more global Subordinated Debt Securities and, if so, the identity of the depositary for such global Subordinated Debt Securities; and (h) any other terms of such Subordinated Debt Securities. (See Section 301.) SUBORDINATION The Subordinated Debt Securities will be subordinate and junior in right of payment to all Senior Indebtedness of PPL Capital Funding. (See Article Fifteen.) No payment of the principal (including redemption and sinking fund payments) of, or interest on, the Subordinated Debt Securities may be made by PPL Capital Funding until all holders of Senior Indebtedness of PPL Capital Funding have been paid, if any of the following occurs: (a) certain events of bankruptcy, insolvency or reorganization of PPL Capital Funding; (b) any Senior Indebtedness of PPL Capital Funding is not paid when due and that default continues without waiver; (c) any other default has occurred and continues without waiver pursuant to which the holders of Senior Indebtedness of PPL Capital Funding are permitted to accelerate the maturity of such Senior Indebtedness; or (d) the maturity of any other series of subordinated debentures under the Subordinated Indenture has been accelerated, because of an event of default which remains uncured. 35 Upon any distribution of assets of PPL Capital Funding to creditors in connection with any insolvency, bankruptcy or similar proceeding, all principal of, and premium, if any, and interest due or to become due on all Senior Indebtedness of PPL Capital Funding must be paid in full before the holders of the Subordinated Debt Securities are entitled to receive or retain any payment from such distribution. Senior Indebtedness, when used with respect to PPL Capital Funding or PPL Corporation, is defined in the Subordinated Indenture to include all obligations of PPL Capital Funding or PPL Corporation, as the case may be, for borrowed money, or guarantees of the same, or for the payment of money pursuant to capital leases, unless such obligation or guarantee expressly provides that it is not superior to or equal in right of payment to the Subordinated Debt Securities or the Subordinated Guarantees, as the case may be. The obligations of PPL Corporation under the Preferred Securities Guarantee shall not be deemed to be Senior Indebtedness. (See Section 101.) The Subordinated Indenture does not limit the aggregate amount of Senior Indebtedness that may be issued. As of December 31, 2000, PPL Capital Funding had approximately $2.068 billion principal amount of indebtedness for borrowed money constituting its Senior Indebtedness, and PPL Corporation had approximately $2.439 billion principal amount of obligations constituting its Senior Indebtedness (including guarantees of indebtedness of PPL Capital Funding and certain of PPL Corporation's other subsidiaries). SUBORDINATED GUARANTEES PPL Corporation will unconditionally guarantee the payment of principal of and any interest and premium on the Subordinated Debt Securities, when due and payable, whether at the stated maturity date, by declaration of acceleration, call for redemption or otherwise, in accordance with the terms of such Subordinated Debt Securities and the Subordinated Indenture. The Subordinated Guarantees will remain in effect until the entire principal of and any premium and interest on the Subordinated Debt Securities has been paid in full or otherwise discharged in accordance with the provisions of the Subordinated Indenture. (See Article Fourteen.) The Subordinated Guarantees will be subordinate and junior in right of payment to all Senior Indebtedness of PPL Corporation. No payment of the principal (including redemption and sinking fund payments) of, or interest on, the Subordinated Debt Securities may be made by PPL Corporation under the Subordinated Guarantees until all holders of Senior Indebtedness of PPL Corporation have been paid, if any of the following occurs: (a) certain events of bankruptcy, insolvency or reorganization of PPL Corporation; (b) any Senior Indebtedness of PPL Corporation is not paid when due and that default continues without waiver; (c) any other default has occurred and continues without waiver pursuant to which the holders of Senior Indebtedness of PPL Corporation are permitted to accelerate the maturity of such Senior Indebtedness; or (d) the maturity of any other series of subordinated debentures under the Subordinated Indenture which has been guaranteed by PPL Corporation and has been accelerated, because of an event of default which remains uncured. 36 Upon any distribution of assets of PPL Corporation to creditors in connection with any insolvency, bankruptcy or similar proceeding, all principal of, and premium, if any, and interest due or to become due on all Senior Indebtedness of PPL Corporation must be paid in full before the holders of the Subordinated Debt Securities are entitled to receive or retain any payment from such distribution. PAYMENT OF SUBORDINATED DEBT SECURITIES INTEREST Unless we indicate differently in a prospectus supplement, we will pay interest on each Subordinated Debt Security on each Subordinated Debt Securities Interest Payment Date by check mailed to the Holder of the Subordinated Debt Securities as of the close of business on the regular record date relating to such Subordinated Debt Securities Interest Payment Date, except, that interest payable at Maturity will be paid to the person to whom principal is paid. However, if we default in paying interest on a Subordinated Debt Security, we will pay defaulted interest in either of the two following ways: (a) We will first propose to the Subordinated Indenture Trustee a payment date for such defaulted interest. Next, the Subordinated Indenture Trustee will choose a Special Record Date for determining which Holders are entitled to the payment. The Special Record Date will be between 10 and 15 days before the payment date we propose. Finally, we will pay such defaulted interest on the payment date to the Holder of the Subordinated Debt Security as of the close of business on the Special Record Date. (b) Alternatively, we can propose to the Subordinated Indenture Trustee any other lawful manner of payment that is consistent with the requirements of any securities exchange on which such Subordinated Debt Securities are listed for trading. If the Subordinated Indenture Trustee thinks the proposal is practicable, payment will be made as proposed. (See Section 307.) PRINCIPAL Unless we indicate differently in a prospectus supplement, we will pay principal of and any interest and premium on the Subordinated Debt Securities at Maturity upon presentation of the Subordinated Debt Securities at the office of The Chase Manhattan Bank in New York, New York, as our Paying Agent. Any other Paying Agent initially designated for the Subordinated Debt Securities of a particular series will be named in the applicable prospectus supplement. In our discretion, we may change the place of payment on the Subordinated Debt Securities, and may remove any Paying Agent and may appoint one or more additional Paying Agents (including PPL Capital Funding, PPL Corporation or any affiliate of either of them). (See Section 602.) OPTION TO EXTEND INTEREST PAYMENT PERIOD So long as no Event of Default under the Subordinated Indenture has occurred and is continuing, PPL Capital Funding may extend the interest payment period from time to time on the Subordinated Debt Securities for one or more 37 periods. As a consequence, distributions on Preferred Trust Securities would be deferred during any extension period. Interest would, however, continue to accrue. During any extended interest period, or for so long as an "Event of Default" under the Subordinated Indenture resulting from a payment default or a payment default under the Preferred Securities Guarantee has occurred and is continuing, PPL Corporation may not: (a) declare or pay any dividend or distribution on its capital stock, other than dividends paid in shares of capital stock of PPL Corporation; (b) redeem, purchase, acquire or make a liquidation payment with respect to any of its capital stock; (c) pay any principal, interest or premium on, or repay, repurchase or redeem any debt securities that are equal or junior in right of payment with the Subordinated Guarantees; or (d) make any payments with respect to any guarantee of debt securities by PPL Corporation if such guarantee is equal or junior in right of payment to the Subordinated Guarantees. (See Section 312.) Before an extension period ends, PPL Capital Funding may further extend the interest payment period. No extension period as further extended may exceed 20 consecutive quarters. After any extension period and the payment of all amounts then due, PPL Capital Funding may select a new extended interest payment period. No interest period may be extended beyond the maturity of the Subordinated Debt Securities. PPL Capital Funding will give the Trust and the Subordinated Indenture Trustee notice of its election of an extension period prior to the earlier of (i) one business day before the record date for the distribution which would occur if PPL Capital Funding did not make the election to extend or (ii) the date the Administrative Trustees are required to give notice to any securities exchange or any other applicable self-regulatory organization of the record date. The Property Trustee shall send notice of that election to the holders of Preferred Trust Securities. ADDITIONAL INTEREST So long as any Preferred Trust Securities remain outstanding, if the Trust is required to pay any taxes, duties, assessments or governmental charges imposed by the United States or any other taxing authority on income derived from the interest payments on the Subordinated Debt Securities, then PPL Capital Funding will pay as interest on the Subordinated Debt Securities any additional interest that may be necessary in order that the net amounts retained by the Trust after the payment of those taxes, duties, assessments or governmental charges will be the same as the Trust would have had in the absence of such payment. (See Section 313.) FORM; TRANSFERS; EXCHANGES Unless we indicated differently in a prospectus supplement, the Subordinated Debt Securities will be issued (a) only in fully registered form; 38 (b) without interest coupons; and (c) in denominations that are even multiples of $25. (See Section 302.) Unless we indicate differently in a prospectus supplement, Subordinated Debt Securities may be exchanged at the office of the Subordinated Indenture Trustee. The Subordinated Indenture Trustee will also act as our agent for registering Subordinated Debt Securities in the names of holders and transferring debt securities. We may appoint another agent or act as our own agent for this purpose. The entity performing the role of maintaining the list of registered holders is called the "Subordinated Indenture Registrar." It will also perform transfers. In our discretion, we may change the place for registration of transfer of the Subordinated Debt Securities and may remove and/or appoint one or more additional Subordinated Indenture Registrars (including PPL Capital Funding, PPL Corporation or any affiliate of either of them). (See Sections 305 and 602.) Except as otherwise provided in a prospectus supplement, there will be no service charge for any transfer or exchange of the Debt Securities, but you may be required to pay a sum sufficient to cover any tax or other governmental charge payable in connection therewith. We may block the transfer or exchange of (a) Subordinated Debt Securities during a period of 15 days prior to giving any notice of redemption or (b) any Subordinated Debt Security selected for redemption in whole or in part, except the unredeemed portion of any Subordinated Debt Security being redeemed in part. (See Section 305.) Unless we indicate differently in a prospectus supplement, if Subordinated Debt Securities are distributed to holders of Preferred Trust Securities in a dissolution of the Trust, the Subordinated Debt Securities will be issued in fully registered certificated form in the denominations and integral multiples thereof in which the Preferred Trust Securities have been issued, and they may be transferred or exchanged at the offices of the Subordinated Indenture Trustee. REDEMPTION For so long as the Trust is the holder of all the Subordinated Debt Securities, the proceeds of any redemption will be used by the Trust to redeem Preferred Trust Securities and Common Trust Securities in accordance with their terms. We will set forth any terms for the redemption of Subordinated Debt Securities in a prospectus supplement. Unless we indicate differently in a prospectus supplement, and except with respect to Subordinated Debt Securities redeemable at the option of the Holder, Subordinated Debt Securities will be redeemable upon notice by mail between 30 and 60 days prior to the redemption date. If less than all of the Subordinated Debt Securities of any series or any tranche thereof are to be redeemed, the Subordinated Indenture Trustee will select the Subordinated Debt Securities to be redeemed. In the absence of any provision for selection, the Subordinated Indenture Trustee will choose a method of random selection as it deems fair and appropriate. (See Sections 403 and 404.) Subordinated Debt Securities will cease to bear interest on the redemption date. PPL Capital Funding will pay the redemption price and any accrued interest once the Subordinated Debt Securities are surrendered for redemption. (See Section 405.) If only part of a Subordinated Debt Security is redeemed, the 39 Subordinated Indenture Trustee will deliver a new Subordinated Debt Security of the same series for the remaining portion without charge. (See Section 406.) We may make any redemption at the option of PPL Capital Funding conditional upon the receipt by the paying agent, on or prior to the date fixed for redemption, of money sufficient to pay the redemption price. If the paying agent has not received such money by the date fixed for redemption, PPL Capital Funding will not be required to redeem such Subordinated Debt Securities. (See Section 404.) EVENTS OF DEFAULT An "Event of Default" occurs with respect to Subordinated Indenture Securities of any series if (a) we do not pay any interest on any Subordinated Indenture Securities of the applicable series within 30 days of the due date; provided, however, that a valid extension of the interest period by us will not constitute an Event of Default; (b) we do not pay principal or premium on any Subordinated Indenture Securities of the applicable series on its due date; (c) we remain in breach of a covenant (excluding covenants solely applicable to a specific series) or warranty of the Subordinated Indenture for 90 days after we receive a written notice of default stating we are in breach and requiring remedy of the breach; the notice must be sent by either the Subordinated Indenture Trustee or Holders of 25% of the principal amount of Subordinated Indenture Securities of the affected series; the Subordinated Indenture Trustee or such Holders can agree to extend the 90-day period and such an agreement to extend will be automatically deemed to occur if we are diligently pursuing action to correct the default; (d) the Subordinated Guarantees of PPL Corporation relating to any Subordinated Indenture Securities of the applicable series (1) cease to be effective (except in accordance with their terms), (2) are found in any judicial proceeding to be unenforceable or invalid, or (3) are denied or disaffirmed (except in accordance with their terms); (e) we file for bankruptcy or certain other events in bankruptcy, insolvency, receivership or reorganization occur; or (f) any other Event of Default specified in the prospectus supplement occurs. (See Section 801.) No Event of Default with respect to the Subordinated Debt Securities necessarily constitutes an Event of Default with respect to the Subordinated Indenture Securities of any other series issued under the Subordinated Indenture. 40 REMEDIES ACCELERATION ANY ONE SERIES. If an Event of Default occurs and is continuing with respect to any one series of Subordinated Indenture Securities, then either the Subordinated Indenture Trustee or the Holders of 25% in principal amount of the outstanding Subordinated Indenture Securities of such series may declare the principal amount of all of the Subordinated Indenture Securities of such series to be due and payable immediately. MORE THAN ONE SERIES. If an Event of Default occurs and is continuing with respect to more than one series of Subordinated Indenture Securities, then either the Subordinated Indenture Trustee or the Holders of 25% in aggregate principal amount of the outstanding Subordinated Indenture Securities of all such series, considered as one class, may make such declaration of acceleration. Thus, if there is more than one series affected, the action by 25% in principal amount of the Subordinated Indenture Securities of any particular series will not, in itself, be sufficient to make a declaration of acceleration. (See Section 802.) RESCISSION OF ACCELERATION After the declaration of acceleration has been made and before the Subordinated Indenture Trustee has obtained a judgment or decree for payment of the money due, such declaration and its consequences will be rescinded and annulled, if (a) we pay or deposit with the Subordinated Indenture Trustee a sum sufficient to pay (1) all overdue interest; (2) the principal of and any premium which have become due otherwise than by such declaration of acceleration and overdue interest thereon; (3) interest on overdue interest to the extent lawful; and (4) all amounts due to the Subordinated Indenture Trustee under the Subordinated Indenture; and (b) all Events of Default, other than the nonpayment of the principal which has become due solely by such declaration of acceleration, have been cured or waived as provided in the Subordinated Indenture. (See Section 802.) For more information as to waiver of defaults, see "--Waiver of Default and of Compliance" below. 41 CONTROL BY HOLDERS; LIMITATIONS Subject to the Subordinated Indenture, if an Event of Default with respect to the Subordinated Indenture Securities of any one series occurs and is continuing, the Holders of a majority in principal amount of the outstanding Subordinated Indenture Securities of that series will have the right to (a) direct the time, method and place of conducting any proceeding for any remedy available to the Subordinated Indenture Trustee, or (b) exercise any trust or power conferred on the Subordinated Indenture Trustee with respect to the Subordinated Indenture Securities of such series. If an Event of Default is continuing with respect to more than one series of Subordinated Indenture Securities, the Holders of a majority in aggregate principal amount of the outstanding Subordinated Indenture Securities of all such series, considered as one class, will have the right to make such direction, and not the Holders of the Subordinated Indenture Securities of any one of such series. These rights of Holders to make direction are subject to the following limitations: (a) the Holders' directions may not conflict with any law or the Subordinated Indenture; and (b) the Holders' directions may not involve the Subordinated Indenture Trustee in personal liability where the Trustee believes indemnity is not adequate. The Subordinated Indenture Trustee may also take any other action it deems proper which is consistent with the Holders' direction. (See Sections 812 and 903.) In addition, the Subordinated Indenture provides that no Holder of any Subordinated Indenture Security will have any right to institute any proceeding, judicial or otherwise, with respect to the Subordinated Indenture for the appointment of a receiver or for any other remedy thereunder unless (a) that Holder has previously given the Subordinated Indenture Trustee written notice of a continuing Event of Default; (b) the Holders of 25% in aggregate principal amount of the outstanding Subordinated Indenture Securities of all affected series, considered as one class, have made written request to the Subordinated Indenture Trustee to institute proceedings in respect of that Event of Default and have offered the Subordinated Indenture Trustee reasonable indemnity against costs and liabilities incurred in complying with such request; and (c) for 60 days after receipt of such notice, the Subordinated Indenture Trustee has failed to institute any such proceeding and no direction inconsistent with such request has been given to the Subordinated Indenture Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of outstanding Subordinated Indenture Securities of all affected series, considered as one class. Furthermore, no Holder will be entitled to institute any such action if and to the extent that such action would disturb or prejudice the rights of other Holders. (See Sections 807 and 903.) 42 However, each Holder has an absolute and unconditional right to receive payment when due and to bring a suit to enforce that right. (See Sections 807 and 808.) ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED TRUST SECURITIES If there is an Event of Default with respect to Subordinated Debt Securities held by the Trust, then the holders of Preferred Trust Securities will rely on the Property Trustee or the Subordinated Indenture Trustee, acting for the benefit of the Property Trustee, to enforce the Property Trustee's rights against PPL Capital Funding and PPL Corporation as a holder of the Subordinated Debt Securities. However, a holder of Preferred Trust Securities may enforce the Subordinated Indenture directly against PPL Capital Funding and PPL Corporation to the same extent as if the holder of Preferred Trust Securities held a principal amount of Subordinated Debt Securities equal to the aggregate liquidation amount of its Preferred Trust Securities. (See Section 609.) Subject to their right to bring suit to enforce their right to payment, the holders of Preferred Trust Securities would not be able to institute any proceeding with respect to the Subordinated Indenture unless the Subordinated Indenture Trustee has failed to do so for 60 days after a request of the holders of 25% in liquidation amount of Preferred Trust Securities. Upon such failure, the holders of a majority of the aggregate liquidation amount of the outstanding Preferred Trust Securities would have the right to directly institute proceedings for enforcement of all other rights of the Subordinated Indenture Trustee against PPL Capital Funding to the fullest extent permitted by law. (See Sections 807, 808 and 812.) NOTICE OF DEFAULT The Subordinated Indenture Trustee is required to give the Holders of the Subordinated Indenture Securities notice of any default under the Subordinated Indenture to the extent required by the Trust Indenture Act, unless such default has been cured or waived; except that in the case of an Event of Default of the character specified above in clause (c) under "--Events of Default," no such notice shall be given to such Holders until at least 90 days after the occurrence thereof. (See Section 902.) The Trust Indenture Act currently permits the Subordinated Indenture Trustee to withhold notices of default (except for certain payment defaults) if the Subordinated Indenture Trustee in good faith determines the withholding of such notice to be in the interests of the Holders. We will furnish the Subordinated Indenture Trustee with an annual statement as to the compliance by PPL Capital Funding with the conditions and covenants in the Subordinated Indenture. (See Section 605.) WAIVER OF DEFAULT AND OF COMPLIANCE The Holders of a majority in aggregate principal amount of the outstanding Subordinated Indenture Securities of any series may waive, on behalf of the Holders of all Subordinated Indenture Securities of such series, any past default under the Subordinated Indenture, except a default in the payment of principal, premium or interest, or with respect to compliance with certain provisions of the Subordinated Indenture that cannot be amended without the consent of the Holder of each outstanding Subordinated Indenture Security. (See Section 813.) Compliance with certain covenants in the Subordinated Indenture or otherwise provided with respect to Subordinated Indenture Securities may be waived by the Holders of a majority in aggregate principal amount of the 43 affected Subordinated Indenture Securities, considered as one class. (See Section 606.) CONSOLIDATION, MERGER AND CONVEYANCE OF ASSETS AS AN ENTIRETY Subject to the provisions described in the next paragraph, each of PPL Capital Funding and PPL Corporation will preserve its corporate existence. (See Section 604.) PPL Capital Funding and PPL Corporation have each agreed not to consolidate with or merge into any other entity or convey, transfer or lease its properties and assets substantially as an entirety to any entity unless (a) the entity formed by such consolidation or into which PPL Capital Funding or PPL Corporation, as the case may be, is merged or the entity which acquires or which leases the property and assets of PPL Capital Funding or PPL Corporation, as the case may be, substantially as an entirety is an entity organized and existing under the laws of the United States of America or any State thereof or the District of Columbia, and expressly assumes, by supplemental indenture, the due and punctual payment of the principal, premium and interest on all the outstanding Subordinated Indenture Securities (or the Subordinated Guarantees endorsed thereon, as the case may be) and the performance of all of the covenants of PPL Capital Funding or PPL Corporation, as the case may be, under the Subordinated Indenture, and (b) immediately after giving effect to such transactions, no Event of Default, and no event which after notice or lapse of time or both would become an Event of Default, will have occurred and be continuing. (See Section 1101.) The Subordinated Indenture does not prevent or restrict: (a) any consolidation or merger after the consummation of which PPL Capital Funding or PPL Corporation would be the surviving or resulting entity; (b) any consolidation of PPL Capital Funding with PPL Corporation or any other entity all of the outstanding voting securities of which are owned, directly or indirectly, by PPL Corporation; or any merger of any such entity into any other of such entities; or any conveyance or other transfer, or lease, or properties by any thereof to any other thereof; (c) any conveyance or other transfer, or lease, of any part of the properties of PPL Capital Funding or PPL Corporation which does not constitute the entirety, or substantially the entirety, thereof; or (d) the approval by PPL Capital Funding or PPL Corporation of, or the consent by PPL Capital Funding or PPL Corporation to, any consolidation or merger to which any direct or indirect subsidiary or affiliate of PPL Capital Funding or PPL Corporation, as the case requires, may be a party or any conveyance, transfer or lease by any such subsidiary or affiliate of any of its assets. (See Section 1103.) 44 MODIFICATION OF SUBORDINATED INDENTURE WITHOUT HOLDER CONSENT. Without the consent of any Holders of Subordinated Indenture Securities, PPL Capital Funding, PPL Corporation and the Subordinated Indenture Trustee may enter into one or more supplemental indentures for any of the following purposes: (a) to evidence the succession of another entity to PPL Capital Funding or PPL Corporation; or (b) to add one or more covenants of PPL Capital Funding or PPL Corporation or other provisions for the benefit of the Holders of all or any series or tranche of Subordinated Indenture Securities, or to surrender any right or power conferred upon PPL Capital Funding or PPL Corporation; or (c) to add any additional Events of Default for all or any series of Subordinated Indenture Securities; or (d) to change or eliminate any provision of the Subordinated Indenture or to add any new provision to the Subordinated Indenture that does not adversely affect the interests of the Holders; or (e) to provide security for the Subordinated Indenture Securities of any series; or (f) to establish the form or terms of Subordinated Indenture Securities of any series or tranche or any Subordinated Guarantees as permitted by the Subordinated Indenture; or (g) to provide for the issuance of bearer securities; or (h) to evidence and provide for the acceptance of appointment of a separate or successor Subordinated Indenture Trustee or co-trustee; or (i) to provide for the procedures required to permit the utilization of a noncertificated system of registration for any series or tranche of Subordinated Indenture Securities; or (j) to change any place or places where (1) we may pay principal, premium and interest, (2) Subordinated Indenture Securities may be surrendered for transfer or exchange, and (3) notices and demands to or upon PPL Capital Funding or PPL Corporation may be served; or (k) to cure any ambiguity, defect or inconsistency or to make any other changes that do not adversely affect the interests of the Holders in any material respect. 45 If the Trust Indenture Act is amended after the date of the Subordinated Indenture so as to require changes to the Subordinated Indenture or so as to permit changes to, or the elimination of, provisions which, at the date of the Subordinated Indenture or at any time thereafter, were required by the Trust Indenture Act to be contained in the Subordinated Indenture, the Subordinated Indenture will be deemed to have been amended so as to conform to such amendment or to effect such changes or elimination, and PPL Capital Funding, PPL Corporation and the Subordinated Indenture Trustee may, without the consent of any Holders, enter into one or more supplemental indentures to effect or evidence such amendment. (See Section 1201.) WITH HOLDER CONSENT. Except as provided above, the consent of the Holders of at least a majority in aggregate principal amount of the Subordinated Indenture Securities of all outstanding series, considered as one class, is generally required for the purpose of adding to, or changing or eliminating any of the provisions of, the Subordinated Indenture pursuant to a supplemental indenture. However, if less than all of the series of outstanding Subordinated Indenture Securities are directly affected by a proposed supplemental indenture, then such proposal only requires the consent of the Holders of a majority in aggregate principal amount of the outstanding Subordinated Indenture Securities of all directly affected series, considered as one class. Moreover, if the Subordinated Indenture Securities of any series have been issued in more than one tranche and if the proposed supplemental indenture directly affects the rights of the Holders of Subordinated Indenture Securities of one or more, but less than all, of such tranches, then such proposal only requires the consent of the Holders of a majority in aggregate principal amount of the outstanding Subordinated Indenture Securities of all directly affected tranches, considered as one class. However, no amendment or modification may, without the consent of the Holder of each outstanding Subordinated Indenture Security directly affected thereby, (a) change the stated maturity of the principal or (except as described above under "--Option to Extend Interest Payment Period") interest on any Subordinated Indenture Security (other than pursuant to the terms thereof), or reduce the principal amount, interest or premium payable or change the currency in which any Subordinated Indenture Security is payable, or impair the right to bring suit to enforce any payment; (b) reduce the percentages of Holders whose consent is required for any supplemental indenture or waiver or reduce the requirements for quorum and voting under the Subordinated Indenture; or (c) modify certain of the provisions in the Subordinated Indenture relating to supplemental indentures and waivers of certain covenants and past defaults. A supplemental indenture which changes or eliminates any provision of the Subordinated Indenture expressly included solely for the benefit of Holders of Subordinated Indenture Securities of one or more particular series or tranches will be deemed not to affect the rights under the Subordinated Indenture of the Holders of Subordinated Indenture Securities of any other series or tranche. So long as any Preferred Trust Securities are outstanding, the Subordinated Indenture Trustee may not consent to any supplemental indenture that would ordinarily require Subordinated Indenture Security Holder consent without the prior consent of the holders of a majority in aggregate liquidation preference of all outstanding Preferred Trust Securities affected or, in the case of changes described in clauses (a) through (c) immediately above, 100% in 46 aggregate liquidation preference of all such outstanding Preferred Trust Securities affected. (See Section 1202.) MISCELLANEOUS PROVISIONS The Subordinated Indenture provides that certain Subordinated Indenture Securities, including those for which payment or redemption money has been deposited or set aside in trust as described under "--Satisfaction and Discharge" below, will not be deemed to be "outstanding" in determining whether the Holders of the requisite principal amount of the outstanding Subordinated Indenture Securities have given or taken any demand, direction, consent or other action under the Subordinated Indenture as of any date, or are present at a meeting of Holders for quorum purposes. (See Section 101.) PPL Capital Funding or PPL Corporation will be entitled to set any day as a record date for the purpose of determining the Holders of outstanding Subordinated Indenture Securities of any series entitled to give or take any demand, direction, consent or other action under the Subordinated Indenture, in the manner and subject to the limitations provided in the Subordinated Indenture. In certain circumstances, the Subordinated Indenture Trustee also will be entitled to set a record date for action by Holders. If such a record date is set for any action to be taken by Holders of particular Subordinated Indenture Securities, such action may be taken only by persons who are Holders of such Subordinated Indenture Securities on the record date. (See Section 104.) SATISFACTION AND DISCHARGE Any Subordinated Indenture Securities or any portion will be deemed to have been paid for purposes of the Subordinated Indenture, and at PPL Capital Funding's election, the entire indebtedness of PPL Capital Funding and PPL Corporation will be satisfied and discharged, if there shall have been irrevocably deposited with the Subordinated Indenture Trustee or any paying agent (other than PPL Capital Funding or PPL Corporation), in trust: (a) money sufficient, or (b) in the case of a deposit made prior to the maturity of such Subordinated Indenture Securities, non-redeemable Eligible Obligations (as defined in the Subordinated Indenture) sufficient, or (c) a combination of (a) and (b), which in total are sufficient, to pay when due the principal of, and any premium, and interest due and to become due on such Subordinated Indenture Securities or portions thereof on and prior to the maturity thereof. (See Section 701.) The Subordinated Indenture will be deemed satisfied and discharged when no Subordinated Indenture Securities remain outstanding and when we have paid all other sums payable by us under the Subordinated Indenture. (See Section 702.) All moneys we pay to the Subordinated Indenture Trustee or any paying agent on Subordinated Debt Securities which remain unclaimed at the end of two years after payments have become due will be paid to or upon the order of PPL Capital 47 Funding. Thereafter, the Holder of such Subordinated Debt Security may look only to us for payment thereof. (See Section 603.) RESIGNATION AND REMOVAL OF THE SUBORDINATED INDENTURE TRUSTEE; DEEMED RESIGNATION The Subordinated Indenture Trustee may resign at any time by giving written notice thereof to us. The Subordinated Indenture Trustee may also be removed by act of the Holders of a majority in principal amount of the then outstanding Subordinated Indenture Securities of any series. No resignation or removal of the Subordinated Indenture Trustee and no appointment of a successor trustee will become effective until the acceptance of appointment by a successor trustee in accordance with the requirements of the Subordinated Indenture. Under certain circumstances, we may appoint a successor trustee and if the successor accepts, the Subordinated Indenture Trustee will be deemed to have resigned. (Section 910). GOVERNING LAW The Subordinated Indenture and the Subordinated Indenture Securities provide that they are to be governed by and construed in accordance with the laws of the State of New York. INFORMATION CONCERNING THE TRUSTEES The Chase Manhattan Bank has at various times in the ordinary course of business made loans to PPL Corporation and its subsidiaries and affiliates, and acts as Administrative Agent with respect to one of our current revolving credit facilities. In addition, The Chase Manhattan Bank acts as issuing and paying agent for PPL Capital Funding's commercial paper notes, and acts as guarantee trustee and property trustee for the trust originated preferred securities and common securities of our affiliates, PPL Capital Trust and PPL Capital Trust I and acts as trustee with respect to junior subordinated deferrable interest debentures of our affiliate, PPL Utilities. Chase Manhattan Bank USA, National Association, an affiliate of the Trustee, also acts as Delaware trustee for the trust originated preferred securities and common securities of PPL Capital Trust and PPL Capital Trust I. EXPERTS The consolidated financial statements of PPL Corporation incorporated in this prospectus by reference to the Annual Report on Form 10-K of PPL Corporation for the year ended December 31, 1999, as amended by Form 10-K/A filed with the SEC on June 28, 2000, have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. The audited consolidated financial information of Hyder plc incorporated in this prospectus by reference to the Current Report on Form 8-K of PPL Corporation filed with the SEC on October 20, 2000 have been so incorporated in reliance on the report of PricewaterhouseCoopers, Cardiff, United Kingdom, independent accountants, given on the authority of said firm as experts in auditing and accounting. 48 The financial statements and schedules of Southern Investments UK plc and subsidiaries incorporated in this prospectus by reference to the Annual Report on Form 10-K of PPL Corporation for the year ended December 31, 1999, as amended by Form 10-K/A filed with the SEC on June 28, 2000, have been audited by Arthur Andersen, independent accountants, as indicated in their report with respect thereto, and are incorporated herein in reliance upon the authority of said firm as experts in accounting and auditing. Michael A. McGrail, Esq., Senior Counsel of PPL Services Corporation, has reviewed the statements made herein and in the incorporated documents as to matters of law and legal conclusions. Such statements have been made in reliance upon his authority as an expert. VALIDITY OF THE SECURITIES AND THE SECURITIES GUARANTEES Thelen Reid & Priest LLP, New York, New York, counsel to PPL Corporation, PPL Capital Funding and PPL Capital Funding Trust I, will pass upon the validity of the Securities and the Securities Guarantees for PPL Corporation, PPL Capital Funding and the Trust. Simpson Thacher & Bartlett, counsel to PPL Corporation, will pass upon the validity of Common Stock and the Preferred Stock for PPL Corporation. Michael A. McGrail, Esq., Senior Counsel of PPL Services Corporation, will pass upon the validity of the PPL Corporation Securities and the Securities Guarantees for PPL Corporation. Sullivan & Cromwell, New York, New York, will pass upon the validity of the Securities and the Securities Guarantees for any underwriters or agents. Certain matters of Delaware law relating to the validity of the Preferred Trust Securities, the enforceability of the Trust Agreement and the creation of the Trust will be passed upon by Richards, Layton & Finger, P.A., special Delaware counsel to PPL Corporation, PPL Capital Funding and the Trust. Thelen Reid & Priest LLP, Simpson Thacher & Bartlett and Sullivan & Cromwell will rely on the opinion of Mr. McGrail as to matters involving the law of the Commonwealth of Pennsylvania, and on the opinion of Richards, Layton & Finger, P.A., as to matters involving the law of the State of Delaware in connection with the Preferred Trust Securities. As to matters involving the law of the State of New York, Mr. McGrail will rely on the opinion of Thelen Reid & Priest LLP. PLAN OF DISTRIBUTION We may sell Securities (a) to purchasers directly; (b) to underwriters for public offering and sale by them; or (c) through agents or dealers. We may determine the price or other terms of the securities offered under this prospectus by use of an electronic auction. We will describe how any auction will determine the price or any other terms, how potential investors may participate in the auction and the nature of the underwriters' obligations in the related supplement to this prospectus. DIRECT SALES We may sell the Securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale of the Securities. A prospectus supplement will describe the terms of any such sale. 49 TO UNDERWRITERS The applicable prospectus supplement will name any underwriter involved in a sale of Securities. Underwriters may offer and sell Securities at a fixed price or prices, which may be changed, or from time to time at market prices or at negotiated prices. Underwriters may be deemed to have received compensation from us from sales of Securities in the form of underwriting discounts or commissions and may also receive commissions from purchasers of Securities for whom they may act as agent. Underwriters may sell Securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions (which may be changed from time to time) from the purchasers for whom they may act as agent. Unless otherwise provided in a prospectus supplement, the obligations of any underwriters to purchase particular Securities will be subject to certain conditions precedent, and the underwriters will be obligated to purchase all such Securities if any are purchased. THROUGH AGENTS We will name any agent or dealer involved in a sale of Securities, as well as any commissions payable by us to such agent, in a prospectus supplement. Unless we indicate differently in the prospectus supplement, any such agent will be acting on a reasonable efforts basis for the period of its appointment. GENERAL INFORMATION Underwriters, dealers acting as principals and agents participating in a sale of Securities may be deemed to be underwriters as defined in the Securities Act, and any discounts and commissions received by them and any profit realized by them on resale of the Securities may be deemed to be underwriting discounts and commissions, under the Securities Act. We may have agreements with underwriters, dealers and agents to indemnify them against certain civil liabilities, including liabilities under the Securities Act, and to reimburse them for certain expenses. Underwriters or agents and their associates may be customers of, engage in transactions with or perform services for us or our affiliates in the ordinary course of business. Each series of Securities will be a new issue and, except for the Common Stock, which is listed on the New York and Philadelphia Stock Exchanges, will have no established trading market. We may elect to list any series of new Securities on an exchange, or in the case of the Common Stock, on any additional exchange, but unless we advise you differently in the prospectus supplement, we have no obligation to cause any Securities to be so listed. Any underwriters that purchase Securities for public offering and sale may make a market in the Securities, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. We make no assurance as to the liquidity of, or the trading markets for, any Securities. 50 PART II. INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION Securities and Exchange Commission registration fee............... $200,000 Printing expenses................................................. 150,000 Trustee fees and expenses......................................... 20,000 Legal fees and expenses........................................... 400,000 Accounting fees and expenses...................................... 40,000 Blue Sky fees and expenses........................................ 15,000 Rating Agency fees................................................ 15,000 Miscellaneous..................................................... 110,000 Total........................................................ $950,000 - ------------------- All of the above except the Securities and Exchange Commission registration fee are estimated. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 7.01 of the Bylaws of PPL Corporation provides: (a) RIGHT TO INDEMNIFICATION. Except as prohibited by law, every director and officer of the corporation shall be entitled as of right to be indemnified by the corporation against reasonable expense and any liability paid or incurred by such person in connection with any actual or threatened claim, action, suit or proceeding, civil, criminal, administrative, investigative or other, whether brought by or in the right of the corporation or otherwise, in which he or she may be involved, as a party or otherwise, by reason of such person being or having been a director or officer of the corporation or by reason of the fact that such person is or was serving at the request of the corporation as a director, officer, employee, fiduciary or other representative of another corporation, partnership, joint venture, trust, employee benefit plan or other entity (such claim, action, suit or proceeding hereinafter being referred to as "action"). Such indemnification shall include the right to have expenses incurred by such person in connection with an action paid in advance by the corporation prior to final disposition of such action, subject to such conditions as may be prescribed by law. Persons who are not directors or officers of the corporation may be similarly indemnified in respect of service to the corporation or to another such entity at the request of the corporation to the extent the board of directors at any time denominates such person as entitled to the benefits of this Section 7.01. As used herein, "expense" shall include fees and expenses of counsel selected by such persons; and "liability" shall include amounts of judgments, excise taxes, fines and penalties, and amounts paid in settlement. (b) RIGHT OF CLAIMANT TO BRING SUIT. If a claim under paragraph (a) of this Section 7.01 is not paid in full by the corporation within thirty days after a written claim has been received by the corporation, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim, and, if successful in whole or in part, the claimant shall also be entitled to be paid the expense of prosecuting such claim. It shall be a defense to any such action that the conduct of the claimant was such that under Pennsylvania law the corporation would be prohibited from indemnifying the claimant for the amount claimed, but the burden of proving such defense shall be on the corporation. Neither the failure of the corporation (including its board of directors, independent legal counsel and its shareholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because the conduct of the claimant was not such that indemnification would be prohibited by law, nor an actual determination by the corporation (including its board of directors, independent legal counsel or its shareholders) that the conduct of the claimant was such that indemnification would be prohibited by law, shall be a defense to the action or create a presumption that the conduct of the claimant was such that indemnification would be prohibited by law. II-1 (c) INSURANCE AND FUNDING. The corporation may purchase and maintain insurance to protect itself and any person eligible to be indemnified hereunder against any liability or expense asserted or incurred by such person in connection with any action, whether or not the corporation would have the power to indemnify such person against such liability or expense by law or under the provisions of this Section 7.01. The corporation may create a trust fund, grant a security interest, cause a letter of credit to be issued or use other means (whether or not similar to the foregoing) to ensure the payment of such sums as may become necessary to effect indemnification as provided herein. (d) NON-EXCLUSIVITY; NATURE AND EXTENT OF RIGHTS. The right of indemnification provided for herein (1) shall not be deemed exclusive of any other rights, whether now existing or hereafter created, to which those seeking indemnification hereunder may be entitled under any agreement, bylaw or charter provision, vote of shareholders or directors or otherwise, (2) shall be deemed to create contractual rights in favor of persons entitled to indemnification hereunder, (3) shall continue as to persons who have ceased to have the status pursuant to which they were entitled or were denominated as entitled to indemnification hereunder and shall inure to the benefit of the heirs and legal representatives of persons entitled to indemnification hereunder and (4) shall be applicable to actions, suits or proceedings commenced after the adoption hereof, whether arising from acts or omissions occurring before or after the adoption hereof. The right of indemnification provided for herein may not be amended, modified or repealed so as to limit in any way the indemnification provided for herein with respect to any acts or omissions occurring prior to the effective date of any such amendment, modification or repeal. Directors and officers of PPL Corporation may also be indemnified in certain circumstances pursuant to the statutory provisions of general application contained in Pennsylvania law. Furthermore, PPL Corporation, as well as its directors and officers, may be entitled to indemnification by any underwriters named in a Prospectus Supplement against certain civil liabilities under the Securities Act of 1933 under agreements entered into between PPL Corporation and such underwriters. PPL Corporation presently has insurance policies which, among other things, include liability insurance coverage for officers and directors and officers and directors of PPL Corporation's subsidiaries, including PPL Capital Funding, under which such officers and directors are covered against any "loss" by reason of payment of damages, judgments, settlements and costs, as well as charges and expenses incurred in the defense of actions, suits or proceedings. "Loss" is specifically defined to exclude fines and penalties, as well as matters deemed uninsurable under the law pursuant to which the insurance policy shall be construed. The policies also contain other specific exclusions, including illegally obtained personal profit or advantage, and dishonesty. Article VI of the By-Laws of PPL Capital Funding, Inc. provides: SECTION 6.1. RIGHT TO INDEMNIFICATION. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (an "Indemnitee") who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding"), by reason of the fact that he, or a person for whom he is the legal representative, is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the written request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys' fees) reasonably incurred by such Indemnitee. Notwithstanding the preceding sentence, except as otherwise provided in Section 6.3, the Corporation shall be required to indemnify an Indemnitee in connection with a proceeding (or part thereof) commenced by such Indemnitee only if the commencement of such proceeding (or part thereof) by the Indemnitee was authorized by the Board of Directors. SECTION 6.2. PREPAYMENT OF EXPENSES. The Corporation shall pay the expenses (including attorneys' fees) incurred by an Indemnitee in defending any proceeding in advance of its final disposition, provided, however, -------- ------- that, to the extent required by law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the Indemnitee to repay all amounts advanced if it should II-2 be ultimately determined that the Indemnitee is not entitled to be indemnified under this Article VI or otherwise. SECTION 6.3. CLAIMS. If a claim for indemnification or payment of expenses under this Article VI is not paid in full within sixty (60) days after a written claim therefor by the Indemnitee has been received by the Corporation, the Indemnitee may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of providing that the Indemnitee is not entitled to the requested indemnification or payment of expenses under applicable law. SECTION 6.4. NONEXCLUSIVITY OF RIGHTS. The rights conferred on any Indemnitee by this Article VI shall not be exclusive of any other rights which such Indemnitee may have or hereafter acquire under any statute, provision of the certificate of incorporation, these by-laws, agreement, vote of stockholders or disinterested directors or otherwise. SECTION 6.5. OTHER SOURCES. The Corporation's obligation, if any, to indemnify or to advance expenses to any Indemnitee who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or nonprofit entity shall be reduced by any amount such Indemnitee may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise or non-profit enterprise. SECTION 6.6. AMENDMENT OR REPEAL. Any repeal or modification of the foregoing provisions of this Article VI shall not adversely affect any right or protection hereunder of any Indemnitee in respect of any act or omission occurring prior to the time of such repeal of modification. SECTION 6.7. OTHER INDEMNIFICATION AND PREPAYMENT OF EXPENSES. This Article VI shall not limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than Indemnitees when and as authorized by appropriate corporate action. Article 7 of the Certificate of Incorporation of PPL Capital Funding, Inc. provides: The Corporation shall indemnify to the full extent authorized by law any person made or threatened to be made a party to an action or proceeding whether criminal, civil, administrative or investigative, by reason of the fact that he, his testator or intestate is or was a director or officer of the Corporation or serves or served any other enterprise as a director or officer at the request of the Corporation or any predecessor of the Corporation. No director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director of the Corporation, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section 174 of the Delaware General Corporation Law; or (iv) for any transaction from which the director derived an improper personal benefit. Directors and officers of PPL Capital Funding may also be indemnified in certain circumstances pursuant to the statutory provisions of general application contained in Delaware law. Furthermore, PPL Capital Funding, as well as its directors and officers, may be entitled to indemnification by any underwriters named in a Prospectus Supplement against certain civil liabilities under the Securities Act of 1933 under agreements entered into between PPL Capital Funding and such underwriters. Section 8.06 of the Amended and Restated Trust Agreement provides that PPL Corporation agrees: to indemnify each Trustee for, and to hold each Trustee harmless against, any and all loss, damage, claims, liability or expense incurred without negligence (gross negligence, in the case of any Administrative Trustee), bad faith or willful misconduct on its part, arising out of or in connection with the acceptance or administration of the trust or trusts under this Trust Agreement, including the reasonable costs and expenses of II-3 defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. ITEM 16. EXHIBITS. Reference is made to the Exhibit Index filed herewith at page II-9, such Exhibit Index being incorporated in this Item 16 by reference. ITEM 17. UNDERTAKINGS. The undersigned registrants hereby undertake: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that (i) and (ii) do not apply if the information -------- ------- required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrants pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of PPL Corporation's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the provisions described under Item 15 above, or otherwise, the registrants have been advised that in the opinion of the Commission such indemnification is against public II-4 policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by a registrant of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, such registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-5 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, PPL CORPORATION CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF ALLENTOWN, AND COMMONWEALTH OF PENNSYLVANIA, ON THE 29TH DAY OF JANUARY, 2001. PPL CORPORATION (REGISTRANT) By /s/ William F. Hecht -------------------------------- William F. Hecht Chairman, President and Chief Executive Officer PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON THE 29TH DAY OF JANUARY, 2001. SIGNATURE TITLE --------- ----- /s/ William F. Hecht Principal Executive - ------------------------------------------------------ Officer and Director William F. Hecht, Chairman, President and Chief Executive Officer /s/ John R. Biggar Principal Financial - ------------------------------------------------------ Officer John R. Biggar, Executive Vice President and Chief Financial Officer /s/ Joseph J. McCabe Principal Accounting - ------------------------------------------------------ Officer Joseph J. McCabe, Vice President and Controller FREDERICK M. BERNTHAL, E. ALLEN DEAVER, ) WILLIAM J. FLOOD, ELMER D. GATES, STUART HEYDT, ) Directors FRANK A. LONG, JOHN W. CONWAY AND W. KEITH SMITH ) By /s/ William F. Hecht - ------------------------------------------------------ William F. Hecht, As Attorney-in-Fact II-6 POWER OF ATTORNEY EACH DIRECTOR AND/OR OFFICER OF THE REGISTRANT WHOSE SIGNATURE APPEARS BELOW HEREBY APPOINTS JOHN R. BIGGAR, JAMES E. ABEL AND ROBERT J. GREY, AND EACH OF THEM SEVERALLY, AS HIS TRUE AND LAWFUL ATTORNEY-IN-FACT AND AGENT TO SIGN IN HIS NAME AND BEHALF, IN ANY AND ALL CAPACITIES STATED BELOW, AND TO FILE WITH THE SECURITIES AND EXCHANGE COMMISSION, ANY AND ALL AMENDMENTS, INCLUDING POST-EFFECTIVE AMENDMENTS, TO THIS REGISTRATION STATEMENT, AND THE REGISTRANT HEREBY ALSO APPOINTS EACH SUCH PERSON AS ITS ATTORNEY-IN-FACT AND AGENT WITH LIKE AUTHORITY TO SIGN AND FILE ANY SUCH AMENDMENTS IN ITS NAME AND BEHALF. SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF ALLENTOWN, AND COMMONWEALTH OF PENNSYLVANIA, ON THE 29TH DAY OF JANUARY, 2001. PPL CAPITAL FUNDING, INC. (REGISTRANT) By /s/ John R. Biggar -------------------------------- John R. Biggar President PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON THE 29TH DAY OF JANUARY, 2001. SIGNATURE TITLE --------- ----- /s/ William F. Hecht Director - --------------------------------------- William F. Hecht /s/ John R. Biggar Principal Executive and - --------------------------------------- Financial Officer and Director John R. Biggar, President /s/ James E. Abel Principal Accounting Officer - --------------------------------------- and Director James E. Abel, Treasurer II-7 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF ALLENTOWN, AND COMMONWEALTH OF PENNSYLVANIA, ON THE 29TH DAY OF JANUARY, 2001. PPL CAPITAL FUNDING TRUST I (REGISTRANT) BY: PPL CORPORATION, AS DEPOSITOR By: /s/ James E. Abel -------------------------------- James E. Abel Vice President - Finance and Treasurer II-8 PPL CORPORATION PPL CAPITAL FUNDING, INC. PPL CAPITAL FUNDING TRUST I REGISTRATION STATEMENT ON FORM S-3 EXHIBIT INDEX
Exhibit No. Description and Method of Filing - ------- -------------------------------- 1.1 Form of Distribution Agreement with respect to Debt Filed herewith. Securities 1.2 Form of Underwriting Agreement with respect to A form of any underwriting Securities agreement with respect to any Securities will be filed as an Exhibit to a report on Form 8-K, as contemplated by Item 601(b)(1) of Regulation S-K under the Securities Act. 3.1 *Restated Articles of PPL Corporation Exhibit B to Proxy Statement of PPL Electric Utilities Corporation and Prospectus of PPL Corporation, dated March 9, 1995. 3.2 Articles of Amendment of PPL Corporation Filed herewith. 3.3 *By-Laws of PPL Corporation Exhibit 3(ii)(a) to PPL Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 1998. 3.4 *Certificate of Incorporation of PPL Capital Exhibit 3.3 to PPL Funding, Inc. Corporation and PPL Capital Funding, Inc. Registration Statement Nos. 333-38003 and 333-38003-01. 3.5 Amended Certificate of Incorporation of PPL Capital Filed herewith. Funding, Inc. 3.6 *By-Laws of PPL Capital Funding, Inc. Exhibit 3.4 to PPL Corporation and PPL Capital Funding, Inc. Registration Statement Nos. 333-38003 and 333-38003-01. 4.1 *Indenture dated as of November 1, 1997 among PPL Exhibit 4.1 to PPL Corporation, PPL Capital Funding, Inc. and The Corporation Current Report on Chase Manhattan Bank, as Trustee Form 8-K dated November 12, 1997. 4.2 *Supplemental Indenture No. 1 to Indenture Exhibit 4.2 to PPL Corporation Current Report on Form 8-K dated November 12, 1997. II-9 Exhibit No. Description and Method of Filing - ------- -------------------------------- 4.3 *Supplemental Indenture No. 2 to Indenture Exhibit 4.3 to PPL Corporation, PPL Capital Funding, Inc. and PPL Capital Funding Trust I Registration Statement Nos. 333-87847, 333-87847-01 and 333-87847-02. 4.4 *Supplemental Indenture No. 3 to Indenture Exhibit 4(c)-4 to PPL Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 1999, as amended by Form 10-K/A filed on June 28, 2000 4.5 *Supplemental Indenture No. 4 to Indenture Exhibit 4 to PPL Corporation Quarterly Report on Form 10-Q for the quarter ended June 30, 2000 4.6 Form of Supplemental Indenture establishing series Filed herewith. of Debt Securities 4.7 Form of Officer's Certificate establishing the form Filed herewith. and terms of Debt Securities. 4.8 Form of Purchase Contract Agreement Filed herewith. 4.9 Form of Pledge Agreement Filed herewith. 4.10 Form of Remarketing Agreement Filed herewith. 4.11 *Trust Agreement and Certificate of Trust of PPL Exhibit 4.9 to PPL Capital Funding Trust I Corporation, PPL Capital Funding, Inc. and PPL Capital Funding Trust I Registration Statement Nos. 333-87847, 333-87847-01 and 333-87847-02. 4.12 Certificate of Amendment to Certificate of Trust of Filed herewith. PPL Capital Funding Trust I 4.13 Amended and Restated Certificate of Trust of PPL Filed herewith. Capital Funding Trust I 4.14 Removal and Appointment of Trustee and Amendment of Filed herewith. Trust Agreement of PPL Capital Funding Trust I 4.15 Form of Amended and Restated Trust Agreement Filed herewith. 4.16 Form of Subordinated Indenture Filed herewith. 4.17 Form of Supplemental Indenture establishing the Filed herewith. series of the Subordinated Debt Securities II-10 Exhibit No. Description and Method of Filing - ------- -------------------------------- 4.18 Form of Officer's Certificate establishing the form Filed herewith. and terms of Subordinated Debt Securities 4.19 Form of Trust Securities Guarantee Agreement Filed herewith. 4.20 Form of Preferred Trust Securities Filed herewith as part of Exhibit 4.15. 4.21 Form of Common Stock certificate Filed herewith. 5.1 Opinion of Michael A. McGrail as to the legality of Filed herewith. the Securities of PPL Corporation and the Securities Guarantees 5.2 Opinion of Thelen Reid & Priest LLP as to the Filed herewith. legality of the Securities and the Securities Guarantees 5.3 Opinion of Simpson Thacher & Bartlett as to Filed herewith. legality of Common Stock and the Preferred Stock 5.4 Opinion of Richards, Layton & Finger, P.A., as to Filed herewith. legality of the Preferred Trust Securities 12.1 *Computation of Ratio of Earnings to Fixed Charges Exhibit 12(a) to PPL Corporation Quarterly Report on Form 10-Q for the quarter ended September 30, 2000. 12.2 Computation of Ratio of Earnings to Fixed Charges Filed herewith. and Preferred Dividends 23.1 Consent of Michael A. McGrail, Esq. Filed herewith as part of Exhibit 5.1 23.2 Consent of Thelen Reid & Priest LLP Filed herewith as part of Exhibit 5.2 23.3 Consent of Simpson Thacher & Bartlett Filed herewith as part of Exhibit 5.3 23.4 Consent of Richards, Layton & Finger, P.A. Filed herewith as part of Exhibit 5.4 23.5 Consent of PricewaterhouseCoopers LLP Filed herewith. 23.6 Consent of PricewaterhouseCoopers Filed herewith. 23.7 Consent of Arthur Andersen Filed herewith. 24.1 Power of Attorney of Directors of PPL Corporation Filed herewith. II-11 Exhibit No. Description and Method of Filing - ------- -------------------------------- 24.2 *Power of Attorney of Trustees of PPL Capital Exhibit 24.2 to PPL Funding Trust I Corporation, PPL Capital Funding, Inc. and PPL Capital Funding Trust I Registration Statement Nos. 333-87847, 333-87847-01 and 333-87847-02 25.1 Statement of Eligibility of Trustee under Indenture Filed herewith. 25.2 Statement of Eligibility of Trustee under Filed herewith. Subordinated Indenture 25.3 Statement of Eligibility of Trustee under Amended Filed herewith. and Restated Trust Agreement of PPL Capital Funding Trust I 25.4 Statement of Eligibility of Trustee under Preferred Filed herewith. Securities Guarantee 25.5 Statement of Eligibility of Trustee under Purchase Filed herewith. Contract Agreement (Purchase Contract Agent)
- ---------------- * Previously filed as indicated and incorporated herein by reference. II-12 EX-1 2 0002.txt EXHIBIT 1.1 EXHIBIT 1.1 PPL CAPITAL FUNDING, INC. $ ----------------- MEDIUM-TERM NOTES, SERIES [ ] - UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY PPL CORPORATION DISTRIBUTION AGREEMENT ---------------------- , 2000 -------- -- [name] [address] [name] [address] [name] [address] [name] [address] Ladies and Gentlemen: PPL Capital Funding, Inc. (formerly known as PP&L Capital Funding, Inc.), a Delaware corporation (the "Company"), and PPL Corporation (formerly known as PP&L Resources, Inc.), a Pennsylvania corporation (the "Guarantor"), confirm their agreement with [insert names of Agents] (each, an "Agent", and collectively, the "Agents") with respect to the issue and sale by the Company of its Medium-Term Notes, Series [ ] (the "Notes"). The Notes will be - unconditionally guaranteed as to payment of principal, premium, if any, and interest by the Guarantor pursuant to guarantees of the Guarantor (the "Guarantees"). Certain terms of the Notes are set forth in Schedule A hereto. The Notes are to be issued pursuant to an Indenture, dated as of November 1, 1997, as amended or modified from time to time (the "Base Indenture"), among the Company, the Guarantor and The Chase Manhattan Bank, as trustee (the "Trustee"), as supplemented by a Supplemental Indenture No. 5, dated as of , 2000 (the "Supplemental Indenture" and, together with ------- -- the Base Indenture, the "Indenture"), among the Company, the Guarantor and the Trustee. As of the date hereof, the Company has authorized the issuance and sale of up to $ aggregate principal amount of Notes to or through the ---------- Agents pursuant to the terms of this Agreement. It is understood, however, that the Company may from time to time authorize the issuance of additional Notes and that such additional Notes may be sold to or through the Agents pursuant to the terms of this Agreement, all as though the issuance of such Notes were authorized as of the date hereof. This Agreement provides both for the sale of Notes by the Company to one or more Agents as principal for resale to investors and other purchasers and for the sale of Notes by the Company directly to investors through one or more agents (as may from time to time be agreed to by the Company and the applicable Agent), in which case the applicable Agent will act as an agent of the Company in soliciting offers for the purchase of Notes. In connection with the foregoing, the Company and the Guarantor have filed with the Securities and Exchange Commission (the "Commission") a joint registration statement on Form S-3 (Nos. 333- , 333- -01 and ----- ----- 333- -02) for the registration of debt securities, including the Notes and ----- the Guarantees, under the Securities Act of 1933, as amended (the "1933 Act") and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations"). Such registration statement (as so amended, if applicable) has been declared effective by the Commission and the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such registration statement (as so amended, if applicable) is referred to herein as the "Registration Statement"; and the final prospectus and all applicable amendments or supplements thereto (including the final prospectus supplement relating to the offering of Notes), in the form first furnished to the applicable Agent(s) and to be transmitted for filing pursuant to Rule 424(b) of the 1933 Act Regulations, are collectively referred to herein as the "Prospectus"; provided, however, that all references to the "Registration Statement" and the "Prospectus" shall also be deemed to include all documents incorporated therein by reference pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to any acceptance by the Company of an offer for the purchase of Notes; provided, further, that if the Company files a registration statement with the Commission pursuant to Rule 462(b) of the 1933 -2- Act Regulations (the "Rule 462(b) Registration Statement"), then, after such filing, all references to the "Registration Statement" shall also be deemed to include the Rule 462(b) Registration Statement. For purposes of this Agreement, all references to the Registration Statement or Prospectus or to any amendment or supplement thereto shall be deemed to include any copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR"). All references in this Agreement to financial statements and schedules and other information that is "contained," "included" or "stated" in the Registration Statement or Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information that are or are deemed to be incorporated by reference in the Registration Statement or Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement or Prospectus shall be deemed to mean and include the filing of any document under the 1934 Act that is or is deemed to be incorporated by reference in the Registration Statement or Prospectus, as the case may be. 1. Appointment as Agent. -------------------- (a) Appointment. On the basis of the representations, warranties and ----------- agreements herein contained, but subject to the terms and conditions herein contained and subject to the reservation by the Company of the right to sell Notes directly to investors on its own behalf (and not through any Agent), offers for the purchase of Notes may be solicited by an Agent as agent for the Company at such times and in such amounts as such Agent deems advisable. The -3- Company may appoint additional agents in connection with the offering of the Notes; provided that (i) the Company promptly notifies the Agents of such appointment and (ii) the commission paid to any such additional agent with respect to the sale of Notes by the Company as a result of a solicitation made by such additional agent does not exceed that percentage specified in Schedule B hereto of the aggregate principal amount of such Notes sold by the Company; and provided further that, unless the appointment of such additional agent is expressly limited to the solicitation of offers to purchase a specified principal amount of Notes on specified terms, such additional agent enters into an agreement with the Company making such agent an Agent under this Agreement or enters into an agreement with the Company on terms which are substantially similar to those contained in this Agreement, which agreement shall include appropriate changes to reflect the arrangements between the Company and such additional agent. (b) Sale of Notes. The Company shall not sell or approve the ------------- solicitation of offers for the purchase of Notes in excess of the amount which shall be authorized by the Company from time to time or in excess of the aggregate principal amount of Notes registered pursuant to the Registration Statement. The Agents shall have no responsibility for maintaining records with respect to the aggregate principal amount of Notes sold, or of otherwise monitoring the availability of Notes for sale, under the Registration Statement. (c) Purchases as Principal. The Agents shall not have any obligation ---------------------- to purchase Notes from the Company as principal. However, absent an agreement between an Agent and the Company that such Agent shall be acting solely as an agent for the Company, such Agent shall be deemed to be acting as principal in connection with any offering of Notes by the Company through such Agent. Accordingly, the Agents, individually or in a syndicate, may agree from time to time to purchase Notes from the Company as principal for resale to investors and other purchasers determined by such Agents. Any purchase of Notes from the -4- Company by an Agent as principal shall be made in accordance with Section 3(a) hereof. (d) Solicitations as Agent. If agreed upon between an Agent and the ---------------------- Company, such Agent, acting solely as an agent for the Company and not as principal, will solicit offers for the purchase of Notes. Such Agent will communicate to the Company, orally or in writing, each offer for the purchase of Notes solicited by it on an agency basis other than those offers rejected by such Agent. Such Agent shall have the right, in its discretion reasonably exercised, to reject any offer for the purchase of Notes, in whole or in part, and any such rejection shall not be deemed a breach of its agreement contained herein. The Company may accept or reject any offer for the purchase of Notes, in whole or in part. Such Agent shall make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer for the purchase of Notes has been solicited by it on an agency basis and accepted by the Company. Such Agent shall not have any liability to the Company in the event that any such purchase is not consummated for any reason. If the Company shall default on its obligation to deliver Notes against payment tendered by a purchaser whose offer has been solicited by such Agent on an agency basis and accepted by the Company, the Company shall hold such Agent harmless against any loss, claim or damage arising from or as a result of such default by the Company. (e) Reliance. The Company and the Agents agree that any Notes -------- purchased from the Company by one or more Agents as principal shall be purchased, and any Notes the placement of which an Agent arranges as an agent of the Company shall be placed by such Agent, in reliance on the representations, warranties, covenants and agreements of the Company contained herein and on the terms and conditions and in the manner provided herein. 2. Representations and Warranties. ------------------------------ (a) The Company and the Guarantor jointly and severally represent and warrant to, and agree with, each Agent as of the date hereof, as of the date of -5- each acceptance by the Company of an offer for the purchase of Notes (whether to such Agent as principal or through such Agent as agent), as of the date of each delivery of Notes (whether to such Agent as principal or through such Agent as agent) (the date of each such delivery to such Agent as principal is referred to herein as a "Settlement Date"), and as of any time that the Registration Statement or the Prospectus shall be amended or supplemented (each of the times referenced above is referred to herein as a "Representation Date"), that: (i) The Registration Statement, when it became effective and at each Representation Date, and the Prospectus and any amendment or supplement thereto, when filed or transmitted for filing with the Commission and at each Representation Date, complied or will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the Commission under the 1939 Act (the "1939 Act Regulations"), and did not or will not contain an untrue 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; provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with the information furnished to the Company in writing by the Agents expressly for use in the Registration Statement or Prospectus or to that part of the Registration Statement which constitutes the Trustee's Statement of Eligibility under the 1939 Act (the "T-1"). (ii) The documents incorporated or deemed to be incorporated by reference in the Registration Statement or Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission under the 1934 Act (the "1934 Act -6- Regulations"), and, when read together with the other information in the Prospectus, at the date hereof, at the date of the Prospectus and at each Representation Date, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by or through any Agent expressly for use in the Registration Statement or Prospectus. (iii) The Guarantor has been duly incorporated and is validly existing as a corporation in good standing under the laws of the Commonwealth of Pennsylvania with corporate power and authority to enter into and perform its obligations under this Agreement, the Indenture and the Guarantees. (iv) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware with corporate power and authority to conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement, the Indenture and the Notes; and the Company is and will be treated as a consolidated subsidiary of the Guarantor pursuant to generally accepted accounting principles. (v) Neither the Guarantor nor the Company is an "investment company" that is required to be registered under the Investment Company Act of 1940, as amended (the "1940 Act"). (vi) This Agreement has been duly authorized, executed and delivered by each of the Company and the Guarantor. -7- (vii) The Indenture has been duly authorized, executed and delivered by the Company and the Guarantor and, assuming due authorization, execution and delivery by the Trustee, constitutes a valid and binding agreement of the Company and the Guarantor enforceable in accordance with its terms except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, fraudulent transfer, or reorganization, moratorium, and other similar laws relating to or affecting the enforcement of creditors' rights and by general equity principles, regardless of whether enforcement is considered in a proceeding at law or in equity (the "Bankruptcy Exceptions"); the Indenture conforms and will conform in all material respects to the statements relating thereto contained in the Prospectus; and at the effective date of the Registration Statement, the Indenture was duly qualified under the 1939 Act. (viii) The Notes have been duly authorized and, when issued, authenticated and delivered in the manner provided for in the Indenture and delivered against payment of the consideration therefor, will constitute valid and binding obligations of the Company enforceable in accordance with their terms except to the extent that enforcement thereof may be limited by the Bankruptcy Exceptions; the Notes will be in the forms established pursuant to, and entitled to the benefits of, the Indenture; and the Notes will conform in all material respects to the statements relating thereto contained in the Prospectus. (ix) The Guarantees have been duly authorized and, when duly executed pursuant to the Indenture and delivered, will constitute valid and binding obligations of the Guarantor enforceable in accordance with their terms except to the extent that enforcement thereof may be limited by the Bankruptcy Exceptions; the Guarantees will be in the forms established -8- pursuant to the Indenture; and the Guarantees will conform in all material respects to the statements relating thereto contained in the Prospectus. (x) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, 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 Guarantor and its subsidiaries considered as one enterprise (a "Material Adverse Effect"). (xi) The Medium-Term Note Program under which the Notes are issued (the "Program"), as well as the Notes, are rated Baa2 by Moody's Investors Service, Inc. and BBB by Standard & Poor's Ratings Service, or such other rating as to which the Company or the Guarantor shall have most recently notified the Agents pursuant to Section 5(a) hereof. (b) Each of the several Agents represents and warrants to, and agrees with, the Company and the Guarantor, their respective directors and such of their respective officers who shall have signed the Registration Statement, and to each other Agent, that the information furnished in writing to the Company and the Guarantor by such Agent expressly for use in the Registration Statement or the Prospectus does not contain an untrue statement of a material fact and does not omit to state a material fact in connection with such information required to be stated therein or necessary to make such information not misleading. (c) Additional Certifications. Any certificate signed by any officer ------------------------- of the Company or the Guarantor and delivered to one or more Agents or to counsel for the Agents in connection with an offering of Notes to one or more Agents as principal or through an Agent as agent shall be deemed a representation and warranty by the Company or the Guarantor, as the case may be, -9- to such Agent or Agents as to the matters covered thereby on the date of such certificate. 3. Purchases as Principal; Solicitations as Agent. ---------------------------------------------- (a) Purchases as Principal. Notes purchased from the Company by the ---------------------- Agents, individually or in a syndicate, as principal shall be made in accordance with terms agreed upon between such Agent or Agents and the Company in a separate agreement (which may be an oral agreement confirmed in writing between the applicable Agent and the Company). Each such separate agreement is herein referred to as a "Terms Agreement". Each such Terms Agreement, whether oral (and confirmed in writing, which may be a facsimile transmission) or in writing, shall include such information (as applicable) as is specified in Schedule A hereto. An Agent's commitment to purchase Notes as principal shall be deemed to have been made on the basis of the representations, warranties and agreements of the Company herein contained, but subject to the terms and conditions herein contained. Unless the context otherwise requires, references herein to "this Agreement" shall include the applicable Terms Agreement of one or more Agents to purchase Notes from the Company as principal. Each purchase of Notes, unless otherwise agreed, shall be at a discount from the principal amount of each such Note equivalent to the applicable commission set forth in Schedule B hereto. The Agents may engage the services of any broker or dealer in connection with the resale of the Notes purchased by them as principal and may allow all or any portion of the discount received from the Company in connection with such purchases to such brokers or dealers. At the time of each Terms Agreement to purchase Notes from the Company by one or more Agents as principal, such Agent or Agents shall specify the requirements for the comfort letter, opinions of counsel and officers' certificate pursuant to Section 8 hereof. (b) Solicitations as Agent. On the basis of the representations, ---------------------- warranties and agreements herein contained, but subject to the terms and conditions herein contained, when agreed by the Company and an Agent, such Agent, as an agent of the Company, will use its reasonable efforts to solicit -10- offers for the purchase of Notes upon the terms set forth in the Prospectus. The Agents are not authorized to appoint sub-agents with respect to Notes sold through them as agent. All Notes sold through an Agent as agent will be sold at 100% of their principal amount unless otherwise agreed upon between the Company and such Agent. The Company reserves the right, in its sole discretion, to suspend solicitation of offers for the purchase of Notes through an Agent, as an agent of the Company, commencing at any time for any period of time or permanently. As soon as practicable after receipt of instructions from the Company, such Agent will suspend solicitation of offers for the purchase of Notes from the Company until such time as the Company has advised such Agent that such solicitation may be resumed. The Company agrees to pay each Agent a commission, in the form of a discount, equal to the applicable percentage of the principal amount of each Note sold by the Company as a result of a solicitation made by such Agent, as an agent of the Company, at the time of settlement of any such sale, as set forth in Schedule B hereto. (c) Administrative Procedures. The purchase price, interest rate or ------------------------- formula, maturity date and other terms of the Notes specified in Schedule A hereto (as applicable) shall be agreed upon between the Company and the applicable Agent(s) and specified in a pricing supplement to the Prospectus (each, a "Pricing Supplement") to be prepared by the Company in connection with each sale of Notes. Except as otherwise specified in the applicable Pricing Supplement, the Notes will be issued in denominations of $1,000 or any larger amount that is an integral multiple of $1,000. Administrative procedures with respect to the issuance and sale of the Notes (the "Procedures") shall be agreed upon from time to time among the Company, the Agents and the Trustee. The initial Procedures, which are set forth in Schedule C hereto, shall remain in effect until changed by agreement among the Company, the Agents and the Trustee. The Agents and the Company agree to perform, and the Company agrees to request -11- the Trustee to perform, their respective duties and obligations specifically provided to be performed by them in the Procedures. 4. Delivery and Payment for Notes Sold through an Agent as Agent. -------------------------------------------------------------- Delivery of Notes sold through an Agent as an agent of the Company shall be made by the Company to such Agent for the account of any purchaser only against payment therefor in immediately available funds. In the event that a purchaser shall fail either to accept delivery of or to make payment for a Note on the date fixed for settlement, such Agent shall promptly notify the Company and deliver such Note to the Company and, if such Agent has theretofore paid the Company for such Note, the Company will promptly return such funds to such Agent. If such failure has occurred for any reason other than default by such Agent in the performance of its obligations hereunder, the Company will reimburse such Agent on an equitable basis for its loss of the use of the funds for the period such funds were credited to the Company's account. 5. Certain Covenants of the Company and the Guarantor. -------------------------------------------------- Each of the Company and the Guarantor jointly and severally covenant with the several Agents as follows: (a) To notify the Agents promptly, and confirm the notice in writing, of (i) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, (ii) the institution by the Commission of any stop order proceedings in respect of the Registration Statement, or the initiation of proceedings for that purpose, and to make every reasonable effort to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued, and (iii) any change in the rating assigned by any nationally recognized statistical rating organization to the Program or any debt securities (including the Notes) of the Company or the Guarantor, or the public announcement by any nationally recognized statistical rating organization that -12- it has under surveillance or review, with possible negative implications, its rating of the Program or any such debt securities, or the withdrawal by any nationally recognized statistical rating organization of its rating of the Program or any such debt securities; (b) To advise the Agents, or Sullivan & Cromwell as counsel to the Agents, promptly of any such filing, and to advise the Agents, or Sullivan & Cromwell, as counsel to the Agents, promptly of any proposal to file or prepare (i) any amendment to the Registration Statement (including any post-effective amendment), (ii) any amendment or supplement to the Prospectus (other than an amendment or supplement providing solely for the determination of the variable terms of the Notes or relating solely to the offering of securities other than the Notes), or (iii) any document that would as a result thereof be incorporated by reference in the Prospectus whether pursuant to the 1933 Act, the 1934 Act or otherwise; and will furnish the Agents with copies of any such amendment, supplement or other document a reasonable amount of time prior to such proposed filing or use, as the case may be; (c) To endeavor, in cooperation with the Agents, to qualify the Notes for offer and sale under the securities or blue sky laws of such states and the other jurisdictions of the United States as the Agents may from time to time designate, to continue such qualifications in effect so long as required for the distribution of the Notes and to reimburse the Agents for any expenses (including filing fees and reasonable fees and disbursements of counsel) paid by the Agents or on their behalf to qualify the Notes for offer and sale, to continue such qualification, to determine the eligibility of the Notes for investment and to print the memoranda relating thereto; provided that neither the Company nor the Guarantor shall be required to qualify as a foreign corporation in any jurisdiction in which it is not so qualified, to consent to service of process in any jurisdiction other than with respect to claims arising out of the offering or sale of the Notes, or to meet any other requirement in connection with this paragraph (c) deemed by them to be unduly burdensome; -13- (d) To deliver promptly to the Agents signed copies of the Registration Statement as originally filed and of all amendments thereto heretofore or hereafter filed, including conformed copies of all exhibits except those incorporated by reference, and such number of conformed copies of the Registration Statement (but excluding the exhibits), the Prospectus, and any amendments and supplements thereto, as the Agents may reasonably request; (e) To prepare, with respect to any Notes to be sold to or through one or more Agents pursuant to this Agreement, a Pricing Supplement with respect to such Notes in a form previously approved by the Agents. The Company will deliver such Pricing Supplement no later than 11:00 A.M., New York City time, on the business day following the date of the Company's acceptance of the offer for the purchase of such Notes and will file such Pricing Supplement pursuant to Rule 424(b) under the 1933 Act within the time periods prescribed thereunder, and, in any event, not later than the close of business of the Commission on the fifth business day after the date on which such Pricing Supplement is first used; (f) Except as otherwise provided in subsection (l) of this Section 5, if at any time during the term of this Agreement any event occurs as a result of which the Prospectus, as then amended or supplemented, would include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances existing at the time the Prospectus is delivered to a purchaser, not misleading, or if it shall be necessary at any time to amend the Registration Statement or amend or supplement the Prospectus to comply with the 1933 Act or the 1933 Act Regulations, to advise the Agents immediately, confirmed in writing, to cease the solicitation of offers for the purchase of Notes in their capacity as agents and to cease sales of any Notes they may then own as principal, and to promptly prepare and file with the Commission, subject to Section 5(b) hereof, such amendment or supplement which will correct such -14- statement or omission or an amendment which will effect such compliance; provided, however, that the cost of any amendment or supplement which relates solely to the activities of any Agent shall be borne by the Agent or Agents requiring the same; (g) Except as otherwise provided in subsection (l) of this Section 5, on or prior to the date on which there shall be released to the general public interim financial statement information related to the Company or the Guarantor with respect to each of the first three quarters of any fiscal year or preliminary financial statement information with respect to any fiscal year, or financial information included in the audited consolidated financial statements of the Company or the Guarantor for the preceding fiscal year, the Company and the Guarantor shall furnish such information to the Agents; (h) As soon as practicable, the Guarantor will make generally available to its security holders an earnings statement covering a period of at least twelve months beginning after the "effective date of the registration statement" within the meaning of Rule 158 under the 1933 Act which will satisfy the provisions of Section 11(a) of the 1933 Act; (i) The Company and the Guarantor during the period when the Prospectus is required to be delivered under the 1933 Act, will file all documents required to be filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act within the time periods prescribed by the 1934 Act and the 1934 Act Regulations; (j) Unless otherwise agreed upon between one or more Agents acting as principal and the Company, between the date of any Terms Agreement by such Agent(s) to purchase Notes from the Company and the Settlement Date with respect thereto, the Company will not, without the prior written consent of such Agent(s), issue, sell, offer or contract to sell, grant any option for the sale of, or otherwise dispose of, any debt securities of the Company with maturities and other terms substantially similar to the Notes being sold pursuant to such Terms Agreement (other than the Notes that are to be sold pursuant to such Terms -15- Agreement, notes to banks under any revolving credit agreement of the Company or commercial paper in the ordinary course of business); (k) The Company will apply the net proceeds from the sale of the Notes for the purposes set forth in the Prospectus; (l) The Company shall not be required to comply with the provisions of subsections (f) or (g) of this Section 5 during any period from the time the Agents shall have suspended solicitation of offers for the purchase of Notes in their capacity as agents pursuant to a request from the Company until the time the Company shall determine that solicitation of offers for the purchase of Notes should be resumed; provided, however, that compliance with such subsections shall be required for any portion of such period during which an Agent shall hold any Notes as principal purchased pursuant to a Terms Agreement; and provided further that the Agents shall, upon inquiry by the Company or the Guarantor, advise the Company and the Guarantor whether or not any of them retains any Notes for purposes of this subsection (1), and from the 30th day immediately following the issuance of such Notes, unless otherwise advised by an Agent, the Company and the Guarantor shall be entitled to assume that the distribution of such Notes is complete; and (m) The Company will comply with the conditions set forth in Rule 3a-5 under the 1940 Act ("Rule 3a-5"), necessary for the Company to not be considered an "investment company" under the 1940 Act. 6. Payment of Expenses. ------------------- The Company will pay or bear (i) all expenses in connection with the matters herein required to be performed by the Company or the Guarantor, including all expenses in connection with the preparation and filing of the Registration Statement and the Prospectus, and any amendment or supplement thereto, and the furnishing of copies thereof to the Agents, and all audits, statements or reports in connection therewith, and all expenses in connection -16- with the issue and delivery of the Notes and the related Guarantees, including the reasonable fees and disbursements of counsel to the Agents incurred in connection with the establishment of the Program and incurred from time to time in connection with the transactions contemplated hereby, any fees and expenses relating to the eligibility and issuance of Notes in book-entry form and the cost of obtaining CUSIP or other identification numbers for the Notes, all Federal and State taxes (if any) payable (not including any transfer taxes) upon the issue of the Notes or the related Guarantees, any fee charged by securities ratings services for rating the Program and the Notes, the fees and expenses incurred in connection with any listing of the Notes on a securities exchange, and the fee of the National Association of Securities Dealers, Inc., if any, and (ii) all expenses in connection with the printing, reproduction and delivery of this Agreement and the printing, reproduction and delivery of such other documents or certificates as may be required in connection with the offering, purchase, sale, issuance or delivery of the Notes or the Guarantees. 7. Conditions of Agents' Obligations. --------------------------------- The obligations of one or more Agents to purchase Notes as principal and to solicit offers for the purchase of Notes as an agent of the Company, and the obligations of any purchasers of Notes sold through an Agent as an agent of the Company, will be subject to the following conditions: (a) The Agents shall have received from PricewaterhouseCoopers LLP a letter, dated the date of this Agreement, in form and substance satisfactory to you, to the effect that: (i) They are independent accountants with respect to the Guarantor and its subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations; (ii) In their opinion, the consolidated financial statements of the Guarantor and its subsidiaries audited by them and incorporated by -17- reference in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the 1934 Act and the published rules and regulations thereunder with respect to registration statements on Form S-3; (iii) On the basis of procedures (but not an audit in accordance with generally accepted auditing standards) consisting of: (A) Reading the minutes of meetings of the shareowners and the Boards of Directors of the Guarantor and the Company and their Executive, Compensation and Corporate Governance, Finance and the Audit and Corporate Responsibility Committees since the day after the end of the last audited period as set forth in the minute books through a specified date not more than five business days prior to the date of delivery of such letter; and (B) With respect to the unaudited consolidated balance sheet as of the most recent quarter ended and the unaudited consolidated statements of income and of cash flows included in the Guarantor's Quarterly Report on Form 10-Q for the most recent quarter ended ("Form 10-Q") incorporated by reference in the Registration Statement, (i) Performing the procedures specified by the American Institute of Certified Public Accountants for a review of interim financial information as described in SAS No. 71, Interim Financial Information, on ----------------------------- the unaudited consolidated balance sheet and the unaudited consolidated statements of income and of cash flows for the most recent quarter ended and year to date, and prior year periods, included in the Guarantor's Form 10-Q incorporated by reference in the Registration Statement; (ii) Making inquiries of certain officials of the Guarantor who have responsibility for financial and accounting matters as to whether the -18- unaudited consolidated financial statements referred to in (B)(i) comply as to form in all material respects with the applicable accounting requirements of the 1934 Act, as it applies to Form 10-Q and the related published rules and regulations thereunder; (C) Reading the unaudited interim financial data for the period from the date of the latest balance sheet included or incorporated in the Registration Statement to the date of the latest available interim financial data; and (D) Making inquiries of certain officials of the Guarantor who have responsibility for financial and accounting matters regarding the specific items for which representations are requested below; nothing has come to their attention as a result of the foregoing procedures that caused them to believe that (i) the unaudited consolidated financial statements described in (B)(i), included in the Form 10-Q and incorporated by reference in the Registration Statement, do not comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the 1934 Act, as it applies to Form 10-Q, and the related published rules and regulations thereunder; or (ii) any material modifications should be made to the unaudited consolidated financial statements described in (B)(i), included in the Form 10-Q and incorporated by reference in the Registration Statement, for them to be in conformity with generally accepted accounting principles; or (iii) at the date of the latest available interim financial data and at the date of the latest available month end, there was any change in the common equity; (iv) at the date of the latest available interim financial data and at a specified date not more than five business days prior to the date of -19- delivery of such letter, there was any change in the common stock or preferred stock (with or without sinking fund requirements) (except for changes in shares of certain series of preferred stock of a subsidiary of the Guarantor redeemed for, purchased or otherwise retired in anticipation of, sinking fund requirements for such series or as a result of the surrender by the Guarantor of any preferred stock of PPL Electric Utilities Corporation theretofore purchased by the Guarantor) or increase in long-term debt of the Guarantor and subsidiaries consolidated as compared with amounts shown in the latest balance sheet incorporated by reference in the Registration Statement; or (v) for the period from the closing date of the latest consolidated income statement incorporated by reference in the Registration Statement to the date of the latest available interim financial data there were any decreases, as compared with the corresponding period in the preceding year, in net income, except in all instances for changes, increases or decreases which the Registration Statement, including the documents incorporated therein by reference, discloses have occurred or may occur, or they shall state any specific changes or decreases. (iv) The letter shall also state that the information set forth in Schedule D hereto, which is expressed in dollars (or percentages derived from such dollar amounts) and has been obtained from accounting records which are subject to the internal controls of the Guarantor's accounting system or which has been derived directly from such accounting records by analysis or computation, is in agreement with such records or computations made therefrom, except as otherwise specified in such letter. (b) The Registration Statement has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement -20- shall have been issued and no proceedings for that purpose shall have been instituted, or, to the knowledge of the Company or the Guarantor, shall be contemplated by the Commission and the Agents shall have received certificates of the Company and of the Guarantor dated the date hereof to such effect. (c) On the date hereof the Agents shall have received from Michael A. McGrail, Esq., Senior Counsel, or such other counsel for the Company and the Guarantor as may be acceptable to you, an opinion, dated as of the date hereof, in form and substance satisfactory to counsel for the Agents, to the effect that: (i) The Guarantor has been duly incorporated and is validly existing as a corporation in good standing under the laws of the Commonwealth of Pennsylvania with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus; (ii) The portions of the information contained in the Prospectus, which are stated therein to have been made on the authority of any such counsel, have been reviewed by such counsel and, as to matters of law and legal conclusions, are correct; (iii) The Guarantor is a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended, but is exempt from such Act (except for the provisions of Section 9(a)(2) thereof) by virtue of an order of the Commission pursuant to Section 3(a)(1) thereof; (iv) The descriptions in the Registration Statement and the Prospectus of statutes, legal and governmental proceedings and contracts and other documents are accurate and fairly present the information required to be shown; and such counsel does not know of any legal or governmental proceedings required to be described in the Registration Statement or Prospectus which are not described, or of any contracts or documents of a character required to be described in the Registration Statement or the -21- Prospectus or to be filed as exhibits to the Registration Statement which are not described and filed as required; it being understood that such counsel need express no opinion as to the financial statements and other financial data contained or incorporated by reference in the Registration Statement or the Prospectus; (v) This Agreement has been duly authorized, executed and delivered by the Guarantor; (vi) The Indenture has been duly authorized, executed and delivered by the Guarantor and, assuming due authorization, execution, and delivery by the Company and the Trustee, is a valid and binding obligation of the Guarantor, enforceable in accordance with its terms, except to the extent limited by the Bankruptcy Exceptions; (vii) The Guarantees are in the form established pursuant to the Indenture, have been duly authorized by the Guarantor, and, when duly executed pursuant to the Indenture and delivered in accordance with the provisions of this Agreement, will constitute valid and binding obligations of the Guarantor, as guarantor, enforceable in accordance with their terms, except to the extent limited by the Bankruptcy Exceptions; (viii) No approval, authorization, consent or other order of any public board or body is legally required for the authorization of the offering, issuance and sale of the Notes, except (a) such as may be required under the 1933 Act or the 1933 Act Regulations or the securities or "blue sky" laws of any jurisdiction and (b) the qualification of the Indenture under the 1939 Act and 1939 Act Regulations. In rendering such opinion, such counsel may rely as to matters governed by New York law upon the opinion of Thelen Reid & Priest LLP referred to in Section 7(d) of this Agreement. -22- (d) On the date hereof, the Agents shall have received from Thelen Reid & Priest LLP, special counsel to the Company and the Guarantor, an opinion, dated as of the date hereof, in form and substance satisfactory to counsel for the Agents, to the effect that: (i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware; (ii) The Notes are in the form established pursuant to the Indenture, have been duly authorized by the Company, and, when issued, authenticated and delivered in the manner provided for in the Indenture and delivered against payment therefor, will constitute valid and binding obligations of the Company enforceable in accordance with their terms, except to the extent limited by the Bankruptcy Exceptions, and are entitled to the benefits of the Indenture; (iii) The Guarantees are in the form established pursuant to the Indenture, have been duly authorized by the Guarantor, and, when duly executed pursuant to the Indenture and delivered in accordance with the provisions of this Agreement, will constitute valid and binding obligations of the Guarantor, as guarantor, enforceable in accordance with their terms, except to the extent limited by the Bankruptcy Exceptions; (iv) This Agreement has been duly authorized, executed and delivered by each of the Guarantor and the Company; (v) The Indenture has been duly authorized, executed and delivered by the Company and the Guarantor and, assuming due authorization, execution, and delivery by the Trustee, is a valid and binding obligation of the Company and the Guarantor, enforceable in accordance with its terms, except to the extent limited by the Bankruptcy Exceptions; and the Indenture has been duly qualified under the 1939 Act; -23- (vi) The Registration Statement has become effective under the 1933 Act and any required filing of the Prospectus pursuant to Rule 424(b) has been made in the manner and within the time period required, and, to the best of the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement or any part thereof has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the 1933 Act, and the Registration Statement, as of its effective date, and any amendment thereto, as of its date, and the Prospectus, as of its date, and each amendment or supplement thereto, as of its date, complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations, and nothing has come to the attention of such counsel which would lead such counsel to believe either that the Registration Statement or any amendment thereto, as of such dates, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus or any amendment or supplement thereto, as of the date issued or the date of such opinion, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; it being understood that such counsel need express no opinion as to the financial statements and other financial or statistical data contained or incorporated by reference in the Registration Statement or the Prospectus; (vii) The statements in the Prospectus under the captions "Description of the Debt Securities" and "Description of the Notes", insofar as they purport to constitute summaries of certain terms of the Indenture, the Notes and the Guarantees, in each case constitute accurate summaries of such terms of such documents and securities, in all material respects; -24- (viii) The Company is a "finance subsidiary" within the meaning of Rule 3a-5 of the 1940 Act, and the Guarantees satisfy the conditions of clauses (a)(1) and (3) of Rule 3a-5. Assuming that the Company continues to qualify as a "finance subsidiary" within the meaning of Rule 3a-5, satisfies the conditions of clauses (a)(5) and (6) of Rule 3a-5 and satisfies the conditions of Rule 3a-5 in respect of any securities other than the Notes issued by the Company, upon giving effect to the transactions contemplated by this Agreement, the Prospectus and the application of the proceeds from the sale of the Notes contemplated in the Prospectus, the Company will not be an "investment company" within the meaning of the 1940 Act. The Guarantor is not an "investment company" within the meaning of the 1940 Act; (ix) No approval, authorization, consent or other order of any public board or body is legally required under federal or New York law for the authorization of the offering, issuance and sale of the Notes, except (a) such as may be required under the 1933 Act or the 1933 Act Regulations or the securities or "blue sky" laws of any jurisdiction and (b) the qualification of the Indenture under the 1939 Act and 1939 Act Regulations; and (x) The statements in the Prospectus, under the caption "Certain United States Federal Income Tax Considerations" constitute an accurate description, in general terms, of certain tax considerations that may be relevant to a holder of a Note. In rendering their opinion, Thelen Reid & Priest LLP may rely as to matters governed by Pennsylvania law upon the opinion of Michael A. McGrail, Esq., or such other counsel referred to in Section 7(c) of this Agreement. (e) On the date hereof, the Agents shall have received from Sullivan & Cromwell, counsel for the Agents, such opinion or opinions, dated as of the date hereof, with respect to the validity of the Notes and the Guarantees, this -25- Agreement, the Registration Statement, the Prospectus and other related matters as the Agents may require, and the Company and the Guarantor shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. In rendering such opinion or opinions, Sullivan & Cromwell may assume the due incorporation and valid existence of the Company and the Guarantor and may rely as to matters governed by Pennsylvania law upon the opinion of Michael A. McGrail, Esq. or such other counsel for the Company and the Guarantor referred to in Section 7(c) of this Agreement. (f) On the date hereof, the Agents shall have received certificates, dated the date hereof, of the President, the Senior Vice President and Chief Financial Officer, the Vice President-Finance, or the Vice President and Controller, or any other Vice President who is also a financial or accounting officer of the Guarantor, and of the President, and Vice President or the Treasurer of the Company in which such officers, to the best of their knowledge after reasonable investigation, shall state that (i) the representations and warranties of the Company or the Guarantor, as the case may be, in this Agreement are true and correct (except for immaterial details) as of the date of such certificate, (ii) the Company or Guarantor, as the case may be, has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the date of such certificate, (iii) no stop order suspending the effectiveness of the Registration Statement has been issued, and no proceedings for that purpose have been instituted or are pending by the Commission, and (iv) subsequent to the date of the latest financial statements in the Prospectus, there has been no Material Adverse Effect, whether or not arising in the ordinary course of business, except as set forth or contemplated in the Prospectus or as described in such certificate. In case any such condition shall not have been satisfied, this Agreement may be terminated by the applicable Agent or Agents upon notice in writing or by telegram to the Company and the Guarantor without liability or -26- obligation of any party, except as provided in Sections 5(c), 6, 9, 11, 12 and 14 hereof. 8 Additional Covenants of the Company and the Guarantor. ----------------------------------------------------- The Company and the Guarantor further covenant and agree with each Agent as follows: (a) Reaffirmation of Representations and Warranties. Each acceptance ----------------------------------------------- by the Company of an offer for the purchase of Notes (whether to one or more Agents as principal or through an Agent as agent), and each delivery of Notes (whether to one or more Agents as principal or through an Agent as Agent), shall be deemed to be an affirmation that the representations and warranties of the Company and the Guarantor herein contained and contained in any certificate delivered therewith to the Agents pursuant to this Agreement are true and correct at the time of such acceptance or sale, as the case may be (it being understood that such representations and warranties shall relate to the Registration Statement and Prospectus as amended and supplemented to each such time). (b) Subsequent Delivery of Certificates. Each time that (i) the ----------------------------------- Registration Statement or the Prospectus shall be amended or supplemented (other than by an amendment or supplement providing solely for the determination of the variable terms of the Notes or relating solely to the offering of securities other than the Notes) or (ii) (if required by the Terms Agreement relating to such Notes) the Company sells Notes to one or more Agents as principal, each of the Company and the Guarantor shall furnish or cause to be furnished to the Agent(s), forthwith a certificate dated the date of filing with the Commission or the date of effectiveness of such amendment or supplement, as applicable, or the date of such sale, as the case may be, in form satisfactory to the Agent(s) to the effect that the statements contained in the certificate referred to in Section 7(f) hereof which were last furnished to the Agents are true and correct at the time of the filing or effectiveness of such amendment or supplement, as -27- applicable, or the time of such sale, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such time) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in Section 7(f) hereof, modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such certificate (it being understood that, in the case of clause (ii) above, any such certificates shall also include a certification that there has been no Material Adverse Effect since the date of the agreement by such Agent(s) to purchase Notes from the Company as principal). (c) Subsequent Delivery of Legal Opinions. Each time that (i) the ------------------------------------- Registration Statement or the Prospectus shall be amended or supplemented (other than (A) by an amendment or supplement providing solely for the determination of the variable terms of the Notes or relating solely to the offering of securities other than the Notes or (B) unless an Agent shall otherwise reasonably request, by filing of any Current Report on Form 8-K) or (ii) (if required by the Terms Agreement relating to such Notes) the Company sells Notes to one or more Agents as principal, the Company shall furnish or cause to be furnished forthwith to the Agent(s) and to counsel to the Agents the written opinions of Michael A. McGrail, Esq., Senior Counsel to the Guarantor (or such other counsel as may be acceptable to the Agent(s)) and Thelen Reid & Priest LLP, special counsel to the Company and the Guarantor, each dated the date of filing with the Commission or the date of effectiveness of such amendment or supplement, as applicable, or the date of such sale, as the case may be, in form and substance satisfactory to the Agent(s), of the same tenor as the opinions referred to in Sections 7(c) and (d) hereof, but modified, as necessary, to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such opinions; or, in lieu of such opinions, counsel last furnishing such opinions to the Agents shall furnish the Agent(s) with a letter substantially to the effect that the Agent(s) may rely on such last opinion to the same extent as though it -28- was dated the date of such letter authorizing reliance (except that statements in such last opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such letter authorizing reliance). (d) Subsequent Delivery of Comfort Letters. Each time that (i) the -------------------------------------- Registration Statement or the Prospectus shall be amended or supplemented to include additional financial information (other than by an amendment or supplement relating solely to the issuance and/or offering of securities other than the Notes) or (ii) (if required by the Terms Agreement relating to such Notes) the Company sells Notes to one or more Agents as principal, the Company shall cause PricewaterhouseCoopers LLP forthwith to furnish to the Agent(s) a letter, dated the date of filing with the Commission or the date of effectiveness of such amendment or supplement, as applicable, or the date of such sale, as the case may be, in form satisfactory to the Agent(s), of the same tenor as the letter referred to in Section 7(a) hereof but modified to relate to the Registration Statement and Prospectus as amended and supplemented to the date of such letter; provided, however, that if the Registration Statement or the Prospectus is amended or supplemented solely to include financial information as of and for a fiscal quarter, PricewaterhouseCoopers LLP may limit the scope of such letter to the unaudited financial statements included in such amendment or supplement unless any other information included therein of an accounting, financial or statistical nature is of such a nature that, in the reasonable judgment of the Agents, such letter should cover such other information. (e) The Company shall not sell Notes which are not substantially in a form previously certified without prior notification to each Agent or Sullivan & Cromwell as counsel to the Agents. 9 Indemnification and Contribution. -------------------------------- (a) The Company and the Guarantor agree that they will jointly and severally indemnify and hold harmless each Agent and each person, if any, who controls any Agent within the meaning of Section 15 of the 1933 Act, against any and all loss, expense, claim, damage or liability to which, jointly or severally, such Agent or such controlling person may become subject, under the -29- 1933 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, 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, the Company and the Guarantor agree to reimburse each Agent and each person who controls any Agent as aforesaid for any reasonable legal or other expenses as incurred by such Agent or such controlling person in connection with investigating or defending any such loss, expense, claim, damage or liability; provided, however, that the Company and the Guarantor 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 Guarantor or the Company by or through any such Agent 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; and provided further, that with respect to any untrue statement or alleged untrue statement or omission or alleged omission made in any prospectus or supplement, the indemnity agreement contained in this subsection (a) shall not inure to the benefit of any Agent from whom the person asserting any such loss, expense, claim, damage or liability purchased the Notes concerned (or to the benefit of any person controlling such Agent), if a copy of the Prospectus (not including documents incorporated by reference therein) or of the Prospectus as then amended or supplemented (not including documents incorporated by reference therein) was not -30- sent or given to such person at or prior to the written confirmation of the sale of such Notes to such person. (b) Each Agent severally agrees that it will indemnify and hold harmless the Company and the Guarantor, their officers and directors, and each of them, and each person, if any, who controls the Company and the Guarantor within the meaning of Section 15 of the 1933 Act, against any loss, expense, claim, damage or liability to which it or they may become subject, under the 1933 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, 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 Guarantor or the Company by or through any Agent expressly for use in any such document; and, except as hereinafter in this Section provided, each Agent agrees to reimburse the Company and the Guarantor, their officers and directors, and each of them, and each person, if any, who controls the Company and the Guarantor within the meaning of Section 15 of the 1933 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 9, 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 -31- Section 9. 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. In the event that any indemnifying party elects to assume the defense of any such action and retain such counsel, the indemnified party shall bear the fees and expenses of any additional counsel retained by it. 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 9(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 Notes. (d) If any Agent or person entitled to indemnification by the terms of subsection (a) of this Section 9 shall have given notice to the Company and the Guarantor of a claim in respect thereof pursuant to Section 9(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 9 or if such claim is unavailable under controlling precedent, such Agent or person shall be entitled to contribution from the Company and the Guarantor to liabilities and expenses, except to the extent that contribution is not permitted under Section 11(f) of the 1933 Act. In determining the amount of contribution to which such Agent or person is entitled, there shall be considered the relative benefits received by such Agent or person and the Company and the Guarantor from the offering of the Notes that were the subject of the claim for indemnification (taking into account the portion of the proceeds of the offering realized by each), the Agent or person's relative 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 Company and the Guarantor and the Agents agree that it would -32- not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Agents were treated as one entity for such purpose). (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 9 (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 9 and the representations and warranties of the Company, the Guarantor and the several Agents 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 any Agent or any person controlling any Agent, the Company, its directors or officers, the Guarantor or any person controlling the Guarantor, (ii) acceptance of any Notes and payment therefor under this Agreement, and (iii) any termination of this Agreement. 10 Default of Agents. ----------------- If the Company and two or more Agents enter into an agreement pursuant to which such Agents agree to purchase Notes from the Company as principal and one or more of such Agents shall fail at the Settlement Date to purchase the Notes which it or they are obligated to purchase (the "Defaulted Notes"), then the non-defaulting Agents may make arrangements satisfactory to the Company for one of them or one or more other Agents or any other agents to purchase all, but not less than all, of the Defaulted Notes in such amounts as may be agreed upon -33- and upon the terms herein set forth in this Agreement. If, however, no such arrangements shall have been made within 24 hours thereafter, then the non-defaulting Agents shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions which their respective initial underwriting obligations bear to the underwriting obligations of all non-defaulting Agents. In the event of any such default, either the non-defaulting Agents or the Company may by prompt written notice to such other parties postpone the Settlement Date for a period of not more than seven full business days in order to effect whatever changes may thereby be made necessary in the Registration Statement or Prospectus or in any other documents or arrangements, and the Company will promptly file any amendments to the Registration Statement or Supplements to the Prospectus which may thereby be made necessary. As used in this Agreement, the term "Agent" includes any person substituted for an Agent under this Section 10. Nothing in this Section 10 shall relieve an Agent from liability for its default. 11 Survival of Certain Representations and Obligations. --------------------------------------------------- The respective indemnities, agreements, representations and warranties of the Company and the Guarantor and of or on behalf of the Agents set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Agent or the Company and the Guarantor or any of their respective officers, directors, or any controlling person, and will survive delivery of and payment for the Notes. If for any reason the purchase of the Notes by the Agents is not consummated, the Company shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Sections 5(c) and 6, and the respective obligations of the Company, the Guarantor and the Agents pursuant to Sections 9, 11, 12 and 14 hereof shall remain in effect. 12 Termination. ----------- -34- (a) This Agreement (excluding any agreement by one or more Agents to purchase Notes as principal) may be terminated, for any reason at any time, by either the Company or an Agent, as to itself, upon the giving of 30 days' prior written notice of such termination to the other party hereto. (b) The applicable Agent(s) may terminate any agreement by such Agent(s) to purchase Notes as principal, immediately upon notice to the Company and the Guarantor, at any time prior to the Settlement Date relating thereto, if (i) there has been, since the date of such Terms Agreement or since the respective dates as of which information is given in the Prospectus, as amended or supplemented to such date, any change or any development involving a prospective change in or affecting particularly the business or properties of the Guarantor, which, in the judgment of any such Agent, materially impairs the investment quality of such Notes; (ii) there has been any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum or maximum prices for trading on such exchange, or any suspension or limitation of trading of any securities of the Company or the Guarantor on any exchange or in the over-the-counter market; (iii) a general banking moratorium has been declared by Federal or New York authorities; (iv) there shall have occurred any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by Congress or any other substantial national or international calamity or emergency if, in the reasonable judgment of such Agent, in each case the effect of which makes it impractical and inadvisable to proceed with completion of the sale of and payment for the Notes and such Agent makes a similar determination with respect to all other underwritings of medium-term notes of utilities or utility holding companies in which it is participating and has the contractual right to make such a determination; or (v) there has been any decrease in the ratings of the Program or any debt securities of the Company or the Guarantor (including the Notes) that existed as of the date of such agreement by any "nationally recognized statistical rating organization" (as defined for purposes of Rule -35- 436(g) under the 1933 Act) or if such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of the Program or any such debt securities. (c) In the event of any such termination, no party will have any liability to the other parties hereto, except that (i) the Agents shall be entitled to any commissions earned in accordance with the third paragraph of Section 3(b) hereof, (ii) if at the time of termination (a) any Agent shall own any Notes purchased by it as principal pursuant to a Terms Agreement or (b) an offer to purchase any of the Notes has been accepted by the Company but the time of delivery to the purchaser or his agent of such Notes relating thereto has not occurred, the covenants set forth in Sections 5 and 8 hereof shall remain in effect until such Notes are so resold or delivered, as the case may be, and (iii) the covenant set forth in Section 5(h) hereof, the provisions of Section 6 hereof, the indemnity and contribution agreements set forth in Section 9 hereof, and the provisions of Sections 11, 14 and 15 hereof shall remain in effect. 13 Notices. ------- The Company and the Guarantor shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of each of the Agents if the same shall have been made or given by the Agents. All statements, requests, notices, consents and agreements hereunder shall be in writing, or by telegraph subsequently confirmed in writing, to the following addresses: If to the Company or the Guarantor: PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18101 Attention: Treasurer Facsimile: (610) 774-5106 -36- If to [name]: [address] Attention: Facsimile: If to [name]: [address] Attention: Facsimile: If to [name]: [address] Attention: Facsimile: If to [name]: [address] Attention: Facsimile: 14 Parties in Interest. ------------------- This Agreement shall each inure solely to the benefit of the Company, the Guarantor and the Agents and, to the extent provided in Section 9 hereof, to any person who controls any Agent, to the officers and directors of the Company and the Guarantor, and to any person who controls the Company or the Guarantor, and their respective successors. No other person, partnership, association or corporation shall acquire or have any right under or by virtue of this Agreement. The term "successor" shall not include any assignee of an Agent (other than a person substituted for an Agent under Section 10 hereof or one who shall acquire all or substantially all of an Agent's business and properties), nor shall it include any purchaser of Notes from any Agent merely because of such purchase. 15 Applicable Law. -------------- THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. -37- 16 Counterparts. ------------ This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. Please confirm that the foregoing correctly sets forth the agreement between us by signing in the space provided below for that purpose, whereupon this Distribution Agreement shall constitute a binding agreement between the Company and the Guarantor and the several Agents in accordance with its terms. Yours very truly, PPL CORPORATION By: ------------------------------------ Name: Title: PPL CAPITAL FUNDING, INC. By: ------------------------------------ Name: Title: -38- The foregoing Distribution Agreement is hereby confirmed and accepted as of the date first above written. [NAME] By: ------------------------------------ Name: Title: [NAME] By: ------------------------------------ Name: Title: [NAME] By: ------------------------------------ Name: Title: [NAME] By: ------------------------------------ Name: Title: -39- SCHEDULE A ---------- PRICING TERMS Principal Amount: $ -------------- Interest Rate or Formula: If Fixed Rate Note, Interest Rate: Interest Payment Dates: If Floating Rate Note, Interest Rate Basis(es): If LIBOR, [ ] LIBOR Reuters Page: [ ] LIBOR Telerate Page: Designated LIBOR Currency: If CMT Rate, Designated CMT Telerate Page: If Telerate Page 7052: [ ] Weekly Average [ ] Monthly Average Designated CMT Maturity Index: Index Maturity: Spread and/or Spread Multiplier, if any: Initial Interest Rate, if any: Initial Interest Reset Date: Interest Reset Dates: Interest Payment Dates: Maximum Interest Rate, if any: Minimum Interest Rate, if any: Fixed Rate Commencement Date, if any: Fixed Interest Rate, if any: Day Count Convention: Calculation Agent: Redemption Provisions: Initial Redemption Date: Initial Redemption Percentage: Annual Redemption Percentage Reduction, if any: -40- Repayment Provisions: Optional Repayment Date(s): Original Issue Date: Stated Maturity Date: Exchange Rate Agent: Authorized Denomination: Purchase Price: %, plus accrued interest, if any, from --- --------- Price to Public: %, plus accrued interest, if any, from --- --------- Issue Price: Settlement Date and Time: Additional/Other Terms: Also, in connection with the purchase of Notes from the Company by one or more Agents as principal, agreement as to whether the following will be required: Officers' Certificate pursuant to Section 7(f) of the Distribution Agreement Legal Opinions pursuant to Sections 7(c) and (d) of the Distribution Agreement Comfort Letter pursuant to Section 7(a) of the Distribution Agreement -41- SCHEDULE B ---------- As compensation for the services of the Agents hereunder, the Company shall pay the applicable Agent, on a discount basis, a commission for the sale of each Note equal to the principal amount of such Notes multiplied by the appropriate percentage set forth below: PERCENT OF MATURITY RANGES PRINCIPAL AMOUNT - --------------- --------------- From 9 months to less than 1 year......................... .125% From 1 year to less than 18 months........................ .150 From 18 months to less than 2 years....................... .200 From 2 years to less than 3 years......................... .250 From 3 years to less than 4 years......................... .350 From 4 years to less than 5 years......................... .450 From 5 years to less than 6 years......................... .500 From 6 years to less than 7 years......................... .550 From 7 years to less than 10 years........................ .600 From 10 years to less than 15 years....................... .625 From 15 years to less than 20 years....................... .700 From 20 years to 30 years................................. .750% From 30 years to 40 Years................................. * -42- - --------------------- * As agreed to by the Company and the applicable Agent at the time of sale. -43- SCHEDULE C ---------- PPL CAPITAL FUNDING, INC. ADMINISTRATIVE PROCEDURES FOR FIXED RATE AND FLOATING RATE MEDIUM-TERM NOTES, SERIES [ ] - (Dated as of 6, 2000) ------ -- Medium-Term Notes, Series [ ] (the "Notes") in an aggregate principal - amount of up to $ are to be offered on a continuous basis by PPL ---------- Capital Funding, Inc., a Delaware corporation (the "Company"), to or through [insert name of Agents] (each, an "Agent" and, collectively, the "Agents") pursuant to a Distribution Agreement, dated , 2000 (the "Distribution ------ -- Agreement"), by and among the Company, PPL Corporation (the "Guarantor") and the Agents. Each of the Notes is to be unconditionally guaranteed as to payment of principal and any premium, and interest by the Guarantor pursuant to guarantees of the Guarantor (the "Guarantees"). The Distribution Agreement provides both for the sale of Notes by the Company to one or more of the Agents as principal for resale to investors and other purchasers and for the sale of Notes by the Company directly to investors through one or more Agents (as may from time to time be agreed to by the Company and the related Agent or Agents), in which case each such Agent will act as an agent of the Company in soliciting purchases of Notes. Unless otherwise agreed by the related Agent or Agents and the Company, Notes will be purchased by the related Agent or Agents as principal. Such purchases will be made in accordance with the applicable Terms Agreement as provided in the Distribution Agreement. If agreed upon by any Agent or Agents and the Company, the Agent or Agents, acting solely as agent or agents for the Company and not as principal, will use reasonable efforts to solicit offers to purchase the Notes. Only those provisions in these Administrative Procedures -44- that are applicable to the particular role to be performed by the related Agent or Agents shall apply to the offer and sale of the relevant Notes. The Notes will be issued under an Indenture, dated as of November 1, 1997, as amended, supplemented or modified from time to time (the "Indenture"), between the Company, the Guarantor and The Chase Manhattan Bank ("Chase"), as trustee (together with any successor in such capacity, the "Trustee"). The Company and the Guarantor have filed a joint Registration Statement with the Securities and Exchange Commission (the "Commission") registering debt securities, including the Notes and the Guarantees (the "Registration Statement", which term shall include any additional registration statements filed in connection with the Notes and the Guarantees). The most recent base prospectus deemed part of the Registration Statement, as supplemented by a Prospectus supplement relating to the Notes, is herein referred to as "Prospectus". The most recent supplement to the Prospectus setting forth the purchase price, interest rate or formula, maturity date and other terms of the Notes (as applicable) is herein referred to as the "Pricing Supplement". The Notes will either be issued (a) in book-entry form and represented by one or more fully registered Notes without coupons (each, a "Global Note") delivered to Chase, as agent for The Depository Company ("DTC"), and recorded in the book-entry system maintained by DTC, or (b) in certificated form (each, a "Certificated Note") delivered to the investor or other purchaser thereof or a person designated by such investor or other purchaser. General procedures relating to the issuance of all Notes are set forth in Part I hereof. Additionally, Notes issued in book-entry form will be issued in accordance with the procedures set forth in Part II hereof, as adjusted from time to time in accordance with changes in DTC's operating requirements, and Certificated Notes will be issued in accordance with the procedures set forth in Part III hereof. To the extent any procedure set forth below conflicts with the provisions of the Notes, the Indenture or the Distribution Agreement, the relevant provisions of the Notes, the Indenture and the Distribution Agreement, -45- respectively, shall control. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Notes, the Indenture or the Distribution Agreement as the case may be. -46- PART I: PROCEDURES OF GENERAL APPLICABILITY Date of Issuance/ Authentication: Each Note will be dated as of the date of its authentication by the Trustee. Each Note shall also bear an original issue date (each, an "Original Issue Date"). The Original Issue Date shall remain the same for all Notes subsequently issued upon transfer, exchange or substitution of an original Note regardless of their dates of authentication. Price to Public: Unless otherwise agreed to by the Company and the Agents and specified in a Pricing Supplement, each Note will be issued at 100% of the principal amount thereof. Maturities: Each Note will mature on a date from nine months to 40 years from its Original Issue Date (the "Stated Maturity Date") selected by the investor or other purchaser and agreed to by the Company. Guarantees: Each of the Notes is to be unconditionally guaranteed as to payment of principal, premium, if any, and interest pursuant to the Guarantees of the Guarantor as set forth in the Indenture. Registration: Unless otherwise provided in the applicable Pricing Supplement, Notes will be issued only in fully registered form. -47- Denominations: Unless otherwise provided in the applicable Pricing Supplement, the Notes will be issued in denominations of $1,000 and integral multiples thereof. Interest Rate Bases applicable to Floating Rate Notes: Unless otherwise provided in the applicable Pricing Supplement, Floating Rate Notes will bear interest at a rate or rates determined by reference to the CMT Rate, the Commercial Paper Rate, the Federal Funds Rate, LIBOR, the Prime Rate, the Treasury Rate, or such other interest rate basis or formula as may be set forth in applicable Pricing Supplement, or by reference to two or more such rates, as adjusted by the Spread and/or Spread Multiplier, if any, applicable to such Floating Rate Notes. Redemption/ Repayment: The Notes will be subject to redemption by the Company in accordance with the terms of the Notes, which will be fixed at the time of sale and set forth in the applicable Pricing Supplement. If no Initial Redemption Date is indicated with respect to a Note, such Note will not be redeemable prior to its Stated Maturity Date (unless alternative redemption provisions are expressly provided for a particular Note). The Notes will be subject to repayment at the option of the Holders thereof in accordance with the terms of the Notes, which will be fixed at the time of sale and set forth in the applicable Pricing Supplement. If no Optional Repayment Date is indicated with respect to a Note, such Note will -48- not be repayable at the option of the Holder prior to its Stated Maturity Date. Calculation of Interest: In case of Fixed Rate Notes, interest (including payments for partial periods) will be calculated and paid on the basis of a 360-day year of twelve 30-day months. The interest rate on each Floating Rate Note will be calculated by reference to the specified Interest Rate Basis or Bases plus or minus the applicable Spread, if any, and/or multiplied by the applicable Spread Multiplier, if any. Unless otherwise provided in the applicable Pricing Supplement, interest on each Floating Rate Note will be calculated by multiplying its principal amount by an accrued interest factor. Such accrued interest factor is computed by adding the interest factor calculated for each day in the period for which accrued interest is being calculated. Unless otherwise provided in the applicable Pricing Supplement, the interest factor for each such day is computed by dividing the interest rate applicable to such day by 360 if the Commercial Paper Rate, Federal Funds Rate, LIBOR or Prime Rate is an applicable Interest Rate Basis, or by the actual number of days in the year if the CMT Rate or Treasury Rate is an applicable Interest Rate Basis. The interest factor for Notes for which the interest rate is calculated with reference to two or more Interest Rate Bases will be calculated as provided in the applicable Pricing Supplement. -49- Interest: General. Each Note will bear interest in ------- accordance with its terms. Unless otherwise provided in the applicable Pricing Supplement, interest on each Note will accrue from and including the Original Issue Date of such Note for the first interest period or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for all subsequent interest periods to but excluding the next applicable Interest Payment Date or the Stated Maturity Date or date of earlier redemption or repayment, as the case may be (the Stated Maturity Date or date of earlier redemption or repayment is referred to herein as the "Maturity Date" with respect to the principal repayable on such date). If an Interest Payment Date or the Maturity Date with respect to any Fixed Rate Note falls on a day that is not a Business Day (as defined below), the required payment to be made on such day need not be made on such day, but may be made on the next succeeding Business Day with the same force and effect as if made on such day, and no interest shall accrue on such payment for the period from and after such day to the next succeeding Business Day. If an Interest Payment Date other than the Maturity Date with respect to any Floating Rate Note would otherwise fall on a day that is not a Business Day, such Interest Payment Date will be postponed to the next succeeding Business Day, except that in the case of a Note for which LIBOR is an applicable Interest Rate Basis, if such Business Day falls in the next succeeding calendar -50- month, such Interest Payment Date will be the immediately preceding Business Day. If the Maturity Date with respect to any Floating Rate Note falls on a day that is not a Business Day, the required payment to be made on such day need not be made on such day, but may be made on the next succeeding Business Day with the same force and effect as if made on such day, and no interest shall accrue on such payment for the period from and after the Maturity Date to the next succeeding Business Day. Unless otherwise provided in the applicable Pricing Supplement, "Business Day" means any day, other than a Saturday or Sunday, that is not a day on which banking institutions or trust companies are generally authorized or required by law, regulation or executive order to close in The City of New York; provided that, with respect to Notes for which LIBOR is an applicable Interest Rate Basis, such day is also a London Business Day (as defined below). "London Business Day" means any day on which dealings in deposits in United States Dollars are transacted in the London interbank market. Regular Record Dates. Unless otherwise provided in -------------------- the applicable Pricing Supplement, the "Regular Record Date" for a Fixed Rate Note shall be the January 31 or July 31 immediately preceding the applicable Interest Payment Date and the "Regular Record Date" for a Floating Rate Note shall be the date 15 calendar days (whether or not a Business Day) preceding the applicable Interest Payment Date. -51- Interest Payment Dates. Interest payments will be ---------------------- made on each Interest Payment Date commencing with the first Interest Payment Date following the Original Issue Date; provided, however, the first payment of interest on any Note originally issued between a Regular Record Date and an Interest Payment Date will occur on the Interest Payment Date following the next succeeding Regular Record Date. Unless otherwise provided in the applicable Pricing Supplement, interest payments on Fixed Rate Notes will be made semiannually in arrears on February 15 and August 15 of each year and on the Maturity Date, while interest payments on Floating Rate Notes will be made as specified in the Prospectus and the applicable Pricing Supplement. Acceptance and Rejection of Offers from Solicitation as Agents: If agreed upon by any Agent and the Company, then such Agent acting solely as agent for the Company and not as principal will solicit purchases of the Notes. Each Agent will communicate to the Company, orally or in writing, each reasonable offer to purchase Notes solicited by such Agent on an agency basis, other than those offers rejected by such Agent. Each Agent has the right, in its discretion reasonably exercised, to reject any proposed purchase of Notes, as a whole or in part, and any such rejection shall not be a breach of such Agent's agreement contained in the -52- Distribution Agreement. The Company has the sole right to accept or reject any proposed purchase of Notes, in whole or in part, and any such rejection shall not be a breach of the Company's agreement contained in the Distribution Agreement. Each Agent has agreed to make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Notes has been solicited by such Agent and accepted by the Company. Preparation of Pricing Supplement: If any offer to purchase a Note is accepted by the Company, the Company and the Guarantor will promptly prepare a Pricing Supplement reflecting the terms of such Note. Information to be included in the Pricing Supplement shall include: 1 the name of the Company and the name of the Guarantor; 2 the title of the Notes; 3 the date of the Pricing Supplement and the date of the Prospectus to which the Pricing Supplement relates; 4 the name of the Offering Agent (as defined below); 5 whether such Notes are being sold to the Offering Agent as principal or to an investor or other purchaser through the Offering Agent acting as agent for the Company; -53- 6 with respect to Notes sold to the Offering Agent as principal, whether such Notes will be resold by the Offering Agent to investors and other purchasers at (i) a fixed public offering price of 100% of their principal amount or at (ii) varying prices related to prevailing market prices at the time of resale to be determined by the Offering Agent; 7 the Offering Agent's discount or commission; 8 Net proceeds to the Company; 9 the Principal Amount, Original Issue Date, Stated Maturity Date, Interest Payment Date(s), Initial Redemption Date, if any, Initial Redemption Percentage, if any, Annual Redemption Percentage Reduction, if any, Optional Repayment Date(s), if any, and, in the case of Fixed Rate Notes, the Interest Rate, and, in the case of Floating Rate Notes, the Interest Rate Basis or Bases, the Day Count Convention, Index Maturity (if applicable), Initial Interest Rate, if any, Maximum Interest Rate, if any, Minimum Interest Rate, if any, Initial Interest Reset Date, Interest Reset Dates, Spread and/or Spread Multiplier, if any, and Calculation Agent; and 10 any other additional provisions of the Notes material to investors or other purchasers of the Notes not otherwise specified in the Prospectus. -54- The Company shall endeavor to send such Pricing Supplement by telecopy or overnight express (for delivery by the close of business on the applicable trade date, but in no event later than 11:00 A.M. New York City time, on the Business Day following the applicable trade date) to the Agent which made or presented the offer to purchase the applicable Note (in such capacity, the "Offering Agent") and the Trustee at the following applicable address: if to [name], to: [name/address], Attention: [name], telecopier [fax]; if to [name], to: [name/address], Attention: [name], telecopier [fax]; if to [name], to: [name/address], Attention: [name], telecopier [fax]; if to [name], to: [name/address], Attention: [name], telecopier [fax]; and if to the Trustee (or Chase), to: 450 W. 33rd Street, New York, New York 10001, Attention: Capital Markets Fiduciary Services (212) 946-3487, telecopier: (212) 946-8159. For record keeping purposes, one copy of such Pricing Supplement shall also be mailed or telecopied to each of Thelen Reid & Priest, LLP, 40 West 57th Street, New York, New York 10019-4097, Attention: Catherine C. Hood, Esq. and Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, Attention: Robert W. Downes, Esq. In each instance that a Pricing Supplement is prepared, the Offering Agent will provide a copy of such Pricing Supplement to each investor or purchaser of the relevant Notes or its agent. -55- Pursuant to Rule 434 of the Securities Act of 1933, as amended ("Rule 434"), the Pricing Supplement may be delivered separately from the Prospectus. Outdated Pricing Supplements (other than those retained for files) will be destroyed. Settlement: The receipt of immediately available funds by the Company in payment for a Note and the authentication and delivery of such Note shall, with respect to such Note, constitute "settlement". Offers accepted by the Company will be settled in three Business Days, or at such time as the purchaser, the applicable Agent and the Company shall agree, pursuant to the timetable for settlement set forth in Parts II and III hereof under "Settlement Procedure Timetable" with respect to Global Notes and Certificated Notes, respectively (each such date fixed for settlement is hereinafter referred to as a "Settlement Date"). If procedures A and B of the applicable Settlement Procedures with respect to a particular offer are not completed on or before the time set forth under the applicable "Settlement Procedures Timetable", such offer shall not be settled until the Business Day following the completion of settlement procedures A and B or such later date as the purchaser and the Company shall agree. The foregoing settlement procedures may be modified with respect to any purchase of Notes by an Agent as principal if so agreed by the Company and such Agent. -56- Procedure for Changing Rates or Other Variable Terms: When a decision has been reached to change the interest rate or any other variable term on any Notes being sold by the Company, the Company will promptly advise the Agents and the Trustee by facsimile transmission and the Agents will forthwith suspend solicitation of offers to purchase such Notes. The Agents will telephone the Company with recommendations as to the changed interest rates or other variable terms. At such time as the Company notifies the Agents and the Trustee of the new interest rates or other variable terms, the Agents may resume solicitation of offers to purchase such Notes. Until such time, only "indications of interest" may be recorded. Immediately after acceptance by the Company of an offer to purchase Notes at a new interest rate or new variable term, the Company, the Offering Agent and the Trustee shall follow the procedures set forth under the applicable "Settlement Procedures". Suspension of Solicitation; Amendment or Supplement: The Company may instruct the Agents to suspend solicitation of offers to purchase Notes at any time. Upon receipt of such instructions, the Agents will forthwith suspend solicitation of offers to purchase from the Company until such time as the Company has advised the Agents that solicitation of offers to purchase may be resumed. If the Company or the Guarantor decides to amend or supplement the Registration Statement or the Prospectus (other than to establish or change -57- interest rates or formulas, maturities, prices or other similar variable terms with respect to the Notes), it will promptly advise the Agents and will furnish the Agents and their counsel with copies of the proposed amendment or supplement. Copies of such amendment or supplement will be delivered or mailed to the Agents, their counsel and the Trustee in quantities which such parties may reasonably request at the following respective addresses: [name/address], Attention: [name/phone], telecopier [fax]; [name/address], Attention: [name/phone], telecopier [fax]; [name/address], [name/address], Attention: [name], telecopier [fax]; [name/address], Attention: [name/phone], telecopier [fax]; [name/address], [name/address], Attention: [name], telecopier [fax]; and [name/address], Attention: [name/phone], telecopier [fax]; [name/address], [name/address], Attention: [name], telecopier [fax]; and if to the Trustee (or Chase), to: 450 W. 33rd Street, New York, New York 10001, Attention: Capital Markets Fiduciary Services, (212) 946-3487, telecopier: (212) 946-8159. For record keeping purposes, one copy of each such amendment or supplement shall also be mailed or telecopied to each of Thelen Reid & Priest LLP, 40 West 57th Street, New York, New York 10019-4097, Attention: Catherine C. Hood, Esq., (212) 603-2000, telecopier: (212) 603-2001 and Sullivan & Cromwell, 125 Broad Street, New York, New York 10004, Attention: Robert W. Downes, Esq., (212) 558-3812, telecopier: (212) 558-3588. -58- In the event that at the time the solicitation of offers to purchase from the Company is suspended (other than to establish or change interest rates or formulas, maturities, prices or other similar variable terms with respect to the Notes) there shall be any offers to purchase Notes that have been accepted by the Company which have not been settled, the Company will promptly advise the Offering Agent and the Trustee whether such offers may be settled and whether copies of the Prospectus as theretofore amended and/or supplemented as in effect at the time of the suspension may be delivered in connection with the settlement of such offers. The Company will have the sole responsibility for such decision and for any arrangements which may be made in the event that the Company determines that such offers may not be settled or that copies of such Prospectus may not be so delivered. Delivery of Prospectus and applicable Pricing Supplement: A copy of the most recent Prospectus and the applicable Pricing Supplement, which pursuant to Rule 434 may be delivered separately from the Prospectus, must accompany or precede the earlier of (a) the written confirmation of a sale sent to an investor or other purchaser or its agent and (b) the delivery of Notes to an investor or other purchaser or its agent. -59- Authenticity of Signatures: The Agents will have no obligation or liability to the Company, the Guarantor or the Trustee in respect of the authenticity of the signature of any officer, employee or agent of the Company, the Guarantor or the Trustee on any Note or Guarantee. Documents Incorporated by Reference: The Company shall supply the Agents with an adequate supply of all documents incorporated by reference in the Registration Statement and the Prospectus. PART II: PROCEDURES FOR NOTES ISSUED IN BOOK-ENTRY FORM In connection with the qualification of Notes issued in book-entry form for eligibility in the book-entry system maintained by DTC, Chase will perform the custodial, document control and administrative functions described below, in accordance with its respective obligations under a Bring-Down Letter of Representations from the Company, the Guarantor and the Trustee to DTC, dated , and a Certificate Agreement, dated December 2, 1988, between - ------ -- ---- Chase and DTC, as amended (the "Certificate Agreement"), and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS"). Issuance: All Fixed Rate Notes issued in book-entry form having the same Original Issue Date, Interest Rate, Interest Payment Dates, redemption and/or repayment terms, if any, and Stated Maturity Date (collectively, the "Fixed Rate Terms") will be represented initially by a single Global Note; and all Floating Rate Notes issued in book-entry form having the same Original Issue Date, formula for the calculation of interest (including the -60- Interest Rate Basis or Bases, which may be the CMT Rate, the Commercial Paper Rate, the Federal Funds Rate, LIBOR, the Prime Rate or the Treasury Rate or any other interest rate basis or formula, and Spread and/or Spread Multiplier, if any), Day Count Convention, Initial Interest Rate, Index Maturity (if applicable), Minimum Interest Rate, if any, Maximum Interest Rate, if any, redemption and/or repayment terms, if any, Interest Payment Dates, Initial Interest Reset Date, Interest Reset Dates and Stated Maturity Date(collectively, the "Floating Rate Terms") will be represented initially by a single Global Note. For other variable terms with respect to the Fixed Rate Notes and Floating Rate Notes, see the Prospectus and the applicable Pricing Supplement. Owners of beneficial interests in Global Notes will be entitled to physical delivery of Certificated Notes equal in principal amount to their respective beneficial interests only upon certain limited circumstances described in the Prospectus. Identification: The Company has arranged with the CUSIP Service Bureau of Standard & Poor's Corporation (the "CUSIP Service Bureau") for the reservation of one series of CUSIP numbers, which series consists of approximately 900 CUSIP numbers which have been reserved for and relating to Global Notes, and the Company has delivered to each of Chase and DTC such list of such CUSIP numbers. Chase will assign CUSIP numbers to Global Notes as described below -61- under Settlement Procedures B. DTC will notify the CUSIP Service Bureau periodically of the CUSIP numbers that Chase has assigned to Global Notes. Chase will notify the Company at any time when fewer than 100 of the reserved CUSIP numbers remain unassigned to Global Notes, and, if it deems necessary, the Company will reserve and obtain additional CUSIP numbers for assignment to Global Notes. Upon obtaining such additional CUSIP numbers, the Company will deliver a list of such additional numbers to Chase and DTC. Notes issued in book-entry form in excess of $400,000,000 aggregate principal amount and otherwise required to be represented by the same Global Note will instead be represented by two or more Global Notes which shall all be assigned the same CUSIP number. Registration: Unless otherwise specified by DTC, each Global Note will be registered in the name of Cede & Co., as nominee for DTC, on the register maintained by Chase under the Indenture. The beneficial owner of a Note issued in book-entry form (i.e., an owner - - of a beneficial interest in a Global Note) (or one or more indirect participants in DTC designated by such owner) will designate one or more participants in DTC (with respect to such Note issued in book-entry form, the "Participants") to act as agent for such beneficial owner in connection with the book-entry system maintained by DTC, and DTC will record in book-entry form, in accordance with instructions provided by such Participants, a credit balance with respect to such Note issued in book-entry form in the account of such Participants. The ownership interest of such beneficial owner in such Note issued in -62- book-entry form will be recorded through the records of such Participants or through the separate records of such Participants and one or more indirect participants in DTC. Transfers: Transfers of beneficial ownership interests in a Global Note will be accomplished by book entries made by DTC and, in turn, by Participants (and in certain cases, one or more indirect participants in DTC) acting on behalf of beneficial transferors and transferees of such Global Note. Exchanges: Chase may deliver to DTC and the CUSIP Service Bureau at any time a written notice specifying (a) the CUSIP numbers of two or more Global Notes outstanding on such date that represent Global Notes having the same Fixed Rate Terms or Floating Rate Terms, as the case may be (other than Original Issue Dates), and for which interest has been paid to the same date; (b) a date, occurring at least 30 days after such written notice is delivered and at least 30 days before the next Interest Payment Date for the related Notes issued in book-entry form, on which such Global Notes shall be exchanged for a single replacement Global Note; and (c) a new CUSIP number, obtained from the Company, to be assigned to such replacement Global Note. Upon receipt of such a notice, DTC will send to its Participants (including Chase) a written reorganization notice to the effect that such exchange will occur on such date. Prior to -63- the specified exchange date, Chase will deliver to the CUSIP Service Bureau written notice setting forth such exchange date and the new CUSIP number and stating that, as of such exchange date, the CUSIP numbers of the Global Notes to be exchanged will no longer be valid. On the specified exchange date, Chase will exchange such Global Notes for a single Global Note bearing the new CUSIP number and the CUSIP numbers of the exchanged Notes will, in accordance with CUSIP Service Bureau procedures, be canceled and not immediately reassigned. Notwithstanding the foregoing, if the Global Notes to be exchanged exceed $400,000,000 in aggregate principal amount, one replacement Note will be authenticated and issued to represent each $400,000,000 in aggregate principal amount of the exchanged Global Notes and an additional Global Note or Notes will be authenticated and issued to represent any remaining principal amount of such Global Notes (See "Denominations" below). Denominations: Unless otherwise provided in the applicable Pricing Supplement, Notes issued in book-entry form will be issued in denominations of $1,000 and integral multiples thereof. Global Notes will not be denominated in excess of $400,000,000 aggregate principal amount. If one or more Notes are issued in book-entry form in excess of $400,000,000 aggregate principal amount and would, but for the preceding sentence, be represented by a single Global Note, then one Global Note will be issued to represent each $400,000,000 in aggregate principal amount of such Notes issued in -64- book-entry form and an additional Global Note or Notes will be issued to represent any remaining aggregate principal amount of such Note or Notes issued in book-entry form. In such a case, each of the Global Notes representing Notes issued in book-entry form shall be assigned the same CUSIP number. Payments of Principal and Interest: Payments of Interest Only. Promptly after each ------------------------- Regular Record Date, Chase will deliver to the Company and DTC a written notice specifying by CUSIP number the amount of interest to be paid (to the extent known) on each Global Note on the following Interest Payment Date (other than an Interest Payment Date coinciding with the Maturity Date) and the total of such amounts. DTC will confirm the amount payable on each Global Note on such Interest Payment Date by reference to the appropriate (daily or weekly) bond reports published by Standard & Poor's Corporation. On such Interest Payment Date, the Company will pay to Chase in immediately available funds an amount sufficient to pay the interest then due and owing on the Global Notes, and upon receipt of such funds from the Company, Chase in turn will pay to DTC such total amount of interest due on such Global Notes (other than on the Maturity Date) at the times and in the manner set forth below under "Manner of Payment". Notice of Interest Rates. Promptly after each ------------------------ Interest Determination Date or Calculation Date, as the case may be, for Floating Rate Notes issued in -65- book-entry form, Chase will notify each of Moody's Investors Service, Inc. and Standard & Poor's Corporation of the interest rates determined as of such Interest Determination Date. Payments at Maturity. On or about the first -------------------- Business Day of each month, Chase will deliver to the Company and DTC a written list of principal, premium, if any, and interest (to the extent known) to be paid on each Global Note maturing or otherwise becoming due in the following month. Chase, the Company and DTC will confirm the amounts of such principal, premium, if any, and interest payments with respect to each such Global Note on or about the fifth Business Day preceding the Maturity Date of such Global Note. On the Maturity Date, the Company will pay to Chase in immediately available funds an amount sufficient to make the required payments, and upon receipt of such funds Chase in turn will pay to DTC the principal amount of Global Notes, together with premium, if any, and interest due on the Maturity Date, at the times and in the manner set forth below under "Manner of Payment". Promptly after payment to DTC of the principal, premium, if any, and interest due on the Maturity Date of such Global Note, the Trustee will cancel such Global Note and deliver it to the Company with an appropriate debit advice. On the first Business Day of each month, the Trustee will deliver to the Company a written statement indicating the total principal amount of -66- outstanding Global Notes as of the close of business on the immediately preceding Business Day. Manner of Payment. The total amount of any ----------------- principal, premium, if any, and interest due on Global Notes on any Interest Payment Date or the Maturity Date, as the case may be, shall be paid by the Company to Chase in funds available for use by the Trustee no later than 10:00 A.M., New York City time, on such date. The Company will make such payment on such Global Notes to an account specified by Chase. Upon receipt of such funds, Chase will pay by separate wire transfer (using Fedwire message entry instructions in a form previously specified by DTC) to an account at the Federal Reserve Bank of New York previously specified by DTC, in funds available for immediate use by DTC, each payment of principal, premium, if any, and interest due on Global Notes on such date. Thereafter on such date, DTC will pay, in accordance with its SDFS operating procedures then in effect, such amounts in funds available for immediate use to the respective Participants in whose names the beneficial interests in such Global Notes are recorded in the book-entry system maintained by DTC. Neither the Company, the Guarantor nor Chase shall have any responsibility or liability for the payment by DTC of the principal of, or premium, if any, or interest on, the Global Notes. Withholding Taxes. The amount of any taxes required ----------------- under applicable law to be withheld from any interest payment on a Global Note will be -67- determined and withheld by the Participant, indirect participant in DTC or other Person responsible for forwarding payments and materials directly to the beneficial owner of such Global Note. Settlement Procedures: Settlement Procedures with regard to each Note in book-entry form sold by an Agent, as agent of the Company, or purchased by an Agent, as principal, will be as follows: A. The Offering Agent will advise the Company by telephone, confirmed by facsimile, of the following settlement information: 1. Principal amount and Authorized Denomination. 2. (a) Fixed Interest Notes: (i) Interest Rate. (ii) Interest Payment Dates. (b) Floating Rate Notes: (i) Whether such Note is a Regular Floating Rate Note, Inverse Floating Rate Note or Floating Rate/Fixed Rate Note. (ii) Interest Rate Basis or Bases. (iii) Initial Interest Rate. (iv) Spread and/or Spread Multiplier, if any. -68- (v) Initial Interest Reset Date and Interest Reset Dates. (vi) Interest Payment Dates. (vii) Index Maturity, if any. (viii) Maximum and/or Minimum Interest Rates, if any. (ix) Day Count Convention. (x) Calculation Agent. (xi) Fixed Rate Commencement Date, if any, and Fixed Interest Rate, if any. (xii) Other terms, if any. 4. Price to public, if any, of such Note (or whether such Note is being offered at varying prices relating to prevailing market prices at time of resale as determined by the Offering Agent). 5. Trade Date. 6. Settlement Date (Original Issue Date). 7. Stated Maturity Date. 8. Redemption provisions, if any. 9. Repayment provisions, if any. 10. Net proceeds to the Company. -69- 11. The Offering Agent's discount or commission. 12. Whether such Note is being sold to the Offering Agent as principal or to an investor or other purchaser through the Offering Agent acting as agent for the Company. 13. Such other information specified with respect to such Note (whether by Addendum or otherwise). B. The Company will advise Chase by facsimile transmission or other electronic transmission of the above settlement information received from the Offering Agent, and the name of the Offering Agent. Chase will assign a CUSIP number to the Global Note representing such Note. Chase will also advise the Offering Agent of the CUSIP number assigned to the Global Note. C. The Company will transmit to the Trustee by telex or facsimile its written request for the authentication and delivery of such Global Note and the name of such Agent. Each such request by the Company shall constitute a representation and warranty by the Company to the Trustee that (i) the Global Note representing -70- such Book-Entry Note is then, and at the time of issuance and sale thereof will be, duly authorized for issuance and sale by the Company, (ii) the Global Note representing such Book-Entry Note will conform to the terms of the Indenture, (iii) such Global Note, when completed, authenticated and delivered pursuant to the Indenture, will constitute the valid and legally binding obligation of the Company, and (iv) upon authentication and delivery of such Global Note, the aggregate principal amount of all Notes initially offered and issued under the Indenture will not exceed $ (except for Notes ---------- represented by and authenticated and delivered in exchange for or in lieu of Notes in accordance with the Indenture). Chase will communicate to DTC and the Offering Agent through DTC's Participant Terminal System a pending deposit message specifying the following settlement information: 1. The information set forth in the Settlement Procedure A. 2. Identification numbers of the participant accounts maintained by DTC on behalf of the Trustee and the Offering Agent. 3. Identification of the Global Note as a Fixed Rate Global Note or Floating Rate Global Note. 4. Initial Interest Payment Date for such Note, number of days by which such date -71- succeeds the related record date for DTC purposes (or, in the case of Floating Rate Notes which reset daily or weekly, the date five calendar days preceding the Interest Payment Date) and, if then calculable, the amount of interest payable on such Interest Payment Date (which amount shall have been confirmed by Chase). 5. CUSIP number of the Global Note representing such Note. 6. Whether such Global Note represents any other Notes issued or to be issued in book-entry form. DTC will arrange for each pending deposit message described above to be transmitted to Standard & Poor's Corporation, which will use the information in the message to include certain terms of the related Global Note in the appropriate daily bond report published by Standard & Poor's Corporation. D. Chase will complete the Global Note and send a copy thereof by facsimile to the Company for verification. In the event any Note is incorrectly prepared, Chase shall promptly prepare a corrected Note in exchange for such incorrectly prepared Note. -72- Chase will authenticate the Global Note representing such Note. E. DTC will credit such Note to the participant account of Chase maintained by DTC. F. Chase will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note to Chase's participant account and credit such Note to Chase's participant account of the Offering Agent maintained by DTC and (ii) to debit the settlement account of the Offering Agent and credit the settlement account of Chase maintained by DTC, in an amount equal to the price of such Note less such Offering Agent's discount or underwriting commission, as applicable. Any entry of such a deliver order shall be deemed to constitute a representation and warranty by Chase to DTC that (i) the Global Note representing such Note has been issued and authenticated and (ii) Chase is holding such Global Note pursuant to the Certificate Agreement. G. In the case of Notes in book-entry form sold through the Offering Agent, as agent, the Offering Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note to the Offering Agent's participant account and credit such Note -73- to the participant account of the Participants maintained by DTC and (ii) to debit the settlement accounts of such Participants and credit the settlement account of the Offering Agent maintained by DTC in an amount equal to the initial public offering price of such Note. H. Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures F and G will be settled in accordance with SDFS operating procedures in effect on the Settlement Date. I. Upon receipt, Chase will pay the Company, by wire transfer of immediately available funds to an account specified by the Company to Chase from time to time, the amount transferred to Chase in accordance with Settlement Procedure F. J. Chase will send a copy of the Global Note by telecopy to the Company together with a statement setting forth the principal amount of Notes Outstanding as of the related Settlement Date after giving effect to such transaction and all other offers to purchase Notes of which the Company has advised Chase but which have not yet been settled. K. If such Note was sold through the Offering Agent, as agent, the Offering Agent will confirm the purchase of such Note to the investor or other purchaser either by transmitting to the Participant with respect to such Note a confirmation order through -74- DTC's Participant Terminal System or by mailing a written confirmation to such investor or other purchaser. Settlement Procedures Timetable: For offers to purchase Notes accepted by the Company, Settlement Procedures A through K set forth above shall be completed as soon as possible following the trade but not later than the respective times (New York City time) set forth below: SETTLEMENT PROCEDURE TIME ---------- ---- A 11:00 A.M. on the trade date or within one hour following the trade B 12:00 noon on the trade date or within one hour following the trade C No later than the close of business on the trade date D 9:00 A.M. on Settlement Date E 10:00 A.M. on Settlement Date F-G No later than 2:00 P.M. on Settlement Date H 4:00 P.M. on Settlement Date I-K 5:00 P.M. on Settlement Date Settlement Procedure H is subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the -75- SDFS operating procedures in effect on the Settlement Date. If settlement of a Note issued in book-entry form is rescheduled or canceled, Chase will deliver to DTC, through DTC's Participant Terminal System, a cancellation message to such effect by no later than 5:00 P.M., New York City time, on the Business Day immediately preceding the scheduled Settlement Date. Failure to Settle: If Chase fails to enter an SDFS deliver order with respect to a Note issued in book-entry form pursuant to Settlement Procedure F, Chase may deliver to DTC, through DTC's Participant Terminal System, as soon as practicable, a withdrawal message instructing DTC to debit such Note to the participant account of Chase maintained at DTC. DTC will process the withdrawal message, provided that such participant account contains a principal amount of the Global Note representing such Note that is at least equal to the principal amount to be debited. If withdrawal messages are processed with respect to all the Notes represented by a Global Note, the Trustee will mark such Global Note "canceled", make appropriate entries in its records and send certification of destruction of such canceled Global Note to the Company. The CUSIP number assigned to such Global Note shall, in accordance with CUSIP Service Bureau procedures, be canceled and not immediately reassigned. If withdrawal messages are processed with respect to a portion of the Notes represented by a Global Note, Chase will exchange such Global Note for two Global Notes, one of which shall -76- represent the Global Notes for which withdrawal messages are processed and shall be canceled immediately after issuance and the other of which shall represent the other Notes previously represented by the surrendered Global Note and shall bear the CUSIP number of the surrendered Global Note. In the case of any Note in book-entry form sold through the Offering Agent, as agent, if the purchase price for any such Note is not timely paid to the Participants with respect thereto by the beneficial investor or other purchaser thereof (or a person, including an indirect participant in DTC, acting on behalf of such investor or other purchaser), such Participants and, in turn, the related Offering Agent may enter SDFS deliver orders through DTC's Participant Terminal System reversing the orders entered pursuant to Settlement Procedures F and G, respectively. Thereafter, Chase will deliver the withdrawal message and take the related actions described in the preceding paragraph. If such failure shall have occurred for any reason other than default by the applicable Offering Agent to perform its obligations hereunder or under the Distribution Agreement, the Company will reimburse such Offering Agent on an equitable basis for its reasonable loss of the use of funds during the period when the funds were credited to the account of the Company. Notwithstanding the foregoing, upon any failure to settle with respect to a Note in book-entry form, -77- DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to a Note that was to have been represented by a Global Note also representing other Notes, the Trustee will provide, in accordance with Settlement Procedure D, for the authentication and issuance of a Global Note representing such remaining Notes and will make appropriate entries in its records. -78- PART III: PROCEDURES FOR CERTIFICATED NOTES Denominations: Unless otherwise provided in the applicable Pricing Supplement, the Certificated Notes will be issued in denominations of $1,000 and integral multiples thereof. Payments of Principal, Premium, if any, and Interest: Upon presentment and delivery of the Certificated Note, Chase upon receipt of immediately available funds from the Company will pay the principal of, premium, if any, and interest on, each Certificated Note on the Maturity Date in immediately available funds. All interest payments on a Certificated Note, other than interest due on the Maturity Date, will be made by check mailed to the address of the person entitled thereto as such address shall appear in the Security Register; provided, however, that registered Holders of $10,000,000 or more in aggregate principal amount of Certificated Notes (whether having identical or different terms and provisions) shall be entitled to receive such interest payments by wire transfer of immediately available funds if appropriate wire transfer instructions have been received in writing by Chase not less than 15 calendar days prior to the applicable Interest Payment Date. Chase will provide monthly to the Company a list of the principal, premium, if any, and interest (to the extent known) to be paid on Certificated Notes -79- maturing in the next succeeding month. Chase will be responsible for withholding taxes on interest paid as required by applicable law. Certificated Notes presented to Chase on the Maturity Date for payment will be canceled by the Trustee. All canceled Certificated Notes held by the Trustee shall be disposed of by the Trustee in accordance with its customary procedures, and the Trustee shall furnish to the Company a certificate with respect to such disposition. Settlement Procedures: Settlement Procedures with regard to each Certificated Note purchased by an Agent, as principal, or through an Agent, as agent, shall be as follows: A. The Offering Agent will advise the Company by telephone (and confirm in writing by facsimile) of the following Settlement information with regard to each Certificated Note: 1. Exact name in which the Certificated Note(s) is to be registered (the "Registered Owner"). 2. Exact address or addresses of the Registered Owner for delivery, notices and payments of principal, premium, if any, and interest. 3. Taxpayer identification number of the Registered Owner. -80- 4. Principal amount and Authorized Denomination. 5. (a) Fixed Rate Notes: (i) Interest Rate. (ii) Interest Payment Dates. (b) Floating Rate Notes: (i) Whether such Note is a Regular Floating Rate Note, Inverse Floating Rate Note or Floating Rate/Fixed Rate Note. (ii) Interest Rate Basis or Bases. (iii) Initial Interest Rate. (iv) Spread and/or Spread Multiplier, if any. (v) Initial Interest Reset Date and Interest Reset Dates. (vi) Interest Payment Dates. (vii) Index Maturity, if any. -81- (viii) Maximum and/or Minimum Interest Rates, if any. (ix) Day Count Convention. (x) Calculation Agent. (xi) Fixed Rate Commencement Date, if any, and Fixed Interest Rate, if any. (xii) Other terms, if any. 6. Price to public of such Certificated Note (or whether such Note is being offered at varying prices relating to prevailing market prices at time of resale as determined by the Offering Agent). 7. Trade Date. 8. Settlement Date (Original Issue Date). 9. Stated Maturity Date. 10. Redemption provisions, if any. 11. Repayment provisions, if any. 12. Net proceeds to the Company. -82- 13. The Offering Agent's discount or commission. 14. Whether such Note is being sold to the Offering Agent as principal or to an investor or other purchaser through the Offering Agent acting as agent for the Company. 15. Such other information specified with respect to such Note (whether by Addendum or otherwise). B. After receiving such settlement information from the Offering Agent, the Company will advise Chase of the above settlement information by facsimile transmission confirmed by telephone. The Company will transmit to the Trustee by telex or facsimile its written request for the authentication and delivery of such Certificated Note and the name of such Agent. Each such request by the Company shall constitute a representation and warranty by the Company to the Trustee that (i) the Certificated Note is then, and at the time of issuance and sale thereof will be, duly authorized for issuance and -83- sale by the Company, (ii) the Certificated Note will conform with the terms of the Indenture, (iii) such Certificated Note, when completed, authenticated and delivered pursuant to the Indenture, will constitute the valid and legally binding obligation of the Company, and (iv) upon authentication and delivery of such Certificated Note, the aggregate principal amount of all Notes initially offered and issued under the Indenture will not exceed $ (except for Notes ---------- represented by and authenticated and delivered in exchange for or in lieu of Notes in accordance with the Indenture). C. Chase will complete the Certificated Note and send a copy thereof by facsimile to the Company for verification. In the event any Note is incorrectly prepared, Chase shall promptly prepare a corrected Note in exchange for such incorrectly prepared Note. The Trustee will authenticate the Certificated Note in the form approved by the Company and the Offering Agent, and will make three copies thereof (herein called "Stub 1", "Stub 2" and "Stub 3"): -84- 1. Certificated Note with the Offering Agent's confirmation, if traded on a principal basis, or the Offering Agent's customer confirmation, if traded on an agency basis. 2. Stub 1 for Trustee. 3. Stub 2 for Offering Agent. 4. Stub 3 for the Company. D. With respect to each trade, the Trustee will deliver the Certificated Note and Stub 2 thereof to the Offering Agent at the following applicable address: [name/address], Attention: [name/phone], telecopier [fax]; [name/address], Attention: [name/phone], telecopier [fax]; [name/address], Attention: [name/phone], telecopier [fax]; and [name/address], Attention: [name/phone], telecopier [fax]; and the Trustee will keep Stub 1. The Offering Agent will acknowledge receipt of the Certificated Note through a broker's receipt and will keep Stub 2. Delivery of the Certificated Note will be made only against such acknowledgment of receipt. Upon determination that the Certificated Note has been authorized, -85- delivered and completed as aforementioned, the Offering Agent will wire the net proceeds of the Certificated Note after deduction of its applicable commission to the Company pursuant to standard wire instructions given by the Company. E. In the case of a Certificated Note sold through the Offering Agent, as agent, the Offering Agent will deliver such Certificated Note (with the confirmation) to the purchaser against payment in immediately available funds. F. The Trustee will send Stub 3 to the Company. Settlement Procedures Timetable: For offers to purchase Certificated Notes accepted by the Company, Settlement Procedures A through F set forth above shall be completed as soon as possible following the trade but not later than the respective times (New York City time) set forth below: SETTLEMENT PROCEDURE TIME ---------- ---- A 11:00 A.M. on the trade date or within one hour following the trade B 12:00 noon on the trade date or within one hour following the trade -86- C-D 2:15 P.M. on Settlement Date E 3:00 P.M. on Settlement Date F 5:00 P.M. on Settlement Date Failure to Settle: In the case of Certificated Notes sold through the Offering Agent, as agent, if an investor or other purchaser of a Certificated Note from the Company shall either fail to accept delivery of or make payment for such Certificated Note on the date fixed for settlement, the Offering Agent will forthwith notify the Trustee and the Company by telephone, confirmed in writing, and return such Certificated Note to the Trustee. The Trustee, upon receipt of such Certificated Note from the Offering Agent, will immediately advise the Company and the Company will promptly arrange to credit the account of the Offering Agent in an amount of immediately available funds equal to the amount previously paid to the Company by such Offering Agent in settlement for such Certificated Note. Such credits will be made on the Settlement Date if possible, and in any event not later than the Business Day following the Settlement Date; provided that the Company has received notice on the same day. If such failure shall have occurred for any reason other than failure by such Offering Agent to perform its obligations hereunder or under the Distribution Agreement, the Company will reimburse such Offering Agent on an equitable basis for its reasonable loss of the use of funds during -87- the period when the funds were credited to the account of the Company. Immediately upon receipt of the Certificated Note in respect of which the failure occurred, the Trustee will cancel and dispose of such Certificated Note in accordance with its customary procedures, make appropriate entries in its records to reflect the fact that such Certificated Note was never issued, and accordingly notify in the Company writing. -88- SCHEDULE D ---------- Additional Matters to be Included in Accountants' Comfort Letter Pursuant to Section 7(a)(iv) of Distribution Agreement ------------------------------------------ PROSPECTUS CAPTION ITEMS - ------------------ ----- "Ratio of Earnings to Fixed "Ratio of Earnings to Fixed Charges" Charges" and supporting calculations shown on Exhibit 12.1 to the Registration Statement FORM 10-K OR 10-Q CAPTION ITEMS - ------------------------- ----- "REVIEW OF THE FINANCIAL CONDITION Changes in total operating revenues AND RESULTS OF OPERATIONS OF PPL CORPORATION AND PPL ELECTRIC UTILITIES CORPORATION" , "Operating Revenues" (or similar caption) "REVIEW OF THE FINANCIAL CONDITION The Company's actual construction AND RESULTS OF OPERATIONS OF PPL expenditures during the year ended CORPORATION AND PPL ELECTRIC [last year ended] and [prior year UTILITIES CORPORATION" , "Capital ended] Expenditure Requirements" (or similar caption) "SELECTED FINANCIAL AND OPERATING The Company's times interest earned DATA OF PPL ELECTRIC UTILITIES before income taxes for [last year CORPORATION"-- ended] and [prior year ended] "Financial Ratios" (or similar caption) -89- EX-3 3 0003.txt EXHIBIT 3.2 EXHIBIT 3.2 MICROFILM NUMBER FILED WITH THE DEPARTMENT OF STATE ON FEB 14, 2000 ----------- ------------ ENTITY NUMBER 2570936 /S/ KIM PIZZINGRILLI -------------- -------------------------------------------------- SECRETARY OF THE COMMONWEALTH ARTICLES OF AMENDMENT-DOMESTIC BUSINESS CORPORATION DSCB:15-1915 (REV 90) In compliance with the requirements of 15 Pa.C.S. ss. 1915 (relating to articles oF amendment), the undersigned business corporation, desiring to amend its Articles, hereby states that: 1. The name of the corporation is: PP&L Resources, Inc. ------------------------------------------- - -------------------------------------------------------------------------------- 2. The (a) address of this corporation's current registered office in this Commonwealth or (b) name of its commercial registered office provider and the county of venue is (the Department is hereby authorized to correct the following information to conform to the records of the Department): (a) 2 N. 9th St., Allentown, PA 18101-1179, Lehigh ----------------------------------------------------------------------- NUMBER AND STREET CITY STATE ZIP COUNTY (b) c/o: ----------------------------------------------------------------------- NAME OF COMMERCIAL REGISTERED OFFICE PROVIDER COUNTY For a corporation represented by a commercial registered office provider, the county in (b) shall be deemed the county in which the corporation is located for venue and official publication purposes. 3. The statute by or under which it was incorporated is: Pennsylvania ---------------------- Business Corporation Law --------------------------------------------------------------------------- 4. The date of its incorporation is: 3/15/94 ------------------------------------------ 5. (Check, and if appropriate complete, one of the following): x The amendment shall be effective upon filing these Articles of --- Amendment in the Department of State. The amendment shall be effective on: At --- -------------- ------------------ DATE HOUR 6. (Check one of the following): The amendment was adopted by the shareholders (or members) pursuant --- to 15 Pa.C.S.ss. 1914(a) and (b). x The amendment was adopted by the board of directors pursuant to 15 --- Pa.C.S.ss. 1914(c). 7. (Check, and if appropriate complete, one of the following): x The amendment adopted by the corporation, set forth in full, is as --- follows: The name of the corporation is PPL Corporation. ---------------------------------------------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------------------- The amendment adopted by the corporation is set forth in full in --- Exhibit A attached hereto and made a part hereof. 8. (Check if the amendment restates the Articles): The restated Articles of Incorporation supersede the original --- Articles and all amendments thereto. IN TESTIMONY WHEREOF, the undersigned corporation has caused these Articles of Amendment to be signed by an authorized officer thereof this 14th day of ----- February , 2000. - ----------- ---- PP&L RESOURCES, INC. ---------------------------------------- (Name of Corporation) BY: /s/ James E. Abel ------------------------------------- JAMES E. ABEL (SIGNATURE) TITLE: ------------------------------------- Vice President-Finance and Treasurer EX-3 4 0004.txt EXHIBIT 3.5 EXHIBIT 3.5 State of Delaware Office of the Secretary of State -------------------------------- I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF "PP&L CAPITAL FUNDING, INC.", CHANGING ITS NAME FROM "PP&L CAPITAL FUNDING, INC." TO "PPL CAPITAL FUNDING, INC.", FILED IN THIS OFFICE ON THE FOURTEENTH DAY OF FEBRUARY, A.D. 2000, AT 4 O'CLOCK P.M. A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS. /s/ Edward J. Freel ---------------------------------------- Edward J. Freel, Secretary of State [Seal] AUTHENTICATION: 0258346 2795490 8100 DATE: 02-15-00 001075634 CERTIFICATE OF AMENDMENT ------------------------ OF THE ------ CERTIFICATE OF INCORPORATION ---------------------------- OF -- PP&L CAPITAL FUNDING, INC. -------------------------- ------------------------------------------------- PP&L Capital Funding, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the "Company"), does hereby certify: FIRST: That by unanimous written consent of its Directors dated as of February 14, 2000, resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of the Company, declaring said amendment to be advisable and calling for consideration of said proposed amendment by the sole Stockholder of the Company. The resolutions setting forth the amendment are as follows: RESOLVED, that the directors of the Company deem it advisable and in the best interests of the Company that the Company's name be changed to PPL Capital Funding, Inc., and that the Company's Certificate of Incorporation be amended to reflect such proposed name change by deleting Item 1 thereof in its entirety, and inserting in lieu thereof the following: 1. Name. The name of the Corporation is PPL Capital Funding, Inc. and it is further RESOLVED, that the foregoing proposed change of the Company's name and amendment of the Company's Certificate of Incorporation be submitted for consideration by the sole Stockholder of the Company; and it is further RESOLVED, that, upon approval by the Company's sole Stockholder of the proposed name change, the proper officers of the Company be, and each of them hereby is, authorized, empowered and directed, in the name and on behalf of the Company and under its corporate seal or otherwise, to execute and file with the Office of the Secretary of State of Delaware a Certificate of Amendment of the Company's Certificate of Incorporation statutorily effecting such name change; and to execute, deliver and file such additional documents, and perform such further actions, as they shall deem necessary or advisable to effectuate the intent and purposes of the foregoing resolutions. SECOND: That, thereafter, pursuant to the resolutions of the Directors, the proposed amendment was approved by the sole Stockholder of the Company by written consent dated as of February 14, 2000. -2- THIRD: That said amendment was duly adopted in accordance with the provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, the Company has caused this Certificate to be executed this 14th day of February, 2000. PP&L CAPITAL FUNDING, INC. By: /s/ James E. Abel ------------------------------------ Name: James E. Abel Title: Treasurer EX-4 5 0005.txt EXHIBIT 4.6 EXHIBIT 4.6 ================================================================================ PPL CAPITAL FUNDING, INC., ISSUER AND PPL CORPORATION, GUARANTOR TO THE CHASE MANHATTAN BANK, TRUSTEE --------- SUPPLEMENTAL INDENTURE NO. [5] DATED AS OF --------------------- SUPPLEMENTAL TO THE INDENTURE DATED AS OF NOVEMBER 1, 1997 ESTABLISHING A SERIES OF SECURITIES DESIGNATED MEDIUM TERM NOTES, SERIES [ ] LIMITED IN AGGREGATE PRINCIPAL AMOUNT TO $[ ] -------------- ================================================================================ SUPPLEMENTAL INDENTURE NO. [5], dated as of among ------------------- PPL CAPITAL FUNDING, INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company"), PPL CORPORATION, a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania (herein called the "Guarantor"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as Trustee (herein called the "Trustee"), under the Indenture dated as of November 1, 1997 (hereinafter called the "Original Indenture"), this Supplemental Indenture No. [5] being supplemental thereto. The Original Indenture and any and all indentures and instruments supplemental thereto are hereinafter sometimes collectively called the "Indenture." RECITALS OF THE COMPANY AND THE GUARANTOR The Original Indenture was authorized, executed and delivered by the Company and the Guarantor to provide for the issuance by the Company from time to time of its Securities (such term and all other capitalized terms used herein without definition having the meanings assigned to them in the Original Indenture), to be issued in one or more series as contemplated therein, and for the Guarantee by the Guarantor of the payment of the principal, premium, if any, and interest, if any, on such Securities. As contemplated by Sections 301 and 1201(f) of the Original Indenture, the Company wishes to establish a series of Securities to be designated "Medium Term Notes, Series " to be limited in aggregate principal amount (except as -- contemplated in Section 301(b) of the Original Indenture) to $[ ], ------------ such series of Securities to be hereinafter sometimes called "Series No. ." -- As contemplated by Section 201 and 1402 of the Original Indenture, the Guarantor wishes to establish the form and terms of the Guarantees to be endorsed on the Securities of Series No. . -- The Company has duly authorized the execution and delivery of this Supplemental Indenture No. [5] to establish the Securities of Series No. and -- has duly authorized the issuance of such Securities; the Guarantor has duly authorized the execution and delivery of this Supplemental Indenture No. [5] and has duly authorized its Guarantees of the Securities of Series No. ; and all -- acts necessary to make this Supplemental Indenture No. [5] a valid agreement of the Company and the Guarantor, to make the Securities of Series No. valid -- obligations of the Company, and to make the Guarantees valid obligations of the Guarantor, have been performed. NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE NO. WITNESSETH: -- For and in consideration of the premises and of the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities of Series No. , as follows: - -- ARTICLE ONE SECOND SERIES OF SECURITIES SECTION 1. There is hereby created a series of Securities designated "Medium Term Notes, Series " and limited in aggregate principal amount (except -- as contemplated in Section 301(b) of the Original Indenture) to $[ ]. ------------ The forms and terms of the Securities of Series No. shall be established in -- an Officer's Certificate of the Company, as contemplated by Section 301 of the Original Indenture. SECTION 2. The Company hereby agrees that, if the Company shall make any deposit of money and/or Eligible Obligations with respect to any Securities of Series No. , or any portion of the principal amount thereof, as -- contemplated by Section 701 of the Indenture, the Company shall not deliver an Officer's Certificate described in clause (z) in the first paragraph of said Section 701 unless the Company shall also deliver to the Trustee, together with such Officer's Certificate, either: (A) an instrument wherein the Company, notwithstanding the satisfaction and discharge of its indebtedness in respect of such Securities, shall assume the obligation (which shall be absolute and unconditional) to irrevocably deposit with the Trustee or Paying Agent such additional sums of money, if any, or additional Eligible Obligations (meeting the requirements of Section 701), if any, or any combination thereof, at such time or times, as shall be necessary, together with the money and/or Eligible Obligations theretofore so deposited, to pay when due the principal of and premium, if any, and interest due and to become due on such Securities or portions thereof, all in accordance with and subject to the provisions of said Section 701; provided, however, that such instrument may state that the obligation of the Company to make additional deposits as aforesaid shall be subject to the delivery to the Company by the Trustee of a notice asserting the deficiency accompanied by an opinion of an independent public accountant of nationally recognized standing, selected by the Trustee, showing the calculation thereof (which opinion shall be obtained at the expense of the Company); or (B) an Opinion of Counsel to the effect that the Holders of such Securities, or portions of the principal amount thereof, will not recognize income, gain or loss for United States federal income tax purposes as a result of the satisfaction and discharge of the Company's indebtedness in respect thereof and will be subject to United States federal income tax on the same amounts, at the same times and in the same manner as if such satisfaction and discharge had not been effected. ARTICLE TWO FORM OF GUARANTEE Guarantees to be endorsed on the Securities of Series No. shall be -- in substantially the form set forth below: 2 [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 (the "Indenture"), referred to in the Security upon which this Guarantee is endorsed), for value received, hereby unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed, the due and punctual payment of the principal of, and premium, if any, and interest on such Security when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption, or otherwise, in accordance with the terms of such Security 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 "Company", 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, call for redemption or otherwise, and as if such payment were made by the Company. 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 Security or the Indenture, any failure to enforce the provisions of such Security or the Indenture, or any waiver, modification or indulgence granted to the Company with respect thereto, by the Holder of such Security 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 Security, or increase the interest rate thereon, or change any redemption provisions thereof (including any change to increase any premium payable upon redemption thereof) or change the Stated Maturity thereof. The Guarantor hereby waives the benefits of diligence, presentment, demand for payment, any requirement that the Trustee or the Holder of such Security exhaust any right or take any action against the Company or any other Person, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to such Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged in respect of such Security except by complete performance of the obligations contained in such Security 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 premium, if any, or interest, if any, on such Security, whether at its Stated Maturity, by declaration of acceleration, call for redemption, or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the 3 Holder of such Security, subject to the terms and conditions set forth in the Indenture, directly against the Guarantor to enforce this Guarantee without first proceeding against the Company. The obligations of the Guarantor hereunder with respect to such Security shall be continuing and irrevocable until the date upon which the entire principal of, premium, if any, and interest on such Security has been, or has been deemed pursuant to the provisions of Article Seven of the Indenture to have been, paid in full or otherwise discharged. The Guarantor shall be subrogated to all rights of the Holder of such Security upon which this Guarantee is endorsed against the Company in respect of any amounts paid by the Guarantor on account of such Security 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 of, and premium, if any, and interest, if any, on all Securities 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 Company for liquidation or reorganization, the Company 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 Company'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 Security 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 Security, 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 Security, such Security 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. This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of the Security 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 deemed to be a contract made under the laws of the State of New York, and for all purposes shall be governed by and construed in accordance with the laws of the State of New York. 4 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 THREE MISCELLANEOUS PROVISIONS SECTION 1. This Supplemental Indenture No. [5] is a supplement to the Original Indenture. As supplemented by this Supplemental Indenture No. [5], the Indenture is in all respects ratified, approved and confirmed, and the Original Indenture and this Supplemental Indenture No. [5] shall together constitute one and the same instrument. SECTION 2. The recitals contained in this Supplemental Indenture No. [5] shall be taken as the statements of the Company and the Guarantor, and the Trustee assumes no responsibility for their correctness and makes no representations as to the validity or sufficiency of this Supplemental Indenture No. [5]. SECTION 3. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 5 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture No. [5] to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first written above. PPL CAPITAL FUNDING, INC. By: ------------------------------------- Name: Title: [SEAL] ATTEST: - ---------------------------------- PPL CORPORATION By: ------------------------------------- Name: Title: [SEAL] ATTEST: - ---------------------------------- THE CHASE MANHATTAN BANK, as Trustee By: ------------------------------------- Name: Title: [SEAL] ATTEST: - ---------------------------------- 6 EX-4 6 0006.txt EXHIBIT 4.7 EXHIBIT 4.7 OFFICERS' CERTIFICATE (UNDER SECTION 301 OF THE INDENTURE OF PPL CAPITAL FUNDING, INC. AND PPL CORPORATION) The undersigned , of PPL CAPITAL FUNDING, -------------- ------------ INC. (the "Company"), in accordance with Section 301 of the Indenture, dated as of November 1, 1997, as heretofore supplemented (the "Indenture", capitalized terms used herein and not defined herein having the meanings specified in the Indenture), of the Company and PPL CORPORATION (the "Guarantor"), to The Chase Manhattan Bank, as Trustee (the "Trustee"), does hereby establish for the series of Securities established in Supplemental Indenture No.5, dated as of (the "Supplemental Indenture"), the following terms and - ---------------- characteristics (the lettered clauses set forth below corresponding to the lettered clauses of Section 301 of the Indenture), and the undersigned , of the Guarantor, does hereby approve of such - ------------- -------------- terms and characteristics on behalf of the Guarantor: (a) the title of the Securities of such series shall be "Medium Term Notes, Series " (the "Notes"); - (b) the aggregate principal amount of Notes which may be authenticated and delivered under the Indenture shall be limited to $ , ----------- except as contemplated in Section 301(b) of the Indenture; (c) interest on the Notes shall be payable to the Person or Persons in whose names the Notes are registered at the close of business on the Regular Record Date for such interest, except as otherwise expressly provided in the forms, attached hereto and hereby authorized and approved, of Fixed Rate Note (as hereinafter defined) and Floating Rate Note (as hereinafter defined) or as otherwise determined by the proper officers of the Company and communicated to the Trustee in a Company Order; (d) the date or dates on which the principal of the Notes shall be payable shall be determined at the time of sale of the Notes, or any Tranche thereof, by the proper officers of the Company pursuant to the Administrative Procedures (the "Administrative Procedures") attached as Schedule C to the Distribution Agreement dated ----------------- among the Company, the Guarantor, ------------------------------------ and certain other Agents named therein; provided, however, that in no event shall any Note have a Stated Maturity that is less than nine months or more than 40 years from the date of original issuance; (e) the Notes, or any Tranche thereof, may bear interest at a fixed rate (any such Note being hereinafter called a "Fixed Rate Note") or at a floating rate (any such Note being hereinafter called a "Floating Rate Note"), in each case as determined by the proper officers of the Company as follows: there shall be determined by the proper officers of the Company and communicated to the Trustee by Company Order, or by the proper officers of the Company pursuant to the Administrative Procedures, at the time of sale of the Notes or any Tranche thereof, (1) in the case of Fixed Rate Notes, the interest rate or rates, and (2) in the case of Floating Rate Notes, whether such Note is a Regular Floating Rate Note, an Inverse Floating Rate Note, or a Floating Rate/Fixed Rate Note, the Initial Interest Rate, the Interest Rate Basis (which shall be the CMT Rate, the Commercial Paper Rate, the Prime Rate, LIBOR, the Federal Funds Rate, the Treasury Rate or any other Interest Rate Basis determined at the time of sale of the Notes or Tranche thereof), the Maximum Interest Rate, if any, the Minimum Interest Rate, if any, the Interest Reset Period, the Interest Reset Dates, the Index Maturity, the Spread, if any, the Spread Multiplier, if any, if such Note is a LIBOR Note, the Designated LIBOR Page, any other terms relating to the determination of the interest rates on the Floating Rate Notes, and, if applicable, any Fixed Interest Rate Commencement Date and Fixed Interest Rate (each of such terms being referred to in the form of Floating Rate Note attached hereto); interest shall accrue on any Note from the Original Issue Date specified in such Note or the most recent Interest Payment Date to which interest has been paid or duly provided for; the Interest Payment Dates for the Fixed Rate Notes shall be and ----------- , and the Regular Record Dates with respect to such Interest --------- Payment Dates shall be and , respectively ---------- ------------ (whether or not a Business Day) or shall be, in each case, such dates as shall be determined by the proper officers of the Company and communicated to the Trustee by Company Order, or determined by the proper officers of the Company pursuant to the Administrative Procedures; the Interest Payment Dates on Floating Rate Notes shall be determined at the time of sale of the Notes or Tranche thereof by the proper officers of the Company and communicated to the Trustee by Company Order, or determined by the proper officers of the Company pursuant to the Administrative Procedures, and the Regular Record Date with respect to each such Interest Payment Date shall be the fifteenth calendar day immediately preceding such Interest Payment Date (whether or not a Business Day); and interest on Floating Rate Notes which employ the CMT Rate or the Treasury Rate as the Interest Rate Basis shall be computed on the basis of the actual number of days in the year; 2 (f) the Corporate Trust Office of the Trustee in New York, New York shall be the office or agency of the Company at which the principal of and any premium and interest, on the Notes shall be payable, at which registration of transfer and exchange of Notes may be effected and at which notices and demands to or upon the Company or the Guarantor in respect of the Notes or any Tranche thereof and the Indenture may be served; provided, however, that the Company and the Guarantor each reserve the right to change, by one or more Officer's Certificates supplemental to this Officer's Certificate, any such office or agency; and provided, further, that the Company and the Guarantor each reserve the right to designate, by one or more Officer's Certificates supplemental to this Officer's Certificate, its principal office in Allentown, Pennsylvania or the office of the Guarantor or the Guarantor's subsidiary, PPL Electric Utilities Corporation in Allentown, Pennsylvania, as any such office or agency; the Trustee shall be the Security Registrar and Paying Agent for the Notes; provided, that the Company and the Guarantor reserve the right, by one or more Officer's Certificates supplemental to this Officer's Certificate, to designate any additional Security Registrar or Paying Agent (which in each case, may be the Company, the Guarantor or any Affiliate of either of them) and to remove any Security Registrar or Paying Agent; (g) the Notes, or any Tranche thereof, shall be redeemable, in whole or in part, at the option of the Company as and to the extent so determined at the time of sale of the Notes or any Tranche thereof by the proper officers of the Company and communicated to the Trustee by Company Order, or determined by the proper officers of the Company pursuant to the Administrative Procedures; (h) the obligation, if any, of the Company to redeem or purchase or repay the Notes or any Tranche thereof pursuant to any sinking fund or other mandatory redemption provisions or at the option of a Holder thereof and the period or periods within which or the date or dates on which, the price or prices at which and the terms and conditions upon which, such Notes or Tranche thereof shall be redeemed or purchased or repaid, in whole or in part, pursuant to such obligations shall be determined at the time of sale of the Notes or any Tranche thereof, by the proper officers of the Company and communicated to the Trustee by Company Order, or determined by the proper officers of the Company pursuant to the Administrative Procedures; and no notice of redemption as contemplated by Section 404 of the Indenture shall be required in the case of any mandatory redemption or repayment at the option of the Holder; in connection with any repayment at the option of the Holder, the Company will comply with the applicable requirements, if any, of Section 14(e) of the Exchange Act and the rules of the Commission promulgated thereunder, and any other securities laws or regulations in connection with any such repayment; (i) the Notes shall be issued in denominations of $1,000 or any amount in excess thereof that is an integral multiple of $1,000 or in such other denominations as shall be determined at the time of sale of the Notes or any Tranche thereof by the proper officers of the Company and communicated to the Trustee by Company Order, or determined by the 3 proper officers of the Company pursuant to the Administrative Procedures; (j) [not applicable]; (k) [not applicable]; (l) [not applicable]; (m) see clause (e) with respect to the interest rate or rates on Floating Rate Notes; (n) [not applicable]; provided, however, that the Company reserves the right to provide by one or more Officer's Certificates supplemental to this Officer's Certificate for the issuance of Discount Securities and the terms thereof as contemplated by Section 301(n) of the Indenture; (o) [not applicable]; provided, however, that the Company reserves the right to make, by one or more Officer's Certificates supplemental to this Officer's Certificate, any additional covenants of the Company for the benefit of the Holders of the Notes or any Tranche thereof, or any additional Events of Default with respect to all or any series of Securities Outstanding; (p) [not applicable]; (q) the only obligations or instruments which shall be considered Eligible Obligations in respect of the Notes shall be Government Obligations; and the provisions of Section 701 of the Indenture and Section 2 of the Supplemental Indenture shall apply to the Notes; (r) [the Notes, or any Tranche thereof, may be issued in global form (the "Global Notes") and the depository for the Global Notes shall initially be The Depository Trust Company ("DTC"); provided, that the Company reserves the right to provide for another depository, registered as a clearing agency under the Exchange Act, to act as depository for the Global Notes (DTC and any such successor depository, the "Depository"); beneficial interests in Notes issued in global form may not be exchanged in whole or in part for individual certificated Notes in definitive form, and no transfer of a Global Note in whole or in part may be registered in the name of any Person other than the Depository or its nominee except that (i) if the Depository (A) has notified the Company that it is unwilling or unable to continue as depository for the Global Notes or (B) has ceased to be a clearing agency registered under the Exchange Act and, in either case, a successor depository is not appointed by the Company within 90 days after such notice or cessation, or (ii) the Company elects to discontinue use of the system of book-entry transfers through the Depository and elects not to appoint a successor depository for such Global Notes, the Company will execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Notes, will authenticate and deliver Notes in definitive certificated form in an aggregate principal amount equal to the principal amount of 4 the Global Note representing such Notes in exchange for such Global Note, such definitive Notes to be registered in the names provided by the Depository; each Global Note (i) shall represent and shall be denominated in an amount equal to the aggregate principal amount of the outstanding Notes to be represented by such Global Note, (ii) shall be registered in the name of the Depository or its nominee, (iii) shall be delivered by the Trustee to the Depository, its nominee, any custodian for the Depository or otherwise pursuant to the Depository's instruction and (iv) shall bear a legend restricting the transfer of such Global Note to any person other than the Depository or its nominee; none of the Company, the Trustee, any Paying Agent or any Authenticating Agent will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in a Global Note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests]; (s) [not applicable]; (t) reference is made to clause (r) above; no service charge shall be made for the registration of transfer or exchange of Notes; provided, however, that the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the exchange or transfer; (u) in lieu of Section 113 of the Indenture, the following provisions shall apply: in the case of any Fixed Rate Note, if any Interest Payment Date, Redemption Date or the Stated Maturity (as specified in such Fixed Rate Note) shall not be a Business Day (as defined in the form of Fixed Rate Note attached hereto), payment of amounts due thereon on such date may be made on the next succeeding Business Day (as defined in the form of Fixed Rate Note attached hereto), and, if such payment is made or duly provided for on such next succeeding Business Day, no interest shall accrue on such amounts for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to such Business Day; in the case of any Floating Rate Note, (a) if any Interest Payment Date (as specified in such Floating Rate Note), other than the Maturity, would otherwise be a day that is not a Business Day (as defined in the Form of Floating Rate Note attached hereto), such Interest Payment Date will be postponed to the next succeeding Business Day, except that if LIBOR is an applicable Interest Rate Basis and such Business Day falls in the next succeeding calendar month, such Interest Payment Date will be the immediately preceding Business Day, and (b) if the Maturity falls on a day that is not a Business Day, payment of the amounts due thereon on such date may be made on the next succeeding Business Day as if made on the date such payment was due and no interest shall accrue on such amount due for the period from and after the Maturity to the date of such payment on the next succeeding Business Day; (v) the Notes shall be entitled to the benefits of Article Fourteen of the Indenture and the Guarantees to be endorsed on the Notes shall be substantially in the form established in the Supplemental Indenture; 5 (w) (i)except as otherwise determined by the proper officers of the Company and communicated to the Trustee in a Company Order or as established in one or more Officers' Certificates supplemental to this Officers' Certificate, the Notes shall be substantially in the forms of Fixed Rate Note and Floating Rate Note attached hereto and hereby authorized and approved and shall have such further terms as are set forth in such forms; (ii) [interest rate reset provisions, if any]; (iii) [remarketing provisions, if any]; and (iv) [other provisions, if any]. 6 IN WITNESS WHEREOF, we have hereunto signed our names this day of . - -------------- PPL CAPITAL FUNDING, INC. ---------------------------------- Name: Title: PPL CORPORATION ---------------------------------- Name: Title: 7 FORM OF FIXED RATE NOTE (SEE LEGEND AT THE END OF THIS SECURITY FOR RESTRICTIONS ON TRANSFER AND CHANGE OF FORM) PPL CAPITAL FUNDING, INC. MEDIUM-TERM NOTE, SERIES [E] Unconditionally Guaranteed as to Payment of Principal and any Interest and Premium by PPL CORPORATION
Original Issue Date: Redeemable: Yes No -- -- Stated Maturity: Initial Redemption Date: Interest Rate: Initial Redemption Price: Interest Payment Dates: Annual Redemption Percentage Reduction: % Issue Price (%): Repayable at Option of the Holder: Yes No -- -- Regular Record Dates: Option Repayment Date(s): Repayment Price: 100% Other/Additional Provisions:
This Security is not a Discount Security within the meaning of the within-mentioned Indenture --------------------------------------------- Principal Amount No. $ CUSIP PPL CAPITAL FUNDING, INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company," which term includes any successor under the Indenture referred to below), for value received, hereby promises to pay to , or registered assigns, the principal sum of DOLLARS on the Stated Maturity specified above, and to pay interest thereon from the Original Issue Date specified above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on the Interest Payment Dates specified above in each year, commencing with the Interest Payment Date next succeeding the Original Issue Date specified above, and at Maturity, at the Interest Rate per annum specified above, until the principal hereof is paid or duly provided for. The interest so payable, and paid or duly provided for, on any Interest Payment Date shall, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date specified above (whether or not a Business Day) next preceding such Interest Payment Date. Notwithstanding the foregoing, (a) if the Original Issue Date of this Security is after a Regular Record Date and before the corresponding Interest Payment Date, interest so payable for the period from and including the Original Issue Date to but excluding such Interest Payment Date shall be paid on the next succeeding Interest Payment Date to the Holder hereof on the related Regular Record Date and (b) interest payable at Maturity shall be paid to the Person to whom principal shall be paid. Except as otherwise provided in said Indenture, any such interest not so paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice of which shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Interest on this Security shall be computed on the basis of a 360-day year consisting of twelve 30-day months, and with respect to any period less than a full calendar month, on the basis of actual days elapsed during such period. [Insert provisions, if any, relating to alternative interest rate formula] Payment of the principal of and premium, if any, on this Security and interest hereon at Maturity shall be made upon presentation of this Security at the corporate trust office of The Chase Manhattan Bank in New York, New York or at such other office or agency as may be designated for such purpose by the Company from time to time. Payment of interest, if any, on this Security (other than interest at Maturity) shall be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register, except that (a) if such Person shall be a securities depositary, such payment may be made by such other means in lieu of check as shall be agreed upon by the Company, the Trustee or other Paying Agent and such Person and (b) if such Person is a Holder of $10,000,000 or more in aggregate principal amount of Securities of this series such payment may be in immediately available funds by wire transfer to such account as may have been designated in writing by the Person entitled thereto as set forth herein in time for the Paying Agent to make such payments in accordance with its normal procedures. Any such designation for wire transfer purposes shall be made by filing the appropriate information with the Trustee at its Corporate Trust Office in The City of New York not less than fifteen calendar days prior to the applicable payment date and, unless revoked by written notice to the Trustee received on or prior to the Regular Record Date immediately preceding the applicable Interest Payment Date, shall remain in effect with respect to any further interest payments (other than interest payments at Maturity) with respect to this Security payable to such Holder. Payment of the principal of and premium, if any, and interest, if any, on this Security, as aforesaid, shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts. This Security is one of a duly authorized issue of securities of the Company (herein called 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 or amended from time to time thereafter, together with any constituent instruments establishing the terms of particular Securities, being herein called the "Indenture"), among the Company (formerly called PP&L Capital Funding, Inc.), PPL Corporation (formerly called PP&L Resources, Inc.), as Guarantor (herein called the "Guarantor," which term includes any successor under the Indenture), and The Chase Manhattan Bank, as Trustee (herein called the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the respective rights, limitations of rights, duties and immunities of the Company, the Guarantor, the Trustee and the Holders of the Securities thereunder and of the terms and 2 conditions upon which the Securities are, and are to be, authenticated and delivered. The acceptance of this Security shall be deemed to constitute the consent and agreement by the Holder hereof to all of the terms and provisions of the Indenture. This Security is one of the series designated above. If any Interest Payment Date, any Redemption Date or the Stated Maturity shall not be a Business Day (as hereinafter defined), payment of the amounts due on this Security on such date may be made on the next succeeding Business Day, and, if such payment is made or duly provided for on such next succeeding Business Day, no interest shall accrue on such amounts for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to such Business Day. [If, as specified above, this Security is redeemable, this Security is subject to redemption at any time on or after the Initial Redemption Date specified above, in whole or in part in increments of $1,000, at the election of the Company, at the applicable redemption price (as described below) plus accrued interest to the date fixed for redemption. Such redemption price shall be the Initial Redemption Price specified above for the twelve-month period commencing on the Initial Redemption Date and shall decline for the twelve-month period commencing on each anniversary of the Initial Redemption Date by a percentage of principal amount equal to the Annual Redemption Percentage Reduction specified above until such redemption price is 100% of the principal amount of this Security to be redeemed.] [Insert provisions, if any, for redemption pursuant to a sinking fund or other mandatory redemption or purchase provisions or other put or call provisions] Notice of redemption (other than at the option of the Holder) shall be given by mail to Holders of Securities, not less than 30 days nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture. As provided in the Indenture, notice of redemption at the election of the Company as aforesaid may state that such redemption shall be conditional upon the receipt by the applicable Paying Agent or Agents of money sufficient to pay the principal of and premium, if any, and interest, if any, on this Security on or prior to the date fixed for such redemption; a notice of redemption so conditioned shall be of no force or effect if such money is not so received and, in such event, the Company shall not be required to redeem this Security. In the event of redemption of this Security in part only, a new Security or Securities of this series, of like tenor, representing the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof. If this Security is specified on the face hereof to be repayable at the Option of the Holder, this Security will be so repaid in whole or in part in increments of $1,000, provided that the remaining principal amount of any Security surrendered for partial repayment shall be at least $1,000, on any Option Repayment Date (as stated on the face hereof), at the option of the Holder, at 100% of the principal amount to be repaid, plus accrued interest, if any, to the repayment date. In order for the exercise of the option to be effective and the Security to be repaid, the Company must receive at the applicable address of the Trustee set forth below, or at such other place or places of which the Company shall from time to time notify the Holder of this Security, on or before the thirtieth, but not earlier than the sixtieth calendar day, or, if such day is not a Business Day, the next succeeding Business Day, prior to the repayment date, either (i) this Security, with the form below entitled "Option to Elect Repayment" duly completed, or (ii) a telegram, telex, facsimile transmission, or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or a trust company in the United States of America setting forth (a) the name, address, and telephone number of the Holder of this Security, (b) the principal amount of this Security and the amount of this Security to be repaid, (c) a statement that the option to elect repayment is being exercised thereby, and (d) a guarantee stating that the Trustee on behalf of the Company will 3 receive this Security, with the form below entitled "Option to Elect Repayment" duly completed, not later than five Business Days after the date of such telegram, telex, facsimile transmission, or letter (and this Security and form duly completed are received by the Trustee on behalf of the Company by such fifth Business Day). Any such election shall be irrevocable. The address to which such deliveries are to be made is The Chase Manhattan Bank, Attention, Capital Markets Fiduciary Services, 450 West 33rd Street, New York, New York 10001 (or, at such other places as the Company shall notify the Holders of the Securities). All questions as to the validity, eligibility (including time of receipt) and acceptance of any Security for repayment will be determined by the Company, whose determination will be final and binding. If an Event of Default with respect to the Securities of this series shall occur and be continuing, the principal of this Security may be declared due and payable in the manner and with the effect provided in the Indenture. 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 Company 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 Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security 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 Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest, if any, on this Security at the times, place and rate, in the coin or currency, and in the manner, herein prescribed. As provided in the Indenture and subject to certain limitations therein and herein set forth, this Security or any portion of the principal amount hereof will be deemed to have been paid for all purposes of the Indenture and to be no longer Outstanding thereunder, and, at the election of the Company, the Company's entire indebtedness in respect thereof will be satisfied and discharged, if there has been irrevocably deposited with the Trustee or any Paying Agent (other than the Company or the Guarantor), in trust, money in an amount which will be sufficient and/or Eligible Obligations, the principal of and interest on which when due, without any regard to reinvestment thereof, will provide moneys which, together with moneys so deposited, will be sufficient to pay when due the principal of and premium, if any, and interest, if any, on this Security when due. 4 The Indenture contains terms, provisions and conditions relating to the consolidation or merger of the Company or the Guarantor with or into, and the conveyance or other transfer, or lease, of assets to, another Person, to the assumption by such other Person, in certain circumstances, of all of the obligations of the Company or the Guarantor under the Indenture and on the Securities (or the Guarantees endorsed thereon, as the case may be) and to the release and discharge of the Company or the Guarantor, as the case may be, in certain circumstances, from such obligations. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office of The Chase Manhattan Bank in New York, New York or such other office or agency as may be designated by the Company from time to time, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar 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 aggregate principal amount, will be issued to the designated transferee or transferees. The Securities of this series are issuable only as registered Securities, without coupons, and in denominations of $1,000 and integral multiples thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of the same series and Tranche, of any authorized denominations, as requested by the Holder surrendering the same, and of like tenor upon surrender of the Security or Securities to be exchanged at the office of The Chase Manhattan Bank in New York, New York or such other office or agency as may be designated by the Company from time to time. The Company shall not be required to execute and the Security Registrar shall not be required to register the transfer of or exchange of (a) Securities of this series during a period of 15 days immediately preceding the date notice is given identifying the serial numbers of the Securities of this series called for redemption or (b) any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the absolute owner hereof for all purposes (subject to Sections 305 and 307 of the Indenture), whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York (including, without limitation, Section 5-1401 of the New York General Obligations Law or any successor to such statute), except to the extent that the Trust Indenture Act shall be applicable. As used herein, "Business Day" means any day, other than a Saturday or Sunday, that is not a day on which banking institutions or trust companies are generally authorized or required by law, regulation or executive order to close in The City of New York or other city in which is located any Paying Agent for the Securities of this series. All other terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 5 As provided in the Indenture, no recourse shall be had for the payment of the principal of or premium, if any, or interest on any Securities, any Guarantees or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under the Indenture, against, and no personal liability whatsoever shall attach to, or be incurred by, any incorporator, stockholder, officer or director, as such, past, present or future of the Company or the Guarantor or of any predecessor or successor of either of them (either directly or through the Company or the Guarantor, as the case may be, or a predecessor or successor of either of them), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that the Indenture and this Security and the Guarantee endorsed hereon are solely corporate obligations and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of the Indenture and the issuance of this Security and such Guarantee. Unless the certificate of authentication hereon has been executed by the Trustee or an Authenticating Agent by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. PPL CAPITAL FUNDING, INC. [SEAL] By: ------------------------------------- President Attested: By: ------------------------------------ Secretary 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 (the "Indenture"), referred to in the Security upon which this Guarantee is endorsed), for value received, hereby unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed, the due and punctual payment of the principal of, and premium, if any, and interest on such Security when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption, or otherwise, in accordance with the terms of such Security 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 "Company," 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 6 same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Company. 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 Security or the Indenture, any failure to enforce the provisions of such Security or the Indenture, or any waiver, modification or indulgence granted to the Company with respect thereto, by the Holder of such Security 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 Security, or increase the interest rate thereon, or change any redemption provisions thereof (including any change to increase any premium payable upon redemption thereof) or change the Stated Maturity thereof. The Guarantor hereby waives the benefits of diligence, presentment, demand for payment, any requirement that the Trustee or the Holder of such Security exhaust any right or take any action against the Company or any other Person, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to such Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged in respect of such Security except by complete performance of the obligations contained in such Security 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 premium, if any, or interest, if any, on such Security, whether at its Stated Maturity, by declaration of acceleration, call for redemption, or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Security, subject to the terms and conditions set forth in the Indenture, directly against the Guarantor to enforce this Guarantee without first proceeding against the Company. The obligations of the Guarantor hereunder with respect to such Security shall be continuing and irrevocable until the date upon which the entire principal of, premium, if any, and interest on such Security has been, or has been deemed pursuant to the provisions of Article Seven of the Indenture to have been, paid in full or otherwise discharged. The Guarantor shall be subrogated to all rights of the Holder of such Security upon which this Guarantee is endorsed against the Company in respect of any amounts paid by the Guarantor on account of such Security 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 of, and premium, if any, and interest, if any, on all Securities 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 Company for liquidation or reorganization, the Company 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 Company's assets, and shall, to the fullest extent permitted by law, continue to be effective or 7 reinstated, as the case may be, if at any time payment of the Security 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 Security, 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 Security, such Security 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. This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of the Security 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 such Indenture shall have the meanings assigned to them in such Indenture. This Guarantee shall be deemed to be a contract made under the laws of the State of New York, and for all purposes 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: ------------------------------------- Vice President-Finance and Treasurer CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. Dated: THE CHASE MANHATTAN BANK --------------------------- AS TRUSTEE By: ------------------------------------- Authorized Officer 8 UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE TO BE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY AMOUNT PAYABLE THEREUNDER IS MADE PAYABLE TO CEDE & CO. OR SUCH OTHER NAME), 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. UNLESS AND UNTIL THIS SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR CERTIFICATED SECURITIES REGISTERED IN THE NAMES OF THE VARIOUS BENEFICIAL HOLDERS HEREOF AS THEN CERTIFIED TO THE COMPANY AND THE TRUSTEE BY THE DEPOSITARY OR A SUCCESSOR DEPOSITARY, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO ITS NOMINEE OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. THIS SECURITY MAY BE EXCHANGED FOR CERTIFICATED SECURITIES REGISTERED IN THE NAMES OF THE VARIOUS BENEFICIAL OWNERS HEREOF ONLY IF (A) THE DEPOSITARY (I) HAS NOTIFIED THE COMPANY THAT IT IS UNWILLING OR UNABLE TO CONTINUE AS DEPOSITARY OR (II) HAS CEASED TO BE A CLEARING AGENCY REGISTERED UNDER THE EXCHANGE ACT, AND, IN EITHER CASE, A SUCCESSOR DEPOSITARY IS NOT APPOINTED BY THE COMPANY WITHIN 90 DAYS, OR (B) THE COMPANY ELECTS TO ISSUE CERTIFICATED SECURITIES TO BENEFICIAL OWNERS (AS CERTIFIED TO THE COMPANY AND THE TRUSTEE BY THE DEPOSITARY OR A SUCCESSOR DEPOSITARY) OF ALL SECURITIES OF THE SERIES DESIGNATED ABOVE. --------- 9 OPTION TO ELECT REPAYMENT [TO BE COMPLETED ONLY IF THIS NOTE IS REPAYABLE AT THE OPTION OF THE HOLDER AND THE HOLDER ELECTS TO EXERCISE SUCH RIGHTS] The undersigned hereby irrevocably requests and instructs the Company to repay the within Security (or portion thereof specified below) pursuant to its terms at a price equal to the principal amount thereof, together with interest to the repayment date, to the undersigned, at - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Please print or type name and address of the undersigned) For this Security to be repaid the Company must receive at the Corporate Trust Office of the Trustee in The City of New York or at such other place or places of which the Company shall from time to time notify the Holder of the within Security, on or before the thirtieth, but not earlier than the sixtieth, calendar day, or, if such day is not a Business Day, the next succeeding Business Day, prior to the repayment date, (i) this Security, with this "Option to Elect Repayment" form duly completed, or (ii) a telegram, telex, facsimile transmission, or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or a trust company in the United States of America setting forth (a) the name, address, and telephone number of the Holder of the Security, (b) the principal amount of the Security and the amount of the Security to be repaid, (c) a statement that the option to elect repayment is being exercised thereby, and (d) a guarantee stating that the Security to be repaid with this form duly completed will be received by the Trustee on behalf of the Company not later than five Business Days after the date of such telegram, telex, facsimile transmission, or letter (and such Security and form duly completed are received by the Trustee on behalf of the Company by such fifth Business Day). Exercise of the repayment option by the Holder shall be irrevocable. If less than the entire principal amount of the within Security is to be repaid, specify the portion thereof (which shall be an integral multiple of $1,000) which the Holder elects to have repaid: ; and ------------------------------------ specify the denomination or denominations (which shall be $1,000 or an integral multiple thereof) of the Security or Securities to be issued to the Holder for the portion of the within Security or Securities to be issued to the Holder for the portion of the within Security not being repaid (in the absence of any specification, one such Security will be issued for the portion not being repaid): Date: - --------------------------------------- ---------------------------- Notice: The signature to this Option to Elect Repayment must correspond with the name as written upon the face of the Security in every particular without alteration or enlargement or any other change whatsoever. 10 FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto - -------------------------------------------------------------------------------- [please insert social security or other identifying number of assignee] - -------------------------------------------------------------------------------- [please print or typewrite name and address of assignee] - -------------------------------------------------------------------------------- the within Security of PPL CAPITAL FUNDING, INC. and does hereby irrevocably constitute and appoint , Attorney, to transfer said --------------------------- Security on the books of the within-mentioned Company, 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 Security in every particular without alteration or enlargement or any change whatsoever. 11 FORM OF FLOATING RATE NOTE (SEE LEGEND AT THE END OF THIS SECURITY FOR RESTRICTIONS ON TRANSFER AND CHANGE OF FORM) PPL CAPITAL FUNDING, INC. MEDIUM-TERM NOTE, SERIES [E] Unconditionally Guaranteed as to Payment of Principal and any Interest and Premium by PPL CORPORATION
Original Issue Date: Interest Payment Dates: Stated Maturity: Regular Record Dates: Issue Price (%): Initial Interest Reset Date: Designation: Interest Reset Dates: - -- Regular Floating Rate Note: Interest Reset Period: - -- Floating Rate/Fixed Rate Note: Index Maturity: Fixed Rate Commencement Date: Spread (expressed in basis points): +/- Fixed Interest Rate: Calculation Agent: - -- Inverse Floating Rate Note: Day Count Convention: Fixed Interest Rate: -- Actual/360 for the period from Initial Interest Rate: to Interest Rate Basis: ------------------ ------------------ - -- CMT Rate: -- Actual/Actual for the period from Designated CMT Maturity Index: to Designated CMT Telerate Page: ------------------ ------------------ - -- Commercial Paper Rate: --30/360 for the period from - -- Federal Funds Rate: to - -- LIBOR: ------------------ ------------------ Designated LIBOR Page: LIBOR Reuters Spread Multiplier: -- Redeemable: Yes No LIBOR Telerate -- -- -- Initial Redemption Date: - -- Prime Rate: Initial Redemption Price: - -- Treasury Rate: Annual Redemption Percentage Reduction: Two or More Interest Rate Bases: Yes No Repayable at Option of the Holder: Yes No -- -- -- -- Specify calculation of interest factor: Option Repayment Dates(s): Maximum Interest Rate: Repayment Price: 100% Minimum Interest Rate: Other/Additional Provisions: Interest Payment Period:
This Security is not a Discount Security within the meaning of the within-mentioned Indenture --------------------------------------------------- Principal Amount No. $ CUSIP PPL Capital Funding, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company," which term includes any successor corporation under the Indenture referred to below), for value received, hereby promises to pay to , or registered assigns, the principal sum of DOLLARS on the Stated Maturity specified above, and to pay interest thereon from the Original Issue Date specified above or from the most recent Interest Payment Date to which interest has been paid or duly provided for, monthly, quarterly, semi-annually or annually, as specified above for the Interest Payment Period, in arrears on the Interest Payment Dates specified above in each year, commencing with the Interest Payment Date next succeeding the Original Issue Date specified above, and at Maturity, until the principal hereof is paid or duly provided for. Except as otherwise provided herein, the rate of interest to be so paid shall be the Initial Interest Rate specified above until the Initial Interest Reset Date specified above and thereafter at a rate determined, in accordance with the provisions for determination of interest rates below, by reference to the Interest Rate Basis or Bases specified above, plus or minus the Spread, if any, specified above and/or multiplied by the Spread Multiplier, if any, specified above. The interest so payable, and paid or duly provided for, on any Interest Payment Date shall, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date specified above (whether or not a Business Day) next preceding such Interest Payment Date. Notwithstanding the foregoing, (a) if the Original Issue Date of this Security is after a Regular Record Date and before the corresponding Interest Payment Date, interest so payable for the period from and including the Original Issue Date to but excluding such Interest Payment Date shall be paid on the next succeeding Interest Payment Date to the Holder hereof on the related Regular Record Date, and (b) interest payable at Maturity shall be paid to the Person to whom principal shall be paid. Except as otherwise provided in said Indenture, any such interest not so paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice of which shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Payment of the principal of and premium, if any, on this Security and interest hereon at Maturity shall be made upon presentation of this Security at the corporate trust office of The Chase Manhattan Bank in New York, New York or at such other office or agency as may be designated for such purpose by the Company from time to time. Payment of interest, if any, on this Security (other than interest at Maturity) shall be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register, except that (a) if such Person shall be a securities depositary, such payment may be made by such other means in lieu of check as shall be agreed upon by the Company, the Trustee or other Paying Agent and such Person and (b) if such Person is a Holder of $10,000,000 or more in aggregate principal amount of Securities of this series such payment may be in immediately available funds by wire transfer to such account as may have been designated in writing by the Person entitled thereto as set forth herein in time for the Paying Agent to make such payments in accordance with its normal procedures. Any such designation for wire transfer purposes shall be made by filing the appropriate information with the Trustee at its Corporate Trust Office in The City of New York not less than fifteen calendar days prior to the applicable payment date and, unless revoked by written notice to the Trustee received on or prior to the Regular Record Date immediately preceding the applicable Interest Payment Date, shall remain in effect with respect to any further interest payments (other than interest 2 payments at Maturity) with respect to this Security payable to such Holder. Payment of the principal of and premium, if any, and interest, if any, on this Security, as aforesaid, shall be made in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts. This Security is one of a duly authorized issue of securities of the Company (herein called 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 or amended from time to time thereafter, together with any constituent instruments establishing the terms of particular Securities, being herein called the "Indenture"), among the Company (formerly called PP&L Capital Funding, Inc.), PPL Corporation (formerly called PP&L Resources, Inc.), as Guarantor (herein called the Guarantor," which term includes any successor under the Indenture), and The Chase Manhattan Bank, as Trustee (herein called the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the respective rights, limitations of rights, duties and immunities of the Company, the Guarantor, the Trustee and the Holders of the Securities thereunder and of the terms and conditions upon which the Securities are, and are to be, authenticated and delivered. The acceptance of this Security shall be deemed to constitute the consent and agreement by the Holder hereof to all of the terms and provisions of the Indenture. This Security is one of the series designated above. The interest rate applicable to this Security will be determined as follows: If this Security is designated as a "Regular Floating Rate Note," then except as described below, this Security will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases specified above (a) plus or minus the applicable Spread, if any, specified above and/or (b) multiplied by the applicable Spread Multiplier, if any, specified above. Commencing on the Initial Interest Reset Date, the rate at which interest on such Regular Floating Rate Note shall be payable shall be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the Original Issue Date specified above to the Initial Interest Reset Date will be the Initial Interest Rate. If this Security is designated as a "Floating Rate/Fixed Rate Note," then, except as described below, this Security will bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases (a) plus or minus the applicable Spread, if any, specified above and/or (b) multiplied by the applicable Spread Multiplier, if any, specified above. Commencing on the Initial Interest Reset Date, the rate at which interest on such Floating Rate/Fixed Rate Note shall be payable shall be reset as of each Interest Reset Date; provided, however, that (y) the interest rate in effect for the period, if any, from the Original Issue Date specified above to the Initial Interest Reset Date will be the Initial Interest Rate and (z) the interest rate in effect for the period commencing on the Fixed Rate Commencement Date to Maturity shall be the Fixed Interest Rate, if any, specified above or, if no such Fixed Interest Rate is specified, the interest rate in effect thereon on the day immediately preceding the Fixed Rate Commencement Date. If this Security is designated as an "Inverse Floating Rate Note," then, except as described below, this Security will bear interest at the Fixed Interest Rate specified above minus the rate determined by reference to the applicable Interest Rate Basis or Bases (a) plus or minus the applicable Spread, if any, specified above and/or (b) multiplied by the applicable Spread Multiplier, if any, specified above; provided, however, that, the interest rate thereon will not be less than zero. Commencing on 3 the Initial Interest Reset Date, the rate at which interest on such Inverse Floating Rate Note shall be payable shall be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the Original Issue Date specified above to the Initial Interest Reset Date shall be the Initial Interest Rate. Commencing with the Initial Interest Reset Date specified above and thereafter upon each succeeding Interest Reset Date specified above, the rate at which interest on this Security is payable shall be reset daily, weekly, monthly, quarterly, semi-annually or annually as specified above as the "Interest Reset Period." Unless otherwise specified above, the Interest Reset Dates shall be: if the interest rate on this Security resets daily, each Business Day; if the interest rate on this Security (unless the Treasury Rate is an applicable Interest Rate Basis) resets weekly, Wednesday of each week; if the Treasury Rate is an applicable Interest Rate Basis specified above and the applicable rate resets weekly, Tuesday of each week (except as provided below under "Determination of Treasury Rate"); if the interest rate on this Security resets monthly, the third Wednesday of each month; if the interest rate on this Security resets quarterly, the third Wednesday of March, June, September and December of each year; if the interest rate on this Security resets semi-annually, the third Wednesday of the two months of each year specified above; and if the interest rate on this Security rests annually, the third Wednesday of the month of each year specified above; provided, however, that, if this Security is a Floating Rate/Fixed Rate Note, the rate of interest hereon will not reset after the applicable Fixed Rate Commencement Date. If an Interest Reset Date for this Security would otherwise be a day that is not a Business Day (as hereinafter defined), such Interest Reset Date shall be postponed to the next succeeding Business Day, except that, if LIBOR is an Interest Rate Basis specified above and such Business Day is in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. The interest rate applicable to each Interest Reset Period commencing on the related Interest Reset Date will be the rate determined by the Calculation Agent (as defined below) as of the applicable Interest Determination Date and calculated on or prior to the Calculation Date (as hereinafter defined), except with respect to LIBOR, which will be calculated on such Interest Determination Date. The "Interest Determination Date" with respect to the CMT Rate, the Commercial Paper Rate, the Federal Funds Rate and the Prime Rate will be the second Business Day immediately preceding the applicable Interest Reset Date; and the "Interest Determination Date" with respect to LIBOR will be the second London Business Day immediately preceding the applicable Interest Reset Date. With respect to the Treasury Rate, the "Interest Determination Date" will be the day in the week in which the applicable Interest Reset Date falls on which day Treasury Bills (as hereinafter defined) are normally auctioned (Treasury Bills are normally sold at an auction held on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday); provided, however, that if an auction is held on the Friday of the week preceding the applicable Interest Reset Date, the "Interest Determination Date" will be such preceding Friday; provided, further, that if the Interest Determination Date would otherwise fall on an Interest Reset Date, then such Interest Reset Date will be postponed to the next succeeding Business Day. If the interest rate on this Security is determined by reference to two or more Interest Rate Bases, the "Interest Determination Date" will be the most recent Business Day which is at least two Business Days prior to the applicable Interest Reset Date for this Security on which each Interest Rate Basis is determinable. Each Interest Rate Basis will be determined as of such date, and the applicable interest rate will take effect on the applicable Interest Reset Date. Anything herein to the contrary notwithstanding, the interest rate hereon shall not be greater than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate, if any, specified above. In addition, the interest rate hereon shall in no event be higher than the maximum rate permitted by applicable law. 4 Except as otherwise provided herein, interest will be payable, if the interest rate on this Security resets daily, weekly or monthly, on the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year, as specified above; if the interest rate on this Security resets quarterly, on the third Wednesday of March, June, September and December of each year; if the interest rate on this Security resets semi-annually, on the third Wednesday of the two months of each year specified above; and if the interest rate on this Security resets annually, on the third Wednesday of the month of each year specified above (each such day being an "Interest Payment Date"), and, in each case, on Maturity. If any Interest Payment Date, other than the Maturity, would otherwise be a day that is not a Business Day, such Interest Payment Date will be postponed to the next succeeding Business Day, except that if LIBOR is an applicable Interest Rate Basis and such Business Day falls in the next succeeding calendar month, such Interest Payment Date will be the immediately preceding Business Day. If the Maturity of this Security falls on a day that is not a Business Day, the required payment of principal and any premium and interest may be made on the next succeeding Business Day as if made on the date such payment was due, and no interest will accrue on such payment for the period from and after the Maturity to the date of such payment on the next succeeding Business Day. Interest payments on this Security shall be in the amount of interest accrued from and including the immediately preceding Interest Payment Date in respect of which interest has been paid or made available for payment (or from and including the Original Issue Date if no interest has been paid or made available for payment) to but excluding the applicable Interest Payment Date or the Maturity, as the case may be. Accrued interest on this Security shall be calculated by multiplying the principal amount of this Security by an accrued interest factor. Such accrued interest factor shall be computed by adding the interest factor calculated for each day in the applicable period for which accrued interest is being calculated. Unless otherwise specified above, the interest factor for each such day shall be computed by dividing the interest rate applicable to such day by 360 if the Interest Rate Basis is the Commercial Paper Rate, the Federal Funds Rate, LIBOR or the Prime Rate, as specified above, or by the actual number of days in the year if the Interest Rate Basis is the CMT Rate or the Treasury Rate, as indicated above. If the interest rate applicable to this Security is calculated with reference to two or more Interest Rate Bases, the interest factor for this Security will be calculated in the manner specified above. All percentages resulting from any calculation of the rate of interest hereon shall be rounded to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and all amounts used in or resulting from such calculation hereon will be rounded to the nearest cent (with one-half cent being rounded upwards). The Company has appointed the Calculation Agent specified above to calculate the interest rates on this Security. Upon the request of the Holder of this Security, the Calculation Agent will disclose the interest rate then in effect, and, if determined, the interest rate that will become effective as a result of a determination made for the next succeeding Interest Reset Date with respect to this Security. Unless otherwise specified herein, the "Calculation Date," if applicable, pertaining to any Interest Determination Date will be the earlier of (i) the tenth calendar day after such Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day or (ii) the Business Day immediately preceding the applicable Interest Payment Date or Maturity, as the case may be. Subject to applicable provisions of law and except as specified herein, the Calculation Agent shall determine the rate of interest in accordance with the provisions under the applicable heading below. All determinations of interest rates by the Calculation Agent shall, in the absence of manifest error, be conclusive for all purposes and binding on the Holder hereof. 5 DETERMINATION OF CMT RATE If the Interest Rate Basis specified above is the CMT Rate, this Security shall bear interest for each Interest Reset Period at an interest rate calculated with reference to the CMT Rate, determined as set forth below, and the Spread or Spread Multiplier, if any, specified above. The CMT Rate for each Interest Reset Period shall be determined by the Calculation Agent with respect to any Interest Determination Date (a "CMT Rate Interest Determination Date") and shall be the rate displayed on the Designated CMT Telerate Page (as defined below) under the caption "...Treasury Constant Maturities...Federal Reserve Board Release H.15...Mondays Approximately 3:45 P.M.," under the column for the Designated CMT Maturity Index (as defined below) for (a) if the Designated CMT Telerate Page is 7051, the rate on such CMT Rate Interest Determination Date and (b) if the Designated CMT Telerate Page is 7052, the weekly or monthly average, as specified above, for the week or the month, as applicable, ended immediately preceding the week or the month, as applicable, in which the related CMT Rate Interest Determination Date falls. If such rate is no longer displayed on the relevant page or is not displayed by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate for such CMT Rate Interest Determination Date will be such treasury constant maturity rate for the Designated CMT Maturity Index as published in H.15(519). If such rate is no longer published or is not published by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate on such CMT Rate Interest Determination Date will be such treasury constant maturity rate for the Designated CMT Maturity Index (or other United States Treasury rate for the Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with respect to such Interest Reset Date as may then be published by either the Board of Governors of the Federal Reserve System or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate formerly displayed on the Designated CMT Telerate Page and published in H.15(519). If such information is not provided by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate on the CMT Rate Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity, based on the arithmetic mean of the secondary market offered rates as of approximately 3:30 P.M., New York City time, on such CMT Rate Interest Determination Date reported, according to their written records, by three leading primary United States government securities dealers in The City of New York (each, a "Reference Dealer") selected by the Calculation Agent (from five such Reference Dealers selected by the Calculation Agent and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for the most recently issued direct noncallable fixed rate obligations of the United States ("Treasury Notes") with an original maturity of approximately the Designated CMT Maturity Index and a remaining term to maturity of not less than such Designated CMT Maturity Index minus one year. If the Calculation Agent is unable to obtain three such Treasury Note quotations, the CMT Rate on such CMT Rate Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity based on the arithmetic mean of the secondary market offered rates as of approximately 3:30 P.M., New York City time, on such CMT Rate Interest Determination Date of three Reference Dealers in The City of New York (from five such Reference Dealers selected by the Calculation Agent and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for Treasury Notes with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining term to maturity closest to the Designated CMT Maturity Index and in an amount of at least $100 million. If three or four (and not five) of such Reference Dealers are quoting as described above, then the CMT Rate will be based on the arithmetic mean of the offered rates obtained and neither the highest nor the lowest of such quotations will be eliminated; provided, however, that if fewer than three Reference Dealers so selected by the Calculation Agent are quoting as mentioned herein, the CMT Rate determined as of such CMT Rate Interest Determination Date will be the CMT Rate in effect on such CMT Rate Interest Determination Date, or if no such CMT Rate is then in effect, the interest rate on this Security will be the Initial Interest Rate. If two Treasury Notes with 6 an original maturity as described in the second preceding sentence have remaining terms to maturity equally close to the Designated CMT Maturity Index, the Calculation Agent will obtain quotations for the Treasury Note with the shorter remaining term to maturity. "Designated CMT Telerate Page" means the display on Bridge Telerate, Inc. (or any successor service) on the page specified above (or any other page as may replace such page on such service) for the purpose of displaying Treasury Constant Maturities as reported in H.15(519) or, if no such page is specified above, page 7052. "Designated CMT Maturity Index" means the original period to maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years) specified above with respect to which the CMT Rate will be calculated or, if no such maturity is specified above, 2 years. DETERMINATION OF COMMERCIAL PAPER RATE If the Interest Rate Basis specified above is the Commercial Paper Rate, this Security shall bear interest for each Interest Reset Period at an interest rate calculated with reference to the Commercial Paper Rate, determined as set forth below, and the Spread or Spread Multiplier, if any, specified above. The Commercial Paper Rate for each Interest Reset Period shall be determined by the Calculation Agent with respect to any Interest Determination Date (a "Commercial Paper Rate Interest Determination Date") and shall be the Money Market Yield (as defined herein) on such Commercial Paper Rate Interest Determination Date of the rate for commercial paper having the Index Maturity specified above as published in H.15(519) under the heading "Commercial Paper-Nonfinancial," or if such rate is not so published prior to 3:00 P.M., New York City time, on the related Calculation Date, the Money Market Yield as of such Commercial Paper Rate Interest Determination Date of the rate for commercial paper having the Index Maturity specified above as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying such rate, under the caption "Commercial Paper - Nonfinancial." "H-15 Daily Update" means the daily update of H.15(519) available through the world-wide web site of the Board of Governors of the Federal Reserve System at http:/www.bog.frb.fed.us/releases/h15/update, or any successor site or publication. If such rate is not yet published in H.15(519), H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on the related Calculation Date, then the Commercial Paper Rate on such Commercial Paper Rate Interest Determination Date shall be the Money Market Yield of the arithmetic mean of the offered rates at approximately 11:00 a.m., New York City time, on such Commercial Paper Rate Interest Determination Date of three leading dealers of United States dollar commercial paper in The City of New York selected by the Calculation Agent for commercial paper having the Index Maturity specified above placed for industrial issuers whose bond rating is "Aa," or the equivalent, from a nationally recognized statistical rating organization; provided, however, that if the dealers selected as aforesaid are not quoting rates as mentioned in this sentence, the Commercial Paper Rate determined as of such Commercial Paper Rate Interest Determination Date will be the Commercial Paper Rate in effect on such Commercial Paper Rate Interest Determination Date, or if no such Commercial Paper Rate is then in effect, the interest rate on this Security shall be the Initial Interest Rate. "Money Market Yield" means a yield (expressed as a percentage) calculated in accordance with the following formula: Money Market Yield = D x 360 x 100 --------------- 360 - (D x M) where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal, and "M" refers to the actual number of days in the Interest Reset Period specified above. 7 DETERMINATION OF FEDERAL FUNDS RATE If the Interest Rate Basis specified above is the Federal Funds Rate, this Security shall bear interest for each Interest Reset Period at an interest rate calculated with reference to the Federal Funds Rate, determined as set forth below, and the Spread or Spread Multiplier, if any, specified above. The Federal Funds Rate for each Interest Reset Period shall be determined by the Calculation Agent with respect to any Interest Determination Date (a "Federal Funds Rate Interest Determination Date") and shall be the rate on such Federal Funds Rate Interest Determination Date for United States dollar federal funds as published in H.15(519) under the heading "Federal Funds (Effective)", as such rate is displayed on Bridge Telerate, Inc. (or any successor service) on page 120 (or any other page as may replace such page on such service) ("Telerate Page 120") or, if such rate does not appear on Telerate Page 120 or is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on such Federal Funds Rate Interest Determination Date for United States dollar federal funds as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying such rate, under the caption "Federal Funds (Effective)." If such rate does not appear on Telerate Page 120 or is not published in H.15(519), H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on the related Calculation Date, then the Federal Funds Rate on such Federal Funds Rate Interest Determination Date shall be calculated by the Calculation Agent and shall be the arithmetic mean of the rates for the last transaction in overnight United States dollar federal funds arranged by three leading brokers of United States dollar federal funds transactions in The City of New York selected by the Calculation Agent prior to 9:00 A.M., New York City time, on such Federal Funds Rate Interest Determination Date; provided, however, that if the brokers so selected by the Calculation Agent are not quoting rates as mentioned in this sentence, the Federal Funds Rate determined as of such Federal Funds Rate Interest Determination Date will be the Federal Funds Rate in effect on such Federal Funds Rate Interest Determination Date, or if no Federal Funds Rate is then in effect, the interest rate on this Security will be the Initial Interest Rate. DETERMINATION OF LIBOR If the Interest Rate Basis specified above is LIBOR, this Security shall bear interest for each Interest Reset Period at an interest rate calculated with reference to LIBOR and the Spread Multiplier, if any, specified above. "LIBOR" for each Interest Reset Period shall be determined with respect to any Interest Determination Date (a "LIBOR Interest Determination Date") by the Calculation Agent for such LIBOR Note as follows: (a) LIBOR will be either: (1) if "LIBOR Reuters" is specified above, the arithmetic mean of the offered rates (unless the Designated LIBOR Page (as defined below) by its terms provides only for a single rate, in which case such single rate shall be used) for deposits in United States dollars having the Index Maturity specified above, commencing on the applicable Interest Reset Date, that appear (or, if only a single rate is required as aforesaid, appears) on the Designated LIBOR Page as of 11:00 A.M., London time, on such LIBOR Interest Determination Date, or (2) if "LIBOR Telerate" is specified above or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified above as the method for calculating LIBOR, the rate for deposits in United States dollars having the Index Maturity specified above, commencing on such Interest Reset Date, that appears on the Designated LIBOR Page as of 11:00 A.M., London time, on such LIBOR Interest Determination Date. If fewer than two such offered rates so appear, or if no such rate so appears, as applicable, LIBOR on such LIBOR Interest Determination Date will be determined in accordance with the provisions described in clause (ii) below. 8 (b) With respect to a LIBOR Interest Determination Date on which fewer than two offered rates appear, or no rate appears, as the case may be, on the Designated LIBOR Page as specified in clause (a) above, the Calculation Agent will request the principal London offices of each of four major reference banks in the London interbank market, as selected by the Calculation Agent, to provide the Calculation Agent with its offered quotation for deposits in United States dollars for the period of the Index Maturity specified above, commencing on the applicable Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date and in a principal amount that is representative for a single transaction in United States dollars in such market at such time. If at least two such quotations are so provided, then LIBOR on such LIBOR Interest Determination Date will be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, then LIBOR on such LIBOR Interest Determination Date will be the arithmetic mean of the rates quoted at approximately 11:00 A.M., New York City time, on such LIBOR Interest Determination Date by three major banks in The City of New York selected by the Calculation Agent for loans in United States dollars to leading European banks, having the Index Maturity specified above and in a principal amount that is representative for a single transaction in United States dollars in such market at such time; provided, however, that if the banks so selected by the Calculation Agent are not quoting as mentioned in this sentence, LIBOR determined as of such LIBOR Interest Determination Date will be LIBOR in effect on such LIBOR Interest Determination Date, or if no such LIBOR rate is then in effect, the interest rate on this Security shall be the Initial Interest Rate. "Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified above, the display on the Reuter Monitor Money Rates Service (or any successor service) on the page specified above (or any other page as may replace such page on such service) for the purpose of displaying the London interbank rates of major banks for United States dollars or (b) if "LIBOR Telerate" is specified above or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified above as the method for calculating LIBOR, the display on Bridge Telerate, Inc. (or any successor service) on the page specified above (or any other page as may replace such page on such service) for the purpose of displaying the London interbank rates of major banks for United States dollars. DETERMINATION OF PRIME RATE If the Interest Rate Basis specified above is the Prime Rate, this Security shall bear interest for each Interest Reset Period at an interest rate calculated with reference to the Prime Rate, determined as set forth below, and the Spread or Spread Multiplier, if any, specified above. The Prime Rate for each Interest Reset Period shall be determined by the Calculation Agent with respect to any Interest Determination Date (a "Prime Rate Interest Determination Date") and shall be the Prime Rate on such Prime Rate Interest Determination Date as such rate is published in H.15(519) under the caption "Bank Prime Loan" or, if not published by 3:00 P.M., New York City time, on the related Calculation Date the rate on such Prime Rate Interest Determination Date as published in H.15 Daily Update, or such other recognized electronic source used for displaying such rate, under the caption "Bank Prime Loan." If such rate is not yet published in H.15(519), H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on the related Calculation Date, then the Prime Rate shall be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIME 1 Page (as hereinafter defined) as such bank's prime rate 9 or base lending rate as of 11:00 A.M., New York City time, on such Prime Rate Interest Determination Date. If fewer than four such rates appear on the Reuters Screen USPRIME 1 Page for such Prime Rate Interest Determination Date, then the Prime Rate shall be the arithmetic mean of the prime rates or base lending rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on such Prime Rate Interest Determination Date by four major banks in The City of New York selected by the Calculation Agent; provided, however, that if the banks or trust companies so selected by the Calculation Agent are not quoting as mentioned in this sentence, the Prime Rate determined as of such Prime Rate Interest Determination Date will be the Prime Rate in effect on such Prime Rate Interest Determination Date, or if no such Prime Rate is then in effect, the interest rate on this Security shall be the Initial Interest Rate. "Reuters Screen USPRIME 1 Page" means the display on the Reuter Monitor Money Rates Service (or any successor service) on the "USPRIME 1" page (or such other page as may replace the USPRIME 1 page on such service) for the purpose of displaying prime rates or base lending rates of major United States banks. DETERMINATION OF TREASURY RATE If the Interest Rate Basis specified above is the Treasury Rate, this Security shall bear interest for each Interest Reset Period at an interest rate calculated with reference to the Treasury Rate and the Spread or Spread Multiplier, if any, specified above. The "Treasury Rate" for each Interest Reset Period shall be determined by the Calculation Agent with respect to any Interest Determination Date (a "Treasury Rate Interest Determination Date") and shall be: (a) the rate from the auction held on such Treasury Rate Interest Determination Date (the "Auction") of direct obligations of the United States ("Treasury bills") having the Index Maturity specified above, as such rate is published under the caption "AVGE INVEST YIELD" on the display on Bridge Telerate, Inc. (or any successor service) on page 56 (or any other page as may replace such page on such service) ("Telerate Page 56") or page 57 (or any other page as may replace such page on such service) ("Telerate Page 57"), as applicable, or (b) if the rate referred to in clause (a) is not published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on such Treasury Rate Interest Determination Date of such Treasury Bills as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying such rate, under the caption "U.S. Government Securities/Treasury Bills/Auction High," or (c) if the rate referred to in clause (b) is not published by 3:00 P.M., New York City time, on the related Calculation Date, the auction average rate of such Treasury Bills (expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) as otherwise announced by the United States Department of the Treasury. In the event that the results of the Auction of Treasury Bills having the Index Maturity specified above are not so published or announced by 3:00 P.M., New York City time, on the related Calculation Date, or if no such Auction is held, then the Treasury Rate will be: (a) the rate (expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) on such Treasury Rate Interest Determination Date of Treasury Bills having the Index Maturity specified above as published in H.15(519) under the caption "U.S. Government Securities/Treasury Bills/Secondary Market," or 10 (b) if not yet published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on such Treasury Rate Interest Determination Date of such Treasury Bills as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying such rate, under the caption "U.S. Government Securities/Treasury Bills/Secondary Market." If such rate is not yet published in H.15(519), H.15 Daily Update or another recognized electronic source by 3:00 P.M. New York City time, on the related Calculation Date, then the "Treasury Rate" will be calculated by the Calculation Agent and will be a yield to maturity (expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M., New York City time, on such Treasury Rate Interest Determination Date, of three primary United States government securities dealers selected by the Calculation Agent, for the issue of Treasury bills with a remaining maturity closest to the Index Maturity specified above; provided, however, that if the dealers so selected by the Calculation Agent are not quoting as mentioned in this sentence, the Treasury Rate determined as of such Treasury Rate Interest Determination Date will be the Treasury Rate in effect on such Treasury Rate Interest Determination Date, or if no such Treasury Rate is then in effect, the interest rate on this Security will be the Initial Interest Rate. [Insert provisions, if any, for alternative interest rate formula] [If, as specified above, this Security is redeemable, this Security is subject to redemption at any time on or after the Initial Redemption Date specified above, in whole or in part in increments of $1,000, at the election of the Company, at the applicable redemption price (as described below) plus accrued interest to the date fixed for redemption. Such redemption price shall be the Initial Redemption Price specified above for the twelve-month period commencing on the Initial Redemption Date and shall decline for the twelve-month period commencing on each anniversary of the Initial Redemption Date by a percentage of principal amount equal to the Annual Redemption Percentage Reduction specified above until such redemption price is 100% of the principal amount of this Security to be redeemed.] [Insert provisions, if any, for redemption pursuant to a sinking fund or other mandatory redemption or purchase provisions or other put or call provisions] Notice of redemption (other than at the option of the Holder) shall be given by mail to Holders of Securities, not less than 30 days nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture. As provided in the Indenture, notice of redemption at the election of the Company as aforesaid may state that such redemption shall be conditional upon the receipt by the applicable Paying Agent or Agents of money sufficient to pay the principal of and premium, if any, and interest, if any, on this Security on or prior to the date fixed for such redemption; a notice of redemption so conditioned shall be of no force or effect if such money is not so received and, in such event, the Company shall not be required to redeem this Security. In the event of redemption of this Security in part only, a new Security or Securities of this series, of like tenor, representing the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof. If this Security is specified on the face hereof to be repayable at the Option of the Holder, this Security will be so repaid in whole or in part in increments of $1,000, provided that the remaining principal amount of any Security surrendered for partial repayment shall be at least $1,000, on any Option Repayment Date (as stated on the face hereof), at the option of the Holder, at 100% of the principal amount to be repaid, plus accrued interest, if any, to the repayment date. In order for the exercise of the option to be effective and the Security to be repaid, the Company must receive at the applicable address of the Trustee set forth below, or at such other place or places of which the Company shall from time to time notify the Holder of this Security, on or before the thirtieth, but not earlier than the sixtieth calendar 11 day, or, if such day is not a Business Day, the next succeeding Business Day, prior to the repayment date, either (i) this Security, with the form below entitled "Option to Elect Repayment" duly completed, or (ii) a telegram, telex, facsimile transmission, or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or a trust company in the United States of America setting forth (a) the name, address, and telephone number of the Holder of this Security, (b) the principal amount of this Security and the amount of this Security to be repaid, (c) a statement that the option to elect repayment is being exercised thereby, and (d) a guarantee stating that the Trustee on behalf of the Company will receive this Security, with the form below entitled "Option to Elect Repayment" duly completed, not later than five Business Days after the date of such telegram, telex, facsimile transmission, or letter (and this Security and form duly completed are received by the Trustee on behalf of the Company by such fifth Business Day). Any such election shall be irrevocable. The address to which such deliveries are to be made is The Chase Manhattan Bank, Attention: Capital Markets Fiduciary Services, 450 West 33rd Street, New York, New York 10001 (or, at such other places as the Company shall notify the Holders of the Securities). All questions as to the validity, eligibility (including time of receipt) and acceptance of any Security for repayment will be determined by the Company, whose determination will be final and binding. If an Event of Default with respect to the Securities of this series shall occur and be continuing, the principal of this Security may be declared due and payable in the manner and with the effect provided in the Indenture. 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 Company 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 Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security 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 Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest, if any, on this Security at the times, place and rate, in the coin or currency, and in the manner, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, this Security or any portion of the principal amount hereof will be deemed to have been paid for all purposes of the Indenture and to be no longer Outstanding thereunder, and, at the election of the Company, the Company's entire indebtedness in respect thereof will be satisfied and discharged, if 12 there has been irrevocably deposited with the Trustee or any Paying Agent (other than the Company or the Guarantor), in trust, money in an amount which will be sufficient and/or Eligible Obligations, the principal of and interest on which when due, without any regard to reinvestment thereof, will provide moneys which, together with moneys so deposited, will be sufficient to pay when due the principal of and premium, if any, and interest, if any, on this Security when due. The Indenture contains terms, provisions and conditions relating to the consolidation or merger of the Company or the Guarantor with or into, and the conveyance or other transfer, or lease, of assets to, another Person, to the assumption by such other Person, in certain circumstances, of all of the obligations of the Company or the Guarantor under the Indenture and on the Securities (or the Guarantees endorsed thereon) and to the release and discharge of the Company or the Guarantor, as the case may be, in certain circumstances, from such obligations. As provided in the Indenture and subject to certain limitations therein and herein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office of The Chase Manhattan Bank in New York, New York or such other office or agency as may be designated by the Company from time to time, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar 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 aggregate principal amount, will be issued to the designated transferee or transferees. The Securities of this series are issuable only as registered Securities, without coupons, and in denominations of $1,000 and integral multiples thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of the same series and Tranche, of any authorized denominations, as requested by the Holder surrendering the same, and of like tenor upon surrender of the Security or Securities to be exchanged at the office of The Chase Manhattan Bank in New York, New York or such other office or agency as may be designated by the Company from time to time. The Company shall not be required to execute and the Security Registrar shall not be required to register the transfer of or exchange of (a) Securities of this series during a period of 15 days immediately preceding the date notice is given identifying the serial numbers of the Securities of this series called for redemption or (b) any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the absolute owner hereof for all purposes (subject to Sections 305 and 307 of the Indenture), whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York (including, without limitation, Section 5-1401 of the New York General Obligations Law or any successor to such statute), except to the extent that the Trust Indenture Act shall be applicable. As used herein, (1) "Business Day" means any day, other than a Saturday or Sunday, that is not a day on which banking institutions or trust companies are generally authorized or required by law, regulation or executive order 13 to close in The City of New York or other city in which is located any Paying Agent for the Securities of this series; provided that if an Interest Rate Basis specified above is LIBOR, such day is also a London Business Day. "London Business Day" means a day on which dealings in deposits in Dollars are transacted in the London interbank market; and (2) "H.15(519)" means the publication entitled "Statistical Release H.15(519), Selected Interest Rates," or any successor publication, published by the Board of Governors of the Federal Reserve System. All other terms used in this Security without definition which are defined in the Indenture shall have the meanings assigned to them in the Indenture. As provided in the Indenture, no recourse shall be had for the payment of the principal of or premium, if any, or interest on any Securities, any Guarantees or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under the Indenture, against, and no personal liability whatsoever shall attach to, or be incurred by, any incorporator, stockholder, officer or director, as such, past, present or future of the Company or the Guarantor or of any predecessor or successor of either of them (either directly or through the Company or the Guarantor, as the case may be, or a predecessor or successor of either of them), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that the Indenture and this Security and the Guarantee endorsed hereon are solely corporate obligations and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of the Indenture and the issuance of this Security and such Guarantee. Unless the certificate of authentication hereon has been executed by the Trustee or an Authenticating Agent by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. PPL CAPITAL FUNDING, INC. [SEAL] By: ------------------------------------ President Attested: By: ----------------- Secretary 14 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 (the "Indenture"), referred to in the Security upon which this Guarantee is endorsed), for value received, hereby unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed, the due and punctual payment of the principal of, and premium, if any, and interest on such Security when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption, or otherwise, in accordance with the terms of such Security 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 "Company", 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, call for redemption or otherwise, and as if such payment were made by the Company. 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 Security or the Indenture, any failure to enforce the provisions of such Security or the Indenture, or any waiver, modification or indulgence granted to the Company with respect thereto, by the Holder of such Security 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 Security, or increase the interest rate thereon, or change any redemption provisions thereof (including any change to increase any premium payable upon redemption thereof) or change the Stated Maturity thereof. The Guarantor hereby waives the benefits of diligence, presentment, demand for payment, any requirement that the Trustee or the Holder of such Security exhaust any right or take any action against the Company or any other Person, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to such Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged in respect of such Security except by complete performance of the obligations contained in such Security 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 premium, if any, or interest, if any, on such Security, whether at its Stated Maturity, by declaration of acceleration, call for redemption, or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Security, subject to the terms and conditions set forth in the Indenture, directly against the Guarantor to enforce this Guarantee without first proceeding against the Company. 15 The obligations of the Guarantor hereunder with respect to such Security shall be continuing and irrevocable until the date upon which the entire principal of, premium, if any, and interest on such Security has been, or has been deemed pursuant to the provisions of Article Seven of the Indenture to have been, paid in full or otherwise discharged. The Guarantor shall be subrogated to all rights of the Holder of such Security upon which this Guarantee is endorsed against the Company in respect of any amounts paid by the Guarantor on account of such Security 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 of, and premium, if any, and interest, if any, on all Securities 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 Company for liquidation or reorganization, the Company 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 Company'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 Security 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 Security, 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 Security, such Security 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. This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of the Security 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 such Indenture shall have the meanings assigned to them in such Indenture. This Guarantee shall be deemed to be a contract made under the laws of the State of New York, and for all purposes 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: ------------------------------------ Vice President-Finance and Treasurer 16 CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. Dated: THE CHASE MANHATTAN BANK ---------------------- AS TRUSTEE By: ------------------------------------ Authorized Officer 17 UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE TO BE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY AMOUNT PAYABLE THEREUNDER IS MADE PAYABLE TO CEDE & CO. OR SUCH OTHER NAME), 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. UNLESS AND UNTIL THIS SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR CERTIFICATED SECURITIES REGISTERED IN THE NAMES OF THE VARIOUS BENEFICIAL HOLDERS HEREOF AS THEN CERTIFIED TO THE COMPANY AND THE TRUSTEE BY THE DEPOSITARY OR A SUCCESSOR DEPOSITARY, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO ITS NOMINEE OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. THIS SECURITY MAY BE EXCHANGED FOR CERTIFICATED SECURITIES REGISTERED IN THE NAMES OF THE VARIOUS BENEFICIAL OWNERS HEREOF ONLY IF (A) THE DEPOSITARY (I) HAS NOTIFIED THE COMPANY THAT IT IS UNWILLING OR UNABLE TO CONTINUE AS DEPOSITARY OR (II) HAS CEASED TO BE A CLEARING AGENCY REGISTERED UNDER THE EXCHANGE ACT, AND, IN EITHER CASE, A SUCCESSOR DEPOSITARY IS NOT APPOINTED BY THE COMPANY WITHIN 90 DAYS, OR (B) THE COMPANY ELECTS TO ISSUE CERTIFICATED SECURITIES TO BENEFICIAL OWNERS (AS CERTIFIED TO THE COMPANY AND THE TRUSTEE BY THE DEPOSITARY OR A SUCCESSOR DEPOSITARY) OF ALL SECURITIES OF THE SERIES DESIGNATED ABOVE. --------- 18 OPTION TO ELECT REPAYMENT [TO BE COMPLETED ONLY IF THIS NOTE IS REPAYABLE AT THE OPTION OF THE HOLDER AND THE HOLDER ELECTS TO EXERCISE SUCH RIGHTS] The undersigned hereby irrevocably requests and instructs the Company to repay the within Security (or portion thereof specified below) pursuant to its terms at a price equal to the principal amount thereof, together with interest to the repayment date, to the undersigned, at - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Please print or type name and address of the undersigned) For this Security to be repaid the Company must receive at the Corporate Trust Office of the Trustee in The City of New York or at such other place or places of which the Company shall from time to time notify the Holder of the within Security, on or before the thirtieth, but not earlier than the sixtieth, calendar day, or, if such day is not a Business Day, the next succeeding Business Day, prior to the repayment date, (i) this Security, with this "Option to Elect Repayment" form duly completed, or (ii) a telegram, telex, facsimile transmission, or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or a trust company in the United States of America setting forth (a) the name, address, and telephone number of the Holder of the Security, (b) the principal amount of the Security and the amount of the Security to be repaid, (c) a statement that the option to elect repayment is being exercised thereby, and (d) a guarantee stating that the Security to be repaid with this form duly completed will be received by the Trustee on behalf of the Company not later than five Business Days after the date of such telegram, telex, facsimile transmission, or letter (and such Security and form duly completed are received by the Trustee on behalf of the Company by such fifth Business Day). Exercise of the repayment option by the Holder shall be irrevocable. If less than the entire principal amount of the within Security is to be repaid, specify the portion thereof (which shall be an integral multiple of $1,000) which the Holder elects to have repaid: ; --------------------------------------- and specify the denomination or denominations (which shall be $1,000 or an integral multiple thereof) of the Security or Securities to be issued to the Holder for the portion of the within Security or Securities to be issued to the Holder for the portion of the within Security not being repaid (in the absence of any specification, one such Security will be issued for the portion not being repaid): Date: ----------------------------- - ----------------------------------------------------- Notice: The signature to this Option to Elect Repayment must correspond with the name as written upon the face of the Security in every particular without alteration or enlargement or any other change whatsoever. 19 FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto - -------------------------------------------------------------------------------- [please insert social security or other identifying number of assignee] - -------------------------------------------------------------------------------- [please print or typewrite name and address of assignee] - -------------------------------------------------------------------------------- the within Security of PPL CAPITAL FUNDING, INC. and does hereby irrevocably constitute and appoint , Attorney, to transfer said ---------------------- Security on the books of the within-mentioned Company, 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 Security in every particular without alteration or enlargement or any change whatsoever. 20 EX-4 7 0007.txt EXHIBIT 4.8 EXHIBIT 4.8 ================================================================================ PPL CORPORATION AND THE CHASE MANHATTAN BANK, AS PURCHASE CONTRACT AGENT AND TRUSTEE ------------------------------- PURCHASE CONTRACT AGREEMENT ------------------------------- Dated as of --------------- ================================================================================ Reconciliation and Tie between Trust Indenture Act of 1939 and Purchase Contract Agreement dated as of , [2000] -------- Section of Section of Trust Indenture Act Purchase Contract of 1939, as amended Agreement ------------------- ---------------- 310(a)................................7.8 310(b)................................7.9(g), 11.8 310(c)................................Inapplicable 311(a)................................11.2(b) 311(b)................................11.2(b) 311(c)................................Inapplicable 312(a)................................11.2(a) 312(b)................................11.2(b) 313...................................11.3 314(a)................................11.4 314(b)................................Inapplicable 314(c)................................11.5 314(d)................................Inapplicable 314(e)................................1.2, 1.3, 11.5 314(f)................................11.1 315(a)................................7.1(a) 315(b)................................7.2 315(c)................................7.1(e) 315(d)................................7.1(b) 316(a)................................11.6 316(b)................................6.1 316(c)................................11.2 317(a)................................Inapplicable 317(b)................................Inapplicable 318(a)................................11.1(b) 318(b)................................11.1 318(c)................................11.1(a) - ------------------- Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Purchase Contract Agreement. -i- TABLE OF CONTENTS PAGE ---- ARTICLE I Definitions and Other Provisions of General Application....1 SECTION 1.1 Definitions....................................................1 SECTION 1.2 Compliance Certificates and Opinions..........................10 SECTION 1.3 Form of Documents Delivered to Purchase Contract Agent........11 SECTION 1.4 Acts of Holders; Record Dates.................................11 SECTION 1.5 Notices to Purchase Contract Agent, Company, Collateral Agent or Guarantor............................................13 SECTION 1.6 Notice to Holders; Waiver.....................................14 SECTION 1.7 Effect of Headings and Table of Contents......................14 SECTION 1.8 Successors and Assigns........................................14 SECTION 1.9 Separability Clause...........................................15 SECTION 1.10 Benefits of Agreement.......................................15 SECTION 1.11 Governing Law...............................................15 SECTION 1.12 Legal Holidays..............................................15 SECTION 1.13 Counterparts................................................15 SECTION 1.14 Inspection of Agreement.....................................15 SECTION 1.15 Appointment of Additional Agents............................16 ARTICLE II Certificate Forms......................16 SECTION 2.1 Forms of Certificates Generally...............................16 SECTION 2.2 Form of Purchase Contract Agent's Certificate of Authentication................................................17 ARTICLE III The Securities.......................17 SECTION 3.1 Amount; Form and Denominations................................17 SECTION 3.2 Rights and Obligations Evidenced by the Certificates..........18 SECTION 3.3 Execution, Authentication, Delivery and Dating................19 SECTION 3.4 Temporary Certificates........................................19 SECTION 3.5 Registration; Registration of Transfer and Exchange...........20 SECTION 3.6 Book-Entry Interests..........................................21 SECTION 3.7 Notices to Holders............................................22 SECTION 3.8 Appointment of Successor Depositary...........................22 SECTION 3.9 Definitive Certificates.......................................22 SECTION 3.10 Mutilated, Destroyed, Lost and Stolen Certificates..........22 SECTION 3.11 Persons Deemed Owners.......................................23 SECTION 3.12 Cancellation................................................24 SECTION 3.13 Creation of Treasury SPC Units by Substitution of Treasury Securities.........................................25 SECTION 3.14 Reestablishment of SPC Units................................26 SECTION 3.15 Transfer of Collateral upon Occurrence of Termination Event.......................................................27 SECTION 3.16 No Consent to Assumption....................................28 ARTICLE IV The [Preferred Securities,] Notes [and Applicable Ownership Interest in the Treasury Portfolio]..................28 SECTION 4.1 [Interest] Payments; Rights to [Interest] Payments Preserved..28 SECTION 4.2 [Deferral of Interest Payments................................29 SECTION 4.3 [Interest Rate Reset; Notice Relating to Cash Settlement......29 SECTION 4.4 Notice and Voting.............................................30 SECTION 4.5 [Distribution of Notes; Tax Event Redemption..................30 -ii- ARTICLE V The Purchase Contracts....................31 SECTION 5.1 Purchase of Shares of Common Stock............................31 SECTION 5.2 [Purchase Contract Payments...................................33 SECTION 5.3 [Deferral of Purchase Contract Payments.......................34 SECTION 5.4 Payment of Purchase Price.....................................35 SECTION 5.5 Issuance of Shares of Common Stock............................40 SECTION 5.6 Adjustment of Settlement Rate.................................41 SECTION 5.7 Notice of Adjustments and Certain Other Events................47 SECTION 5.8 Termination Event; Notice.....................................48 SECTION 5.9 Early Settlement..............................................48 SECTION 5.10 No Fractional Shares........................................50 SECTION 5.11 Charges and Taxes...........................................51 ARTICLE VI Remedies...........................51 SECTION 6.1 Unconditional Right of Holders to Receive Purchase Contract Payments and to Purchase Shares of Common Stock......51 SECTION 6.2 Restoration of Rights and Remedies............................51 SECTION 6.3 Rights and Remedies Cumulative................................52 SECTION 6.4 Delay or Omission Not Waiver..................................52 SECTION 6.5 Undertaking for Costs.........................................52 SECTION 6.6 Waiver of Stay or Extension Laws..............................52 ARTICLE VII The Purchase Contract Agent.................53 SECTION 7.1 Certain Duties and Responsibilities...........................53 SECTION 7.2 Notice of Default.............................................54 SECTION 7.3 Certain Rights of Purchase Contract Agent.....................54 SECTION 7.4 Not Responsible for Recitals or Issuance of Securities........55 SECTION 7.5 May Hold Securities...........................................55 SECTION 7.6 Money Held in Custody.........................................55 SECTION 7.7 Compensation and Reimbursement................................55 SECTION 7.8 Corporate Purchase Contract Agent Required; Eligibility.......56 SECTION 7.9 Resignation and Removal; Appointment of Successor.............56 SECTION 7.10 Acceptance of Appointment by Successor......................58 SECTION 7.11 Merger, Conversion, Consolidation or Succession to Business.58 SECTION 7.12 Preservation of Information; Communications to Holders......59 SECTION 7.13 No Obligations of Purchase Contract Agent...................59 SECTION 7.14 Tax Compliance..............................................59 ARTICLE VIII Supplemental Agreements..................60 SECTION 8.1 Supplemental Agreements Without Consent of Holders............60 SECTION 8.2 Supplemental Agreements With Consent of Holders...............60 SECTION 8.3 Execution of Supplemental Agreements..........................61 SECTION 8.4 Effect of Supplemental Agreements.............................61 SECTION 8.5 Reference to Supplemental Agreements..........................62 ARTICLE IX Merger, Consolidation, Sale or Conveyance..........62 SECTION 9.1 Covenant Not to Merge, Consolidate, Sell or Convey Property Except Under Certain Conditions...............................62 SECTION 9.2 Rights and Duties of Successor Corporation....................62 SECTION 9.3 Officer's Certificate and Opinion of Counsel Given to Purchase Contract Agent.......................................63 -iii- ARTICLE X Covenants...........................63 SECTION 10.1 Performance Under Purchase Contracts........................63 SECTION 10.2 Maintenance of Office or Agency.............................63 SECTION 10.3 Company to Reserve Common Stock.............................64 SECTION 10.4 Covenants as to Common Stock................................64 SECTION 10.5 ERISA.......................................................64 ARTICLE XI Trust Indenture Act.....................65 SECTION 11.1 Trust Indenture Act; Application............................65 SECTION 11.2 Lists of Holders of Securities..............................65 SECTION 11.3 Reports by the Purchase Contract Agent......................65 SECTION 11.4 Periodic Reports to Purchase Contract Agent.................65 SECTION 11.5 Evidence of Compliance with Conditions Precedent............66 SECTION 11.6 Defaults; Waiver............................................66 SECTION 11.7 Purchase Contract Agent's Knowledge of Defaults.............66 SECTION 11.8 Conflicting Interests.......................................66 SECTION 11.9 Direction of Purchase Contract Agent........................66 EXHIBITS - -------- EXHIBIT A Form of SPC Units Certificate...................................A-1 EXHIBIT B Form of Treasury SPC Units Certificate..........................B-1 EXHIBIT C Instruction to Purchase Contract Agent..........................C-1 EXHIBIT D Notice from Purchase Contract Agent to Holders (Transfer of Collateral upon Occurrence of a Termination Event).D-1 EXHIBIT E Notice to Settle by Cash........................................E-1 EXHIBIT F Notice from Purchase Contract Agent to Collateral Agent and Indenture Trustee (Settlement of Purchase Contract through Remarketing)....................................................F-1 -iv- PURCHASE CONTRACT AGREEMENT, dated as of , , between PPL CORPORATION, a Pennsylvania corporation (the "Company"), and THE CHASE MANHATTAN BANK, a New York banking corporation, acting as purchase contract agent, attorney-in-fact and trustee for the Holders of Securities from time to time (the "Purchase Contract Agent"). RECITALS The Company has duly authorized the execution and delivery of this Agreement and the Certificates evidencing the Securities. All things necessary to make the Purchase Contracts, when the Certificates are executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Purchase Contract Agent, as provided in this Agreement, the valid obligations of the Company, and to constitute these presents a valid agreement of the Company, in accordance with its terms, have been done. For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 1.1. DEFINITIONS. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular, and nouns and pronouns of the masculine gender include the feminine and neuter genders; (b) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States; (c) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, Exhibit or other subdivision; [(d) the following terms have the meanings given to them in the Trust Agreement: (i) Applicable Ownership Interest; (ii) Applicable Principal Amount; (iii) Guarantee; (iv) Primary Treasury Dealer; (v) Pro Rata, (vi) Quotation Agent; (vii) Redemption Amount; (viii) Redemption Price; (ix) Remarketing, (x) Tax Event Redemption, (xi) Tax Event Redemption Date; (xii) Two-Year Benchmark Treasury Rate; and (xiii) Treasury Portfolio; and] (e) the following terms have the meanings given to them in this Section 1.1(e): "ACT" has the meaning, with respect to any Holder, set forth in Section 1.4. "AFFILIATE" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "AGREEMENT" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof. "APPLICABLE MARKET VALUE" has the meaning set forth in Section 5.1. "APPLICANTS" has the meaning set forth in Section 7.12(b). "AUTHORIZED OFFICER" means the Chairman of the Board, the President, any Vice President, the Treasurer, any Assistant Treasurer or any other officer or agent of the Company duly authorized by the Board of Directors to act in respect of matters relating to this Agreement. "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. "BENEFICIAL OWNER" means, with respect to a Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry Interest as reflected on the books of the Depositary or on the books of a Person maintaining an account with such Depositary (directly as a Depositary Participant or as an indirect participant, in each case in accordance with the rules of such Depositary). "BOARD OF DIRECTORS" means the board of directors of the Company or a duly authorized committee of that board. "BOARD RESOLUTION" means one or more resolutions of the Board of Directors, a copy of which has been certified by the Secretary or an Assistant Secretary of the Company, to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification and delivered to the Purchase Contract Agent. "BOOK-ENTRY INTEREST" means a beneficial interest in a Global Certificate, registered in the name of a Depositary or a nominee thereof, ownership and transfers of which shall be maintained and made through book entries by such Depositary as described in Section 3.6. "BUSINESS DAY" means any day other than a Saturday or Sunday or a day on which banking institutions in New York, New York are authorized or required 2 by law or executive order to remain closed or a day on which the Indenture Trustee [or the Property Trustee] is closed for business; provided that for purposes of the second paragraph of Section 1.12 only, the term "Business Day" shall also be deemed to exclude any day on which trading on the New York Stock Exchange, Inc. is closed or suspended. "CASH SETTLEMENT" has the meaning set forth in Section 5.4(a)(i). "CERTIFICATE" means a SPC Units Certificate or a Treasury SPC Units Certificate. "CLEARING AGENCY" means an organization registered as a "Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as a depositary for the Securities and in whose name, or in the name of a nominee of that organization, shall be registered a Global Certificate and which shall undertake to effect book entry transfers and pledges of the Securities. "CLOSING PRICE" has the meaning set forth in Section 5.1. "CODE" means the Internal Revenue Code of 1986, as amended. "COLLATERAL" has the meaning set forth in Section 1 of the Pledge Agreement. "COLLATERAL ACCOUNT" has the meaning set forth in Section 1 of the Pledge Agreement. "COLLATERAL AGENT" means , as Collateral Agent under the -------------- Pledge Agreement until a successor Collateral Agent shall have become such pursuant to the applicable provisions of the Pledge Agreement, and thereafter "Collateral Agent" shall mean the Person who is then the Collateral Agent thereunder. "COLLATERAL SUBSTITUTION" has the meaning set forth in Section 3.13. "COMMON STOCK" means the Common Stock, par value $.01 per share, of the Company. "COMPANY" means the Person named as the "Company" in the first paragraph of this instrument until a successor shall have become such pursuant to the applicable provision of this Agreement, and thereafter "Company" shall mean such successor. "CONSTITUENT PERSON" has the meaning set forth in Section 5.6(b)(1). "CORPORATE TRUST OFFICE" means the corporate trust office of the Purchase Contract Agent at which, at any particular time, its corporate trust business shall be principally administered, which office at the date hereof is located at The Chase Manhattan Bank, 450 West 33rd Street, New York, New York 10001, Attention: Capital Markets Fiduciary Services. "COUPON RATE" means the percentage rate per annum at which each Note will bear interest. "CURRENT MARKET PRICE" has the meaning set forth in Section 5.6(a)(8). 3 "DEFAULT" means a default by the Company in any of its obligations under this Agreement and continuance of such default for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Purchase Contract Agent or to the Company and the Purchase Contract Agent by the Holders of at least 25% of the Outstanding Purchase Contracts a written notice specifying such default and requiring that it be remedied and stating that such notice is a "Notice of Default" hereunder. ["DEPOSITARY" means DTC, as depository for the Securities, until another Clearing Agency is designated to act as depositary for the Securities as contemplated by Sections 3.6, 3.7, 3.8 and 3.9.] "DEPOSITARY PARTICIPANT" means a broker, dealer, bank, other financial institution or other Person for whom from time to time the Depositary effects book entry transfers and pledges of securities deposited with the Depositary. "DTC" means The Depository Trust Company, the initial Depositary. "EARLY SETTLEMENT" has the meaning set forth in Section 5.9(a). "EARLY SETTLEMENT AMOUNT" has the meaning set forth in Section 5.9(a). "EARLY SETTLEMENT DATE" has the meaning set forth in Section 5.9(a)(2). "EARLY SETTLEMENT RATE" has the meaning set forth in Section 5.9(b). "EARLY SETTLEMENT WEEK" has the meaning set forth in Section 5.6(b)(2). "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "EXCHANGE ACT" means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder. "EXPIRATION DATE" has the meaning set forth in Section 1.4(e). ["EXPIRATION TIME" has the meaning set forth in Section 5.6(a)(6).] ["EXTENSION PERIOD" has the meaning set forth in Section 4.2.] "FAILED REMARKETING" has the meaning set forth in Section 5.4(b). "GLOBAL CERTIFICATE" means a Certificate that evidences all or part of the Securities and is registered in the name of a Clearing Agency or a nominee thereof. "HOLDER" means, with respect to a Security, the Person in whose name the Security evidenced by a SPC Units Certificate or a Treasury SPC Units Certificate is registered in the related SPC Units Register or the Treasury SPC Units Register, as the case may be. 4 "INDENTURE" means the Subordinated Indenture, dated as of , ----------- , among PPL Capital Funding, Inc., as Issuer, the Company, as - ---------- Guarantor, and The Chase Manhattan Bank, as Trustee, pursuant to which the Notes are to be issued, as originally executed and delivered and as it may from time to time be supplemented and amended by one or more indentures supplemental thereto entered into pursuant to the applicable provisions thereof and shall include the terms of a particular series established as contemplated by Section 301 thereof. "INDENTURE TRUSTEE" means The Chase Manhattan Bank, as trustee under the Indenture, or any successor thereto. "ISSUER ORDER" or "ISSUER REQUEST" means a written order or request signed in the name of the Company by an Authorized Officer, and delivered to the Purchase Contract Agent. "NON-ELECTING SHARE" has the meaning set forth in Section 5.6(b). ["NOTE ISSUER" means PPL Capital Funding, Inc, in its capacity as issuer of the Notes.] "NOTES" means the PPL Capital Funding, Inc. [Notes] due , ---------- guaranteed as to payment of principal, premium, if any, and interest by the Company, issued under the Indenture, each bearing interest, payable on the Payment Dates, at the Coupon Rate until the Purchase Contract Settlement Date, and at the Reset Rate thereafter and substantially in the form of Exhibit -- hereto. "NYSE" has the meaning set forth in Section 5.1. "OFFICER'S CERTIFICATE" means a certificate signed by an Authorized Officer. "OPINION OF COUNSEL" means a written opinion of counsel, who may be counsel to the Company (and who may be an employee of the Company), and who shall be reasonably acceptable to the Purchase Contract Agent. "OUTSTANDING" means, with respect to any SPC Units or Treasury SPC Units and as of the date of determination, all SPC Units or Treasury SPC Units evidenced by Certificates theretofore authenticated, executed and delivered under this Agreement, except: (1) If a Termination Event has occurred, (i) Treasury SPC Units and (ii) SPC Units for which the underlying Notes have been theretofore deposited with the Purchase Contract Agent in trust for the Holders of such SPC Units; (2) SPC Units and Treasury SPC Units evidenced by Certificates theretofore cancelled by the Purchase Contract Agent or delivered to the Purchase Contract Agent for cancellation or deemed cancelled pursuant to the provisions of this Agreement; and (3) SPC Units and Treasury SPC Units evidenced by Certificates in exchange for or in lieu of which other Certificates have been authenticated, executed on behalf of the Holder and delivered pursuant to this Agreement, other than any such Certificate in respect of which there 5 shall have been presented to the Purchase Contract Agent proof satisfactory to it that such Certificate is held by a bona fide purchaser in whose hands the SPC Units or Treasury SPC Units evidenced by such Certificate are valid obligations of the Company; provided, however, that in determining whether the Holders of the requisite number of the SPC Units or Treasury SPC Units have given any request, demand, authorization, direction, notice, consent or waiver hereunder, SPC Units or Treasury SPC Units owned by the Company or any Affiliate of the Company shall be disregarded and deemed not to be Outstanding Securities, except that, in determining whether the Purchase Contract Agent shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only SPC Units or Treasury SPC Units which a Responsible Officer of the Purchase Contract Agent knows to be so owned shall be so disregarded. SPC Units or Treasury SPC Units so owned which have been pledged in good faith may be regarded as Outstanding Securities if the pledgee establishes to the satisfaction of the Purchase Contract Agent the pledgee's right so to act with respect to such SPC Units or Treasury SPC Units and that the pledgee is not the Company or any Affiliate of the Company. "PAYMENT DATE" means each February 16, May 16, August 16 and November 16, commencing , [2001]. ------- "PERMITTED INVESTMENTS" has the meaning set forth in Section 1 of the Pledge Agreement. "PERSON" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or government or any agency or political subdivision thereof or any other entity of whatever nature. ["PLAN" means an employee benefit plan that is subject to ERISA, a plan or individual retirement account that is subject to Section 4975 of the Code or any entity whose assets are considered assets of any such plan.] "PLEDGE" means the pledge under the Pledge Agreement of the [Preferred Securities, the] Notes, [or] the Treasury Securities, [or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio] in [each] case constituting a part of the Securities. "PLEDGE AGREEMENT" means the Pledge Agreement, dated as of the date hereof, among the Company, the Collateral Agent, the Securities Intermediary and the Purchase Contract Agent, on its own behalf and as attorney-in-fact for the Holders from time to time of the Securities. "PLEDGED NOTES" has the meaning set forth in Section 1 of the Pledge Agreement. ["PLEDGED PREFERRED SECURITIES" has the meaning set forth in Section 1 of the Pledge Agreement.] 6 "PREDECESSOR CERTIFICATE" means a Predecessor SPC Units Certificate or a Predecessor Treasury SPC Units Certificate. "PREDECESSOR SPC UNITS CERTIFICATE" of any particular SPC Units Certificate means every previous SPC Units Certificate evidencing all or a portion of the rights and obligations of the Company and the Holder under the SPC Units evidenced thereby; and, for the purposes of this definition, any SPC Units Certificate authenticated and delivered under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or stolen SPC Units Certificate shall be deemed to evidence the same rights and obligations of the Company and the Holder as the mutilated, destroyed, lost or stolen SPC Units Certificate. "PREDECESSOR TREASURY SPC UNITS CERTIFICATE" of any particular Treasury SPC Units Certificate means every previous Treasury SPC Units Certificate evidencing all or a portion of the rights and obligations of the Company and the Holder under the Treasury SPC Units evidenced thereby; and, for the purposes of this definition, any Treasury SPC Units Certificate authenticated and delivered under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury SPC Units Certificate shall be deemed to evidence the same rights and obligations of the Company and the Holder as the mutilated, destroyed, lost or stolen Treasury SPC Units Certificate. ["PREFERRED SECURITIES" means the Preferred Securities of the Trust, each having a stated liquidation amount of $25, representing preferred undivided beneficial interests in the assets of the Trust.] "PROCEEDS" has the meaning set forth in Section 1 of the Pledge Agreement. ["PROPERTY TRUSTEE" means The Chase Manhattan Bank, as initial property trustee under the Trust Agreement, or any successors thereto that is a financial institution unaffiliated with the Company.] "PURCHASE CONTRACT" means, with respect to any Security, the contract forming a part of such Security and obligating the Company to (i) sell, and the Holder of such Security to purchase, shares of Common Stock and (ii) pay the Holder Purchase Contract Payments on the terms and subject to the conditions set forth in Article Five hereof. "PURCHASE CONTRACT AGENT" means the Person named as the "Purchase Contract Agent" in the first paragraph of this agreement until a successor Purchase Contract Agent shall have become such pursuant to the applicable provisions of this Agreement, and thereafter "Purchase Contract Agent" shall mean such Person. "PURCHASE CONTRACT PAYMENTS" means the payments payable by the Company on the Payment Dates in respect of each Purchase Contract, equal to % per ---- annum of the Stated Amount. "PURCHASE CONTRACT SETTLEMENT DATE" means . ------------- "PURCHASE CONTRACT SETTLEMENT FUND" has the meaning set forth in Section 5.5. 7 "PURCHASE PRICE" has the meaning set forth in Section 5.1. ["PURCHASED SHARES" has the meaning set forth in Section 5.6(a)(6)]. "RECORD DATE" for the Purchase Contract Payments payable on any Payment Date means, as to any Global Certificate, the Business Day next preceding such Payment Date, and as to any other Certificate, a day selected by the Company which shall be at least one Business Day but less than thirty (30) Business Days prior to such Payment Date [and which shall correspond to the related record date for the Notes]. "REFERENCE DEALER" means a dealer engaged in trading of convertible securities. "REFERENCE PRICE" has the meaning set forth in Section 5.1. "REGISTER" means the SPC Units Register and the Treasury SPC Units Register. "REGISTRAR" means the SPC Units Registrar and the Treasury SPC Units Registrar. "REMARKETING" has the meaning set forth in the [Trust Agreement] [Notes.] "REMARKETING AGENT" has the meaning set forth in Section 5.4(b). "REMARKETING AGREEMENT" means the Remarketing Agreement, dated as of , between the Company and the Remarketing Agent, including any supplements thereto. "REMARKETING FEE" has the meaning set forth in Section 5.4(b). "REORGANIZATION EVENT" has the meaning set forth in Section 5.6(b). "RESET RATE" means the Coupon Rate to be in effect for the [Preferred Securities] [Notes] on and after the Purchase Contract Settlement Date, as determined in accordance with Section 4.3 and the [Trust Agreement] [form of Note included in Exhibit hereto]. -- "RESPONSIBLE OFFICER" means, with respect to the Purchase Contract Agent, any officer of the Purchase Contract Agent assigned by the Purchase Contract Agent to administer its corporate trust matters. "SECURITIES INTERMEDIARY" means , as Securities ------------- Intermediary under the Pledge Agreement until a successor Securities Intermediary shall have become such pursuant to the applicable provisions of the Pledge Agreement, and thereafter "Securities Intermediary" shall mean such successor. "SECURITY" means a SPC Unit or a Treasury SPC Unit, as the case may be. "SETTLEMENT RATE" has the meaning set forth in Section 5.1. "SPC UNIT" means a Security, initially issued in substantially the form set forth as Exhibit A hereto in the Stated Amount of [$25], which represents (i) beneficial ownership by the Holder of one [Preferred Security or] 8 Note having a [stated liquidation] [principal] amount of [$25,] [or an appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] subject [, in each case,] to the Pledge thereof pursuant to the Pledge Agreement, and (ii) the rights and obligations of the Holder thereof and the Company under one Purchase Contract[; provided, that the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio shall not be subject to the Pledge.] "SPC UNITS CERTIFICATE" means a certificate evidencing the rights and obligations of a Holder in respect of the number of SPC Units specified on such certificate. "SPC UNITS REGISTER" and "SPC UNITS REGISTRAR" have the respective meanings set forth in Section 3.5. "STATED AMOUNT" means [$25]. "STATED MATURITY" means, with respect to the Notes, . ------------- "TERMINATION DATE" means the date, if any, on which a Termination Event occurs. "TERMINATION EVENT" means the occurrence of any of the following events: (1) at any time on or prior to the Purchase Contract Settlement Date, a judgment, decree or court order shall have been entered granting relief under the Bankruptcy Code (or any similar applicable Federal or State law), adjudicating the Company to be insolvent, or approving as properly filed a petition seeking reorganization or liquidation of the Company, and, unless such judgment, decree or order shall have been entered within 60 days prior to the Purchase Contract Settlement Date, such decree or order shall have continued undischarged and unstayed for a period of 60 days; (2) at any time on or prior to the Purchase Contract Settlement Date, a judgment, decree or court order for the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the Company or of its property, or for the termination or liquidation of its affairs, shall have been entered, and, unless such judgment, decree or order shall have been entered within 60 days prior to the Purchase Contract Settlement Date, such judgment, decree or order shall have continued undischarged and unstayed for a period of 60 days; or (3) at any time on or prior to the Purchase Contract Settlement Date, the Company shall file a petition for relief under the Bankruptcy Code (or any similar applicable Federal or State law), or shall consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking reorganization or liquidation under the Bankruptcy Code or any other similar applicable Federal or State law, or shall consent to the filing of any such petition, or shall consent to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or of its property, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due. 9 "THRESHOLD APPRECIATION PRICE" has the meaning set forth in Section 5.1. "TIA" means the Trust Indenture Act of 1939, as amended from time to time, or any successor legislation. "TRADING DAY" has the meaning set forth in Section 5.1. "TREASURY SPC UNIT" means a Security, in substantially the form set forth as Exhibit B hereto, which represents (i) a [1/40] undivided beneficial ownership interest in a Treasury Security having a principal amount at maturity equal to $1,000, subject to the Pledge thereof pursuant to the Pledge Agreement and (ii) the rights and obligations of the Holder thereof and the Company under one Purchase Contract. "TREASURY SPC UNITS CERTIFICATE" means a certificate evidencing the rights and obligations of a Holder in respect of the number of Treasury SPC Units specified on such certificate. "TREASURY SPC UNITS REGISTER" and "Treasury SPC Units Registrar" have the respective meanings set forth in Section 3.5. "TREASURY SECURITIES" means zero-coupon U.S. Treasury Securities (Cusip No. ) which are the principal strip of the % U.S. Treasury -------- ---- Securities which mature on . ---------------- ["TRUST" means PPL Capital Funding Trust I, a statutory business formed under the laws of the State of Delaware, or any successor thereto by merger or consolidation.] ["TRUST AGREEMENT" means the Amended and Restated Trust Agreement of PPL Capital Funding Trust I, dated as of , among the Company as ----------- depositor, the trustees named therein and the holders from time to time of individual beneficial interests in the assets of the Trust.] "UNDERWRITING AGREEMENT" means the Underwriting Agreement, dated ,between the Company and . - ------------- ------------------------------- SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS. Except as otherwise expressly provided by this Agreement, upon any application or request by the Company to the Purchase Contract Agent to take any action under any provision of this Agreement, the Company shall furnish to the Purchase Contract Agent an Officer's Certificate stating that all conditions precedent, if any, provided for in this Agreement relating to the proposed action have been complied with and, if requested by the Purchase Contract Agent, an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Agreement relating to such particular application or request, no additional certificate or opinion need be furnished. 10 Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Agreement (other than compliance certificates required by Section 11.4 to the extent permitted by the TIA) shall include: (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of each such individual, he or she has made such examination or investigation as is necessary to enable such individual to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO PURCHASE CONTRACT AGENT. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Agreement, they may, but need not, be consolidated and form one instrument. SECTION 1.4 ACTS OF HOLDERS; RECORD DATES. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Agreement to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent 11 duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Purchase Contract Agent and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Agreement and (subject to Section 7.1) conclusive in favor of the Purchase Contract Agent and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Purchase Contract Agent deems sufficient. (c) The ownership of Securities shall be proved by the SPC Units Register or the Treasury SPC Units Register, as the case may be. (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Certificate evidencing such Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Purchase Contract Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Certificate. (e) The Company may set any date as a record date for the purpose of determining the Holders of Outstanding Securities entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Agreement to be given, made or taken by Holders of Securities. If any record date is set pursuant to this paragraph, the Holders of the Outstanding SPC Units and the Outstanding Treasury SPC Units, as the case may be, on such record date, and no other Holders, shall be entitled to take the relevant action with respect to the SPC Units or the Treasury SPC Units, as the case may be, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken prior to or on the applicable Expiration Date by Holders of the requisite number of Outstanding Securities on such record date. Nothing contained in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and be of no effect), and nothing contained in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite number of Outstanding Securities on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Purchase Contract Agent in writing and to each Holder of Securities in the manner set forth in Section 1.6. 12 With respect to any record date set pursuant to this Section, the Company may designate any date as the "Expiration Date" and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the Purchase Contract Agent in writing, and to each Holder of Securities in the manner set forth in Section 1.6, prior to or on the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the Company shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date. SECTION 1.5 NOTICES TO PURCHASE CONTRACT AGENT, COMPANY, COLLATERAL AGENT OR GUARANTOR. Any notice or communication is duly given if in writing and delivered in Person or mailed by first-class mail (registered or certified, return receipt requested), telecopier (with receipt confirmed) or overnight air courier guaranteeing next day delivery, to the others' address; provided that notice shall be deemed given to the Purchase Contract Agent only upon receipt thereof: If to the Purchase Contract Agent: The Chase Manhattan Bank 450 West 33rd Street New York, New York 10001 Telecopier No.: (212) 946-8159 Attention: Capital Markets Fiduciary Services If to the Company: PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18101-1179 Telecopier No.: (610) 774-5106 Attention: Treasurer If to the Collateral Agent: Telecopier No.: Attention: 13 [If to the Property Trustee:] Telecopier No.: Attention: If to the Indenture Trustee: The Chase Manhattan Bank 450 West 33rd Street New York, New York 10001 Telecopier No.: (212) 946-8159 Attention: Capital Markets Fiduciary Services SECTION 1.6 NOTICE TO HOLDERS; WAIVER. Where this Agreement provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at its address as it appears in the applicable Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Agreement provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Purchase Contract Agent, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Purchase Contract Agent shall constitute a sufficient notification for every purpose hereunder. SECTION 1.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 1.8 SUCCESSORS AND ASSIGNS. All covenants and agreements in this Agreement by the Company and the Purchase Contract Agent shall bind their respective successors and assigns, whether so expressed or not. 14 SECTION 1.9 SEPARABILITY CLAUSE. In case any provision in this Agreement or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof and thereof shall not in any way be affected or impaired thereby. SECTION 1.10 BENEFITS OF AGREEMENT. Nothing contained in this Agreement or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and, to the extent provided hereby, the Holders, any benefits or any legal or equitable right, remedy or claim under this Agreement. The Holders from time to time shall be beneficiaries of this Agreement and shall be bound by all of the terms and conditions hereof and of the Securities evidenced by their Certificates by their acceptance of delivery of such Certificates. SECTION 1.11 GOVERNING LAW. This Agreement and the Securities shall be governed by, and construed in accordance with, the laws of the State of New York. SECTION 1.12 LEGAL HOLIDAYS. In any case where any Payment Date shall not be a Business Day, notwithstanding any other provision of this Agreement or the SPC Units Certificates or the Treasury SPC Units Certificates, Purchase Contract Payments shall not be made on such date, but shall be made on the next succeeding Business Day with the same force and effect as if made on such Payment Date, provided that no interest shall accrue or be payable by the Company or any Holder for the period from and after any such Payment Date, except that, if such next succeeding Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day with the same force and effect as if made on such Payment Date. In any case where any Purchase Contract Settlement Date shall not be a Business Day, notwithstanding any other provision of this Agreement, the SPC Units Certificates or the Treasury SPC Units Certificates, the Purchase Contracts shall not be performed on such date, but the Purchase Contracts shall be performed on the immediately following Business Day with the same force and effect as if performed on the Purchase Contract Settlement Date. SECTION 1.13 COUNTERPARTS. This Agreement may be executed in any number of counterparts by the parties hereto on separate counterparts, each of which, when so executed and delivered, shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. SECTION 1.14 INSPECTION OF AGREEMENT. A copy of this Agreement shall be available at all reasonable times during normal business hours at the Corporate Trust Office for inspection by any Holder. 15 SECTION 1.15 APPOINTMENT OF ADDITIONAL AGENTS. The Company may appoint a financial institution (which may be the Collateral Agent) to act as its agent in performing its obligations and in accepting and enforcing performance of the obligations of the Purchase Contract Agent and the Holders, under this Agreement and the Purchase Contracts. Any such appointment shall not relieve the Company in any way from its obligations hereunder. ARTICLE II CERTIFICATE FORMS SECTION 2.1 FORMS OF CERTIFICATES GENERALLY. The SPC Units Certificates (including the form of Purchase Contract forming part of each SPC Unit evidenced thereby) shall be in substantially the form set forth in Exhibit A hereto, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the SPC Units are listed or any depositary therefor, or as may, consistently herewith, be determined by the officers of the Company executing such SPC Units Certificates, as evidenced by their execution of the SPC Units Certificates. The definitive SPC Units Certificates shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers of the Company executing the SPC Units evidenced by such SPC Units Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof. The Treasury SPC Units Certificates (including the form of Purchase Contract forming part of each Treasury SPC Unit evidenced thereby) shall be in substantially the form set forth in Exhibit B hereto, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the Treasury SPC Units may be listed or any depositary therefor, or as may, consistently herewith, be determined by the officers of the Company executing such Treasury SPC Units Certificates, as evidenced by their execution of the Treasury SPC Units Certificates. The definitive Treasury SPC Units Certificates shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers of the Company executing the Treasury SPC Units evidenced by such Treasury SPC Units Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof. Every Global Certificate authenticated, executed on behalf of the Holders and delivered hereunder shall bear a legend in substantially the following form: "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 16 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 THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT. 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." SECTION 2.2 FORM OF PURCHASE CONTRACT AGENT'S CERTIFICATE OF AUTHENTICATION. The form of the Purchase Contract Agent's certificate of authentication of the SPC Units shall be in substantially the form set forth on the form of SPC Units Certificate set forth as Exhibit A hereto. The form of the Purchase Contract Agent's certificate of authentication of the Treasury SPC Units shall be in substantially the form set forth on the form of Treasury SPC Units Certificate set forth as Exhibit B hereto. ARTICLE III THE SECURITIES SECTION 3.1 AMOUNT; FORM AND DENOMINATIONS. The aggregate number of Securities evidenced by Certificates authenticated, executed on behalf of the Holders and delivered hereunder is limited to (including relating to the Underwriters' -------- ------ over-allotment option), except for Certificates authenticated, executed and delivered upon registration of transfer of, in exchange for, or in lieu of, other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.12, 3.13, 3.14, 5.9 or 8.5. 17 The Certificates shall be issuable only in registered form and only in denominations of a single SPC Unit or Treasury SPC Unit and any integral multiple thereof. SECTION 3.2 RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES. Each SPC Units Certificate shall evidence the number of SPC Units specified therein, with each such SPC Unit representing (1) the ownership by the Holder thereof of a beneficial interest in one [Preferred Security,] Note having a [liquidation] [principal] amount of [$25] [or the Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] subject to the Pledge of such [Preferred Security,] Note [or Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be] by such Holder pursuant to the Pledge Agreement, and (2) the rights and obligations of the Holder thereof and the Company under one Purchase Contract. The Purchase Contract Agent as attorney-in-fact for, and on behalf of, the Holder of each SPC Unit shall pledge, pursuant to the Pledge Agreement, the [Preferred Security,] Note [or Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be,] forming a part of such SPC Unit, to the Collateral Agent and grant to the Collateral Agent a security interest in the right, title and interest of such Holder in such [Preferred Security,] Note [or Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be] for the benefit of the Company, to secure the obligation of the Holder under each Purchase Contract to purchase shares of Common Stock. Prior to the purchase of shares of Common Stock under each Purchase Contract, such Purchase Contracts shall not entitle the Holder of a SPC Units Certificate to any of the rights of a holder of shares of Common Stock, including, without limitation, the right to vote or receive any dividends or other payments or to consent or to receive notice as a shareholder in respect of the meetings of shareholders or for the election of directors of the Company or for any other matter, or any other rights whatsoever as a shareholder of the Company. Upon the formation of a Treasury SPC Unit pursuant to Section 3.13, each Treasury SPC Units Certificate shall evidence the number of Treasury SPC Units specified therein, with each such Treasury SPC Unit representing (1) the ownership by the Holder thereof of a [1/40] undivided beneficial ownership interest in a Treasury Security with a principal amount at maturity equal to $1,000, subject to the Pledge of such Treasury Security by such Holder pursuant to the Pledge Agreement, and (2) the rights and obligations of the Holder thereof and the Company under one Purchase Contract. The Purchase Contract Agent as attorney-in-fact for, and on behalf of, the Holder of each Treasury SPC Unit shall pledge, pursuant to the Pledge Agreement, each Treasury Security or portion thereof forming a part of such Treasury SPC Unit, to the Collateral Agent and grant to the Collateral Agent a security interest in the right, title and interest of such Holder in such Treasury Security for the benefit of the Company, to secure the obligation of the Holder under each Purchase Contract to purchase shares of Common Stock. Prior to the purchase of shares of Common Stock under each Purchase Contract, such Purchase Contracts shall not entitle the Holder of a Treasury SPC Units Certificate to any of the rights of a holder of shares of Common Stock, including, without limitation, the right to vote or receive any dividends or other payments or to consent or to receive notice as a shareholder in respect of the meetings of shareholders or for the election of directors of the Company or for any other matter, or any other rights whatsoever as a shareholder of the Company. 18 SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING. Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the execution and delivery of this Agreement, and at any time and from time to time thereafter, the Company may deliver Certificates executed by the Company to the Purchase Contract Agent for authentication, execution on behalf of the Holders and delivery, together with its Issuer Order for authentication of such Certificates, and the Purchase Contract Agent in accordance with such Issuer Order shall authenticate, execute on behalf of the Holders and deliver such Certificates. The Certificates shall be executed on behalf of the Company by one of its Authorized Officers. The signature of any Authorized Officer on the Certificates may be manual or facsimile. Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Certificates or did not hold such offices at the date of such Certificates. No Purchase Contract evidenced by a Certificate shall be valid until such Certificate has been executed on behalf of the Holder by the manual signature of an authorized officer of the Purchase Contract Agent, as such Holder's attorney-in-fact. Such signature by an authorized officer of the Purchase Contract Agent shall be conclusive evidence that the Holder of such Certificate has entered into the Purchase Contracts evidenced by such Certificate. Each Certificate shall be dated the date of its authentication. No Certificate shall be entitled to any benefit under this Agreement or be valid or obligatory for any purpose unless there appears on such Certificate a certificate of authentication substantially in the form provided for herein executed by an authorized officer of the Purchase Contract Agent by manual signature, and such certificate upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder. SECTION 3.4 TEMPORARY CERTIFICATES. Pending the preparation of definitive Certificates, the Company shall execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu of such definitive Certificates, temporary Certificates which are in substantially the form set forth in Exhibit A or Exhibit B hereto, as the case may be, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the SPC Units or Treasury SPC Units, as the case may be, are listed, or as may, consistently herewith, be determined by the officers of the Company executing such Certificates, as evidenced by their execution of the Certificates. If temporary Certificates are issued, the Company will cause definitive Certificates to be prepared without unreasonable delay. After the preparation of definitive Certificates, the temporary Certificates shall be exchangeable for definitive Certificates upon surrender of the temporary 19 Certificates at the Corporate Trust Office, at the expense of the Company and without charge to the Holder. Upon surrender for cancellation of any one or more temporary Certificates, the Company shall execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, one or more definitive Certificates of like tenor and denominations and evidencing a like number of SPC Units or Treasury SPC Units, as the case may be, as the temporary Certificate or Certificates so surrendered. Until so exchanged, the temporary Certificates shall in all respects evidence the same benefits and the same obligations with respect to the SPC Units or Treasury SPC Units, as the case may be, evidenced thereby as definitive Certificates. SECTION 3.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The Purchase Contract Agent shall keep at the Corporate Trust Office a register (the "SPC Units Register") in which, subject to such reasonable regulations as it may prescribe, the Purchase Contract Agent shall provide for the registration of SPC Units Certificates and of transfers of SPC Units Certificates (the Purchase Contract Agent, in such capacity, the "SPC Units Registrar") and a register (the "Treasury SPC Units Register") in which, subject to such reasonable regulations as it may prescribe, the Purchase Contract Agent shall provide for the registration of the Treasury SPC Units Certificates and of transfers of Treasury SPC Units Certificates (the Purchase Contract Agent, in such capacity, the "Treasury SPC Units Registrar"). Upon surrender for registration of transfer of any Certificate at the Corporate Trust Office, the Company shall execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of the designated transferee or transferees, and deliver, in the name of the designated transferee or transferees, one or more new Certificates of any authorized denominations, like tenor, and evidencing a like number of SPC Units or Treasury SPC Units, as the case may be. At the option of the Holder, Certificates may be exchanged for other Certificates, of any authorized denominations and evidencing a like number of SPC Units or Treasury SPC Units, as the case may be, upon surrender of the Certificates to be exchanged at the Corporate Trust Office. Whenever any Certificates are so surrendered for exchange, the Company shall execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver the Certificates which the Holder making the exchange is entitled to receive. All Certificates issued upon any registration of transfer or exchange of a Certificate shall evidence the ownership of the same number of SPC Units or Treasury SPC Units, as the case may be, and be entitled to the same benefits and subject to the same obligations, under this Agreement as the SPC Units or Treasury SPC Units, as the case may be, evidenced by the Certificate surrendered upon such registration of transfer or exchange. Every Certificate presented or surrendered for registration of transfer or exchange shall (if so required by the Purchase Contract Agent) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Purchase Contract Agent duly executed, by the Holder thereof or its attorney duly authorized in writing. 20 No service charge shall be made for any registration of transfer or exchange of a Certificate, but the Company and the Purchase Contract Agent may require payment from the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Certificates, other than any exchanges pursuant to Sections 3.6 and 8.5 not involving any transfer. Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall not be obligated to authenticate, execute on behalf of the Holder and deliver any Certificate in exchange for any other Certificate presented or surrendered for registration of transfer or for exchange during the period commencing on the Business Day immediately preceding the Purchase Contract Settlement Date and ending on such Purchase Contract Settlement Date, or on or after the Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Purchase Contract Agent shall: (1) if the Purchase Contract Settlement Date has occurred, deliver the shares of Common Stock issuable in respect of the Purchase Contracts forming a part of the Securities evidenced by such other Certificate; or (2) if a Termination Event shall have occurred prior to the Purchase Contract Settlement Date, transfer the [Preferred Securities,] Notes, Treasury Securities [or the appropriate Applicable Ownership Interest in the Treasury Portfolio,] as the case may be, evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Article Five hereof. SECTION 3.6 BOOK-ENTRY INTERESTS. The Certificates, on original issuance, will be issued in the form of one or more fully registered Global Certificates, to be delivered to the Depositary by, or on behalf of, the Company. Such Global Certificate shall initially be registered on the books and records of the Company in the name of Cede & Co., the nominee of the initial Depositary, DTC, and no Beneficial Owner will receive a definitive Certificate representing such Beneficial Owner's interest in such Global Certificate, except as provided in Section 3.9. The Purchase Contract Agent shall enter into an agreement with the Depositary if so requested by the Company. Unless and until definitive, fully registered Certificates have been issued to Beneficial Owners pursuant to Section 3.9: (1) the provisions of this Section 3.6 shall be in full force and effect; (2) the Company shall be entitled to deal with the Depositary for all purposes of this Agreement (including making Purchase Contract Payments and receiving approvals, votes or consents hereunder) as the Holder of the Securities and the sole holder of the Global Certificates and shall have no obligation to the Beneficial Owners; (3) to the extent that the provisions of this Section 3.6 conflict with any other provisions of this Agreement, the provisions of this Section 3.6 shall control; and 21 (4) the rights of the Beneficial Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Beneficial Owners and the Depositary or the Depositary Participants. SECTION 3.7 NOTICES TO HOLDERS. Whenever a notice or other communication to the Holders is required to be given under this Agreement, the Company or the Company's agent shall give such notices and communications to the Holders and, with respect to any Securities registered in the name of the Depositary or the nominee of the Depositary, the Company or the Company's agent shall, except as set forth herein, have no obligations to the Beneficial Owners. SECTION 3.8 APPOINTMENT OF SUCCESSOR DEPOSITARY. If the Depositary elects to discontinue its services as securities depositary with respect to the Securities, the Company may, in its sole discretion, appoint a successor Clearing Agency to act as Depositary with respect to the Securities. SECTION 3.9 DEFINITIVE CERTIFICATES. If: (1) the Depositary elects to discontinue its services as securities depositary with respect to the Securities or ceases to be a Clearing Agency and a successor Depositary is not appointed within 90 days after such discontinuance pursuant to Section 3.8 or such cessation; or (2) the Company elects to terminate the book-entry system through the Depositary with respect to the Securities, then upon surrender of the Global Certificates representing the Securities by the Depositary, accompanied by registration instructions, the Company shall cause definitive Certificates to be delivered to Beneficial Owners in accordance with the instructions of the Depositary. The Company and the Purchase Contract Agent shall not be liable for any delay in delivery of such instructions and may conclusively rely on and shall be protected in relying on, such instructions. SECTION 3.10 MUTILATED, DESTROYED, LOST AND STOLEN CERTIFICATES. If any mutilated Certificate is surrendered to the Purchase Contract Agent, the Company shall execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, a new Certificate, evidencing the same number of SPC Units or Treasury SPC Units, as the case may be, and bearing a Certificate number not contemporaneously outstanding. If there shall be delivered to the Company and the Purchase Contract Agent (i) evidence to their satisfaction of the destruction, loss or theft of any Certificate, and (ii) such security or indemnity as may be required by them to hold each of them and any agent of any of them harmless, then, in the absence of notice to the Company or the Purchase Contract Agent that such Certificate 22 has been acquired by a bona fide purchaser, the Company shall execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver to the Holder, in lieu of any such destroyed, lost or stolen Certificate, a new Certificate, evidencing the same number of SPC Units or Treasury SPC Units, as the case may be, and bearing a Certificate number not contemporaneously outstanding. Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall not be obligated to authenticate, execute on behalf of the Holder, and deliver to the Holder, a Certificate during the period commencing on the Business Day immediately preceding the Purchase Contract Settlement Date and ending on such Purchase Contract Settlement Date or on or after the Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Purchase Contract Agent shall: (1) if the Purchase Contract Settlement Date has occurred, deliver the shares of Common Stock issuable in respect of the Purchase Contracts forming a part of the Securities evidenced by such Certificate; or (2) if a Termination Event shall have occurred prior to the Purchase Contract Settlement Date, transfer [the Preferred Securities,] the Notes, the Treasury Securities [or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio,] as the case may be, evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Article Five hereof. Upon the issuance of any new Certificate under this Section, the Company and the Purchase Contract Agent may require the payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Purchase Contract Agent) connected therewith. Every new Certificate issued pursuant to this Section in lieu of any destroyed, lost or stolen Certificate shall constitute an original additional contractual obligation of the Company and of the Holder in respect of the Security evidenced thereby, whether or not the destroyed, lost or stolen Certificate (and the Securities evidenced thereby) shall be at any time enforceable by anyone, and shall be entitled to all the benefits and be subject to all the obligations of this Agreement equally and proportionately with any and all other Certificates delivered hereunder. The provisions of this Section are exclusive and shall preclude, to the extent lawful, all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Certificates. SECTION 3.11 PERSONS DEEMED OWNERS. Prior to due presentment of a Certificate for registration of transfer, the Company and the Purchase Contract Agent, and any agent of the Company or the Purchase Contract Agent, may treat the Person in whose name such Certificate is registered as the owner of the SPC Units or Treasury SPC Units evidenced thereby, for the purpose of receiving [distributions, and] interest 23 payments on the [Preferred Securities,] Notes, [Treasury Securities or on the maturing quarterly interest strips of the Treasury Portfolio, as applicable,] receiving Purchase Contract Payments, performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any [distributions, and] interest payments on the [Preferred Securities,] Notes[, Treasury Securities or on the maturing quarterly interest strips of the Treasury Portfolio, as applicable] or Purchase Contract Payments payable in respect of the Purchase Contracts constituting a part of the SPC Units or Treasury SPC Units evidenced thereby shall be overdue and notwithstanding any notice to the contrary, and neither the Company nor the Purchase Contract Agent, nor any agent of the Company or the Purchase Contract Agent, shall be affected by notice to the contrary. Notwithstanding the foregoing, with respect to any Global Certificate, nothing contained herein shall prevent the Company, the Purchase Contract Agent or any agent of the Company or the Purchase Contract Agent, treating the Depositary as the sole Holder of such Global Certificate, from giving effect to any written certification, proxy or other authorization furnished by the Depositary (or its nominee), as a Holder, with respect to such Global Certificate or impair, as between the Depositary and owners of beneficial interests in such Global Certificate, the operation of customary practices governing the exercise of rights of the Depositary (or its nominee) as Holder of such Global Certificate. SECTION 3.12 CANCELLATION. All Certificates surrendered for delivery of shares of Common Stock on or after the Purchase Contract Settlement Date, upon the transfer of [Preferred Securities,] Notes[, the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio] or Treasury Securities, as the case may be, after the occurrence of a Termination Event or pursuant to an Early Settlement, or upon the registration of transfer or exchange of a Security, or a Collateral Substitution or the reestablishment of SPC Units shall, if surrendered to any Person other than the Purchase Contract Agent, be delivered to the Purchase Contract Agent and, if not already cancelled, shall be promptly cancelled by it. The Company may at any time deliver to the Purchase Contract Agent for cancellation any Certificates previously authenticated, executed and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Certificates so delivered shall, upon Issuer Order, be promptly cancelled by the Purchase Contract Agent. No Certificates shall be authenticated, executed on behalf of the Holder and delivered in lieu of or in exchange for any Certificates cancelled as provided in this Section, except as expressly permitted by this Agreement. All cancelled Certificates held by the Purchase Contract Agent shall be disposed by the Purchase Contract Agent in accordance with its customary procedures unless otherwise directed by Issuer Order. If the Company or any Affiliate of the Company shall acquire any Certificate, such acquisition shall not operate as a cancellation of such Certificate unless and until such Certificate is delivered to the Purchase Contract Agent cancelled or for cancellation. 24 SECTION 3.13 CREATION OF TREASURY SPC UNITS BY SUBSTITUTION OF TREASURY SECURITIES. A Holder may separate the [Preferred Securities or] Notes[, as applicable,] from the related Purchase Contracts in respect of such Holder's SPC Units by substituting for such [Preferred Securities or] Notes, [as applicable,] Treasury Securities in an aggregate principal amount equal to the aggregate [liquidation preference or] principal amount of such [Preferred Securities or] Notes[, as applicable,] (a "Collateral Substitution"), at any time from and after the date of this Agreement and prior to or on the seventh Business Day immediately preceding the Purchase Contract Settlement Date by: (1) depositing with the [Securities Intermediary, Collateral Agent] Treasury Securities having an aggregate principal amount equal to the aggregate [liquidation preference or] principal amount of the [Preferred Securities or] Notes [, as the case may be] comprising part of such SPC Units; and (2) transferring the related SPC Units to the Purchase Contract Agent accompanied by a notice to the Purchase Contract Agent, substantially in the form of Exhibit C hereto, (i) stating that the Holder has transferred the relevant amount of Treasury Securities to the Securities Intermediary and (ii) requesting that the Purchase Contract Agent instruct the Collateral Agent to release the [Preferred Securities or] Notes[, as applicable,] underlying such SPC Units, whereupon the Purchase Contract Agent shall promptly give such instruction to the Collateral Agent, substantially in the form of Exhibit A to the Pledge Agreement. [Insert any provisions for adjustment relating to Purchase Contract Payments.] Upon receipt of the Treasury Securities described in clause (1) above and the instruction described in clause (2) above, in accordance with the terms of the Pledge Agreement, the Collateral Agent will cause the Securities Intermediary to effect the release of such [Preferred Securities or] Notes[, as the case may be,] from the Pledge, free and clear of the Company's security interest therein, and the transfer of such [Preferred Securities or] Notes[, as the case may be,] to the Purchase Contract Agent on behalf of the Holder. Upon receipt thereof, the Purchase Contract Agent shall promptly: (i) cancel the related SPC Units transferred and surrendered; (ii) transfer the [Preferred Securities or] Notes[, as the case may be,] that had been components of such SPC Unit to the Holder; and (iii) authenticate, execute on behalf of such Holder and deliver a Treasury SPC Units Certificate executed by the Company in accordance with Section 3.3 evidencing the same number of Purchase Contracts as were evidenced by the cancelled SPC Units. Holders who elect to separate the [Preferred Securities or] Notes[, as the case may be] from the related Purchase Contracts and to substitute Treasury Securities for such [Preferred Securities or] Notes[, as the case may be,] shall be responsible for any fees or expenses payable to the Collateral Agent for its services as Collateral Agent in respect of the substitution, and the Company shall not be responsible for any such fees or expenses. 25 Holders may make Collateral Substitutions only in integral multiples of 40 SPC Units. [If a Tax Event Redemption has occurred, Holders may not convert their SPC Units to Treasury SPC Units.] In the event a Holder making a Collateral Substitution pursuant to this Section 3.13 fails to effect a book-entry transfer of the SPC Units or fails to deliver SPC Units Certificates to the Purchase Contract Agent after depositing Treasury Securities with the Collateral Agent, the [Preferred Securities or] Notes, [as the case may be,] constituting a part of such SPC Units, and any [distributions or] interest payments on such [Preferred Securities or] Notes, [as the case may be,] shall be held in the name of the Purchase Contract Agent or its nominee in trust for the benefit of such Holder, until such SPC Units are so transferred or the SPC Units Certificate is so delivered, as the case may be, or, with respect to a SPC Units Certificate, such Holder provides evidence satisfactory to the Company and the Purchase Contract Agent that such SPC Units Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Purchase Contract Agent and the Company. Except as described in this Section 3.13, for so long as the Purchase Contract underlying a SPC Unit remains in effect, such SPC Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder in respect of the [Preferred Security or] Note[, as the case may be,] and the Purchase Contract comprising such SPC Unit may be acquired, and may be transferred and exchanged, only as a SPC Unit. SECTION 3.14 REESTABLISHMENT OF SPC UNITS. Subject to the conditions set forth herein, a Holder of Treasury SPC Units may recreate SPC Units at any time prior to or on the seventh Business Day immediately preceding the Purchase Contract Settlement Date by: (1) depositing with the [Securities Intermediary, Collateral Agent] [Preferred Securities or] Notes, [as the case may be,] having an aggregate [liquidation preference (in the case of Preferred Securities) or aggregate] principal amount [in the case of Notes] equal to the aggregate principal amount at maturity of the Treasury Securities comprising part of the Treasury SPC Units; and (2) transferring the related Treasury SPC Units to the Purchase Contract Agent accompanied by a notice to the Purchase Contract Agent, substantially in the form of Exhibit C hereto, (i) stating that the Holder has transferred the relevant amount of [Preferred Securities or] Notes[, as the case may be,] to the Securities Intermediary and (ii) requesting that the Purchase Contract Agent instruct the Collateral Agent to release the Treasury Securities underlying such Treasury SPC Units, whereupon the Purchase Contract Agent shall promptly give such instruction to the Collateral Agent, substantially in the form of Exhibit C to the Pledge Agreement. Upon receipt of the [Preferred Securities or] Notes[, as the case may be,] described in clause (1) above and the instruction described in clause (2) above, in accordance with the terms of the Pledge Agreement, the Collateral Agent will cause the Securities Intermediary to effect the release of the Treasury Securities having a corresponding aggregate principal amount at maturity from 26 the Pledge, free and clear of the Company's security interest therein, and the transfer to the Purchase Contract Agent on behalf of the Holder. Upon receipt thereof, the Purchase Contract Agent shall promptly: (i) cancel the related Treasury SPC Units transferred and surrendered; (ii) transfer the Treasury Securities that had been components of such Treasury SPC Units to the Holder; and (iii) authenticate, execute on behalf of such Holder and deliver a SPC Units Certificate executed by the Company in accordance with Section 3.3 evidencing the same number of Purchase Contracts as were evidenced by the cancelled Treasury SPC Units. Holders who elect to recreate SPC Units shall be responsible for any fees or expenses payable to the Collateral Agent for its services as Collateral Agent in respect of the substitution, and the Company shall not be responsible for any such fees or expenses. Holders of Treasury SPC Units may only recreate SPC Units in integral multiples of 40 Treasury SPC Units for 40 SPC Units. [If a Tax Event Redemption has occurred, Holders may no longer convert their Treasury SPC Units into SPC Units.] Except as provided in this Section 3.14, for so long as the Purchase Contract underlying a Treasury SPC Unit remains in effect, such Treasury SPC Unit shall not be separable into its constituent parts and the rights and obligations of the Holder of such Treasury SPC Unit in respect of the 1/40 of a Treasury Security and the Purchase Contract comprising such Treasury SPC Unit may be acquired, and may be transferred and exchanged, only as a Treasury SPC Unit. SECTION 3.15 TRANSFER OF COLLATERAL UPON OCCURRENCE OF TERMINATION EVENT. Upon the occurrence of a Termination Event and the transfer to the Purchase Contract Agent of the [Preferred Securities,] Notes[, appropriate Applicable Ownership Interest in the Treasury Portfolio,] or the Treasury Securities, as the case may be, underlying the SPC Units and the Treasury SPC Units, as the case may be, pursuant to the terms of the Pledge Agreement, the Purchase Contract Agent shall request transfer instructions with respect to such [Preferred Securities,] Notes[, appropriate Applicable Ownership Interest in the Treasury Portfolio] or Treasury Securities, as the case may be, from each Holder by written request, substantially in the form of Exhibit D hereto, mailed to such Holder at its address as it appears in the SPC Units Register or the Treasury SPC Units Register, as the case may be. Upon book-entry transfer of the SPC Units or the Treasury SPC Units or delivery of a SPC Units Certificate or Treasury SPC Units Certificate to the Purchase Contract Agent with such transfer instructions, the Purchase Contract Agent shall transfer the [Preferred Securities,] Notes[, appropriate Applicable Ownership Interest in the Treasury Portfolio] or Treasury Securities, as the case may be, underlying such SPC Units or Treasury SPC Units, as the case may be, to such Holder by book-entry transfer, or other appropriate procedures, in accordance with such instructions. In the event a Holder of SPC Units or Treasury SPC Units fails to effect such transfer or delivery, the [Preferred Securities,] Notes[, appropriate Applicable Ownership Interest in the Treasury Portfolio] or Treasury Securities, as the case may be, underlying such SPC Units 27 or Treasury SPC Units, as the case may be, and any distributions thereon, shall be held in the name of the Purchase Contract Agent or its nominee in trust for the benefit of such Holder, until the earlier to occur of: (1) the transfer of such SPC Units or Treasury SPC Units or the surrender of the SPC Units Certificate or Treasury SPC Units Certificate or receipt by the Company and the Purchase Contract Agent of satisfactory evidence that such SPC Units Certificate or Treasury SPC Units Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Purchase Contract Agent and the Company; and (2) the expiration of the time period specified in the abandoned property laws of the [relevant State]. SECTION 3.16 NO CONSENT TO ASSUMPTION. Each Holder of a Security, by acceptance thereof, shall be deemed expressly to have withheld any consent to the assumption under Section 365 of the Bankruptcy Code or otherwise, of the Purchase Contract by the Company or its trustee, receiver, liquidator or a person or entity performing similar functions in the event that the Company becomes the debtor under the Bankruptcy Code or subject to other similar state or Federal law providing for reorganization or liquidation. ARTICLE IV THE [PREFERRED SECURITIES,] NOTES [AND APPLICABLE OWNERSHIP INTEREST IN THE TREASURY PORTFOLIO] SECTION 4.1 [INTEREST] PAYMENTS; RIGHTS TO [INTEREST] PAYMENTS PRESERVED. Any [distribution or] interest payment on any [Preferred Security or any,] Note [or on the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] which is paid on any Payment Date shall, subject to receipt thereof by the Purchase Contract Agent from the Collateral Agent as provided by the terms of the Pledge Agreement, be paid to the Person in whose name the SPC Units Certificate (or one or more Predecessor SPC Units Certificates) of which such [Preferred Security,] Note [or Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] is a part is registered at the close of business on the Record Date for such Payment Date. Each SPC Units Certificate evidencing the [Preferred Securities,] Notes [or the appropriate Applicable Ownership Interest in the Treasury Portfolio] delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of any other SPC Units Certificate shall carry the right to accrued and unpaid and deferred [distributions and] interest and the right to accrue [distributions and] interest, which rights were carried by the [Preferred Securities,] Notes [or the appropriate Applicable Ownership Interest in the Treasury Portfolio] underlying such other SPC Units Certificate. In the case of any SPC Units with respect to which Cash Settlement of the underlying Purchase Contract is properly effected pursuant to Section 5.4 hereof, or with respect to which Early Settlement of the underlying Purchase 28 Contract is properly effected on an Early Settlement Date pursuant to Section 5.9 hereof, or with respect to which a Collateral Substitution is properly effected, in each case on a date that is after any Record Date and prior to or on the next succeeding Payment Date, the [distribution or] interest payment on the [Preferred Securities,] Notes [or the appropriate Applicable Ownership Interest in the Treasury Portfolio] underlying such SPC Units otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such Cash Settlement or Early Settlement or Collateral Substitution, and such [distribution or] interest payment shall, subject to receipt thereof by the Purchase Contract Agent, be payable to the Person in whose name the SPC Units Certificate (or one or more Predecessor SPC Units Certificates) was registered at the close of business on the Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any SPC Unit with respect to which Cash Settlement or Early Settlement of the underlying Purchase Contract is properly effected, or with respect to which a Collateral Substitution has been properly effected, [distributions or] interest payments on the related [Preferred Securities,] Notes [or the appropriate Applicable Ownership Interest in the Treasury Portfolio], as the case may be, that would otherwise be payable after the Purchase Contract Settlement Date or Early Settlement Date or date of Collateral Substitution, as the case may be, shall not be payable hereunder to the Holder of such SPC Units; provided, however, that to the extent that such Holder continues to hold the separated [Preferred Securities,] Notes [or the appropriate Applicable Ownership Interest in the Treasury Portfolio] that formerly comprised a part of such Holder's SPC Units, such Holder shall be entitled to receive the [distribution or] interest payments on such separated [Preferred Securities or] Notes, as provided therein. SECTION 4.2 [DEFERRAL OF INTEREST PAYMENTS. So long as no event of default has occurred and is occurring under the Indenture, the Note Issuer and the Company shall have the right at any time until the Stated Maturity of the Notes to defer the payment of interest on the Notes as provided therein for a period of time not extending beyond the Stated Maturity (each such period of deferral, an "Extension Period"). If the Note Issuer and the Company so elect to defer interest payments on the Notes, the Note Issuer or the Company shall be required to pay at the end of the Extension Period all interest then accrued and unpaid, together with accrued interest at the Coupon Rate or the Reset Rate, as applicable, compounded on each succeeding Payment Date.] SECTION 4.3 [INTEREST RATE RESET; NOTICE RELATING TO CASH SETTLEMENT. The Coupon Rate on the Notes to be in effect on and after the Purchase Contract Settlement Date shall be reset on the third Business Day immediately preceding the Purchase Contract Settlement Date to the Reset Rate (such Reset Rate to be in effect on and after the Purchase Contract Settlement Date). [The Reset Rate shall be equal to or greater than the Coupon Rate.] Not later than 15 calendar days nor more than 30 calendar days prior to the third Business Day immediately preceding the Purchase Contract Settlement Date [Remarketing Date], the Company shall request (or shall cause the Note Issuer to request) that the Depositary notify the Beneficial Owners or Depositary Participants holding SPC Units of [the interest rate reset and] any procedures to be followed by Holders of SPC Units who intend to effect a Cash 29 Settlement [prior to or on the fifth Business Day immediately preceding the Purchase Contract Settlement Date]. SECTION 4.4 NOTICE AND VOTING. Under and subject to the terms of the Pledge Agreement, the Purchase Contract Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Pledged [Preferred Securities or] Notes, but only to the extent instructed by the Holders as described below. Upon receipt of notice of any meeting at which holders of [Preferred Securities or] Notes are entitled to vote or upon any solicitation of consents, waivers or proxies of holders of [Preferred Securities or] Notes, the Purchase Contract Agent shall, as soon as practicable thereafter, mail to the Holders of SPC Units a notice: (1) containing such information as is contained in the notice or solicitation; (2) stating that each Holder on the record date set by the Purchase Contract Agent therefor (which, to the extent possible, shall be the same date as the record date for determining the holders of [Preferred Securities or] Notes[, as the case may be,] entitled to vote or consent) shall be entitled to instruct the Purchase Contract Agent as to the exercise of the voting or consensual rights pertaining to such [Preferred Securities or] Notes underlying their SPC Units; and (3) stating the manner in which such instructions may be given. Upon the written request of the Holders of SPC Units on such record date, the Purchase Contract Agent shall endeavor insofar as practicable to vote or consent or cause to be voted or consented, in accordance with the instructions set forth in such requests, the maximum number of [Preferred Securities or] Notes[, as the case may be,] as to which any particular voting or consent instructions are received. In the absence of specific instructions from the Holder of a SPC Unit, the Purchase Contract Agent shall abstain from voting or consenting the [Preferred Securities or] Notes underlying such SPC Unit. The Company hereby agrees, if applicable, to solicit Holders of SPC Units to timely instruct the Purchase Contract Agent in order to enable the Purchase Contract Agent to vote or consent such [Preferred Securities or] Notes [and the Trust shall covenant to this effect in the Trust Agreement.] SECTION 4.5 [DISTRIBUTION OF NOTES; TAX EVENT REDEMPTION. Upon the dissolution and liquidation of the Trust in accordance with the Trust Agreement, a principal amount at maturity of Notes constituting the assets of the Trust and underlying the Preferred Securities equal to the aggregate liquidation amount of the Pledged Preferred Securities shall be delivered to the Securities Intermediary in exchange for the Pledged Preferred Securities. Thereafter, the Notes will be substituted for the Pledged Preferred Securities as the Collateral, and will be held by the Securities Intermediary in the Collateral Account in accordance with the terms of the Pledge Agreement to secure the obligations of each Holder of a SPC Unit to purchase the Common Stock of the Company under the Purchase Contracts constituting a part of such SPC Unit. Following the dissolution and liquidation of the Trust, the Holders and the Collateral Agent shall have such security interests, rights and obligations with respect to the Notes as the Holders and the Collateral Agent had in respect 30 of the Preferred Securities subject to the Pledge thereof as provided in the Pledge Agreement. The Company may cause to be made in any SPC Unit Certificates thereafter to be issued such change in phraseology and form (but not in substance) as may be appropriate to reflect the dissolution and liquidation of the Trust and the substitution of Notes for Preferred Securities as Collateral. Upon the occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement Date, the Redemption Price payable on the Tax Event Redemption Date with respect to the Applicable Principal Amount shall be deposited in the Collateral Account in exchange for the Pledged Preferred Securities or the Pledged Notes. Thereafter, pursuant to the terms of the Pledge Agreement, the Collateral Agent shall cause the Securities Intermediary to apply an amount equal to the Redemption Amount of such Redemption Price to purchase on behalf of the Holders of SPC Units the Treasury Portfolio and promptly remit the remaining portion of such Redemption Price to the Purchase Contract Agent for payment to the Holders of such SPC Units. The Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio will be substituted as Collateral for the Pledged Preferred Securities or the Pledged Notes, as the case may be, and will be held by the Collateral Agent in accordance with the terms of the Pledge Agreement to secure the obligation of each Holder of a SPC Unit to purchase the Common Stock of the Company under the Purchase Contract constituting a part of such SPC Unit. Following the occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement Date, the Holders of SPC Units and the Collateral Agent shall have such security interest rights and obligations with respect to the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio as the Holders of SPC Units and the Collateral Agent had in respect of the Preferred Securities or Notes, as the case may be, subject to the Pledge thereof as provided in the Pledge Agreement, and any reference herein to the Preferred Securities or the Notes shall be deemed to be reference to such Treasury Portfolio. The Company may cause to be made in any SPC Unit Certificates thereafter to be issued such change in phraseology and form (but not in substance) as may be appropriate to reflect the liquidation of the Trust and the substitution of the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio for Preferred Securities or Notes as Collateral.] ARTICLE V THE PURCHASE CONTRACTS SECTION 5.1 PURCHASE OF SHARES OF COMMON STOCK. Each Purchase Contract shall, unless a Termination Event or an Early Settlement in accordance with Section 5.9 hereof has occurred with respect to the Security of which such Purchase Contract is a part, obligate the Holder of the related Security to purchase, and the Company to sell, on the Purchase Contract Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a number of shares of Common Stock equal to the Settlement Rate. The "Settlement Rate" is equal to: (1) if the Applicable Market Value (as defined below) equals or exceeds $ (the "Threshold Appreciation Price") , ----------- ------------ shares of Common Stock per Purchase Contract; 31 (2) if the Applicable Market Value is less than the Threshold Appreciation Price but greater than $ (the "Reference Price"), ------------ the number of shares of Common Stock having a value, based on the Applicable Market Value, equal to the Stated Amount; and (3) if the Applicable Market Value is less than or equal to the Reference Price, shares of Common Stock per Purchase Contract, -------- in each case subject to adjustment as provided in Section 5.6 (and in each case rounded upward or downward to the nearest 1/10,000th of a share). As provided in Section 5.10, no fractional shares of Common Stock will be issued upon settlement of Purchase Contracts. The "Applicable Market Value" means the average of the Closing Price per share of Common Stock on each of the 20 consecutive Trading Days ending on the third Trading Day immediately preceding the Purchase Contract Settlement Date. The "Closing Price" per share of Common Stock on any date of determination means: (1) the closing sale price as of the 4:15 p.m. close of trading (or, if no closing price is reported, the last reported sale price) per share on the New York Stock Exchange, Inc. (the "NYSE") on such date; (2) if Common Stock is not listed for trading on the NYSE on any such date, the closing sale price per share as reported in the composite transactions for the principal United States securities exchange on which Common Stock is so listed; (3) if Common Stock is not so listed on a United States national or regional securities exchange, the closing sale price per share as reported by The Nasdaq Stock Market, Inc.; (4) if Common Stock is not so reported, the last quoted bid price for Common Stock in the over-the-counter market as reported by the National Quotation Bureau or similar organization; or (5) if such bid price is not available, the average of the mid-point of the last bid and ask prices of Common Stock on such date from at least three nationally recognized independent investment banking firms retained for this purpose by the Company. A "Trading Day" means a day on which Common Stock (1) is not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (2) has traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of Common Stock. 32 Each Holder of a SPC Unit or a Treasury SPC Unit, by its acceptance thereof: (1) irrevocably authorizes the Purchase Contract Agent to enter into and perform the related Purchase Contract on its behalf as its attorney-in- fact (including the execution of Certificates on behalf of such Holder); (2) agrees to be bound by the terms and provisions thereof; (3) covenants and agrees to perform its obligations under such Purchase Contracts; (4) consents to the provisions hereof; (5) irrevocably authorizes the Purchase Contract Agent to enter into and perform this Agreement and the Pledge Agreement on its behalf as its attorney-in-fact; and (6) consents to, and agrees to be bound by, the Pledge of the [Preferred Securities,] Notes [Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio] or the Treasury Securities pursuant to the Pledge Agreement. Each Holder of a SPC Unit or a Treasury SPC Unit, by its acceptance thereof, further covenants and agrees, that to the extent and in the manner provided in Section 5.4 and the Pledge Agreement, but subject to the terms thereof, payments in respect of the [Preferred Securities or the] Notes or the proceeds from the Treasury Securities [or the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio] at maturity on the Purchase Contract Settlement Date, as the case may be, shall be paid by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such payments. Upon registration of transfer of a Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee) by the terms of this Agreement, the Purchase Contracts underlying such Certificate[, the Trust Agreement] and the Pledge Agreement and the transferor shall be released from the obligations under this Agreement, the Purchase Contracts underlying the Certificate so transferred and the Pledge Agreement. The Company covenants and agrees, and each Holder of a Certificate, by its acceptance thereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. SECTION 5.2 [PURCHASE CONTRACT PAYMENTS. Subject to Section 5.3, the Company shall pay, on each Payment Date, the Purchase Contract Payments payable in respect of each Purchase Contract to the Person in whose name a Certificate (or one or more Predecessor Certificates) is registered at the close of business on the Record Date next preceding such Payment Date. The Purchase Contract Payments will be payable at the office of the Purchase Contract Agent in The City of New York maintained for that purpose or, at the option of the Company, by check mailed to the address of the Person 33 entitled thereto at such Person's address as it appears on the SPC Units Register or Treasury SPC Units Register. If any date on which Purchase Contract Payments are to be made is not a Business Day, then payment of the Purchase Contract Payments payable on such date will be made on the next day that is a Business Day (and without any interest in respect of any such delay), [except that, if such Business Day is in the next calendar year, such payment will be made on the preceding Business Day]. Upon the occurrence of a Termination Event, the Company's obligation to pay Purchase Contract Payments (including any accrued or deferred Purchase Contract Payments) shall cease. Each Certificate delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of (including as a result of a Collateral Substitution or the reestablishment of SPC Units) any other Certificate shall carry the right to accrued and unpaid or deferred Purchase Contract Payments and the right to accrue Purchase Contract Payments, which rights were carried by the Purchase Contracts underlying such other Certificates. Subject to Section 5.9, in the case of any Security with respect to which Early Settlement of the underlying Purchase Contract is effected on an Early Settlement Date that is after any Record Date and prior to or on the next succeeding Payment Date, Purchase Contract Payments otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such Early Settlement, and such Purchase Contract Payments shall be paid to the Person in whose name the Certificate evidencing such Security (or one or more Predecessor Certificates) is registered at the close of business on such Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any Security with respect to which Early Settlement of the underlying Purchase Contract is effected on an Early Settlement Date, Purchase Contract Payments that would otherwise be payable after the Early Settlement Date with respect to such Purchase Contract shall not be payable.] [Insert, if applicable: Provisions relating to ranking of Purchase Contract Payments.] SECTION 5.3 [DEFERRAL OF PURCHASE CONTRACT PAYMENTS. The Company has the right to defer payment of all or part of the Purchase Contract Payments in respect of each Purchase Contract until no later than the Purchase Contract Settlement Date, but only if the Company shall give the Holders and the Purchase Contract Agent written notice of its election to defer such payment (specifying the amount to be deferred) at least ten Business Days prior to the earlier of (i) the next succeeding Payment Date or (ii) the date the Company is required to give notice of the Record Date or Payment Date with respect to payment of such Purchase Contract Payments to the NYSE or other applicable self-regulatory organization or to Holders of the Securities, but in any event not less than one Business Day prior to such Record Date. If the Company so elects to defer Purchase Contract Payments, the Company shall pay additional Purchase Contract Payments on such deferred installments of Purchase Contract Payments at a rate equal to % per annum, compounding quarterly, ---- until such deferred installments are paid in full (such deferred installments of Purchase Contract Payments together with the accrued additional Purchase Contract Payments thereon, being referred to herein as the "Deferred Purchase 34 Contract Payments"). Deferred Purchase Contract Payments shall be due on the Payment Date except to the extent that payment is deferred pursuant to this Section. No Purchase Contract Payments may be deferred to a date that is after the Purchase Contract Settlement Date. If the Purchase Contracts are terminated upon the occurrence of a Termination Event, the Holder's right to receive Purchase Contract Payments and Deferred Purchase Contract Payments will terminate. In the event that the Company elects to defer the payment of Purchase Contract Payments on the Purchase Contracts until the Purchase Contract Settlement Date, each Holder will receive on the Purchase Contract Settlement Date, in lieu of a cash payment, a number of shares of Common Stock (in addition to a number of shares of Common Stock equal to the applicable Settlement Rate) equal to (x) the aggregate amount of Deferred Purchase Contract Payments payable to such Holder divided by (y) the Applicable Market Value. No fractional shares of Common Stock will be issued by the Company with respect to the payment of Deferred Purchase Contract Payments on the Purchase Contract Settlement Date. In lieu of fractional shares otherwise issuable with respect to such payment of Deferred Purchase Contract Payments, the Holder will be entitled to receive an amount in cash as provided in Section 5.10. In the event the Company exercises its option to defer the payment of Purchase Contract Payments, then, until the Deferred Purchase Contract Payments have been paid, the Company shall not declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of its capital stock or make guarantee payments with respect to the foregoing (other than (i) purchases or acquisitions of capital stock of the Company in connection with the satisfaction by the Company of its obligations under any employee or agent benefit plans or the satisfaction by the Company of its obligations pursuant to any contract or security outstanding on the date of such event requiring the Company to purchase its capital stock, (ii) as a result of a reclassification of the Company's capital stock or the exchange or conversion of one class or series of the Company's capital stock for another class or series of the Company's capital stock, (iii) the purchase of fractional interests in shares of the Company's capital stock pursuant to the conversion or exchange provisions of the Company's capital stock or the security being converted or exchanged, (iv) dividends or distributions in capital stock of the Company (or rights to acquire capital stock) or repurchases or redemptions of capital stock solely from the issuance or exchange of capital stock or (v) redemptions or repurchases of any rights outstanding under a shareholder rights plan). If a Holder effects an Early Settlement or if a Termination Event shall occur, such Holder will have no right to receive any accrued deferred Purchase Contract Payments.] SECTION 5.4 PAYMENT OF PURCHASE PRICE. (a) (i) Unless [a Tax Event Redemption has occurred or] a Holder of a SPC Unit effects an Early Settlement of the underlying Purchase Contract in the manner described in Section 5.9, each Holder who intends to pay in cash to satisfy such Holder's obligations under the Purchase Contract shall notify the Purchase Contract Agent by use of a notice in substantially the form of Exhibit E hereto of his intention to pay in cash ("Cash 35 Settlement") the Purchase Price for the shares of Common Stock to be purchased pursuant to the related Purchase Contract. Such notice shall be given prior to 5:00 p.m. (New York City time) on the seventh Business Day immediately preceding the Purchase Contract Settlement Date. Prior to 11:00 a.m. (New York City time) on the next succeeding Business Day, the Purchase Contract Agent shall notify the Collateral Agent and the Indenture Trustee of the receipt of such notices from Holders intending to make a Cash Settlement. (ii) A Holder of a SPC Unit who has so notified the Purchase Contract Agent of his intention to effect a Cash Settlement in accordance with paragraph (a)(i) above shall pay the Purchase Price to the Securities Intermediary for deposit in the Collateral Account prior to 11:00 a.m. (New York City time) on the [fifth] Business Day immediately preceding the Purchase Contract Settlement Date in lawful money of the United States by certified or cashiers' check or wire transfer, in each case in immediately available funds payable to or upon the order of the [Securities Intermediary]. Any cash received by the Collateral Agent shall be invested promptly by the Securities Intermediary in Permitted Investments and paid to the Company on the Purchase Contract Settlement Date in settlement of the Purchase Contract in accordance with the terms of this Agreement and the Pledge Agreement. Any funds received by the Securities Intermediary in respect of the investment earnings from such Permitted Investments in excess of the Purchase Price for the shares of Common Stock to be purchased by such Holder, shall be distributed to the Purchase Contract Agent when received for payment to the Holder of the related SPC Unit. (iii) If a Holder of a SPC Unit fails to notify the Purchase Contract Agent of his intention to make a Cash Settlement in accordance with paragraph (a)(i) above, or does notify the Purchase Contract Agent as provided in paragraph (a)(i) above of his intention to pay the Purchase Price in cash, but fails to make such payment as required by paragraph (a)(ii) above, such failure shall constitute a default under the related Purchase Contract, and the Collateral Agent, for the benefit of the Company, will exercise its rights as a secured party with respect to the Notes, including those rights to dispose of [Preferred Securities] [Notes], as described in paragraph (b) below and such defaulting Holder shall be deemed to have consented to any such disposition. (iv) Promptly after 11:00 a.m. (New York City time) on the [fifth] Business Day preceding the Purchase Contract Settlement Date, the Purchase Contract Agent, based on notices received by the Purchase Contract Agent pursuant to Section 5.4(a) hereof and notice from the Securities Intermediary regarding cash received by it prior to such time, shall notify the Collateral Agent and the [Property] [Indenture] Trustee of the aggregate number of [Preferred Securities or] Notes to be tendered for purchase in the Remarketing in a notice substantially in the form of Exhibit F hereto. (b) In order to dispose of the [Preferred Securities or] Notes relating to, SPC Units the Holders of which have not notified the Purchase Contract Agent of their intention to effect a Cash Settlement as provided in paragraph (a)(i) above, or who have so notified the Purchase Contract Agent but failed to make such payment as required by paragraph (a)(ii) above, the Company shall engage (the "Remarketing ---------------------- 36 Agent") pursuant to the Remarketing Agreement to sell such [Preferred Securities or] Notes. In order to facilitate the Remarketing, the Purchase Contract Agent, based on the notices specified in Section 5.4(a)(iv), shall notify the Remarketing Agent, promptly after 11:00 a.m. (New York City time) on the [fifth] Business Day immediately preceding the Purchase Contract Settlement Date, of the aggregate number of [Preferred Securities or] Notes that are part of SPC Units to be remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the Pledge Agreement, shall cause such [Preferred Securities or] Notes to be presented to the Remarketing Agent for Remarketing. Upon receipt of such notice from the Purchase Contract Agent and such [Preferred Securities or] Notes, the Remarketing Agent shall, on the third Business Day immediately preceding the Purchase Contract Settlement Date, use reasonable efforts to remarket such [Preferred Securities or] Notes on such date at a price equal to at least [100.25%] of the Stated Amount [($25.0625)] per [Preferred Security or Note], as provided in the Remarketing Agreement. The proceeds from the Remarketing shall be invested by the Collateral Agent in Permitted Investments, in accordance with the Pledge Agreement, and then applied by the Collateral Agent, in accordance with the Pledge Agreement, to satisfy in full such SPC Units Holders' obligations to pay the Purchase Price for the shares of Common Stock under the related Purchase Contracts on the Purchase Contract Settlement Date. In addition, $[.0625] per [Preferred Security or] Note of the proceeds shall be automatically remitted to the Remarketing Agent for services rendered in connection with the Remarketing (the "Remarketing Fee"). Any proceeds remaining after satisfaction of the Purchase Contract and payment of the Remarketing Fee shall be payable to the Holder of such SPC Unit. If, in spite of using its reasonable efforts, the Remarketing Agent cannot remarket the related Preferred Securities or Notes of such Holders of SPC Units at a price equal to 100.25% of the Stated Amount ($25.0625), then the Remarketing Agent shall increase the distribution rate on the Preferred Securities or the interest rate on the Notes, as the case may be, so that the market value of such Preferred Securities will equal $25.0625. If the Remarketing Agent determines that it will be able to remarket the related Preferred Securities or Notes of such Holders of SPC Units at a price in excess of 100.25% of the Stated Amount ($25.0625), then the Remarketing Agent shall decrease the distribution rate on the Preferred Securities or the interest rate on the Notes, as the case may be, so that the market value of such Preferred Securities or Notes will be equal to $25.0625. If in spite of using reasonable efforts, the Remarketing Agent cannot Remarket the [Preferred Securities or] the Notes[, as the case may be,] after such increase or decrease, the Remarketing shall be deemed to have failed (a "Failed Remarketing"), [an event of default shall be deemed to have occurred under this Agreement and the Pledge Agreement] and in accordance with the terms of the Pledge Agreement, the Collateral Agent, for the benefit of the Company, shall exercise its rights as a secured party with respect to such Preferred Securities or Notes, including those actions specified in paragraph (c) below; provided, that if upon a Failed Remarketing the Collateral Agent exercises such rights for the benefit of the Company with respect to such Preferred Securities or Notes, any accrued and unpaid distributions or interest on such Preferred Securities or Notes shall become payable by the Company to the Purchase Contract Agent for payment to the Beneficial Owner 37 of the SPC Units to which such Preferred Securities or Notes relate. The Company shall cause a notice of such Failed Remarketing to be published on the second Business Day immediately preceding the Purchase Contract Settlement Date 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, and on Bloomberg News. (c) With respect to any [Preferred Securities or] Notes which are subject to a Failed Remarketing, the Collateral Agent for the benefit of the Company reserves all of its rights as a secured party with respect thereto and, subject to applicable law and paragraph (g) below, may, among other things, (i) retain the [Preferred Securities or] Notes in full satisfaction of the Holders' obligations under the Purchase Contracts or (ii) sell the [Preferred Securities or] Notes in one or more public or private sales. (d) (i) Unless a Holder of a Treasury SPC Units, [or, if a Tax Event Redemption has occurred, SPC Units,] effects an Early Settlement of the underlying Purchase Contract through the early delivery of cash to the Purchase Contract Agent in the manner described in Section 5.9, each such Holder who intends to pay in cash shall notify the Purchase Contract Agent by use of a notice in substantially the form of Exhibit E hereto of his intention to pay in cash the Purchase Price for the shares of Common Stock to be purchased pursuant to the related Purchase Contract. Such notice shall be given prior to 5:00 p.m. (New York City time) on the [seventh] Business Day immediately preceding the Purchase Contract Settlement Date. Prior to 11:00 a.m. (New York City time) on the next succeeding Business Day, the Purchase Contract Agent shall notify the Collateral Agent of the receipt of such notices from such Holders intending to make a Cash Settlement. Treasury SPC Unit Holders may make Cash Settlements only in integral multiples of 40 Treasury SPC Units. (ii) A Holder of a Treasury SPC Unit, [or, if a Tax Event Redemption has occurred, SPC Units,] who has so notified the Purchase Contract Agent of his intention to make a Cash Settlement in accordance with paragraph (d)(i) above shall pay the Purchase Price to the Securities Intermediary for deposit in the Collateral Account prior to 11:00 a.m. (New York City time) on the [fifth] Business Day immediately preceding the Purchase Contract Settlement Date in lawful money of the United States by certified or cashiers' check or wire transfer, in each case in immediately available funds payable to or upon the order of the [Securities Intermediary]. Any cash received by the Collateral Agent shall be invested promptly by the Securities Intermediary in Permitted Investments and paid to the Company on the Purchase Contract Settlement Date in settlement of the Purchase Contract in accordance with the terms of this Agreement and the Pledge Agreement. Any funds received by the Securities Intermediary in respect of the investment earnings from the investment in such Permitted Investments [in excess of the Purchase Price for shares of common stock to be purchased by such Holder] shall be distributed to the Purchase Contract Agent when received for payment to the Holder of the related Treasury SPC Unit. (iii) If a Holder of a Treasury SPC Unit, [or, if a Tax Event Redemption has occurred, SPC Units,] fails to notify the Purchase Contract Agent of his intention to make a Cash Settlement in accordance with 38 paragraph (d)(i) above, or does notify the Purchase Contract Agent as provided in paragraph (d)(i) above of his intention to pay the Purchase Price in cash, but fails to make such payment as required by paragraph (d)(ii) above, then such failure shall constitute a default under the related Purchase Contract, and upon the maturity of the Pledged Treasury Securities, or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, held by the Securities Intermediary on the Business Day immediately preceding the Purchase Contract Settlement Date, the principal amount of the Treasury Securities, or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, received by the Collateral Agent shall be invested promptly in Permitted Investments. On the Purchase Contract Settlement Date, an amount equal to the Purchase Price shall be remitted to the Company as payment thereof without receiving any instructions from the Holder of the related Treasury SPC Unit or SPC Unit. In the event the sum of the proceeds from the related Pledged Treasury Securities, [or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio,] and the investment earnings earned from such investments is in excess of the aggregate Purchase Price of the Purchase Contracts being settled thereby, the Collateral Agent shall cause the Securities Intermediary to distribute such excess to the Purchase Contract Agent for the benefit of the Holder of the related Treasury SPC Unit or SPC Units when received. (iv) A holder of a [Preferred Security or] Note that is no longer part of a SPC Unit may elect to have [such Preferred Security or] Note, [as the case may be,] remarketed. A Holder making such an election must notify the [Property] Indenture Trustee prior to 11:00 a.m. (New York City time) on the fifth Business Day immediately preceding the Purchase Contract Settlement Date, of the aggregate number of [Preferred Securities or] Notes[, as the case may be,] that are not part of SPC Units to be remarketed. Any such notice will be irrevocable and may not be conditioned upon the level at which the Reset Rate is established in the Remarketing. Concurrently, the [Property] Indenture Trustee shall cause such [Preferred Securities or] Notes to be presented to the Remarketing Agent for Remarketing. (e) Any distribution to Holders of excess funds [and interest] described above shall be payable at the office of the Purchase Contract Agent in New York City maintained for that purpose or, at the option of the Holder, by check mailed to the address of the Person entitled thereto at such address as it appears on the Register. (f) Upon Cash Settlement of any Purchase Contract: (1) the Collateral Agent will in accordance with the terms of the Pledge Agreement cause the [Pledged Preferred Security,] Pledged Note[, appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio,] or Pledged Treasury Securities, as the case may be, underlying the relevant Security to be released from the Pledge, free and clear of any security interest of 39 the Company, and transferred to the Purchase Contract Agent for delivery to the Holder thereof or its designee as soon as practicable; and (2) subject to the receipt thereof, the Purchase Contract Agent shall, by book-entry transfer or other appropriate procedures, in accordance with written instructions provided by the Holder thereof, transfer such [Preferred Security,] Note[, appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio,] or Treasury Securities, as the case may be (or, if no such instructions are given to the Purchase Contract Agent by the Holder, the Purchase Contract Agent shall hold such [Preferred Security,] Note[, appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio,] or Treasury Securities, as the case may be, and any interest payment thereon, in the name of the Purchase Contract Agent or its nominee in trust for the benefit of such Holder until the expiration of the time period specified in the abandoned property laws of the relevant State). (g) The obligations of the Holders to pay the Purchase Price are non- recourse obligations and, except to the extent satisfied by Early Settlement or Cash Settlement, are payable solely out of the proceeds of any Collateral pledged to secure the obligations of the Holders and in no event will Holders be liable for any deficiency between the proceeds of the disposition of Collateral and the Purchase Price. (h) The Company shall not be obligated to issue any shares of Common Stock in respect of a Purchase Contract or deliver any certificates thereof to the Holder of the related SPC Unit or Treasury SPC Unit unless the Company shall have received payment in full for the aggregate purchase price for the Common Stock to be purchased thereunder in the manner herein set forth. SECTION 5.5 ISSUANCE OF SHARES OF COMMON STOCK. Unless a Termination Event or an Early Settlement shall have occurred, on the Purchase Contract Settlement Date, upon its receipt of payment in full of the applicable Purchase Price for shares of Common Stock purchased by Holders pursuant to the foregoing provisions of this Article and subject to Section 5.6(b), the Company shall issue and deposit with the Purchase Contract Agent, for the benefit of the Holders of the Outstanding Securities, one or more certificates representing the shares of Common Stock registered in the name of the Purchase Contract Agent (or its nominee) as custodian for the Holders (such certificates for shares of Common Stock, together with any dividends or distributions for which both a record date and payment date for such dividend or distribution has occurred after the Purchase Contract Settlement Date, being hereinafter referred to as the "Purchase Contract Settlement Fund") to which the Holders are entitled hereunder. Subject to the foregoing, upon surrender of a Certificate to the Purchase Contract Agent on or after the Purchase Contract Settlement Date, together with settlement instructions thereon duly completed and executed, the Holder of such Certificate shall be entitled to receive in exchange therefor a certificate representing that number of whole shares of Common Stock which such Holder is entitled to receive pursuant to the provisions of this Article Five 40 (after taking into account all Securities then held by such Holder), together with cash in lieu of fractional shares as provided in Section 5.10 and any dividends or distributions with respect to such shares constituting part of the Purchase Contract Settlement Fund, but without any interest thereon, and the Certificate so surrendered shall forthwith be cancelled. Such shares shall be registered in the name of the Holder or the Holder's designee as specified in the settlement instructions provided by the Holder to the Purchase Contract Agent. If any shares of Common Stock issued in respect of a Purchase Contract are to be registered to a Person other than the Person in whose name the Certificate evidencing such Purchase Contract is registered, no such registration shall be made unless the Person requesting such registration has paid any transfer and other taxes required by reason of such registration in a name other than that of the registered Holder of the Certificate evidencing such Purchase Contract or has established to the satisfaction of the Company that such tax either has been paid or is not payable. SECTION 5.6 ADJUSTMENT OF SETTLEMENT RATE. (a) Adjustments for Dividends, Distributions, Stock Splits, Etc. (1) In case the Company shall pay or make a dividend or other distribution on Common Stock in Common Stock, the Settlement Rate, as in effect at the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution shall be increased by dividing such Settlement Rate by a fraction of which: (i) the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination; and (ii) the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (1), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include any shares issuable in respect of any scrip certificates issued in lieu of fractions of shares of Common Stock. The Company shall not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company. (2) In case the Company shall issue rights, warrants or options to all holders of its Common Stock that are not available on an equivalent basis to Holders of the Securities upon settlement of the Purchase Contracts underlying such Securities entitling such holders of the Common Stock, for a period expiring within 45 days after the record date for the determination of shareholders entitled to receive such rights, warrants or options, to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price per share of Common Stock on the date fixed for the determination of shareholders entitled to receive such rights, warrants or options (other than pursuant to a dividend reinvestment plan), the Settlement Rate in effect at the opening of business on the day 41 following the date fixed for such determination shall be increased by dividing such Settlement Rate by a fraction of which: (i) the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price; and (ii) the denominator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (2), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include any shares issuable in respect of any scrip certificates issued in lieu of fractions of shares of Common Stock. The Company shall not issue any such rights, warrants or options in respect of shares of Common Stock held in the treasury of the Company. (3) In case outstanding shares of Common Stock shall be subdivided or split into a greater number of shares of Common Stock, the Settlement Rate in effect at the opening of business on the day following the day upon which such subdivision or split becomes effective shall be proportionately increased, and, conversely, in case outstanding shares of Common Stock shall each be combined into a smaller number of shares of Common Stock, the Settlement Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision, split or combination becomes effective. (4) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock evidences of its indebtedness or assets (including securities, but excluding any rights, warrants or options referred to in paragraph (2) of this Section 5.6(a), any dividend or distribution paid exclusively in cash and any dividend or distribution referred to in paragraph (1) of this Section 5.6(a)), the Settlement Rate shall be adjusted so that the same shall equal the rate determined by dividing the Settlement Rate in effect immediately prior to the close of business on the date fixed for the determination of shareholders entitled to receive such distribution by a fraction of which: (i) the numerator shall be the Current Market Price per share of Common Stock on the date fixed for such determination less the then fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) of the portion of the assets or evidences of indebtedness so distributed applicable to one share of Common Stock; and 42 (ii) the denominator shall be such Current Market Price per share of Common Stock, such adjustment to become effective immediately prior to the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such distribution. In any case in which this paragraph (4) is applicable, paragraph (2) of this Section 5.6(a) shall not be applicable. In the event that such dividend or distribution is not so paid or made, the Settlement Rate shall again be adjusted to be the Settlement Rate which would then be in effect if such dividend or distribution had not been declared. (5) In case the Company shall, (I) by dividend or otherwise, distribute to all holders of its Common Stock cash (excluding any cash that is distributed in a Reorganization Event to which Section 5.6(b) applies or as part of a distribution referred to in paragraph (4) of this Section 5.6(a)) in an aggregate amount that, combined together with (II) the aggregate amount of any other distributions to all holders of its Common Stock made exclusively in cash within the 12 months preceding the date of payment of such distribution and in respect of which no adjustment pursuant to this paragraph (5) or paragraph (6) of this Section 5.6(a) has been made and (III) the aggregate of any cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) of consideration payable in respect of any tender or exchange offer by the Company or any of its subsidiaries for all or any portion of the Common Stock concluded within the 12 months preceding the date of payment of the distribution described in clause (I) above and in respect of which no adjustment pursuant to this paragraph (5) or paragraph (6) of this Section 5.6(a) has been made, exceeds 15% of the product of the Current Market Price per share of the Common Stock on the date for the determination of holders of shares of Common Stock entitled to receive such distribution times the number of shares of Common Stock outstanding on such date, then, and in each such case, immediately after the close of business on such date for determination, the Settlement Rate, shall be increased so that the same shall equal the rate determined by dividing the Settlement Rate in effect immediately prior to the close of business on the date fixed for determination of the stockholders entitled to receive such distribution by a fraction (i) the numerator of which shall be equal to the Current Market Price per share of the Common Stock on the date fixed for such determination less an amount equal to the quotient of (x) the combined amount distributed or payable in the transactions described in clauses (I), (II) and (III) above and (y) the number of shares of Common Stock outstanding on such date for determination and (ii) the denominator of which shall be equal to the Current Market Price per share of the Common Stock on such date for determination. (6) In case a tender or exchange offer made by the Company or any subsidiary of the Company for all or any portion of Common Stock shall expire and such tender or exchange offer (as amended upon the expiration thereof) shall require the payment to shareholders (based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of Purchased Shares) of (I) an aggregate consideration having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) that combined together with the aggregate of the cash plus the fair market value (as determined by 43 the Board of Directors, whose determination shall be conclusive and described in a Board Resolution), as of the expiration of such tender or exchange offer, of consideration payable in respect of any other tender or exchange offer, by the Company or any subsidiary of the Company for all or any portion of Common Stock expiring within the 12 months preceding the expiration of such tender or exchange offer and in respect of which no adjustment pursuant to paragraph (5) of this Section 5.6(a) or this paragraph (6) has been made, and (II) the aggregate amount of any distributions to all holders of the Company's Common Stock made exclusively in cash within the 12 months preceding the expiration of such tender or exchange offer and in respect of which no adjustment pursuant to paragraph (5) of this Section 5.6(a) or this paragraph (6) has been made, exceeds 15% of the product of the Current Market Price per share of Common Stock as of the last time (the "Expiration Time") tenders could have been made pursuant to such tender or exchange offer (as it may be amended) times the number of shares of Common Stock outstanding (including any tendered shares) on the Expiration Time, then, and in each such case, immediately prior to the opening of business on the day after the date of the Expiration Time, the Settlement Rate shall be adjusted so that the same shall equal the rate determined by dividing the Settlement Rate immediately prior to the close of business on the date of the Expiration Time by a fraction: (i) the numerator of which shall be equal to (A) the product of (I) the Current Market Price per share of Common Stock on the date of the Expiration Time and (II) the number of shares of Common Stock outstanding (including any tendered shares) on the Expiration Time less (B) the amount of cash plus the fair market value (determined as aforesaid) of the aggregate consideration payable to shareholders based on the transactions described in clauses (I) and (II) above (assuming in the case of clause (I) the acceptance, up to any maximum specified in the terms of the tender or exchange offer, of Purchased Shares); and (ii) the denominator of which shall be equal to the product of (A) the Current Market Price per share of Common Stock as of the Expiration Time and (B) the number of shares of Common Stock outstanding (including any tendered shares) as of the Expiration Time less the number of all shares validly tendered and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "Purchased Shares"). (7) The reclassification of Common Stock into securities including securities other than Common Stock (other than any reclassification upon a Reorganization Event to which Section 5.6(b) applies) shall be deemed to involve: (i) a distribution of such securities other than Common Stock to all holders of Common Stock (and the effective date of such reclassification shall be deemed to be "the date fixed for the determination of shareholders entitled to receive such distribution" and the "date fixed for such determination" within the meaning of paragraph (4) of this Section); and (ii) a subdivision, split or combination, as the case may be, of the number of shares of Common Stock outstanding immediately prior to such 44 reclassification into the number of shares of Common Stock outstanding immediately thereafter (and the effective date of such reclassification shall be deemed to be "the day upon which such subdivision or split becomes effective" or "the day upon which such combination becomes effective", as the case may be, and "the day upon which such subdivision, split or combination becomes effective" within the meaning of paragraph (3) of this Section). (8) The "Current Market Price" per share of Common Stock on any day means the average of the daily Closing Prices for the five consecutive Trading Days selected by the Company commencing not more than 30 Trading Days before, and ending not later than, the earlier of the day in question and the day before the "ex date" with respect to the issuance or distribution requiring such computation. For purposes of this paragraph, the term "ex date", when used with respect to any issuance or distribution, shall mean the first date on which Common Stock trades regular way on such exchange or in such market without the right to receive such issuance or distribution. (9) All adjustments to the Settlement Rate shall be calculated to the nearest 1/10,000th of a share of Common Stock (or if there is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment in the Settlement Rate shall be required unless such adjustment would require an increase or decrease of at least one percent thereof; provided, however, that any adjustments which by reason of this subparagraph are not required to be made shall be carried forward and taken into account in any subsequent adjustment. If an adjustment is made to the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a), an adjustment shall also be made to the Applicable Market Value solely to determine which of clauses (1), (2) or (3) of the definition of Settlement Rate in Section 5.1 will apply on the Purchase Contract Settlement Date. Such adjustment shall be made by multiplying the Applicable Market Value by a fraction of which the numerator shall be the Settlement Rate immediately after such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a) and the denominator shall be the Settlement Rate immediately prior to such adjustment; provided, however, that if such adjustment to the Settlement Rate is required to be made pursuant to the occurrence of any of the events contemplated by paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a) during the period taken into consideration for determining the Applicable Market Value, appropriate and customary adjustments shall be made to the Settlement Rate. (10) The Company may, but shall not be required to, make such increases in the Settlement Rate, in addition to those required by this Section, as it considers to be advisable in order to avoid or diminish any income tax to any holders of shares of Common Stock resulting from any dividend or distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from any event treated as such for income tax purposes or for any other reason. (b) Adjustment for Consolidation, Merger or Other Reorganization Event. (1) In the event of: 45 (i) any consolidation or merger of the Company with or into another Person (other than a merger or consolidation in which the Company is the continuing corporation and in which the shares of Common Stock outstanding immediately prior to the merger or consolidation are not exchanged for cash, securities or other property of the Company or another corporation); (ii) any sale, transfer, lease or conveyance to another Person of the property of the Company as an entirety or substantially as an entirety; (iii) any statutory share exchange of the Company with another Person (other than in connection with a merger or acquisition); (iv) any liquidation, dissolution or termination of the Company other than as a result of or after the occurrence of a Termination Event (any such event, a "Reorganization Event"), the Settlement Rate will be adjusted to provide that each Holder of Securities will receive on the Purchase Contract Settlement Date with respect to each Purchase Contract forming a part thereof, the kind and amount of securities, cash and other property receivable upon such Reorganization Event (without any interest thereon, and without any right to dividends or distribution thereon which have a record date that is prior to the Purchase Contract Settlement Date) by a Holder of the number of shares of Common Stock issuable on account of each Purchase Contract if the Purchase Contract Settlement Date had occurred immediately prior to such Reorganization Event, assuming such Holder of Common Stock is not a Person with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or transfer was made, as the case may be (any such Person, a "Constituent Person"), or an Affiliate of a Constituent Person to the extent such Reorganization Event provides for different treatment of Common Stock held by Affiliates of the Company and non-affiliates and such Holder failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such Reorganization Event (provided that if the kind or amount of securities, cash and other property receivable upon such Reorganization Event is not the same for each share of Common Stock held immediately prior to such Reorganization Event by other than a Constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised ("non-electing share"), then for the purpose of this Section the kind and amount of securities, cash and other property receivable upon such Reorganization Event by each non- electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). In the event of such a Reorganization Event, the Person formed by such consolidation, merger or exchange or the Person which acquires the assets of the Company or, in the event of a liquidation, dissolution or termination of the Company, the Company or a liquidating trust created in connection therewith, shall execute and deliver to the Purchase Contract Agent an agreement supplemental hereto providing that each Holder of an Outstanding Security shall have the rights provided by this Section 5.6(b). Such supplemental agreement shall provide for adjustments which, for events 46 subsequent to the effective date of such supplemental agreement, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section. The above provisions of this Section shall similarly apply to successive Reorganization Events. [(2) In the event of a consolidation or merger of the Company with or into another Person, any merger of another Person into the Company (other than a merger that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock) in which 30% or more of the total consideration paid to the Company's shareholders consists of cash or cash equivalents, then a Holder of a Security may settle his Purchase Contract for cash as described in Section 5.4(a)(i) or 5.4(d)(i) hereof, as applicable, during the one week period beginning on the twenty-third Trading Day following the closing date of such merger (the "Early Settlement Week"), at the applicable Settlement Rate. For the purposes of this Section, the twenty-third Trading Day after the closing of the merger or consolidation shall be deemed to be the Purchase Contract Settlement Date for the purpose of determining the Applicable Market Value and the deadline for submitting the notice to settle early and the related cash payment shall be 5:00 p.m. (New York City time) of the last Business Day of the Early Settlement Week.] All calculations and determinations pursuant to this Section 5.6 shall be made by the Company or its agent and the Purchase Contract Agent shall have no responsibility with respect thereto. SECTION 5.7 NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS. (a) Whenever the Settlement Rate is calculated or adjusted as herein provided, the Company shall: (1) forthwith compute the Settlement Rate adjusted as necessary in accordance with Section 5.6 in accordance with Section 5.6 and prepare and transmit to the Purchase Contract Agent an Officer's Certificate setting forth the Settlement Rate, the method of calculation thereof in reasonable detail, and the facts requiring such adjustment and upon which such adjustment is based; and (2) within 10 Business Days following the occurrence of an event that requires an adjustment to the Settlement Rate pursuant to Section 5.6 (or if the Company is not aware of such occurrence, as soon as practicable after becoming so aware), provide a written notice to the Holders of the Securities of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the Settlement Rate was determined and setting forth the adjusted Settlement Rate. (b) The Purchase Contract Agent shall not at any time be under any duty or responsibility to any Holder of Securities to determine whether any facts exist which may require any adjustment of the Settlement Rate or the Applicable Market Value, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed in making the same or with respect to any matters, adjustments or calculations contained in any supplemental agreement entered into in 47 accordance with Section 5.6(b). The Purchase Contract Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at the time be issued or delivered with respect to any Purchase Contract; and the Purchase Contract Agent makes no representation with respect thereto. The Purchase Contract Agent shall not be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock pursuant to a Purchase Contract or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article. SECTION 5.8 TERMINATION EVENT; NOTICE. The Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Company to pay any Purchase Contract Payments (including any deferred or accrued and unpaid Purchase Contract Payments), if the Company shall have such obligation, and the rights and obligations of Holders to purchase Common Stock, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Purchase Contract Agent or the Company, if, prior to or on the Purchase Contract Settlement Date, a Termination Event shall have occurred. Upon and after the occurrence of a Termination Event, the Securities shall thereafter represent the right to receive the [Preferred Securities,] Notes [or appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] forming part of such Securities in the case of SPC Units, or Treasury Securities in the case of Treasury SPC Units, in accordance with the provisions of Section 5.4 of the Pledge Agreement. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Purchase Contract Agent, the Collateral Agent and the Holders, at their addresses as they appear in the Register. SECTION 5.9 EARLY SETTLEMENT. (a) Subject to and upon compliance with the provisions of this Section 5.9, at the option of the Holder thereof, Purchase Contracts underlying Securities may be settled early ("Early Settlement") on or prior to 5:00 p.m. (New York City time) on the seventh Business Day immediately preceding the Purchase Contract Settlement Date, as provided herein. Holders of Treasury SPC Units may only settle the related Purchase Contracts in integral multiples of 40 Purchase Contracts. In order to exercise the right to effect Early Settlement with respect to any Purchase Contracts, the Holder of the Certificate evidencing Securities shall deliver such Certificates to the Purchase Contract Agent at the Corporate Trust Office duly endorsed for transfer to the Company or in blank with the form of Election to Settle Early on the reverse thereof duly completed and accompanied by payment (payable to the Company in immediately available funds) in an amount (the "Early Settlement Amount") equal to: (1) the product of (A) the Stated Amount times (B) the number of Purchase Contracts with respect to which the Holder has elected to effect Early Settlement, plus 48 [(2) if such delivery is made with respect to any Purchase Contracts during the period from the close of business on any Record Date next preceding any Payment Date to the opening of business on such Payment Date, an amount equal to the sum of (x) the Purchase Contract Payments payable on such Payment Date with respect to such Purchase Contracts plus (y) in the case of a SPC Units Certificate, the [distributions or] interest on the related [Preferred Securities or] Notes payable on such Payment Date.] Except as provided in the immediately preceding sentence and subject to the second to last paragraph of Section 5.2, no payment shall be made upon Early Settlement of any Purchase Contract on account of any Purchase Contract Payments accrued on such Purchase Contract or on account of any dividends on the Common Stock issued upon such Early Settlement. If the foregoing requirements are first satisfied with respect to Purchase Contracts underlying any Securities prior to or at 5:00 p.m. (New York City time) on a Business Day, such day shall be the "Early Settlement Date" with respect to such Securities and if such requirements are first satisfied after 5:00 p.m. (New York City time) on a Business Day or on a day that is not a Business Day, the "Early Settlement Date" with respect to such Securities shall be the next succeeding Business Day. (b) Upon Early Settlement of Purchase Contracts by a Holder of the related Securities, the Company shall issue, and the Holder shall be entitled to receive, [ ] shares of Common Stock on account of each -------- Purchase Contract as to which Early Settlement is effected (the "Early Settlement Rate"). The Early Settlement Rate shall be adjusted in the same manner and at the same time as the Settlement Rate is adjusted. (c) No later than the third Business Day after the applicable Early Settlement Date, the Company shall cause: (1) the shares of Common Stock issuable upon Early Settlement of Purchase Contracts to be issued and delivered, together with payment in lieu of any fraction of a share, as provided in Section 5.10; and (2) the related [Preferred Securities,] Notes [or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio], in the case of SPC Units, or the related Treasury Securities, in the case of Treasury SPC Units, to be released from the Pledge by the Collateral Agent and transferred, in each case, to the Purchase Contract Agent for delivery to the Holder thereof or its designee. (d) Upon Early Settlement of any Purchase Contracts, and subject to receipt of shares of Common Stock from the Company and the [Preferred Securities,] Notes [or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio] or Treasury Securities, as the case may be, from the Securities Intermediary, as applicable, the Purchase Contract Agent shall, in accordance with the instructions provided by the Holder thereof on the applicable form of Election to Settle Early on the reverse of the Certificate evidencing the related Securities: 49 (1) transfer to the Holder the [Preferred Securities,] Notes [or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio] or Treasury Securities, as the case may be, forming a part of such Securities; and (2) deliver to the Holder a certificate or certificates for the full number of shares of Common Stock issuable upon such Early Settlement, together with payment in lieu of any fraction of a share, as provided in Section 5.10. (e) In the event that Early Settlement is effected with respect to Purchase Contracts underlying less than all the Securities evidenced by a Certificate, upon such Early Settlement the Company shall execute and the Purchase Contract Agent shall authenticate, countersign and deliver to the Holder thereof, at the expense of the Company, a Certificate evidencing the Securities as to which Early Settlement was not effected. (f) A Holder of a Security who effects Early Settlement may elect to have the [Preferred Security or] Note, [as the case may be,] no longer a part of a SPC Unit or Treasury SPC Unit. as the case my be, remarketed. A Holder making such an election must notify the [Property] Indenture Trustee prior to 11:00 a.m. (New York City time) on the fifth Business Day immediately preceding the Purchase Contract Settlement Date, of the aggregate number of [Preferred Securities or] Notes that are not part of SPC Units or Treasury SPC Units, as the case may be, to be remarketed. Any such notice will be irrevocable and may not be conditioned upon the level at which the Reset Rate is established in the Remarketing. Concurrently, the [Property] Indenture Trustee shall cause such Notes to be presented to the Remarketing Agent for Remarketing. SECTION 5.10 NO FRACTIONAL SHARES. No fractional shares or scrip representing fractional shares of Common Stock shall be issued or delivered upon settlement on the Purchase Contract Settlement Date or upon Early Settlement of any Purchase Contracts. If Certificates evidencing more than one Purchase Contract shall be surrendered for settlement at one time by the same Holder, the number of full shares of Common Stock which shall be delivered upon settlement shall be computed on the basis of the aggregate number of Purchase Contracts evidenced by the Certificates so surrendered. Instead of any fractional share of Common Stock which would otherwise be deliverable upon settlement of any Purchase Contracts on the Purchase Contract Settlement Date or upon Early Settlement, the Company, through the Purchase Contract Agent, shall make a cash payment in respect of such fractional interest in an amount equal to the product of the total fractional share interest times the Applicable Market Value per share, determined as provided in Section 5.1. The Company shall provide the Purchase Contract Agent from time to time with sufficient funds to permit the Purchase Contract Agent to make all cash payments required by this Section 5.10 in a timely manner. 50 SECTION 5.11 CHARGES AND TAXES. The Company will pay all stock transfer and similar taxes attributable to the initial issuance and delivery of the shares of Common Stock pursuant to the Purchase Contracts; provided, however, that the Company shall not be required to pay any such tax or taxes which may be payable in respect of any exchange of or substitution for a Certificate evidencing a Security or any issuance of a share of Common Stock in a name other than that of the registered Holder of a Certificate surrendered in respect of the Securities evidenced thereby, other than in the name of the Purchase Contract Agent, as custodian for such Holder, and the Company shall not be required to issue or deliver such share certificates or Certificates unless or until the Person or Persons requesting the transfer or issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. ARTICLE VI REMEDIES SECTION 6.1 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PURCHASE CONTRACT PAYMENTS AND TO PURCHASE SHARES OF COMMON STOCK. Each Holder of a SPC Unit or Treasury SPC Unit shall have the right, which is absolute and unconditional, [(1) subject to the right of the Company to defer Purchase Contract Payments in accordance with Section 5.3 and to the obligation of a Holder to make certain Purchase Contract Payments pursuant to Section 5.9(a), to receive each Purchase Contract Payment with respect to the Purchase Contract constituting a part of such Security on the respective Payment Date for such Security (provided, however, that a Holder will have no right to receive any accrued deferred Purchase Contract Payments if such Holder effects an Early Settlement or if a Termination Event shall occur), and (2)] to purchase shares of Common Stock pursuant to such Purchase Contract and, in each such case, to institute suit for the enforcement of [any such Purchase Contract Payment and] right to purchase shares of Common Stock, and such rights shall not be impaired without the consent of such Holder. SECTION 6.2 RESTORATION OF RIGHTS AND REMEDIES. If any Holder has instituted any proceeding to enforce any right or remedy under this Agreement and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to such Holder, then and in every such case, subject to any determination in such proceeding, the Company and such Holder shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of such Holder shall continue as though no such proceeding had been instituted. 51 SECTION 6.3 RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Certificates in the last paragraph of Section 3.10, no right or remedy herein conferred upon or reserved to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 6.4 DELAY OR OMISSION NOT WAIVER. No delay or omission of any Holder to exercise any right or remedy upon a default shall impair any such right or remedy or constitute a waiver of any such right. Every right and remedy given by this Article or by law to the Holders may be exercised from time to time, and as often as may be deemed expedient, by such Holders. SECTION 6.5 UNDERTAKING FOR COSTS. All parties to this Agreement agree, and each Holder of a SPC Unit or a Treasury SPC Unit, by its acceptance of such SPC Unit or Treasury SPC Unit shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Agreement, or in any suit against the Purchase Contract Agent for any action taken, suffered or omitted by it as Purchase Contract Agent, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and costs, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Purchase Contract Agent, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% of the Outstanding Securities, or to any suit instituted by any Holder for the enforcement of [distributions or payments] on any [Preferred Securities or] Notes or Purchase Contract Payments on any Purchase Contract on or after the respective Payment Date therefor in respect of any Security held by such Holder, or for enforcement of the right to purchase shares of Common Stock under the Purchase Contracts constituting part of any Security held by such Holder. SECTION 6.6 WAIVER OF STAY OR EXTENSION LAWS. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Agreement; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any 52 power herein granted to the Purchase Contract Agent or the Holders, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE VII THE PURCHASE CONTRACT AGENT SECTION 7.1 CERTAIN DUTIES AND RESPONSIBILITIES. (a) Prior to a Default and after the curing or waiving of all such Defaults that may have occurred, the Purchase Contract Agent: (1) undertakes to perform, with respect to the Securities, such duties and only such duties as are specifically set forth in this Agreement and the Pledge Agreement, and no implied covenants or obligations shall be read into this Agreement or the Pledge Agreement against the Purchase Contract Agent; and (2) in the absence of bad faith or negligence on its part, may, with respect to the Securities, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Purchase Contract Agent and conforming to the requirements of this Agreement or the Pledge Agreement, as applicable, but in the case of any certificates or opinions which by any provision hereof are specifically required to be furnished to the Purchase Contract Agent, the Purchase Contract Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Agreement or the Pledge Agreement, as applicable. (b) No provision of this Agreement or the Pledge Agreement shall be construed to relieve the Purchase Contract Agent from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (1) this Subsection shall not be construed to limit the effect of Subsection (a) of this Section; (2) the Purchase Contract Agent shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Purchase Contract Agent was negligent in ascertaining the pertinent facts; and (3) no provision of this Agreement or the Pledge Agreement shall require the Purchase Contract Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if adequate indemnity is not provided to it. (c) Whether or not therein expressly so provided, every provision of this Agreement and the Pledge Agreement relating to the conduct or affecting the liability of or affording protection to the Purchase Contract Agent shall be subject to the provisions of this Section. 53 (d) The Purchase Contract Agent is authorized to execute and deliver the Pledge Agreement in its capacity as Purchase Contract Agent. (e) In case a Default has occurred (that has not been cured or waived), and is actually known by a Responsible Officer of the Purchase Contract Agent, the Purchase Contract Agent shall exercise such of the rights and powers vested in it by this Agreement, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (f) At the request of the Company, the Purchase Contract Agent is authorized to execute and deliver one or more Remarketing Agreements to, among other things, effectuate Section 5.4 SECTION 7.2 NOTICE OF DEFAULT. Within 90 days after the occurrence of any Default by the Company hereunder of which a Responsible Officer of the Purchase Contract Agent has actual knowledge, the Purchase Contract Agent shall transmit by mail to the Company and the Holders of Securities, as their names and addresses appear in the Register, notice of such Default hereunder, unless such Default shall have been cured or waived; provided that, except for a default in any payment obligation hereunder, the Purchase Contract Agent shall be protected in withholding such notice if and so long as the Responsible Officer of the Purchase Contract Agent in good faith determines that the withholding of such notice is in the interests of the Holders of the Securities. SECTION 7.3 CERTAIN RIGHTS OF PURCHASE CONTRACT AGENT. Subject to the provisions of Section 7.1: (1) the Purchase Contract Agent may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (2) any request or direction of the Company mentioned herein shall be sufficiently evidenced by an Officer's Certificate, Issuer Order or Issuer Request, and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution; (3) whenever in the administration of this Agreement or the Pledge Agreement the Purchase Contract Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Purchase Contract Agent (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer's Certificate of the Company; (4) the Purchase Contract Agent may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and 54 complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (5) the Purchase Contract Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Purchase Contract Agent, in its discretion, may make reasonable further inquiry or investigation into such facts or matters related to the execution, delivery and performance of the Purchase Contracts as it may see fit, and, if the Purchase Contract Agent shall determine to make such further inquiry or investigation, it shall be given a reasonable opportunity to examine the books, records and premises of the Company, personally or by agent or attorney; and (6) the Purchase Contract Agent may execute any of the powers hereunder or under the Pledge Agreement or perform any duties hereunder or under the Pledge Agreement either directly or by or through agents or attorneys or an Affiliate and the Purchase Contract Agent shall not be responsible for any misconduct or negligence on the part of any agent or attorney or an Affiliate appointed with due care by it hereunder. SECTION 7.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The recitals contained herein and in the Certificates shall be taken as the statements of the Company, and the Purchase Contract Agent assumes no responsibility for their accuracy. The Purchase Contract Agent makes no representations as to the validity or sufficiency of either this Agreement or of the Securities, or of the Pledge Agreement or the Pledge. The Purchase Contract Agent shall not be accountable for the use or application by the Company of the proceeds in respect of the Purchase Contracts. SECTION 7.5 MAY HOLD SECURITIES. Any Registrar or any other agent of the Company, or the Purchase Contract Agent and its Affiliates, in their individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Company, the Collateral Agent or any other Person with the same rights it would have if it were not Registrar or such other agent, or the Purchase Contract Agent. The Company may also become the owner or pledgee of Securities. SECTION 7.6 MONEY HELD IN CUSTODY. Money held by the Purchase Contract Agent in custody hereunder need not be segregated from the other funds except to the extent required by law or provided herein. The Purchase Contract Agent shall be under no obligation to invest or pay interest on any money received by it hereunder except as provided herein or otherwise agreed in writing with the Company. SECTION 7.7 COMPENSATION AND REIMBURSEMENT. The Company agrees: 55 (1) to pay to the Purchase Contract Agent compensation for all services rendered by it hereunder and under the Pledge Agreement as the Company and the Purchase Contract Agent shall from time to time agree in writing; (2) except as otherwise expressly provided for herein, to reimburse the Purchase Contract Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Purchase Contract Agent in accordance with any provision of this Agreement and the Pledge Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3) to indemnify the Purchase Contract Agent and any predecessor Purchase Contract Agent for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of its duties hereunder or under the Pledge Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder or under the Pledge Agreement. SECTION 7.8 CORPORATE PURCHASE CONTRACT AGENT REQUIRED; ELIGIBILITY. There shall at all times be a Purchase Contract Agent hereunder which shall be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having (or being a member of a bank holding company having) a combined capital and surplus of at least $50,000,000, subject to supervision or examination by Federal or State authority and having a corporate trust office, in the Borough of Manhattan in The City of New York, if there be such a corporation in the Borough of Manhattan in The City of New York, qualified and eligible under this Article and willing to act on reasonable terms. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Purchase Contract Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. SECTION 7.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a) No resignation or removal of the Purchase Contract Agent and no appointment of a successor Purchase Contract Agent pursuant to this Article shall become effective until the acceptance of appointment by the successor Purchase Contract Agent in accordance with the applicable requirements of Section 7.10. (b) The Purchase Contract Agent may resign at any time by giving written notice thereof to the Company 60 days prior to the effective date of such resignation. If the instrument of acceptance by a successor 56 Purchase Contract Agent required by Section 7.10 shall not have been delivered to the Purchase Contract Agent within 30 days after the giving of such notice of resignation, the resigning Purchase Contract Agent may petition any court of competent jurisdiction for the appointment of a successor Purchase Contract Agent. (c) The Purchase Contract Agent may be removed at any time by Act of the Holders of a majority in number of the Outstanding Securities delivered to the Purchase Contract Agent and the Company. (d) If at any time: (1) the Purchase Contract Agent fails to comply with Section 310(b) of the TIA, as if the Purchase Contract Agent were an indenture trustee under an indenture qualified under the TIA, after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months; (2) the Purchase Contract Agent shall cease to be eligible under Section 7.8 and shall fail to resign after written request therefor by the Company or by any such Holder; or (3) the Purchase Contract Agent shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Purchase Contract Agent or of its property shall be appointed or any public officer shall take charge or control of the Purchase Contract Agent or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company by a Board Resolution may remove the Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Purchase Contract Agent and the appointment of a successor Purchase Contract Agent. (e) If the Purchase Contract Agent shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Purchase Contract Agent for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Purchase Contract Agent and shall comply with the applicable requirements of Section 7.10. If no successor Purchase Contract Agent shall have been so appointed by the Company and accepted appointment in the manner required by Section 7.10, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Purchase Contract Agent. (f) The Company shall give, or shall cause such successor Purchase Contract Agent to give, notice of each resignation and each removal of the Purchase Contract Agent and each appointment of a successor Purchase Contract Agent by mailing written notice of such event by first-class mail, postage prepaid, to all Holders as their names and addresses appear in the 57 applicable Register. Each notice shall include the name of the successor Purchase Contract Agent and the address of its Corporate Trust Office. (g) If the Purchase Contract Agent has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Purchase Contract Agent and the Company shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. SECTION 7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In case of the appointment hereunder of a successor Purchase Contract Agent, every such successor Purchase Contract Agent so appointed shall execute, acknowledge and deliver to the Company and to the retiring Purchase Contract Agent an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Purchase Contract Agent shall become effective and such successor Purchase Contract Agent, without any further act, deed or conveyance, shall become vested with all the rights, powers, agencies and duties of the retiring Purchase Contract Agent; but, on the request of the Company or the successor Purchase Contract Agent, such retiring Purchase Contract Agent shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Purchase Contract Agent all the rights, powers and trusts of the retiring Purchase Contract Agent and shall duly assign, transfer and deliver to such successor Purchase Contract Agent all property and money held by such retiring Purchase Contract Agent hereunder. (b) Upon request of any such successor Purchase Contract Agent, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Purchase Contract Agent all such rights, powers and agencies referred to in paragraph (a) of this Section. (c) No successor Purchase Contract Agent shall accept its appointment unless at the time of such acceptance such successor Purchase Contract Agent shall be qualified and eligible under this Article. SECTION 7.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any Person into which the Purchase Contract Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Purchase Contract Agent shall be a party, or any Person succeeding to all or substantially all the corporate trust business of the Purchase Contract Agent, shall be the successor of the Purchase Contract Agent hereunder, provided such Person shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Certificates shall have been authenticated and executed on behalf of the Holders, but not delivered, by the Purchase Contract Agent then in office, any successor by merger, conversion or consolidation to such Purchase Contract Agent may adopt such authentication and execution and deliver the Certificates so authenticated and executed with the same effect as if such successor Purchase Contract Agent had itself authenticated and executed such Securities. 58 SECTION 7.12 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS. The Purchase Contract Agent shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders received by the Purchase Contract Agent in its capacity as Registrar and comply with Section 312 of the Trust Indenture Act. SECTION 7.13 NO OBLIGATIONS OF PURCHASE CONTRACT AGENT. Except to the extent otherwise provided in this Agreement, the Purchase Contract Agent assumes no obligations and shall not be subject to any liability under this Agreement, the Pledge Agreement or any Purchase Contract in respect of the obligations of the Holder of any Security thereunder. The Company agrees, and each Holder of a Certificate, by his acceptance thereof, shall be deemed to have agreed, that the Purchase Contract Agent's execution of the Certificates on behalf of the Holders shall be solely as agent and attorney-in-fact for the Holders, and that the Purchase Contract Agent shall have no obligation to perform such Purchase Contracts on behalf of the Holders, except to the extent expressly provided in Article Five hereof. Anything contained in this Agreement to the contrary notwithstanding, in no event shall the Purchase Contract Agent or its officers, employees or agents be liable under this Agreement to any third party for indirect, special, punitive, or consequential loss or damage of any kind whatsoever, including lost profits, whether or not the likelihood of such loss or damage was known to the Purchase Contract Agent. SECTION 7.14 TAX COMPLIANCE. (a) The Company and the Purchase Contract Agent will comply with all applicable certification, information reporting and withholding (including "backup" withholding) requirements imposed by applicable tax laws, regulations or administrative practice with respect to (i) any payments made with respect to the Securities or (ii) the issuance, delivery, holding, transfer, redemption or exercise of rights under the Securities. Such compliance shall include, without limitation, the preparation and timely filing of required returns and the timely payment of all amounts required to be withheld to the appropriate taxing authority or its designated agent. (b) The Purchase Contract Agent shall comply in accordance with the terms hereof with any reasonable written direction received from the Company with respect to the execution or certification of any required documentation and the application of such requirements to particular payments or Holders or in other particular circumstances, and may for purposes of this Agreement rely on any such direction in accordance with the provisions of Section 7.1(a)(2) hereof. (c) The Purchase Contract Agent shall maintain all appropriate records documenting compliance with such requirements, and shall make such records available, on written request, to the Company or its authorized representative within a reasonable period of time after receipt of such request. 59 ARTICLE VIII SUPPLEMENTAL AGREEMENTS SECTION 8.1 SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS. Without the consent of any Holders, the Company and the Purchase Contract Agent, at any time and from time to time, may enter into one or more agreements supplemental hereto, in form satisfactory to the Company and the Purchase Contract Agent, to: (1) evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Certificates; (2) evidence and provide for the acceptance of appointment hereunder by a successor Purchase Contract Agent; (3) add to the covenants of the Company for the benefit of the Holders, or surrender any right or power herein conferred upon the Company; (4) make provision with respect to the rights of Holders pursuant to the requirements of Section 5.6(b); or (5) except as provided for in Section 5.6, cure any ambiguity, correct or supplement any provisions herein which may be inconsistent with any other provisions herein, or make any other provisions with respect to such matters or questions arising under this Agreement, provided such action shall not adversely affect the interests of the Holders. SECTION 8.2 SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS. With the consent of the Holders of not less than a majority of the outstanding Purchase Contracts voting together as one class, by Act of said Holders delivered to the Company and the Purchase Contract Agent, the Company, when authorized by a Board Resolution, and the Purchase Contract Agent may enter into an agreement or agreements supplemental hereto for the purpose of modifying in any manner the terms of the Purchase Contracts, or the provisions of this Agreement or the rights of the Holders in respect of the Securities; provided, however, that, except as contemplated herein, no such supplemental agreement shall, without the unanimous consent of the Holders of each Outstanding Purchase Contract affected thereby, (1) change any Payment Date; (2) change the amount or the type of Collateral required to be Pledged to secure a Holder's obligations under the Purchase Contract, impair the right of the Holder of any Purchase Contract to receive distributions on the related Collateral (except for the rights of Holders of SPC Units to substitute Treasury Securities for the Pledged Preferred Securities or Pledged Notes or the Applicable Ownership Interest in the Treasury 60 Portfolio or the rights of Holders or Treasury SPC Units to substitute Preferred Securities, Notes or the Applicable Ownership Interest in the Treasury Portfolio for the Pledged Treasury Securities) or otherwise adversely affect the Holder's rights in or to such Collateral or adversely alter the rights in or to such Collateral; (3) reduce any Purchase Contract Payments or change the coin or currency in which any Purchase Contract Payment is payable; (4) impair the right to institute suit for the enforcement of any Purchase Contract; (5) reduce the number of shares of Common Stock to be purchased pursuant to any Purchase Contract, increase the price to purchase shares of Common Stock upon settlement of any Purchase Contract, change the Purchase Contract Settlement Date; or (6) reduce the percentage of the outstanding Purchase Contracts the consent of whose Holders is required for any such supplemental agreement; provided that if any amendment or proposal referred to above would adversely affect only the SPC Units or the Treasury SPC Units, then only the affected class of Holders as of the record date (if any) for the Holders entitled to vote thereon will be entitled to vote on such amendment or proposal, and such amendment or proposal shall not be effective except with the consent of Holders of not less than a majority of such class; and provided, further, that the unanimous consent of the Holders of each outstanding Purchase Contract of such class affected thereby shall be required to approve any amendment or proposal specified in clauses (1) through (6) above. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental agreement, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 8.3 EXECUTION OF SUPPLEMENTAL AGREEMENTS. In executing, or accepting the additional agencies created by, any supplemental agreement permitted by this Article or the modifications thereby of the agencies created by this Agreement, the Purchase Contract Agent shall be entitled to receive, and (subject to Section 7.1) shall be fully protected in relying upon, an Officer's Certificate and an Opinion of Counsel stating that the execution of such supplemental agreement is authorized or permitted by this Agreement. The Purchase Contract Agent may, but shall not be obligated to, enter into any such supplemental agreement which affects the Purchase Contract Agent's own rights, duties or immunities under this Agreement or otherwise. SECTION 8.4 EFFECT OF SUPPLEMENTAL AGREEMENTS. Upon the execution of any supplemental agreement under this Article, this Agreement shall be modified in accordance therewith, and such supplemental agreement shall form a part of this Agreement for all purposes; and every Holder 61 of Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered hereunder, shall be bound thereby. SECTION 8.5 REFERENCE TO SUPPLEMENTAL AGREEMENTS. Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any supplemental agreement pursuant to this Article may, and shall if required by the Purchase Contract Agent, bear a notation in form approved by the Purchase Contract Agent as to any matter provided for in such supplemental agreement. If the Company shall so determine, new Certificates so modified as to conform, in the opinion of the Purchase Contract Agent and the Company, to any such supplemental agreement may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Purchase Contract Agent in exchange for Outstanding Certificates. ARTICLE IX MERGER, CONSOLIDATION, SALE OR CONVEYANCE SECTION 9.1 COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY PROPERTY EXCEPT UNDER CERTAIN CONDITIONS. The Company covenants that it will not merge, consolidate or sell, assign, transfer, lease or convey its properties and assets as an entirety or substantially as an entirety to any Person or group of affiliated Persons in one transaction or a series of related transactions, unless: (1) either the Company shall be the continuing corporation, or the successor (if other than the Company) shall be a corporation organized and existing under the laws of the United States of America or a State thereof or the District of Columbia and such corporation shall expressly assume all the obligations of the Company under the Purchase Contracts, the Preferred Securities, the Notes, this Agreement [the Indenture], [the Trust Agreement] and the Pledge Agreement by one or more supplemental agreements in form reasonably satisfactory to the Purchase Contract Agent, the Collateral Agent, [the Indenture Trustee] and [the Property Trustee] executed and delivered to the Purchase Contract Agent and the Collateral Agent by such corporation; and (2) the Company or such successor corporation, as the case may be, shall not, immediately after such merger, consolidation, or sale, assignment, transfer, lease or conveyance, be in default in the performance of any covenant or condition hereunder, under any of the Securities or under the Pledge Agreement. SECTION 9.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of any such merger, consolidation, sale, assignment, transfer, lease or conveyance and upon any such assumption by a successor corporation in accordance with Section 9.1, such successor corporation shall succeed to and be substituted for the Company with the same effect as if it had been named herein as the Company and, except in the case of a lease, the Company shall be relieved of all of its covenants and obligations under this Agreement and the Securities. 62 Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of PPL Corporation, any or all of the Certificates evidencing Securities issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Purchase Contract Agent; and, upon the order of such successor corporation, instead of the Company, and subject to all the terms, conditions and limitations in this Agreement prescribed, the Purchase Contract Agent shall authenticate and execute on behalf of the Holders and deliver any Certificates which previously shall have been signed and delivered by the officers of the Company to the Purchase Contract Agent for authentication and execution, and any Certificate evidencing Securities which such successor corporation thereafter shall cause to be signed and delivered to the Purchase Contract Agent for that purpose. All the Certificates issued shall in all respects have the same legal rank and benefit under this Agreement as the Certificates theretofore or thereafter issued in accordance with the terms of this Agreement as though all of such Certificates had been issued at the date of the execution hereof. In case of any such merger, consolidation, sale, assignment, transfer, lease or conveyance such change in phraseology and form (but not in substance) may be made in the Certificates evidencing Securities thereafter to be issued as may be appropriate. SECTION 9.3 OFFICER'S CERTIFICATE AND OPINION OF COUNSEL GIVEN TO PURCHASE CONTRACT AGENT. The Purchase Contract Agent, subject to Sections 7.1 and 7.3, shall receive an Officer's Certificate and an Opinion of Counsel as conclusive evidence that any such merger, consolidation, sale, assignment, transfer, lease or conveyance, and any such assumption, complies with the provisions of this Article and that all conditions precedent to the consummation of any such merger, consolidation, sale, assignment, transfer, lease or conveyance have been met. ARTICLE X COVENANTS SECTION 10.1 PERFORMANCE UNDER PURCHASE CONTRACTS. The Company covenants and agrees for the benefit of the Holders from time to time of the Securities that it will duly and punctually perform its obligations under the Purchase Contracts in accordance with the terms of the Purchase Contracts and this Agreement. SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain in the Borough of Manhattan in The City of New York, an office or agency where payments made on Securities may be made, where Certificates may be presented or surrendered for acquisition of shares of Common Stock upon settlement of the Purchase Contracts on the Purchase Contract Settlement Date or Early Settlement and for transfer of Collateral upon occurrence of a Termination Event, where Certificates may be surrendered for registration of transfer or exchange, for a Collateral Substitution or reestablishment of SPC Units and where notices and demands to or upon the Company in respect of the Securities and this Agreement may be served. The Company will give prompt written notice to the Purchase Contract Agent of the 63 location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Purchase Contract Agent with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Company hereby appoints the Purchase Contract Agent as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies where Certificates may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company will give prompt written notice to the Purchase Contract Agent of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates as the place of payment for the Securities the Corporate Trust Office and appoints the Purchase Contract Agent at its Corporate Trust Office as paying agent in such city. SECTION 10.3 COMPANY TO RESERVE COMMON STOCK. The Company shall at all times prior to the Purchase Contract Settlement Date reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock the full number of shares of Common Stock issuable against tender of payment in respect of all Purchase Contracts constituting a part of the Securities evidenced by Outstanding Certificates. SECTION 10.4 COVENANTS AS TO COMMON STOCK. The Company covenants that all shares of Common Stock which may be issued against tender of payment in respect of any Purchase Contract constituting a part of the Outstanding Securities will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable. SECTION 10.5 ERISA. Each Holder from time to time of the SPC Units which is a Plan hereby represents that its acquisition of the SPC Units and the holding of the same satisfies the applicable fiduciary requirements of ERISA and that it is entitled to exemption relief from the prohibited transaction provisions of ERISA and the Code in accordance with one or more prohibited transaction exemptions or otherwise will not result in a nonexempt prohibited transaction. 64 ARTICLE XI TRUST INDENTURE ACT SECTION 11.1 TRUST INDENTURE ACT; APPLICATION. (a) This Agreement is subject to the provisions of the TIA that are required or deemed to be part of this Agreement and shall, to the extent applicable, be governed by such provisions; and (b) If and to the extent that any provision of this Agreement limits, qualifies or conflicts with the duties imposed by Section 310 to 317, inclusive, of the TIA, such imposed duties shall control. SECTION 11.2 LISTS OF HOLDERS OF SECURITIES. (a) The Company shall furnish or cause to be furnished to the Purchase Contract Agent (a) semiannually, not later than June 1 and December 1 in each year, commencing December 1, [2000], a list, in such form as the Purchase Contract Agent may reasonably require, of the names and addresses of the Holders ("List of Holders") as of a date not more than 15 days prior to the delivery thereof, and (b) at such other times as the Purchase Contract Agent may request in writing, within 30 days after the receipt by the Company of any such request, a List of Holders as of a date not more than 15 days prior to the time such list is furnished; provided that, the Company shall not be obligated to provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Purchase Contract Agent by the Company. The Purchase Contract Agent may destroy any List of Holders previously given to it on receipt of a new List of Holders (b) The Purchase Contract Agent shall comply with its obligations under Section 311(a) of the TIA, subject to the provisions of Section 311(b) and Section 312(b) of the TIA. SECTION 11.3 REPORTS BY THE PURCHASE CONTRACT AGENT. Not later than November 15 of each year, commencing November 15, [2000], the Purchase Contract Agent shall provide to the Holders such reports, if any, as are required by Section 313(a) of the TIA in the form and in the manner provided by Section 313(a) of the TIA. Such reports shall be as of the preceding September 15. The Purchase Contract Agent shall also comply with the requirements of Sections 313(b), (c) and (d) of the TIA. SECTION 11.4 PERIODIC REPORTS TO PURCHASE CONTRACT AGENT. The Company shall provide to the Purchase Contract Agent such documents, reports and information as required by Section 314 (if any) and the compliance certificate required by Section 314(a)(4) of the TIA in the form, in the manner and at the times required by Section 314 of the TIA, provided, that such compliance certificate shall be delivered annually on or before in -------- each year, commencing . ------------- 65 SECTION 11.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The Company shall provide to the Purchase Contract Agent such evidence of compliance with any conditions precedent provided for in this Agreement as and to the extent required by Section 314(c) of the TIA. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) of the TIA may be given in the form of an Officer's Certificate. Any opinion required to be given pursuant to Section 314(c)(2) of the TIA may be given in the form of an Opinion of Counsel. SECTION 11.6 DEFAULTS; WAIVER. The Holders of a majority of the Outstanding Purchase Contracts voting together as one class may, by vote, on behalf of all of the Holders, waive any past Default and its consequences, except a default (a) in the payment on any Security, or (b) in respect of a provision hereof which under Section 8.2 cannot be modified or amended without the consent of the Holder of each Outstanding Security affected. Upon such waiver, any such Default shall cease to exist, and any Default arising therefrom shall be deemed to have been cured, for every purpose of this Agreement, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. SECTION 11.7 PURCHASE CONTRACT AGENT'S KNOWLEDGE OF DEFAULTS The Purchase Contract Agent shall not be deemed to have knowledge of any Default unless a Responsible Officer charged with the administration of this Agreement shall have obtained written notice of such Default from the Company or any Holder. SECTION 11.8 CONFLICTING INTERESTS. The Indenture, the Indenture dated as of November 1, 1997 among PPL Capital Funding, Inc. as issuer, the Company as guarantor and the Chase Manhattan Bank, as trustee, as supplemented and amended, [others] shall be deemed to be specifically described in this Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the TIA. SECTION 11.9 DIRECTION OF PURCHASE CONTRACT AGENT. Section 316(a)(1)(A) of the TIA is hereby expressly excluded from this Agreement, as permitted by the TIA. 66 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. PPL CORPORATION By: ------------------------------------- Name: Title: ---------------------------------------- as Purchase Contract Agent and Trustee By: ------------------------------------- Name: Title: 67 EXHIBIT A FORM OF SPC UNITS CERTIFICATE 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 REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED 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. No. Cusip No. ------- -------- Number of SPC Units -------- PPL CORPORATION SPC UNITS This SPC Units Certificate certifies that is the registered Holder of the number of SPC Units set forth above. Each SPC Unit consists of (i) [either (a)] the beneficial ownership by the Holder of one [Preferred Security (the "Preferred Security") of PPL Capital Funding Trust I, a Delaware statutory business trust (the "Trust"), having a stated liquidation amount of $25] [Note (the "Note") of PPL Capital Funding, Inc., a Delaware corporation guaranteed by PPL Corporation, a Pennsylvania corporation (the "Company"), having a principal amount of $25], subject to the Pledge of such [Preferred Security] [Note] by such Holder pursuant to the Pledge Agreement or (b) upon the occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement Date, the appropriate Applicable Ownership Interest (as specified in A-1 clause (A) of the definition of such term) in the Treasury Portfolio by such Holder pursuant to the Pledge Agreement, and (ii) the rights and obligations of the Holder and the Company under one Purchase Contract with the Company. All capitalized terms used herein which are defined in the Purchase Contract Agreement (as defined below) have the meaning set forth therein. Pursuant to the Pledge Agreement, the [Preferred Security or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be,] [Note] constituting part of each SPC Unit evidenced hereby has been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Purchase Contract comprising part of such SPC Unit. Payments of [distributions] [interest] on any [Preferred Security] [Note] forming part of a SPC Unit evidenced hereby, shall, subject to receipt thereof by the Purchase Contract Agent from the Securities Intermediary, be paid to the Person in whose name this SPC Units Certificate (or a Predecessor SPC Units Certificate) is registered at the close of business on the Record Date for such Payment Date. Interest is payable quarterly in arrears on February 16, May 16, August 16 and November 16 of each year, commencing (each, -------------- a "Payment Date"). Payments of [distributions] [interest] on the [Preferred Security] [Note] forming a part of the SPC Unit evidenced hereby may be deferred at the option of the Company and the [Trust] [Note Issuer], under the circumstances described in such [Preferred Security] [Note]. Each Purchase Contract evidenced hereby obligates the Holder of this SPC Units Certificate to purchase, and the Company to sell, on the Purchase Contract Settlement Date, at a price equal to [$25] (the "Stated Amount"), a number of shares of PPL Corporation Common Stock, par value $.01 per share ("Common Stock"), equal to the Settlement Rate, unless on or prior to the Purchase Contract Settlement Date there shall have occurred a Termination Event or an Early Settlement with respect to the SPC Unit of which such Purchase Contract is a part, all as provided in the Purchase Contract Agreement and more fully described on the reverse hereof. The purchase price (the "Purchase Price") for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract Settlement Date by cash or by application of payment received in respect of the [liquidation] [principal] amount with respect to each Pledged [Preferred Security] [Note] pursuant to the Remarketing [or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be,] pledged to secure the obligations under such Purchase Contract of the Holder of the SPC Unit of which such Purchase Contract is a part. The Company shall pay, on each Payment Date, in respect of each Purchase Contract forming part of a SPC Unit evidenced hereby, an amount (the "Purchase Contract Payments") equal to % per annum of the Stated Amount. ---- Such Purchase Contract Payments shall be payable to the Person in whose name this SPC Units Certificate (or a Predecessor SPC Units Certificate) is registered at the close of business on the Record Date for such Payment Date. The Company may, at its option, defer Purchase Contract Payments. A-2 [Distributions on the Preferred Securities and the Applicable Ownership Interest (as specified in clause (B) of the definition of such term),] [Interest payments on the Notes] and [Purchase Contract Payments] will be payable at the office of the Purchase Contract Agent in New York City or, at the option of the Company, by check mailed to the address of the Person entitled thereto as such address appears on the SPC Units Register. Each Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement, dated as of (as may be supplemented from time to -------- time, the "Purchase Contract Agreement"), between the Company and , ------------- as Purchase Contract Agent (including its successors hereunder, the "Purchase Contract Agent"), to which Purchase Contract Agreement and supplemental agreements thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Purchase Contract Agent, the Company, and the Holders and of the terms upon which the SPC Units Certificates are, and are to be, executed and delivered. Each Purchase Contract evidenced hereby obligates the Holder of this SPC Units Certificate to purchase, and the Company to sell, on the Purchase Contract Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a number of shares of Common Stock equal to the Settlement Rate, unless, prior to or on the Purchase Contract Settlement Date, there shall have occurred a Termination Event with respect to the Security of which such Purchase Contract is a part or an Early Settlement shall have occurred. The "Settlement Rate" is equal to: (1) if the Applicable Market Value (as defined below) equals or exceeds $. (the "Threshold Appreciation Price"), shares of Common ----- Stock per Purchase Contract; (2) if the Applicable Market Value is less than the Threshold Appreciation Price but greater than $ (the "Reference Price"), the ------- number of shares of Common Stock per Purchase Contract having a value, based on the Applicable Market Value, equal to the Stated Amount; and (3) if the Applicable Market Amount is less than or equal to the Reference Price, shares of Common Stock per Purchase Contract, ---- in each case subject to adjustment as provided in the Purchase Contract Agreement (and in each case rounded upward or downward to the nearest 1/10,000th of a share). No fractional shares of Common Stock will be issued upon settlement of Purchase Contracts, as provided in Section 5.10 of the Purchase Contract Agreement. Each Purchase Contract evidenced hereby, which is settled either through Early Settlement or on the Purchase Contract Settlement Date, shall obligate the Holder of the related SPC Unit to purchase at the Purchase Price in cash, and the Company to sell, a number of shares of Common Stock equal to the Early Settlement Rate or the Settlement Rate, as applicable. The "Applicable Market Value" means the average of the Closing Price per share of Common Stock on each of the 20 consecutive Trading Days ending on the third Trading Day immediately preceding the Purchase Contract Settlement Date. A-3 The "Closing Price" per share of Common Stock on any date of determination means: (1) the closing sale price at the 4:15 p.m. close of trading (or, if no closing price is reported, the last reported sale price) per share on the New York Stock Exchange, Inc. (the "NYSE") on such date; (2) if Common Stock is not listed for trading on the NYSE on any such date, the closing sale price per share as reported in the composite transactions for the principal United States securities exchange on which Common Stock is so listed; (3) if Common Stock is not so listed on a United States national or regional securities exchange, the closing sale price per share as reported by The Nasdaq Stock Market, Inc.; (4) if Common Stock is not so reported, the last quoted bid price for Common Stock in the over-the-counter market as reported by the National Quotation Bureau or similar organization; or (5) if such bid price is not available, the average of the mid-point of the last bid and ask prices of Common Stock on such date from at least three nationally recognized independent investment banking firms retained for this purpose by the Company. A "Trading Day" means a day on which Common Stock (1) is not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (2) has traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of Common Stock. In accordance with the terms of the Purchase Contract Agreement, the Holder of this SPC Units Certificate may pay the Purchase Price for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby by effecting a Cash Settlement or an Early Settlement [or from the proceeds of the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio] or a Remarketing of the related Pledged [Preferred Securities] [Notes]. A Holder of SPC Units who does not effect, on or prior to 11:00 a.m. (New York City time) on the fifth Business Day immediately preceding the Purchase Contract Settlement Date [(or in the event a Tax Event Redemption has occurred, the Business Day prior to the Purchase Contract Settlement Date)], an effective Cash Settlement or, who does not effect on or prior to 5:00 p.m. (New York City time) on the seventh Business Day prior to the Purchase Contract Settlement Date, an effective Early Settlement, shall pay the Purchase Price for the shares of Common Stock to be delivered under the related Purchase Contract from the proceeds of the sale of the related Pledged [Preferred Securities] [Notes] held by the Collateral Agent. Such sale will be made by the Remarketing Agent pursuant to the terms of the Remarketing Agreement on the third Business Day prior to the Purchase Contract Settlement Date. If, as provided in the Purchase Contract Agreement, upon the occurrence of a Failed Remarketing, the Collateral Agent, for the benefit of the Company, exercises its A-4 rights as a secured creditor with respect to the Pledged [Preferred Securities] [Notes] related to this SPC Units certificate, any accrued and unpaid or deferred [distributions] [interest] payments on such Pledged [Preferred Securities] [Notes] will become payable by [the Company] to the holder of this SPC Units Certificate in the manner provided for in the Purchase Contract Agreement. The Company shall not be obligated to issue any shares of Common Stock in respect of a Purchase Contract or deliver any certificates therefor to the Holder unless it shall have received payment of the aggregate purchase price for the shares of Common Stock to be purchased thereunder in the manner herein set forth. Under the terms of the Pledge Agreement, the Purchase Contract Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Pledged [Preferred Securities] [Notes]. Upon receipt of notice of any meeting at which holders of [Preferred Securities] [Notes] are entitled to vote or upon the solicitation of consents, waivers or proxies of holders of [Preferred Securities] [Notes], the Purchase Contract Agent shall, as soon as practicable thereafter, mail to the SPC Units Holders a notice: (1) containing such information as is contained in the notice or solicitation; (2) stating that each SPC Unit Holder on the record date set by the Purchase Contract Agent therefor (which, to the extent possible, shall be the same date as the record date for determining the holders of [Preferred Securities] [Notes] entitled to vote or consent) shall be entitled to instruct the Purchase Contract Agent as to the exercise of the voting or consensual rights pertaining to the [Preferred Securities] [Notes] constituting a part of such Holder's SPC Unit; and (3) stating the manner in which such instructions may be given. Upon the written request of the SPC Unit Holders on such record date, the Purchase Contract Agent shall endeavor insofar as practicable to vote or consent or cause to be voted or consented, in accordance with the instructions set forth in such requests, the maximum number of [Preferred Securities] [Notes] as to which any particular voting or consent instructions are received. In the absence of specific instructions from the Holder of a SPC Unit, the Purchase Contract Agent shall abstain from voting or consenting the [Preferred Securities] [Notes] evidenced by such SPC Unit. [Upon the dissolution and liquidation of the Trust, a principal amount of the Notes constituting the assets of the Trust and underlying the Preferred Securities equal to the aggregate liquidation amount of the Pledged Preferred Securities shall be delivered to the Securities Intermediary in exchange for the Pledged Preferred Securities. Thereafter, the Notes shall be held by the Securities Intermediary to secure the obligations of each Holder of SPC Units to purchase shares of Common Stock under the Purchase Contracts constituting a part of such SPC Units. Following the dissolution and liquidation of the Trust, the Holders and the Collateral Agent shall have such security interests, rights and obligations with respect to the Notes as the Holders and the Collateral Agent had in respect of the Pledged Preferred Securities, any reference herein to the Preferred Securities shall be deemed to be a reference to the Notes and any A-5 reference herein to the liquidation amount of the Preferred Securities shall be deemed to be a reference to the principal amount of the Notes.] [Upon the occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement Date, the Redemption Price payable on the Tax Event Redemption Date with respect to the Applicable Principal Amount of Notes shall be delivered to the Securities Intermediary in exchange for the Pledged Preferred Securities. Thereafter, pursuant to the terms of the Pledge Agreement, the Securities Intermediary will apply an amount equal to the Redemption Amount of such Redemption Price to purchase on behalf of the Holders of SPC Units, the Treasury Portfolio and promptly (a) transfer the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio to the Collateral Account to secure the obligations of each Holder of SPC Units to purchase shares of Common Stock under the Purchase Contracts constituting a part of such SPC Units, (b) transfer the Applicable Ownership Interest (as specified in clause (B) of the definition of such term) in the Treasury Portfolio to the Purchase Contract Agent for the benefit of the Holders of such SPC Units and (C) remit the remaining portion of such Redemption Price to the Purchase Contract Agent for payment to the Holders of such SPC Units.] [Following the occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement Date, the Holders of SPC Units and the Collateral Agent shall have such security interest rights and obligations with respect to the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio as the Holder of SPC Units and the Collateral Agent had in respect of the Preferred Securities or Notes, as the case may be, subject to the Pledge thereof as provided in the Pledge Agreement and any reference herein to the Preferred Securities shall be deemed to be a reference to such Treasury Portfolio.] The SPC Certificates are issuable only in registered form and only in denominations of a single SPC Unit and any integral multiple thereof. The transfer of any SPC Units Certificate will be registered and SPC Units Certificates may be exchanged as provided in the Purchase Contract Agreement. The SPC Units Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Purchase Contract Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. A holder who elects to substitute a Treasury Security for [Preferred Securities] [Notes], thereby creating Treasury SPC Units, shall be responsible for any fees or expenses payable in connection therewith. Except as provided in the Purchase Contract Agreement, for so long as the Purchase Contract underlying a SPC Unit remains in effect, such SPC Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such SPC Unit in respect of the [Preferred Security] [Note] and Purchase Contract constituting such SPC Unit may be transferred and exchanged only as a SPC Unit. The Holder of SPC Units may substitute for the Pledged [Preferred Securities] [Notes] securing such Holder's obligations under the related Purchase Contracts Treasury Securities in an aggregate principal amount equal to the aggregate [liquidation] [principal] amount of the Pledged [Preferred Securities] [Notes] in accordance with the terms of the Purchase Contract A-6 Agreement and the Pledge Agreement. From and after such Collateral Substitution, each Security for which such Pledged Treasury Securities secures the Holder's obligation under the Purchase Contract shall be referred to as a "Treasury SPC Unit". A Holder may make such Collateral Substitution only in integral multiples of 40 SPC Units for 40 Treasury SPC Units. [Such Collateral Substitution may cause the equivalent aggregate principal amount of this Certificate to be increased or decreased; provided, however, this SPC Units Certificate shall not represent more than [x,000,000] SPC Units. All such adjustments to the equivalent aggregate principal amount of this SPC Units Certificate shall be duly recorded by placing an appropriate notation on the Schedule attached hereto.] A Holder of Treasury SPC Units may recreate SPC Units by delivering to the Securities Intermediary [Preferred Securities] [Notes] with an aggregate [liquidation] [principal] amount equal to the aggregate principal amount of the Pledged Treasury Securities in exchange for the release of such Pledged Treasury Securities in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. A Holder may recreate SPC Units in integral multiples of 40 Treasury SPC Units for 40 SPC Units. [If a Tax Event Redemption has occurred, a SPC Unit Holder may not create Treasury SPC Units, and a Treasury SPC Unit Holder may not recreate a SPC Unit.] [The Company shall pay, on each Payment Date, the Purchase Contract Payments payable in respect of each Purchase Contract to the Person in whose name the SPC Units Certificate evidencing such Purchase Contract is registered at the close of business on the Record Date for such Payment Date. Purchase Contract Payments will be payable at the office of the Purchase Contract Agent in New York City or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such address as it appears on the SPC Units Register. The Company has the right to defer payment of all or part of the Purchase Contract Payments in respect of each Purchase Contract until no later than the Purchase Contract Settlement Date. If the Company so elects to defer Purchase Contract Payments, the Company shall pay additional Purchase Contract Payments on such deferred installments of Purchase Contract Payments at a rate equal to % per annum, compounding quarterly, until such deferred ---- installments are paid. If a Holder effects an Early Settlement or if a Termination Event shall occur, such Holder will have no right to receive any accrued and unpaid or deferred Purchase Contract Payments.] The Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Company to pay any Purchase Contract Payments, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Purchase Contract Agent or the Company, if, on or prior to the Purchase Contract Settlement Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Purchase Contract Agent, the Collateral Agent and the Holders, at their addresses as they appear in the SPC Units Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the [Pledged Preferred Security or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of A-7 such term) in the Treasury Portfolio] [Notes] forming a part of each SPC Unit from the Pledge in accordance with the provisions of the Pledge Agreement. A SPC Unit shall thereafter represent the right to receive the [Pledged Preferred Security or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio] [Note] forming a part of such SPC Unit in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. Subject to and upon compliance with the provisions of the Purchase Contract Agreement, at the option of the Holder thereof, Purchase Contracts underlying Securities may be settled early ("Early Settlement") as provided in the Purchase Contract Agreement. In order to exercise the right to effect Early Settlement with respect to any Purchase Contracts evidenced by this SPC Units Certificate, the Holder of this SPC Units Certificate shall deliver this SPC Units Certificate to the Purchase Contract Agent at the Corporate Trust Office duly endorsed for transfer to the Company or in blank with the form of Election to Settle Early set forth below duly completed and accompanied by payment in the form of immediately available funds payable to the order of the Company in an amount (the "Early Settlement Amount") equal to: (1) the product of (A) the Stated Amount times (B) the number of Purchase Contracts with respect to which the Holder has elected to effect Early Settlement, plus (2) if such delivery is made with respect to any Purchase Contracts during the period from the close of business on any Record Date for any Payment Date to the opening of business on such Payment Date, an amount equal to [the sum of (x)] the Purchase Contract Payments payable on such Payment Date with respect to such Purchase Contracts [plus (y) in the case of a SPC Units Certificate, the [distributions or] interest on the related [Preferred Securities or] Notes payable on such Payment Date. Upon Early Settlement of Purchase Contracts by a Holder of the related Securities, the Pledged [Preferred Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be,] [Notes] underlying such Securities shall be released from the Pledge as provided in the Pledge Agreement and the Holder shall be entitled to receive a number of shares of Common Stock on account of each Purchase Contract forming part of a SPC Unit as to which Early Settlement is effected equal to the Early Settlement Rate. The Early Settlement Rate shall initially be equal to shares of Common Stock and shall -- be adjusted in the same manner and at the same time as the Settlement Rate is adjusted as provided in the Purchase Contract Agreement. Upon registration of transfer of this SPC Units Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Purchase Contract Agent pursuant to the Purchase Contract Agreement), under the terms of the Purchase Contract Agreement and the Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Purchase Contracts evidenced by this SPC Units Certificate. The Company covenants and agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. A-8 The Holder of this SPC Units Certificate, by its acceptance hereof, authorizes the Purchase Contract Agent to enter into and perform the related Purchase Contracts forming part of the SPC Units evidenced hereby on its behalf as its attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform his obligations under such Purchase Contracts, consents to the provisions of the Purchase Contract Agreement, authorizes the Purchase Contract Agent to enter into and perform the Purchase Contract Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of the [Preferred Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be,] [Notes] underlying this SPC Units Certificate pursuant to the Pledge Agreement. The Holder further covenants and agrees that, to the extent and in the manner provided in the Purchase Contract Agreement and the Pledge Agreement, but subject to the terms thereof, payments in respect to the aggregate [liquidation] [principal] amount of the Pledged [Preferred Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be,] [Notes], on the Purchase Contract Settlement Date shall be paid by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such payments. Subject to certain exceptions, the provisions of the Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the Purchase Contracts. The Purchase Contracts shall be governed by, and construed in accordance with, the laws of the State of New York. The Company, the Purchase Contract Agent and their Affiliates and any agent of the Company or the Purchase Contract Agent or their Affiliates may treat the Person in whose name this SPC Units Certificate is registered as the owner of the SPC Units evidenced hereby for the purpose of receiving [distributions] [payments of interest] payable quarterly on the [Preferred Securities] [Notes], receiving payments of Purchase Contract Payments, performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Purchase Contract Agent nor any such Affiliates or agent shall be affected by notice to the contrary. The Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of shares of Common Stock. A copy of the Purchase Contract Agreement is available for inspection at the offices of the Purchase Contract Agent. Unless the certificate of authentication hereon has been executed by the Purchase Contract Agent by manual signature, this SPC Units Certificate shall not be entitled to any benefit under the Pledge Agreement or the Purchase Contract Agreement or be valid or obligatory for any purpose. A-9 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. PPL CORPORATION By: ------------------------------------- Name: Title: By: ------------------------------------- Name: Title: HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase Contracts evidenced hereby) By: , not ------------------------- individually but solely as Attorney-in-Fact of such Holder By: ------------------------------------- Name: Title: Dated: A-10 CERTIFICATE OF AUTHENTICATION OF PURCHASE CONTRACT AGENT This is one of the SPC Units Certificates referred to in the within mentioned Purchase Contract Agreement. By: , as ---------------------------- Purchase Contract Agent By: ------------------------------------- Authorized Officer Dated: A-11 ABBREVIATIONS The following abbreviations, when used in the inscription on the face 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) Under Uniform Gifts to Minors Act of ------------------------------------- (State) TEN ENT: as tenants by the entireties JT TEN: as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ---------------------- FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto - -------------------------------------------------------------------------------- (Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Please Print or Type Name and Address Including Postal Zip Code of Assignee) the within SPC Units Certificates and all rights thereunder, hereby irrevocably constituting and appointing - -------------------------------------------------------------------------------- attorney to transfer said SPC Units Certificates on the books of PPL Corporation and [Trust] [PPL Capital Funding, Inc.] with full power of substitution in the premises. Dated: ------------------------------- ------------------------------------ Signature NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within SPC Units Certificates in every particular, without alteration or enlargement or any change whatsoever. Signature Guarantee: ----------------------- A-12 SETTLEMENT INSTRUCTIONS The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon settlement on or after the Purchase Contract Settlement Date of the Purchase Contracts underlying the number of SPC Units evidenced by this SPC Units Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: ------------------------- ---------------------------- Signature Signature Guarantee: ------------------ (if assigned to another person) [STAMP LEGEND] If shares are to be registered in the REGISTERED HOLDER name of and delivered to a Person other than the Holder, please (i) print such Person's name and address and Please print name and address of (ii) provide a guarantee of your Registered Holder: signature: - ------------------------------- ------------------------------------- Name Name - ------------------------------- ------------------------------------- Address Address - ------------------------------- ------------------------------------- - ------------------------------- ------------------------------------- - ------------------------------- ------------------------------------- Social Security or other Taxpayer Identification Number, if any ------------------------------------- A-13 ELECTION TO SETTLE EARLY The undersigned Holder of this SPC Units Certificate hereby irrevocably exercises the option to effect Early Settlement in accordance with the terms of the Purchase Contract Agreement with respect to the Purchase Contracts underlying the number of SPC Units evidenced by this SPC Units Certificate specified below. The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon such Early Settlement be registered in the name of, and delivered, together with a check in payment for any fractional share and any SPC Units Certificate representing any SPC Units evidenced hereby as to which Early Settlement of the related Purchase Contracts is not effected, to the undersigned at the address indicated below unless a different name and address have been indicated below. Pledged [Preferred Securities or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] [Notes] deliverable upon such Early Settlement will be transferred in accordance with the transfer instructions set forth below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: ------------------------- ---------------------------- Signature Signature Guarantee: -------------------------- [Stamp Legend] A-14 Number of Securities evidenced hereby as to which Early Settlement of the related Purchase Contracts is being elected: If shares of Common Stock or SPC Units REGISTERED HOLDER Certificates are to be registered in the name of and delivered to and Pledged [Preferred Securities or the Applicable Ownership Interest in the Treasury Portfolio, as the case may Please print name and address of be,] [Notes] are to be transferred to Registered Holder: a Person other than the Holder, please print such Person's name and address: - ------------------------------- ------------------------------------- Name Name - ------------------------------- ------------------------------------- Address Address - ------------------------------- ------------------------------------- - ------------------------------- ------------------------------------- - ------------------------------- ------------------------------------- Social Security or other Taxpayer Identification Number, if any ------------------------------------- Transfer Instructions for Pledged [Preferred Securities or the Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] [Notes] Transferable Upon Early Settlement or a Termination Event: - ------------------------------------------------------------------------------- A-15 [TO BE ATTACHED TO GLOBAL CERTIFICATES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE The following increases or decreases in this Global Certificate have been made: ================================================================================ NUMBER OF SPC AMOUNT OF AMOUNT OF UNITS EVIDENCED SIGNATURE OF INCREASE IN DECREASE IN BY THIS GLOBAL AUTHORIZED NUMBER OF SPC NUMBER OF SPC CERTIFICATE OFFICER OF UNITS EVIDENCED UNITS EVIDENCED FOLLOWING SUCH TRUSTEE OR BY THE GLOBAL BY THE GLOBAL DECREASE OR SECURITIES DATE CERTIFICATE CERTIFICATE INCREASE CUSTODIAN - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ A-16 EXHIBIT B FORM OF TREASURY SPC CERTIFICATE 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 REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED 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. No. Cusip No. ----- -------- Number of Treasury SPC Units --------- PPL CORPORATION TREASURY SPC UNITS This Treasury SPC Units Certificate certifies that is ------------- the registered Holder of the number of Treasury SPC Units set forth above. Each Treasury SPC Unit consists of (i) a 1/40 undivided beneficial ownership interest of a Treasury Security having a principal amount at maturity equal to $1,000, subject to the Pledge of such Treasury Security by such Holder pursuant to the Pledge Agreement, and (ii) the rights and obligations of the Holder under one Purchase Contract with PPL Corporation, a Pennsylvania corporation (the "Company"). All capitalized terms used herein which are defined in the Purchase Contract Agreement (as defined below) have the meaning set forth therein. B-1 Pursuant to the Pledge Agreement, the Treasury Securities constituting part of each Treasury SPC Unit evidenced hereby have been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Purchase Contract comprising part of such Treasury SPC Unit. Each Purchase Contract evidenced hereby obligates the Holder of this Treasury SPC Units Certificate to purchase, and the Company, to sell, on the Purchase Contract Settlement Date, at a price equal to [$25] (the "Stated Amount"), a number of shares of PPL Corporation Common Stock, par value $.01 per share ("Common Stock"), equal to the Settlement Rate, unless prior to or on the Purchase Contract Settlement Date there shall have occurred a Termination Event or an Early Settlement with respect to the Treasury SPC Unit of which such Purchase Contract is a part, all as provided in the Purchase Contract Agreement and more fully described on the reverse hereof. The purchase price (the "Purchase Price") for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract Settlement Date by application of the proceeds from the Treasury Securities at maturity pledged to secure the obligations of the Holder under such Purchase Contract of the Treasury SPC Unit of which such Purchase Contract is a part. [The Company shall pay, quarterly in arrears on February 16, May 16, August 16 and November 16, commencing (each, a "Payment Date"), in ----------- respect of each Purchase Contract evidenced hereby an amount (the "Purchase Contract Payments") equal to % per annum of the Stated Amount. Such Purchase ---- Contract Payments shall be payable to the Person in whose name this Treasury SPC Units Certificate (or a Predecessor Treasury SPC Units Certificate) is registered at the close of business on the Record Date for such Payment Date. The Company may, at its option, defer Purchase Contract Payments.] [Purchase Contract Payments will be payable at the office of the Purchase Contract Agent in New York City or, at the option of the Company, by check mailed to the address of the Person entitled thereto as such address appears on the Treasury SPC Units Register.] Each Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement, dated as of (as may be supplemented from time ------------ to time, the "Purchase Contract Agreement") between the Company and , ----------- as Purchase Contract Agent (including its successors thereunder, herein called the "Purchase Contract Agent"), to which the Purchase Contract Agreement and supplemental agreements thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Purchase Contract Agent, the Company and the Holders and of the terms upon which the Treasury SPC Units Certificates are, and are to be, executed and delivered. Each Purchase Contract evidenced hereby obligates the Holder of this Treasury SPC Units Certificate to purchase, and the Company to sell, on the Purchase Contract Settlement Date at a price equal to the Stated Amount (the "Purchase Price") a number of shares of Common Stock equal to the Settlement Rate, unless prior to the Purchase Contract Settlement Date, there shall have occurred a Termination Event with respect to the Security of which such Purchase B-2 Contract is a part or an Early Settlement shall have occurred. The "Settlement Rate" is equal to: (1) if the Applicable Market Value (as defined below) is equals or exceeds $. (the "Threshold Appreciation Price"), shares of Common Stock --- per Purchase Contract; (2) if the Applicable Market Value is less than the Threshold Appreciation Price but greater than $ . (the "Reference Price"), the --- number of shares of Common Stock per Purchase Contract having a value, based on the Applicable Market Value, equal to the Stated Amount; and (3) if the Applicable Market Value is less than or equal to the Reference Price, shares of Common Stock per Purchase Contract, in ----- each case subject to adjustment as provided in the Purchase Contract Agreement, in each case subject to adjustment as provided in the Purchase Contract Agreement (and in each case rounded upward or downward to the nearest 1/10,000th of a share). No fractional shares of Common Stock will be issued upon settlement of Purchase Contracts, as provided in Section 5.10 of the Purchase Contract Agreement. Each Purchase Contract evidenced hereby, which is settled either through Early Settlement or on the Purchase Contract Settlement Date, shall obligate the Holder of the related Treasury SPC Unit to purchase at the Purchase Price in cash, and the Company to sell, a number of shares of Common Stock equal to the Early Settlement Rate or the Settlement Rate, as applicable. The "Applicable Market Value" means the average of the Closing Prices per share of Common Stock on each of the 20 consecutive Trading Days ending on the third Trading Day immediately preceding the Purchase Contract Settlement Date. The "Closing Price" per share of Common Stock on any date of determination means the: (1) closing sale price at the 4:15 p.m. close of trading (or, if no closing price is reported, the last reported sale price) per share on the New York Stock Exchange, Inc. (the "NYSE") on such date; (2) if Common Stock is not listed for trading on the NYSE on any such date, the closing sale price per share as reported in the composite transactions for the principal United States securities exchange on which Common Stock is so listed; (3) if Common Stock is not so listed on a United States national or regional securities exchange, the closing sale price per share as reported by The Nasdaq Stock Market, Inc.; B-3 (4) if Common Stock is not so reported, the last quoted bid price for Common Stock in the over-the-counter market as reported by the National Quotation Bureau or similar organization; or (5) if such bid price is not available, the average of the mid-point of the last bid and ask prices of Common Stock on such date from at least three nationally recognized independent investment banking firms retained for this purpose by the Company. A "Trading Day" means a day on which Common Stock (1) is not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (2) has traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of Common Stock. In accordance with the terms of the Purchase Contract Agreement, the Holder of this Treasury SPC Unit shall pay the Purchase Price for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby either by effecting a Cash Settlement or an Early Settlement of each such Purchase Contract or by applying a principal amount of the Pledged Treasury Securities underlying such Holder's Treasury SPC Unit equal to the Stated Amount of such Purchase Contract to the purchase of the Common Stock. A Holder of Treasury SPC Unit who does not effect, prior to or on 11:00 a.m. (New York City time) on the [fifth] Business Day immediately preceding the Purchase Contract Settlement Date, an effective Cash Settlement or who does not effect on or prior to 5:00 p.m. (New York City time) on the seventh Business Day prior to the Purchase Contract Settlement Date an effective Early Settlement, shall pay the Purchase Price for the shares of Common Stock to be issued under the related Purchase Contract from the proceeds of the Pledged Treasury Securities. The Company shall not be obligated to issue any shares of Common Stock in respect of a Purchase Contract or deliver any certificates therefor to the Holder unless it shall have received payment of the aggregate purchase price for the shares of Common Stock to be purchased thereunder in the manner herein set forth. The Treasury SPC Units Certificates are issuable only in registered form and only in denominations of a single Treasury SPC and any integral multiple thereof. The transfer of any Treasury SPC Certificate will be registered and Treasury SPC Certificates may be exchanged as provided in the Purchase Contract Agreement. The Treasury SPC Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Purchase Contract Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. A Holder who elects to substitute [Preferred Securities or] Notes for Treasury Securities, thereby recreating SPC Units, shall be responsible for any fees or expenses associated therewith. Except as provided in the Purchase Contract Agreement, for so long as the Purchase Contract underlying a Treasury SPC Unit remains in effect, such Treasury SPC Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Treasury SPC Unit in B-4 respect of the Treasury Security and the Purchase Contract constituting such Treasury SPC Unit may be transferred and exchanged only as a Treasury SPC Unit. A Holder of Treasury SPC Units may recreate SPC Units by delivering to the Collateral Agent [Preferred Securities or] Notes with a [liquidation amount, in the case of Preferred Securities, or] principal amount, in the case of Notes, equal to the aggregate principal amount at maturity of the Pledged Treasury Securities, in exchange for the release of such Pledged Treasury Securities in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. From and after such substitution, the Holder's Security shall be referred to as a "SPC Unit". [Such substitution may cause the equivalent aggregate principal amount of this Certificate to be increased or decreased; provided, however, this Treasury SPC Units Certificate shall not represent more than [x,000,000] Treasury SPC Units. All such adjustments to the equivalent aggregate principal amount of this Treasury SPC Units Certificate shall be duly recorded by placing an appropriate notation on the Schedule attached hereto.] Any such creation of SPC Units may be effected only in multiples of 40 Treasury SPC Units for 40 SPC Units. A Holder of SPC Units may recreate Treasury SPC Units by delivering to the Collateral Agent Treasury Securities in an aggregate principal amount equal to the aggregate principal amount at maturity of the Pledged [Preferred Securities or Pledged] Notes in exchange for the release of such Pledged [Preferred Securities or Pledged] Notes in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. Any such recreation of Treasury SPC Units may be effected only in multiples of 40 SPC Units for 40 Treasury SPC Units. [If a Tax Event Redemption has occurred, a Treasury SPC Unit Holder may not recreate an SPC Unit and a SPC Unit Holder may not create a Treasury SPC Unit.] [The Company shall pay, on each Payment Date, the Purchase Contract Payments payable in respect of each Purchase Contract to the Person in whose name the Treasury SPC Units Certificate evidencing such Purchase Contract is registered at the close of business on the Record Date for such Payment Date. Purchase Contract Payments will be payable at the office of the Purchase Contract Agent in New York City or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such address as it appears on the Treasury SPC Units Register. The Company has the right to defer payment of all or part of the Purchase Contract Payments in respect of each Purchase Contract until no later than the Purchase Contract Settlement Date. If the Company so elects to defer Purchase Contract Payments, the Company shall pay additional Purchase Contract Payments on such deferred installments of Purchase Contract Payments at a rate equal to % per annum, compounding quarterly, until such deferred ---- installments are paid. If a Holder effects an Early Settlement or if a Termination Event shall occur, such Holder will have no right to receive any accrued and unpaid or deferred Purchase Contract Payments.] The Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Company to pay Purchase Contract B-5 Payments, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Purchase Contract Agent or the Company, if, on or prior to the Purchase Contract Settlement Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Purchase Contract Agent, the Collateral Agent and the Holders, at their addresses as they appear in the Treasury SPC Units Register. Upon the occurrence of a Termination Event, the Collateral Agent shall release the Treasury Securities from the Pledge in accordance with the provisions of the Pledge Agreement. A Treasury SPC Unit shall thereafter represent the right to receive the interest in the Treasury Security forming a part of such Treasury SPC Unit, in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. Subject to and upon compliance with the provisions of the Purchase Contract Agreement, at the option of the Holder thereof, Purchase Contracts underlying Securities may be settled early ("Early Settlement") as provided in the Purchase Contract Agreement. In order to exercise the right to effect Early Settlement with respect to any Purchase Contracts evidenced by this Treasury SPC Unit, the Holder of this Treasury SPC Units Certificate shall deliver this Treasury SPC Units Certificate to the Purchase Contract Agent at the Corporate Trust Office duly endorsed for transfer to the Company or in blank with the form of Election to Settle Early set forth below duly completed and accompanied by payment in the form of immediately available funds payable to the order of the Company in an amount (the "Early Settlement Amount") equal to: (1) the product of (A) $25 times (B) the number of Purchase Contracts with respect to which the Holder has elected to effect Early Settlement, plus (2) [ if such delivery is made with respect to any Purchase Contracts during the period from the close of business on any Record Date for any Payment Date to the opening of business on such Payment Date, an amount equal to the Purchase Contract Payments payable, if any, on such Payment Date with respect to such Purchase Contracts.] Upon Early Settlement of Purchase Contracts by a Holder of the related Securities, the Pledged Treasury Securities underlying such Securities shall be released from the Pledge as provided in the Pledge Agreement and the Holder shall be entitled to receive a number of shares of Common Stock on account of each Purchase Contract forming part of a Treasury SPC Unit as to which Early Settlement is effected equal to shares of Common Stock per Purchase Contract --- (the "Early Settlement Rate"). The Early Settlement Rate shall be adjusted in the same manner and at the same time as the Settlement Rate is adjusted as provided in the Purchase Contract Agreement. Upon registration of transfer of this Treasury SPC Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Purchase Contract Agent pursuant to the Purchase Contract Agreement), under the terms of the Purchase Contract Agreement and the Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Purchase Contracts evidenced by this Treasury SPC Units Certificate. The Company covenants and B-6 agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. The Holder of this Treasury SPC Units Certificate, by its acceptance hereof, authorizes the Purchase Contract Agent to enter into and perform the related Purchase Contracts forming part of the Treasury SPC Units evidenced hereby on its behalf as its attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform its obligations under such Purchase Contracts, consents to the provisions of the Purchase Contract Agreement, authorizes the Purchase Contract Agent to enter into and perform the Purchase Contract Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of the Treasury Securities underlying this Treasury SPC Units Certificate pursuant to the Pledge Agreement. The Holder further covenants and agrees, that, to the extent and in the manner provided in the Purchase Contract Agreement and the Pledge Agreement, but subject to the terms thereof, payments in respect to the aggregate principal amount of the Pledged Treasury Securities on the Purchase Contract Settlement Date shall be paid by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such payments. Subject to certain exceptions, the provisions of the Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the Purchase Contracts. The Purchase Contracts shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York. The Company, the Purchase Contract Agent and their Affiliates and any agent of the Company or the Purchase Contract Agent or their Affiliates may treat the Person in whose name this Treasury SPC Units Certificate is registered as the owner of the Treasury SPC Units evidenced hereby for the purpose of receiving payments of interest on the Treasury Securities, receiving payments of Purchase Contract Payments, performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Purchase Contract Agent nor any such Affiliate or agent shall be affected by notice to the contrary. The Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of shares of Common Stock. A copy of the Purchase Contract Agreement is available for inspection at the offices of the Purchase Contract Agent. Unless the certificate of authentication hereon has been executed by the Purchase Contract Agent by manual signature, this Treasury SPC Units Certificate shall not be entitled to any benefit under the Pledge Agreement or the Purchase Contract Agreement or be valid or obligatory for any purpose. B-7 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. PPL CORPORATION By: ------------------------------------ Name: Title: By: ------------------------------------ Name: Title: HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase Contracts) By: , not ------------------------- individually but solely as Attorney-in-Fact of such Holder By: ------------------------------------ Name: Title: Dated: B-8 CERTIFICATE OF AUTHENTICATION OF PURCHASE CONTRACT AGENT This is one of the Treasury SPC Units referred to in the within-mentioned Purchase Contract Agreement. By: , as ------------------------- Purchase Contract Agent By: ------------------------------------ Authorized Officer Dated: B-9 ABBREVIATIONS The following abbreviations, when used in the inscription on the face 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) Under Uniform Gifts to Minors Act of ------------------------------------- (State) TEN ENT: as tenants by the entireties JT TEN: as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ---------------- FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto - -------------------------------------------------------------------------------- (Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee) - -------------------------------------------------------------------------------- (Please Print or Type Name and Address Including Postal Zip Code of Assignee) the within Treasury SPC Units Certificates and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Treasury SPC Units Certificates on the books of PPL Corporation and [Trust] [PPL Capital Funding, Inc.] with full power of substitution in the premises. Dated: ------------------------------- ------------------------------------ Signature NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Treasury SPC Units Certificates in every particular, without alteration or enlargement or any change whatsoever. Signature Guarantee: ----------------------- B-10 SETTLEMENT INSTRUCTIONS The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon settlement on or after the Purchase Contract Settlement Date of the Purchase Contracts underlying the number of Treasury SPC Units evidenced by this Treasury SPC Units Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: ------------------------------- ------------------------------------ Signature Signature Guarantee: (if assigned to another person) If shares of Common Stock or Treasury REGISTERED HOLDER SPC Units Certificates are to be registered in the name of and delivered to a Person other than the Holder, please print such Person's name and address: Please print name and address of Registered Holder: - ------------------------------------- ------------------------------------ Name Name - ------------------------------------- ------------------------------------ Address Address - ------------------------------------- ------------------------------------ - ------------------------------------- ------------------------------------ - ------------------------------------- ------------------------------------ Social Security or other Taxpayer Identification Number, if any ------------------------------------ B-11 ELECTION TO SETTLE EARLY The undersigned Holder of this Treasury SPC Units Certificate irrevocably exercises the option to effect Early Settlement in accordance with the terms of the Purchase Contract Agreement with respect to the Purchase Contracts underlying the number of Treasury SPC Units evidenced by this Treasury SPC Units Certificate specified below. The option to effect Early Settlement may be exercised only with respect to Purchase Contracts underlying Treasury SPC with an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon such Early Settlement be registered in the name of, and delivered, together with a check in payment for any fractional share and any Treasury SPC Units Certificate representing any Treasury SPC Units evidenced hereby as to which Early Settlement of the related Purchase Contracts is not effected, to the undersigned at the address indicated below unless a different name and address have been indicated below. Pledged Treasury Securities deliverable upon such Early Settlement will be transferred in accordance with the transfer instructions set forth below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: ------------------------------- ------------------------------------ Signature Signature Guarantee: ----------------------------- [Stamp Legend?] B-12 Number of Securities evidenced hereby as to which Early Settlement of the related Purchase Contracts is being elected: If shares of Common Stock or Treasury REGISTERED HOLDER SPC Units Certificates are to be registered in the name of and delivered to and Pledged Treasury Securities are to be transferred to a Person other than the Holder, please print such Please print name and address of Person's name and address: Registered Holder: - ------------------------------------- ------------------------------------ Name Name - ------------------------------------- ------------------------------------ Address Address - ------------------------------------- ------------------------------------ - ------------------------------------- ------------------------------------ - ------------------------------------- ------------------------------------ Social Security or other Taxpayer Identification Number, if any ------------------------------------ Transfer Instructions for Pledged Treasury Securities Transferable Upon Early Settlement or a Termination Event: B-13 [TO BE ATTACHED TO GLOBAL CERTIFICATES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE The following increases or decreases in this Global Certificate have been made: ================================================================================ AMOUNT OF AMOUNT OF NUMBER OF SPC INCREASE IN DECREASE IN UNITS EVIDENCED SIGNATURE OF NUMBER OF NUMBER OF BY THIS GLOBAL AUTHORIZED TREASURY SPC TREASURY SPC CERTIFICATE OFFICER OF UNITS EVIDENCED UNITS EVIDENCED FOLLOWING SUCH TRUSTEE OR BY THE GLOBAL BY THE GLOBAL DECREASE OR SECURITIES DATE CERTIFICATE CERTIFICATE INCREASE CUSTODIAN - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ B-14 EXHIBIT C INSTRUCTION TO PURCHASE CONTRACT AGENT - ------------------- - ------------------- - ------------------- - ------------------- Attention: ------------- Re: [ SPC Units] [ Treasury SPC Units] of PPL ------- ------- Corporation, a Pennsylvania corporation (the "Company") The undersigned Holder hereby notifies you that it has delivered to , as Securities Intermediary, for credit to the Collateral - --------------- Account, $ aggregate [liquidation] [principal] amount of [Preferred ------ Securities] [Notes] [Treasury Securities] in exchange for the [Pledged Preferred Securities] [Pledged Notes] [Pledged Treasury Securities] held in the Collateral Account, in accordance with the Pledge Agreement, dated as of (the ------- "Pledge Agreement"; unless otherwise defined herein, terms defined in the Pledge Agreement are used herein as defined therein), between you, the Company, the Collateral Agent and the Securities Intermediary. The undersigned Holder has paid all applicable fees relating to such exchange. The undersigned Holder hereby instructs you to instruct the Collateral Agent to release to you on behalf of the undersigned Holder the [Pledged Preferred Securities] [Pledged Notes] [Pledged Treasury Securities] related to such [SPC Units] [Treasury SPC Units]. Date: ----------------------------- ------------------------------------ Signature Signature Guarantee: ---------------- (if assigned to another person) Please print name and address of Registered Holder: - ---------------------------------- ------------------------------------ Name Social Security or other Taxpayer Identification Number, if any Address - ---------------------------------- - ---------------------------------- - ---------------------------------- C-1 EXHIBIT D NOTICE FROM PURCHASE CONTRACT AGENT TO HOLDERS (TRANSFER OF COLLATERAL UPON OCCURRENCE OF A TERMINATION EVENT) [HOLDER] - ----------------------------- - ----------------------------- Attention: Telecopy: ---------- Re: [ SPC Units] [ Treasury SPC Units] of PPL ---------- ------ Corporation, a Pennsylvania corporation (the "Company") Please refer to the Purchase Contract Agreement, dated as of --------- (the "Purchase Contract Agreement"; unless otherwise defined herein, terms defined in the Purchase Contract Agreement are used herein as defined therein), between the Company and the undersigned, as Purchase Contract Agent and as attorney-in-fact for the holders of SPC Units and Treasury SPC Units from time to time. We hereby notify you that a Termination Event has occurred and that the [Preferred Securities] [the Notes][the Treasury Securities] underlying your ownership interest in [SPC Units] [Treasury SPC Units] have been released ----- and are being held by us for your account pending receipt of transfer instructions with respect to such [Preferred Securities] [Notes] [Treasury Securities] (the "Released Securities"). Pursuant to Section 3.15 of the Purchase Contract Agreement, we hereby request written transfer instructions with respect to the Released Securities. Upon receipt of your instructions and upon transfer to us of your [SPC Units][Treasury SPC Units] effected through book-entry or by delivery to us of your [SPC Units Certificate][Treasury SPC Units Certificate], we shall transfer the Released Securities by book-entry transfer or other appropriate procedures, in accordance with your instructions. In the event you fail to effect such transfer or delivery, the Released Securities and any distributions thereon, shall be held in our name, or a nominee in trust for your benefit, until such time as such [SPC Units][Treasury SPC Units] are transferred or your [SPC Units Certificate] [Treasury SPC Units Certificate] is surrendered or satisfactory evidence is provided that such your [SPC Units Certificate][Treasury SPC Units Certificate] has been destroyed, lost or stolen, together with any indemnification that we or the Company may require. Date: By: ------------------------------ --------------------------------- Name: Title: Authorized Officer D-1 EXHIBIT E NOTICE TO SETTLE BY CASH - ----------------------------- - ----------------------------- - ----------------------------- Attention: ------------- Re: [ SPC Units] [Treasury SPC Units] of PPL Corporation, a ------- Pennsylvania corporation (the "Company") The undersigned Holder hereby irrevocably notifies you in accordance with Section 5.4 of the Purchase Contract Agreement, dated as of --------------- (the "Purchase Contract Agreement"; unless otherwise defined herein, terms defined in the Purchase Contract Agreement are used herein as defined therein), between the Company and you, as Purchase Contract Agent and as Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder has elected to pay to the Securities Intermediary for deposit in the Collateral Account, prior to or on 11:00 a.m. (New York City time) on the fifth Business Day immediately preceding the Purchase Contract Settlement Date (in lawful money of the United States by certified or cashiers' check or wire transfer, in immediately available funds), $ as the Purchase Price for the shares of Common Stock ------ issuable to such Holder by the Company under the related Purchase Contracts on the Purchase Contract Settlement Date. The undersigned Holder hereby instructs you to notify promptly the Collateral Agent of the undersigned Holders' election to make such cash settlement with respect to the Purchase Contracts related to such Holder's [SPC Units] [Treasury SPC Units]. Date: ----------------------------- ------------------------------------ Signature Signature Guarantee: -------------- Please print name and address of Registered Holder: E-1 EXHIBIT F NOTICE FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT AND INDENTURE TRUSTEE (SETTLEMENT OF PURCHASE CONTRACT THROUGH REMARKETING) - ----------------------------- - ----------------------------- - ----------------------------- Attention: ------------- Telecopy: -------------- , as Indenture Trustee - ------------------------ - ----------------------------- - ----------------------------- Attention: Telecopy: Re: SPC Units of PPL Corporation, a Pennsylvania ----------- corporation (the "Company") Please refer to the Purchase Contract Agreement, dated as of --------- (the "Purchase Contract Agreement"; unless otherwise defined herein, terms defined in the Purchase Contract Agreement are used herein as defined therein), between the Company and the undersigned, as Purchase Contract Agent and as attorney-in-fact for the Holders of SPC Units from time to time. In accordance with Section 5.4 of the Purchase Contract Agreement and, based on instructions and Cash Settlements received from Holders of SPC Units as of 11:00 a.m. (New York City time), the fifth Business Day preceding the Purchase Contract Settlement Date, we hereby notify you that [Preferred ------ Securities] [Notes] are to be tendered for purchase in the Remarketing. Date: By: ------------------------------ --------------------------------- Name: Title: Authorized Officer F-1 EX-4 8 0008.txt EXHIBIT 4.9 EXHIBIT 4.9 ================================================================================ PPL CORPORATION , ---------------------------------- AS COLLATERAL AGENT AND SECURITIES INTERMEDIARY AND THE CHASE MANHATTAN BANK, AS PURCHASE CONTRACT AGENT ------------------------------- PLEDGE AGREEMENT ------------------------------- Dated as of --------------- ================================================================================ TABLE OF CONTENTS SECTION 1. Definitions.............................................2 SECTION 2. Pledge; Control.........................................5 SECTION 2.1 The Pledge..............................................5 SECTION 2.2 Control; Financing Statement............................6 SECTION 2.3 Termination.............................................6 SECTION 3. Distributions on Pledged Collateral.....................6 SECTION 3.1 Income Distributions....................................6 SECTION 3.2 Principal Payments Following Termination Event..........6 SECTION 3.3 Principal Payments Prior To or On Purchase Contract Settlement Date.........................................6 SECTION 3.4 Payments to Purchase Contract Agent.....................7 SECTION 3.5 Assets Not Properly Released............................7 SECTION 4. Control.................................................7 SECTION 4.1 Establishment of Collateral Account.....................7 SECTION 4.2 Treatment as Financial Assets...........................8 SECTION 4.3 Sole Control by Collateral Agent........................8 SECTION 4.4 Securities Intermediary's Location......................8 SECTION 4.5 No Other Claims.........................................8 SECTION 4.6 Investment and Release..................................9 SECTION 4.7 Statements and Confirmations............................9 SECTION 4.8 Tax Allocations.........................................9 SECTION 4.9 No Other Agreements.....................................9 SECTION 4.10 Powers Coupled With An Interest.........................9 SECTION 5. Initial Deposit; Establishment of Treasury SPC Units and Reestablishment of SPC Units............................9 SECTION 5.1 Initial Deposit of [Preferred Securities] [Notes].......9 SECTION 5.2 Establishment of Treasury SPC Units....................10 SECTION 5.3 Reestablishment of SPC Units...........................11 SECTION 5.4 Termination Event......................................12 SECTION 5.5 Cash Settlement........................................14 SECTION 5.6 Early Settlement.......................................15 SECTION 5.7 Application of Proceeds Settlement.....................15 [SECTION 5.8 Tax Event Redemption...................................17 SECTION 6. Voting Rights..........................................17 SECTION 7. Rights and Remedies....................................18 SECTION 7.1 Rights and Remedies of the Collateral Agent............18 SECTION 7.2 [Substitution of Notes.................................19 SECTION 7.3 [Tax Event Redemption..................................19 SECTION 7.4 Substitutions..........................................19 -i- SECTION 8. Representations and Warranties; Covenants..............19 SECTION 8.1 Representations and Warranties.........................19 SECTION 8.2 Covenants..............................................20 SECTION 9. The Collateral Agent and the Securities Intermediary...21 SECTION 9.1 Appointment, Powers and Immunities.....................21 SECTION 9.2 Instructions of the Company............................22 SECTION 9.3 Reliance by Collateral Agent and Securities Intermediary...........................................22 SECTION 9.4 Rights in Other Capacities.............................22 SECTION 9.5 Non-Reliance on Collateral Agent and Securities Intermediary...........................................23 SECTION 9.6 Compensation and Indemnity.............................23 SECTION 9.7 Failure to Act.........................................23 SECTION 9.8 Resignation of Collateral Agent and Securities Intermediary...........................................24 SECTION 9.9 Right to Appoint Agent or Advisor......................25 SECTION 9.10 Survival...............................................26 SECTION 9.11 Exculpation............................................26 SECTION 10. Amendment..............................................26 SECTION 10.1 Amendment Without Consent of Holders...................26 SECTION 10.2 Amendment With Consent of Holders......................26 SECTION 10.3 Execution of Amendments................................27 SECTION 10.4 Effect of Amendments...................................27 SECTION 10.5 Reference to Amendments................................28 SECTION 11. Miscellaneous..........................................28 SECTION 11.1 No Waiver..............................................28 SECTION 11.2 Governing Law..........................................28 SECTION 11.3 Notices................................................28 SECTION 11.4 Successors and Assigns.................................29 SECTION 11.5 Counterparts...........................................29 SECTION 11.6 Severability...........................................29 SECTION 11.7 Expenses, etc..........................................29 SECTION 11.8 Security Interest Absolute.............................30 SECTION 11.9 Notice of a Tax Event, Tax Event Redemption and Termination Event......................................30 EXHIBIT A Instruction from Purchase Contract Agent to Collateral Agent (Establishment of Treasury SPC Units) EXHIBIT B Instruction from Collateral Agent to Securities Intermediary (Establishment of Treasury SPC Units) EXHIBIT C Instruction from Purchase Contract Agent to Collateral Agent (Reestablishment of SPC Units) EXHIBIT D Instruction from Collateral Agent to Securities Intermediary (Reestablishment of SPC Units) EXHIBIT E Notice of Cash Settlement from the Securities Intermediary to the Purchase Contract Agent -ii- PLEDGE AGREEMENT PLEDGE AGREEMENT, dated as of , among PPL ---------- CORPORATION, a Pennsylvania corporation (the "Company"), , ---------------------- as collateral agent (in such capacity, together with its successors in such capacity, the "Collateral Agent"), and as a "securities intermediary" within the meaning of Section 8-102(a)(14) of the UCC (as defined herein) with respect to the Collateral Account (in such capacity, together with its successors in such capacity, the "Securities Intermediary"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as purchase contract agent and as attorney-in-fact of the Holders from time to time of the Securities (in such capacity, together with its successors in such capacity, the "Purchase Contract Agent") under the Purchase Contract Agreement. RECITALS The Company and the Purchase Contract Agent are parties to the Purchase Contract Agreement dated as of the date hereof (as modified and supplemented and in effect from time to time, the "Purchase Contract Agreement"), pursuant to which there may be issued up to SPC -------------- Units (the "Securities"). Each SPC Unit, at issuance, consists of a unit comprised of (a) a stock purchase contract (as modified and supplemented and in effect from time to time, a "Purchase Contract") under which [(i)] the Holder will purchase from the Company not later than the Purchase Contract Settlement Date, for an amount in cash equal to $[25] (the "Stated Amount"), a number of shares of PPL Corporation Common Stock $.01 per share par value ("Common Stock") equal to the Settlement Rate (as defined in the Purchase Contract Agreement), [and (ii) the Company will pay the Holder Purchase Contract Payments] and (b) [a Preferred Security (a "Preferred Security") of PPL Capital Funding Trust I (the "Trust"), having a liquidation amount] [a note of PPL Capital Funding, Inc., a wholly-owned subsidiary of the Company, which note shall be guaranteed as to payment of principal, premium, if any, and interest by the Company (a "Note"), having a principal amount] equal to the Stated Amount and maturing on . -------------- [address overallotment option, if applicable] Pursuant to the terms of the Purchase Contract Agreement and the Purchase Contracts, the Holders of the Securities have irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such Holders, among other things, to execute and deliver this Agreement on behalf of such Holders and to grant the pledge provided herein of the Collateral Account to secure the Obligations. Accordingly, the Company, the Collateral Agent, the Securities Intermediary and the Purchase Contract Agent, on its own behalf and as attorney-in-fact of the Holders from time to time of the Securities, agree as follows: SECTION 1. DEFINITIONS. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (b) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, Exhibit or other subdivision; (c) the following terms which are defined in the UCC shall have the meanings set forth therein: "certificated security", "control", "financial asset", "entitlement order", "securities account" and "securities entitlement"; (d) the following terms have the meanings assigned to them in the Purchase Contract Agreement: "Act," "Bankruptcy Code," "Board Resolution," "Business Day," "Cash Settlement," "Certificate," "Early Settlement," "Early Settlement Amount," "Early Settlement Date," "Holders," "Indenture," "Indenture Trustee," "Opinion of Counsel," "Outstanding Securities," "SPC Units," "Person," "Purchase Contract," "Purchase Contract Payments," "Purchase Contract Settlement Date," "Purchase Price," "Remarketing Agent," "Remarketing Agreement," "Settlement Rate," "Termination Event," "Treasury SPC Units," and "Underwriting Agreement"; (e) the following terms have the meanings assigned to them in the Amended and Restated Trust Agreement of PPL Capital Funding Trust I, of even date herewith (the "Trust Agreement"): "Applicable Ownership Interest," "Applicable Principal Amount," "Failed Remarketing," "Indenture," "Indenture Trustee," "Primary Treasury Dealer," "Property Trustee," "Quotation Agent," "Redemption Amount," "Redemption Price," "Tax Event," "Tax Event Redemption," "Tax Event Redemption Date," and "Treasury Portfolio;" and (f) the following terms have the meanings given to them in this section 1(f): "AGREEMENT" means this Pledge Agreement, as the same may be amended, modified or supplemented from time to time. "CASH" means any coin or currency of the United States as at the time shall be legal tender for payment of public and private debts. "COLLATERAL" has the meaning specified in the definition of Collateral Account. "COLLATERAL ACCOUNT" means the collective reference to: (1) Securities Account No. entitled " , maintained --- -------------- at [Collateral Agent] in the name of "The Chase Manhattan Bank, as Purchase Contract Agent on behalf of the holders of securities subject to the Security Interest of as Collateral Agent under the Pledge ---------- Agreement, for the benefit of PPL Corporation, as pledgee" maintained by 2 the Securities Intermediary for the Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders; (2) all investment property and other financial assets from time to time credited to the Collateral Account, including, without limitation, (A) [Preferred Securities] and securities entitlements relating thereto which are a component of the SPC Units from time to time, (B) the Applicable Ownership Interests (as specified in Clause (A) of the definition of such term) of the Holders with respect to the Treasury Portfolio which are a component of the SPC Units from time to time; (C) the Notes and securities entitlements relating thereto which are a component of the SPC Units from time to time, (D) any Treasury Securities and securities entitlements relating thereto delivered from time to time upon establishment of Treasury SPC Units in accordance with Section 5.2 hereof and (E) payments made by Holders pursuant to Section 5.5 hereof; (3) all Proceeds of any of the foregoing (whether such Proceeds arise before or after the commencement of any proceeding under any applicable bankruptcy, insolvency or other similar law, by or against the pledgor or with respect to the pledgor); and (4) all powers and rights now owned or hereafter acquired under or with respect to the Collateral Account; ((2), (3) and (4) being collectively referred to herein as the "Collateral"). "COMPANY" means the Person named as the "Company" in the first paragraph of this instrument until a successor shall have become such pursuant to the applicable provisions of the Purchase Contract Agreement, and thereafter "Company" shall mean such successor. "OBLIGATIONS" means, with respect to each Holder, the collective reference to all obligations and liabilities of such Holder under such Holder's Purchase Contract (including, but not limited to, such Holder's obligation to pay the aggregate Purchase Price for Common Stock on the Purchase Contract Settlement Date) and this Agreement or any other document made, delivered or given in connection herewith or therewith, in each case whether on account of principal, interest (including, without limitation, interest accruing before and after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Holder, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), purchase price, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Company or the Collateral Agent or the Securities Intermediary that are required to be paid by the Holder pursuant to the terms of any of the foregoing agreements). "PERMITTED INVESTMENTS" means any one of the following which shall mature not later than the next succeeding Business Day: (1) any evidence of indebtedness with an original maturity of 365 days or less issued, or directly and fully guaranteed or insured, by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in 3 support of the timely payment thereof or such indebtedness constitutes a general obligation of it); (2) deposits, certificates of deposit or acceptances with an original maturity of 365 days or less of any institution which is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $200.0 million at the time of deposit; (3) investments with an original maturity of 365 days or less of any Person that is fully and unconditionally guaranteed by a bank referred to in clause (2); (4) repurchase agreements and reverse repurchase agreements relating to marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed as to timely payment by the full faith and credit of the United States Government; (5) investments in commercial paper, other than commercial paper issued by the Company or its affiliates, of any corporation incorporated under the laws of the United States or any State thereof, which commercial paper has a rating at the time of purchase at least equal to "A-1" by Standard & Poor's Ratings Services ("S&P") or at least equal to "P-1" by Moody's Investors Service, Inc. ("Moody's"); and (6) investments in money market funds registered under the Investment Company Act of 1940, as amended, rated in the highest applicable rating category by S&P or Moody's. "PERSON" means any legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or government or any agency or political subdivision thereof. "PLEDGE" means the pledge, lien and security interest created by this Agreement. "PLEDGED NOTES" means the Notes and securities entitlements with respect thereto from time to time credited to the Collateral Account and not then released from the Pledge. "PLEDGED PREFERRED SECURITIES" means the Preferred Securities and securities entitlements with respect thereto from time to time credited to the Collateral Account and not then released from the Pledge. "PLEDGED TREASURY SECURITIES" means Treasury Securities and securities entitlements with respect thereto from time to time credited to the Collateral Account and not then released from the Pledge. "PROCEEDS" has the meaning ascribed thereto in the UCC and includes, without limitation, all interest, dividends, cash, instruments, securities, financial assets (as defined in Section 8-102(a)(9) of the UCC) and other property received, receivable or otherwise distributed upon the sale, exchange, collection or disposition of any financial assets from time to time held in the Collateral Account. 4 "PURCHASE CONTRACT AGENT" has the meaning specified in the paragraph preceding the recitals of this Agreement. "TRADES" means the Treasury Reserve Automated Debt Entry System maintained by the Federal Reserve Bank of New York pursuant to the TRADES Regulations. "TRADES REGULATIONS" means the regulations of the United States Department of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time. Unless otherwise defined herein, all terms defined in the TRADES Regulations are used herein as therein defined. "TRANSFER" means: (1) in the case of certificated securities in registered form, delivery as provided in Section 8-301(a) of the UCC, indorsed to the transferee or in blank by an effective indorsement; (2) in the case of Treasury Securities, registration of the transferee as the owner of such Treasury Securities on TRADES; and (3) in the case of securities entitlements, including, without limitation, securities entitlements with respect to Treasury Securities, a securities intermediary indicating by book entry that such security entitlement has been credited to the transferee's securities account. "TREASURY SECURITIES" means zero-coupon U.S. Treasury Securities (Cusip No. ) which are the principal strips of the % ------------------ ----- U.S. Treasury Securities which mature on . ------------- "UCC" means the Uniform Commercial Code as in effect in the State of New York from time to time. "VALUE" means, with respect to any item of Collateral on any date, as to (1) Cash, the face amount thereof, [(2) Preferred Securities, the liquidation amount thereof] and (3) Treasury Securities or Notes, the aggregate principal amount thereof at maturity. SECTION 2. PLEDGE; CONTROL. SECTION 2.1 THE PLEDGE. Each Holder, from time to time acting through the Purchase Contract Agent as such Holder's attorney-in-fact, hereby pledges and grants to the Collateral Agent, as agent of and for the benefit of the Company, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Obligations, a continuing first priority security interest in and to, and a lien upon and right of set off against, all of the right, title and interest of such Holder and the Purchase Contract Agent in and to the Collateral and the Collateral Account. The Collateral Agent shall have all of the rights, remedies and recourses with respect to the Collateral afforded a secured party by the UCC, in addition to, 5 and not in limitation of, the other rights, remedies and recourses afforded to the Collateral Agent by this Agreement. SECTION 2.2 CONTROL; FINANCING STATEMENT. (a) The Collateral Agent shall have control of the Collateral Account pursuant to the provisions of Section 4 of this Agreement. (b) On the date of initial issuance of the Securities, the Purchase Contract Agent shall deliver to the Collateral Agent a financing statement prepared by the Company for filing in the Office of the Secretary of State of the State of New York, signed by the Purchase Contract Agent, as attorney-in- fact for the Holders, as Debtors, and describing the Collateral. SECTION 2.3 TERMINATION. As to each Holder, this Agreement and the Pledge created hereby shall terminate upon the satisfaction of such Holder's Obligations. Upon such termination, the Securities Intermediary shall Transfer such Holder's portion of the Collateral to the Purchase Contract Agent for distribution to such Holder in accordance with his interest, free and clear of any lien, pledge or security interest created hereby. SECTION 3. DISTRIBUTIONS ON PLEDGED COLLATERAL. SECTION 3.1 INCOME DISTRIBUTIONS. All income distributions received by the Securities Intermediary on account of the [Preferred Securities, the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio,] the Notes or Permitted Investments from time to time held in the Collateral Account shall be distributed to the Purchase Contract Agent for the benefit of the applicable Holders as provided in the Purchase Contracts or the Purchase Contract Agreement. SECTION 3.2 PRINCIPAL PAYMENTS FOLLOWING TERMINATION EVENT. All payments received by the Securities Intermediary following a Termination Event of (1) the [liquidation amount of Pledged Preferred Securities or securities entitlements with respect thereto or (2) the Applicable Ownership Interests (as specified in Clause (A) of the definition thereof) in the Treasury Portfolio, (3) the] principal amount of Pledged Notes or securities entitlements with respect thereto or (4) the principal amount of the Pledged Treasury Securities or securities entitlements with respect thereto, shall be distributed to the Purchase Contract Agent for the benefit of the applicable Holders for distribution to such Holders in accordance with their respective interests. SECTION 3.3 PRINCIPAL PAYMENTS PRIOR TO OR ON PURCHASE CONTRACT SETTLEMENT DATE. (a) Subject to the provisions of Section 7.2, and except as provided in clause 3.3(b) below, if no Termination Event shall have occurred, all payments received by the Securities Intermediary of (1) the [liquidation amount 6 of Pledged Preferred Securities or securities entitlements with respect thereto or (2) the Applicable Ownership Interests (as specified in Clause (A) of the definition thereof) in the Treasury Portfolio, (3)] the principal amount with respect to the Pledged Notes or securities entitlements with respect thereto or (4) the principal amount of Pledged Treasury Securities or securities entitlements with respect thereto, shall be held and invested in Permitted Investments until the Purchase Contract Settlement Date and on the Purchase Contract Settlement Date distributed to the Company as provided in Section 5.7 hereof. Any balance remaining in the Collateral Account shall be distributed to the Purchase Contract Agent for the benefit of the applicable Holders for distribution to such Holders in accordance with their respective interests. (b) All payments received by the Securities Intermediary of (1) the liquidation amount of Pledged Preferred Securities or securities entitlements with respect thereto, or (2) the Applicable Ownership Interests (as specified in Clause (A) of the definition thereof) in the Treasury Portfolio, or (3) the principal amount of Notes or securities entitlements with respect thereto or (4) the principal amount of Treasury Securities or securities entitlements with respect thereto, that, in each case, have been released from the Pledge shall be distributed to the Purchase Contract Agent for the benefit of the applicable Holders for distribution to such Holders in accordance with their respective interests. SECTION 3.4 PAYMENTS TO PURCHASE CONTRACT AGENT. Payments to the Purchase Contract Agent hereunder shall be made to the account designated by the Purchase Contract Agent for such purpose not later than 12:00 p.m. (New York City time) on the Business Day such payment is received by the Securities Intermediary; provided, however, that if such payment is received on a day that is not a Business Day or after 12:00 p.m. (New York City time) on a Business Day, then such payment shall be made no later than 10:30 a.m. (New York City time) on the next succeeding Business Day. SECTION 3.5 ASSETS NOT PROPERLY RELEASED. If the Purchase Contract Agent or any Holder shall receive any principal payments on account of financial assets credited to the Collateral Account and not released therefrom in accordance with this Agreement, the Purchase Contract Agent or such Holder shall hold the same as trustee of an express trust for the benefit of the Company and, upon receipt of an Officers' Certificate (as defined in the Purchase Contract Agreement) of the Company so directing, promptly deliver the same to the Securities Intermediary for credit to the Collateral Account or to the Company for application to the obligations of the Holders under the related Purchase Contracts, and the Purchase Contract Agent and Holders shall acquire no right, title or interest in any such payments of principal amounts so received. SECTION 4. CONTROL. SECTION 4.1 ESTABLISHMENT OF COLLATERAL ACCOUNT. The Securities Intermediary hereby confirms that: (1) the Securities Intermediary has established the Collateral Account; 7 (2) the Collateral Account is a securities account; (3) subject to the terms of this Agreement, the Securities Intermediary shall treat the Purchase Contract Agent as entitled to exercise the rights that comprise any financial asset credited to the Collateral Account; (4) all property delivered to the Securities Intermediary pursuant to this Agreement or the Purchase Contract Agreement will be credited promptly to the Collateral Account; (5) all securities or other property underlying any financial assets credited to the Collateral Account shall be registered in the name of the Securities Intermediary, indorsed to the Securities Intermediary, or in blank or credited to another securities account maintained in the name of the Securities Intermediary, and in no case will any financial asset credited to the Collateral Account be registered in the name of the Purchase Contract Agent or any Holder, payable to the order of the Purchase Contract Agent or any Holder or specially indorsed to the Purchase Contract Agent or any Holder. SECTION 4.2 TREATMENT AS FINANCIAL ASSETS. Each item of property (whether investment property, financial asset, security, instrument or cash) credited to the Collateral Account shall be treated as a financial asset. SECTION 4.3 SOLE CONTROL BY COLLATERAL AGENT. Except as provided in Section 6, at all times prior to the termination of the Pledge, the Collateral Agent shall have sole control of the Collateral Account, and the Securities Intermediary shall take instructions and directions with respect to the Collateral Account solely from the Collateral Agent. If at any time the Securities Intermediary shall receive an entitlement order issued by the Collateral Agent and relating to the Collateral Account, the Securities Intermediary shall comply with such entitlement order without further consent by the Purchase Contract Agent or any Holder or any other Person. Until termination of the Pledge, the Securities Intermediary will not comply with any entitlement orders issued by the Purchase Contract Agent or any Holder. SECTION 4.4 SECURITIES INTERMEDIARY'S LOCATION. The Collateral Account, and the rights and obligations of the Securities Intermediary, the Collateral Agent, the Purchase Contract Agent and the Holders with respect thereto, shall be governed by the laws of the State of New York. Regardless of any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the Securities Intermediary's location. SECTION 4.5 NO OTHER CLAIMS. Except for the claims and interest of the Collateral Agent and of the Purchase Contract Agent and the Holders in the Collateral Account, the Securities Intermediary does not know of any claim to, or interest in, the Collateral Account or in any financial asset credited thereto. If any person 8 asserts any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Collateral Account or in any financial asset carried therein, the Securities Intermediary will promptly notify the Collateral Agent and the Purchase Contract Agent. SECTION 4.6 INVESTMENT AND RELEASE. All proceeds of financial assets from time to time deposited in the Collateral Account shall be invested and reinvested as provided in this Agreement. At all times prior to termination of the Pledge, no property shall be released from the Collateral Account except in accordance with this Agreement or upon written instructions of the Collateral Agent. SECTION 4.7 STATEMENTS AND CONFIRMATIONS. The Securities Intermediary will promptly send copies of all statements, confirmations and other correspondence concerning the Collateral Account and any financial assets credited thereto simultaneously to each of the Purchase Contract Agent and the Collateral Agent at their addresses for notices under this Agreement. SECTION 4.8 TAX ALLOCATIONS. The Purchase Contract Agent shall report all items of income, gain, expense and loss recognized in the Collateral Account to the Internal Revenue Service and all state and local taxing authorities under the names and taxpayer identification numbers of the holders which are the beneficial owners thereof. SECTION 4.9 NO OTHER AGREEMENTS. The Securities Intermediary has not entered into, and prior to the termination of the Pledge will not enter into, any agreement with any other Person relating to the Collateral Account or any financial assets credited thereto, including, without limitation, any agreement to comply with entitlement orders of any Person other than the Collateral Agent. SECTION 4.10 POWERS COUPLED WITH AN INTEREST. The rights and powers granted in this Section 4 to the Collateral Agent have been granted in order to perfect its security interests in the Collateral Account, are powers coupled with an interest and will be affected neither by the bankruptcy of the Purchase Contract Agent or any Holder nor by the lapse of time. The obligations of the Securities Intermediary under this Section 4 shall continue in effect until the termination of the Pledge. SECTION 5. INITIAL DEPOSIT; ESTABLISHMENT OF TREASURY SPC UNITS AND REESTABLISHMENT OF SPC UNITS. SECTION 5.1 INITIAL DEPOSIT OF [PREFERRED SECURITIES] [NOTES]. Prior to or concurrently with the execution and delivery of this Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the SPC Units, shall Transfer to the Securities Intermediary, for credit to the 9 Collateral Account, the [Preferred Securities] [Notes] or securities entitlements relating thereto, and the Securities Intermediary shall indicate by book-entry that a securities entitlement to such [Preferred Securities] [Notes] has been credited to the Collateral Account. SECTION 5.2 ESTABLISHMENT OF TREASURY SPC UNITS. (a) [So long as no Tax Event Redemption shall have occurred, and the Trust shall not have been dissolved and liquidated,] at any time prior to or on the seventh Business Day immediately preceding the Purchase Contract Settlement Date, a Holder of SPC Units shall have the right to establish or reestablish Treasury SPC Units by substitution of Treasury Securities or securities entitlements thereto for the Pledged [Preferred Securities] [Notes] comprising a part of such Holder's SPC Units in integral multiples of 40 SPC Units by: (1) transferring to the Securities Intermediary for credit to the Collateral Account Treasury Securities or securities entitlements thereto having a Value equal to the [liquidation] [principal] amount of the Pledged [Preferred Securities] [Notes] to be released, accompanied by a notice, substantially in the form of Exhibit C to the Purchase Contract Agreement, whereupon the Purchase Contract Agent shall deliver to the Collateral Agent a notice, substantially in the form of Exhibit A hereto, (A) stating that such Holder has Transferred Treasury Securities or securities entitlements thereto to the Securities Intermediary for credit to the Collateral Account, (B) stating the Value of the Treasury Securities or securities entitlements thereto Transferred by such Holder and (C) requesting that the Collateral Agent release from the Pledge the Pledged [Preferred Securities] [Notes] that are a component of such SPC Units; and (2) delivering the related SPC Units to the Purchase Contract Agent. Upon receipt of such notice and confirmation that Treasury Securities or securities entitlements thereto have been credited to the Collateral Account as described in such notice, the Collateral Agent shall instruct the Securities Intermediary by a notice, substantially in the form of Exhibit B hereto, to release such Pledged [Preferred Securities] [Notes] from the Pledge by Transfer to the Purchase Contract Agent for distribution to such Holder, free and clear of any lien, pledge or security interest created hereby. (b) If a Tax Event Redemption has occurred and the Treasury Portfolio has become a component of the SPC Units, a Holder of SPC Units shall not have the right to establish or reestablish Treasury SPC Units. (c) If no Tax Event Redemption shall have occurred, but the Trust shall have been dissolved and liquidated, and the Notes have become a component of the SPC Units, at any time on or prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date, a Holder of SPC Units shall have the right to substitute Treasury Securities or securities entitlements thereto for the Pledged Notes comprising a part of such Holder's SPC Units in integral multiples of 40 SPC Units by: (1) Transferring to the Securities Intermediary for credit to the Collateral Account Treasury Securities or securities entitlements with respect thereto having a Value equal to the aggregate principal amount at 10 maturity of Pledged Notes to be released, accompanied by a notice, substantially in the form of Exhibit C to the Purchase Contract Agreement, whereupon the Purchase Contract Agent shall deliver to the Collateral Agent a notice, substantially in the form of Exhibit A hereto, (A) stating that such Holder has Transferred Treasury Securities or securities entitlements with respect thereto to the Securities Intermediary for credit to the Collateral Account, (B) stating the Value of the Treasury Securities or securities entitlements with respect thereto Transferred by such Holder and (C) requesting that the Collateral Agent release from the Pledge the Pledged Notes that are a component of such SPC Units; and (2) delivering the related SPC Units to the Purchase Contract Agent. Upon receipt of such notice and confirmation that Treasury Securities or securities entitlements with respect thereto have been credited to the Collateral Account as described in such notice, the Collateral Agent shall instruct the Securities Intermediary by a notice, substantially in the form of Exhibit B hereto, to release such Pledged Notes from the Pledge by Transfer to the Purchase Contract Agent for distribution to such Holder free and clear of any lien, pledge or security interest created hereby. (d) Upon credit to the Collateral Account of Treasury Securities or securities entitlements thereto delivered by a Holder of SPC Units and receipt of the related instruction from the Collateral Agent, the Securities Intermediary shall release the Pledged [Preferred Securities or] Notes[, as the case may be,] and shall promptly transfer the same to the Purchase Contract Agent for distribution to such Holder, free and clear of any lien, pledge or security interest created hereby. SECTION 5.3 REESTABLISHMENT OF SPC UNITS. (a) [So long as no Tax Event Redemption shall have occurred, and the Trust shall not have been dissolved and liquidated,] at any time prior to or on the seventh Business Day immediately preceding the Purchase Contract Settlement Date, a Holder of Treasury SPC Units shall have the right to reestablish SPC Units by substitution of [Preferred Securities] [Notes] or securities entitlements thereto for Pledged Treasury Securities in integral multiples of 40 Treasury SPC Units by: (1) Transferring to the Securities Intermediary for credit to the Collateral Account [Preferred Securities] [Notes] or securities entitlements thereto having a [liquidation] [principal] amount equal to the Value of the Pledged Treasury Securities to be released, accompanied by a notice, substantially in the form of Exhibit C to the Purchase Contract Agreement, whereupon the Purchase Contract Agent shall deliver to the Collateral Agent a notice, substantially in the form of Exhibit C hereto, (A) stating that such Holder has Transferred [Preferred Securities] [Notes] or securities entitlements thereto to the Securities Intermediary for credit to the Collateral Account and (B) requesting that the Collateral Agent release from the Pledge the Pledged Treasury Securities related to such Treasury SPC Units; and (2) delivering the related Treasury SPC Units to the Purchase Contract Agent. 11 Upon receipt of such notice and confirmation that [Preferred Securities] [Notes] or securities entitlements thereto have been credited to the Collateral Account as described in such notice, the Collateral Agent shall instruct the Securities Intermediary by a notice in the form provided in Exhibit D hereto to release such Pledged Treasury Securities from the Pledge by Transfer to the Purchase Contract Agent for distribution to such Holder. (b) [ If a Tax Event Redemption has occurred and the Treasury Portfolio has become a component of the SPC Units, a holder of a Treasury SPC Unit shall not have the right to reestablish a SPC Unit.] (c) If no Tax Event Redemption shall have occurred, but the Trust shall have been dissolved and liquidated, and the Notes have become a component of the SPC Units, at any time on or prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date, a Holder of Treasury SPC Units shall have the right to reestablish SPC Units by substitution of Notes or securities entitlements with respect thereto for Pledged Treasury Securities in integral multiples of 40 Treasury SPC Units by: (1) Transferring to the Securities Intermediary for credit to the Collateral Account Notes or securities entitlements having a principal amount equal to the Value of the Pledged Treasury Securities to be released, accompanied by a notice, substantially in the form of Exhibit C to the Purchase Contract Agreement, whereupon the Purchase Contract Agent shall deliver to the Collateral Agent a notice, substantially in the form of Exhibit C hereto, stating that such Holder has Transferred the Notes or securities entitlements with respect thereto to the Securities Intermediary for credit to the Collateral Account and requesting that the Collateral Agent release from the Pledge the Pledged Treasury Securities related to such Treasury SPC Units; and (2) delivering the related Treasury SPC Units to the Purchase Contract Agent. Upon receipt of such notice and confirmation that Notes or securities entitlements have been credited to the Collateral Account as described in such notice, the Collateral Agent shall instruct the Securities Intermediary by a notice in the form provided in Exhibit D to release such Pledged Treasury Securities from Pledge by Transfer to the Purchase Contract Agent for distribution to such Holder, free and clear of any lien, pledge or security interest created hereby. (d) Upon credit to the Collateral Account of [Preferred Securities or] Notes[, as the case may be,] or securities entitlements thereto, and receipt of the related instruction from the Collateral Agent, the Securities Intermediary shall release the applicable Pledged Treasury Securities and shall promptly Transfer the same to the Purchase Contract Agent for distribution to such Holder, free and clear of any lien, pledge or security interest created hereby. SECTION 5.4 TERMINATION EVENT. (a) Upon receipt by the Collateral Agent of written notice from the Company or the Purchase Contract Agent that a Termination Event has occurred, the Collateral Agent shall release all Collateral from the Pledge and shall promptly Transfer: 12 (1) any Pledged [Preferred Securities] [Notes]or securities entitlements with respect thereto [or the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio (if a Tax Event Redemption has occurred and the Treasury Portfolio has become a component of the SPC Units) or the Pledged Notes (if the Trust has been dissolved and liquidated, and the or securities entitlements with respect thereto have become a component of the SPC Units)]; and (2) any Pledged Treasury Securities, to the Purchase Contract Agent for the benefit of the Holders for distribution to such Holders in accordance with their respective interests, free and clear of any lien, pledge or security interest or other interest created hereby; provided, however, if any Holder shall be entitled to receive less than $1,000 with respect to his interest in the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, the Purchase Contract Agent shall have the right to dispose of such interest for cash and deliver to such Holder cash in lieu of delivering the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio. (b) If such Termination Event shall result from the Company's becoming a debtor under the Bankruptcy Code, and if the Collateral Agent shall for any reason fail promptly to effectuate the release and Transfer of all Pledged [Preferred Securities, the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, the Pledged] Notes or the Pledged Treasury Securities, as the case may be, as provided by this Section 5.4, the Purchase Contract Agent shall: (1) use its best efforts to (i) obtain, at the expense of the Company, an opinion of a nationally recognized law firm reasonably acceptable to the Collateral Agent to the effect that, as a result of the Company's being the debtor in such a bankruptcy case, the Collateral Agent will not be prohibited from releasing or Transferring the Collateral as provided in this Section 5.4, and (ii) deliver such opinion to the Collateral Agent within ten days after the occurrence of such Termination Event, and if (A) the Purchase Contract Agent shall be unable to obtain such opinion within ten days after the occurrence of such Termination Event or (B) the Collateral Agent shall continue, after delivery of such opinion, to refuse to effectuate the release and Transfer of all Pledged [Preferred Securities, the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, the Pledged] Notes, all the Pledged Treasury Securities or the Proceeds of any of the foregoing, as the case may be, as provided in this Section 5.4, then the Purchase Contract Agent shall within fifteen days after the occurrence of such Termination Event commence (subject to Section 7.1(b)(3) of the Purchase Contract Agreement) an action or proceeding in the court having jurisdiction of the Company's case under the Bankruptcy Code seeking an order requiring the Collateral Agent to effectuate the release and transfer of all Pledged [Preferred Securities, the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, the Pledged] Notes or all the Pledged Treasury Securities, as the case may be, as provided by this Section 5.4; or 13 (2) commence (subject to Section 7.1(b)(3) of the Purchase Contract Agreement) an action or proceeding like that described in clause 5.4(b)(1)(B) hereof within ten days after the occurrence of such Termination Event. SECTION 5.5 CASH SETTLEMENT. (a) Upon receipt by the Collateral Agent of (1) a notice from the Purchase Contract Agent promptly after the receipt by the Purchase Contract Agent of a notice from a Holder of SPC Units or Treasury SPC Units that such Holder has elected, in accordance with the procedures specified in Section 5.4(a)(i) or (d)(i) of the Purchase Contract Agreement, respectively, to effect a Cash Settlement and (2) payment by such Holder by deposit in the Collateral Account prior to or on 11:00 a.m. (New York City time) on the fifth Business Day immediately preceding the Purchase Contract Settlement Date [in the case of a SPC Unit, unless a Tax Event Redemption has occurred, or on the Business Day prior to the Purchase Contract Settlement Date in the case of Treasury SPC Units or a SPC Unit, if a Tax Event Redemption has occurred,] of the Purchase Price in lawful money of the United States by certified or cashier's check or wire transfer of immediately available funds payable to or upon the order of the Securities Intermediary, then the Collateral Agent shall: (1) instruct the Securities Intermediary promptly to invest any such Cash in Permitted Investments [maturing on or prior to the Contract Settlement Date]; (2) release from the Pledge (i) in the case of a Holder of SPC Units, the related [Pledged Preferred Securities, Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, or] Pledged Notes [as applicable] or (ii) in the case of a Holder of Treasury SPC Units, the related Pledged Treasury Securities with a [liquidation] [principal] amount equal to the product of (x) the Stated Amount times (y) the number of Purchase Contracts as to which such Holder has elected to effect a Cash Settlement pursuant to this Section 5.5(a); and (3) instruct the Securities Intermediary to Transfer all such Pledged [Preferred Securities, Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, or] Pledged Notes or Pledged Treasury Securities, as the case may be, to the Purchase Contract Agent for the benefit of such Holder, in each case free and clear of the Pledge created hereby, for distribution to such Holder. Upon receipt of the proceeds upon the maturity of the Permitted Investments on the Purchase Contract Settlement Date, the Collateral Agent shall (A) instruct the Securities Intermediary to pay the portion of such proceeds and deliver any certified or cashier's checks received, in an aggregate amount equal to the Purchase Price, to the Company on the Purchase Contract Settlement Date, and (B) instruct the Securities Intermediary to release any amounts in excess of the Purchase Price of the interest earned from such Permitted Investments to the Purchase Contract Agent for distribution to the such Holder. (b) [So long as a Tax Event Redemption shall not have occurred,] if a Holder of SPC Units notifies the Purchase Contract Agent as provided in paragraph 5.4(a)(i) of the Purchase Contract Agreement of its intention to pay the Purchase Price in cash, but fails to make such payment as required by 14 paragraph 5.4(a)(ii) of the Purchase Contract Agreement, such Holder shall be deemed to have consented to the disposition of such Holder's Pledged [Preferred Securities or] Notes in accordance with paragraph 5.4(a)(iii) of the Purchase Contract Agreement. (c) If a Holder of Treasury SPC Units [or, if a Tax Event Redemption shall have occurred, a Holder of SPC Units,] notifies the Purchase Contract Agent as provided in paragraph 5.4(d)(i) of the Purchase Contract Agreement of its intention to pay the Purchase Price in cash, but fails to make such payment as required by paragraph 5.4(d)(ii) of the Purchase Contract Agreement, such Holder shall be deemed to have elected to pay the Purchase Price in accordance with paragraph 5.4(d)(iii) of the Purchase Contract Agreement. (d) Prior to 3:00 p.m. (New York City time) on the fourth Business Day immediately preceding the Purchase Contract Settlement Date, the Securities Intermediary shall deliver to the Purchase Contract Agent a notice, substantially in the form of Exhibit E hereto, stating (i) the amount of cash that it has received with respect to the Cash Settlement of SPC Units and (ii) the amount of cash that it has received with respect to the Cash Settlement of Treasury SPC Units. SECTION 5.6 EARLY SETTLEMENT. Upon receipt by the Collateral Agent of a notice from the Purchase Contract Agent that a Holder of Securities has elected to effect Early Settlement of its obligations under the Purchase Contracts forming a part of such Securities in accordance with the terms of the Purchase Contracts and Section 5.9 of the Purchase Contract Agreement (which notice shall set forth the number of such Purchase Contracts as to which such Holder has elected to effect Early Settlement), and that the Purchase Contract Agent has received from such Holder, and paid to the Company as confirmed in writing by the Company, the related Early Settlement Amounts pursuant to the terms of the Purchase Contracts and the Purchase Contract Agreement and that all conditions to such Early Settlement have been satisfied, then the Collateral Agent shall release from the Pledge, (1) Pledged [Preferred Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definitions at such term) in the Treasury Portfolio or] Notes in the case of a Holder of SPC Units or (2) Pledged Treasury Securities, in the case of a Holder of Treasury SPC Units, with a Value equal to the product of (x) the Stated Amount times (y) the number of Purchase Contracts as to which such Holder has elected to effect Early Settlement, and shall instruct the Securities Intermediary to Transfer all such Pledged [Preferred Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definitions at such term) in the Treasury Portfolio or] Notes or Pledged Treasury Securities, as the case may be, to the Purchase Contract Agent for the benefit of such Holder, in each case free and clear of the Pledge created hereby, for distribution to such Holder. A Treasury SPC Unit holder may settle early only in integral multiples of 40 Purchase Contracts. SECTION 5.7 APPLICATION OF PROCEEDS SETTLEMENT. (a) So long as a Tax Event Redemption has not occurred, if a Holder of SPC Units has not elected to make an effective Cash Settlement by notifying the Purchase Contract Agent in the manner provided for in Section 5.4(a)(i) in the Purchase Contract Agreement, or has given such notice but failed to deliver the 15 required cash prior to 11:00 A.M. (New York City time) on the fifth Business Day immediately preceding the Purchase Contract Settlement Date, such Holder shall be deemed to have elected to pay for the shares of Common Stock to be issued under such Purchase Contracts from the Proceeds of the remarketing of the related [Pledged Preferred Securities or] Pledged Notes. In such event, the Collateral Agent shall instruct the Securities Intermediary to Transfer the related [Pledged Preferred Securities or] Pledged Notes to the Remarketing Agent for remarketing. Upon receiving such [Pledged Preferred Securities or] Pledged Notes, the Remarketing Agent, pursuant to the terms of the Remarketing Agreement, will use reasonable efforts to remarket such [Pledged Preferred Securities or] Pledged Notes on such date. The Remarketing Agent will deposit the entire amount of the Proceeds of such remarketing in the Collateral Account. On the Purchase Contract Settlement Date, the Collateral Agent shall instruct the Securities Intermediary to apply a portion of the Proceeds from such remarketing equal to the aggregate principal amount of such [Pledged Preferred Securities or] Pledged Notes to satisfy in full such Holder's obligations to pay the Purchase Price to purchase the shares of Common Stock under the related Purchase Contracts. The Collateral Agent shall also instruct the Securities Intermediary to apply a portion of the Proceeds of such remarketing equal to $[.0625] per [Pledged Preferred Security or] Pledged Note to pay the Remarketing Agent for its services rendered in connection with the remarketing. The balance of the Proceeds from such remarketing, if any, shall be transferred to the Purchase Contract Agent for the benefit of such Holder for distribution to such Holder. If the Remarketing Agent advises the Collateral Agent in writing that there has been a Failed Remarketing, thus resulting in an event of default under the Purchase Contract Agreement and hereunder, the Collateral Agent, for the benefit of the Company shall, at the written direction of the Company, dispose of the [Pledged Preferred Security or] Pledged Notes in accordance with applicable law and satisfy in full, from such disposition, such Holder's obligations to pay the Purchase Price for the shares of PPL Corporation Common Stock. (b) If a Holder of Treasury SPC Units [ or, if a Tax Event Redemption has occurred, a SPC Unit,] has not elected to make an effective Cash Settlement by notifying the Purchase Contract Agent in the manner provided for in Section 5.4(d)(i) of the Purchase Contract Agreement, or has given such notice but failed to make such payment in the manner required by Section 5.4(d)(ii) of the Purchase Contract Agreement, such Holder shall be deemed to have elected to pay for the shares of Common Stock to be issued under such Purchase Contracts from the Proceeds of the related Pledged Treasury Securities [(or such Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be]. Upon maturity of the Pledged Treasury Securities [or Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be], the Securities Intermediary, at the written direction of the Collateral Agent, shall invest the Cash Proceeds of the maturing Pledged Treasury Securities [or Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be,] in Permitted Investments [maturing on or prior to the Purchase Contract Settlement Date]. Without receiving any instruction from any such Holder, the Collateral Agent shall apply the Proceeds of the related Pledged Treasury Securities [or 16 Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be], to the settlement of such Purchase Contracts on the Purchase Contract Settlement Date. In the event the sum of the Proceeds from the related Pledged Treasury Securities [or Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as the case may be], and the investment earnings from the investment in Permitted Investments exceeds the aggregate Purchase Price of the Purchase Contracts being settled thereby, the Collateral Agent shall instruct the Securities Intermediary to distribute such excess, when received, to the Purchase Contract Agent for the benefit of such Holder for distribution to such Holder. [SECTION 5.8 TAX EVENT REDEMPTION. If the Securities Intermediary receives notice from the Company or the Purchase Contract Agent that a Tax Event Redemption has occurred prior to the Purchase Contract Settlement Date, the Securities Intermediary, promptly after receipt of such notice, shall apply the Redemption Amount to purchase the Treasury Portfolio and the Securities Intermediary shall credit the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio to the Collateral Account and shall transfer the Applicable Ownership Interest (as specified in clause (B) of the definition of such term) in the Treasury Portfolio to the Purchase Contract Agent for distribution to the Holders of the SPC Units. Upon credit to the Collateral Account of the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio having a Value equal to the liquidation amount of the Pledged Preferred Securities or the aggregate principal amount of the Pledged Notes, the Securities Intermediary shall release the Pledged Preferred Securities or the Pledged Notes, as applicable, from the Collateral Account and shall promptly transfer the Pledged Preferred Securities to the Trust and the Pledged Notes to the Company, as applicable.] SECTION 6. VOTING RIGHTS. The Purchase Contract Agent may exercise, or refrain from exercising, any and all voting and other consensual rights pertaining to the [Pledged Preferred Securities or] Pledged Notes or any part thereof for any purpose not inconsistent with the terms of this Agreement and in accordance with the terms of the Purchase Contract Agreement; provided, that the Purchase Contract Agent shall not exercise or shall not refrain from exercising such right, as the case may be, if, in the judgment of the Purchase Contract Agent, such action would impair or otherwise have a material adverse effect on the value of all or any of the [Pledged Preferred Securities or] Pledged Notes; and provided, further, that the Purchase Contract Agent shall give the Company and the Collateral Agent at least five Business Days' prior written notice of the manner in which it intends to exercise, or its reasons for refraining from exercising, any such right. Upon receipt of any notices and other communications in respect of any [Pledged Preferred Securities or] Pledged Notes, including notice of any meeting at which holders of the [Preferred Securities or] Notes are entitled to vote or solicitation of consents, waivers or proxies of holders of the [Preferred Securities or] Notes, the Collateral Agent shall use reasonable efforts to send promptly to the Purchase Contract Agent such notice or communication, and as soon as reasonably practicable after receipt of a written request therefor from the Purchase Contract Agent, execute and deliver to the Purchase Contract Agent such proxies and other instruments in respect of such [Pledged Preferred Securities or] Pledged Notes (in form and substance satisfactory to the Collateral Agent) as are prepared by the Purchase Contract Agent with respect to the [Pledged Preferred Securities or] Pledged Notes. 17 SECTION 7. RIGHTS AND REMEDIES. SECTION 7.1 RIGHTS AND REMEDIES OF THE COLLATERAL AGENT. (a) In addition to the rights and remedies specified in Sections 5.5 and 5.7 hereof or otherwise available at law or in equity, after an event of default (as specified in Section 7.1(b) below) hereunder, the Collateral Agent shall have all of the rights and remedies with respect to the Collateral of a secured party under the UCC (whether or not the UCC is in effect in the jurisdiction where the rights and remedies are asserted) and the TRADES Regulations and such additional rights and remedies to which a secured party is entitled under the laws in effect in any jurisdiction where any rights and remedies hereunder may be asserted. Without limiting the generality of the foregoing, such remedies may include, to the extent permitted by applicable law, (1) retention of the [Pledged Preferred Securities,] [Pledged Treasury Securities] or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term)] Pledged Notes[, as the case may be,] in full satisfaction of the Holders' obligations under the Purchase Contracts or (2) sale of the [Pledged Preferred Securities,] [Pledged Treasury Securities] or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term)] Pledged Notes[, as the case may be] in one or more public or private sales and application of the proceeds in full satisfaction of the Holders' obligations under the Purchase Contracts. (b) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, in the event the Collateral Agent is unable to make payments to the Company on account of [the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, or on account of ] principal payments of any Pledged Treasury Securities as provided in Section 3 hereof, in satisfaction of the Obligations of the Holder of [the SPC Units (if a Tax Event Redemption has occurred) of which such appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio or] the Holder of the Treasury SPC Units of which such Pledged Treasury Securities are a part under the related Purchase Contracts, the inability to make such payments shall constitute an event of default hereunder and the Collateral Agent shall have and may exercise, with reference to such Pledged Treasury Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, as applicable, and such Obligations of such Holder, any and all of the rights and remedies available to a secured party under the UCC and the TRADES Regulations after default by a debtor, and as otherwise granted herein or under any other law. (c) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably authorized to receive and collect all payments of (i) the liquidation amount of the Pledged Preferred Securities, (ii) the principal amount of the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in the Treasury Portfolio, (iii) the principal amount of the Pledged Notes and (iv) the principal amount of the Pledged Treasury Securities subject, in each case, to the provisions of Section 3 hereof, and as otherwise granted herein. (d) The Purchase Contract Agent individually and as attorney-in-fact for each Holder of Securities, and each Holder of Securities agrees that, from time to time, upon the written request of the Collateral Agent, or the Purchase 18 Contract Agent, such Holder shall execute and deliver such further documents and do such other acts and things as the Collateral Agent may reasonably request in order to maintain the Pledge, and the perfection and priority thereof, and to confirm the rights of the Collateral Agent hereunder. The Purchase Contract Agent shall have no liability to any Holder for executing any documents or taking any such acts requested by the Collateral Agent hereunder, except for liability for its own negligent acts, its own negligent failure to act or its own willful misconduct. SECTION 7.2 [SUBSTITUTION OF NOTES. If the Trust shall have been dissolved and liquidated prior to the Purchase Contract Settlement Date, the Securities Intermediary shall transfer to the Collateral Agent Notes having a Value equal to the liquidation amount of the Pledged Preferred Securities for credit to the Collateral Account. Upon credit to the Collateral Account of such Notes, the Collateral Agent shall release the Pledged Preferred Securities from the Collateral Account and shall promptly transfer the same to the Trust.] SECTION 7.3 [TAX EVENT REDEMPTION. Upon the occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement Date, the Redemption Price payable on the Tax Event Redemption Date with respect to the Applicable Principal Amount shall be credited to the Collateral Account by the Property Trustee or, in case there has been a dissolution of the Trust and the distribution of the related Notes, by the Indenture Trustee, on or prior to 12:30 p.m., New York City time on such Tax Event Redemption Date, by federal funds check or wire transfer of immediately available funds. The Collateral Agent is hereby authorized to present the Pledged Preferred Securities or the Pledged Notes for payment as may be required by their respective terms. Upon receipt of such funds, the Pledged Preferred Securities or Pledged Notes, as the case may be, shall be released from the Collateral Account. In the event such funds are credited to the Collateral Account, the Collateral Agent, at the written direction of the Company, shall instruct the Securities Intermediary to (a) apply an amount equal to the Redemption Amount of such Redemption Price to purchase the Treasury Portfolio from the Quotation Agent for credit to the Collateral Account and (b) promptly remit the remaining portion of such Redemption Price, if any, to the Purchase Contract Agent for payment to the Holders of SPC Units.] SECTION 7.4 SUBSTITUtIONS. Whenever a Holder has the right to substitute Treasury Securities, [Preferred Securities] Notes [the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] or securities entitlements to any of them, for financial assets held in the Collateral Account, such substitution shall not constitute a novation of the security interest created hereby. SECTION 8. REpRESENTATIONS AND WARRANTIES; COVENANTS. SECTION 8.1 REPRESENTATIONS AND WARRANTIES. Each Holder from time to time, acting through the Purchase Contract Agent as attorney-in-fact (it being understood that the Purchase Contract Agent shall not be liable for any representation or warranty made by or on behalf of a 19 Holder), hereby represents and warrants to the Collateral Agent (with respect to such Holder's interest in the Collateral), which representations and warranties shall be deemed repeated on each day a Holder Transfers Collateral that: (1) such Holder has the power to grant a security interest in and lien on the Collateral; (2) such Holder is the sole beneficial owner of the Collateral and, in the case of Collateral delivered in physical form, is the sole holder of such Collateral and is the sole beneficial owner of, or has the right to Transfer, the Collateral it Transfers to the Securities Intermediary for credit to the Collateral Account, free and clear of any security interest, lien, encumbrance, call, liability to pay money or other restriction other than the security interest and lien granted under Section 2 hereof; (3) upon the Transfer of the Collateral to the Securities Intermediary for credit to the Collateral Account, the Collateral Agent, for the benefit of the Company, will have a valid and perfected first priority security interest therein (assuming that any central clearing operation or any securities intermediary or other entity not within the control of the Holder involved in the Transfer of the Collateral, including the Collateral Agent and the Securities Intermediary, gives the notices and takes the action required of it hereunder and under applicable law for perfection of that interest and assuming the establishment and exercise of control pursuant to Section 4 hereof); and (4) the execution and performance by the Holder of its obligations under this Agreement will not result in the creation of any security interest, lien or other encumbrance on the Collateral other than the security interest and lien granted under Section 2 hereof or violate any provision of any existing law or regulation applicable to it or of any mortgage, charge, pledge, indenture, contract or undertaking to which it is a party or which is binding on it or any of its assets. SECTION 8.2 COVENANTS. The Holders from time to time, acting through the Purchase Contract Agent as their attorney-in-fact (it being understood that the Purchase Contract Agent shall not be liable for any covenant made by or on behalf of a Holder), hereby covenant to the Collateral Agent that for so long as the Collateral remains subject to the Pledge: (1) neither the Purchase Contract Agent nor such Holders will create or purport to create or allow to subsist any mortgage, charge, lien, pledge or any other security interest whatsoever over the Collateral or any part of it other than pursuant to this Agreement; and (2) neither the Purchase Contract Agent nor such Holders will sell or otherwise dispose (or attempt to dispose) of the Collateral or any part of it except for the beneficial interest therein, subject to the Pledge hereunder, transferred in connection with the Transfer of the Securities. 20 SECTION 9. THE COLLATERAL AGENT AND THE SECURITIES INTERMEDIARY. It is hereby agreed as follows: SECTION 9.1 APPOINTMENT, POWERS AND IMMUNITIES. The Collateral Agent shall act as agent for the Company hereunder with such powers as are specifically vested in the Collateral Agent by the terms of this Agreement, together with such other powers as are reasonably incidental thereto. The Collateral Agent shall: (1) have no duties or responsibilities except those expressly set forth in this Agreement and no implied covenants or obligations shall be inferred from this Agreement against the Collateral Agent, nor shall the Collateral Agent be bound by the provisions of any agreement by any party hereto beyond the specific terms hereof; (2) not be responsible for any recitals contained in this Agreement, or in any certificate or other document referred to or provided for in, or received by it under, this Agreement, the Securities or the Purchase Contract Agreement, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement (other than as against the Collateral Agent), the Securities or the Purchase Contract Agreement or any other document referred to or provided for herein or therein or for any failure by the Company or any other Person (except the Collateral Agent) to perform any of its obligations hereunder or thereunder or for the perfection, priority or, except as expressly required hereby, maintenance of any security interest created hereunder; (3) not be required to initiate or conduct any litigation or collection proceedings hereunder (except pursuant to directions furnished under Section 9.2 hereof, subject to Section 9.6 hereof); (4) not be responsible for any action taken or omitted to be taken by it hereunder or under any other document or instrument referred to or provided for herein or in connection herewith or therewith, except for its own negligence or willful misconduct; and (5) not be required to advise any party as to selling or retaining, or taking or refraining from taking any action with respect to, any securities or other property deposited hereunder. Subject to the foregoing, during the term of this Agreement, the Collateral Agent shall take all reasonable action in connection with the safekeeping and preservation of the Collateral hereunder. No provision of this Agreement shall require the Collateral Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. In no event shall the Collateral Agent be liable for any amount in excess of the Value of the Collateral. Notwithstanding the foregoing, each of the Collateral Agent and the Securities Intermediary in its individual capacity hereby waives any right of setoff, 21 bankers' lien, liens or perfection rights as securities intermediary or any counterclaim with respect to any of the Collateral. SECTION 9.2 INSTRUCTIONS OF THE COMPANY. The Company shall have the right, by one or more instruments in writing executed and delivered to the Collateral Agent, to direct the time, method and place of conducting any proceeding for the realization of any right or remedy available to the Collateral Agent, or of exercising any power conferred on the Collateral Agent, or to direct the taking or refraining from taking of any action authorized by this Agreement; provided, however, that (i) such direction shall not conflict with the provisions of any law or of this Agreement and (ii) the Collateral Agent shall be adequately indemnified as provided herein. Nothing contained in this Section 9.2 shall impair the right of the Collateral Agent in its discretion to take any action or omit to take any action which it deems proper and which is not inconsistent with such direction. SECTION 9.3 RELIANCE BY COLLATERAL AGENT AND SECURITIES INTERMEDIARY. Each of the Securities Intermediary and the Collateral Agent shall be entitled to rely upon any certification, order, judgment, opinion, notice or other written communication (including, without limitation, any thereof by telephone, telecopy, e-mail or similar electronic media, telex or facsimile) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons (without being required to determine the correctness of any fact stated therein) and upon advice and statements of legal counsel and other experts selected by the Collateral Agent and the Securities Intermediary. As to any matters not expressly provided for by this Agreement, the Collateral Agent and the Securities Intermediary shall in all cases be fully protected in acting, or in refraining from acting, hereunder in accordance with instructions given by the Company in accordance with this Agreement. SECTION 9.4 RIGHTS IN OTHER CAPACITIES. The Collateral Agent and the Securities Intermediary and their affiliates may (without having to account therefor to the Company) accept deposits from, lend money to, make their investments in and generally engage in any kind of banking, trust or other business with the Purchase Contract Agent or the Securities Intermediary, as the case may be, any other Person interested herein and any Holder of Securities (and any of their respective subsidiaries or affiliates) as if it were not acting as the Collateral Agent or the Securities Intermediary, as the case may be, and the Collateral Agent, the Securities Intermediary and their affiliates may accept fees and other consideration from the Purchase Contract Agent and any Holder of Securities without having to account for the same to the Company; provided that each of the Securities Intermediary and the Collateral Agent covenants and agrees with the Company that it shall not accept, receive or permit there to be created in favor of itself and shall take no affirmative action to permit there to be created in favor of any other Person, any security interest, lien or other encumbrance of any kind in or upon the Collateral other than the lien created by the Pledge. 22 SECTION 9.5 NON-RELIANCE ON COLLATERAL AGENT AND SECURITIES INTERMEDIARY. Neither the Securities Intermediary nor the Collateral Agent shall be required to keep itself informed as to the performance or observance by the Purchase Contract Agent or any Holder of Securities of this Agreement, the Purchase Contract Agreement, the Securities or any other document referred to or provided for herein or therein or to inspect the properties or books of the Purchase Contract Agent or any Holder of Securities. Neither the Collateral Agent nor the Securities Intermediary shall have any duty or responsibility to provide the Company with any credit or other information concerning the affairs, financial condition or business of the Purchase Contract Agent or any Holder of Securities (or any of their respective affiliates) that may come into the possession of the Collateral Agent or the Securities Intermediary or any of their respective affiliates. SECTION 9.6 COMPENSATION AND INDEMNITY. The Company agrees to: (1) pay the Collateral Agent and the Securities Intermediary from time to time such compensation as shall be agreed in writing between the Company and the Collateral Agent or the Securities Intermediary, as the case may be, for all services rendered by them hereunder; and (2) indemnify the Collateral Agent and the Securities Intermediary for, and hold each of them harmless from and against, any loss, liability or reasonable out-of-pocket expense incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of its powers and duties under this Agreement, including the reasonable out-of-pocket costs and expenses (including reasonable fees and expenses of counsel) of defending itself against any claim or liability in connection with the exercise or performance of such powers and duties. The Collateral Agent and the Securities Intermediary shall each promptly notify the Company of any third party claim which may give rise to indemnity hereunder and give the Company the opportunity to participate in the defense of such claim with counsel reasonably satisfactory to the indemnified party, and no such claim shall be settled without the written consent of the Company, which consent shall not be unreasonably withheld. SECTION 9.7 FAILURE TO ACT. In the event of any ambiguity in the provisions of this Agreement or any dispute between or conflicting claims by or among the parties hereto or any other Person with respect to any funds or property deposited hereunder, the Collateral Agent and the Securities Intermediary shall be entitled, after prompt notice to the Company and the Purchase Contract Agent, at its sole option, to refuse to comply with any and all claims, demands or instructions with respect to such property or funds so long as such dispute or conflict shall continue, and the Collateral Agent and the Securities Intermediary shall not be or become liable in any way to any of the parties hereto for its failure or refusal to comply with such conflicting claims, demands or instructions. The Collateral Agent and the Securities Intermediary shall be entitled to refuse to act until either: 23 (1) such conflicting or adverse claims or demands shall have been finally determined by a court of competent jurisdiction or settled by agreement between the conflicting parties as evidenced in a writing satisfactory to the Collateral Agent or the Securities Intermediary; or (2) the Collateral Agent or the Securities Intermediary shall have received security or an indemnity satisfactory to it sufficient to save it harmless from and against any and all loss, liability or reasonable out-of- pocket expense which it may incur by reason of its acting. The Collateral Agent and the Securities Intermediary may in addition elect to commence an interpleader action or seek other judicial relief or orders as the Collateral Agent or the Securities Intermediary may deem necessary. Notwithstanding anything contained herein to the contrary, neither the Collateral Agent nor the Securities Intermediary shall be required to take any action that is in its opinion contrary to law or to the terms of this Agreement, or which would in its opinion subject it or any of its officers, employees or directors to liability. SECTION 9.8 RESIGNATION OF COLLATERAL AGENT AND SECURITIES INTERMEDIARY. (a) Subject to the appointment and acceptance of a successor Collateral Agent as provided below: (1) the Collateral Agent may resign at any time by giving notice thereof to the Company and the Purchase Contract Agent as attorney-in-fact for the Holders of Securities; (2) the Collateral Agent may be removed at any time by the Company; and (3) if the Collateral Agent fails to perform any of its material obligations hereunder in any material respect for a period of not less than 20 days after receiving written notice of such failure by the Purchase Contract Agent and such failure shall be continuing, the Collateral Agent may be removed by the Purchase Contract Agent. The Purchase Contract Agent shall promptly notify the Company of any removal of the Collateral Agent pursuant to clause (3) of the immediately preceding sentence. Upon any such resignation or removal, the Company shall have the right to appoint a successor Collateral Agent. If no successor Collateral Agent shall have been so appointed and shall have accepted such appointment within 30 days after the retiring Collateral Agent's giving of notice of resignation or such removal, then the retiring Collateral Agent may petition any court of competent jurisdiction for the appointment of a successor Collateral Agent. The Collateral Agent shall be a bank which has an office in New York City with a combined capital and surplus of at least $50,000,000 and shall not be the Purchase Contract Agent or any of its affiliates. Upon the acceptance of any appointment as Collateral Agent hereunder by a successor Collateral Agent, such successor Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall take all appropriate action to transfer any money and property held by it hereunder (including the Collateral) to such successor Collateral Agent. The retiring Collateral Agent shall, upon such 24 succession, be discharged from its duties and obligations as Collateral Agent hereunder. After any retiring Collateral Agent's resignation hereunder as Collateral Agent, the provisions of this Section 9 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Collateral Agent. (b) Subject to the appointment and acceptance of a successor Securities Intermediary as provided below: (1) the Securities Intermediary may resign at any time by giving notice thereof to the Company and the Purchase Contract Agent as attorney- in-fact for the Holders of Securities; (2) the Securities Intermediary may be removed at any time by the Company; and (3) if the Securities Intermediary fails to perform any of its material obligations hereunder in any material respect for a period of not less than 20 days after receiving written notice of such failure by the Purchase Contract Agent and such failure shall be continuing, the Securities Intermediary may be removed by the Purchase Contract Agent. The Purchase Contract Agent shall promptly notify the Company of any removal of the Securities Intermediary pursuant to clause (3) of the immediately preceding sentence. Upon any such resignation or removal, the Company shall have the right to appoint a successor Securities Intermediary. If no successor Securities Intermediary shall have been so appointed and shall have accepted such appointment within 30 days after the retiring Securities Intermediary's giving of notice of resignation or such removal, then the retiring Securities Intermediary may petition any court of competent jurisdiction for the appointment of a successor Securities Intermediary. The Securities Intermediary shall be a bank which has an office in New York City with a combined capital and surplus of at least $50,000,000 and shall not be the Purchase Contract Agent or any of its affiliates. Upon the acceptance of any appointment as Securities Intermediary hereunder by a successor Securities Intermediary, such successor Securities Intermediary shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Securities Intermediary, and the retiring Securities Intermediary shall take all appropriate action to transfer any money and property held by it hereunder (including the Collateral) to such successor Securities Intermediary. The retiring Securities Intermediary shall, upon such succession, be discharged from its duties and obligations as Securities Intermediary hereunder. After any retiring Securities Intermediary's resignation hereunder as Securities Intermediary, the provisions of this Section 9 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Securities Intermediary. SECTION 9.9 RIGHT TO APPOINT AGENT OR ADVISOR. The Collateral Agent shall have the right to appoint agents or advisors in connection with any of its duties hereunder, and the Collateral Agent shall not be liable for any action taken or omitted by, or in reliance upon the advice of, such agents or advisors selected in good faith. The 25 appointment of agents pursuant to this Section 9.9 shall be subject to prior consent of the Company, which consent shall not be unreasonably withheld. SECTION 9.10 SURVIVAL. The provisions of this Section 9 shall survive termination of this Agreement and the resignation or removal of the Collateral Agent or the Securities Intermediary. SECTION 9.11 EXCULPATION. Anything contained in this Agreement to the contrary notwithstanding, in no event shall the Collateral Agent or the Securities Intermediary or their officers, directors, employees or agents be liable under this Agreement to any third party for indirect, special, punitive, or consequential loss or damage of any kind whatsoever, including lost profits, whether or not the likelihood of such loss or damage was known to the Collateral Agent or the Securities Intermediary, or any of them, incurred without any act or deed that is found to be attributable to gross negligence or willful misconduct on the part of the Collateral Agent or the Securities Intermediary. SECTION 10. AMENDMENT. SECTION 10.1 AMENDMENT WITHOUT CONSENT OF HOLDERS. Without the consent of any Holders, the Company, the Collateral Agent, the Securities Intermediary and the Purchase Contract Agent, at any time and from time to time, may amend this Agreement, in form satisfactory to the Company, the Collateral Agent, the Securities Intermediary and the Purchase Contract Agent, to: (1) evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company; (2) evidence and provide for the acceptance of appointment hereunder by a successor Collateral Agent, Securities Intermediary or Purchase Contract Agent; (3) add to the covenants of the Company for the benefit of the Holders, or surrender any right or power herein conferred upon the Company, provided such covenants or such surrender do not adversely affect the validity, perfection or priority of the Pledge created hereunder; or (4) cure any ambiguity (or formal defect), correct or supplement any provisions herein which may be inconsistent with any other such provisions herein, or make any other provisions with respect to such matters or questions arising under this Agreement, provided such action shall not adversely affect the interests of the Holders. SECTION 10.2 AMENDMENT WITH CONSENT OF HOLDERS. With the consent of the Holders of not less than a majority of the Purchase Contracts at the time outstanding, by Act of such Holders delivered to the Company, the Purchase Contract Agent, the Securities Intermediary and the 26 Collateral Agent, the Company, the Purchase Contract Agent, the Securities Intermediary and the Collateral Agent may amend this Agreement for the purpose of modifying in any manner the provisions of this Agreement or the rights of the Holders in respect of the Securities; provided, however, that no such supplemental agreement shall, without the unanimous consent of the Holders of each Outstanding Security adversely affected thereby: (1) change the amount or type of Collateral underlying a Security, impair the right of the Holder of any Security to receive distributions on the underlying Collateral or otherwise adversely affect the Holder's rights in or to such Collateral; (2) otherwise effect any action that would require the consent of the Holder of each Outstanding Security affected thereby pursuant to the Purchase Contract Agreement if such action were effected by an agreement supplemental thereto; or (3) reduce the percentage of Purchase Contracts the consent of whose Holders is required for any such amendment; provided that if any amendment or proposal referred to above would adversely affect only the SPC Units or only the Treasury SPC Units, then only the affected class of Holders( as of the record date, if any) for the Holders entitled to vote thereon will be entitled to vote on such amendment or proposal, and such amendment or proposal shall not be effective except with the consent of Holders of not less than a majority of such class; provided, further, that the unanimous consent of the Holders of each outstanding Purchase Contract of such class affected thereby shall be required to approve any amendment or proposal specified in clauses (1) through (3) above. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 10.3 EXECUTION OF AMENDMENTS. In executing any amendment permitted by this Section, the Collateral Agent, the Securities Intermediary and the Purchase Contract Agent shall be entitled to receive and (subject to Section 7.1 of the Purchase Contract Agreement with respect to the Purchase Contract Agent) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent, if any, to the execution and delivery of such amendment have been satisfied. SECTION 10.4 EFFECT OF AMENDMENTS. Upon the execution of any amendment under this Section, this Agreement shall be modified in accordance therewith, and such amendment shall form a part of this Agreement for all purposes; and every Holder of Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered under the Purchase Contract Agreement shall be bound thereby. 27 SECTION 10.5 REFERENCE TO AMENDMENTS. Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any amendment pursuant to this Section may, and shall if required by the Collateral Agent or the Purchase Contract Agent, bear a notation in form approved by the Purchase Contract Agent and the Collateral Agent as to any matter provided for in such amendment. If the Company shall so determine, new Security Certificates so modified as to conform, in the opinion of the Collateral Agent, the Purchase Contract Agent and the Company, to any such amendment may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Purchase Contract Agent in accordance with the Purchase Contract Agreement in exchange for Outstanding Security Certificates. SECTION 11. MISCELLANEOUS. SECTION 11.1 NO WAIVER. No failure on the part of the Collateral Agent or any of its agents to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Collateral Agent or any of its agents of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law. SECTION 11.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Company, the Collateral Agent, the Securities Intermediary and the Holders from time to time of the Securities, acting through the Purchase Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York state court sitting in New York City for the purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Company, the Collateral Agent, the Securities Intermediary and the Holders from time to time of the Securities, acting through the Purchase Contract Agent as their attorney-in-fact, irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. SECTION 11.3 NOTICES. All notices, requests, consents and other communications provided for herein (including, without limitation, any modifications of, or waivers or consents under, this Agreement) shall be given or made in writing (including, without limitation, by telecopy) delivered to the intended recipient at the "Address for Notices" specified below its name on the signature pages hereof or, as to any party, at such other address as shall be designated by such party in a notice to the other parties (or in the case of Holders, as may be made and 28 deemed given as provided in Section 1.6 of the Purchase Contract Agreement). Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by telecopier or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. SECTION 11.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the Company, the Collateral Agent, the Securities Intermediary and the Purchase Contract Agent, and the Holders from time to time of the Securities, by their acceptance of the same, shall be deemed to have agreed to be bound by the provisions hereof and to have ratified the agreements of, and the grant of the Pledge hereunder by, the Purchase Contract Agent. SECTION 11.5 COUNTERPARTS. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. SECTION 11.6 SEVERABILITY. If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. SECTION 11.7 EXPENSES, ETC. The Company agrees to reimburse the Collateral Agent and the Securities Intermediary for: (1) all reasonable out-of-pocket costs and expenses of the Collateral Agent and the Securities Intermediary (including, without limitation, the reasonable fees and expenses of counsel to the Collateral Agent and the Securities Intermediary), in connection with (i) the negotiation, preparation, execution and delivery or performance of this Agreement and (ii) any modification, supplement or waiver of any of the terms of this Agreement; (2) all reasonable costs and expenses of the Collateral Agent and the Securities Intermediary (including, without limitation, reasonable fees and expenses of counsel) in connection with (i) any enforcement or proceedings resulting or incurred in connection with causing any Holder of Securities to satisfy its obligations under the Purchase Contracts forming a part of the Securities and (ii) the enforcement of this Section 11.7; and 29 (3) all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any other document referred to herein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated hereby. SECTION 11.8 SECURITY INTEREST ABSOLUTE. All rights of the Collateral Agent and security interests hereunder, and all obligations of the Holders from time to time hereunder, shall be absolute and unconditional irrespective of: (1) any lack of validity or enforceability of any provision of the Purchase Contracts or the Securities or any other agreement or instrument relating thereto; (2) any change in the time, manner or place of payment of, or any other term of, or any increase in the amount of, all or any of the obligations of Holders of the Securities under the related Purchase Contracts, or any other amendment or waiver of any term of, or any consent to any departure from any requirement of, the Purchase Contract Agreement or any Purchase Contract or any other agreement or instrument relating thereto; or (3) any other circumstance which might otherwise constitute a defense available to, or discharge of, a borrower, a guarantor or a pledgor. SECTION 11.9 NOTICE OF A TAX EVENT, TAX EVENT REDEMPTION AND TERMINATION EVENT Upon the occurrence of a Tax Event, a Tax Event Redemption or a Termination Event, the Company shall deliver written notice to the Collateral Agent and the Securities Intermediary. Upon the written request of the Collateral Agent or the Securities Intermediary, the Company shall inform such party whether or not a Tax Event, a Tax Event Redemption or a Termination Event has occurred. 30 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. PPL CORPORATION THE CHASE MANHATTAN BANK, as Purchase Contract Agent and as attorney-in- fact of the Holders from time to time of the Securities By: By: ---------------------------------- ---------------------------------- Name: Name: Title: Title: Address for Notices: Address for Notices: Attention: Attention: Telecopy: Telecopy: , as Collateral , as - ------------------------ ------------------------ Agent Securities Intermediary By: By: ---------------------------------- ---------------------------------- Name: Name: Title: Title: Address for Notices: Address for Notices: Attention: Attention: Telecopy: Telecopy: 31 EXHIBIT A INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT (Establishment of Treasury SPC Units) - ------------------------ - ------------------------ - ------------------------ - ------------------------ Attention: ------------- Telecopy: -------------- Re: SPC Units of PPL Corporation (the "Company") and [PPL Capital Funding, Inc.] [PPL Capital Funding Trust I] Please refer to the Pledge Agreement, dated as of (the -------------- "Pledge Agreement"), among the Company, you, as Collateral Agent, , ------------- as Securities Intermediary, and the undersigned, as Purchase Contract Agent and as attorney-in-fact for the holders of SPC Units from time to time. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. We hereby notify you in accordance with Section 5.2 of the Pledge Agreement that the holder of securities named below (the "Holder") has elected to substitute $ Value of Treasury Securities or securities ---------- entitlements thereto in exchange for an equal Value of Pledged [Preferred Securities] [Notes] and has delivered to the undersigned a notice stating that the Holder has Transferred such Treasury Securities or securities entitlements thereto to the Securities Intermediary, for credit to the Collateral Account. We hereby request that you instruct the Securities Intermediary, upon confirmation that such Treasury Securities or securities entitlements thereto have been credited to the Collateral Account, to release to the undersigned an equal Value of Pledged [Preferred Securities] [Notes] in accordance with Section 5.2 of the Pledge Agreement. [We also hereby confirm that no Tax Event Redemption has occurred.] THE CHASE MANHATTAN BANK By: ---------------------------- Name: Title: Date: Please print name and address of Holder electing to substitute Treasury Securities or securities entitlements thereto for the Pledged [Preferred Securities] [Notes]: - -------------------------------- -------------------------------------- Name Social Security or other Taxpayer Identification Number, if any - ------------------------- Address - ------------------------- - ------------------------- 2 EXHIBIT B INSTRUCTION FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY (Establishment of Treasury SPC Units) - ------------------------ - ------------------------ - ------------------------ Attention: ------------- Telecopy: -------------- Re: SPC Units of PPL Corporation (the "Company") Securities Account No. . entitled " , as Collateral Agent, ---- -------------------- Securities Account (PPL Corporation)" (the "Collateral Account") Please refer to the Pledge Agreement, dated as of (the -------------- "Pledge Agreement"), among the Company, you, as Securities Intermediary, -------- , as Purchase Contract Agent and as attorney-in-fact for the holders - ---------- of SPC Units from time to time, and the undersigned, as Collateral Agent. Capitalized terms used herein but not defined shall have the meanings set forth in the Pledge Agreement. When you have confirmed that $ Value of Treasury Securities ---------- or securities entitlements thereto has been credited to the Collateral Account by or for the benefit of , as Holder of SPC Units (the "Holder"), you --------- are hereby instructed to release from the Collateral Account an equal Value of [Preferred Securities] [Notes] or securities entitlements thereto by Transfer to the Purchase Contract Agent. ------------------------------ By: ------------------------------ Name: Title: Dated: ------------------------------ Please print name and address of Holder: - -------------------------------- -------------------------------------- Name Social Security or other Taxpayer Identification Number, if any - ------------------------- Address - ------------------------- - ------------------------- 2 EXHIBIT C INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT (Reestablishment of SPC Units ) Attention: Telecopy: Re: SPC Units of PPL Corporation (the "Company") and [PPL Capital Funding, Inc.] [PPL Capital Funding Trust I] Please refer to the Pledge Agreement, dated as of (the -------------- "Pledge Agreement"), among the Company, you, as Collateral Agent, , ------------- as Securities Intermediary, and the undersigned, as Purchase Contract Agent and as attorney-in-fact for the holders of SPC Units from time to time. Capitalized terms used herein but not defined shall have the meanings set forth in the Pledge Agreement. We hereby notify you in accordance with Section 5.3(a) of the Pledge Agreement that the holder of securities listed below (the "Holder") has elected to substitute $ Value of [Preferred Securities] [Notes] or securities ---------- entitlements thereto in exchange for $ Value of Pledged Treasury ---------- Securities and has delivered to the undersigned a notice stating that the Holder has Transferred such [Preferred Securities] [Notes] or securities entitlements thereto to the Securities Intermediary, for credit to the Collateral Account. We hereby request that you instruct the Securities Intermediary, upon confirmation that such [Preferred Securities] [Notes] or securities entitlements thereto have been credited to the Collateral Account, to release to the undersigned $ Value of Treasury Securities or securities entitlements ---------- thereto related to Treasury SPC Units of such Holder in accordance with ----- Section 5.3(a) of the Pledge Agreement. [We also hereby confirm that no Tax Event Redemption has occurred.] THE CHASE MANHATTAN BANK By: ---------------------------------- Name: Title: Dated: ------------------------------ Please print name and address of Holder electing to substitute Pledged [Preferred Securities] [Notes] or securities entitlements thereto for Pledged Treasury Securities: - -------------------------------- -------------------------------------- Name Social Security or other Taxpayer Identification Number, if any - ------------------------- Address - ------------------------- - ------------------------- 2 EXHIBIT D INSTRUCTION FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY (Reestablishment of SPC Units) - ------------------------ - ------------------------ - ------------------------ Attention: ------------- Telecopy: -------------- Re: SPC Units of PPL Corporation (the "Company") Securities Account No. . entitled " , as Collateral Agent, ----- -------------- Securities Account (PPL Corporation)" (the "Collateral Account") Please refer to the Pledge Agreement, dated as of (the "Pledge ------- Agreement"), among the Company, you, as Securities Intermediary, , -------------- as Purchase Contract Agent and as attorney-in-fact for the holders of SPC Units from time to time, and the undersigned, as Collateral Agent. Capitalized terms used herein but not defined shall have the meanings set forth in the Pledge Agreement. When you have confirmed that $ Value of [Preferred --------- Securities] [Notes] or securities entitlements thereto has been credited to the Collateral Account by or for the benefit of , as Holder of SPC Units --------- (the "Holder"), you are hereby instructed to release from the Collateral Account $ Value of Treasury Securities or securities entitlements thereto by ---------- Transfer to the Purchase Contract Agent. --------------------------- By: ----------------------------------- Name: Title: Dated: ------------------------------ Please print name and address of Holder: - -------------------------------- -------------------------------------- Name Social Security or other Taxpayer Identification Number, if any - ------------------------- Address - ------------------------- - ------------------------- 2 EXHIBIT E NOTICE OF CASH SETTLEMENT FROM SECURITIES INTERMEDIARY TO PURCHASE CONTRACT AGENT (Cash Settlement Amounts) The Chase Manhattan Bank 450 West 33rd Street New York, New York 10001 Attention: ------------- Telecopy: -------------- Re: SPC Units of PPL Corporation (the "Company") and [PPL Capital Funding, Inc.] [PPL Capital Funding Trust I] Please refer to the Pledge Agreement, dated as of (the "Pledge -------- Agreement"), among you, the Company, , as Collateral Agent and the ------------- undersigned, as Securities Intermediary. Unless otherwise defined herein, terms defined in the Pledge Agreement are used herein as defined therein In accordance with Section 5.5(d) of the Pledge Agreement, we hereby notify you that as of 11:00 a.m., [on the fifth Business Day immediately preceding the Purchase Contract Settlement Date], we have received (i) $ in ----- immediately available funds paid in an aggregate amount equal to the Purchase Price owing to the Company on the Purchase Contract Settlement Date with respect to SPC Units and (ii) $ in immediately available funds paid ---------- --------- in an aggregate amount equal to the Purchase Price owing to the Company on the Purchase Contract Settlement Date with respect to Treasury SPC Units. ------ --------------------------- By: ----------------------------------- Name: Title: Dated: ------------------------------ EX-4 9 0009.txt EXHIBIT 4.10 EXHIBIT 4.10 PPL CORPORATION PPL CAPITAL FUNDING[, INC.] OR [TRUST I] [PPL CAPITAL FUNDING TRUST I % PREFERRED SECURITIES DUE ] ----- ----- [PPL CAPITAL FUNDING, INC. % DEFERRABLE NOTES DUE ] ----- ---- [GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY PPL CORPORATION] REMARKETING AGREEMENT [Date] [Remarketing Agent] - ----------------- - ----------------- Ladies and Gentlemen: (the "Remarketing Agent") is undertaking --------------------------------- to remarket the [ % Deferrable Notes due (the "Securities"), --- --------------- issued by PPL Capital Funding, Inc., a Delaware corporation ("Capital Funding"), and unconditionally guaranteed as to payment of principal, premium, if any, and interest by PPL Corporation, a Pennsylvania corporation (the "Company"), pursuant to the Indenture, dated as of , among Capital Funding, the ------- Company and , as trustee (the "Indenture Trustee") as amended and --------- supplemented by the First Supplemental Indenture to the Indenture, dated , relating to the Notes (as amended or supplemented, the "Indenture").] - ------- [ % Preferred Securities due (the "Securities"), issued by PPL ---- -------- Capital Funding Trust I (the "Trust"), pursuant to an Amended and Restated Trust Agreement (the "Trust Agreement"), dated as of , by and among --------- , [Describe Notes for Preferred Securities]] - ------------- The Remarketing (as defined below) of the Securities is provided for in [an Officer's Certificate relating to and establishing certain terms of the Notes (the "Officer's Certificate").] [the Trust Agreement, the Pledge Agreement and the Purchase Contract Agreement (as defined below).] [If a liquidation and dissolution of the Trust shall have occurred prior to the Purchase Contract Settlement Date and the Notes have been distributed to the holders of the Preferred Securities all references herein to "Preferred Securities" shall instead be references to "Notes" and references to "Remarketed Preferred Securities" shall mean "Remarketed Notes", unless the context otherwise requires.] 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 (the ------- "Purchase Contract Agreement"), between the Company and The Chase Manhattan Bank, a New York banking corporation, as Purchase Contract Agent and Trustee (the "Purchase Contract Agent"), or in the Officer's Certificate, as the case may be. (b) As used in this Agreement, the following terms have the following meanings: "Remarketed Securities" means the Securities subject to the Remarketing, as identified to the Remarketing Agent by the Purchase Contract Agent after 11:00 a.m. on the fifth Business Day immediately preceding the Purchase Contract Settlement Date; "Remarketing" means the remarketing of the Remarketed Securities pursuant to the Remarketing Procedures; and "Remarketing Procedures" means the procedures in connection with the Remarketing of the Securities described in [the Officer's Certificate;] [Trust Agreement, other Preferred Security Documents] "Subsidiary" has the meaning set forth in Rule 405 under the Securities Act. SECTION 2. APPOINTMENT AND OBLIGATIONS OF THE REMARKETING AGENT. ---------------------------------------------------- (a) The Company and [Capital Funding] [theTrust]hereby appoint as exclusive remarketing agent (the "Remarketing Agent"), and - -------------- hereby (1) accepts appointment as Remarketing Agent, for the - -------------- purpose of (A) Remarketing Remarketed Securities on behalf of the holders thereof and (B) performing such other duties as are assigned to the Remarketing Agent in the Remarketing Procedures, all in accordance with and pursuant to the Remarketing Procedures, and (2) accepts and will perform all obligations of the Remarketing Agreement set forth in the [Trust Agreement,] [Officers' Certificate,] the Pledge Agreement and the Purchase Contract Agreement. (b) The Remarketing Agent agrees to (1) use reasonable efforts to remarket the Remarketed Securities tendered or deemed tendered to the Remarketing Agent in the Remarketing, (2) notify the Company promptly of the Reset Rate and (3) carry out such other duties as are assigned to the Remarketing Agent in the Remarketing Procedures, all in accordance with the provisions of the Remarketing Procedures. (c) On the third Business Day immediately preceding the Purchase Contract Settlement Date (the "Remarketing Date"), the Remarketing Agent shall use reasonable efforts to remarket, at a price at least equal to [100.25%] of the Stated Amount, the Remarketed Securities tendered or deemed tendered for purchase. 2 (d) If, as a result of the efforts described in Section 2(b), the Remarketing Agent determines that it will be able to remarket all Remarketed Securities tendered or deemed tendered for purchase at a price at least equal to [100.25%] of the Stated Amount prior to 4:00 p.m. (New York City time) on the Remarketing Date, the Remarketing Agent shall set the Reset Rate at a rate per annum (rounded to the nearest one-thousandth of one percent per annum) that the Remarketing Agent determines to be the lowest rate per annum that will enable it to remarket all of the Remarketed Securities tendered or deemed tendered for purchase at a price equal to [100.25%] of the Stated Amount. (e) upon receipt of the proceeds from the Remarketing, the Remarketing Agent shall: (1) retain [25 basis points (.25%)] of the Stated Amount for the performance of its services as Remarketing Agent hereunder; and (2) remit to the Collateral Agent all excess proceeds of the Remarketed Securities subject to the Pledge Agreement. (f) If none of the holders of Remarketed Notes elects to have Remarketed Securities remarketed in the Remarketing, the Remarketing Agent shall determine the rate that would have been established had a Remarketing been held on the Remarketing Date, and such rate shall be the Reset Rate. (g) If, by 4:00 p.m. (New York City time) on the Remarketing Date, the Remarketing Agent is unable to remarket all Remarketed Securities tendered or deemed tendered for purchase, a failed Remarketing ("Failed Remarketing") shall be deemed to have occurred, and the Remarketing Agent shall so advise by telephone DTC, the Indenture Trustee and the Company. In the event of a Failed Remarketing, the Reset Rate shall equal the Two-Year Benchmark Treasury rate plus the Applicable Margin. (h) Provided that there has not been a Failed Remarketing, by approximately 4:30 p.m. (New York City time) on the Remarketing Date, the Remarketing Agent shall advise, by telephone: (1) DTC, the [, Property Trustee, the] Indenture Trustee and the Company of the Reset Rate determined in the Remarketing and the number of Remarketed Securities sold in the Remarketing; (2) each purchaser (or the Depositary Participant thereof) of Remarketed Securities of the Reset Rate and the number of Remarketed Securities such purchaser is to purchase; and (3) each purchaser to give instructions to the Depositary Participant to pay the purchase price on the Purchase Contract Settlement Date in same day funds against delivery of the Remarketed Securities purchased through the facilities of DTC. SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND [CAPITAL ---------------------------------------------------------- FUNDING] [THE TRUST]. -------------------- 3 The Company represents and warrants (i) on and as of the date hereof, (ii) on and as of the date the Prospectus Supplement or other Remarketing Materials (each as defined in Section 3(a) below) are first distributed in connection with the Remarketing (the "Commencement Date"), (iii) on and as of the Remarketing Date, and (iv) on and as of the Purchase Contract Settlement Date that: (a) The conditions for use of Form S-3, as set forth in the General Instructions thereto, have been satisfied. (b) A registration statement on Form S-3 (File No. ) and an --------- amendment or amendments thereto with respect to the initial offering of the Notes has (i) been prepared by the Company in conformity with the requirements of the Securities Act of 1933, as amended (the "Securities Act"), and the rules and regulations (the "Rules and Regulations") of the Securities and Exchange Commission (the "Commission") thereunder; (ii) been filed with the Commission under the Securities Act, and (iii) become effective under the Securities Act; a registration statement on Form S-3, if required to be filed in connection with the Remarketing also may be prepared by the Company in conformity with the requirements of the Securities Act and the Rules and Regulations and filed with the Commission under the Securities Act; and the Indenture has been qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Copies of such registration statement or registration statements that have become effective and the amendment or amendments to such registration statements have been delivered by the Company to you. As used in this Agreement, "Effective Time" means the date and time as of which the last of such registration statements that have become effective or may be filed, or the most recent post-effective amendment thereto, if any, was declared effective by the Commission; "Effective Date" means the date of the Effective Time of such last registration statement; "Preliminary Prospectus" means each prospectus included in such last registration statement, or amendment thereto, before it became effective under the Securities Act and any prospectus filed by the Company with your consent pursuant to Rule 424(a) of the Rules and Regulations; "Registration Statement" means such last registration statement, as amended at its Effective Time, including documents incorporated by reference therein at such time and, if applicable, all information contained in the final prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations, including any information deemed to be part of such Registration Statement as of the Effective Time pursuant to paragraph (b) of Rule 430A of the Rules and Regulations; and "Prospectus" means such final prospectus, as first filed pursuant to Rule 424(b) of the Rules and Regulations. Reference made herein to any Preliminary Prospectus, the Prospectus or any other information furnished by the Company to the Remarketing Agent for distribution to investors in connection with the Remarketing (the "Remarketing Materials") shall be deemed to refer to and include any documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act as 4 of the date of such Preliminary Prospectus or the Prospectus, as the case may be, or, in the case of Remarketing Materials, referred to as incorporated by reference therein, and any reference to any amendment or supplement to any Preliminary Prospectus, the Prospectus or the Remarketing Materials shall be deemed to refer to and include any document filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the date of such Preliminary Prospectus or the Prospectus incorporated by reference therein pursuant to Item 12 of Form S-3 or, if so incorporated, the Remarketing Materials, as the case may be; and any reference to any amendment to the Registration Statement shall be deemed to include any annual report of the Company filed with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act after the Effective Time that is incorporated by reference in the Registration Statement. (c) The Commission has not issued an order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus, the Prospectus or the Remarketing Materials. (d) The Registration Statement, as of the Effective Date, conformed (and the Prospectus and any further amendments or supplements to the Registration Statement or the Prospectus, when they become effective or are filed with the Commission, as the case may be, will conform) in all respects to the requirements of the Securities Act and the Rules and Regulations, and the Registration Statement, the Prospectus and the Remarketing Materials do not and will not, as of the Effective Date (as to the Registration Statement and any amendment thereto), as of the applicable filing date (as to the Prospectus and any amendment or supplement thereto) and as of the Commencement Date, Remarketing Date and Purchase Contract Settlement Date (as to any Remarketing Materials) contain any untrue 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; provided that no representation and warranty is made as to the statement of eligibility and qualification on Form T-1 of the Indenture Trustee under the Trust Indenture Act, or as to information contained in or omitted from the Registration Statement, the Prospectus or the Remarketing Materials in reliance upon and in conformity with written information furnished to the Company by the Remarketing Agent specifically for inclusion therein. The Indenture conforms in all material respects to the requirements of the Trust Indenture Act and the applicable rules and regulations thereunder. (e) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus, when such documents become effective or are filed with 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, and the rules and regulations of the Commission thereunder and will not contain any untrue 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. 5 (f) Subsequent to the date of the latest consolidated financial statements included or incorporated by reference in the Prospectus or in any Remarketing Materials, there has not been any material adverse change in the financial position or results of operations of the Company and its subsidiaries taken as a whole, except in each case as set forth in or contemplated by the Prospectus or any Remarketing Materials. (g) The certificate delivered pursuant to paragraph (e) of Section 6 hereof in connection with the issuance and sale of the Remarketed Notes was on the dates on which it was delivered, or will be on the dates on which it is to be delivered, in all material respects true and complete. [Capital Funding or Trust Representations, as Applicable] SECTION 4. FEES. ---- For the performance of its services as Remarketing Agent hereunder, the Remarketing Agent shall retain from the proceeds of the Remarketing an amount equal to [25 basis points (.25%)] of the [$25] Stated Amount of the Remarketed Securities. SECTION 5. COVENANTS OF THE COMPANY AND [CAPITAL FUNDING] [THE TRUST]. ---------------------------------------------------------- Each of the Company and [Capital Funding] [the Trust] covenant and agree 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 within the period required by the Rules and Regulations; (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; (3) to file promptly all reports and any definitive proxy or information statements required to be filed by it with 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 Securities; (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 Securities 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. 6 (b) To furnish promptly to the Remarketing Agent and to counsel to the Remarketing Agent a signed copy (or true 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 the Remarketing Agent in New York City such number of the following documents as the Remarketing Agent shall request (i) conformed copies of the Registration Statement as originally filed with the Commission and each amendment thereto (in each case excluding exhibits other than this Agreement and the Indenture); (ii) the Prospectus and any amended or supplemented Prospectus; (ii) any document incorporated by reference in the Prospectus (excluding exhibits thereto); and (iv) any Remarketing Materials; 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; provided that the expense of preparing and filing any such amendment or supplement (i) which is necessary in connection with such a delivery of a prospectus more than nine months after the Remarketing Date or (ii) which relates solely to the activities of the Remarketing Agent shall be borne by the Remarketing Agent. (d) To file promptly with the Commission any amendment to the Registration Statement or the Prospectus or any supplement to the Prospectus that is required by the Securities Act or requested by the Commission. (e) Prior to filing with the Commission (i) any amendment to the Registration Statement or supplement to the Prospectus or any document incorporated by reference in the Prospectus or (ii) 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 objected to in writing by the Remarketing Agent promptly after reasonable notice. (f) As soon as practicable, but in any event not later than 15 months, after the Effective Date of the Registration Statement, to make "generally available to its security holders" an "earnings statement" (which need not be audited) covering a period of at least twelve months beginning after the Effective Date which will satisfy the provisions of 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. 7 (g) To take such action as the Remarketing Agent may reasonably request in order to qualify the Remarketed Securities for offer and sale under the securities or "blue sky" laws of such jurisdictions as the Remarketing Agent may reasonably request; provided that the Company shall not be required to qualify as a foreign corporation in any State, to consent to service of process in any State other than with respect to claims arising out of the offering or sale of the Remarketed Securities, or to meet any other requirement in connection with this paragraph (g) deemed by the Company to be unduly burdensome. (h) To pay (1) the costs incident to the preparation and printing of the Registration Statement, Prospectus and any Remarketing Materials and any amendments or supplements thereto; (2) the costs of distributing the Registration Statement, Prospectus and any Remarketing Materials and any amendments or supplements thereto; (3) the fees and expenses of qualifying the Remarketed Securities 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 their duties hereunder. SECTION 6. CONDITIONS TO THE REMARKETING AGENT'S OBLIGATIONS. ------------------------------------------------- The obligations of the Remarketing Agent hereunder are subject to the following conditions: (a) 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. (b) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, (i) there shall not have been any material adverse change in the financial position or results of operations of the Company and its subsidiaries taken as a whole, that, in the judgment of the Remarketing Agent, materially impairs the investment quality of the Notes, in each case other than as set forth in or contemplated by the Registration Statement or Prospectus. (c) The representations and warranties of the Company and [Capital Funding] [the Trust] contained herein shall be true and correct in all material respects on and as of the Remarketing Date, and the Company 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. (d) 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] stating that to the best of their knowledge after reasonable investigation: 8 (i) 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; (ii) the representations and warranties of the Company in Section 3 are true and correct in all material respects on and as of the Remarketing Date and the Company 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; (iii) the Registration Statement, as of its Effective Date, and the Prospectus and the Remarketing Materials, as of their respective dates, 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. (e) 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 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 and in the Remarketing Materials. (f) Counsel to the Company shall have furnished to the Remarketing Agent its opinion letter or opinion letters, as the case may be, addressed to the Remarketing Agent and dated the Remarketing Date, in form and substance satisfactory to the Remarketing Agent as set forth as Exhibit A hereto. [ (g) On or after the execution and delivery of this Agreement, no downgrading shall have occurred in the rating accorded the Company's debt securities by any "nationally recognized statistical rating organization", as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act.] SECTION 7. INDEMNIFICATION AND CONTRIBUTION. -------------------------------- (a) The Company and [Capital Funding] [the Trust] 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, 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, the Remarketing Materials 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, the Company and [Capital Funding] [the Trust] agree to reimburse the Remarketing Agent and each person who controls the Remarketing Agent as aforesaid for any reasonable legal or other expenses incurred by the 9 Remarketing Agent or such controlling person in connection with investigating or defending any such loss, expense, claim, damage or liability; provided, however, that neither the Company nor [Capital Funding] [the Trust] shall 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 [Capital Funding] [the Trust] or the Company by or through the Remarketing Agent 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 Statement of Eligibility under the Trust Indenture Act of any trustee; and provided further, that with respect to any untrue statement or alleged untrue statement or omission or alleged omission made in any prospectus or supplement, the indemnity agreement contained in this subsection (a) shall not inure to the benefit of the Remarketing Agent (or to the benefit of any person controlling the Remarketing Agent), if a copy of the Prospectus (not including documents incorporated by reference therein) was not sent or given to such person at or prior to the written confirmation of the sale of the Remarketed Securities to such person. (b) The Remarketing Agent agrees that it will indemnify and hold harmless the Company and [Capital Funding] [the Trust], their officers and directors, and each of them, and each person, if any, who controls the Company and [Capital Funding] [the Trust] within the meaning of Section 15 of the Securities 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, the Remarketing Materials 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 document in reliance upon, and in conformity with, written information furnished to [Capital Funding] [the Trust] or the Company by or through the Remarketing Agent expressly for use in any such document; and, except as hereinafter in this Section provided, the Remarketing Agent agrees to reimburse the Company and [Capital Funding] [the Trust], their officers and directors, and each of them, and each person, if any, who controls the Company and [Capital Funding] [the Trust] within the meaning of Section 15 of the Securities 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 10 indemnified party and to any other indemnifying party, defendant in the suit. In the event that any indemnifying party elects to assume the defense of any such action and retain such counsel, the indemnified party shall bear the fees and expenses of any additional counsel retained by it. 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 Remarketed Securities. (d) If the Remarketing Agent or any person entitled to indemnification by the terms of subsection (a) of this Section 7 shall have given notice to the Company and [Capital Funding] [the Trust] 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 such person shall be entitled to contribution from the Company and [Capital Funding] [the Trust] for 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 such person is entitled, there shall be considered the relative benefits received by the Remarketing Agent or such person and the Company and [Capital Funding] [the Trust] from the offering of the Remarketed Securities that were the subject of the claim for indemnification (taking into account the portion of the proceeds realized by each), the Remarketing Agent or person's relative 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 Company and [Capital Funding] [the Trust] 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 Company, [Capital Funding] [the Trust] and the Remarketing Agent 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 Company, its directors or officers, [Capital Funding] [the Trust] or any person controlling [Capital Funding] [the Trust], (ii) acceptance of any Remarketed Securities and payment therefor under this Agreement, and (iii) any termination of this Agreement. 11 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 15 days' prior written notice, in the case of a resignation, to the Company, DTC and the [Property Trustee] Indenture Trustee and, in the case of a removal, the removed Remarketing Agent, DTC and the [Property Trustee] Indenture Trustee; provided however, that no such resignation nor any such removal shall become effective until the Company shall have appointed 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, in which it shall have agreed to conduct the Remarketing in accordance with the Remarketing Procedures. 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 4, 5(h) and 7 shall survive the resignation or removal of any Remarketing Agent pursuant to this Agreement. SECTION 9. DEALING IN THE REMARKETED SECURITIES. ------------------------------------ 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 Securities. The Remarketing Agent may exercise any vote or join in any action which any beneficial owner of Remarketed Securities may be entitled to exercise or take pursuant to the Indenture 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. 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 and the [Indenture] [Preferred Security documents]. No implied covenants or obligations of or against the Remarketing Agent shall be read into this Agreement or the Indenture. 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, which purports to conform to the requirements of this Agreement or the [Indenture] [Preferred Security documents] 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. The Remarketing Agent, acting under this Agreement, shall incur no liability to the Company or to any holder of Remarketed Securities 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 the gross negligence or willful misconduct on its part. 12 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 by notifying the Remarketing Agent at any time before the time when the Remarketed Securities are first generally offered by the Remarketing Agent to dealers by letter or telegram, or (B) by the Remarketing Agent by notifying the Company at or prior to 10:00 a.m. (New York City time) on the Remarketing Date by letter or telegram if, (a) in the judgement of the Remarketing Agent the sale and delivery of the Remarketed Securities is rendered impracticable or inadvisable because: (1) there has been any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum or maximum prices for trading on such exchange, or any suspension or limitation of trading of any securities of the Company or Capital Funding on any exchange or in the over-the-counter market; or a general banking moratorium has been declared by Federal or New York authorities; (2) any event shall have occurred or shall exist which makes untrue or incorrect in any material respect any statement or information contained in the Registration Statement or Prospectus or which is not reflected in the Registration Statement or Prospectus but should be reflected therein in order to make the statements or information contained therein not misleading in any material respect, and such untrue or incorrect statement or information is not corrected in an amendment or supplement to the Registration Statement or Prospectus, or (b) prior to that time, any of the events described in Sections 6(b) [or (g)] shall have occurred. 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 Remarketing 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 Securities hereunder, without some reason sufficient hereunder to justify the cancellation or termination of its obligations hereunder, the Remarketing Agent shall not be relieved of liability to the Company for damages occasioned by its default. 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 Attention: ; --------------------- ----------------- 13 (b) if to the Company or [Capital Funding] [the Trust], 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). 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, [Capital Funding] [the Trust] and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except that (x) the representations, warranties, indemnities and agreements of the Company 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 (y) 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 directors and officers who sign the Registration Statement and any person controlling the Company 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 [Capital Funding] [the Trust] and the Remarketing Agent contained in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall survive the 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 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 and the Remarketing Agent, please indicate your acceptance in the space provided for that purpose below. 14 If the foregoing correctly sets forth the agreement between the Company and the Remarketing Agent, please indicate your acceptance in the space provided for that purpose below. Very truly yours, PPL CORPORATION By: ------------------------------- Title: [PPL CAPITAL FUNDING, INC.] or [PPL CAPITAL FUNDING TRUST I] By: ------------------------------- Accepted: - ---------------------------------- By: ---------------------------------- Authorized Representative 15 EX-4 10 0010.txt EXHIBIT 4.12 EXHIBIT 4.12 CERTIFICATE OF AMENDMENT TO CERTIFICATE OF TRUST (PURSUANT TO SECTION 3810 OF THE DELAWARE BUSINESS TRUST ACT) To the Secretary of State State of Delaware It is hereby certified that: 1. The name of the business trust (hereinafter referred to as the "trust") is PP&L Capital Funding Trust I. 2. Article 1 of the Certificate of Trust of the trust is hereby amended to read as follows: "Name. The name of the business trust formed hereby is PPL Capital Funding Trust I." 3. The undersigned person is a trustee of the trust. 4. This Certificate of Amendment to Certificate of Trust shall be effective upon its filing with the Secretary of State of the State of Delaware. Signed on May 22, 2000 /s/ James E. Abel --------------------------------------- JAMES E. ABEL, not in his individual capacity but solely as trustee EX-4 11 0011.txt EXHIBIT 4.13 EXHIBIT 4.13 AMENDED AND RESTATED CERTIFICATE OF TRUST OF PPL CAPITAL FUNDING TRUST I This Amended and Restated Certificate of Trust of PPL Capital Funding Trust I (originally known as "PP&L Capital Funding Trust I") (the "Trust"), dated as of August 15, 2000, is being duly executed and filed under the Delaware Business Trust Act (12 Del. C. ss. 3801, et seq.) (the "Act") by the undersigned, as trustees of the Trust, to amend and restate the Certificate of Trust of the Trust, which was filed with the Secretary of State of the State of Delaware (the "Secretary of State") on September 21, 1999, as amended by the Certificate of Amendment to the Certificate of Trust, which was filed with the Secretary of State on May 23, 2000 (the "Certificate of Trust"). The Certificate of Trust is hereby amended and restated in its entirety, pursuant to Section 3810(c)(1) of the Act, to read as follows: 1. Name. The name of the business trust formed hereby is PPL Capital ---- Funding Trust I. 2. Delaware Trustee. The name and business address of the trustee of ---------------- the Trust with its principal place of business in the State of Delaware are Chase Manhattan Bank USA, National Association, 1201 Market Street, Wilmington, Delaware, 19801, Attention: Corporate Trust Administration. 3. Effective Date. This Certificate of Trust shall be effective upon -------------- the date and time of filing. 4. Counterparts. This Certificate of Trust may be executed in one or ------------ more counterparts. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the undersigned have executed this Certificate of Trust in accordance with Section 3811(a)(2) of the Act. CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity, but solely as trustee By: /s/ Denis Kelly --------------------------------------- Name: Denis Kelly Title: Assistant Vice President THE CHASE MANHATTAN BANK, not in its individual capacity, but solely as trustee By: /s/ Robert S. Peschler --------------------------------------- Name: Robert S. Peschler Title: Assistant Vice President JAMES E. ABEL, not in his individual capacity, but solely as trustee /s/ James E. Abel -------------------------------------------- 2 EX-4 12 0012.txt EXHIBIT 4.14 EXHIBIT 4.14 REMOVAL AND APPOINTMENT OF TRUSTEE AND AMENDMENT OF TRUST AGREEMENT OF PP&L CAPITAL FUNDING TRUST I This Removal and Appointment of Trustee and Amendment of Trust Agreement of PP&L Capital Funding Trust I (the "Trust") is made as of August 15, 2000 (this "Appointment and Amendment"), among PPL Corporation, a Pennsylvania corporation (formally known as "PP&L Rosources, Inc."), as depositor (the "Depositor"), The Chase Manhattan Bank, a New York banking corporation, as trustee, and James E. Abel, as trustee (jointly, the "Trustees"), and Chase Manhattan Bank USA, National Association ("Chase Delaware"), as an additional trustee of the Trust. WHEREAS, the Trust was created pursuant to the filing of a Certificate of Trust of the Trust in the office of the Secretary of State of the State of Delaware (the "Secretary of State") on September 21, 1999, and by the entering into of a Trust Agreement of the Trust, dated as of September 21, 1999 (the "Trust Agreement"); WHEREAS, Chase Manhattan Bank Delaware converted from a Delaware banking corporation to a national association (the "Conversion") and is now known as "Chase Manhattan Bank USA, National Association"; WHEREAS, pursuant to the Conversion, Chase Manhattan Bank Delaware ceased to exist; WHEREAS, the Sponsor desires to appoint Chase Delaware as an additional trustee of the Trust; WHEREAS, Chase Delaware desires to become an additional trustee of the Trust; WHEREAS, a Certificate of Amendment to the Certificate of Trust was filed in the office of the Secretary of State on May 23, 2000, changing the name of the Trust to "PPL Capital Funding Trust I"; and WHEREAS, the parties hereto desire to confirm that the name of the Trust has been changed to "PPL Capital Funding Trust I." NOW, THEREFORE, in consideration of the mutual promises and obligations contained herein, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Pursuant to Section 6 of the Trust Agreement, the Sponsor hereby appoints Chase Delaware as an additional trustee of the Trust effective as of the effective time of the Conversion. Chase Delaware hereby accepts such appointment and agrees to be a trustee of the Trust pursuant to the Trust Agreement effective as of the effective time of the Conversion. 2. All references in the Trust Agreement to the term "Trustees" are deemed to include a reference to Chase Delaware as a trustee of the Trust. 3. Section 1 of the Trust Agreement is hereby amended and restated in its entirety as follows: 1. The trust created hereby shall be known as "PPL Capital Funding Trust I," in which name the Trustees or the Depositor, to the extent provided herein, may conduct the business of the Trust, make and execute contracts, and sue and be sued. 4. The filing of the Certificate of Amendment to the Certificate of Trust of the Trust in the office of the Secretary of State on May 23, 2000, changing the name of the Trust to "PPL Capital Funding Trust I" is hereby approved, ratified and confirmed in all respects. 5. This Appointment and Amendment may be executed in one or more counterparts. 6. Except to the extent that it is expressly modified by this Appointment and Amendment, the Trust Agreement shall continue in full force and effect. 7. This Appointment and Amendment shall be governed by, and construed in accordance with, the laws of the State of Delaware (without regard to conflict of laws principles). [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the parties hereto have caused this Appointment and Amendment to be duly executed as of the date and year first above written. PPL CORPORATION, as depositor By: /s/ James E. Abel ------------------------------------ Name: Title: THE CHASE MANHATTAN BANK, as trustee By: /s/ Robert S. Peschler ------------------------------------ Name: Robert S. Peschler Title: Assistant Vice President JAMES E. ABEL, as trustee /s/ James E. Abel ------------------------------------ CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, as an additional trustee of the Trust By: /s/ Denis Kelly ------------------------------------ Name: Denis Kelly Title: Assistant Vice President EX-4 13 0013.txt EXHIBIT 4.15 EXHIBIT 4.15 ================================================================================ AMENDED AND RESTATED TRUST AGREEMENT among PPL CORPORATION, as Depositor and Trust Securities Guarantor, THE CHASE MANHATTAN BANK, as Property Trustee, CHASE MANHATTAN BANK DELAWARE, as Delaware Trustee, THE ADMINISTRATIVE TRUSTEES NAMED HEREIN and THE SEVERAL HOLDERS OF THE TRUST SECURITIES Dated as of , ------ ---- PPL CAPITAL FUNDING TRUST I ================================================================================ PPL CAPITAL FUNDING TRUST I Certain Sections of this Trust Agreement relating to Sections 310 through 318 of the Trust Indenture Act of 1939: Trust Indenture Trust Agreement Act Section Section - --------------- --------------- Section 310(a)(1) ......................................... 8.07 (a)(2) ......................................... 8.07 (a)(3) ......................................... 8.09 (a)(4) ......................................... Not Applicable (b) ......................................... 8.08 Section 311(a) ......................................... 8.13 (b) ......................................... 8.13 Section 312(a) ......................................... 5.07 (b) ......................................... 5.07 (c) ......................................... 5.07 Section 313(a) ......................................... 8.14(a) (b) ......................................... 8.14(a) (c) ......................................... 8.14(a) (d) ......................................... 8.14(b) Section 314(a) ......................................... 8.15 (b) ......................................... Not Applicable (c)(1) ......................................... 8.16 (c)(2) ......................................... 8.16 (c)(3) ......................................... Not Applicable (d) ......................................... Not Applicable (e) ......................................... 1.01 Section 315(a) ......................................... 8.01, 8.03 (b) ......................................... 8.02 (c) ......................................... 8.01(a) (d) ......................................... 8.01, 8.03 (e) ......................................... Not Applicable Section 316(a) ......................................... 6.01 (a)(1)(A)......................................... 6.01 (a)(1)(B)......................................... Not Applicable (a)(2) ......................................... Not Applicable (b) ......................................... Not Applicable (c) ......................................... 6.07 Section 317(a)(1) ......................................... Not Applicable (a)(2) ......................................... Not Applicable (b) ......................................... 5.09 Section 318(a) ......................................... 10.10 Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Trust Agreement. TABLE OF CONTENTS ARTICLE I DEFINED TERMS Section 1.01. Definitions....................................................2 ARTICLE II CONTINUATION OF THE TRUST Section 2.01. Name..........................................................10 Section 2.02. Office of the Delaware Trustee; Principal Place of Business...10 Section 2.03. Initial Contribution of Trust Property; Organizational Expenses......................................................11 Section 2.04. Issuance of the Preferred Trust Securities....................11 Section 2.05. Subscription and Purchase of Debentures; Issuance of the Common Trust Securities.......................................11 Section 2.06. Declaration of Trust; Appointment of Additional Administrative Trustees.......................................11 Section 2.07. Authorization to Enter into Certain Transactions..............11 Section 2.08. Assets of Trust...............................................15 Section 2.09. Title to Trust Property.......................................15 ARTICLE III PAYMENT ACCOUNT Section 3.01. Payment Account...............................................15 ARTICLE IV DISTRIBUTIONS; REDEMPTION Section 4.01. Distributions.................................................16 Section 4.02. Redemption....................................................16 Section 4.03. Subordination of Common Trust Securities......................18 Section 4.04. Payment Procedures............................................19 Section 4.05. Tax Returns and Reports.......................................19 Section 4.06. Payments under Indenture......................................20 Section 4.07. [Remarketing].................................................20 ARTICLE V TRUST SECURITIES CERTIFICATES Section 5.01. Initial Ownership.............................................20 Section 5.02. The Trust Securities Certificates.............................20 Section 5.03. Execution and Delivery of Trust Securities Certificates.......20 Section 5.04. Registration of Transfer and Exchange of Trust Securities Certificates..................................................21 Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates..................................................21 Section 5.06. Persons Deemed Securityholders................................22 -i- Section 5.07. Access to List of Securityholders' Names and Addresses........22 Section 5.08. Maintenance of Office or Agency...............................22 Section 5.09. Appointment of Paying Agent...................................23 Section 5.10. Ownership of Common Trust Securities by Depositor.............24 Section 5.11. Definitive Preferred Trust Securities Certificates............24 Section 5.12. Book-Entry System.............................................24 Section 5.13. Rights of Securityholders.....................................25 Section 5.14. Cancellation by Transfer Agent and Registrar..................25 ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING Section 6.01. Limitations on Voting Rights..................................25 Section 6.02. Notice of Meetings............................................27 Section 6.03. Meetings of Holders of Preferred Trust Securities.............27 Section 6.04. Voting Rights.................................................27 Section 6.05. Proxies, etc..................................................27 Section 6.06. Securityholder Action by Written Consent......................28 Section 6.07. Record Date for Voting and Other Purposes.....................28 Section 6.08. Acts of Securityholders.......................................28 Section 6.09. Inspection of Records.........................................29 ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE Section 7.01. Property Trustee..............................................29 Section 7.02. Delaware Trustee..............................................30 ARTICLE VIII THE TRUSTEES Section 8.01. Certain Duties and Responsibilities...........................31 Section 8.02. Notice of Defaults............................................32 Section 8.03. Certain Rights of Property Trustee............................32 Section 8.04. Not Responsible for Recitals or Issuance of Securities........35 Section 8.05. May Hold Securities...........................................35 Section 8.06. Compensation; Fees; Indemnity.................................35 Section 8.07. Certain Trustees Required; Eligibility........................36 Section 8.08. Conflicting Interests.........................................37 Section 8.09. Co-Trustees and Separate Trustee..............................37 Section 8.10. Resignation and Removal; Appointment of Successor.............38 Section 8.11. Acceptance of Appointment by Successor........................40 Section 8.12. Merger, Conversion, Consolidation or Succession to Business...40 Section 8.13. Preferential Collection of Claims Against Depositor or Trust..40 Section 8.14. Reports by Property Trustee...................................41 Section 8.15. Reports to the Property Trustee...............................41 -ii- Section 8.16. Evidence of Compliance With Conditions Precedent..............41 Section 8.17. Number of Trustees............................................41 Section 8.18. Delegation of Power...........................................42 Section 8.19. Fiduciary Duty................................................42 Section 8.20. Delaware Trustee..............................................43 ARTICLE IX DISSOLUTION AND LIQUIDATION Section 9.01. Dissolution Upon Expiration Date..............................43 Section 9.02. Early Dissolution.............................................43 Section 9.03. Termination...................................................44 Section 9.04. Liquidation...................................................44 Section 9.05. Mergers, Consolidations, Amalgamations or Replacements of the Trust.....................................................46 ARTICLE X MISCELLANEOUS PROVISIONS Section 10.01. Payment of Expenses of the Trust.............................47 Section 10.02. Limitation of Rights of Securityholders......................47 Section 10.03. Amendment....................................................47 Section 10.04. Separability.................................................48 Section 10.05. Governing Law................................................48 Section 10.06. Successors...................................................49 Section 10.07. Headings.....................................................49 Section 10.08. Notice and Demand............................................49 Section 10.09. Agreement Not to Petition....................................49 Section 10.10. Conflict with Trust Indenture Act............................50 Section 10.11. Counterparts.................................................50 -iii- AMENDED AND RESTATED TRUST AGREEMENT, dated as of , , among ------ ---- (i) PPL Corporation, a Pennsylvania corporation as depositor (the "Depositor") and as Trust Securities guarantor (the "Trust Securities Guarantor"), (ii) The Chase Manhattan Bank, a banking corporation duly organized and existing under the laws of the State of New York, as trustee (the "Property Trustee" and, in its separate capacity and not in its capacity as Property Trustee, the "Bank"), (iii) Chase Manhattan Bank USA, National Association, a national association, as Delaware trustee (the "Delaware Trustee"), (iv) and , each ---------- ----------- an individual, and each of whose address is c/o PPL Electric Utilities Corporation, Two North Ninth Street, Allentown, Pennsylvania 18101-1179 (each, an "Administrative Trustee" and collectively the "Administrative Trustees") (the Property Trustee, the Delaware Trustee and the Administrative Trustees are referred to herein each as a "Trustee" and collectively as the "Trustees"), and (v) the several Holders, as hereinafter defined. R E C I T A L S: - - - - - - - - The Depositor, the Property Trustee, the Delaware Trustee and James E. Abel, as Administrative Trustee, have heretofore duly created and continued a business trust under the Delaware Business Trust Act by the entering into that certain Trust Agreement, dated as of September 21, 1999 (the "Original Trust Agreement"), as amended by the execution and filing with the Secretary of State of the State of Delaware of the Certificate of Trust, dated September 21, 1999, as amended by the Certificate of Amendment to Certificate of Trust, dated May 22, 2000, as amended by the Removal and Appointment of Trustee and Amendment of Trust Agreement of the Trust, dated as of August 15, 2000, and as amended by the Amended and Restated Certificate of Trust of PPL Capital Funding Trust I, dated as of August 15, 2000, copies of which are attached as Exhibit A (as it may be amended from time to time, the "Certificate of Trust"). [The Trust and the Depositor have entered into an Underwriting Agreement dated , with .] ------- ---- ------------------------------------------- The parties hereto desire to amend and restate the Original Trust Agreement in its entirety as set forth herein to provide for, among other things, (i) the issuance of the Common Trust Securities, as hereinafter defined, by the Trust to the Depositor, (ii) the issuance of the Preferred Trust Securities, as hereinafter defined, by the Trust, pursuant to the Underwriting Agreement and (iii) the acquisition by the Trust of all of the right, title and interest in the Debentures, as hereinafter defined. NOW THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each party, for the benefit of the other party and for the benefit of the Securityholders, hereby amends and restates the Original Trust Agreement in its entirety and agrees as follows: ARTICLE I DEFINED TERMS SECTION 1.01. DEFINITIONS. (a) For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the context otherwise requires: (b) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (c) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (d) unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Trust Agreement; and (e) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section or other subdivision. "Act" has the meaning specified in Section 6.08. "Additional Amount" means, with respect to Trust Securities of a given Liquidation Amount for a given period, the amount of Additional Interest (as defined in the Subordinated Indenture) paid by the Debenture Issuer on a Like Amount of Debentures for such period. "Administrative Trustee" means each of the individuals identified as an "Administrative Trustee" in the preamble to this Trust Agreement solely in their capacities as Administrative Trustees of the Trust and not in their individual capacities, or such trustee's successor in interest in such capacity, or any successor trustee appointed as herein provided. "Adverse Tax Consequence" means any of the circumstances described in clauses (i), (ii) and (iii) of the definition of "Tax Event" herein. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Authorized Officer" means the Chairman of the Board, the President and Vice President, the Treasurer, any Assistant Treasurer or any other officer or agent of the Depositor duly authorized by the Board of Directors to act in respect of matters relating to this Trust Agreement. 2 "Bank" has the meaning specified in the preamble to this Trust Agreement. "Bankruptcy Event" means, with respect to any Person: (i) the entry of a decree or order by a court having jurisdiction in the premises judging such Person a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjudication or composition of or in respect of such Person under Federal bankruptcy law or any other applicable Federal or state law, or appointing a receiver, liquidator, assignee, trustee, sequestrator or other similar official of such Person or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or (ii) the institution by such Person of proceedings to be adjudicated a bankrupt or insolvent, or of the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under Federal bankruptcy law or any other applicable Federal or state law, or the consent by it to the filing of such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or similar official of such Person or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due. "Bankruptcy Laws" has the meaning specified in Section 10.09. "Business Day" means a day other than (x) a Saturday or a Sunday, (y) a day on which banks in New York, New York or Pennsylvania are authorized or obligated by law or executive order to remain closed or (z) a day on which the Property Trustee's Corporate Trust Office or the Debenture Trustee's principal corporate trust office is closed for business. "Certificate of Trust" has the meaning specified the recitals hereof. "Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act. "Closing Date" means the date of execution and delivery of this Trust Agreement. "Code" means the Internal Revenue Code of 1986, as amended. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Common Trust Security" means a security representing an undivided beneficial interest in the assets of the Trust having a Liquidation Amount of $25 and having the rights provided therefor in this Trust Agreement, including 3 the right to receive Distributions, Debentures and a Liquidation Distribution as provided herein. "Common Trust Securities Certificate" means a certificate evidencing ownership of Common Trust Securities, substantially in the form attached as Exhibit B. "Corporate Trust Office" means the principal corporate trust office of the Property Trustee located in New York, New York which at the date of execution of this Trust Agreement is located at 450 West 33rd Street, 15th Floor, New York, New York 10001. "Covered Person" means: (a) any officer, director, shareholder, partner, member, representative, employee or agent of the Trust or the Trust's Affiliates; and (b) any Holder of Trust Securities. "Debenture Event of Default" means an "Event of Default" as defined in the Subordinated Indenture. "Debenture Issuer" means PPL Capital Funding, Inc., a Delaware corporation, in its capacity as issuer of the Debentures, and its successors. "Debenture Redemption Date" means "Redemption Date" as defined in the Subordinated Indenture with respect to the Debentures. "Debenture Trustee" means The Chase Manhattan Bank, a New York banking corporation, as trustee under the Subordinated Indenture, and its permitted successors and assigns as such trustee. "Debentures" means $ aggregate principal amount of the ----------- Debenture Issuer's % Subordinated Debt Securities, Series , issued pursuant -- - to the Subordinated Indenture which will mature on , . ------ ---- "Definitive Preferred Trust Securities Certificates" means Preferred Trust Securities Certificates issued in certificated, fully registered form as provided in Section 5.11. "Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time. "Delaware Trustee" means the banking corporation identified as the "Delaware Trustee" in the preamble to this Trust Agreement solely in its capacity as Delaware Trustee of the Trust and not in its individual capacity, or its successor in interest in such capacity, or any successor trustee appointed as herein provided. "Depositor" has the meaning specified in the preamble to this Trust Agreement and includes PPL Corporation, in its capacity as Holder of the Common Trust Securities, and its successors. "Distribution Date" has the meaning specified in Section 4.01(a). 4 "Distributions" means amounts payable in respect of the Trust Securities as provided in Section 4.01. "Early Termination Event" has the meaning specified in Section 9.02. "Event of Default" means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (i) the occurrence of a Debenture Event of Default; or (ii) default by the Trust in the payment of any Distribution when it becomes due and payable, and continuation of such default for a period of 30 days; or (iii) default by the Trust in the payment of any Redemption Price, plus accumulated and unpaid Distributions, of any Trust Security when it becomes due and payable; or (iv) default in the performance, or breach, in any material respect, of any covenant or warranty of the Trustees in this Trust Agreement (other than a covenant or warranty a default in whose performance or breach is specifically dealt with in clause (ii) or (iii), above) and continuation of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Trust, the defaulting trustee and the Depositor by the Holders of at least 25% in Liquidation Amount of the Outstanding Preferred Trust Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (v) the occurrence of a Bankruptcy Event with respect to the Trust. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Expiration Date" shall have the meaning specified in Section 9.01. "Indemnified Person" means any Trustee, any Affiliate of any Trustee, or any officer, director, shareholder, member, partners, employee, representative or agent of any Trustee, or any employee or agent of the Trust or its Affiliates. "Investment Company Act" means the Investment Company Act of 1940, as amended. ["Investment Company Event" means the receipt by the Trust of an Opinion of Counsel experienced in such matters to the effect that, as a result of the occurrence of a change in law or regulation or a change in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority (a "Change in 1940 Act Law"), the Trust is or will be considered an "investment company" that is required to be registered 5 under the 1940 Act, which change in 1940 Act Law become effective on or after the date of original issuance of the Preferred Securities under this Trust Agreement. "Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse ownership interest, hypothecation, assignment, security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever. "Like Amount" means (i) Trust Securities having a Liquidation Amount equal to the principal amount of Debentures to be contemporaneously redeemed in accordance with the Subordinated Indenture and the proceeds of which will be used to pay the Redemption Price of such Trust Securities plus accumulated and unpaid Distributions to the date of such payment and (ii) Debentures having a principal amount equal to the Liquidation Amount of the Trust Securities of the Holders to which such Debentures are distributed. "Liquidation Amount" means the stated amount of $25 per Trust Security. "Liquidation Date" means the date on which Debentures are to be distributed to Holders of Trust Securities in connection with a dissolution and liquidation of the Trust pursuant to Section 9.04. "Liquidation Distribution" has the meaning specified in Section 9.04(e). "Offer" has the meaning specified in Section 2.07(c). "Officer's Certificate" means a certificate signed by an Authorized Officer of the Depositor and delivered to the appropriate Trustee. Any officer signing an Officer's Certificate given pursuant to Section 8.16 shall be the principal executive, financial or accounting officer of the Depositor. Any Officer's Certificate delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement shall include: (a) a statement that the officer signing the Officer's Certificate has read the covenant or condition and the definitions relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by such officer in rendering the Officer's Certificate; (c) a statement that such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of such officer, such condition or covenant has been complied with. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Trust, the Property Trustee, the Delaware Trustee or the Depositor, and who shall be reasonably acceptable to the Property Trustee. Any Opinion of Counsel delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement shall include statements 6 comparable to the statements referred to in the definition of "Officer's Certificate" herein. "Original Trust Agreement" has the meaning specified in the recitals to this Trust Agreement. "Outstanding," when used with respect to Preferred Trust Securities, means, as of the date of determination, all Preferred Trust Securities theretofore delivered under this Trust Agreement, except: (i) Preferred Trust Securities theretofore canceled by the Transfer Agent and Registrar or delivered to the Transfer Agent and Registrar for cancellation; (ii) Preferred Trust Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Property Trustee or any Paying Agent for the Holders of such Preferred Trust Securities; provided that, if such Preferred Trust Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Trust Agreement; and (iii) Preferred Trust Securities which have been paid or in exchange for or in lieu of which other Preferred Trust Securities have been delivered pursuant to this Trust Agreement, including pursuant to Sections 5.04, 5.05 or 5.11; provided, however, that in determining whether the Holders of the requisite Liquidation Amount of the Outstanding Preferred Trust Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Preferred Trust Securities owned by the Depositor, the Trust Securities Guarantor, any Administrative Trustee or any Affiliate of the Depositor, the Trust Securities Guarantor or any Administrative Trustee shall be disregarded and deemed not to be Outstanding, except that (a) in determining whether any Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Preferred Trust Securities which such Trustee knows to be so owned shall be so disregarded and (b) the foregoing shall not apply at any time when all of the Outstanding Preferred Trust Securities are owned by the Depositor, the Trust Securities Guarantor, one or more of the Administrative Trustees and/or any such Affiliate. Preferred Trust Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Administrative Trustees the pledgee's right so to act with respect to such Preferred Trust Securities and that the pledgee is not the Depositor or the Trust Securities Guarantor, or any Affiliate of the Depositor or the Trust Securities Guarantor. "Owner" means each Person who is the beneficial owner of a Trust Securities Certificate as reflected in the records of the Securities Depository or, if a Securities Depository participant is not the beneficial owner, then as reflected in the records of a Person maintaining an account with such Securities Depository (directly or indirectly), in accordance with the rules of such Securities Depository. "Paying Agent" means any paying agent or co-paying agent appointed pursuant to Section 5.09 and shall initially be the Property Trustee. 7 "Payment Account" means a segregated non-interest-bearing corporate trust account maintained by the Property Trustee with the Bank, or such other banking institution as the Depositor shall select for the benefit of the Securityholders in which all amounts paid in respect of the Debentures will be held and from which the Paying Agent, pursuant to Section 5.09, shall make payments to the Securityholders in accordance with Sections 4.01 and 4.02. "Person" means any individual, corporation, partnership, joint venture, trust, limited liability company or corporation, unincorporated organization or government or any agency or political subdivision thereof. "Preferred Trust Security" means a security representing an undivided beneficial interest in the assets of the Trust having a Liquidation Amount of $25 and having rights provided therefor in this Trust Agreement, including the right to receive Distributions, Debentures and a Liquidation Distribution as provided herein and, in certain circumstances, a preference over the Common Trust Securities. "Preferred Trust Securities Certificate" means a certificate evidencing ownership of Preferred Trust Securities, substantially in the form attached as Exhibit C. "Property Trustee" means the commercial bank or trust company identified as the "Property Trustee" in the preamble to this Trust Agreement solely in its capacity as Property Trustee of the Trust and not in its individual capacity, or its successor in interest in such capacity, or any successor trustee appointed as herein provided. "Redemption Date" means, with respect to any Trust Security to be redeemed, the date fixed for such redemption by or pursuant to this Trust Agreement; provided that each Debenture Redemption Date shall be a Redemption Date for a Like Amount of Trust Securities. "Redemption Price" means, with respect to any date fixed for redemption of any Trust Security, the Liquidation Amount of such Trust Security. "Relevant Trustee" shall have the meaning specified in Section 8.10. "Responsible Officer," when used with respect to the Property Trustee, means an officer of the Property Trustee assigned by the Property Trustee to administer its corporate trust matters. "Securities Depository" shall have the meaning specified in Section 5.12. The Depository Trust Company will be the initial Securities Depository. "Securities Register" shall mean the Securities Register as described in Section 5.04. "Securityholder" or "Holder" means a Person in whose name a Trust Security or Securities is registered in the Securities Register; any such Person shall be a beneficial owner of such security within the meaning of the Delaware Business Trust Act. 8 "Subordinated Indenture" means the Indenture, dated as of , , among the Debenture Issuer, the Depositor, as guarantor - -------------- ---- and the Debenture Trustee, as trustee, as amended or supplemented from time to time. "Tax Event" means the receipt by the Trust or the Depositor of an Opinion of Counsel experienced in such matters to the effect that, as a result of (a) any amendment to, clarification of, or change (including any announced prospective change) in, the laws or treaties (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein affecting taxation, (b) any judicial decision or any official administrative pronouncement, ruling, regulatory procedure, notice or announcement (including any notice or announcement of intent to issue or adopt any such administrative pronouncement, ruling, regulatory procedure or regulation) (each, an "Administrative Action"), or (c) any amendment to, clarification of, or change in the official position or the interpretation of any such Administrative Action or judicial decision or any interpretation or pronouncement that provides for a position with respect to such Administrative Action or judicial decision that differs from the theretofore generally accepted position, in each case by any legislative body, court, governmental authority or regulatory body, irrespective of the time or manner in which such amendment, clarification or change is introduced or made known, which amendment, clarification, or change is effective, or which Administrative Action is taken or which judicial decision is issued, in each case on or after the date of issuance of the Preferred Trust Securities, there is more than an insubstantial risk that (i) the Trust is, or will be subject to United States Federal income tax with respect to interest received on the Debentures, (ii) interest payable by the Depositor on the Debentures is not, or will not be, fully deductible by the Depositor for United States Federal income tax purposes, or (iii) the Trust is, or will be subject to more than a de minimis amount of other taxes, duties or other governmental charges. "Transfer Agent and Registrar" shall mean the transfer agent and registrar for the Preferred Trust Securities appointed by the Trust and shall be initially the Property Trustee. "Trust" means the Delaware business trust created by the Original Trust Agreement and the Certificate of Trust and continued hereby and identified on the cover page to this Trust Agreement. "Trust Agreement" means this Amended and Restated Trust Agreement, as the same may be modified, amended or supplemented in accordance with the applicable provisions hereof, including (i) all exhibits hereto and (ii) for all purposes of this Amended and Restated Trust Agreement and any such modification, amendment or supplement, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Amended and Restated Trust Agreement and any such modification, amendment or supplement, respectively. "Trust Indenture Act" means the Trust Indenture Act of 1939 as amended and in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. 9 "Trust Property" means (i) the Debentures, (ii) any cash on deposit in, or owing to, the Payment Account and (iii) all proceeds and rights in respect of the foregoing for the time being held by the Property Trustee pursuant to the terms of this Trust Agreement. "[Trust] Securities Certificate" means any one of the Common Trust Securities Certificates or the Preferred Trust Securities Certificates. "Trust Securities Guarantee" means the Trust Securities Guarantee Agreement executed and delivered by the Depositor, as guarantor and The Chase Manhattan Bank, a New York banking corporation, as trustee, contemporaneously with the execution and delivery of this Trust Agreement, for the benefit of the Holders of the [Preferred] Trust Securities, as amended from time to time. "Trust Securities Guarantor" means PPL Corporation, a Pennsylvania corporation, and its successors, as guarantor under the Trust Securities Guarantee. "Trust Security" means any one of the Common Trust Securities or the Preferred Trust Securities. The Common Trust Securities and the Preferred Trust Securities represent the sole beneficial interests in the Trust, and the Trust shall not issue any interests other than the Trust Securities. "Trustees" mean, collectively, the Property Trustee, the Delaware Trustee and the Administrative Trustees. "Underwriting Agreement" means the Underwriting Agreement, dated as of , , among the Trust, the Depositor and the underwriters named - ------- ---- therein. [Additional Definitions if Securities are to be issued in connection with Stock Purchase Units] ARTICLE II CONTINUATION OF THE TRUST SECTION 2.01. NAME. The Trust continued hereby shall be known as "PPL Capital Funding Trust I", as such name may be modified from time to time by the Administrative Trustees following written notice to the Holders of Trust Securities and the other Trustees, in which name the Trustees may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued. SECTION 2.02. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS. The office of the Delaware Trustee in the State of Delaware is 1201 Market Street, 9th Floor, Wilmington, Delaware 19801, or at such other address in Delaware as the Delaware Trustee may designate by written notice to the Securityholders, the Depositor and the Trust Securities Guarantor. The principal place of business of the Trust is c/o PPL Corporation, Two North Ninth Street, Allentown, Pennsylvania 18101-1179. 10 SECTION 2.03. INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL EXPENSES. The Property Trustee acknowledges receipt in trust from the Depositor in connection with the Original Trust Agreement of the sum of $10, which constituted the initial Trust Property. The Depositor shall pay organizational expenses of the Trust as they arise or shall, upon request of any Trustee, promptly reimburse such Trustee for any such expenses paid by such Trustee. The Depositor shall make no claim upon the Trust Property for the payment of such expenses. SECTION 2.04. ISSUANCE OF THE PREFERRED TRUST SECURITIES. On , , an authorized representative of the Depositor and the Trust, both - ------- ---- executed and delivered the Underwriting Agreement. Contemporaneously with the execution and delivery of this Trust Agreement, one of the Administrative Trustees, on behalf of the Trust in accordance with Section 5.02, executed and delivered a Preferred Trust Securities Certificate, registered in the name of the nominee of The Depository Trust Company, having an aggregate Liquidation Amount of $ . ----------- SECTION 2.05. SUBSCRIPTION AND PURCHASE OF DEBENTURES; ISSUANCE OF THE COMMON TRUST SECURITIES. Contemporaneously with the execution and delivery of this Trust Agreement, the Administrative Trustees, on behalf of the Trust, subscribed to and purchased from the Debenture Issuer Debentures, registered in the name of the Property Trustee and having an aggregate principal amount equal to $ and, in satisfaction of the purchase price for such Debentures, ----------- (x) one of the Administrative Trustees, on behalf of the Trust, executed and delivered to the Depositor Common Trust Securities Certificates, registered in the name of the Depositor, representing Common Trust Securities having an ----- aggregate Liquidation Amount of $ , and (y) the Property Trustee, on --------- behalf of the Trust, delivered to the Debenture Issuer the sum of $ ----------- representing the proceeds from the sale of the Preferred Trust Securities pursuant to the Underwriting Agreement. SECTION 2.06. DECLARATION OF TRUST; APPOINTMENT OF ADDITIONAL ADMINISTRATIVE TRUSTEES. The exclusive purposes and functions of the Trust are (i) to issue Trust Securities and invest the proceeds thereof in Debentures, and (ii) to engage in those activities necessary or incidental thereto. The Depositor hereby appoints the Trustees as trustees of the Trust, to have all the rights, powers and duties to the extent set forth herein, and the Trustees hereby accept such appointment. The Property Trustee hereby declares that it will hold the Trust Property in trust upon and subject to the conditions set forth herein for the benefit of the Securityholders. The Trustees shall have all rights, powers and duties set forth herein and in accordance with applicable law with respect to accomplishing the purposes of the Trust. Anything in this Trust Agreement to the contrary notwithstanding, the Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities of the Property Trustee or the Administrative Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of the Trust for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Delaware Business Trust Act. SECTION 2.07. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS. (a) The Trustees shall conduct the affairs of the Trust in accordance with the terms of this Trust Agreement. Subject to the limitations set forth in paragraph (b) of this Section and Article VIII and in accordance with the following provisions (A) and (B), the Trustees shall have the authority to enter into all 11 transactions and agreements determined by the Trustees to be appropriate in exercising the authority, express or implied, otherwise granted to the Trustees under this Trust Agreement, and to perform all acts in furtherance thereof, including without limitation, the following: (A) As among the Trustees, the Administrative Trustees, acting singularly or together, shall have the power, duty and authority to act on behalf of the Trust with respect to the following matters: (i) the issuance and sale of the Trust Securities pursuant to the Underwriting Agreement; (ii) without the consent of any Person, to cause the Trust to enter into and to execute, deliver and perform on behalf of the Trust, such agreements as may be necessary or desirable in connection with the consummation of the Underwriting Agreement; (iii) to qualify the Trust to do business in any jurisdiction as may be necessary or desirable; (iv) the registration of the Preferred Trust Securities under the Securities Act of 1933, as amended, and under state securities or blue sky laws, and the qualification of this Trust Agreement as a trust indenture under the Trust Indenture Act; (v) the listing, if any, of the Preferred Trust Securities upon such national securities exchange or exchanges or automated quotation system or systems as shall be determined by the Depositor and the registration of the Preferred Trust Securities under the Exchange Act, and the preparation and filing of all periodic and other reports and other documents pursuant to the foregoing; (vi) the appointment or removal of a Paying Agent and Transfer Agent and Registrar in accordance with this Trust Agreement; (vii) the establishment of a record date for any of the purposes contemplated by Section 6.07 hereof; (viii) to duly prepare and file all applicable tax returns and tax information reports that are required to be filed with respect to the Trust on behalf of the trust; (ix) to take all action that may be necessary or appropriate for the preservation and the continuation of the Trust's valid existence, rights, franchises and privileges as a statutory business trust under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Holders of the Preferred Trust Securities or to enable the Trust to effect the purposes for which the Trust was created; 12 (x) to execute and deliver all documents or instruments, perform all duties and powers, and do all things for and on behalf of the Trust in all matters necessary or incidental to the foregoing; (xi) to the extent provided in this Trust Agreement, the winding up of the affairs of and liquidation of the Trust and the preparation, execution and filing of the certificate of cancellation with the Secretary of State of Delaware; and (xii) the taking of any action incidental to the foregoing as the Administrative Trustees may from time to time determine is necessary or advisable to protect and conserve the Trust Property for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder). (B) As among the Trustees, the Property Trustee shall have the power, duty and authority to act on behalf of the Trust with respect to the following ministerial matters: (i) the establishment of the Payment Account; (ii) the receipt of the Debentures; (iii) the collection and deposit in the Payment Account of interest, principal and any other payments made in respect of the Debentures; (iv) the distribution of amounts owed to the Securityholders in respect of the Trust Securities in accordance with the terms of this Trust Agreement; (v) the sending of notices of default and other information regarding the Trust Securities and the Debentures to the Securityholders in accordance with the terms of this Trust Agreement; (vi) the distribution of the Trust Property in accordance with the terms of this Trust Agreement; (vii) to the extent provided in this Trust Agreement, the winding up of the affairs of and liquidation of the Trust and the execution of the certificate of cancellation to be prepared and filed by the Administrative Trustees with the Secretary of State of the State of Delaware; and (viii) the taking of any ministerial action incidental to the foregoing as the Property Trustee may from time to time determine is necessary or advisable to protect and conserve the Trust Property for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder). Subject to this Section 2.07(a)(B), the Property Trustee shall have none of the duties, powers or authority of the Administrative Trustees set forth in Sections 2.07(a)(A) and 2.07(c) or the Depositor set forth in Section 2.07(c). The Property Trustee shall have the power and authority to exercise all 13 of the rights, powers and privileges of a holder of Debentures under the Subordinated Indenture, subject to the terms of this Trust Agreement, and, if an Event of Default occurs and is continuing, the Property Trustee may, for the benefit of Holders of the Trust Securities, in its discretion, proceed to protect and enforce its rights as holder of the Debentures subject to the rights of the Holders pursuant to the terms of this Trust Agreement. (b) So long as this Trust Agreement remains in effect, the Trust (or the Trustees acting on behalf of the Trust) shall not undertake any business, activities or transaction except as expressly provided herein or contemplated hereby. In particular, the Trustees, acting on behalf of the Trust, shall not (i) acquire any investments or engage in any activities not authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange, pledge, set-off or otherwise dispose of any of the Trust Property or interests therein, including to Securityholders, except as expressly provided herein, (iii) take any action that would reasonably be expected to cause the Trust to fail or cease to qualify as a "grantor trust" for United States Federal income tax purposes, (iv) incur any indebtedness for borrowed money or (v) take or consent to any action that would result in the placement of a Lien on any of the Trust Property. The Trustees shall defend all claims and demands of all Persons at any time claiming any Lien on any of the Trust Property adverse to the interest of the Trust or the Securityholders in their capacity as Securityholders. (c) In connection with the issue and sale of the Preferred Trust Securities, each of the Depositor and the Administrative Trustees, acting singularly or together, (and, in the case of (i), (iii) and (v) below, , as authorized representative of the Trust), shall have the - -------------------- right and responsibility to assist the Trust with respect to, or effect on behalf of the Trust, the following (and any actions taken by the Depositor in furtherance of the following prior to the date of this Trust Agreement are hereby ratified and confirmed in all respects): (i) to prepare for filing by the Trust with the Commission and to execute and file a registration statement on Form S-3 in relation to the Preferred Trust Securities, including any amendments thereto and to take any action necessary or desirable to sell the Preferred Trust Securities in a transaction or series of transactions pursuant thereto; (ii) to determine the States in which to take appropriate action to qualify or register for sale all or part of the Preferred Trust Securities and to do any and all such acts, other than actions which must be taken by or on behalf of the Trust, and advise the Trustees of actions they must take on behalf of the Trust, and prepare for execution and filing any documents to be executed and filed by the Trust or on behalf of the Trust, as the Depositor deems necessary or advisable in order to comply with the applicable laws of any such States in connection with the sale of Preferred Trust Securities; (iii) to select the investment banker or bankers to act as underwriters with respect to the offer and sale by the Trust of Preferred Trust Securities ("Offer") and negotiate the terms of an Underwriting Agreement and pricing agreement providing for the Offer; 14 (iv) to execute and deliver on behalf of the Trust the Underwriting Agreement and such other agreements as may be necessary or desirable in connection with the consummation thereof; (v) to take any other actions necessary or desirable to carry out any of the foregoing activities. (d) Notwithstanding anything herein to the contrary, the Administrative Trustees are hereby authorized and directed to conduct the affairs of the Trust and to operate the Trust so that the Trust will not be deemed to be an "investment company" required to be registered under the Investment Company Act or classified other than as a "grantor trust" for United States Federal income tax purposes and so that the Debentures will be treated as indebtedness of the Debenture Issuer for United States Federal income tax purposes. In this connection, the Depositor and the Administrative Trustees are authorized to take any action, not inconsistent with applicable law, the Certificate of Trust or this Trust Agreement, that each of the Depositor and the Administrative Trustees determines in its discretion to be necessary or desirable for such purposes, as long as such action does not materially adversely affect the interests of the Holders of the Preferred Trust Securities. SECTION 2.08. ASSETS OF TRUST. The assets of the Trust shall consist of the Trust Property. SECTION 2.09. TITLE TO TRUST PROPERTY. Legal title to all Trust Property shall be vested at all times in the Property Trustee (in its capacity as such) and shall be held and administered by the Property Trustee for the benefit of the Securityholders in accordance with this Trust Agreement. ARTICLE III PAYMENT ACCOUNT SECTION 3.01. PAYMENT ACCOUNT. (a) On or prior to the Closing Date, the Property Trustee shall establish the Payment Account. The Property Trustee and any Paying Agent appointed by the Administrative Trustees shall have exclusive control and sole right of withdrawal with respect to the Payment Account for the purpose of making deposits in and withdrawals from the Payment Account in accordance with this Trust Agreement. All monies and other property deposited or held from time to time in the Payment Account shall be held by the Property Trustee in the Payment Account for the exclusive benefit of the Holders of Trust Securities and for distribution as herein provided, including (and subject to) any priority of payments provided for herein. The Property Trustee shall have no liability in any respect whatsoever in regards to any moneys or other property deposited in the Payment Account at an institution other than the Property Trustee. (b) The Property Trustee shall deposit in the Payment Account, promptly upon receipt, all payments of principal or interest on, and any other payments or proceeds with respect to, the Debentures. Amounts held in the Payment Account shall not be invested by the Property Trustee pending distribution thereof. 15 ARTICLE IV DISTRIBUTIONS; REDEMPTION SECTION 4.01. DISTRIBUTIONS. (a) Distributions on the Trust Securities shall be cumulative, and will accumulate whether or not there are funds of the Trust available for the payment of Distributions. Distributions shall accrue from the Closing Date, and, except in the event (and to the extent) that the Depositor exercises its right to extend the interest payment period for the Debentures pursuant to Section 312 of the Subordinated Indenture, shall be payable quarterly in arrears on , , , and --------- --------- ---------- ---------- of each year, commencing on , . If any date on which Distributions ------- ---- are otherwise payable on the Trust Securities is not a Business Day, then the payment of such Distribution shall be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) in each case, with the same force and effect as if made on such date (each date on which Distributions are payable in accordance with this Section 4.01(a), a "Distribution Date"). (b) Distributions payable on the Trust Securities shall be fixed at a rate of % per annum of the Liquidation Amount of the Trust Securities. The -- amount of Distributions payable for any quarterly period shall be computed on the same basis as interest is calculated on the Debentures. If the interest payment period for the Debentures is extended pursuant to Section 312 of the Subordinated Indenture, then Distributions on the Trust Securities will be deferred for the period equal to the extension of the interest payment period for the Debentures and the rate per annum at which Distributions on the Trust Securities accumulate shall be increased by an amount such that the aggregate amount of Distributions that accumulate on all Trust Securities during any such extended interest payment period is equal to the aggregate amount of interest (including, to the extent permitted by law, interest payable on unpaid interest at the percentage rate per annum set forth above, compounded quarterly) that accrues during any such extended interest payment period on the Debentures. The amount of Distributions payable for any period shall include the Additional Amounts, if any. (c) Distributions on the Trust Securities shall be made and shall be deemed payable on each Distribution Date only to the extent that the Trust has funds available in the Payment Account for the payment of such Distributions. (d) Distributions on the Trust Securities with respect to a Distribution Date shall be payable to the Holders thereof as they appear on the Securities Register for the Trust Securities on the relevant record date, which shall be one Business Day prior to the relevant Distribution Date, if Trust Securities are in book-entry only form, and 15 days prior to the relevant Distribution Date if Trust Securities are not in book-entry only form. SECTION 4.02. REDEMPTION. (a) On each Debenture Redemption Date and at the maturity date ("Maturity Date") for the Debentures (as defined in the Subordinated Indenture), the Property Trustee will be required to redeem a Like Amount of Trust Securities at the Redemption Price plus accumulated and unpaid Distributions to the Redemption Date or Maturity Date, as the case may be. 16 (b) Notice of redemption shall be given by the Property Trustee by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date to each Holder of Trust Securities to be redeemed, at such Holder's address appearing in the Security Register. All notices of redemption or liquidation shall state: (i) the Redemption Date; (ii) the Redemption Price and the amount of accumulated and unpaid Distributions to be paid on the Redemption Date; (iii) the CUSIP number; (iv) if less than all the Outstanding Trust Securities are to be redeemed, the identification and the total Liquidation Amount of the particular Trust Securities to be redeemed; (v) that on the Redemption Date the Redemption Price plus accumulated and unpaid Distributions to the Redemption Date will become due and payable upon each such Trust Security to be redeemed and that Distributions thereon will cease to accrue on and after said date; and (vi) if the Preferred Trust Securities are no longer held in book-entry only form, the place and address where the Holders shall surrender their Preferred Trust Securities Certificates. (c) The Trust Securities redeemed on each Redemption Date shall be redeemed at the Redemption Price plus accumulated and unpaid Distributions to the Redemption Date with the proceeds from the contemporaneous redemption of Debentures. Redemptions of the Trust Securities shall be made and the Redemption Price plus accumulated and unpaid Distributions to the Redemption Date shall be deemed payable on each Redemption Date only to the extent that the Trust has funds immediately available in the Payment Account for such payment. (d) If the Property Trustee gives a notice of redemption in respect of any Preferred Trust Securities, then, by 12:00 noon, New York time, on the Redemption Date, subject to Section 4.02(c), the Property Trustee shall irrevocably deposit with the Paying Agent funds sufficient to pay the applicable Redemption Price plus accumulated and unpaid Distributions to the Redemption Date and will give the Paying Agent irrevocable instructions and authority to pay the Redemption Price plus accumulated and unpaid Distributions to the Redemption Date to the Holders thereof upon surrender of their Preferred Trust Securities Certificates and Common Trust Securities Certificates. Notwithstanding the foregoing, Distributions on the Trust Securities with respect to Distribution Dates occurring on or prior to the Redemption Date for any Trust Securities called for redemption shall be payable to the Holders of such Trust Securities as they appear on the Securities Register for the Trust Securities on the relevant record dates for the related Distribution Dates. If notice of redemption shall have been given and funds deposited as required, then on the Redemption Date, all rights of Securityholders holding Trust Securities so called for redemption will cease, except the right of such Securityholders to receive the Redemption Price plus accumulated and unpaid Distributions to the 17 Redemption Date thereof, but without interest thereon, and such Trust Securities will cease to be Outstanding. In the event that any Redemption Date is not a Business Day, then payment of the Redemption Price payable on such date plus accumulated and unpaid Distributions to such Redemption Date shall be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on such date. In the event that payment of the Redemption Price plus accumulated and unpaid Distributions in respect of any Trust Securities called for redemption is improperly withheld or refused and not paid either by the Trust or by the Trust Securities Guarantor pursuant to the Trust Securities Guarantee, Distributions on such Trust Securities will continue to accrue, at the then applicable rate, from the Redemption Date originally established by the Trust for such Trust Securities to the date such Redemption Price plus accumulated and unpaid Distributions is actually paid, in which case the actual payment date will be deemed the date fixed for redemption for purposes of calculating the Redemption Price plus accumulated and unpaid Distributions to such date. (e) Payment of the Redemption Price on the Trust Securities shall be made to the Holders thereof as they appear on the Securities Register for the Trust Securities on the relevant record date, which shall be one Business Date prior to the relevant Redemption Date; provided, however, that in the event that the Preferred Securities do not remain in book-entry-only form, the relevant record date shall be the date fifteen days prior to the relevant Redemption Date. (f) Subject to Section 4.03(a), if less than all the Outstanding Trust Securities are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust Securities to be redeemed shall be allocated to the Common Trust Securities and to the Preferred Trust Securities in the proportion that the aggregate Liquidation Amount of each is to the aggregate Liquidation Amount of all outstanding Trust Securities. The particular Preferred Trust Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Property Trustee from the Outstanding Preferred Trust Securities not previously called for redemption, by such method as the Property Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to $25 or integral multiples thereof) of the Liquidation Amount of Preferred Trust Securities of a denomination larger than $25. The Property Trustee shall promptly notify the Transfer Agent and Registrar in writing of the Preferred Trust Securities selected for redemption and, in the case of any Preferred Trust Securities selected for partial redemption, the Liquidation Amount thereof to be redeemed. For all purposes of this Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of Preferred Trust Securities shall relate, in the case of any Preferred Trust Securities redeemed or to be redeemed only in part, to the portion of the Liquidation Amount of Preferred Trust Securities which has been or is to be redeemed. SECTION 4.03. SUBORDINATION OF COMMON TRUST SECURITIES. (a) Payment of Distributions (including Additional Amounts, if applicable) on, and the Redemption Price plus accumulated and unpaid Distributions of, the Trust Securities, as applicable, shall be made pro rata based on the Liquidation Amount of the Trust Securities; provided, however, that if on any Distribution Date or Redemption Date an Event of Default resulting from a Debenture Event of Default shall have occurred and be continuing, no payment of any Distribution 18 (including Additional Amounts, if applicable) on, or Redemption Price plus accumulated and unpaid Distributions of, any Common Trust Security, and no other payment on account of the redemption, liquidation or other acquisition of Common Trust Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions (including Additional Amounts, if applicable) on all Outstanding Preferred Trust Securities for all distribution periods terminating on or prior thereto, or in the case of payment of the Redemption Price plus accumulated and unpaid Distributions the full amount of such Redemption Price plus accumulated and unpaid Distributions on all Outstanding Preferred Trust Securities, shall have been made or provided for, and all funds immediately available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions (including Additional Amounts, if applicable) on, or Redemption Price plus accumulated and unpaid Distributions of, Preferred Trust Securities then due and payable. (b) In the case of the occurrence of any Event of Default resulting from a Debenture Event of Default, the Holder of Common Trust Securities will be deemed to have waived any right to act with respect to any such Event of Default under this Trust Agreement until the effect of all such Events of Default with respect to the Preferred Trust Securities have been cured, waived or otherwise eliminated. Until all such Events of Default under this Trust Agreement with respect to the Preferred Trust Securities have been so cured, waived or otherwise eliminated, the Property Trustee shall, to the fullest extent permitted by law, act solely on behalf of the Holders of the Preferred Trust Securities and not the Holder of the Common Trust Securities, and only the Holders of the Preferred Trust Securities will have the right to direct the Property Trustee to act on their behalf. SECTION 4.04. PAYMENT PROCEDURES. Payments in respect of the Preferred Trust Securities shall be made by check mailed to the address of the Person entitled thereto as such address shall appear on the Securities Register or, if the Preferred Trust Securities are held by a Securities Depository, such Distributions shall be made to the Securities Depository in immediately available funds, which shall credit the relevant Persons' accounts at such Securities Depository on the applicable Distribution Dates. Payments in respect of the Common Trust Securities shall be made in such manner as shall be mutually agreed between the Property Trustee and the Holder of the Common Trust Securities. SECTION 4.05. TAX RETURNS AND REPORTS. The Administrative Trustees shall prepare (or cause to be prepared), at the Depositor's expense and direction, and file all United States Federal, state and local tax and information returns and reports required to be filed by or in respect of the Trust. In this regard, the Administrative Trustees shall (a) prepare and file (or cause to be prepared or filed) the Internal Revenue Service Form 1041 (or any successor form) required to be filed in respect of the Trust in each taxable year of the Trust and (b) prepare and furnish (or cause to be prepared and furnished), to the extent required by law, to each Securityholder the related Internal Revenue Service Form 1099 (or any successor form) and the information required to be provided on such form. The Administrative Trustees shall provide the Depositor and the Property Trustee with a copy of all such returns, reports and schedules promptly after such filing or furnishing. The Trustees shall comply with United States Federal withholding and backup withholding tax laws and information reporting requirements with respect to any payments to Securityholders under the Trust Securities. 19 SECTION 4.06. PAYMENTS UNDER INDENTURE. Any amount payable hereunder to any Holder of Preferred Trust Securities shall be reduced by the amount of any corresponding payment such Holder has directly received pursuant to Section 808 of the Subordinated Indenture. [SECTION 4.07. REMARKETING.] [Add remarketing and coupon reset provisions if Securities are issued in connection with Stock Purchase Units] ARTICLE V TRUST SECURITIES CERTIFICATES SECTION 5.01. INITIAL OWNERSHIP. Upon the creation of the Trust by the contribution by the Depositor pursuant to Section 2.03 and until the issuance of the Trust Securities, and at any time during which no Trust Securities are outstanding, the Depositor shall be the sole beneficial owner of the Trust. SECTION 5.02. THE TRUST SECURITIES CERTIFICATES. The Trust Securities Certificates shall be issued in denominations of $25 Liquidation Amount and integral multiples thereof. The Trust Securities Certificates shall be executed on behalf of the Trust by manual or facsimile signature of at least one Administrative Trustee and, if executed on behalf of the Trust by facsimile signature, the Preferred Trust Securities shall be countersigned by the Transfer Agent and Registrar or its agent. Trust Securities Certificates bearing the manual or facsimile signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on behalf of the Trust and, in the case of Preferred Trust Securities, if executed by facsimile signature, countersigned by the Transfer Agent and Registrar or its agent, shall be validly issued and entitled to the benefits of this Trust Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the delivery of such Trust Securities Certificates or did not hold such offices at the date of delivery of such Trust Securities Certificates. A transferee of a Trust Securities Certificate shall become a Securityholder, and shall be entitled to the rights and subject to the obligations of a Securityholder hereunder, upon due registration of such Trust Securities Certificate in such transferee's name pursuant to Section 5.04 or 5.12. Every Person, by virtue of having become a Securityholder, shall be deemed to have expressly assented and agreed to the terms of, and shall be bound by, this Trust Agreement, the Trust Securities Guarantee and the Subordinated Indenture. SECTION 5.03. EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES. On the Closing Date, the Administrative Trustees, or any one of them, shall cause Trust Securities Certificates, in an aggregate Liquidation Amount as provided in Sections 2.04 and 2.05, to be executed on behalf of the Trust, and in the case of Preferred Trust Securities executed by facsimile signature, countersigned by the Transfer Agent and Registrar, or its agent, and delivered to or upon the written order of the Depositor signed by its chairman of the 20 board, any of its vice presidents or its treasurer, without further corporate action by the Depositor, in authorized denominations. SECTION 5.04. REGISTRATION OF TRANSFER AND EXCHANGE OF TRUST SECURITIES CERTIFICATES. The Transfer Agent and Registrar shall keep or cause to be kept, at the office or agency maintained pursuant to Section 5.08, a Securities Register in which, subject to such reasonable regulations as it may prescribe, the Transfer Agent and Registrar shall provide for the registration of Preferred Trust Securities Certificates and the Common Trust Securities Certificates (subject to Section 5.10 in the case of the Common Trust Securities Certificates) and registration of transfers and exchanges of Preferred Trust Securities Certificates as herein provided. The Property Trustee shall be the initial Transfer Agent and Registrar. Upon surrender for registration of transfer of any Preferred Trust Securities Certificate at the office or agency maintained pursuant to Section 5.08, the Administrative Trustees, or any one of them, shall execute on behalf of the Trust by manual or facsimile signature and, if executed on behalf of the Trust by facsimile signature, cause the Transfer Agent and Registrar or its agent to countersign and deliver, in the name of the designated transferee or transferees, one or more new Preferred Trust Securities Certificates in authorized denominations of a like aggregate Liquidation Amount. At the option of a Holder, Preferred Trust Securities Certificates may be exchanged for other Preferred Trust Securities Certificates in authorized denominations of the same class and of a like aggregate Liquidation Amount upon surrender of the Preferred Trust Securities Certificates to be exchanged at the office or agency maintained pursuant to Section 5.08. Every Preferred Trust Securities Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Administrative Trustees and the Transfer Agent and Registrar duly executed by the Holder or such Holder's attorney duly authorized in writing. Each Preferred Trust Securities Certificate surrendered for registration of transfer or exchange shall be canceled and subsequently disposed of by the Transfer Agent and Registrar in accordance with its customary procedures. The Trust shall not be required to (i) issue, register the transfer of, or exchange any Preferred Trust Securities during a period beginning at the opening of business 15 calendar days before the day of mailing of a notice of redemption of any Preferred Trust Securities called for redemption and ending at the close of business on the day of such mailing or (ii) register the transfer of or exchange any Preferred Trust Securities so selected for redemption, in whole or in part, except the unredeemed portion of any such Preferred Trust Securities being redeemed in part. No service charge shall be made for any registration of transfer or exchange of Preferred Trust Securities Certificates, but the Transfer Agent and Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Preferred Trust Securities Certificates. SECTION 5.05. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES CERTIFICATES. If (a) any mutilated Trust Securities Certificate shall be surrendered to the Transfer Agent and Registrar, or if the Transfer Agent and Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Trust Securities Certificate and (b) there shall be delivered to 21 the Transfer Agent and Registrar and the Administrative Trustees such security or indemnity as may be required by them to save each of them and the Depositor harmless, then in the absence of notice that such Trust Securities Certificate shall have been acquired by a bona fide purchaser, the Administrative Trustees, or any one of them, on behalf of the Trust shall execute by manual or facsimile signature and, if execution on behalf of the Trust is by facsimile signature, in the case of Preferred Trust Securities shall also cause the Transfer Agent and Registrar or its agent to countersign; and the Administrative Trustees, or any one of them, and, if executed on behalf of the Trust by facsimile signature, in the case of Preferred Trust Securities the Transfer Agent and Registrar or its agent, shall make available for delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities Certificate of like class, tenor and denomination. In connection with the issuance of any new Trust Securities Certificate under this Section, the Administrative Trustees or the Transfer Agent and Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Trust Securities Certificate issued pursuant to this Section shall constitute conclusive evidence of an undivided beneficial interest in the Trust Property, as if originally issued, whether or not the lost, stolen or destroyed Trust Securities Certificate shall be found at any time. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement of mutilated, destroyed, lost or stolen Trust Securities Certificates. SECTION 5.06. PERSONS DEEMED SECURITYHOLDERS. Prior to due presentation of a Trust Securities Certificate for registration of transfer, the Trustees and the Transfer Agent and Registrar, and any agent of the Trustees and the Transfer Agent and Registrar, shall be entitled to treat the Person in whose name any Trust Securities Certificate shall be registered in the Securities Register as the owner of such Trust Securities Certificate for the purpose of receiving Distributions and for all other purposes whatsoever, and neither the Trustees nor the Transfer Agent and Registrar shall be bound by any notice to the contrary. SECTION 5.07. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES. The Administrative Trustees shall furnish or cause to be furnished (x) to the Depositor or the Property Trustee, within 15 days after receipt by any Administrative Trustee of a request therefor from the Depositor or the Property Trustee, as the case may be, in writing and (y) to the Property Trustee, [quarterly not more than 5 days after each , , -------- -------- -------- and of each year beginning ] (unless the Property Trustee is -------- -------- the Transfer Agent and Registrar), a list, in such form as the Depositor or the Property Trustee may reasonably require, of the names and addresses of the Securityholders as of a recent date. Each Holder, by receiving and holding a Trust Securities Certificate, shall be deemed to have agreed not to hold either the Depositor or any Trustees accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived. SECTION 5.08. MAINTENANCE OF OFFICE OR AGENCY. The Depositor shall or shall cause the Transfer Agent and Registrar to maintain in The City of New York, an office or offices or agency or agencies where Preferred Trust Securities Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Depositor, the Trust or the Transfer Agent and Registrar in respect of the Trust Securities and the 22 Trust Agreement may be served. The Depositor initially designates The Chase Manhattan Bank, Capital Markets Fiduciary Services, 450 West 33rd Street, 15th Floor, New York, New York 10001 as its principal office for such purposes. The Depositor shall or shall cause the Transfer Agent and Registrar to give prompt written notice to the Depositor, The Trust Securities Guarantor, the Property Trustee, the Administrative Trustees and to the Securityholders of any change in the location of the Securities Register or any such office or agency. If at any time the Depositor shall fail to maintain such office or agency or shall fail to furnish the Property Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Property Trustee, and the Depositor hereby appoints the Property Trustee its agent and the agent of the Trust to receive all such presentations, surrenders, notices and demands. SECTION 5.09. APPOINTMENT OF PAYING AGENT. The Paying Agent shall make Distributions to Securityholders from the Payment Account and shall report the amounts of such Distributions to the Administrative Trustees and the Property Trustee. Any Paying Agent shall have the revocable power to withdraw funds from the Payment Account for the purpose of making the Distributions referred to above. The Property Trustee shall be entitled to rely upon a certificate of the Paying Agent stating in effect the amount of such funds so to be withdrawn and that same are to be applied by the Paying Agent in accordance with this Section 5.09. The Administrative Trustees or any one of them may revoke such power and remove the Paying Agent if the Administrative Trustee or any one of them determines in its sole discretion that the Paying Agent shall have failed to perform its obligations under this Trust Agreement in any material respect. The Paying Agent shall initially be the Property Trustee, and it may choose any co-paying agent that is acceptable to the Administrative Trustees, the Debenture Issuer, and the Depositor. The Paying Agent shall be permitted to resign upon 30 days' written notice to the Administrative Trustees, the Property Trustee, the Debenture Issuer and the Depositor. In the event of the removal or resignation of the Property Trustee as Paying Agent, the Administrative Trustees shall appoint a successor that is reasonably acceptable to the Property Trustee, the Debenture Issuer and the Depositor to act as Paying Agent (which shall be a bank, trust company or an Affiliate of the Depositor). The Administrative Trustees shall cause such successor Paying Agent or any additional Paying Agent appointed by the Administrative Trustees to execute and deliver to the Trustees an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Trustees that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Securityholders in trust for the benefit of the Securityholders entitled thereto until such sums shall be paid to such Securityholders. The Paying Agent shall return all unclaimed funds to the Property Trustee and upon resignation or removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06 shall apply to the Paying Agent appointed hereunder, and the Paying Agent shall be bound by the requirements with respect to paying agents of securities issued pursuant to the Trust Indenture Act. Any reference in this Trust Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise. 23 SECTION 5.10. OWNERSHIP OF COMMON TRUST SECURITIES BY DEPOSITOR. On the Closing Date, the Depositor shall acquire, and thereafter retain, beneficial and record ownership of the Common Trust Securities. Except in connection with a transaction involving the Depositor that would be permitted under Article Eleven of the Subordinated Indenture, any attempted transfer of the Common Trust Securities shall, to the fullest extent permitted by law, be void. The Administrative Trustees shall cause each Common Trust Securities Certificate issued to the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE TRUST AGREEMENT." Common Trust Securities Certificates representing the Common Trust Securities shall be issued to the Depositor in the form of a typewritten or definitive Common Trust Securities Certificate. SECTION 5.11. DEFINITIVE PREFERRED TRUST SECURITIES CERTIFICATES. Definitive Preferred Trust Securities Certificates shall be typewritten, printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Administrative Trustees, as evidenced by the execution thereof by the Administrative Trustees, or any one of them. The Administrative Trustees, or any one of them, shall execute on behalf of the Trust by manual or facsimile signature, and, if executed by facsimile on behalf of the Trust, countersigned by the Transfer Agent and Registrar or its agent, the Definitive Preferred Trust Securities Certificates initially in accordance with the instructions of the Depositor complying with Section 5.03. Neither the Transfer Agent and Registrar nor any of the Administrative Trustees shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. SECTION 5.12. BOOK-ENTRY SYSTEM. Some or all of the Preferred Trust Securities may be registered in the name of a securities depository ("Securities Depository") or a nominee therefor, and held in the custody of the Securities Depository or a custodian thereof. In such event, a single certificate will be issued and delivered to the Securities Depository for such Preferred Trust Securities, in which case the Owners of such Preferred Trust Securities will not receive physical delivery of certificates for Preferred Trust Securities. Unless Definitive Preferred Trust Securities Certificate are delivered to the Owners of Preferred Trust Securities as provided herein, all transfers of beneficial ownership interests in such Preferred Trust Securities will be made by book-entry only, and no investor or other party purchasing, selling or otherwise transferring beneficial ownership of the Preferred Trust Securities will receive, hold or deliver any certificate for Preferred Trust Securities. The Depositor, the Trustees and the Paying Agent will recognize the Securities Depository or its nominee as the Holder of Preferred Trust Securities for all purposes, including payment, notices and voting and shall have no payment, notice or communication obligations to the Owners. The Administrative Trustees, at the direction and expense of the Depositor, may from time to time appoint a Securities Depository or a successor thereto and enter into a letter of representations or other agreement with such Securities Depository to establish procedures with respect to the Preferred Trust Securities. Any Securities Depository shall be a Clearing Agency. The Depositor and the Trustees covenant and agree to meet the requirements of a Securities Depository for the Preferred Trust Securities with respect to required notices and other provisions of the letter of representations or agreement executed with respect to such Preferred Trust Securities. 24 Whenever the beneficial ownership of any Preferred Trust Securities is determined through the books of a Securities Depository, the requirements in this Trust Agreement of holding, delivering or transferring such Preferred Trust Securities shall be deemed modified with respect to such Preferred Trust Securities to meet the requirements of the Securities Depository with respect to actions of the Trustees, the Depositor and the Paying Agent. Any provisions hereof permitting or requiring delivery of such Preferred Trust Securities shall, while such Preferred Trust Securities are in a book-entry system, be satisfied by the notation on the books of the Securities Depository in accordance with applicable state law. Definitive Preferred Trust Securities Certificates will be issued and delivered to the Owners of such Preferred Trust Securities in accordance with registration instructions of the Securities Depository if (a) the Securities Depository is no longer willing or able to properly discharge its responsibilities with respect to the Preferred Trust Securities, and the Depositor does not appoint a successor Securities Depository within 90 days after such discontinuance, or (b) the Depositor at its option advises the Trustees in writing that it elects to terminate the book-entry system through the Securities Depository. SECTION 5.13. RIGHTS OF SECURITYHOLDERS. The legal title to the Trust Property is vested exclusively in the Property Trustee (in its capacity as such) in accordance with Section 2.09, and the Securityholders shall not have any right or title therein other than an undivided beneficial interest in the assets of the Trust conferred by their Trust Securities and they shall have no right to call for any partition or division of property, profits or rights of the Trust except as described below. The Trust Securities shall be personal property giving only the rights specifically set forth therein and in this Trust Agreement. The Preferred Trust Securities shall have no preemptive or similar rights and when issued and delivered to Securityholders against payment of the purchase price therefor will be fully paid and nonassessable undivided beneficial interests in the assets of the Trust. SECTION 5.14. CANCELLATION BY TRANSFER AGENT AND REGISTRAR. All Trust Securities Certificates surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Transfer Agent and Registrar, be delivered to the Transfer Agent and Registrar and, if not theretofore canceled, shall be promptly canceled by the Transfer Agent and Registrar. No Trust Securities Certificates shall be issued in lieu of or in exchange for any Trust Securities Certificates canceled as provided in this Section, except as expressly permitted by this Trust Agreement. All canceled Trust Securities Certificates held by the Transfer Agent and Registrar shall be disposed of in accordance with its customary procedures. ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING SECTION 6.01. LIMITATIONS ON VOTING RIGHTS. (a) Except as provided in this Section 6.01, Section 8.10 and Section 10.03 and as otherwise required by law, no Holder of Preferred Trust Securities shall have any right to vote or in any manner otherwise control the administration, operation and management of the Trust or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Trust Securities Certificates, be 25 construed so as to constitute the Securityholders from time to time as partners or members of an association. If the Property Trustee fails to enforce its rights under the Debentures or this Trust Agreement, a Holder of Preferred Trust Securities may, to the fullest extent permitted by law, institute a legal proceeding directly against the Depositor or the Debenture Issuer to enforce the Property Trustee's rights under the Debentures or this Trust Agreement without first instituting any legal proceeding against the Property Trustee or any other Person. Notwithstanding the foregoing, a Holder of Preferred Trust Securities may directly institute a proceeding for enforcement of payment to such Holder of principal of or interest on the Debentures having a principal amount equal to the aggregate liquidation preference amount of the Preferred Trust Securities of such Holder on or after the due dates specified in the Debentures. (b) So long as any Debentures are held by the Property Trustee, the Property Trustee shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Debenture Trustee, or executing any trust or power conferred on the Debenture Trustee with respect to such Debentures, (ii) waive any past default which is waivable under Section 813 of the Subordinated Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Debentures shall be due and payable or (iv) consent to any amendment, modification or termination of the Subordinated Indenture or the Debentures, where such consent shall be required, without, in each case, obtaining the prior approval of the Holders of at least a majority of the aggregate Liquidation Amount of the Outstanding Preferred Trust Securities; provided, however, that where a consent under the Subordinated Indenture would require the consent of each Holder of Debentures affected thereby, no such consent shall be given by the Property Trustee without the prior written consent of each Holder of Preferred Trust Securities. The Property Trustee shall not revoke any action previously authorized or approved by a vote of the Preferred Trust Securities, except pursuant to a subsequent vote of the Preferred Trust Securities. The Property Trustee shall notify all Holders of the Preferred Trust Securities of any notice of default received from the Debenture Trustee with respect to the Debentures. In addition to obtaining the foregoing approvals of the Holders of the Preferred Trust Securities, prior to taking any of the foregoing actions, the Property Trustee shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced in such matters to the effect that such action will not cause the Trust to be classified other than as a "grantor trust" for United States Federal income tax purposes. (c) If any proposed amendment to the Trust Agreement provides for, or the Trustees otherwise propose to effect, (i) any action that would materially adversely affect the powers, preferences or special rights of the Preferred Trust Securities, whether by way of amendment to the Trust Agreement or otherwise, or (ii) the dissolution, winding-up or termination of the Trust, other than pursuant to the terms of this Trust Agreement, then the Holders of Outstanding Preferred Trust Securities as a class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of the Holders of at least majority in aggregate Liquidation Amount of the Outstanding Preferred Trust Securities. (d) The Holders of a majority in Outstanding Liquidation Amount of the Preferred Trust Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee in respect of this Trust Agreement or the Debentures or exercising any 26 trust or power conferred upon the Property Trustee under this Trust Agreement; provided, however, that, subject to Section 8.01, the Property Trustee shall have the right to decline to follow any such direction if the Property Trustee being advised by counsel determines that the action so directed may not lawfully be taken, or if the Property Trustee in good faith shall, by a Responsible Officer or Officers of the Property Trustee, determine that the proceedings so directed would be illegal or involve it in personal liability or be unduly prejudicial to the rights of Holders not party to such direction, and provided further that nothing in this Trust Agreement shall impair the right of the Property Trustee to take any action deemed proper by the Property Trustee and which is not inconsistent with such direction. SECTION 6.02. NOTICE OF MEETINGS. Notice of all meetings of the Holders of Preferred Trust Securities, stating the time, place and purpose of the meeting, shall be given by the Administrative Trustees pursuant to Section 10.08 to each Holder of a Preferred Trust Security, at such Holder's registered address, at least 15 days and not more than 90 days before the meeting. At any such meeting, any business properly before the meeting may be so considered whether or not stated in the notice of the meeting. Any adjourned meeting may be held as adjourned without further notice. SECTION 6.03. MEETINGS OF HOLDERS OF PREFERRED TRUST SECURITIES. No annual meeting of Securityholders is required to be held. The Administrative Trustees, however, shall call a meeting of Securityholders to vote on any matter upon the written request of the Holders of 25% of the then Outstanding Preferred Trust Securities (based upon their aggregate Liquidation Amount) and the Administrative Trustees or the Property Trustee may, at any time in their discretion, call a meeting of Holders of Preferred Trust Securities to vote on any matters as to which the Holders of Preferred Trust Securities are entitled to vote. Holders of at least a majority of the then Outstanding Preferred Trust Securities (based upon their aggregate Liquidation Amount), present in person or by proxy, shall constitute a quorum at any meeting of Securityholders. If a quorum is present at a meeting, an affirmative vote by the Holders of Preferred Trust Securities present, in person or by proxy, holding at least a majority of the then Outstanding Preferred Trust Securities (based upon their aggregate Liquidation Amount) present, either in person or by proxy, at such meeting shall constitute the action of the Securityholders, unless this Trust Agreement requires a greater number of affirmative votes. SECTION 6.04. VOTING RIGHTS. Securityholders shall be entitled to one vote for each $25 of Liquidation Amount represented by their Outstanding Trust Securities in respect of any matter as to which such Securityholders are entitled to vote. SECTION 6.05. PROXIES, ETC. At any meeting of Securityholders, any Securityholder entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Administrative Trustees, or with such other officer or agent of the Trust as the Administrative Trustees may direct, for verification prior to the time at which such vote shall be taken. Only Securityholders of record shall be entitled to vote. When Trust Securities are held jointly by several Persons, any 27 one of them may vote at any meeting in person or by proxy in respect of such Trust Securities, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Securityholder shall be deemed valid unless challenged at or prior to its exercise, or, if earlier, until eleven months after it is sent and the burden of proving invalidity shall rest on the challenger. No proxy shall be valid more than three years after its date of execution. SECTION 6.06. SECURITYHOLDER ACTION BY WRITTEN CONSENT. Any action which may be taken by Securityholders at a meeting may be taken without a meeting and without prior notice if Securityholders holding a majority of all Outstanding Trust Securities entitled to vote in respect of such action (or such larger proportion thereof as shall be required by any express provision of this Trust Agreement) shall consent to the action in writing (based upon their aggregate Liquidation Amount). SECTION 6.07. RECORD DATE FOR VOTING AND OTHER PURPOSES. For the purposes of determining the Securityholders who are entitled to notice of and to vote at any meeting or to vote by written consent without prior notice, or to participate in any Distribution on the Trust Securities in respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of any other action, the Administrative Trustees may from time to time fix a date, not more than 90 days prior to the date of any meeting of Securityholders or the payment of Distribution or other action including action to be taken by written consent, as the case may be, as a record date for the determination of the identity of the Securityholders of record for such purposes. SECTION 6.08. ACTS OF SECURITYHOLDERS. Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Trust Agreement to be given, made or taken by Securityholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Securityholders in person or by an agent duly appointed in writing; and, except as otherwise expressly provided herein, such action shall become effective when such instrument or instruments are delivered to the Administrative Trustees. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Securityholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Trust Agreement and (subject to Section 8.01) conclusive in favor of the Trustees, if made in the manner provided in this Section. The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgements of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which any Trustee deems sufficient. 28 The ownership of Preferred Trust Securities shall be proved by the Securities Register. Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Securityholder of any Trust Security shall bind every future Securityholder of the same Trust Security and the Securityholder of every Trust Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustees or the Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security. Without limiting the foregoing, a Securityholder entitled hereunder to take any action hereunder with regard to any particular Trust Security may do so with regard to all or any part of the Liquidation Amount of such Trust Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such Liquidation Amount. If any dispute shall arise between or among the Securityholders and the Administrative Trustees with respect to the authenticity, validity or binding nature of any request, demand, authorization, direction, consent, waiver or other Act of such Securityholder or Trustee under this Article VI, then the determination of such matter by the Property Trustee shall be conclusive with respect to such matter. SECTION 6.09. INSPECTION OF RECORDS. Subject to Section 5.07 concerning access to the list of Securityholders, upon reasonable notice to the Administrative Trustees and the Property Trustee, the other records of the Trust shall be open to inspection by Securityholders during normal business hours for any purpose reasonably related to such Securityholder's interest as a Securityholder. ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE SECTION 7.01. PROPERTY TRUSTEE. The Property Trustee and any successor Property Trustee hereby represents and warrants for the benefit of the Depositor and the Securityholders that: (a) the Property Trustee is a banking corporation, trust company or national association duly incorporated, validly existing and in good standing under the laws of the State of New York; (b) the Property Trustee has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement; (c) this Trust Agreement has been duly authorized, executed and delivered by the Property Trustee and constitutes the valid and legally binding agreement of the Property Trustee enforceable against it in accordance with its 29 terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (d) the execution, delivery and performance by the Property Trustee of this Trust Agreement will not violate, conflict with or constitute a breach of the Property Trustee's charter or by-laws; and (e) the execution, delivery and performance by the Property Trustee of this Trust Agreement does not require the consent or approval of, the giving of notice to, or the registration with any Federal or state banking authority having jurisdiction over its trust powers. SECTION 7.02. DELAWARE TRUSTEE. The Delaware Trustee and any successor Delaware Trustee represents and warrants for the benefit of the Depositor and the Securityholders that: (a) the Delaware Trustee is a banking corporation, trust company or national association duly incorporated, validly existing and in good standing under the laws of the State of Delaware; (b) the Delaware Trustee has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement; (c) this Trust Agreement has been duly authorized, executed and delivered by the Delaware Trustee and constitutes the valid and legally binding agreement of the Delaware Trustee enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (d) the Delaware Trustee is a natural person who is a resident of the State of Delaware or, if not a natural person, an entity which has its principal place of business in the State of Delaware and, in either case, a Person that satisfies for the Trust the requirements of Section 3807 of the Delaware Business Trust Act; (e) the execution, delivery and performance by the Delaware Trustee of this Trust Agreement will not (i) violate the Delaware Trustee's charter or by-laws or (ii) violate any law, governmental rule or regulation of the State of Delaware governing the banking or trust powers of the Delaware Trustee or any order, judgment or decree applicable to the Delaware Trustee; and (f) the execution, delivery and performance by the Delaware Trustee of this Trust Agreement does not require the consent or approval of, the giving of notice to, or the registration with any Federal or state banking authority having jurisdiction over its banking or trust powers. 30 ARTICLE VIII THE TRUSTEES SECTION 8.01. CERTAIN DUTIES AND RESPONSIBILITIES. (a) The rights, immunities, duties and responsibilities of the Trustees shall be restricted to those set forth in the express provisions of this Trust Agreement and, in the case of the Property Trustee, as provided in the Trust Indenture Act, and no implied covenants or obligations shall be read into this Trust Agreement against any of the Trustees. For purposes of Sections 315(a) and 315(c) of the Trust Indenture act, the term "default" is hereby defined as an Event of Default which has occurred and is continuing. Notwithstanding the foregoing, no provision of this Trust Agreement shall require any of the Trustees to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Trust Agreement relating to the conduct or affecting the liability of or affording protection to the Trustees shall be subject to the provisions of this Section. To the extent that, at law or in equity, an Administrative Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to the Securityholders, such Administrative Trustee shall not be liable to the Trust or to any Securityholder for such Trustee's good faith reliance on the provisions of this Trust Agreement. The provisions of this Trust Agreement, to the extent that they restrict the duties and liabilities of the Administrative Trustees otherwise existing at law or in equity, are agreed by the Depositor and the Securityholders to replace such other duties and liabilities of the Administrative Trustees. (b) All payments made by the Property Trustee or a Paying Agent in respect of the Trust Securities shall be made only from the income and proceeds from the Trust Property and only to the extent that there shall be sufficient income or proceeds from the Trust Property to enable the Property Trustee or Paying Agent to make payments in accordance with the terms hereof. Each Securityholder, by its acceptance of a Trust Security, agrees that it will look solely to the income and proceeds from the Trust Property to the extent available for distribution to it as herein provided and that the Trustees are not personally liable to it for any amount distributable in respect of any Trust Security or for any other liability in respect of any Trust Security. This Section 8.01(b) does not limit the liability of the Trustees expressly set forth elsewhere in this Trust Agreement or, in the case of the Property Trustee, in the Trust Indenture Act. (c) All duties and responsibilities of the Property Trustee contained in this Trust Agreement are subject to the following: (i) the Property Trustee's sole duty with respect to the custody, safe keeping and physical preservation of the Trust Property shall be to deal with such property in a similar manner as the Property Trustee deals with similar property for its own account, subject to the protections, exculpations and limitations on liability afforded to the Property Trustee under this Trust Agreement, the Trust Indenture Act, the Delaware Business Trust Act and, to the extent applicable, Rule 3a-7 under the Investment Company Act or any successor rule thereunder; 31 (ii) the Property Trustee shall have no duty or liability for or with respect to the value, genuineness, existence or sufficiency of the Trust Property or the payment of any taxes or assessments levied thereon or in connection therewith; (iii) the Property Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree with the Depositor. Money held by the Property Trustee need not be segregated from other funds held by it except in relation to the Payment Account established by the Property Trustee pursuant to this Trust Agreement and except to the extent otherwise required by law; and (iv) the Property Trustee shall not be responsible for monitoring the compliance by the Administrative Trustees or the Depositor with their respective duties under this Trust Agreement, nor shall the Property Trustee be liable for the default or misconduct of the Administrative Trustees or the Depositor. (d) The Administrative Trustees shall not be responsible for monitoring the compliance by the other Trustees or the Depositor with their respective duties under this Trust Agreement, nor shall any Administrative Trustee be liable for the default or misconduct of any other Administrative Trustee, the other Trustees or the Depositor. SECTION 8.02. NOTICE OF DEFAULTS. (a) Within ninety (90) days after the occurrence of any default known to the Property Trustee, the Property Trustee shall transmit, in the manner and to the extent provided in Section 10.08, notice of such default to the Securityholders, the Depositor, the Trust Securities Guarantor and the Administrative Trustees, unless such default shall have been cured or waived before the giving of such notice, provided that, except in the case of a payment default, the Property Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors or Responsible Officers of the Property Trustee in good faith determines that the withholding of such notice is in the interests of the Holders. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default. (b) Within five Business Days after receipt of notice of the Debenture Issuer's exercise of its right to defer the payment of interest on the Debentures pursuant to the Subordinated Indenture, the Property Trustee shall transmit, in the manner and to the extent provided in Section 10.08, notice of such exercise to the Securityholders and the Administrative Trustees, unless such exercise shall have been revoked. SECTION 8.03. CERTAIN RIGHTS OF PROPERTY TRUSTEE. Subject to the provisions of Section 8.01 and except as provided by law: (i) the Property Trustee may rely and shall be protected in acting or refraining from acting in good faith upon any resolution, Opinion of Counsel, certificate, written representation of a Holder or transferee, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, direction, 32 consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties; (ii) if (A) in performing its duties under this Trust Agreement the Property Trustee is required to decide between alternative courses of action or (B) in construing any of the provisions in this Trust Agreement the Property Trustee finds the same ambiguous or inconsistent with any other provisions contained herein or (C) the Property Trustee is unsure of the application of any provision of this Trust Agreement, then, except as to any matter as to which the Preferred Trust Securityholders are entitled to vote under the terms of this Trust Agreement, the Property Trustee shall deliver a notice to the Depositor requesting written instructions of the Depositor as to the course of action to be taken. The Property Trustee shall take such action, or refrain from taking such action, as the Property Trustee shall be instructed in writing to take, or to refrain from taking, by the Depositor; provided, however, that if the Property Trustee does not receive such instructions of the Depositor within ten Business Days after it has delivered such notice, or such reasonably shorter period of time set forth in such notice (which to the extent practicable shall not be less than two Business Days), it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Trust Agreement as it shall deem advisable and in the best interests of the Securityholders, in which event the Property Trustee shall have no liability except for its own bad faith, negligence or willful misconduct; (iii) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Property Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, request and rely upon an Officer's Certificate which, upon receipt of such request, shall be promptly delivered by the Depositor or the Administrative Trustees; (iv) the Property Trustee may consult with counsel of its selection (which counsel may be counsel to the Property Trustee, Depositor or the Trust Securities Guarantor or any of their Affiliates, and may include any of their employees) and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon and in accordance with such advice; (v) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any Securityholder pursuant to this Trust Agreement, unless such Securityholder shall have offered to the Property Trustee reasonable security or indemnity against the costs, expenses (including reasonable attorneys' fees and expenses) and liabilities which might be incurred by it in complying with such request or direction; provided that, nothing contained in this Section 33 8.03(v) shall be taken to relieve the Property Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Trust Agreement; (vi) the Property Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, approval, bond, debenture, note or other evidence of indebtedness or other paper or document, but the Property Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Property Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Depositor personally or by agent or attorney; (vii) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys, and the Property Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (viii) the Property Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Trust Agreement; (ix) the Property Trustee shall not be charged with knowledge of any default or Event of Default with respect to the Trust Securities unless either (A) a Responsible Officer of the Property Trustee shall have actual knowledge of the default or Event of Default or (B) written notice of such default or Event of Default shall have been given to the Property Trustee by the Depositor, the Administrative Trustees or by any Holder of the Trust Securities; (x) no provision of this Trust Agreement shall be deemed to impose any duty or obligation on the Property Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Property Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts or to exercise any such right, power, duty or obligation; and no permissive or discretionary power or authority available to the Property Trustee shall be construed to be a duty; (xi) no provision of this Trust Agreement shall require the Property Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Property Trustee shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the 34 terms of this Trust Agreement or adequate indemnity against such risk or liability is not reasonably assured to it; (xii) the Property Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any tax or securities form) (or any rerecording, refiling or reregistration thereof); (xiii) the Property Trustee shall have the right at any time to seek instructions concerning the administration of this Trust Agreement from any court of competent jurisdiction; (xiv) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Property Trustee (A) may request instructions from the Holders of the Trust Securities, which instructions may only be given by the Holders of the same Liquidation Amount of the Trust Securities as would be entitled to direct the Property Trustee under the terms of this Trust Agreement in respect of such remedies, rights or actions, (B) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (C) shall be protected in acting in accordance with such instructions; and (xv) unless otherwise expressly provided herein, any direction or act of the Depositor contemplated by this Trust Agreement shall be sufficiently evidenced by an Officers' Certificate. SECTION 8.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The recitals contained herein and in the Trust Securities Certificates shall be taken as the statements of the Trust, and the Trustees do not assume any responsibility for their correctness. The Trustees make no representations as to the title to, or value or condition of, the property of the Trust or any part thereof, nor as to the validity or sufficiency of this Trust Agreement, the Debentures or the Trust Securities. The Trustees shall not be accountable for the use or application by the Trust of the proceeds of the Trust Securities. SECTION 8.05. MAY HOLD SECURITIES. Any Trustee or any agent of any Trustee or the Trust, in its individual or any other capacity, may become the owner or pledgee of Trust Securities and, subject to Sections 8.08 and 8.13, and except as provided in the definition of the term "Outstanding" in Article I, may otherwise deal with the Trust with the same rights it would have if it were not a Trustee or such agent. SECTION 8.06. COMPENSATION; FEES; INDEMNITY. The Depositor agrees: (i) to pay to the Trustees from time to time such reasonable compensation as shall be agreed in writing with the Depositor for all services rendered by the Trustees hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); 35 (ii) except as otherwise expressly provided herein, to reimburse the Trustees upon request for all reasonable expenses, disbursements and advances reasonably incurred or made by the Trustees in accordance with any provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements of their agents and counsel), except any such expense, disbursement or advance as may be attributable to their negligence (gross negligence, in the case of any Administrative Trustee), bad faith or willful misconduct; and (iii) to the fullest extent permitted by applicable law, to indemnify each Trustee for, and to hold each Trustee harmless against, any and all loss, damage, claims, liability or expense incurred without negligence (gross negligence, in the case of any Administrative Trustee or the Delaware Trustee), bad faith or willful misconduct on its part, arising out of or in connection with the acceptance or administration of the trust or trusts under this Trust Agreement, including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. No Trustee may claim any Lien or charge on any Trust Property as a result of any amount due pursuant to this Section 8.06. In addition to the rights provided to each Trustee pursuant to the provisions of the immediately preceding paragraph of this Section 8.06 and without prejudice to any rights available to the Trustees under applicable law, when a Trustee incurs expenses or renders services in connection with an Event of Default resulting from a Bankruptcy Event with respect to the Trust, the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable Federal or State bankruptcy, insolvency or other similar law. The provisions of this Section 8.06 shall survive the termination of this Trust Agreement. SECTION 8.07. CERTAIN TRUSTEES REQUIRED; ELIGIBILITY. (a) There shall at all times be a Property Trustee hereunder with respect to the Trust Securities. The Property Trustee shall be a Person that has a combined capital and surplus of at least $50,000,000. If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Property Trustee with respect to the Trust Securities shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article VIII. (b) There shall at all times be one or more Administrative Trustees hereunder with respect to the Trust Securities. Each Administrative Trustee shall be either a natural person who is at least 21 years of age or a legal 36 entity that shall act through one or more persons authorized to bind such entity. (c) There shall at all times be a Delaware Trustee with respect to the Trust Securities. The Delaware Trustee shall either be (i) a natural person who is at least 21 years of age and a resident of the State of Delaware or (ii) a legal entity with its principal place of business in the State of Delaware that otherwise meets the requirements of applicable Delaware law and that shall act through one or more persons authorized to bind such entity. SECTION 8.08. CONFLICTING INTERESTS. If the Property Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Property Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Trust Agreement. The Subordinated Indenture and the securities of any series issued thereunder and the Trust Securities Guarantee Agreement shall be deemed to be specifically described in this Trust Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. SECTION 8.09. CO-TRUSTEES AND SEPARATE TRUSTEE. At any time or times, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust Property may at the time be located, the Depositor and the Administrative Trustees, by agreed action of the majority of such Trustees (except as provided in the following sentence), shall have power to appoint, and upon the written request of the Administrative Trustees, the Depositor shall for such purpose join with the Administrative Trustees in the execution, delivery, and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Property Trustee either to act as co-trustee, jointly with the Property Trustee, of all or any part of such Trust Property, or to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section. If the Depositor does not join in such appointment within 15 days after the receipt by it of a request so to do, or in case a Debenture Event of Default has occurred and is continuing, the Property Trustee alone shall have power to make such appointment. Should any written instrument from the Depositor be required by any co-trustee or separate trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right, or power, any and all such instruments shall, on request, be executed, acknowledged, and delivered by the Depositor. Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely: (1) The Trust Securities shall be executed and delivered and all rights, powers, duties, and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustees designated for such purpose hereunder, shall be exercised, solely by such Trustees. 37 (2) The rights, powers, duties, and obligations hereby conferred or imposed upon the Property Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Property Trustee or by the Property Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Property Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties, and obligations shall be exercised and performed by such co-trustee or separate trustee. (3) The Property Trustee at any time, by an instrument in writing executed by it, with the written concurrence of the Depositor, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section 8.09, and, in case a Debenture Event of Default has occurred and is continuing, the Property Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Depositor. Upon the written request of the Property Trustee, the Depositor shall join with the Property Trustee in the execution, delivery, and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section. (4) No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of any Trustee, or any other such trustee hereunder. (5) The Property Trustee shall not be liable by reason of any act of a co-trustee or separate trustee hereunder. (6) Any Act of Holders delivered to the Property Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee. SECTION 8.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. No resignation or removal of any Trustee (as the case may be, the "Relevant Trustee") and no appointment of a successor Relevant Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Relevant Trustee in accordance with the applicable requirements of Section 8.11. The Relevant Trustee may resign at any time by giving written notice thereof to the Securityholders, the Depositor and the other Trustees, except that notice is only required to be delivered to the Securityholders in the event that the Property Trustee or the Delaware Trustee is the resigning Relevant Trustee. If the instrument of acceptance by a successor Relevant Trustee required by Section 8.11 shall not have been delivered to the resigning Relevant Trustee within 30 days after the giving of such notice of resignation, the resigning Relevant Trustee may petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee. Unless a Debenture Event of Default shall have occurred and be continuing, the Relevant Trustee may be removed at any time by Act of the Common Trust Securityholder. If a Debenture Event of Default shall have occurred and be continuing, the Property Trustee or the Delaware Trustee, or both of them, may 38 be removed at such time by Act of the Holders of a majority of the aggregate Liquidation Amount of the Outstanding Preferred Trust Securities, delivered to the Relevant Trustee (in its individual capacity and on behalf of the Trust). An Administrative Trustee may be appointed, replaced or removed solely by the Common Trust Securityholder at any time. If the Relevant Trustee shall resign, be removed or become incapable of continuing to act as Relevant Trustee at a time when no Debenture Event of Default shall have occurred and be continuing, the Common Trust Securityholder, by Act of the Common Trust Securityholder delivered to the retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and the retiring Relevant Trustee shall comply with the applicable requirements of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign, be removed or become incapable of continuing to act as the Property Trustee or the Delaware Trustee, as the case may be, at a time when a Debenture Event of Default shall have occurred and be continuing, the Preferred Trust Securityholders, by Act of the Preferred Trust Securityholders of a majority in aggregate Liquidation Amount of the Outstanding Preferred Trust Securities delivered to such retiring Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and such successor shall comply with the applicable requirements of Section 8.11. If an Administrative Trustee shall resign, be removed or become incapable of acting as Administrative Trustee, at a time when a Debenture Event of Default shall have occurred and be continuing, the Common Securityholder by Act of the Common Securityholder delivered to the Administrative Trustees shall promptly appoint a successor Administrative Trustee or Trustees and such successor Administrative Trustee or Trustees shall comply with the applicable requirements of Section 8.11. If no successor Relevant Trustee shall have been so appointed by the Common Trust Securityholders or the Preferred Trust Securityholders and accepted appointment in the manner required by Section 8.11, any Securityholder who has been a Securityholder of Trust Securities for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee. The Property Trustee shall give notice of each resignation and each removal of a Property Trustee or Delaware Trustee and each appointment of a successor to such Trustee to all Securityholders in the manner provided in Section 10.08 and shall give notice to the Depositor. Such notice shall include the name of the successor Relevant Trustee and the address of its Corporate Trust Office if it is the Property Trustee. Notwithstanding the foregoing or any other provision of this Trust Agreement, in the event any Administrative Trustee or a Delaware Trustee who is a natural person dies or becomes in the opinion of the Depositor, incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by (i) the unanimous act of remaining Administrative Trustees if there are at least two of them or (ii) otherwise by the Depositor (with the successor in each case being an individual who satisfies the eligibility requirements for Administrative Trustees or Delaware Trustee, as the case may be, set forth in Section 8.07). Additionally, notwithstanding the foregoing or any other provision of this Trust Agreement, in the event the Depositor reasonably believes that any Administrative Trustee who is a natural person has become incompetent or incapacitated, the Depositor, by notice to the remaining 39 Trustees, may terminate the status of such Person as an Administrative Trustee (in which case the vacancy so created will be filled in accordance with the preceding sentence). No Trustee shall be liable for the acts or omissions to act of any successor Trustee. SECTION 8.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. In case of the appointment hereunder of a successor Relevant Trustee, the retiring Relevant Trustee (if requested by the Depositor) and each successor Trustee shall execute and deliver an amendment hereto wherein each successor Relevant Trustee shall accept such appointment and which shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Relevant Trustee all the rights, powers, trusts and duties of the retiring Relevant Trustee and upon the execution and delivery of such amendment the resignation or removal of the retiring Relevant Trustee shall become effective to the extent provided therein and each such successor Relevant Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Relevant Trustee; but, on request of the Trust or any successor Relevant Trustee such retiring Relevant Trustee shall, upon payment of all sums owed to it, duly assign, transfer and deliver to such successor Trustee all Trust Property, all proceeds thereof and money held by such retiring Relevant Trustee hereunder with respect to the Trust Securities and the Trust. Upon request of any such successor Relevant Trustee, the retiring Relevant Trustee shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Relevant Trustee all such rights, powers and trusts referred to in the preceding paragraph. No successor Relevant Trustee shall accept its appointment unless at the time of such acceptance such successor Relevant Trustee shall be qualified and eligible under this Article VIII. SECTION 8.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any Person into which the Property Trustee or the Delaware Trustee or any Administrative Trustee that is not a natural person may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which such Relevant Trustee shall be a party, or any Person succeeding to all or substantially all the corporate trust business of such Relevant Trustee, shall be the successor of such Relevant Trustee hereunder, provided such Person shall be otherwise qualified and eligible under this Article VIII, without the execution or filing of any paper, the giving of any notice or any further act on the part of any of the parties hereto. SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST. If and when the Property Trustee shall be or become a creditor of the Depositor or the Trust (or any other obligor upon the Debentures or the Trust Securities), the Property Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Depositor or Trust (or any such other obligor). 40 SECTION 8.14. REPORTS BY PROPERTY TRUSTEE. (a) The Property Trustee shall transmit to Securityholders such reports concerning the Property Trustee and its actions under this Trust Agreement as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. Such of those reports as are required to be transmitted by the Property Trustee pursuant to Section 313(a) of the Trust Indenture Act shall be dated as of the next preceding September 15, and shall be transmitted no later than November 15 of each year, commencing September 15, 200 . - (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Property Trustee with each national exchange, the Nasdaq National Market or such other interdealer quotation system or self-regulatory organization upon which the Trust Securities are listed or traded, if any, with the Commission and with the Depositor. The Depositor will notify the Property Trustee of any such listing or trading. SECTION 8.15. REPORTS TO THE PROPERTY TRUSTEE. The Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such documents, reports and information, if any, and the compliance certificate required by Section 314(a)(4) of the Trust Indenture Act, in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act, provided that such compliance certificate shall be delivered annually on or before in each year, beginning . Delivery -------- ------------- of such reports, information and documents by the Depositor to the Property Trustee is for informational purposes only and the Property Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Depositor's compliance with any of its covenants hereunder (as to which the Property Trustee is entitled to rely exclusively on Officer's Certificates). SECTION 8.16. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. Each of the Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Trust Agreement (including any covenants compliance with which constitutes a condition precedent) that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act may be given in the form of an Officer's Certificate. SECTION 8.17. NUMBER OF TRUSTEES. (a) The number of Trustees shall be five, provided that the Depositor, by written instrument, may increase or decrease the number of Administrative Trustees. (b) If a Trustee ceases to hold office for any reason and the number of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall occur. The vacancy shall be filled with a Trustee appointed in accordance with Section 8.10. (c) The death, resignation, retirement, removal, bankruptcy, incompetence or incapacity to perform the duties of a Trustee shall not operate to annul, dissolve or terminate the Trust. Whenever a vacancy in the number of Administrative Trustees shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with Section 8.10, the 41 Administrative Trustees in office, regardless of their number (and notwithstanding any other provision of this Agreement), shall have all the powers granted to the Administrative Trustees and shall discharge all the duties imposed upon the Administrative Trustees by this Trust Agreement. SECTION 8.18. DELEGATION OF POWER. (a) Any Administrative Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purpose of executing any documents contemplated in Sections 2.07(a) and 2.07(c), including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing; and (b) the Administrative Trustees shall have power to delegate from time to time to such of their number the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Administrative Trustees or otherwise as the Administrative Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein. SECTION 8.19. FIDUCIARY DUTY. (a) To the extent that, at law or in equity, an Indemnified Person has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to any other Covered Person, an Indemnified Person acting under this Trust Agreement shall not be liable to the Trust or to any other Covered Person for its good faith reliance on the provisions of this Trust Agreement. The provisions of this Trust Agreement, to the extent that they restrict the duties and liabilities of an Indemnified Person otherwise existing at law or in equity (other than the duties imposed on the Property Trustee under the Trust Indenture Act), are agreed by the parties hereto to replace such other duties and liabilities of such Indemnified Person; (b) Unless otherwise expressly provided herein and subject to the provisions of the Trust Indenture Act: (i) whenever a conflict of interest exists or arises between an Indemnified Person and any Covered Person; or (ii) whenever this Trust Agreement or any other agreement contemplated herein or therein provides that an Indemnified Person shall act in a manner that is, or provides terms that are, fair and reasonable to the Trust or any Holder of Trust Securities, the Indemnified Person shall resolve such conflict of interest, take such action or provide such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Indemnified Person, the resolution, action or term so made, taken or provided by the Indemnified Person shall not constitute a breach of this Trust Agreement or any other agreement contemplated herein or of any duty or obligation of the Indemnified Person at law or in equity or otherwise; and 42 (c) Unless otherwise expressly provided herein and subject to the provisions of the Trust Indenture Act, whenever in this Trust Agreement an Indemnified Person is permitted or required to make a decision (i) in its "discretion" or under a grant of similar authority, the Indemnified Person shall be entitled to consider such interests and factors as it reasonably desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Trust or any other Person; or (ii) in its "good faith" or under another express standard, the Indemnified Person shall act under such express standard and shall not be subject to any other or different standard imposed by this Trust Agreement or by applicable law. SECTION 8.20. DELAWARE TRUSTEE. It is expressly understood and agreed by the parties hereto that in fulfilling its obligations as Delaware Trustee hereunder on behalf of the Trust (i) any agreements or instruments executed and delivered by Chase Manhattan Bank USA, National Association are executed and delivered not in its individual capacity but solely as Delaware Trustee under this Trust Agreement in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as representations, warrants, covenants, undertakings and agreements by Chase Manhattan Bank USA, National Association in its individual capacity but is made and intended for the purpose of binding only the Trust, and (iii) under no circumstances shall Chase Manhattan Bank USA, National Association in its individual capacity be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaking by the Trust under this Trust Agreement, except if such breach or failure is due to any gross negligence or willful misconduct of the Delaware Trustee. ARTICLE IX DISSOLUTION AND LIQUIDATION SECTION 9.01. DISSOLUTION UPON EXPIRATION DATE. Unless earlier dissolved, the Trust shall automatically dissolve on December 31, 20 (the -- "Expiration Date") and the Trustees shall take such action as is required by Section 9.04. SECTION 9.02. EARLY DISSOLUTION. Upon the first to occur of any of the following events (such first occurrence, an "Early Termination Event"): (i) the occurrence of a Bankruptcy Event in respect of, or the dissolution or liquidation of, the Depositor; (ii) the redemption of all of the Preferred Trust Securities; (iii) an order for judicial dissolution of the Trust having been entered by a court of competent jurisdiction; 43 (iv) the election by the Depositor to dissolve the Trust and, after satisfaction of liabilities to creditors of the Trust, distribute the Debentures to the Holders of Preferred Trust Securities in liquidation of the Trust; the Trust shall dissolve and the Trustees shall take such action as is required by Section 9.04. SECTION 9.03. TERMINATION. The respective obligations and responsibilities of the Trust and the Trustees created hereby shall terminate upon the latest to occur of the following: (i) the distribution by the Property Trustee to Securityholders upon the liquidation of the Trust pursuant to Section 9.04, or upon the redemption of all of the Trust Securities pursuant to Section 4.02 or 9.04(d), of all amounts required to be distributed hereunder upon the final payment of the Trust Securities; (ii) the payment of any expenses owed by the Trust; and (iii) the discharge of all administrative duties of the Administrative Trustees, including the performance of any tax reporting obligations with respect to the Trust or the Securityholders. SECTION 9.04. LIQUIDATION. (a) Upon the Expiration Date or if an Early Termination Event specified in clause (i), (iii) or (iv) of Section 9.02 occurs, after satisfaction of creditors of the Trust, if any, as provided by applicable law, the Trust shall be liquidated by the Property Trustee as expeditiously as the Property Trustee determines to be appropriate by distributing to each Securityholder a Like Amount of Debentures, subject to Section 9.04(e). Notice of liquidation shall be given by the Administrative Trustees by first-class mail, postage prepaid, mailed not later than 30 nor more than 60 days prior to the Liquidation Date to each Holder of Trust Securities at such Holder's address appearing in the Securities Register. All notices of liquidation shall: (i) state the Liquidation Date; (ii) state that from and after the Liquidation Date, the Trust Securities will no longer be deemed to be Outstanding and any Trust Securities Certificates not surrendered for exchange will be deemed to represent a Like Amount of Debentures; and (iii) provide such information with respect to the mechanics by which Holders may exchange Trust Securities Certificates for Debentures, or, if Section 9.04(e) applies, receive a Liquidation Distribution, as the Administrative Trustees or the Property Trustee shall deem appropriate. (b) Except where Sections 9.02(ii), 9.04(d) or 9.04(e) apply, in order to effect the liquidation of the Trust hereunder, and any resulting distribution of the Debentures to Securityholders, the Administrative Trustees shall establish a record date for such distribution (which shall be not more than 45 days prior to the Liquidation Date) and, either itself acting as exchange agent or through the appointment of a separate exchange agent, shall establish such procedures as it shall deem appropriate to effect the distribution of Debentures in exchange for the Outstanding Trust Securities Certificates. (c) Except where Sections 9.02(ii), 9.04(d) or 9.04(e) apply, after any Liquidation Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii) certificates representing a Like Amount of Debentures will, after satisfaction of liabilities to creditors of the Trust, if any, as provided 44 by applicable law, be issued to Holders of Trust Securities Certificates, upon surrender of such Trust Securities Certificates to the Administrative Trustees or their agent for exchange, (iii) any Trust Securities Certificates not so surrendered for exchange will be deemed to represent a Like Amount of Debentures, accruing interest at the rate provided for in the Debentures from the last Distribution Date on which a Distribution was made on such Trust Securities Certificates until such Trust Securities Certificates are so surrendered (and until such Trust Securities Certificates are so surrendered, no payments or interest or principal will be made to Holders of Trust Securities Certificates with respect to such Debentures) and (iv) all rights of Securityholders holding Trust Securities will cease, except the right of such Securityholders to receive, after satisfaction of liabilities to creditors of the Trust, if any, as provided by applicable law, Debentures upon surrender of Trust Securities Certificates. (d) If at any time, a Tax Event shall occur and be continuing, and either (i) in the Opinion of Counsel to the Depositor experienced in such matters, there would in all cases, after effecting the dissolution of the Trust, after satisfaction of liabilities to creditors of the Trust, if any, as provided by applicable law, and the distribution of the Debentures to the Holders of the Preferred Trust Securities in exchange therefor, be more than an insubstantial risk that an Adverse Tax Consequence would continue to exist or (ii) the Debentures are not held by the Trust, then the Depositor shall have the right to redeem the Debentures, in whole but not in part, at any time within 90 days following the occurrence of the Tax Event. Whether or not a Tax Event has occurred, the Depositor has the right, at any time, to dissolve the Trust and, after satisfaction of liabilities to creditors of the Trust, if any, as provided by applicable law, cause the Debentures to be distributed to the Holders of the Preferred Trust Securities and Common Trust Securities in liquidation of the Trust on a pro rata basis. [Add Provisions to substitute Treasury Securities if securities are issued in connection with Stock Purchase Units] (e) In the event that, notwithstanding the other provisions of this Section 9.04, whether because of an order for dissolution entered by a court of competent jurisdiction or otherwise, distribution of the Debentures in the manner provided herein is determined by the Property Trustee not to be practical, the Trust Property shall be liquidated, and the Trust shall be wound-up, by the Property Trustee in such manner as the Property Trustee determines. In such event, Securityholders will be entitled to receive out of the assets of the Trust available for distribution to Securityholders, after satisfaction of liabilities to creditors of the Trust, if any, as provided by applicable law, an amount equal to the Liquidation Amount per Trust Security plus accumulated and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). If, upon any such winding up, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then, subject to the next succeeding sentence, the amounts payable by the Trust on the Trust Securities shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder of Common Trust Securities will be entitled to receive Liquidation Distributions upon any such winding-up pro rata (determined as aforesaid) with Holders of Preferred Trust Securities, except that, if a Debenture Event of Default (or event that with the lapse of time or giving of notice would become an Event of Default) has occurred and is continuing, the Preferred Trust Securities shall have a priority over the Common Trust Securities. 45 SECTION 9.05. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST. The Trust may not merge, consolidate, amalgamate with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any other Person, except pursuant to this Article IX. At the request of the Depositor, with the consent of the Administrative Trustees and without the consent of the Holders of at least a majority in Liquidation Amount of the Preferred Trust Securities, the Property Trustee or the Delaware Trustee, the Trust may merge, consolidate, amalgamate, with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to a trust organized as such under the laws of any State; provided, that (i) such successor entity either (a) expressly assumes all of the obligations of the Trust with respect to the Preferred Securities or (b) substitutes for the Preferred Trust Securities other securities having substantially the same terms as the Preferred Trust Securities (the "Successor Securities") so long as the Successor Securities rank the same as the Preferred Trust Securities rank in priority with respect to distributions and payments upon liquidation, redemption and otherwise, (ii) a trustee of such successor entity possessing substantially the same powers and duties as the Property Trustee is appointed to hold the Debentures, (iii) the Successor Securities are listed or traded, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or other organization on which the Preferred Trust Securities are then listed or traded, if any, (iv) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the Preferred Trust Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization, (v) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of the Preferred Securities (including any Successor Securities) in any material respect, (vi) such successor entity has a purpose substantially identical to that of the Trust, (vii) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Depositor has received an Opinion of Counsel to the effect that (a) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of the Preferred Securities (including any Successor Securities) in any material respect, and (b) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor such successor entity will be required to register as an investment company under the Investment Company Act and (viii) the Depositor or its permitted transferee owns all of the common securities of such successor entity and guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the guarantee. Notwithstanding the foregoing, the Trust shall not, except with the consent of Holders of all the Preferred Trust Securities, consolidate, amalgamate or merge with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any other Person or permit any other Person to consolidate, amalgamate or merge with or into, or replace it if such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the Trust or the successor entity to be classified as other than a grantor trust for United States federal income tax purposes. 46 ARTICLE X MISCELLANEOUS PROVISIONS SECTION 10.01. PAYMENT OF EXPENSES OF THE TRUST. Pursuant to Article Three of the Supplemental Indenture No. 1 to the Indenture, the Trust Securities Guarantor has agreed to pay to the Trust, and reimburse the Trust for, the full amount of any costs, expenses or liabilities of the Trust (other than obligations of the Trust to pay the Holders of any Preferred Securities or Common Securities), including, without limitation, any taxes, duties or other governmental charges of whatever nature (other than withholding taxes) imposed on the Trust by the United States or any other taxing authority. Such payment obligation includes any such costs, expenses or liabilities of the Trust that are required by applicable law to be satisfied in connection with a termination of the Trust. SECTION 10.02. LIMITATION OF RIGHTS OF SECURITYHOLDERS. The death, incapacity, bankruptcy, dissolution or termination of any Person having an interest, beneficial or otherwise, in a Trust Security shall not operate to terminate this Trust Agreement, nor dissolve, terminate or annul the Trust, nor entitle the legal representatives or heirs of such Person or any Securityholder for such Person, to claim an accounting, take any action or bring any proceeding in any court for a partition or winding up of the arrangements contemplated hereby, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. SECTION 10.03. AMENDMENT. (a) In addition to amendments contemplated by Section 8.11, this Trust Agreement may be amended from time to time by a majority of the Administrative Trustees, the Property Trustee and the Depositor, without the consent of any Securityholders, (i) to cure any ambiguity, correct or supplement any provision herein or therein which may be inconsistent with any other provision herein or therein, or to make any other provisions with respect to matters or questions arising under this Trust Agreement, (ii) to change the name of the Trust or (iii) to modify, eliminate or add to any provisions of this Trust Agreement to such extent as shall be necessary to ensure that the Trust will not be classified for United States Federal income tax purposes other than as a "grantor trust" at any time that any Trust Securities are outstanding or to ensure the Trust's exemption from the status of an "investment company" under the Investment Company Act; provided, however, that such action shall not adversely affect in any material respect the interests of any Securityholder and, in the case of clause (i), any such amendments of this Trust Agreement shall become effective when notice thereof is given to the Securityholders. (b) Except as provided in Sections 6.01(c) and 10.03(c), any provision of this Trust Agreement may be amended by the Administrative Trustees, the Property Trustee and the Depositor with (i) the consent of Holders of Trust Securities representing not less than a majority (based upon Liquidation Amounts) of the Outstanding Trust Securities and (ii) receipt by the Trustees of an Opinion of Counsel to the effect that such amendment or the exercise of any power granted to the Trustees in accordance with such amendment will not affect the Trust's status as a grantor trust for Federal income tax purposes or the Trust's exemption from status as an "investment company" under the Investment Company Act. 47 (c) In addition to and notwithstanding any other provision in this Trust Agreement, without the consent of each affected Securityholder, this Trust Agreement may not be amended to (i) adversely change the amount or timing of any Distribution on the Trust Securities or otherwise adversely affect the amount of any Distribution required to be made in respect of the Trust Securities as of a specified date or (ii) restrict the right of a Securityholder to institute suit for the enforcement of any such payment on or after such date. (d) Notwithstanding any other provisions of this Trust Agreement, no amendment to this Trust Agreement may be made if, as a result of such amendment, the Trust would not be classified as a "grantor trust" for United States Federal income tax purposes or would to fail or cease to qualify for the exemption from status of an "investment company" under the Investment Company Act afforded by Rule 3a-5 thereunder. (e) Notwithstanding anything in this Trust Agreement to the contrary, the Depositor and the Trustees may, but shall not be obligated to, enter into any amendment which imposes any additional obligation on the Depositor or any Trustee or, in the case of the Trustees, which affects any of their respective rights, duties or immunities hereunder. (f) In the event that any amendment to this Trust Agreement is made, the Administrative Trustees shall promptly provide to the Depositor a copy of such amendment. (g) The Delaware Trustee may join in the execution of any amendment to the Trust Agreement and the Property Trustee and the Delaware Trustee are entitled to rely upon an Opinion of Counsel as conclusive evidence that any amendment to this Trust Agreement entered into pursuant to this Section 10.03 is authorized or permitted by, and conforms to, the terms of this Section 10.03, has been duly authorized by and lawfully executed and delivered on behalf of the other requisite parties, and that it is proper for the Property Trustee under the provisions of this Section 10.03 to accept the additional trusts created thereby and, if so requested, for the Delaware Trustee to join in the execution thereof. SECTION 10.04. SEPARABILITY. In case any provision in this Trust Agreement or in the Trust Securities Certificates shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 10.05. GOVERNING LAW. THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST, THE DEPOSITOR, THE TRUST SECURITIES GUARANTOR AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES), PROVIDED, THAT THE IMMUNITIES AND STANDARD OF CARE OF THE PROPERTY TRUSTEE IN CONNECTION WITH THE ADMINISTRATION OF ITS TRUSTS AND DUTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. 48 SECTION 10.06. SUCCESSORS. This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to the Depositor, the Trust Securities Guarantor, the Trust or the Relevant Trustees or any of them, including any successor by operation of law. SECTION 10.07. HEADINGS. The Article and Section headings are for convenience only and shall not affect the construction of this Trust Agreement. SECTION 10.08. NOTICE AND DEMAND. Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon any Securityholder or the Depositor may be given or served in writing by deposit thereof, postage prepaid, in the United States mail, hand delivery or facsimile transmission, in each case, addressed, (i) in the case of a Preferred Trust Securityholder, to such Preferred Trust Securityholder as such Securityholder's name and address may appear on the Securities Register, and (ii) in the case of the Depositor, the Common Securityholder or the Trust Securities Guarantor, to PPL Corporation, Two North Ninth Street, Allentown, Pennsylvania 18101, Attention: Treasurer, facsimile no. 610-774-5106 (until another address is given to the Property Trustee). Such notice, demand or other communication to or upon a Securityholder shall be deemed to have been sufficiently given or made, for all purposes, upon hand delivery, mailing or facsimile transmission. Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon the Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees shall be given in writing addressed (until another address is given to the other parties hereto) as follows: (i) with respect to the Property Trustee, to The Chase Manhattan Bank, 450 West 33rd Street, 15th Floor, New York, New York 10001, Attention: Capital Markets Fiduciary Services, (ii) with respect to the Delaware Trustee, to Chase Manhattan Bank USA, National Association, 1201 Market Street, 9th Floor, Wilmington, Delaware 19801 with a copy to the Property Trustee at the address set forth in (i) above, Attention: , and (iii) with respect to the Trust or the - ---------------------------- Administrative Trustees, at the address above for notice to the Depositor, marked "Attention: Administrative Trustees for PPL Capital Funding Trust I". Such notice, demand or other communication to or upon the Trust, the Delaware Trustee or the Property Trustee shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the Trust, the Delaware Trustee or the Property Trustee. SECTION 10.09. AGREEMENT NOT TO PETITION. Each of the Trustees and the Depositor agrees for the benefit of the Securityholders that, until at least one year and one day after the Trust has been terminated in accordance with Article IX, it shall not file, or join in the filing of, a petition against the Trust under any bankruptcy, reorganization, arrangement, insolvency, liquidation or other similar law (including, without limitation, the United States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of any proceeding against the Trust under any Bankruptcy Law. In the event the Depositor takes action in violation of this Section 10.09, the Property Trustee agrees, for the benefit of Securityholders, that it shall file an answer with the bankruptcy court or otherwise properly contest the filing of such petition by the Depositor against the Trust or the commencement of such action and raise the defense that the Depositor has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as 49 counsel for the Property Trustee or the Trust may assert. The provisions of this Section 10.09 shall survive the termination of this Trust Agreement. SECTION 10.10. CONFLICT WITH TRUST INDENTURE ACT. (a) This Trust Agreement is subject to the provisions of the Trust Indenture Act that are required or deemed to be part of this Trust Agreement and shall, to the extent applicable, be governed by such provisions. (b) The Property Trustee shall be the only Trustee which is a trustee for the purposes of the Trust Indenture Act. (c) If any provision hereof limits, qualifies or conflicts with another provision hereof which is required or deemed to be included in this Trust Agreement by any of the provisions of the Trust Indenture Act, such required or deemed provision shall control. (d) The application of the Trust Indenture Act to this Trust Agreement shall not affect the nature of the Trust Securities as equity securities representing interests in the Trust. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON BEHALF OF A SECURITYHOLDER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS. SECTION 10.11. COUNTERPARTS. This Trust Agreement may contain more than one counterpart of the signature page and this Trust Agreement may be executed by the affixing of the signature of each of the Trustees to one of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page. 50 IN WITNESS WHEREOF, the parties have caused this Amended and Restated Trust Agreement to be duly executed, all as of the day and year first above written. PPL CORPORATION, as Depositor and Trust Securities Guarantor By: -------------------------------------- Title: THE CHASE MANHATTAN BANK, as Property Trustee By: -------------------------------------- Title: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, as Delaware Trustee By: -------------------------------------- Title: -------------------------------------- as Administrative Trustee -------------------------------------- as Administrative Trustee 51 EXHIBIT A CERTIFICATE OF TRUST OF PP&L CAPITAL FUNDING TRUST I THIS CERTIFICATE OF TRUST of PP&L Capital Funding Trust I (the "Trust"), dated as of September 21, 1999, is being duly executed and filed by the undersigned, as trustees, to form a business trust under the Delaware Business Trust Act (12 Del.C. ss. 3801 et seq.). 1. Name. The name of the business trust formed hereby is PPL Capital Funding Trust I. 2. Delaware Trustee. The name and business address of the trustee of the Trust with a principal place of business in the State of Delaware are Chase Manhattan Bank Delaware, 1201 Market Street, 9th Floor, Wilmington, Delaware 19801. 3. Effective Date. This Certificate of Trust shall be effective upon its filing with the Secretary of State of the State of Delaware. IN WITNESS WHEREOF, the undersigned, being the only trustees of the Trust, have executed this Certificate of Trust as of the date first above written. THE CHASE MANHATTAN BANK, not in its individual capacity but solely as trustee By: /s/ Francine Springer -------------------------------------- Name: Francine Springer Title: Assistant Vice President CHASE MANHATTAN BANK DELAWARE, not in its individual capacity but solely as trustee By: /s/ Denis Kelly -------------------------------------- Name: Denis Kelly Title: Assistant Vice President /s/ James E. Abel ------------------------------------------- JAMES E. ABEL, not in his individual capacity but solely as trustee A-1 CERTIFICATE OF AMENDMENT TO CERTIFICATE OF TRUST (PURSUANT TO SECTION 3810 OF THE DELAWARE BUSINESS TRUST ACT) To the Secretary of State State of Delaware It is hereby certified that: 1. The name of the business trust (hereinafter referred to as the "trust") is PPL Capital Funding Trust I. 2. Article 1 of the Certificate of Trust of the trust is hereby amended to read as follows: "Name. The name of the business trust formed hereby is PPL Capital Funding Trust I." 3. The undersigned person is a trustee of the trust. 4. This Certificate of Amendment to Certificate of Trust shall be effective upon its filing with the Secretary of State of the State of Delaware. Signed on May 22, 2000 /s/ James E. Abel ------------------------------------------ JAMES E. ABEL, not in his individual capacity but solely as trustee A-2 AMENDED AND RESTATED CERTIFICATE OF TRUST OF PPL CAPITAL FUNDING TRUST I This Amended and Restated Certificate of Trust of PPL Capital Funding Trust I (originally known as "PPL Capital Funding Trust I") (the "Trust"), dated as of August 15, 2000, is being duly executed and filed under the Delaware Business Trust Act (12 Del. C. ss. 3801, et seq.) (the "Act") by the undersigned, as trustees of the Trust, to amend and restate the Certificate of Trust of the Trust, which was filed with the Secretary of State of the State of Delaware (the "Secretary of State") on September 21, 1999, as amended by the Certificate of Amendment to the Certificate of Trust, which was filed with the Secretary of State on May 23, 2000 (the "Certificate of Trust"). The Certificate of Trust is hereby amended and restated in its entirety, pursuant to Section 3810(c)(1) of the Act, to read as follows: 1. Name. The name of the business trust formed hereby is PPL Capital ---- Funding Trust I. 2. Delaware Trustee. The name and business address of the trustee of ---------------- the Trust with its principal place of business in the State of Delaware are Chase Manhattan Bank USA, National Association, 1201 Market Street, Wilmington, Delaware, 19801, Attention: Corporate Trust Administration. 3. Effective Date. This Certificate of Trust shall be effective upon -------------- the date and time of filing. 4. Counterparts. This Certificate of Trust may be executed in one or ------------ more counterparts. [SIGNATURE PAGE FOLLOWS] A-3 IN WITNESS WHEREOF, the undersigned have executed this Certificate of Trust in accordance with Section 3811(a)(2) of the Act. CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity, but solely as trustee By: /s/ Denis Kelly -------------------------------------- Name: Denis Kelly Title: Assistant Vice President THE CHASE MANHATTAN BANK, not in its individual capacity, but solely as trustee By: /s/ Robert S. Peschler -------------------------------------- Name: Robert S. Peschler Title: Assistant Vice President JAMES E. ABEL, not in his individual capacity, but solely as trustee /s/ James E. Abel -------------------------------------------- A-4 EXHIBIT B THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE TRUST AGREEMENT Certificate Number Number of Common Trust Securities C - Certificate Evidencing Common Trust Securities of PPL Capital Funding Trust I Common Trust Securities (liquidation amount $[25] per Common Trust Security) PPL Capital Funding Trust I, a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that PPL Corporation (the "Holder") is the registered owner of common securities of ----- the Trust representing undivided beneficial interests in the assets of the Trust and designated the PPL Capital Funding Trust I Common Trust Securities (liquidation amount $[25] per Common Trust Security) (the "Common Trust Securities"). Except as permitted by Section 5.10 of the Trust Agreement (as defined below), the Common Trust Securities are not transferable and any attempted transfer hereof shall be void. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Common Trust Securities are set forth in, and this certificate and the Common Trust Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust dated as of , , as the same may be amended from time to ---------- -- ---- time (the "Trust Agreement"), including the designation of the terms of the Common Trust Securities as set forth therein. .Capitalized terms used herein but not defined shall have the meaning given them in the Trust Agreement. The holder of this certificate is entitled to the benefits of the Trust Securities Guarantee Agreement of PPL Corporation and The Chase Manhattan Bank, as guarantee trustee, dated as of , , ----------- ----- as the same may be amended from time to time, (the "Guarantee") to the extent provided therein.] The Trust will furnish a copy of the Trust Agreement [and the Guarantee] to the Holder without charge upon written request to the Trust at its principal place of business or registered office. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the Debentures as indebtedness and the Common Trust Securities as evidence of undivided beneficial interests in the assets of the Trust. B-1 IN WITNESS WHEREOF, an Administrative Trustee of the Trust has executed this certificate for and on behalf of the Trust this day of --- , . - -------- ---- PPL Capital Funding Trust I By: -------------------------------------- not in his individual capacity, but solely as Administrative Trustee B-2 EXHIBIT C [Legend] Certificate Number Number of Preferred Trust Securities P- CUSIP NO. Certificate Evidencing Preferred Trust Securities of PPL Capital Funding Trust I [Title of Securities] (liquidation amount $[25] per Preferred Trust Security) PPL Capital Funding Trust I, a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that (the "Holder") is the registered owner of preferred - ------------ ----- securities of the Trust representing an undivided beneficial interest in the assets of the Trust and designated the PPL Capital Funding Trust I [Title of Securities] (liquidation amount $[25] per Preferred Trust Security) (the "Preferred Trust Securities"). The Preferred Trust Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.04 or 5.12 of the Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Trust Securities are set forth in, and this certificate and the Preferred Trust Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust dated as of , , ------ ---- as the same may be amended from time to time (the "Trust Agreement"), including the designation of the terms of the Preferred Trust Securities as set forth therein. Capitalized terms used herein but not defined shall have the meaning given them in the Trust Agreement. The holder of this certificate is entitled to the benefits of the Trust Securities Guarantee Agreement of PPL Corporation and The Chase Manhattan Bank, as guarantee trustee, dated as of , , as the ------ ---- same may be amended from time to time, (the "Guarantee") to the extent provided therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee to the Holder without charge upon written request to the Trust at its principal place of business or registered office. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the Debentures as indebtedness and the Preferred Trust Securities as evidence of undivided beneficial interests in the assets of the Trust. IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed this certificate for and on behalf of the Trust. C-1 Dated: PPL CAPITAL FUNDING TRUST I By: -------------------------------------- not in his individual capacity, but solely as Administrative Trustee Countersigned and Registered: -------------------------------, Transfer Agent and Registrar By: -------------------------------------- (Authorized Signature) C-2 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Trust Security to: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert assignee's social security or tax identification number) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Insert address and zip code of assignee) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- of the Preferred Trust Securities represented by this Certificate and irrevocably appoints - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- attorney to transfer such Preferred Trust Securities Certificate on the books of the Trust. The attorney may substitute another to act for him or her. Date: ---------------------------- Signature: ------------------------ (Sign exactly as your name appears on the other side of this Preferred Trust Securities Certificate) Signature: ------------------------ (Sign exactly as your name appears on the other side of this Preferred Trust Securities Certificate) C-3 EX-4 14 0014.txt EXHIBIT 4.16 EXHIBIT 4.16 ------------------------------------------------------------------ PPL CAPITAL FUNDING, INC., ISSUER AND PPL CORPORATION, GUARANTOR TO THE CHASE MANHATTAN BANK, TRUSTEE --------- SUBORDINATED INDENTURE DATED AS OF ------------------------- ------------------------------------------------------------------ TABLE OF CONTENTS PARTIES......................................................................1 ARTICLE ONE Definitions and other Provisions of General Application..........2 SECTION 101. Definitions...........................................2 Act...................................................2 Additional Interest...................................2 Affiliate.............................................2 Authenticating Agent..................................2 Authorized Officer....................................3 Board of Directors....................................3 Board Resolution......................................3 Business Day..........................................3 Commission............................................3 Common Securities.....................................3 Company...............................................3 Company Order or Company Request......................3 Corporate Trust Office................................3 corporation...........................................3 Defaulted Interest....................................3 [Discount Security]...................................4 Dollar or $...........................................4 [Eligible Obligations]................................4 Event of Default......................................4 Exchange Act..........................................4 Government Obligations................................4 Guarantee.............................................4 Guarantor.............................................4 Guarantor Order or Guarantor Request..................4 Holder................................................5 Indenture.............................................5 interest..............................................5 Interest Payment Date.................................5 Maturity..............................................5 Notice of Default.....................................5 Officer's Certificate.................................5 Opinion of Counsel....................................5 Outstanding...........................................5 Paying Agent..........................................7 Periodic Offering.....................................7 Person................................................7 Place of Payment......................................7 Predecessor Security..................................7 [Preferred Securities]................................7 Redemption Date.......................................7 -i- Redemption Price......................................7 Regular Record Date...................................7 Required Currency.....................................7 Responsible Officer...................................7 Securities............................................8 Securities Act........................................8 Security Register and Security Registrar..............8 [Senior Indebtedness].................................8 Special Record Date...................................8 Stated Interest Rate..................................8 Stated Maturity.......................................8 Tranche...............................................9 [Trust]...............................................9 Trust Agreement.......................................9 Trustee...............................................9 Trust Indenture Act...................................9 Trust Securities Guarantee............................9 United States.........................................9 SECTION 102. Compliance Certificates and Opinions..................9 SECTION 103. Form of Documents Delivered to Trustee...............10 SECTION 104. Acts of Holders......................................11 SECTION 105. Notices, Etc. to Trustee, Company or Guarantor.......13 SECTION 106. Notice to Holders of Securities; Waiver..............14 SECTION 107. Conflict with Trust Indenture Act....................15 SECTION 108. Effect of Headings and Table of Contents.............15 SECTION 109. Successors and Assigns...............................15 SECTION 110. Separability Clause..................................15 SECTION 111. Benefits of Indenture................................15 SECTION 112. Governing Law........................................15 SECTION 113. Legal Holidays.......................................15 ARTICLE TWO Security Forms..................................................16 SECTION 201. Forms Generally......................................16 SECTION 202. Form of Trustee's Certificate of Authentication......16 ARTICLE THREE The Securities................................................17 SECTION 301. Amount Unlimited; Issuable in Series.................17 SECTION 302. Denominations........................................21 SECTION 303. Execution, Authentication, Delivery and Dating.......21 SECTION 304. Temporary Securities.................................24 SECTION 305. Registration, Registration of Transfer and Exchange.............................................25 SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.....26 SECTION 307. Payment of Interest; Interest Rights Preserved.......27 SECTION 308. Persons Deemed Owners................................28 SECTION 309. Cancellation.........................................28 SECTION 310. Computation of Interest..............................28 SECTION 311. Payment to Be in Proper Currency.....................29 -ii- [SECTION 312. Extension of Interest Payment........................29 [SECTION 313. Additional Interest..................................29 ARTICLE FOUR Redemption of Securities.......................................30 SECTION 401. Applicability of Article.............................30 SECTION 402. Election to Redeem; Notice to Trustee................30 SECTION 403. Selection of Securities to Be Redeemed...............30 SECTION 404. Notice of Redemption.................................31 SECTION 405. Securities Payable on Redemption Date................32 SECTION 406. Securities Redeemed in Part..........................32 ARTICLE FIVE Sinking Funds..................................................32 SECTION 501. Applicability of Article.............................32 SECTION 502. Satisfaction of Sinking Fund Payments with Securities...........................................33 SECTION 503. Redemption of Securities for Sinking Fund............33 ARTICLE SIX Covenants.......................................................34 SECTION 601. Payment of Principal, Premium and Interest...........34 SECTION 602. Maintenance of Office or Agency......................34 SECTION 603. Money for Securities Payments to Be Held in Trust................................................35 SECTION 604. Corporate Existence..................................36 SECTION 605. Annual Officer's Certificate.........................36 SECTION 606. Waiver of Certain Covenants..........................36 SECTION 607. Restriction on Payment of Dividends..................37 [SECTION 608. Maintenance of Trust Existence.......................37 [SECTION 609. Rights of Holders of Preferred Securities............38 ARTICLE SEVEN Satisfaction and Discharge....................................38 SECTION 701. Satisfaction and Discharge of Securities.............38 SECTION 702. Satisfaction and Discharge of Indenture..............40 SECTION 703. Application of Trust Money...........................41 ARTICLE EIGHT Events of Default; Remedies...................................42 SECTION 801. Events of Default....................................42 SECTION 802. Acceleration of Maturity; Rescission and Annulment............................................43 SECTION 803. Collection of Indebtedness and Suits for Enforcement by Trustee...............................44 SECTION 804. Trustee May File Proofs of Claim.....................45 SECTION 805. Trustee May Enforce Claims Without Possession of Securities...........................................46 SECTION 806. Application of Money Collected.......................46 SECTION 807. Limitation on Suits..................................46 SECTION 808. Unconditional Right of Holders to Receive Principal, Premium and Interest......................47 SECTION 809. Restoration of Rights and Remedies...................47 SECTION 810. Rights and Remedies Cumulative.......................48 SECTION 811. Delay or Omission Not Waiver.........................48 -iii- SECTION 812. Control by Holders of Securities.....................48 SECTION 813. Waiver of Past Defaults..............................48 SECTION 814. Undertaking for Costs................................49 SECTION 815. Waiver of Usury, Stay or Extension Laws..............49 ARTICLE NINE The Trustee....................................................50 SECTION 901. Certain Duties and Responsibilities..................50 SECTION 902. Notice of Defaults...................................51 SECTION 903. Certain Rights of Trustee............................51 SECTION 904. Not Responsible for Recitals or Issuance of Securities...........................................52 SECTION 905. May Hold Securities..................................52 SECTION 906. Money Held in Trust..................................53 SECTION 907. Compensation and Reimbursement.......................53 SECTION 908. Disqualification; Conflicting Interests..............53 SECTION 909. Corporate Trustee Required; Eligibility..............54 SECTION 910. Resignation and Removal; Appointment of Successor............................................54 SECTION 911. Acceptance of Appointment by Successor...............56 SECTION 912. Merger, Conversion, Consolidation or Succession to Business..........................................57 SECTION 913. Preferential Collection of Claims Against Company..............................................57 SECTION 914. Appointment of Authenticating Agent..................58 SECTION 915. Co-trustee and Separate Trustees.....................59 ARTICLE TEN Holders' Lists and Reports by Trustee, Company and Guarantor....61 SECTION 1001. Lists of Holders.....................................61 SECTION 1002. Reports by Trustee, Company and Guarantor............61 ARTICLE ELEVEN Consolidation, Merger, Conveyance, or Other Transfer.........61 SECTION 1101. Company or Guarantor May Consolidate, Etc., Only on Certain Terms.....................................61 SECTION 1102. Successor Person Substituted.........................62 SECTION 1103. Limitation...........................................62 ARTICLE TWELVE Supplemental Indentures......................................63 SECTION 1201. Supplemental Indentures Without Consent of Holders..............................................63 SECTION 1202. Supplemental Indentures With Consent of Holders......65 SECTION 1203. Execution of Supplemental Indentures.................66 SECTION 1204. Effect of Supplemental Indentures....................67 SECTION 1205. Conformity With Trust Indenture Act..................67 SECTION 1206. Reference in Securities to Supplemental Indentures...........................................67 SECTION 1207. Modification Without Supplemental Indenture..........67 ARTICLE THIRTEEN Meetings of Holders; Action Without Meeting................68 SECTION 1301. Purposes for Which Meetings May Be Called............68 SECTION 1302. Call, Notice and Place of Meetings...................68 SECTION 1303. Persons Entitled to Vote at Meetings.................68 SECTION 1304. Quorum; Action.......................................69 -iv- SECTION 1305. Attendance at Meetings; Determination of Voting Rights; Conduct and Adjournment of Meetings..........70 SECTION 1306. Counting Votes and Recording Action of Meetings......70 SECTION 1307. Action Without Meeting...............................71 ARTICLE FOURTEEN Guarantee..................................................71 SECTION 1401. Guarantee............................................71 SECTION 1402. Guarantee Subordinate to Senior Indebtedness of the Guarantor........................................73 SECTION 1403. Payment Over of Proceeds of Securities...............73 SECTION 1404. Disputes with Holders of Certain Senior Indebtedness of the Guarantor........................75 SECTION 1405. Subrogation..........................................75 SECTION 1406. Obligation of the Guarantor Unconditional............76 SECTION 1407. Priority of Senior Indebtedness of the Guarantor Upon Maturity........................................76 SECTION 1408. Trustee as Holder of Senior Indebtedness of the Guarantor............................................77 SECTION 1409. Notice to Trustee to Effectuate Subordination........77 SECTION 1410. Modification, Extension, etc. of Senior Indebtedness of the Guarantor........................77 SECTION 1411. Trustee Has No Fiduciary Duty to Holders of Senior Indebtedness of the Guarantor.................78 SECTION 1412. Paying Agents Other Than the Trustee.................78 SECTION 1413. Rights of Holders of Senior Indebtedness of the Guarantor Not Impaired...............................78 SECTION 1414. Effect of Subordination Provisions; Termination......78 SECTION 1415. Execution and Delivery of Guarantee..................79 ARTICLE FIFTEEN Subordination of Securities.................................79 SECTION 1501. Securities Subordinate to Senior Indebtedness of the Company..........................................79 SECTION 1502. Payment Over of Proceeds of Securities...............80 SECTION 1503. Disputes with Holders of Certain Senior Indebtedness of the Company..........................81 SECTION 1504. Subrogation..........................................82 SECTION 1505. Obligation of the Company Unconditional..............82 SECTION 1506. Priority of Senior Indebtedness of the Company Upon Maturity........................................83 SECTION 1507. Trustee as Holder of Senior Indebtedness of the Company..............................................83 SECTION 1508. Notice to Trustee to Effectuate Subordination........83 SECTION 1509. Modification, Extension, etc. of Senior Indebtedness of the Company..........................84 SECTION 1510. Trustee Has No Fiduciary Duty to Holders of Senior Indebtedness of the Company...................84 SECTION 1511. Paying Agents Other Than the Trustee.................84 SECTION 1512. Rights of Holders of Senior Indebtedness of the Company Not Impaired.................................85 -v- SECTION 1513. Effect of Subordination Provisions; Termination......85 ARTICLE SIXTEEN Immunity of Incorporators, Stockholders, Officers and Directors............................................85 SECTION 1601. Liability Solely Corporate...........................85 Testimonium.................................................................85 Signatures and Seals........................................................85 -vi- PPL CAPITAL FUNDING, INC. Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated as of ----------------- Trust Indenture Act Section Indenture Section ss.310(a)(1)................................. 909 (a)(2)................................. 909 (a)(3)................................. 915 (a)(4)................................. Not Applicable (b).................................... 908 910 ss.311(a).................................... 913 (b).................................... 913 (c).................................... Not Applicable ss.312(a).................................... 1001 (b).................................... 1001 (c).................................... 1001 ss.313(a).................................... 1002 (b)(1)................................. Not Applicable (b)(2)................................. 1002 (c).................................... 1002 (d).................................... 1002 ss.314(a).................................... 1002 (a)(4)................................. 605 (b).................................... Not Applicable (c)(1)................................. 102 (c)(2)................................. 102 (c)(3)................................. Not Applicable (d).................................... Not Applicable (e).................................... 102 ss.315(a).................................... 901(a) (b).................................... 902 (c).................................... 901(b) (d).................................... 901(c) (d)(1)................................. 901(a)(1), 901(c)(1) (d)(2)................................. 901(c)(2) (d)(3)................................. 901(c)(3) (e).................................... 814 ss.316(a).................................... 812 813 (a)(1)(A).............................. 802 812 (a)(1)(B).............................. 813 (a)(2)................................. Not Applicable (b).................................... 808 -vii- Trust Indenture Act Section Indenture Section ss.317(a)(1)................................. 803 (a)(2)................................. 804 (b).................................... 603 ss.318(a).................................... 107 -viii- SUBORDINATED INDENTURE, dated as of among PPL ----------------------- CAPITAL FUNDING, INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company"), having its principal office at Two North Ninth Street, Allentown, Pennsylvania 18101, PPL CORPORATION, a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania (herein called the "Guarantor"), having its principal office at Two North Ninth Street, Allentown, Pennsylvania 18101-1179, and The Chase Manhattan Bank, a New York banking corporation, having its principal corporate trust office at 450 West 33rd Street, 15th Floor, New York, New York 10001, as Trustee (herein called the "Trustee"). RECITAL OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured subordinated debentures, notes or other evidences of indebtedness (herein called the "Securities"), to be issued in one or more series as contemplated herein, with Guarantees endorsed thereon in order to evidence loans made to the Company or the Guarantor or their affiliates of the proceeds from the issuance from time to time by one or more Trusts (as defined below) of undivided beneficial ownership interests in the assets of such Trusts and all acts necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been performed. RECITAL OF THE GUARANTOR The Guarantor has duly authorized the execution and delivery of this Indenture to provide for the Guarantee of the Securities provided for herein; and all acts necessary to make this Indenture a valid agreement of the Guarantor, in accordance with its terms, have been performed. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof (except as otherwise contemplated herein), as follows: ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 101. DEFINITIONS. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (b) all terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States of America, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States of America at the date of such computation; (d) any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Indenture; and (e) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. Certain terms, used principally in Article Nine, are defined in that Article. "ACT", when used with respect to any Holder of a Security, has the meaning specified in Section 104. ["ADDITIONAL INTEREST" has the meaning specified in Section 313.] "AFFILIATE" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "CONTROL" when used with respect to any specified Person means the power to direct generally the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the foregoing. "AUTHENTICATING AGENT" means any Person or Persons authorized by the Trustee to act on behalf of the Trustee to authenticate the Securities of one or more series. 2 "AUTHORIZED OFFICER" means the Chairman of the Board, the President, any Vice President, the Treasurer, or any other Person duly authorized by the Company or the Guarantor, as the case requires, to act in respect of matters relating to this Indenture. "BOARD OF DIRECTORS" means either the board of directors of the Company or the Guarantor, as the case requires, or any committee of that board duly authorized to act in respect of matters relating to this Indenture (including, in the case of the Guarantor, the finance committee of the board of directors of the Guarantor). "BOARD RESOLUTION" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company or the Guarantor, as the case requires, to have been duly adopted by the Board of Directors of the Company or the Guarantor, as the case requires, and to be in full force and effect on the date of such certification, and delivered to the Trustee. "BUSINESS DAY", when used with respect to a Place of Payment or any other particular location specified in the Securities or this Indenture, means any day, other than a Saturday or Sunday, which is not a day on which banking institutions or trust companies in such Place of Payment or other location are generally authorized or required by law, regulation or executive order to remain closed, except as may be otherwise specified as contemplated by Section 301. "COMMISSION" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the date of execution and delivery of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body, if any, performing such duties at such time. ["COMMON SECURITIES" means any common trust interests issued by a Trust or similar securities issued by permitted successors to such Trust in accordance with the Trust Agreement pertaining to such Trust.] "COMPANY" means the Person named as the "Company" in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "COMPANY ORDER" or "COMPANY REQUEST" mean, respectively, a written order or request, as the case may be, signed in the name of the Company by an Authorized Officer and delivered to the Trustee. "CORPORATE TRUST OFFICE" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution of this Indenture is located at 450 West 33rd Street, 15th Floor, New York, New York 10001. "CORPORATION" means a corporation, association, company, joint stock company or business trust. "DEFAULTED INTEREST" has the meaning specified in Section 307. 3 "[DISCOUNT SECURITY" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 802.] "DOLLAR" or "$" means a dollar or other equivalent unit in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts. "[ELIGIBLE OBLIGATIONS" means: (a) with respect to Securities denominated in Dollars, Government Obligations; or (b) with respect to Securities denominated in a currency other than Dollars or in a composite currency, such other obligations or instruments as shall be specified with respect to such Securities, as contemplated by Section 301.] "EVENT OF DEFAULT" has the meaning specified in Section 801. "EXCHANGE ACT" means the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, as amended from time to time. "GOVERNMENT OBLIGATIONS" means securities which are (a) (i) direct obligations of the United States where the payment or payments thereunder are supported by the full faith and credit of the United States or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States where the timely payment or payments thereunder are unconditionally guaranteed as a full faith and credit obligation by the United States or (b) depository receipts issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such Government Obligation or a specific payment of interest on or principal of or other amount with respect to any such Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Obligation or the specific payment of interest on or principal of or other amount with respect to the Government Obligation evidenced by such depository receipt. "GUARANTEE" means any guarantee of the Guarantor endorsed on a Security authenticated and delivered pursuant to this Indenture and shall include the guarantee set forth in Section 1401. "GUARANTOR" means the Person named as "Guarantor" in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Guarantor" shall include such successor Person. "GUARANTOR ORDER" or "GUARANTOR REQUEST" mean, respectively, a written order or request, as the case may be, signed in the name of the Guarantor by an Authorized Officer of the Guarantor and delivered to the Trustee. 4 "HOLDER" means a Person in whose name a Security is registered in the Security Register. "INDENTURE" means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Indenture and any such supplemental indenture, respectively. The term "Indenture" shall also include the terms of particular series of Securities established as contemplated by Section 301. "[INTEREST", when used with respect to a Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.] "INTEREST PAYMENT DATE", when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security. "MATURITY", when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as provided in such Security or in this Indenture, whether at the Stated Maturity, by declaration of acceleration, upon call for redemption or otherwise. "NOTICE OF DEFAULT" means a written notice of the kind specified in Section 801(c). "OFFICER'S CERTIFICATE" means a certificate signed by an Authorized Officer of the Company or the Guarantor, as the case requires, and delivered to the Trustee. "OPINION OF COUNSEL" means a written opinion of counsel, who may be counsel for the Company or the Guarantor, and who shall be acceptable to the Trustee. "OUTSTANDING", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (a) Securities theretofore canceled or delivered to the Trustee for cancellation; (b) Securities deemed to have been paid for all purposes of this Indenture in accordance with Section 701 (whether or not the Company's indebtedness in respect thereof shall be satisfied and discharged for any other purpose); and (c) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it and the Company that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; 5 provided, however, that in determining whether or not the Holders of the requisite principal amount of the Securities Outstanding under this Indenture, or the Outstanding Securities of any series or Tranche, have given any request, demand, authorization, direction, notice, consent or waiver hereunder or whether or not a quorum is present at a meeting of Holders of Securities, (x) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor (unless the Company, such Affiliate or such obligor owns all Securities Outstanding under this Indenture, or all Outstanding Securities of each such series and each such Tranche, as the case may be, determined without regard to this clause (x)) shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver or upon any such determination as to the presence of a quorum, only Securities which the Trustee knows to be so owned shall be so disregarded; provided, however, that Securities so owned which have been pledged in good faith may be regarded as Outstanding if it is established to the reasonable satisfaction of the Trustee that the pledgee, and not the Company, or any such other obligor or Affiliate of either thereof, has the right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor; [(y) the principal amount of a Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the Maturity thereof pursuant to Section 802; and] [(z) the principal amount of any Security which is denominated in a currency other than Dollars or in a composite currency that shall be deemed to be Outstanding for such purposes shall be the amount of Dollars which could have been purchased by the principal amount (or, in the case of a Discount Security, the Dollar equivalent on the date determined as set forth below of the amount determined as provided in (y) above) of such currency or composite currency evidenced by such Security, in each such case certified to the Trustee in an Officer's Certificate, based (i) on the average of the mean of the buying and selling spot rates quoted by three banks which are members of the New York Clearing House Association selected by the Company in effect at 11:00 A.M. (New York time) in The City of New York on the fifth Business Day preceding any such determination or (ii) if on such fifth Business Day it shall not be possible or practicable to obtain such quotations from such three banks, on such other quotations or alternative methods of determination which shall be as consistent as practicable with the method set forth in (i) above;] provided, further, that in the case of any Security the principal of which is payable from time to time without presentment or surrender, the principal amount of such Security that shall be deemed to be Outstanding at any time for all purposes of this Indenture shall be the original principal amount thereof less the aggregate amount of principal thereof theretofore paid. 6 "PAYING AGENT" means any Person, including the Company or the Guarantor, authorized by the Company to pay the principal of, and premium, if any, or interest, if any, on any Securities on behalf of the Company or the Guarantor. "PERIODIC OFFERING" means an offering of Securities of a series from time to time any or all of the specific terms of which Securities, including without limitation the rate or rates of interest, if any, thereon, the Stated Maturity or Maturities thereof and the redemption provisions, if any, with respect thereto, are to be determined by the Company or its agents from time to time subsequent to the initial request for the authentication and delivery of such Securities by the Trustee, as contemplated in Section 301 and clause (b) of Section 303. "PERSON" means any individual, corporation, partnership, limited liability company, joint venture, trust or unincorporated organization or any government or any political subdivision, instrumentality or agency thereof. "PLACE OF PAYMENT", when used with respect to the Securities of any series, or Tranche thereof, means the place or places, specified as contemplated by Section 301, at which, subject to Section 602, principal of and premium, if any, and interest, if any, on the Securities of such series or Tranche are payable. "PREDECESSOR SECURITY" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. ["PREFERRED SECURITIES" means any preferred trust interests issued by a Trust or similar securities issued by permitted successors to such Trust in accordance with the Trust Agreement pertaining to such Trust.] "REDEMPTION DATE", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "REDEMPTION PRICE", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "REGULAR RECORD DATE" for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301. "[REQUIRED CURRENCY" has the meaning specified in Section 311.] "RESPONSIBLE OFFICER", when used with respect to the Trustee, means the chairman or any vice-chairman of the board of directors, the chairman or any vice-chairman of the executive committee of the board of directors, the chairman of the trust committee, the president, any vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any senior trust officer, any trust officer or assistant trust officer, the controller or any assistant controller or any other officer 7 of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer of the Trustee to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "SECURITIES" has the meaning stated in the first recital of this Indenture and more particularly means any securities authenticated and delivered under this Indenture. "SECURITIES ACT" means the Securities Act of 1933, and the rules and regulations promulgated thereunder, as amended from time to time. "SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings specified in Section 305. "SENIOR INDEBTEDNESS", when used with respect to the Company or the Guarantor, means all obligations (other than non-recourse obligations and the indebtedness issued under this Indenture) of, or guaranteed or assumed by, the Company or the Guarantor, as the case may be, for borrowed money, including both senior and subordinated indebtedness for borrowed money (other than the Securities), or for the payment of money relating to any lease which is capitalized on the consolidated balance sheet of the Company or the Guarantor, as the case may be, and its subsidiaries in accordance with generally accepted accounting principles as in effect from time to time, or evidenced by bonds, debentures, notes or other similar instruments, and in each case, amendments, renewals, extensions, modifications and refundings of any such indebtedness or obligations, whether existing as of the date of this Indenture or subsequently incurred by the Company 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 Securities or the Guarantees, as the case may be; provided that the Guarantor's obligations under the Trust Securities Guarantee shall not be deemed to be Senior Indebtedness of the Guarantor. "SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the Securities of any series means a date fixed by the Trustee pursuant to Section 307. "STATED INTEREST RATE" means a rate (whether fixed or variable) at which an obligation by its terms is stated to bear simple interest. Any calculation or other determination to be made under this Indenture by reference to the Stated Interest Rate on a Security shall be made without regard to the effective interest cost to the Company of such Security and without regard to the Stated Interest Rate on, or the effective cost to the Company of, any other indebtedness the Company's obligations in respect of which are evidenced or secured in whole or in part by such Security. "STATED MATURITY", when used with respect to any Security or any obligation or any installment of principal thereof or interest thereon, means the date on which the principal of such obligation or such installment of principal or interest is stated to be due and payable (without regard to any 8 provisions for redemption, prepayment, acceleration, purchase or extension). "TRANCHE" means a group of Securities which (a) are of the same series and (b) have identical terms except as to principal amount and/or date of issuance. ["TRUST" means PPL Capital Funding Trust I, a statutory business trust formed under the laws of the State of Delaware, or any other trust designated pursuant to Section 301 hereof or any permitted successor under the Trust Agreement pertaining to such Trust.] ["TRUST AGREEMENT" means the Amended and Restated Trust Agreement, dated as of , , relating to PPL Capital Funding Trust I, or an Amended ------ ---- and Restated Trust Agreement relating to a Trust designated pursuant to Section 301 hereof, in each case, among PPL Corporation, as Depositor and Trust Securities Guarantor, the trustees named therein and the several holders referred to therein, as such agreement or agreements, as the case may be, may be amended from time to time.] "TRUSTEE" means the Person named as the "Trustee" in the first paragraph of this Indenture until a successor Trustee shall have become such with respect to one or more series of Securities pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. "TRUST INDENTURE ACT" means, as of any time, the Trust Indenture Act of 1939 as in force at such time. ["TRUST SECURITIES GUARANTEE" means the Trust Securities Guarantee Agreement between the Guarantor, as Trust Securities Guarantor, and a guarantee trustee for the benefit of the holders of Preferred Securities [and Common Securities] issued by such Trust.] "UNITED STATES" means the United States of America, its territories, its possessions and other areas subject to its jurisdiction. [Additional Definitions to be included if Securities are issued in connection with Stock Purchase Units]. SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS. Except as otherwise expressly provided in this Indenture, upon any application or request by the Company or the Guarantor to the Trustee to take any action under any provision of this Indenture, the Company and the Guarantor shall each furnish to the Trustee an Officer's Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. 9 Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (a) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. (a) Any Officer's Certificate may be based (without further examination or investigation), insofar as it relates to or is dependent upon legal matters, upon an opinion of, or representations by, counsel, unless, in any case, such officer has actual knowledge that the certificate or opinion or representations with respect to the matters upon which such Officer's Certificate may be based as aforesaid are erroneous. Any Opinion of Counsel may be based (without further examination or investigation), insofar as it relates to or is dependent upon factual matters, information with respect to which is in the possession of the Company or the Guarantor, upon a certificate of, or representations by, an officer or officers of the Company or the Guarantor, as the case may be, unless such counsel has actual knowledge that the certificate or opinion or representations with respect to the matters upon which his opinion may be based as aforesaid are erroneous. In addition, any Opinion of Counsel may be based (without further examination or investigation), insofar as it relates to or is dependent upon matters covered in an Opinion of Counsel rendered by other counsel, upon such other Opinion of Counsel, unless such counsel has actual knowledge that the Opinion of Counsel rendered by such other counsel with respect to the matters upon which his Opinion of Counsel may be based as aforesaid are erroneous. If, in order to render any Opinion of Counsel provided for herein, the signer thereof shall deem it necessary that additional facts or matters be stated in any Officer's Certificate provided for herein, then such certificate may state all such additional facts or matters as the signer of such Opinion of Counsel may request. (b) In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Where (i) any 10 Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, or (ii) two or more Persons are each required to make, give or execute any such application, request, consent, certificate, statement, opinion or other instrument, any such applications, requests, consents, certificates, statements, opinions or other instruments may, but need not, be consolidated and form one instrument. (c) Whenever, subsequent to the receipt by the Trustee of any Board Resolution, Officer's Certificate, Opinion of Counsel or other document or instrument, a clerical, typographical or other inadvertent or unintentional error or omission shall be discovered therein, a new document or instrument may be substituted therefor in corrected form with the same force and effect as if originally filed in the corrected form and, irrespective of the date or dates of the actual execution and/or delivery thereof, such substitute document or instrument shall be deemed to have been executed and/or delivered as of the date or dates required with respect to the document or instrument for which it is substituted. Anything in this Indenture to the contrary notwithstanding, if any such corrective document or instrument indicates that action has been taken by or at the request of the Company which could not have been taken had the original document or instrument not contained such error or omission, the action so taken shall not be invalidated or otherwise rendered ineffective but shall be and remain in full force and effect, except to the extent that such action was a result of willful misconduct or bad faith. Without limiting the generality of the foregoing, any Securities issued under the authority of such defective document or instrument shall nevertheless be the valid obligations of the Company entitled to the benefits of this Indenture equally and ratably with all other Outstanding Securities, except as aforesaid. SECTION 104. ACTS OF HOLDERS. (a) Any request, demand, authorization, direction, notice, consent, election, waiver or other action provided by this Indenture to be made, given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing or, alternatively, may be embodied in and evidenced by the record of Holders voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders duly called and held in accordance with the provisions of Article Thirteen, or a combination of such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company and the Guarantor. Such instrument or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments and so voting at any such meeting. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of a Security, shall be sufficient for any purpose of this Indenture and (subject to Section 901) conclusive in favor of the Trustee, the Company and the Guarantor, if made in the manner provided in this Section. The record of any meeting of Holders shall be proved in the manner provided in Section 1306. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by 11 law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof or may be proved in any other manner which the Trustee and the Company deem sufficient. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. (c) The ownership, principal amount (except as otherwise contemplated in clause (y) of the first proviso to the definition of Outstanding) and serial numbers of Securities held by any Person, and the date of holding the same, shall be proved by the Security Register. (d) Any request, demand, authorization, direction, notice, consent, election, waiver or other Act of a Holder shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, the Company or the Guarantor in reliance thereon, whether or not notation of such action is made upon such Security. (e) Until such time as written instruments shall have been delivered to the Trustee with respect to the requisite percentage of principal amount of Securities for the action contemplated by such instruments, any such instrument executed and delivered by or on behalf of a Holder may be revoked with respect to any or all of such Securities by written notice by such Holder or any subsequent Holder, proven in the manner in which such instrument was proven. (f) Securities of any series, or any Tranche thereof, authenticated and delivered after any Act of Holders may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any action taken by such Act of Holders. If the Company shall so determine, new Securities of any series, or any Tranche thereof, so modified as to conform, in the opinion of the Trustee and the Company, to such action may be prepared and executed by the Company and the Guarantor and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series or Tranche. (g) Each of the Company and the Guarantor may, at its option, by Company Order or Guarantor Order, as appropriate, fix in advance a record date for the determination of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or other Act solicited by the Company, but neither the Company nor the Guarantor shall have any obligation to do so; provided, however, that neither the Company nor the Guarantor may fix a record date for the giving or making of any notice, declaration, request or direction referred to in the next sentence. In addition, the Trustee may, at its option, fix in advance a record date for the determination of Holders entitled to join in the giving or making of any Notice of Default, any declaration of acceleration referred to in Section 802, any request to institute proceedings referred to in Section 807 or any direction referred to in Section 812. If any such record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act, or such notice, declaration, request or direction, may be given before or after such record date, but only the Holders of record at the close of business on the record date shall be deemed to be Holders for the purposes of determining (i) whether Holders of the requisite proportion of the Outstanding Securities have authorized or agreed or consented to such Act (and for that purpose the Outstanding Securities shall be computed 12 as of the record date) and/or (ii) which Holders may revoke any such Act (notwithstanding subsection (e) of this Section ); and any such Act, given as aforesaid, shall be effective whether or not the Holders which authorized or agreed or consented to such Act remain Holders after such record date and whether or not the Securities held by such Holders remain Outstanding after such record date. SECTION 105. NOTICES, ETC. TO TRUSTEE, COMPANY OR GUARANTOR. Any request, demand, authorization, direction, notice, consent, election, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, the Trustee by any Holder or by the Company or the Guarantor, or the Company or the Guarantor by the Trustee or by any Holder, shall be sufficient for every purpose hereunder (unless otherwise expressly provided herein) if in writing and delivered personally to an officer or other responsible employee of the addressee, or transmitted by facsimile transmission, telex or other direct written electronic means to such telephone number or other electronic communications address set forth for such party below or such other address as the parties hereto shall from time to time designate, or transmitted by registered mail, charges prepaid, to the applicable address set forth for such party below or to such other address as any party hereto may from time to time designate: If to the Trustee, to: The Chase Manhattan Bank 450 West 33rd Street 15th Floor New York, New York 10001 Attention: Capital Markets Fiduciary Services Telephone: Telecopy: If to the Company, to: PPL Capital Funding, Inc. Two North Ninth Street Allentown, Pennsylvania 18101-1179 Attention: Treasurer Telephone:(610) 774-5987 Telecopy: (610) 774-5106 13 With a copy to: PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18109-1179 Attention: Treasurer Telephone: (610) 774-5987 Telecopy:(610) 774-5106 If to the Guarantor, to: PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18109-1179 Attention: Treasurer Telephone: (610) 774-5987 Telecopy: (610) 774-5106 Any communication contemplated herein shall be deemed to have been made, given, furnished and filed if personally delivered, on the date of delivery, if transmitted by facsimile transmission, telex or other direct written electronic means, on the date of transmission, and if transmitted by registered mail, on the date of receipt. SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER. Except as otherwise expressly provided herein, where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given, and shall be deemed given, to Holders if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at the address of such Holder as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such Notice. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice to Holders by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Any notice required by this Indenture may be waived in writing by the Person entitled to receive such notice, either before or after the event otherwise to be specified therein, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. 14 SECTION 107. CONFLICT WITH TRUST INDENTURE ACT. If any provision of this Indenture limits, qualifies or conflicts with another provision hereof which is required or deemed to be included in this Indenture by, or is otherwise governed by, any provision of the Trust Indenture Act, such other provision shall control; and if any provision hereof otherwise conflicts with the Trust Indenture Act, the Trust Indenture Act shall control. SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section headings in this Indenture and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 109. SUCCESSORS AND ASSIGNS. All covenants and agreements in this Indenture by the Company or the Guarantor shall bind its successors and assigns, whether so expressed or not. SECTION 110. SEPARABILITY CLAUSE. In case any provision in this Indenture or the Securities or the Guarantees shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 111. BENEFITS OF INDENTURE. Nothing in this Indenture, the Securities or the Guarantees, express or implied, shall give to any Person, other than the parties hereto, their successors hereunder, the Holders and the holders of Senior Indebtedness, any benefit or any legal or equitable right, remedy or claim under this Indenture [, provided, however, that for so long as any Preferred Securities remain outstanding, the holders of such Preferred Securities, subject to certain limitations set forth in this Indenture, may enforce the Company's and the Guarantor's obligations hereunder, directly against the Company or the Guarantor, as the case may be, as third party beneficiaries of this Indenture without proceeding against the Trust issuing such Preferred Securities]. SECTION 112. GOVERNING LAW. This Indenture, the Securities and the Guarantees shall be governed by and construed in accordance with the law of the State of New York (including without limitation Section 5-1401 of the New York General Obligations Law or any successor to such statute), except to the extent that the Trust Indenture Act shall be applicable. SECTION 113. LEGAL HOLIDAYS. In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities other than a provision in Securities of any series, or any Tranche thereof, or in the indenture supplemental hereto, Board Resolution or Officer's Certificate 15 which establishes the terms of the Securities of such series or Tranche, which specifically states that such provision shall apply in lieu of this Section) payment of interest or principal and premium, if any, need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment [, except that if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case] with the same force and effect as if made on the Interest Payment Date, Redemption Date, or Stated Maturity, and, if such payment is made or duly provided for on such Business Day, no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to such Business Day. ARTICLE TWO SECURITY FORMS SECTION 201. FORMS GENERALLY. The definitive Securities of each series and the Guarantees to be endorsed thereon as contemplated by Article Fourteen shall be in substantially the form or forms thereof established in the indenture supplemental hereto establishing such series or in a Board Resolution establishing such series, or in an Officer's Certificate pursuant to such a supplemental indenture or Board Resolution, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities or Guarantees endorsed thereon, as the case may be, as evidenced by their execution thereof. If the form or forms of Securities of any series or Guarantees endorsed thereon are established in a Board Resolution or in an Officer's Certificate pursuant to a Board Resolution, such Board Resolution and Officer's Certificate, if any, shall be delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities. Unless otherwise specified as contemplated by Section 301 or 1201(g), the Securities of each series shall be issuable in registered form without coupons. The definitive Securities and Guarantees endorsed thereon shall be produced in such manner as shall be determined by the officers executing such Securities or Guarantees, as evidenced by their execution thereof. SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The Trustee's certificate of authentication shall be in substantially the form set forth below: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. --------------------------------, as Trustee 16 By: ------------------------------ Authorized Officer ARTICLE THREE THE SECURITIES SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited [; provided, however, that all Securities shall be issued to a Trust to evidence loans by a Trust of the proceeds of the issuance of Preferred Securities and Common Securities of such Trust.] The Securities may be issued in one or more series. Subject to the last paragraph of this Section, prior to the authentication and delivery of Securities of any series there shall be established by specification in a supplemental indenture or in a Board Resolution of the Company or in an Officer's Certificate of the Company (which need not, comply with Section 102) pursuant to a supplemental indenture or a Board Resolution: (a) the title of the Securities of such series (which shall distinguish the Securities of such series from Securities of all other series); (b) any limit upon the aggregate principal amount of the Securities of such series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of such series pursuant to Section 304, 305, 306, 406 or 1206 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder); (c) the Person or Persons (without specific identification) to whom any interest on Securities of such series, or any Tranche thereof, shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest; (d) the date or dates on which the principal of the Securities of such series or any Tranche thereof, is payable or any formulary or other method or other means by which such date or dates shall be determined, by reference to an index or other fact or event ascertainable outside of this Indenture or otherwise (without regard to any provisions for redemption, prepayment, acceleration, purchase or extension); 17 (e) the rate or rates at which the Securities of such series, or any Tranche thereof, shall bear interest, if any (including the rate or rates at which overdue principal shall bear interest after Maturity if different from the rate or rates at which such Securities shall bear interest prior to Maturity, and, if applicable, the rate or rates at which overdue premium or interest shall bear interest, if any), or any formulary or other method or other means by which such rate or rates shall be determined by reference to an index or other fact or event ascertainable outside of this Indenture or otherwise, the date or dates from which such interest shall accrue; the Interest Payment Dates and the Regular Record Dates, if any, for the interest payable on such Securities on any Interest Payment Date; [the right of the Company, if any, to extend the interest payment periods and the duration of any such extension as contemplated by Section 312;] and the basis of computation of interest, if other than as provided in Section 310; (f) the place or places at which or methods (if other than as provided elsewhere in this Indenture) by which (i) the principal of and premium, if any, and interest, if any, on Securities of such series, or any Tranche thereof, shall be payable, (ii) registration of transfer of Securities of such series, or any Tranche thereof, may be effected, (iii) exchanges of Securities of such series, or any Tranche thereof, may be effected and (iv) notices and demands to or upon the Company in respect of the Securities of such series, or any Tranche thereof, and this Indenture may be served; the Security Registrar and any Paying Agent or Agents for such series or Tranche; and if such is the case, that the principal of such Securities shall be payable without presentment or surrender thereof; (g) the period or periods within which, or the date or dates on which, the price or prices at which and the terms and conditions upon which the Securities of such series, or any Tranche thereof, may be redeemed, in whole or in part, at the option of the Company and any restrictions on such redemptions; (h) the obligation, if any, of the Company to redeem or purchase or repay the Securities of such series, or any Tranche thereof, pursuant to any sinking fund or other mandatory redemption provisions or at the option of a Holder thereof and the period or periods within which or the date or dates on which, the price or prices at which and the terms and conditions upon which such Securities shall be redeemed or purchased or repaid, in whole or in part, pursuant to such obligation and applicable exceptions to the requirements of Section 404 in the case of mandatory redemption or redemption or repayment at the option of the Holder; (i) the denominations in which Securities of such series, or any Tranche thereof, shall be issuable if other than denominations of $[25] and any integral multiple thereof; (j) if the principal of or premium, if any, or interest, if any, on the Securities of such series, or any Tranche thereof, are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than that in which the Securities are stated to be 18 payable, the period or periods within which, and the terms and conditions upon which, such election may be made and the manner in which the amount of such coin or currency payable is to be determined; (k) the currency or currencies, including composite currencies, in which payment of the principal of and premium, if any, and interest, if any, on the Securities of such series, or any Tranche thereof, shall be payable (if other than Dollars) and the manner in which the equivalent of the principal amount thereof in Dollars is to be determined for any purpose, including for the purpose of determining the principal amount deemed to be Outstanding at any time; (l) if the principal of or premium, if any, or interest on the Securities of such series, or any Tranche thereof, are to be payable, or are to be payable at the election of the Company or a Holder thereof, in securities or other property, the type and amount of such securities or other property, or the formulary or other method or other means by which such amount shall be determined, and the period or periods within which, and the terms and conditions upon which, any such election may be made; (m) if the amount payable in respect of principal of or premium, if any, or interest, if any, on the Securities of such series, or any Tranche thereof, may be determined with reference to an index or other fact or event ascertainable outside this Indenture, the manner in which such amounts shall be determined to the extent not established pursuant to clause (e) of this paragraph; (n) if other than the entire principal amount thereof, the portion of the principal amount of Securities of such series, or any Tranche thereof, which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 802; (o) any Events of Default, in addition to those specified in Section 801, or any exceptions to those specified in Section 801, with respect to the Securities of such series, and any covenants of the Company or the Guarantor for the benefit of the Holders of the Securities of such series, or any Tranche thereof, in addition to those set forth in Article Six, or any exceptions to those set forth in Article Six; (p) the terms, if any, pursuant to which the Securities of such series, or any Tranche thereof, may be converted into or exchanged for shares of capital stock or other securities of the Company or any other Person; (q) the obligations or instruments, if any, which shall be considered to be Eligible Obligations in respect of the Securities of such series, or any Tranche thereof, denominated in a currency other than Dollars or in a composite currency, and any provisions for satisfaction and discharge of Securities of any series, in addition to those set forth in Section 701 and 702, or any exceptions to those set forth in Section 701 and 702; 19 (r) if the Securities of such series, or any Tranche thereof, are to be issued in global form, (i) any limitations on the rights of the Holder or Holders of such Securities to transfer or exchange the same or to obtain the registration of transfer thereof, (ii) any limitations on the rights of the Holder or Holders thereof to obtain certificates therefor in definitive form in lieu of global form and (iii) any other matters incidental to such Securities; (s) if the Securities of such series, or any Tranche thereof, are to be issuable as bearer securities, any and all matters incidental thereto which are not specifically addressed in a supplemental indenture as contemplated by clause (g) of Section 1201; (t) to the extent not established pursuant to clause (r) of this paragraph, any limitations on the rights of the Holders of the Securities of such Series, or any Tranche thereof, to transfer or exchange such Securities or to obtain the registration of transfer thereof; and if a service charge will be made for the registration of transfer or exchange of Securities of such series, or any Tranche thereof, the amount or terms thereof; (u) any exceptions to Section 113, or variation in the definition of Business Day, with respect to the Securities of such series, or any Tranche thereof; (v) any terms of the Guarantees with respect to the Securities of such series, or any Tranche thereof, in addition to those set forth in Section 1401, or any exceptions to those set forth in Section 1401; and [w) the designation of the Trust to which Securities of such series are to be issued;] (x) any other terms of the Securities of such series, or any Tranche thereof. With respect to Securities of a series subject to a Periodic Offering, the indenture supplemental hereto or the Board Resolution which establishes such series, or the Officer's Certificate pursuant to such supplemental indenture or Board Resolution, as the case may be, may provide general terms or parameters for Securities of such series and provide either that the specific terms of Securities of such series, or any Tranche thereof, shall be specified in a Company Order or that such terms shall be determined by the Company or its agents in accordance with procedures specified in a Company Order as contemplated in clause (b) of Section 303. [All Securities of any one series shall be substantially identical, except as to principal amount and date of issue and except as may be set forth in the terms of such series as contemplated above.] The Securities of each series shall be subordinated in right of payment to Senior Indebtedness of the Company as provided in Article Fifteen. The Guarantees relating to such Securities shall be subordinated in right of payment to Senior Indebtedness of the Guarantor as provided in Article Fourteen. 20 Unless otherwise provided with respect to a series of Securities as contemplated in Section 301(b), the aggregate principal amount of a series of Securities may be increased and additional Securities of such series may be issued up to the maximum aggregate principal amount authorized with respect to such series as increased. SECTION 302. DENOMINATIONS. Unless otherwise provided as contemplated by Section 301 with respect to any series of Securities, or any Tranche thereof, the Securities of each series shall be issuable in denominations of $[25] and any integral multiple thereof. SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. Unless otherwise provided as contemplated by Section 301 with respect to any series of Securities or any Tranche thereof, the Securities shall be executed on behalf of the Company by an Authorized Officer of the Company, and may have the corporate seal of the Company affixed thereto or reproduced thereon attested by its Secretary, one of its Assistant Secretaries or any other Authorized Officer. The signature of any or all of these officers on the Securities may be manual or facsimile. A Security bearing the manual or facsimile signature of an individual who was at the time of execution an Authorized Officer of the Company shall bind the Company, notwithstanding that any such individual has ceased to be an Authorized Officer prior to the authentication and delivery of the Security or did not hold such office at the date of such Security. Unless otherwise provided as contemplated by Section 301, with respect to any series of Securities or any Tranche thereof, Guarantees to be endorsed on any Securities shall be executed and delivered in accordance with the provisions of Section 1402. The Trustee shall authenticate and deliver Securities of a series, with the Guarantees endorsed thereon, for original issue, at one time or from time to time in accordance with the Company Order referred to below, upon receipt by the Trustee of: (a) the instrument or instruments establishing the form or forms and terms of the Securities of such series and the Guarantees to be endorsed thereon, as provided in Sections 201 and 301; (b) a Company Order requesting the authentication and delivery of such Securities, with the Guarantees endorsed thereon, and, to the extent that the terms of such Securities and Guarantees shall not have been established in an indenture supplemental hereto or in a Board Resolution, or in an Officer's Certificate pursuant to a supplemental indenture or Board Resolution, all as contemplated by Sections 201 and 301, either (i) establishing such terms or (ii) in the case of Securities of a series subject to a Periodic Offering, specifying procedures, acceptable to the Trustee, by which such terms are to be established (which procedures may provide, to the extent acceptable to the Trustee, for authentication and delivery pursuant to oral or 21 electronic instructions from the Company or any agent or agents thereof, which oral instructions are to be promptly confirmed electronically or in writing), in either case in accordance with the instrument or instruments delivered pursuant to clause (a) above; (c) A Guarantor Order approving the terms and delivery of the Guarantees to be endorsed on such Securities as contemplated by the Company Order delivered pursuant to clause (b) above; (d) Securities of such series, each executed on behalf of the Company by an Authorized Officer of the Company and having a Guarantee endorsed thereon executed on behalf of the Guarantor by an Authorized Officer of the Guarantor; (e) an Opinion of Counsel to the effect that: (i) (A) the forms of such Securities have been duly authorized by the Company, (B) the forms of such Guarantees have been duly authorized by the Guarantor, and (C) the forms of the Securities and the Guarantees have been established in conformity with the provisions of this Indenture; (ii) (A) the terms of such Securities have been duly authorized by the Company, (B) the terms of such Guarantees have been duly authorized by the Guarantor and (C) the terms of the Securities and the Guarantees have been established in conformity with the provisions of this Indenture; and (iii) such Securities and the Guarantees endorsed thereon, when authenticated and delivered by the Trustee and issued and delivered by the Company and the Guarantor in the manner and subject to any conditions specified in such Opinion of Counsel, will have been duly issued under this Indenture and will constitute valid and legally binding obligations of the Company and the Guarantor, respectively, entitled to the benefits provided by this Indenture, and enforceable in accordance with their terms, subject, as to enforcement, to laws relating to or affecting generally the enforcement of creditors' rights, including, without limitation, bankruptcy and insolvency laws and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity as at law); provided, however, that, with respect to Securities of a series subject to a Periodic Offering, the Trustee shall be entitled to receive such Opinion of Counsel only once at or prior to the time of the first authentication and delivery of Securities of such series, and the Guarantees endorsed thereon, and that in lieu of the opinions described in clauses (ii) and (iii) above such Opinion of Counsel may, alternatively, state, respectively, (x) that, when the terms of such Securities and the Guarantees to be endorsed thereon shall have been established pursuant to a Company Order or Orders and, if applicable, a Guarantor Order or Orders or pursuant to such procedures as may be specified from time to time by a Company Order or Orders, and, if applicable, a Guarantor Order or Orders all as contemplated by and in accordance with the instrument or 22 instruments delivered pursuant to clause (a) above, such terms will have been duly authorized by the Company and the Guarantor, respectively, and will have been established in conformity with the provisions of this Indenture; and (y) that such Securities, and the Guarantees endorsed thereon, when (1) executed by the Company or the Guarantor, as the case may be, (2) authenticated and delivered by the Trustee in accordance with this Indenture, (3) issued and delivered by the Company and the Guarantor and (4) paid for, all as contemplated by and in accordance with the aforesaid Company Order or Orders and, if applicable, a Guarantor Order or Orders or specified procedures, as the case may be, will have been duly issued under this Indenture and will constitute valid and legally binding obligations of the Company and the Guarantor, respectively, entitled to the benefits provided by the Indenture, and enforceable in accordance with their terms, subject, as to enforcement, to laws relating to or affecting generally the enforcement of creditors' rights, including, without limitation, bankruptcy and insolvency laws and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). With respect to Securities of a series subject to a Periodic Offering, the Trustee may conclusively rely, as to the authorization by the Company and the Guarantor of any of such Securities and Guarantees, the forms and terms thereof and the legality, validity, binding effect and enforceability thereof, upon the Opinion of Counsel and other documents delivered pursuant to Sections 201 and 301 and this Section, as applicable, at or prior to the time of the first authentication of Securities of such series, with the Guarantees endorsed thereon, unless and until such opinion or other documents have been superseded or revoked or expire by their terms. In connection with the authentication and delivery of Securities of a series, with Guarantees endorsed thereon, pursuant to a Periodic Offering, the Trustee shall be entitled to assume that the Company's instructions to authenticate and deliver such Securities, and the Guarantor's approval of the delivery of the Guarantees thereon, do not violate any applicable law or any applicable rule, regulation or order of any governmental agency or commission having jurisdiction over the Company or the Guarantor. If the forms or terms of the Securities of any series have been established by or pursuant to a Board Resolution or an Officer's Certificate as permitted by Sections 201 or 301, the Trustee shall not be required to authenticate such Securities if the issuance of such Securities pursuant to this Indenture will adversely affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. Except as otherwise specified as contemplated by Section 301 with respect to any series of securities, or any Tranche thereof, each Security, and any Guarantee endorsed thereon, shall each be dated the date of its authentication. Except as otherwise specified as contemplated by Section 301 with respect to any series of Securities, or any Tranche thereof, no Security or Guarantee endorsed thereon shall be entitled to any benefit under this Indenture 23 or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee or its agent by manual signature of an authorized officer thereof, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security or Guarantee endorsed thereon has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder to the Company, or any Person acting on its behalf, but shall never have been issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309 together with a written statement (which need not comply with Section 102 and need not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and sold by the Company, for all purposes of this Indenture such Security (including any Guarantee endorsed thereon) shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits hereof. SECTION 304. TEMPORARY SECURITIES. Pending the preparation of definitive Securities of any series, or any Tranche thereof, the Company may execute, and upon Company Order and a Guarantor Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued, having Guarantees endorsed thereon, with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities or Guarantees may determine, as evidenced by their execution of such Securities or Guarantees; provided, however, that temporary Securities need not recite specific redemption, sinking fund, conversion or exchange provisions. If temporary Securities of any series or Tranche are issued, the Company shall cause definitive Securities of such series or Tranche to be prepared without unreasonable delay. After the preparation of definitive Securities of such series or Tranche, the temporary Securities of such series or Tranche shall be exchangeable for definitive Securities of such series or Tranche, with the definitive Guarantees of the Guarantor endorsed thereon, upon surrender of the temporary Securities of such series or Tranche at the office or agency of the Company maintained pursuant to Section 602 in a Place of Payment for such series or Tranche, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series or Tranche, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor definitive Securities of the same series or Tranche, of authorized denominations and of like tenor and aggregate principal amount, with the definitive Guarantees of the Guarantor endorsed thereon. Until exchanged in full as hereinabove provided, temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of the same series and Tranche and of like tenor authenticated and delivered hereunder. 24 SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. The Company shall cause to be kept in one of the offices or agencies designated pursuant to Section 602, with respect to the Securities of each series or any Tranche thereof, a register (the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities of such series or Tranche and the registration of transfer thereof. The Company shall designate one Person to maintain the Security Register for the Securities of each series, and such Person is referred to herein, with respect to such series, as the "Security Registrar." Anything herein to the contrary notwithstanding, the Company may designate one or more of its offices or an office of any Affiliate (including the Guarantor) as an office in which a register with respect to the Securities of one or more series, or any Tranche or Tranches thereof, shall be maintained, and the Company may designate itself or any Affiliate (including the Guarantor) as the Security Registrar with respect to one or more of such series. The Security Register shall be open for inspection by the Trustee and the Company at all reasonable times. Except as otherwise specified as contemplated by Section 301 with respect to the Securities of any series, or any Tranche thereof, upon surrender for registration of transfer of any Security of such series or Tranche at the office or agency of the Company maintained pursuant to Section 602 in a Place of Payment for such series or Tranche, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series and Tranche, of authorized denominations and of like tenor and aggregate principal amount, with the Guarantees of the Guarantor endorsed thereon. Except as otherwise specified as contemplated by Section 301 with respect to the Securities of any series, or any Tranche thereof, any Security of such series or Tranche may be exchanged at the option of the Holder for one or more new Securities of the same series and Tranche, of authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at any such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities, with the Guarantees of the Guarantor endorsed thereon, which the Holder making the exchange is entitled to receive. All Securities and Guarantees delivered upon any registration of transfer or exchange of Securities and the Guarantees endorsed thereon shall be valid obligations of the Company and the Guarantor, respectively, evidencing the same obligation, and entitled to the same benefits under this Indenture, as the Securities and Guarantees surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company, the Guarantor, or the Trustee) be duly endorsed or shall be accompanied by a written instrument of transfer in form satisfactory to the Company, the Guarantor and the Trustee, duly executed by the Holder thereof or his attorney duly authorized in writing. 25 Unless otherwise specified as contemplated by Section 301, with respect to Securities of any series, or any Tranche thereof, no service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 406 or 1206 not involving any transfer. The Company shall not be required to execute or to provide for the registration of transfer of or the exchange of (a) Securities of any series, or any Tranche thereof, during a period of 15 days immediately preceding the date notice is to be given identifying the serial numbers of the Securities of such series or Tranche called for redemption or (b) any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and Tranche, and of like tenor and principal amount, having a Guarantee of the Guarantor endorsed thereon and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company, the Guarantor and the Trustee (a) evidence to their satisfaction of the ownership of and the destruction, loss or theft of any Security and (b) such security or indemnity as may be reasonably required by them to save each of them and any agent of any of them harmless, then, in the absence of notice to the Company, the Guarantor or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and Tranche, and of like tenor and principal amount, having a Guarantee of the Guarantor endorsed thereon and bearing a number not contemporaneously outstanding. Notwithstanding the foregoing, in case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company or the Guarantor in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Trustee) in connection therewith. Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security and any Guarantee endorsed thereon shall constitute an original additional contractual obligation of the Company and the Guarantor, respectively, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone other than the Holder of such new security, and any such new Security shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of such series duly issued hereunder, and the Guarantees endorsed on such Securities. 26 The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Unless otherwise provided as contemplated by Section 301 with respect to the Securities of any series, or any Tranche thereof, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. [Subject to Section 312,] any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the related Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company or the Guarantor, at its election in each case, as provided in clause (a) or (b) below: (a) The Company or the Guarantor may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a date (a "Special Record Date") for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company or the Guarantor shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company or the Guarantor, as the case may be, shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company and the Guarantor of such Special Record Date and, in the name and at the expense of the Company or the Guarantor, shall promptly cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such series at the address of such Holder as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date. 27 (b) The Company or the Guarantor may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company or the Guarantor to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section and Section 305, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. SECTION 308. PERSONS DEEMED OWNERS. Prior to due presentment of a Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may treat the Person in whose name such Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and premium, if any, and (subject to Sections 305 and 307) interest, if any, on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and none of the Company, the Guarantor, the Trustee or any agent of the Company, the Guarantor or the Trustee shall be affected by notice to the contrary. SECTION 309. CANCELLATION. All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and, if not theretofore canceled, shall be promptly canceled by the Trustee. The Company or the Guarantor may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company or the Guarantor may have acquired in any manner whatsoever or which the Company shall not have issued and sold, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Securities held by the Trustee shall be disposed of in accordance with the Trustee's customary procedures, and the Trustee shall promptly deliver a certificate of disposition to the Company unless, by a Company Order, the Company shall direct that canceled Securities be returned to it. SECTION 310. COMPUTATION OF INTEREST. Except as otherwise specified as contemplated by Section 301 for Securities of any series, or Tranche thereof, interest on the Securities of each series shall be computed on the basis of a 360-day year consisting of twelve 30-day months, and with respect to any period less than a full calendar month, on the basis of the actual number of days elapsed during such period. 28 SECTION 311. PAYMENT TO BE IN PROPER CURRENCY. In the case of any Security denominated in any currency other than Dollars or in a composite currency (the "Required Currency"), except as otherwise specified with respect to such Security as contemplated by Section 301, the obligation of the Company or the Guarantor to make any payment of the principal thereof, or the premium or interest thereon, shall not be discharged or satisfied by any tender by the Company or the Guarantor, or recovery by the Trustee, in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the Trustee timely holding the full amount of the Required Currency then due and payable. If any such tender or recovery is in a currency other than the Required Currency, the Trustee may take such actions as it considers appropriate to exchange such currency for the Required Currency. The costs and risks of any such exchange, including without limitation the risks of delay and exchange rate fluctuation, shall be borne by the Company and the Guarantor, the Company and the Guarantor shall remain fully liable for any shortfall or delinquency in the full amount of Required Currency then due and payable, and in no circumstances shall the Trustee be liable therefor except in the case of its negligence or willful misconduct. The Company and the Guarantor hereby waive any defense of payment based upon any such tender or recovery which is not in the Required Currency, or which, when exchanged for the Required Currency by the Trustee, is less than the full amount of Required Currency then due and payable. [SECTION 312. EXTENSION OF INTEREST PAYMENT. The Company shall have the right at any time, so long as no Event of Default hereunder has occurred and is continuing with respect to the Securities of any series, to extend interest payment periods from time to time on all Securities of such series, if so specified as contemplated by Section 301 with respect to such Securities and upon such terms as may be specified as contemplated by Section 301 with respect to such Securities.] [SECTION 313. ADDITIONAL INTEREST. So long as any Preferred Securities remain outstanding, if the Trust which issued such Preferred Securities shall be required to pay, with respect to its income derived from the interest payments on the Securities of any series, any amounts for or on account of any taxes, duties, assessments or governmental charges of whatever nature imposed by the United States, or any other taxing authority, then, in any such case, the Company will pay as interest on such series such additional interest ("Additional Interest") as may be necessary in order that the net amounts received and retained by such Trust after the payment of such taxes, duties, assessments or governmental charges shall result in such Trust's having such funds as it would have had in the absence of any such payments.] [Whenever in this Indenture there is mentioned, in any context, the payment of interest on the Securities, such mention shall be deemed to include the payment of Additional Interest to the extent that, in such context, Additional Interest is, was or would be payable in respect thereof.] 29 ARTICLE FOUR REDEMPTION OF SECURITIES SECTION 401. APPLICABILITY OF ARTICLE. Securities of any series, or any Tranche thereof, which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities of such series or Tranche) in accordance with this Article. SECTION 402. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the Company to redeem any Securities shall be evidenced by a Board Resolution or an Officer's Certificate. The Company shall, at least 45 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee [and in the case of Securities of a series held by a Trust, the Property Trustee under the related Trust Agreement] in writing of such Redemption Date and of the principal amount of such Securities to be redeemed. In the case of any redemption of Securities (a) prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture or (b) pursuant to an election of the Company which is subject to a condition specified in the terms of such Securities, the Company and the Guarantor shall each furnish the Trustee with an Officer's Certificate evidencing compliance with such restriction or condition. SECTION 403. SELECTION OF SECURITIES TO BE REDEEMED. If less than all the Securities of any series, or any Tranche thereof, are to be redeemed, the particular Securities to be redeemed shall be selected by the Trustee from the Outstanding Securities of such series or Tranche not previously called for redemption, by such method as shall be provided for such particular series or Tranche, or in the absence of any such provision, by such method of random selection as the Trustee shall deem fair and appropriate and which may, in any case, provide for the selection for redemption of portions (equal to any authorized denomination for Securities of such series or Tranche) of the principal amount of Securities of such series or Tranche of a denomination larger than the minimum authorized denomination for Securities of such series or Tranche; provided, however, that if, as indicated in an Officer's Certificate, the Company shall have offered to purchase all or any principal amount of the Securities then Outstanding of any series, or any Tranche thereof, and less than all of such Securities as to which such offer was made shall have been tendered to the Company for such purchase, the Trustee, if so directed by Company Order, shall select for redemption all or any principal amount of such Securities which have not been so tendered. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected to be redeemed in part, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the 30 portion of the principal amount of such Securities which has been or is to be redeemed. SECTION 404. NOTICE OF REDEMPTION. Notice of redemption shall be given in the manner provided in Section 106 to the Holders of Securities to be redeemed not less than 30 nor more than 60 days prior to the Redemption Date. All notices of redemption shall state: (a) the Redemption Date, (b) the Redemption Price, (c) if less than all the Securities of any series or Tranche are to be redeemed, the identification of the particular Securities to be redeemed and the portion of the principal amount of any Security to be redeemed in part, (d) that on the Redemption Date the Redemption Price, together with accrued interest, if any, to the Redemption Date, will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date, (e) the place or places where such Securities are to be surrendered for payment of the Redemption Price and accrued interest, if any, unless it shall have been specified as contemplated by Section 301 with respect to such Securities that such surrender shall not be required, (f) that the redemption is for a sinking or other fund, if such is the case, and (g) such other matters as the Company shall deem desirable or appropriate. Unless otherwise specified with respect to any Securities in accordance with Section 301, with respect to any notice of redemption of Securities at the election of the Company, unless, upon the giving of such notice, such Securities shall be deemed to have been paid in accordance with Section 701, such notice may state that such redemption shall be conditional upon the receipt by the Paying Agent or Agents for such Securities, on or prior to the date fixed for such redemption, of money sufficient to pay the principal of and premium, if any, and interest, if any, on such Securities and that if such money shall not have been so received such notice shall be of no force or effect and the Company shall not be required to redeem such Securities. In the event that such notice of redemption contains such a condition and such money is not so received, the redemption shall not be made and within a reasonable time thereafter notice shall be given, in the manner in which the notice of redemption was given, that such money was not so received and such redemption was not required to be made. 31 Notice of redemption of Securities to be redeemed at the election of the Company, and any notice of non-satisfaction of a condition for redemption as aforesaid, shall be given by the Company or, on Company Request, by the Trustee in the name and at the expense of the Company. SECTION 405. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of redemption having been given as aforesaid, and the conditions, if any, set forth in such notice having been satisfied, the Securities or portions thereof so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless, in the case of an unconditional notice of redemption, the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Securities or portions thereof, if interest-bearing, shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with such notice, such Security or portion thereof shall be paid by the Company at the Redemption Price, together with accrued interest, if any, to the Redemption Date; provided, however, that no such surrender shall be a condition to such payment if so specified as contemplated by Section 301 with respect to such Security; and provided, further, that except as otherwise specified as contemplated by Section 301 with respect to such Security, any installment of interest on any Security the Stated Maturity of which installment is on or prior to the Redemption Date shall be payable to the Holder of such Security, or one or more Predecessor Securities, registered as such at the close of business on the related Regular Record Date according to the terms of such Security and subject to the provisions of Sections 305 and 307. SECTION 406. SECURITIES REDEEMED IN PART. Upon the surrender of any Security which is to be redeemed only in part at a Place of Payment therefor (with, if the Company, the Guarantor or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company, the Guarantor and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security, without service charge, a new Security or Securities of the same series and Tranche, of any authorized denomination requested by such Holder and of like tenor and in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered, with the Guarantee of the Guarantor endorsed thereon. ARTICLE FIVE SINKING FUNDS SECTION 501. APPLICABILITY OF ARTICLE. The provisions of this Article shall be applicable to any sinking fund for the retirement of the Securities of any series, or any Tranche thereof, except as otherwise specified as contemplated by Section 301 for Securities of such series or Tranche. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series, or any Tranche thereof, is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum 32 amount provided for by the terms of Securities of any series, or any Tranche thereof, is herein referred to as an "optional sinking fund payment". If provided for by the terms of Securities of any series, or any Tranche thereof, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 502. Each sinking fund payment shall be applied to the redemption of Securities of the series or Tranche in respect of which it was made as provided for by the terms of such Securities. SECTION 502. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES. The Company (a) may deliver to the Trustee Outstanding Securities (other than any previously called for redemption) of a series or Tranche in respect of which a mandatory sinking fund payment is to be made and (b) may apply as a credit Securities of such series or Tranche which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of such mandatory sinking fund payment; provided, however, that no Securities shall be applied in satisfaction of a mandatory sinking fund payment if such Securities shall have been previously so applied. Securities so applied shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such mandatory sinking fund payment shall be reduced accordingly. SECTION 503. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than 45 days prior to each sinking fund payment date for the Securities of any series, or any Tranche thereof, the Company shall deliver to the Trustee an Officer's Certificate specifying: (a) the amount of the next succeeding mandatory sinking fund payment for such series or Tranche; (b) the amount, if any, of the optional sinking fund payment to be made together with such mandatory sinking fund payment; (c) the aggregate sinking fund payment; (d) the portion, if any, of such aggregate sinking fund payment which is to be satisfied by the payment of cash; (e) the portion, if any, of such aggregate sinking fund payment which is to be satisfied by delivering and crediting Securities of such series or Tranche pursuant to Section 502 and stating the basis for such credit and that such Securities have not previously been so credited, and the Company shall also deliver to the Trustee any Securities to be so delivered. If the Company shall not deliver such Officer's Certificate, the next succeeding sinking fund payment for such series or Tranche shall be made entirely in cash in the amount of the mandatory sinking fund payment. Not less than 30 days before each such sinking fund payment date the Trustee shall select the Securities 33 to be redeemed upon such sinking fund payment date in the manner specified in Section 403 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 404. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 405 and 406. ARTICLE SIX COVENANTS SECTION 601. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company shall pay the principal of and premium, if any, and interest, if any [(including Additional Interest)], on the Securities of each series in accordance with the terms of such Securities and this Indenture. SECTION 602. MAINTENANCE OF OFFICE OR AGENCY. The Company and the Guarantor shall maintain in each Place of Payment for the Securities of each series, or any Tranche thereof, an office or agency where payment of such Securities shall be made or surrendered for payment, where registration of transfer or exchange of such Securities may be effected and where notices and demands to or upon the Company or the Guarantor in respect of such Securities and this Indenture may be served. The Company and the Guarantor shall give prompt written notice to the Trustee of the location, and any change in the location, of each such office or agency and prompt notice to the Holders of any such change in the manner specified in Section 106. If at any time the Company or the Guarantor shall fail to maintain any such required office or agency in respect of Securities of any series, or any Tranche thereof, or shall fail to furnish the Trustee with the address thereof, payment of such Securities may be made, registration of transfer or exchange thereof may be effected and notices and demands in respect thereby may be served at the Corporate Trust Office of the Trustee, and each of the Company and the Guarantor hereby appoint the Trustee as its agent for all such purposes in any such event. The Company or the Guarantor may also from time to time designate one or more other offices or agencies with respect to the Securities of one or more series, or any Tranche thereof, for any or all of the foregoing purposes and may from time to time rescind such designations; provided, however, that, unless otherwise specified as contemplated by Section 301 with respect to the Securities of such series or Tranche, no such designation or rescission shall in any manner relieve the Company or the Guarantor of its obligation to maintain an office or agency for such purposes in each Place of Payment for such Securities in accordance with the requirements set forth above. The Company and the Guarantor shall give prompt written notice to the Trustee, and prompt notice to the Holders in the manner specified in Section 106, of any such designation or rescission and of any change in the location of any such other office or agency. Anything herein to the contrary notwithstanding, any office or agency required by this Section may be maintained at an office of the Company or the Guarantor or any Affiliate of either of them, in which event the Company, the 34 Guarantor or such Affiliate, as the case may be, shall perform all functions to be performed at such office or agency. SECTION 603. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST. If the Company shall at any time act as its own Paying Agent with respect to the Securities of any series, or any Tranche thereof, it shall, on or before each due date of the principal of and premium, if any, or interest, if any, on any of such Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and premium or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and shall promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for the Securities of any series, or any Tranche thereof, it shall, prior to each due date of the principal of and premium, if any, or interest, if any, on such Securities, deposit with such Paying Agents sums sufficient (without duplication) to pay the principal and premium or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company shall promptly notify the Trustee of its action or failure so to act. The Company shall cause each Paying Agent for the Securities of any series, or any Tranche thereof, other than the Company or the Trustee, to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent shall: (a) hold all sums held by it for the payment of the principal of and premium, if any, or interest, if any, on Securities of such series or Tranche in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (b) give the Trustee notice of any default by the Company (or any other obligor upon the Securities of such series) in the making of any payment of principal of and premium, if any, or interest, if any, on the Securities of such series or Tranche; and (c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Company may at any time pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent and, if as stated in a Company Order delivered to the Trustee, in accordance with the provisions of Article Seven; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. 35 Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of and premium, if any, or interest, if any, on any Security and remaining unclaimed for two years after such principal and premium, if any, or interest has become due and payable shall be paid to the Company on Company Request, or, if then held by the Company, shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company and the Guarantor for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such payment to the Company, may at the expense of the Company, either (a) cause to be mailed, on one occasion only, notice to such Holder that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such mailing, any unclaimed balance of such money then remaining will be paid to the Company or (b) cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and that after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be paid to the Company. SECTION 604. CORPORATE EXISTENCE. Subject to the rights of the Company and the Guarantor under Article Eleven, each of the Company and the Guarantor shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence. SECTION 605. ANNUAL OFFICER'S CERTIFICATE Not later than in each year, commencing , , each -------- -------- ---- of the Company and the Guarantor shall deliver to the Trustee an Officer's Certificate which need not comply with Section 102, executed by its principal executive officer, principal financial officer or principal accounting officer, as to such officer's knowledge of such obligor's compliance with all conditions and covenants under this Indenture, such compliance to be determined without regard to any period of grace or requirement of notice under this Indenture. SECTION 606. WAIVER OF CERTAIN COVENANTS. The Company may omit in any particular instance to comply with any term, provision or condition set forth in (a) Section 607, 608 or any covenant or restriction specified with respect to the Securities of any series, or any Tranche thereof, as contemplated by Section 301 or by Section 1201(b), if before the time for such compliance the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series and Tranches with respect to which compliance with such covenant or restriction is to be omitted, considered as one class, shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition; and 36 (b) Section 604 or 1101, if before the time for such compliance the Holders of a majority in principal amount of Securities Outstanding under this Indenture shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition; but, in either case, no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect [; provided, however, so long as a Trust holds Securities of any series, such Trust may not waive compliance or waive any default in compliance by the Company with any covenant or other term contained in this Indenture or the Securities of such series without the approval of the holders of at least a majority in aggregate liquidation preference of the outstanding Preferred Securities issued by such Trust affected, obtained as provided in the Trust Agreement pertaining to such Trust.] SECTION 607. RESTRICTION ON PAYMENT OF DIVIDENDS. So long as any Preferred Securities of any series remain outstanding, if at such time (a) the Guarantor shall be in default with respect to its payment obligations under the Trust Securities Guarantee relating to such Preferred Securities, (b) there shall have occurred and be continuing an Event of Default (whether before or after expiration of any period of grace) resulting from a payment default hereunder or (c) the Company shall have elected to extend any interest payment period as provided in Section 312, and any such period, or any extension thereof, shall be continuing, then the Guarantor shall not (i) declare or pay any dividends or distributions on its capital stock, other than dividends paid in shares of capital stock of the Guarantor, or (ii) redeem, purchase, acquire or make a liquidation payment with respect to any of the Guarantor's capital stock, or (iii) pay any principal, interest or premium on, or repay, repurchase or redeem any debt securities that are equal or junior in right of payment to the Guarantees, or (iv) make any payments with respect to any guarantee of debt securities by the Guarantor if such guarantee is equal or junior in right of payment to the Guarantees (other than payments under the Guarantee or the Trust Securities Guarantee relating to such Preferred Securities). [SECTION 608. MAINTENANCE OF TRUST EXISTENCE. So long as Preferred Securities of any series remain outstanding, the Company shall (i) maintain direct or indirect ownership of all interests in the Trust which issued such Preferred Securities, other than such Preferred Securities, (ii) not voluntarily (to the extent permitted by law) dissolve, liquidate or wind up such Trust, except in connection with a distribution of the Securities to the holders of the Preferred Securities in liquidation of such Trust, (iii) remain the sole Depositor under the Trust Agreement (the "Depositor") of such Trust and timely perform in all material respects all of its duties as Depositor of such Trust, and (iv) use reasonable efforts to cause such Trust to remain a business trust and otherwise continue to be treated as a grantor trust for Federal income tax purposes, provided that any permitted successor to the Guarantor or the Company under this Indenture may succeed to the Guarantor's or the Company's duties as Depositor of such Trust; and provided further that the Guarantor or the Company may permit such Trust to consolidate or merge with or into another business trust or other permitted successor under 37 the Trust Agreement pertaining to such Trust so long as the Guarantor agrees to comply with this Section 608 with respect to such successor business trust or other permitted successor.] [SECTION 609. RIGHTS OF HOLDERS OF PREFERRED SECURITIES. The Company agrees that, for so long as any Preferred Securities remain outstanding, its obligations under this Indenture will also be for the benefit of the holders from time to time of Preferred Securities, and the Company acknowledges and agrees that such holders will be entitled to enforce this Indenture, as third party beneficiaries, directly against the Company to the same extent as if such holders of Preferred Securities held a principal amount of Securities equal to the stated liquidation amount of the Preferred Securities held by such holders.] ARTICLE SEVEN SATISFACTION AND DISCHARGE SECTION 701. SATISFACTION AND DISCHARGE OF SECURITIES. Any Security or Securities, or any portion of the principal amount thereof, shall be deemed to have been paid for all purposes of this Indenture, and the entire indebtedness of the Company and the Guarantor in respect thereof shall be satisfied and discharged, if there shall have been irrevocably deposited with the Trustee or any Paying Agent (other than the Company or the Guarantor), in trust: (a) money in an amount which shall be sufficient, or (b) in the case of a deposit made prior to the Maturity of such Securities or portions thereof, Eligible Obligations, which shall not contain provisions permitting the redemption or other prepayment thereof at the option of the issuer thereof, the principal of and the interest on which when due, without any regard to reinvestment thereof, will provide moneys which, together with the money, if any, deposited with or held by the Trustee or such Paying Agent, shall be sufficient, or (c) a combination of (a) or (b) which shall be sufficient, to pay when due the principal of and premium, if any, and interest [(including any Additional Interest)], if any, due and to become due on such Securities or portions thereof; provided, however, that in the case of the provision for payment or redemption of less than all the Securities of any series or Tranche, such Securities or portions thereof shall have been selected by the Trustee as provided herein and, in the case of a redemption, the notice requisite to the validity of such redemption shall have been given or irrevocable authority shall have been given by the Company to the Trustee to give such notice, under arrangements satisfactory to the Trustee; and provided, further, that the Company shall have delivered to the Trustee and such Paying Agent: 38 (x) if such deposit shall have been made prior to the Maturity of such Securities, a Company Order stating that the money and Eligible Obligations deposited in accordance with this Section shall be held in trust, as provided in Section 603; (y) if Eligible Obligations shall have been deposited, an Opinion of Counsel to the effect that such obligations constitute Eligible Obligations and do not contain provisions permitting the redemption or other prepayment thereof at the option of the issuer thereof, and an opinion of an independent public accountant of nationally recognized standing, selected by the Company, to the effect that the other requirements set forth in clause (b) and (c) above have been satisfied; and (z) if such deposit shall have been made prior to the Maturity of such Securities, an Officer's Certificate stating the Company's intention that, upon delivery of such Officer's Certificate, its indebtedness in respect of such Securities or portions thereof will have been satisfied and discharged as contemplated in this Section. Upon the deposit of money or Eligible Obligations, or both, in accordance with this Section, together with the documents required by clauses (x), (y) and (z) above, the Trustee shall, upon Company Request, acknowledge in writing that such Securities or portions thereof are deemed to have been paid for all purposes of this Indenture and that the entire indebtedness of the Company in respect thereof has been satisfied and discharged as contemplated in this Section. In the event that all of the conditions set forth in the preceding paragraph shall have been satisfied in respect of any Securities or portions thereof except that, for any reason, the Officer's Certificate specified in clause (z) (if otherwise required) shall not have been delivered, such Securities or portions thereof shall nevertheless be deemed to have been paid for all purposes of this Indenture, and the Holders of such Securities or portions thereof shall nevertheless be no longer entitled to the benefits provided by this Indenture or of any of the covenants of the Company under Article Six (except the covenants contained in Sections 602 and 603) or any other covenants made in respect of such Securities or portions thereof as contemplated by Section 301 or Section 1201(b), but the indebtedness of the Company in respect of such Securities or portions thereof shall not be deemed to have been satisfied and discharged prior to Maturity for any other purpose; and, upon Company Request, the Trustee shall acknowledge in writing that such Securities or portions thereof are deemed to have been paid for all purposes of this Indenture. If payment at Stated Maturity of less than all of the Securities of any series, or any Tranche thereof, is to be provided for in the manner and with the effect provided in this Section, the Trustee shall select such Securities, or portions of principal amount thereof, in the manner specified by Section 403 for selection for redemption of less than all the Securities of a series or Tranche. In the event that Securities which shall be deemed to have been paid for purposes of this Indenture, and, if such is the case, in respect of which the Company's indebtedness shall have been satisfied and discharged, all as provided in this Section, do not mature and are not to be redeemed within the 39 sixty (60) day period commencing with the date of the deposit of moneys or Eligible Obligations, as aforesaid, the Company shall, as promptly as practicable, give a notice, in the same manner as a notice of redemption with respect to such Securities, to the Holders of such Securities to the effect that such deposit has been made and the effect thereof. Notwithstanding that any Securities shall be deemed to have been paid for purposes of this Indenture, as aforesaid, the obligations of the Company, the Guarantor and the Trustee in respect of such Securities under Sections 304, 305, 306, 404, 602, 603, 907 and 914 and this Article shall survive. The Company shall pay, and shall indemnify the Trustee or any Paying Agent with which Eligible Obligations shall have been deposited as provided in this Section against, any tax, fee or other charge imposed on or assessed against such Eligible Obligations or the principal or interest received in respect of such Eligible Obligations, including, but not limited to, any such tax payable by any entity deemed, for tax purposes, to have been created as a result of such deposit. Anything herein to the contrary notwithstanding, (a) if, at any time after a Security would be deemed to have been paid for purposes of this Indenture, and, if such is the case, the Company's indebtedness in respect thereof would be deemed to have been satisfied and discharged, pursuant to this Section (without regard to the provisions of this paragraph), the Trustee or any Paying Agent, as the case may be, (i) shall be required to return the money or Eligible Obligations, or combination thereof, deposited with it as aforesaid to the Company or its representative under any applicable Federal or State bankruptcy, insolvency or other similar law, or (ii) are unable to apply any money in accordance with this Article with respect to any Securities by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, such Security shall thereupon be deemed retroactively not to have been paid and any satisfaction and discharge of the Company's indebtedness in respect thereof shall retroactively be deemed not to have been effected, and such Security shall be deemed to remain Outstanding and (b) any satisfaction and discharge of the Company's indebtedness in respect of any Security shall be subject to the provisions of the last paragraph of Section 603. SECTION 702. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall upon Company Request cease to be of further effect (except as hereinafter expressly provided), and the Trustee, at the expense of the Company, shall execute such instruments as the Company shall reasonably request to evidence and acknowledge the satisfaction and discharge of this Indenture, when: (a) no Securities remain Outstanding hereunder; and (b) the Company or the Guarantor has paid or caused to be paid all other sums payable hereunder by the Company or the Guarantor; provided, however, that if, in accordance with the last paragraph of Section 701, any Security, previously deemed to have been paid for purposes of this Indenture, shall be deemed retroactively not to have been so paid, this Indenture shall thereupon be deemed retroactively not to have been satisfied and 40 discharged, as aforesaid, and to remain in full force and effect, and the Company shall execute and deliver such instruments as the Trustee shall reasonably request to evidence and acknowledge the same. Notwithstanding the satisfaction and discharge of this Indenture as aforesaid, the obligations of the Company, the Guarantor and the Trustee under Sections 304, 305, 306, 404, 602, 603, 907 and 914 and this Article shall survive. Upon satisfaction and discharge of this Indenture as provided in this Section, the Trustee shall turn over to the Company any and all money, securities and other property then held by the Trustee for the benefit of the Holders of the Securities (other than money and Eligible Obligations held by the Trustee pursuant to Section 703) and shall execute and deliver to the Company and the Guarantor such instruments as, in the judgment of the Company and the Guarantor, shall be necessary, desirable or appropriate to effect or evidence the satisfaction and discharge of this Indenture. SECTION 703. APPLICATION OF TRUST MONEY. Neither the Eligible Obligations nor the money deposited pursuant to Section 701, nor the principal or interest payments on any such Eligible Obligations, shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal of and premium, if any, and interest, if any, on the Securities or portions of principal amount thereof in respect of which such deposit was made, all subject, however, to the provisions of Section 603; provided, however, that any cash received from such principal or interest payments on such Eligible Obligations, if not then needed for such purpose, shall, to the extent practicable and upon Company Request and delivery to the Trustee of the documents referred to in clause (y) in the first paragraph of Section 701, be invested in Eligible Obligations of the type described in clause (b) in the first paragraph of Section 701 maturing at such times and in such amounts as shall be sufficient, together with any other moneys and the proceeds of any other Eligible Obligations then held by the Trustee, to pay when due the principal of and premium, if any, and interest, if any, due and to become due on such Securities or portions thereof on and prior to the Maturity thereof, and interest earned from such reinvestment shall be paid over to the Company as received, free and clear of any trust, lien or pledge under this Indenture (except the lien provided by Section 907); and provided, further, that any moneys held in accordance with this Section on the Maturity of all such Securities in excess of the amount required to pay the principal of and premium, if any, and interest, if any, then due on such Securities shall be paid over to the Company free and clear of any trust, lien or pledge under this Indenture (except the lien provided by Section 907); and provided, further, that if an Event of Default shall have occurred and be continuing, moneys to be paid over to the Company pursuant to this Section shall be held until such Event of Default shall have been waived or cured. 41 ARTICLE EIGHT EVENTS OF DEFAULT; REMEDIES SECTION 801. EVENTS OF DEFAULT. "Event of Default", wherever used herein with respect to Securities of any series, means any one of the following events: (a) default in the payment of any interest [, including any Additional Interest,] on any Security of such series when it becomes due and payable [(whether or not payment is prohibited by the subordination provisions of Article Fifteen or the subordination provisions of Article Fourteen hereof)] and continuance of such default for a period of 30 days; [provided, however, that a valid extension of the interest payment period by the Company as contemplated in Section 312 of this Indenture shall not constitute a default in the payment of interest for this purpose;] or (b) default in the payment of the principal of or premium, if any, on any Security of such series when it becomes due and payable [(whether or not payment is prohibited by the subordination provisions of Article Fifteen or the subordination provisions of Article Fourteen hereof)]; or (c) default in the performance of, or breach of, any covenant or warranty of the Company or the Guarantor in this Indenture (other than a covenant or warranty a default in the performance of which or breach of which is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of one or more series of Securities other than such series) and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company and the Guarantor by the Trustee, or to the Company, the Guarantor and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of such series, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder, unless the Trustee, or the Trustee and the Holders of a principal amount of Securities of such series not less than the principal amount of Securities the Holders of which gave such notice, as the case may be, shall agree in writing to an extension of such period prior to its expiration; provided, however, that the Trustee, or the Trustee and the Holders of such principal amount of Securities of such series, as the case may be, shall be deemed to have agreed to an extension of such period if corrective action is initiated by the Company or the Guarantor within such period and is being diligently pursued; or (d) except as provided by the terms hereof, the Securities of such series and the Guarantees endorsed thereon, the cessation of effectiveness of the Guarantee endorsed on a Security of such series or the finding by any judicial proceeding that the Guarantee endorsed on a Security of such series is unenforceable or invalid or the denial 42 or disaffirmation by the Guarantor of its obligations under the Guarantee endorsed on a Security of such series; or (e) the entry by a court having jurisdiction in the premises of (1) a decree or order for relief in respect of the Company or the Guarantor in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (2) a decree or order adjudging the Company or the Guarantor a bankrupt or insolvent, or approving as properly filed a petition by one or more Persons other than the Company or the Guarantor seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or the Guarantor under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official for the Company or the Guarantor or for any substantial part of its property, or ordering the winding up or liquidation of its affairs, and any such decree or order for relief or any such other decree or order shall have remained unstayed and in effect for a period of 90 consecutive days; or (f) the commencement by the Company or the Guarantor of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by the Company or the Guarantor to the entry of a decree or order for relief in respect of the Company or the Guarantor in a case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against the Company or the Guarantor, or the filing by the Company or the Guarantor of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by the Company or the Guarantor to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or the Guarantor or of any substantial part of its property, or the making by the Company or the Guarantor of an assignment for the benefit of creditors, or the admission by the Company or the Guarantor in writing of its inability to pay its debts generally as they become due, or the authorization of such action by the Board of Directors of the Company or the Guarantor; or (g) any other Event of Default specified with respect to Securities of such series. SECTION 802. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an Event of Default shall have occurred and be continuing with respect to Securities of any series at the time Outstanding, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of such series may declare the principal amount (or, if any of the Securities of such series are Discount Securities, such portion of the principal amount of such Securities as may be specified in the terms thereof as contemplated by Section 301) of all of the Securities of such series to be 43 due and payable immediately (provided that the payment of principal and interest on such Securities shall remain subordinated to the extent provided in this Indenture), by a notice in writing to the Company (and to the Trustee if given by Holders), and upon receipt by the Company of notice of such declaration such principal amount (or specified amount) shall become immediately due and payable; provided, however, that if an Event of Default shall have occurred and be continuing with respect to more than one series of Securities, the Trustee or the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities of all such series, considered as one class, may make such declaration of acceleration, and not the Holders of the Securities of any one of such series (provided that the payment of principal and interest on such Securities shall remain subordinated to the extent provided in this Indenture). At any time after such a declaration of acceleration with respect to Securities of any series shall have been made and before a judgment or decree for payment of the money due shall have been obtained by the Trustee as hereinafter in this Article provided, such declaration and its consequences shall, without further act, be deemed to have been rescinded and annulled, if (a) the Company or the Guarantor shall have paid or deposited with the Trustee a sum sufficient to pay (1) all overdue interest [including Additional Interest], if any, on all Securities of such series then Outstanding; (2) the principal of and premium, if any, on any Securities of such series then Outstanding which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Securities; (3) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities; (4) all amounts due to the Trustee under Section 907; and (b) all Events of Default with respect to Securities of such series, other than the non-payment of the principal of Securities of such series which shall have become due solely by such declaration of acceleration, shall have been cured or waived as provided in Section 813. No such rescission shall affect any subsequent Event of Default or impair any right consequent thereon. SECTION 803. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE. If an Event of Default described in clause (a) or (b) of Section 801 shall have occurred, the Company or the Guarantor shall, upon demand of the Trustee, pay to it, for the benefit of the Holders of the Securities of the 44 series with respect to which such Event of Default shall have occurred, the whole amount then due and payable on such Securities for principal and premium, if any, and interest, if any, and, to the extent permitted by law, interest on premium, if any, and on any overdue principal and interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover any amounts due to the Trustee under Section 907. If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company and the Guarantor or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company and the Guarantor or any other obligor upon such Securities, wherever situated. If an Event of Default with respect to Securities of any series shall have occurred and be continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or the Guarantor or any other obligor upon the Securities or the property of the Company or the Guarantor or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company or the Guarantor for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (a) to file and prove a claim for the whole amount of principal, premium, if any, and interest, if any, owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for amounts due to the Trustee under Section 907) and of the Holders allowed in such judicial proceeding, and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amounts due it under Section 907. 45 Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, be a member of a creditors' or similar other committee. SECTION 805. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES. All rights of action and claims under this Indenture, the Securities or the Guarantees endorsed thereon may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders in respect of which such judgment has been recovered. SECTION 806. APPLICATION OF MONEY COLLECTED. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, to the extent permitted by law, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or premium, if any, or interest, if any, upon presentation of the Securities in respect of which or for the benefit of which such money shall have been collected and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 907; SECOND: Subject to the provisions of Articles Fourteen and Fifteen, to the payment of the amounts then due and unpaid upon the Securities for principal of and premium, if any, and interest [including Additional Interest], if any, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, premium, if any, and interest, if any, respectively; THIRD: To the payment of the remainder, if any, to the Company or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct. SECTION 807. LIMITATION ON SUITS. No Holder shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: 46 (a) such Holder shall have previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of such series; (b) the Holders of 25% in aggregate principal amount of the Outstanding Securities of all series in respect of which an Event of Default shall have occurred and be continuing, considered as one class, shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (c) such Holder or Holders shall have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such proceeding; and (e) no direction inconsistent with such written request shall have been given to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series in respect of which an Event of Default shall have occurred and be continuing, considered as one class; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. SECTION 808. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and premium, if any, and (subject to Section 307 [and 312]) interest [including Additional Interest], if any, on such Security on the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. [In addition, in the case of Securities of a series held by a Trust, a holder of Preferred Trust Securities may directly institute a proceeding for enforcement of payment to such holder of principal of or interest on the Securities having a principal amount equal to the aggregate liquidation preference amount of the Preferred Trust Securities of such holder on or after the due dates specified or provided for in the Securities. SECTION 809. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding shall have been discontinued or abandoned for any reason, or shall have been determined 47 adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Guarantor, the Trustee and such Holder shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and such Holder shall continue as though no such proceeding had been instituted. SECTION 810. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 811. DELAY OR OMISSION NOT WAIVER. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. SECTION 812. CONTROL BY HOLDERS OF SECURITIES. If an Event of Default shall have occurred and be continuing in respect of a series of Securities, the Holders of a majority in principal amount of the Outstanding Securities of such series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series; provided, however, that if an Event of Default shall have occurred and be continuing with respect to more than one series of Securities, the Holders of a majority in aggregate principal amount of the Outstanding Securities of all such series, considered as one class, shall have the right to make such direction, and not the Holders of the Securities of any one of such series; and provided, further, that (a) such direction shall not be in conflict with any rule of law or with this Indenture, and could not involve the Trustee in personal liability in circumstances where indemnity would not, in the Trustee's sole discretion, be adequate, and (b) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. SECTION 813. WAIVER OF PAST DEFAULTS. The Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of any series may on behalf of the Holders of all 48 the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default (a) in the payment of the principal of or premium, if any, or interest [including Additional Interest], if any, on any Security of such series, or (b) in respect of a covenant or provision hereof which under Section 1202 cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected. ; provided, however, that so long as a Trust holds the Securities of any series, such Trust may not waive any past default without the consent of at least a majority in aggregate liquidation preference of the outstanding Preferred Securities issued by such Trust affected, obtained as provided in the Trust Agreement pertaining to such Trust. Any such waiver by holders of a majority in aggregate liquidation preference of outstanding Preferred Securities issued by any such Trust shall be deemed to be on behalf of all holders of Preferred Securities issued by any such Trust.] Upon any such waiver, such default shall cease to exist, and any and all Events of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 814. UNDERTAKING FOR COSTS. The Company, the Guarantor and the Trustee agree, and each Holder by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant, in each case in the manner, to the extent, and subject to the exceptions provided in the Trust Indenture Act; provided, that the provisions of this Section shall not be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company or the Guarantor. SECTION 815. WAIVER OF USURY, STAY OR EXTENSION LAWS. Each of the Company and the Guarantor covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and each of the Company and the Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. 49 ARTICLE NINE THE TRUSTEE SECTION 901. CERTAIN DUTIES AND RESPONSIBILITIES. (a) Except during the continuance of an Event of Default with respect to Securities of any series, (1) the Trustee undertakes to perform, with respect to Securities of such series, such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may, with respect to Securities of such series, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. (b) In case an Event of Default with respect to Securities of any series shall have occurred and be continuing, the Trustee shall exercise, with respect to Securities of such series, such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that (1) this subsection shall not be construed to limit the effect of subsection (a) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities of any one or more series, as provided herein, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series; and (4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the 50 performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. SECTION 902. NOTICE OF DEFAULTS. The Trustee shall give notice of any default hereunder with respect to the Securities of any series to the Holders of Securities of such series in the manner and to the extent required to do so by the Trust Indenture Act, unless such default shall have been cured or waived; provided, however, that in the case of any default of the character specified in Section 801(c), no such notice to Holders shall be given until at least 90 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time, or both, would become, an Event of Default with respect to the Securities of such series. SECTION 903. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of Section 901 and to the applicable provisions of the Trust Indenture Act: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company or the Guarantor mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, or a Guarantor Request or Guarantor Order, as the case may be, or as otherwise expressly provided herein, and any resolution of the Board of Directors of the Company or the Guarantor may be sufficiently evidenced by a Board Resolution thereof; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer's Certificate of the Company or the Guarantor, as appropriate; (d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; 51 (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any Holder pursuant to this Indenture, unless such Holder shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall (subject to applicable legal requirements) be entitled to examine, during normal business hours, the books, records and premises of the Company or the Guarantor, personally or by agent or attorney; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and (h) the Trustee shall not be charged with knowledge of any Event of Default with respect to the Securities of any series for which it is acting as Trustee unless either (1) a Responsible Officer of the Trustee assigned to the Corporate Trustee Administration Department and agency group of the Trustee (or any successor division or department of the Trustee) shall have actual knowledge of the Event of Default or (2) written notice of such Event of Default shall have been given to the Trustee by the Company or the Guarantor or any other obligor on such Securities, or by any Holder of such Securities. SECTION 904. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The recitals contained herein and in the Securities and the Guarantees endorsed thereon (except the Trustee's certificates of authentication) shall be taken as the statements of the Company and the Guarantor, as the case may be, and neither the Trustee nor any Authenticating Agent assumes responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities or the Guarantees endorsed thereon. Neither Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Securities or the proceeds thereof. SECTION 905. MAY HOLD SECURITIES. Each of the Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company or the Guarantor, in its individual or any other capacity, may become the owner or pledgee of Securities [and/or Preferred Securities] and, subject to Sections 908 and 913, may otherwise deal with the Company or the Guarantor with the same rights it would 52 have if it were not the Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. SECTION 906. MONEY HELD IN TRUST. Money held by the Trustee in trust hereunder need not be segregated from other funds, except to the extent required by law. The Trustee shall be under no liability for interest on or investment of any money received by it hereunder except as expressly provided herein or otherwise agreed with, and for the sole benefit of, the Company or the Guarantor. SECTION 907. COMPENSATION AND REIMBURSEMENT. The Company and the Guarantor jointly and severally agree (a) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances reasonably incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence, willful misconduct or bad faith; and (c) to indemnify the Trustee and hold it harmless from and against, any loss, liability or expense reasonably incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. As security for the performance of the obligations of the Company and the Guarantor under this Section, the Trustee shall have a lien prior to the Securities upon all property and funds held or collected by the Trustee as such, other than property and funds held in trust under Section 703 (except moneys payable to the Company as provided in Section 703). SECTION 908. DISQUALIFICATION; CONFLICTING INTERESTS. If the Trustee shall have or acquire any conflicting interest within the meaning of the Trust Indenture Act, it shall either eliminate such conflicting interest or resign to the extent, in the manner and with the effect, and subject to the conditions, provided in the Trust Indenture Act and this Indenture. For purposes of Section 310(b)(1) of the Trust Indenture Act and to the extent permitted thereby, the Trustee, in its capacity as trustee in respect of the Securities of any series, shall not be deemed to have a conflicting 53 interest arising from its capacity as trustee in respect of (i) the Securities of any other series, (ii) the Trust Agreement and the Trust Securities Guarantee Agreement pertaining to each Trust [OTHERS]. SECTION 909. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all times be a Trustee hereunder which shall be (a) a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal, State or District of Columbia authority, or (b) if and to the extent permitted by the Commission by rule, regulation or order upon application, a corporation or other Person organized and doing business under the laws of a foreign government, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 or the Dollar equivalent of the applicable foreign currency and subject to supervision or examination by authority of such foreign government or a political subdivision thereof substantially equivalent to supervision or examination applicable to United States institutional trustees and, in either case, qualified and eligible under this Article and the Trust Indenture Act. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of such supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section and the Trust Indenture Act, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. SECTION 910. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 911. (b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company and the Guarantor. If the instrument of acceptance by a successor Trustee required by Section 911 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Trustee, the Company and the Guarantor [; provided that so long as any Preferred Securities remain outstanding, the Trust which issued such Preferred Securities shall not execute any Act to remove the Trustee without the consent of the holders of a 54 majority in aggregate liquidation preference of Preferred Securities issued by such Trust outstanding, obtained as provided in the Trust Agreement pertaining to such Trust.] (d) If at any time: (1) the Trustee shall fail to comply with Section 908 after written request therefor by the Company, the Guarantor or by any Holder who has been a bona fide Holder for at least six months, or (2) the Trustee shall cease to be eligible under Section 909 or Section 310(a) of the Trust Indenture Act and shall fail to resign after written request therefor by the Company, the Guarantor or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (x) the Company and the Guarantor by Board Resolutions may remove the Trustee with respect to all Securities or (y) subject to Section 814, any Holder who has been a bona fide Holder for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause (other than as contemplated by clause (y) in subsection (d) or this Section), with respect to the Securities of one or more series, the Company and the Guarantor, by Board Resolutions, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time (subject to Section 915) there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 911. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 911, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company and the Guarantor. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company and the Guarantor or the Holders and accepted appointment in the manner required by Section 911, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. 55 (f) So long as no event which is, or after notice or lapse of time, or both, would become, an Event of Default shall have occurred and be continuing, and except with respect to a Trustee appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities pursuant to subsection (e) of this Section, if the Company and the Guarantor shall have delivered to the Trustee (i) Board Resolutions of the Company and the Guarantor appointing a successor Trustee, effective as of a date specified therein, and (ii) an instrument of acceptance of such appointment, effective as of such date, by such successor Trustee in accordance with Section 911, the Trustee shall be deemed to have resigned as contemplated in subsection (b) of this Section, the successor Trustee shall be deemed to have been appointed by the Company and the Guarantor pursuant to subsection (e) of this Section and such appointment shall be deemed to have been accepted as contemplated in Section 911, all as of such date, and all other provisions of this Section and Section 911 shall be applicable to such resignation, appointment and acceptance except to the extent inconsistent with this subsection (f). (g) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. SECTION 911. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In case of the appointment hereunder of a successor Trustee with respect to the Securities of all series, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company, the Guarantor and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company, the Guarantor or the successor Trustee, such retiring Trustee shall, upon payment of all sums owed to it, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. (b) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the Guarantor, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (3) shall add to or change any of the provisions of this 56 Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company, the Guarantor or any successor Trustee, such retiring Trustee, upon payment of all sums owed to it, shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. (c) Upon request of any such successor Trustee, the Company and the Guarantor shall execute any instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in subsection (a) or (b) of this Section, as the case may be. (d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. SECTION 912. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. SECTION 913. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If the Trustee shall be or become a creditor of the Company, the Guarantor or any other obligor upon the Securities (other than by reason of a relationship described in Section 311(b) of the Trust Indenture Act), the Trustee shall be subject to any and all applicable provisions of the Trust Indenture Act regarding the collection of claims against the Company, the Guarantor or such other obligor. For purposes of Section 311(b) of the Trust Indenture Act (a) the term "cash transaction" shall have the meaning provided in Rule 11b-4 under the Trust Indenture Act, and (b) the term "self-liquidating paper" shall have the meaning provided in Rule 11b-6 under the Trust Indenture Act. 57 SECTION 914. APPOINTMENT OF AUTHENTICATING AGENT. The Trustee may appoint an Authenticating Agent or Agents with respect to the Securities of one or more series, or any Tranche thereof, which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series or Tranche issued upon original issuance, exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and the Guarantor and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State or territory thereof or the District of Columbia or the Commonwealth of Puerto Rico, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee, the Company and the Guarantor. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent, the Company and the Guarantor. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and the Guarantor. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. Unless appointed at the request of the Company pursuant to the last paragraph of this Section 914, the Trustee agrees to pay to each Authenticating 58 Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, in accordance with and subject to the provisions of Section 907. The provisions of Sections 308, 904 and 905 shall be applicable to each Authenticating Agent. If an appointment with respect to the Securities of one or more series, or any Tranche thereof, shall be made pursuant to this Section, the Securities of such series or Tranche may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternate certificate of authentication substantially in the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. ------------------------------------- As Trustee By ---------------------------------- As Authenticating Agent By ---------------------------------- Authorized Officer If all of the Securities of a series may not be originally issued at one time, and if the Trustee does not have an office capable of authenticating Securities upon original issuance located in a Place of Payment where the Company wishes to have Securities of such series authenticated upon original issuance, the Trustee, if so requested by the Company in writing (which writing need not comply with Section 102 and need not be accompanied by an Opinion of Counsel), shall appoint, in accordance with this Section and in accordance with such procedures as shall be acceptable to the Trustee, an Authenticating Agent having an office in a Place of Payment designated by the Company with respect to such series of Securities. SECTION 915. CO-TRUSTEE AND SEPARATE TRUSTEES. At any time or times, for the purpose of meeting the legal requirements of any applicable jurisdiction, the Company, the Guarantor and the Trustee shall have power to appoint, and, upon the written request of the Trustee or of the Holders of at least 33% in principal amount of the Securities then Outstanding, the Company and the Guarantor shall for such purpose join with the Trustee in the execution and delivery of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Trustee either to act as co-trustee, jointly with the Trustee, or to act as separate trustee, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons, in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to 59 the other provisions of this Section. If the Company or the Guarantor does not join in such appointment within 15 days after the receipt by it of a request so to do, or if an Event of Default shall have occurred and be continuing, the Trustee alone shall have power to make such appointment. Should any written instrument or instruments from the Company or the Guarantor be required by any co-trustee or separate trustee to more fully confirm to such co-trustee or separate trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Company or the Guarantor, as the case may be. Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following conditions: (a) the Securities shall be authenticated and delivered, and all rights, powers, duties and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder, shall be exercised solely, by the Trustee; (b) the rights, powers, duties and obligations hereby conferred or imposed upon the Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed either by the Trustee or by the Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee. (c) the Trustee at any time, by an instrument in writing executed by it, with the concurrence of the Company and the Guarantor, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section, and, if an Event of Default shall have occurred and be continuing, the Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Company or the Guarantor. Upon the written request of the Trustee, the Company and the Guarantor shall join with the Trustee in the execution and delivery of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section; (d) no co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Trustee, or any other such trustee hereunder, and the Trustee shall not be personally liable by reason of any act or omission of any such co-trustee or separate trustee; and (e) any Act of Holders delivered to the Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee. 60 ARTICLE TEN HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND GUARANTOR SECTION 1001. LISTS OF HOLDERS. Semiannually, not later than June 30 and December 31 in each year, and at such other times as the Trustee may request in writing, the Company and the Guarantor shall furnish or cause to be furnished to the Trustee information as to the names and addresses of the Holders, and the Trustee shall preserve such information and similar information received by it in any other capacity and afford to the Holders access to information so preserved by it, all to such extent, if any, and in such manner as shall be required by the Trust Indenture Act; provided, however, that no such list need be furnished so long as the Trustee shall be the Security Registrar. SECTION 1002. REPORTS BY TRUSTEE, COMPANY AND GUARANTOR. The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the time and in the manner provided pursuant thereto. Reports so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than November 15 in each calendar year with respect to the 12-month period ending on the preceding September 15 commencing September 15, 200 . A copy of each such report shall, at the time of such - transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company and the Guarantor. The Company and the Guarantor will notify the Trustee when any Securities are listed on any stock exchange. The Company and the Guarantor shall file with the Trustee (within thirty (30) days after filing with the Commission in the case of reports that pursuant to the Trust Indenture Act must be filed with the Commission and furnished to the Trustee) and transmit to the Holders, such other information, reports and other documents, if any, at such times and in such manner, as shall be required by the Trust Indenture Act. ARTICLE ELEVEN CONSOLIDATION, MERGER, CONVEYANCE, OR OTHER TRANSFER SECTION 1101. COMPANY OR GUARANTOR MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. Neither the Company nor the Guarantor shall consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless (a) the Person formed by such consolidation or into which the Company or Guarantor, as the case may be, is merged or the Person which acquires by conveyance or transfer, or which leases, the 61 properties and assets of the Company or the Guarantor, as the case may be, substantially as an entirety shall be a Person organized and existing under the laws of the United States, any State thereof or the District of Columbia, and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and premium, if any, and interest, if any, on all Outstanding Securities (or the Guarantees endorsed thereon, as the case may be) and the performance of every covenant of this Indenture on the part of the Company or the Guarantor, as the case may be, to be performed or observed; (b) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and (c) the Company or the Guarantor, as the case may be, shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance or other transfer or lease and such indenture supplemental hereto complies with this Article and that all conditions precedent herein provided for relating to such transactions have been complied with. SECTION 1102. SUCCESSOR PERSON SUBSTITUTED. Upon any consolidation by the Company or the Guarantor with or merger by the Company or the Guarantor into any other Person or any conveyance or other transfer or lease of the properties and assets of the Company or the Guarantor substantially as an entirety in accordance with Section 1101, the successor Person formed by such consolidation or into which the Company or the Guarantor, as the case may be, is merged or the Person to which such conveyance, or other transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company or the Guarantor, as the case may be, under this Indenture with the same effect as if such successor Person had been named as the Company or the Guarantor, as the case may be, herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities Outstanding hereunder (or the Guarantees endorsed thereon, as the case may be). SECTION 1103. LIMITATION. Nothing in this Indenture shall be deemed to prevent or restrict: (a) any consolidation or merger after the consummation of which the Company or the Guarantor would be the surviving or resulting entity, (b) any consolidation of the Company with the Guarantor or any other Person all of the outstanding voting securities of which are owned, directly or indirectly, by the Guarantor; or any merger of any of such Persons into any other of such Persons; or any conveyance or other transfer, or lease, of its properties substantially as an entirety by any thereof to any other thereof, 62 (c) any conveyance or other transfer, or lease, of any part of the properties of the Company or the Guarantor which does not constitute the entirety, or substantially the entirety, thereof or (d) the approval by the Company or the Guarantor of, or the consent by the Company or the Guarantor to, any consolidation or merger to which any direct or indirect subsidiary or affiliate of the Company or the Guarantor, as the case requires, may be a party or any conveyance, transfer or lease by any such subsidiary or affiliate of any of its assets. ARTICLE TWELVE SUPPLEMENTAL INDENTURES SECTION 1201. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without the consent of any Holders, the Company, the Guarantor and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (a) to evidence the succession of another Person to the Company or the Guarantor, as the case may be, and the assumption by any such successor of the covenants of the Company or the Guarantor, as the case may be, herein and in the Securities or the Guarantees endorsed thereon, all as provided in Article Eleven; or (b) to add one or more covenants of the Company or the Guarantor or other provisions for the benefit of the Holders of all or any series of Securities, or any Tranche thereof or to surrender any right or power herein conferred upon the Company or the Guarantor (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series); or (c) to add any additional Events of Default with respect to all or any series of Securities Outstanding hereunder (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such series); or (d) to change or eliminate any provision of this Indenture or to add any new provision to this Indenture; provided, however, that if such change, elimination or addition shall adversely affect the interests of the Holders of Securities of any series or Tranche Outstanding on the date of such supplemental indenture in any material respect, such change, elimination or addition shall become effective with respect to such series or Tranche only pursuant to the provisions of Section 1202 hereof or when no Security of such series or Tranche remains Outstanding; or 63 (e) to provide collateral security for the Securities of any series; or (f) to establish the form or terms of Securities of any series or Tranche or any Guarantees as contemplated by Sections 201 and 301; or (g) to provide for the authentication and delivery of bearer securities and coupons appertaining thereto representing interest, if any, thereon and for the procedures for the registration, exchange and replacement thereof and for the giving of notice to, and the solicitation of the vote or consent of, the holders thereof, and for any and all other matters incidental thereto; or (h) to evidence and provide for the acceptance of appointment hereunder by a separate or successor Trustee or co-trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 911(b); or (i) to provide for the procedures required to permit the Company to utilize, at its option, a non certificated system of registration for all, or any series or Tranche of, the Securities; or (j) to change any place or places where (1) the principal of and premium, if any, and interest, if any, on all or any series of Securities, or any Tranche thereof, shall be payable, (2) all or any series of Securities, or any Tranche thereof, may be surrendered for registration of transfer, (3) all or any series of Securities, or any Tranche thereof, may be surrendered for exchange and (4) notices and demands to or upon the Company or the Guarantor in respect of all or any series of Securities, or any Tranche thereof, and this Indenture may be served; or (k) to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other changes to the provisions hereof or to add other provisions with respect to matters or questions arising under this Indenture, provided that such other changes or additions shall not adversely affect the interests of the Holders of Securities of any series or Tranche in any material respect. Without limiting the generality of the foregoing, if the Trust Indenture Act as in effect at the date of the execution and delivery of this Indenture or at any time thereafter shall be amended and (x) if any such amendment shall require one or more changes to any provisions hereof or the inclusion herein of any additional provisions, or shall by operation of law be deemed to effect such changes or incorporate such provisions by reference or otherwise, this Indenture shall be deemed to have been amended so as to conform to such amendment to the Trust Indenture Act, and the Company, the Guarantor and the Trustee may, without the consent of any Holders, 64 enter into an indenture supplemental hereto to evidence such amendment hereof; or (y) if any such amendment shall permit one or more changes to, or the elimination of, any provisions hereof which, at the date of the execution and delivery hereof or at any time thereafter, are required by the Trust Indenture Act to be contained herein or are contained herein to reflect any provision of the Trust Indenture Act as in effect at such date, this Indenture shall be deemed to have been amended to effect such changes or elimination, and the Company, the Guarantor and the Trustee may, without the consent of any Holders, enter into an indenture supplemental hereto to this Indenture to effect such changes or elimination or evidence such amendment. SECTION 1202. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. Subject to the provisions of Section 1201, 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 this Indenture, considered as one class, by Act of said Holders delivered to the Company, the Guarantor and the Trustee, the Company and the Guarantor, when authorized by Board Resolutions, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture; provided, however, that if there shall be Securities of more than one series Outstanding hereunder 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 no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security of each series or Tranche so directly affected, (a) change the Stated Maturity of the principal of, or any installment of principal of or interest on (except as provided in Section 312 hereof), any Security (other than pursuant to the terms thereof), or reduce the principal amount thereof or the rate of interest thereon (or the amount of any installment of interest thereon) or change the method of calculating such rate or reduce any premium payable upon the redemption thereof, or reduce the amount of the principal of a Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 802, or change the coin or currency (or other property), in which any Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or 65 (b) reduce the percentage in principal amount of the Outstanding Securities of any series [(or, if applicable, in liquidation preference of any series of Preferred Securities)] or any Tranche thereof, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with any provision of this Indenture or of any default hereunder and its consequences, or reduce the requirements of Section 1304 for quorum or voting, or (c) modify any of the provisions of this Section, Section 606 or Section 813 with respect to the Securities of any series or any Tranche thereof, except to increase the percentages in principal amount referred to in this Section or such other Sections or to provide that other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to "the Trustee" and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Sections 911(b) and 1201(h). [Notwithstanding the foregoing, so long as any of the Preferred Securities remain outstanding, the Trustee may not consent to a supplemental indenture under this Section 1202 without the prior consent, obtained as provided in a Trust Agreement pertaining to a Trust which issued such Preferred Securities, of the holders of not less than a majority in aggregate liquidation preference of all Preferred Securities issued by such Trust affected, considered as one class, or, in the case of changes described in clauses (a), (b) and (c) above, 100% in aggregate liquidation preference of all such Preferred Securities then outstanding which would be affected thereby, considered as one class.] A supplemental indenture which (x) changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of the Holders of, or which is to remain in effect only so long as there shall be Outstanding, Securities of one or more particular series, or one or more Tranches thereof, or (y) modifies the rights of the Holders of Securities of such series or Tranches with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series or Tranche. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 1203. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 901) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties, immunities or liabilities under this Indenture or otherwise. 66 SECTION 1204. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any supplemental indenture under this Article this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Any supplemental indenture permitted by this Article may restate this Indenture in its entirety, and, upon the execution and delivery thereof, any such restatement shall supersede this Indenture as theretofore in effect for all purposes. SECTION 1205. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. SECTION 1206. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. Securities of any series, or any Tranche thereof, authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company and the Guarantor shall so determine, new Securities of any series, or any Tranche thereof, so modified as to conform, in the opinion of the Trustee, the Company and Guarantor, to any such supplemental indenture may be prepared and executed by the Company (with Guarantees of the Guarantor endorsed thereon), and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series or Tranche. SECTION 1207. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE. To the extent, if any, that the terms of any particular series of Securities shall have been established in or pursuant to a Board Resolution or an Officer's Certificate pursuant to a supplemental indenture or Board Resolution as contemplated by Section 301, and not in an indenture supplemental hereto, additions to, changes in or the elimination of any of such terms may be effected by means of a supplemental Board Resolution or Officer's Certificate, as the case may be, delivered to, and accepted by, the Trustee; provided, however, that such supplemental Board Resolution or Officer's Certificate shall not be accepted by the Trustee or otherwise be effective unless all conditions set forth in this Indenture which would be required to be satisfied if such additions, changes or elimination were contained in a supplemental indenture shall have been appropriately satisfied. Upon the acceptance thereof by the Trustee, any such supplemental Board Resolution or Officer's Certificate shall be deemed to be a "supplemental indenture" for purposes of Section 1204 and 1206. 67 ARTICLE THIRTEEN MEETINGS OF HOLDERS; ACTION WITHOUT MEETING SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED. A meeting of Holders of Securities of one or more, or all, series, or any Tranche or Tranches thereof, may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by Holders of Securities of such series or Tranches. SECTION 1302. CALL, NOTICE AND PLACE OF MEETINGS. (a) The Trustee may at any time call a meeting of Holders of Securities of one or more, or all, series, or any Tranche or Tranches thereof, for any purpose specified in Section 1301, to be held at such time and at such place in the Borough of Manhattan, The City of New York, as the Trustee shall determine, or, with the approval of the Company, at any other place. Notice of every such meeting, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 106, not less than 21 nor more than 180 days prior to the date fixed for the meeting. (b) If the Trustee shall have been requested to call a meeting of the Holders of Securities of one or more, or all, series, or any Tranche or Tranches thereof, by the Company, the Guarantor or by the Holders of 33% in aggregate principal amount of all of such series and Tranches, considered as one class, for any purpose specified in Section 1301, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have given the notice of such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company, the Guarantor or the Holders of Securities of such series and Tranches in the amount above specified, as the case may be, may determine the time and the place in the Borough of Manhattan, The City of New York, or in such other place as shall be determined or approved by the Company or the Guarantor, for such meeting and may call such meeting for such purposes by giving notice thereof as provided in subsection (a) of this Section. (c) Any meeting of Holders of Securities of one or more, or all, series, or any Tranche or Tranches thereof, shall be valid without notice if the Holders of all Outstanding Securities of such series or Tranches are present in person or by proxy and if representatives of the Company, the Guarantor and the Trustee are present, or if notice is waived in writing before or after the meeting by the Holders of all Outstanding Securities of such series, or by such of them as are not present at the meeting in person or by proxy, and by the Company, the Guarantor and the Trustee. SECTION 1303. PERSONS ENTITLED TO VOTE AT MEETINGS. To be entitled to vote at any meeting of Holders of Securities of one or more, or all, series, or any Tranche or Tranches thereof, a Person shall be (a) a Holder of one or more Outstanding Securities of such series or Tranches, or (b) a Person appointed by an instrument in writing as proxy for a Holder or 68 Holders of one or more Outstanding Securities of such series or Tranches by such Holder or Holders. The only Persons who shall be entitled to attend any meeting of Holders of Securities of any series or Tranche shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and the Guarantor and their counsel. SECTION 1304. QUORUM; ACTION. The Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of the series and Tranches with respect to which a meeting shall have been called as hereinbefore provided, considered as one class, shall constitute a quorum for a meeting of Holders of Securities of such series and Tranches; provided, however, that if any action is to be taken at such meeting which this Indenture expressly provides may be taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Securities of such series and Tranches, considered as one class, the Persons entitled to vote such specified percentage in principal amount of the Outstanding Securities of such series and Tranches, considered as one class, shall constitute a quorum. In the absence of a quorum within one hour of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such series and Tranches, be dissolved. In any other case the meeting may be adjourned for such period as may be determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for such period as may be determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Except as provided by Section 1305(e), notice of the reconvening of any meeting adjourned for more than 30 days shall be given as provided in Section 1302(a) not less than ten days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Securities of such series and Tranches which shall constitute a quorum. Except as limited by Section 1202, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in aggregate principal amount of the Outstanding Securities of the series and Tranches with respect to which such meeting shall have been called, considered as one class; provided, however, that, except as so limited, any resolution with respect to any action which this Indenture expressly provides may be taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Securities of such series and Tranches, considered as one class, may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified percentage in principal amount of the Outstanding Securities of such series and Tranches, considered as one class. Any resolution passed or decision taken at any meeting of Holders of Securities duly held in accordance with this Section shall be binding on all the Holders of Securities of the series and Tranches with respect to which such meeting shall have been held, whether or not present or represented at the meeting. 69 SECTION 1305. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS. (a) Attendance at meetings of Holders of Securities may be in person or by proxy; and, to the extent permitted by law, any such proxy shall remain in effect and be binding upon any future Holder of the Securities with respect to which it was given unless and until specifically revoked by the Holder or future Holder of such Securities before being voted. (b) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities in regard to proof of the holding of such Securities and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Section 104 and the appointment of any proxy shall be proved in the manner specified in Section 104. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 104 or other proof. (c) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or the Guarantor or by Holders as provided in Section 1302(b), in which case the Company or the Guarantor or the Holders of Securities of the series and Tranches calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of all series and Tranches represented at the meeting, considered as one class. (d) At any meeting each Holder or proxy shall be entitled to one vote for each $1,000 principal amount of Securities held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security or proxy. (e) Any meeting duly called pursuant to Section 1302 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of all series and Tranches represented at the meeting, considered as one class; and the meeting may be held as so adjourned without further notice. SECTION 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS. The vote upon any resolution submitted to any meeting of Holders shall be by written ballots on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities, of the series and Tranches with respect to which the meeting shall have been called, held or represented by them. The 70 permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports of all votes cast at the meeting. A record, in duplicate, of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 1302 and, if applicable, Section 1304. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company, and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. SECTION 1307. ACTION WITHOUT MEETING. In lieu of a vote of Holders at a meeting as hereinbefore contemplated in this Article, any request, demand, authorization, direction, notice, consent, waiver or other action may be made, given or taken by Holders by written instruments as provided in Section 104. ARTICLE FOURTEEN GUARANTEE SECTION 1401. GUARANTEE. The Guarantor hereby unconditionally guarantees to each Holder of a Security authenticated and delivered by the Trustee, and to the Trustee on behalf of such Holder, the due and punctual payment of the principal of, and premium, if any, and interest [including any Additional Interest], if any, on the Securities of such series when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption, or otherwise, in accordance with the terms of such Security and of this Indenture. In case of the failure of the Company 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, call for redemption or otherwise, and as if such payment were made by the Company. 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 Security or this Indenture, any failure to enforce the provisions of such Security or this Indenture, or any waiver, modification or indulgence granted to the Company with respect thereto, by the Holder of such Security 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 Security, or increase the interest rate thereon, or change any redemption provisions thereof (including any change to increase any premium payable upon redemption thereof), or change the Stated 71 Maturity thereof, or increase the principal amount of any Discount Security that would be due and payable upon a declaration of acceleration or the maturity thereof pursuant to Article Eight of this Indenture. The Guarantor hereby waives the benefits of diligence, presentment, demand for payment, any requirement that the Trustee or any of the Holders exhaust any right or take any action against the Company or any other Person, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to any Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged in respect of any Security except by complete performance of the obligations contained in such Security 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 premium, if any, or interest, if any, on any Security, whether at its Stated Maturity, by declaration of acceleration, call for redemption, or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Security, subject to the terms and conditions set forth in this Indenture, directly against the Guarantor to enforce this Guarantee without first proceeding against the Company. The obligations of the Guarantor hereunder with respect to any Security shall be continuing and irrevocable until the date upon which the entire principal of, premium, if any, and interest on such Security has been, or has been deemed pursuant to the provisions of Article Seven of this Indenture to have been, paid in full or otherwise discharged. The Guarantor shall be subrogated to all rights of the Holders of the Securities upon which its Guarantee is endorsed against the Company in respect of any amounts paid by the Guarantor on account of such Securities pursuant to the provisions of its Guarantee or this 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 of, and premium, if any, and interest, if any, on all Securities issued hereunder 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 Company for liquidation or reorganization, the Company 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 Company'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 any Security, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any Holder of such Security, 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 a Security, such Security 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. 72 SECTION 1402. GUARANTEE SUBORDINATE TO SENIOR INDEBTEDNESS OF THE GUARANTOR. The Guarantor, for itself, its successors and assigns, covenants and agrees, and each Holder of the Securities of each series, by its acceptance thereof, likewise covenants and agrees, that the payment under the Guarantee of the principal of and premium, if any, and interest [including any Additional Interest], if any, on each and all of the Securities 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 Guarantor. Each Holder of the Securities of each series, 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. SECTION 1403. PAYMENT OVER OF PROCEEDS OF SECURITIES. 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 Section 1404, 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 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 of and accrued interest on the Securities of any series shall have been declared due and payable pursuant to Section 801 and such declaration shall not have been rescinded and annulled as provided in Section 802, 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 Securities are entitled to receive a payment on account of the Guarantee of the principal of or interest on the indebtedness evidenced by the Securities, including, without limitation, any payments made pursuant to Articles Four and Five; (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 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 Guarantor or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior 73 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 Securities or to the Trustee under the Guarantee and this 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 or securities, in respect of principal of or interest on the Securities or in connection with any repurchase by the Guarantor of the Securities, 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 of or interest on the Securities or in connection with any repurchase by the Guarantor of the Securities 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. 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 (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 Article Fourteen; provided that no event described in clauses (e) and (f) of Section 801 with respect to the Guarantor has occurred during such 123-day period. For purposes of this Article 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 Securities are so subordinated as provided in this Article. 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, 74 or substantially as an entirety, to another corporation upon the terms and conditions provided for in Article Eleven hereof shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 1403 if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article Eleven hereof. Nothing in Section 1402 or in this Section 1403 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 907. SECTION 1404. DISPUTES WITH HOLDERS OF CERTAIN SENIOR INDEBTEDNESS OF THE GUARANTOR. 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 Section 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 Section 1403 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 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. SECTION 1405. SUBROGATION. 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 Securities 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 Securities shall be paid in full; and such payments or distributions of cash, property or securities received by the Holders of the Securities, 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 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 Guarantor, on the other hand. 75 SECTION 1406. OBLIGATION OF THE GUARANTOR UNCONDITIONAL. Nothing contained in this Article or elsewhere in this 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 of and interest on the Securities 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 this Indenture, subject to the rights, if any, under this Article 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. Upon any payment or distribution of assets or securities of the Guarantor 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 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 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 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 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 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 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 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 1407. PRIORITY OF SENIOR INDEBTEDNESS OF THE GUARANTOR UPON MATURITY. 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 and premium, if any, thereon shall first be paid in full before any payment of principal or premium, if any, or interest, if any, is made upon the Securities under the Guarantee. 76 SECTION 1408. TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS OF THE GUARANTOR. The Trustee shall be entitled to all rights set forth in this Article 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 Article shall deprive the Trustee of any of its rights as such holder. SECTION 1409. 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 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, 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 acknowledging that Securities or portions thereof are deemed to have been paid for all purposes of this Indenture, acknowledging that the entire indebtedness of the Company in respect thereof has been satisfied and discharged or acknowledging satisfaction and discharge of this 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 1410. MODIFICATION, EXTENSION, ETC. OF SENIOR INDEBTEDNESS OF THE GUARANTOR. The holders of Senior Indebtedness of the Guarantor may, without affecting in any manner the subordination of the payment of the principal of and premium, if any, and interest, if any, on the Securities under the Guarantee, at any time or from time to time and in their absolute discretion, agree with the 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. 77 SECTION 1411. TRUSTEE HAS NO FIDUCIARY DUTY TO HOLDERS OF SENIOR INDEBTEDNESS OF THE GUARANTOR. 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 this Indenture, and no implied covenants or obligations with respect to the holders of Senior Indebtedness of the Guarantor shall be read into this 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 Article or otherwise. SECTION 1412. PAYING AGENTS OTHER THAN THE TRUSTEE. 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 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 1408, 1409 and 1411 shall not apply to the Guarantor if it acts as Paying Agent. SECTION 1413. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS OF THE GUARANTOR NOT IMPAIRED. 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 this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. SECTION 1414. 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 this 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 Fourteen 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. 78 SECTION 1415. EXECUTION AND DELIVERY OF GUARANTEE. The Guarantee to be endorsed on the Securities of each series shall include the terms of the Guarantee set forth in this Article Fourteen and any other terms that may be set forth as established pursuant to Section 301. The Guarantor hereby agrees to execute its Guarantee, in a form established pursuant to Section 201, to be endorsed on each Security authenticated and delivered by the Trustee. The Guarantee shall be executed on behalf of the Guarantor by an Authorized Officer of the Guarantor. The signature of any such officer on the Guarantee may be manual or facsimile. A Guarantee bearing the manual or facsimile signature of an individual who was at the time of execution an Authorized Officer of the Guarantor shall bind the Guarantor, notwithstanding that any such individual has ceased to be an Authorized Officer prior to the authentication and delivery of the Security on which such Guarantee is endorsed or was not an Authorized Officer at the date of such Guarantee. The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee endorsed thereon on behalf of the Guarantor. The Guarantor hereby agrees that its Guarantee set forth in this Article Fourteen shall remain in full force and effect notwithstanding any failure to endorse a Guarantee on any Security. The Guarantor by its execution of this Indenture hereby authorizes the Company, in the name and on behalf of the Guarantor, to confirm the applicable Guarantee to the Holder of each Security authenticated and delivered hereunder by its execution and delivery of each such Security, with such Guarantee endorsed thereon, authenticated and delivered by the Trustee. ARTICLE FIFTEEN SUBORDINATION OF SECURITIES SECTION 1501. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS OF THE COMPANY. The Company, for itself, its successors and assigns, covenants and agrees, and each Holder of the Securities of each series, by its acceptance thereof, likewise covenants and agrees, that the payment of the principal of and premium, if any, and interest, if any, on each and all of the Securities 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 Company. Each Holder of the Securities of each series, 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. 79 SECTION 1502. PAYMENT OVER OF PROCEEDS OF SECURITIES. In the event (a) of any insolvency or bankruptcy proceedings or any receivership, liquidation, reorganization or other similar proceedings in respect of the Company or a substantial part of its property, or of any proceedings for liquidation, dissolution or other winding up of the Company, whether or not involving insolvency or bankruptcy, or (b) subject to the provisions of Section 1503, 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 Company, 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 Company, 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 Securities of any series shall have been declared due and payable pursuant to Section 801 and such declaration shall not have been rescinded and annulled as provided in Section 802, then: (1) the holders of all Senior Indebtedness of the Company 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 Securities are entitled to receive a payment on account of the principal of or interest on the indebtedness evidenced by the Securities, including, without limitation, any payments made pursuant to Articles Four and Five; (2) any payment by, or distribution of assets of, the Company 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 Company 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 Company may have been issued, ratably according to the aggregate amounts remaining unpaid on account of such Senior Indebtedness of the Company held or represented by each, to the extent necessary to make payment in full of all Senior Indebtedness of the Company remaining unpaid after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Indebtedness of the Company, before any payment or distribution is made to the Holders of the indebtedness evidenced by the Securities or to the Trustee under this Indenture; and (3) in the event that, notwithstanding the foregoing, any payment by, or distribution of assets of, the Company of any kind 80 or character, whether in cash, property or securities, in respect of principal of or interest on the Securities or in connection with any repurchase by the Company of the Securities, shall be received by the Trustee or any Holder before all Senior Indebtedness of the Company 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 of or interest on the Securities or in connection with any repurchase by the Company of the Securities shall be paid over to the holders of such Senior Indebtedness of the Company 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 Company may have been issued, ratably as aforesaid, for application to the payment of all Senior Indebtedness of the Company remaining unpaid until all such Senior Indebtedness of the Company 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 Company. 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 (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 Company including, without limitation, those arising under this Article Fifteen; provided that no event described in clauses (e) and (f) of Section 801 with respect to the Company has occurred during such 123-day period. For purposes of this Article only, the words "cash, property or securities" shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company 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 Company which may at the time be outstanding to the same extent as, or to a greater extent than, the Securities are so subordinated as provided in this Article. The consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company 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 hereof shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 1502 if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article Eleven hereof. Nothing in Section 1501 or in this Section 1502 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 907. SECTION 1503. DISPUTES WITH HOLDERS OF CERTAIN SENIOR INDEBTEDNESS OF THE COMPANY. Any failure by the Company to make any payment on or perform any other obligation in respect of Senior Indebtedness of the Company, other than any indebtedness incurred by the Company or assumed or guaranteed, directly or indirectly, by the Company 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 Company in the 81 instrument or instruments by which the Company incurred, assumed, guaranteed or otherwise created such indebtedness or obligation, shall not be deemed a default under clause (b) of Section 1502 if (i) the Company 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 Company 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 Company 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 1504. SUBROGATION. Senior Indebtedness of the Company 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 Company then outstanding. Upon the payment in full of all Senior Indebtedness of the Company, the rights of the Holders of the Securities shall be subrogated to the rights of the holders of Senior Indebtedness of the Company to receive any further payments or distributions of cash, property or securities of the Company applicable to the holders of the Senior Indebtedness of the Company until all amounts owing on the Securities shall be paid in full; and such payments or distributions of cash, property or securities received by the Holders of the Securities, by reason of such subrogation, which otherwise would be paid or distributed to the holders of such Senior Indebtedness of the Company shall, as between the Company, its creditors other than the holders of Senior Indebtedness of the Company, and the Holders, be deemed to be a payment by the Company to or on account of Senior Indebtedness of the Company, 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 Company, on the other hand. SECTION 1505. OBLIGATION OF THE COMPANY UNCONDITIONAL. Nothing contained in this Article or elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the Company, its creditors other than the holders of Senior Indebtedness of the Company and the Holders, the obligation of the Company, which is absolute and unconditional, to pay to the Holders the principal of and interest on the Securities 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 Company other than the holders of Senior Indebtedness of the Company, nor shall anything herein or therein prevent the Trustee or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article of the holders of Senior Indebtedness of the Company in respect of cash, property or securities of the Company received upon the exercise of any such remedy. Upon any payment or distribution of assets or securities of the Company 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 82 are pending for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Indebtedness of the Company and other indebtedness of the Company, 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 Company (or a representative of such holder or a trustee under any indenture under which any instruments evidencing any such Senior Indebtedness of the Company may have been issued) to establish that such notice has been given by a holder of such Senior Indebtedness of the Company 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 Company 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 Company 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 1506. PRIORITY OF SENIOR INDEBTEDNESS OF THE COMPANY UPON MATURITY. Upon the maturity of the principal of any Senior Indebtedness of the Company by lapse of time, acceleration or otherwise, all matured principal of Senior Indebtedness of the Company and interest and premium, if any, thereon shall first be paid in full before any payment of principal or premium, if any, or interest, if any, is made upon the Securities or before any Securities can be acquired by the Company or any sinking fund payment is made with respect to the Securities (except that required sinking fund payments may be reduced by Securities acquired before such maturity of such Senior Indebtedness of the Company). SECTION 1507. TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS OF THE COMPANY. The Trustee shall be entitled to all rights set forth in this Article with respect to any Senior Indebtedness of the Company at any time held by it, to the same extent as any other holder of Senior Indebtedness of the Company. Nothing in this Article shall deprive the Trustee of any of its rights as such holder. SECTION 1508. 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 Company, from a Holder or from a holder of any Senior Indebtedness of the Company 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 Company may have been issued and, prior to the receipt of any such written notice, the Trustee shall be entitled, subject to Section 901, in all respects to assume that no such 83 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 acknowledging that Securities or portions thereof are deemed to have been paid for all purposes of this Indenture, acknowledging that the entire indebtedness of the Company in respect thereof has been satisfied and discharged or acknowledging satisfaction and discharge of this 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 1509. MODIFICATION, EXTENSION, ETC. OF SENIOR INDEBTEDNESS OF THE COMPANY. The holders of Senior Indebtedness of the Company may, without affecting in any manner the subordination of the payment of the principal of and premium, if any, and interest, if any, on the Securities, at any time or from time to time and in their absolute discretion, agree with the Company 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 Company, or amend or supplement any instrument pursuant to which any Senior Indebtedness of the Company is issued, or exercise or refrain from exercising any other of their rights under the Senior Indebtedness of the Company including, without limitation, the waiver of default thereunder, all without notice to or assent from the Holders or the Trustee. SECTION 1510. TRUSTEE HAS NO FIDUCIARY DUTY TO HOLDERS OF SENIOR INDEBTEDNESS OF THE COMPANY. With respect to the holders of Senior Indebtedness of the Company, the Trustee undertakes to perform or to observe only such of its covenants and objectives as are specifically set forth in this Indenture, and no implied covenants or obligations with respect to the holders of Senior Indebtedness of the Company shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of the Company, and shall not be liable to any such holders if it shall mistakenly pay over or deliver to the Holders or the Company or any other Person, money or assets to which any holders of Senior Indebtedness of the Company shall be entitled by virtue of this Article or otherwise. SECTION 1511. PAYING AGENTS OTHER THAN THE TRUSTEE. In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company 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 1507, 1508 and 1510 shall not apply to the Company if it acts as Paying Agent. 84 SECTION 1512. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS OF THE COMPANY NOT IMPAIRED. No right of any present or future holder of Senior Indebtedness of the Company 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 Company or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. SECTION 1513. 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 this 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 Fifteen shall be of no further effect, and the Securities shall no longer be subordinated in right of payment to the prior payment of Senior Indebtedness of the Company, if the Company shall have delivered to the Trustee a notice to such effect. Any such notice delivered by the Company shall not be deemed to be a supplemental indenture for purposes of Article Twelve. ARTICLE SIXTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS SECTION 1601. LIABILITY SOLELY CORPORATE. No recourse shall be had for the payment of the principal of or premium, if any, or interest, if any, on any Securities, any Guarantees or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under this Indenture, against any incorporator, stockholder, officer or director, as such, past, present or future of the Company or the Guarantor or of any predecessor or successor of either of them (either directly or through the Company or the Guarantor, as the case may be, or a predecessor or successor of either of them), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that this Indenture and all the Securities and Guarantees are solely corporate obligations, and that no personal liability whatsoever shall attach to, or be incurred by, any incorporator, stockholder, officer or director, past, present or future, of the Company or of the Guarantor or of any predecessor or successor corporation, either directly or indirectly through the Company or the Guarantor or any predecessor or successor of either of them, because of the indebtedness hereby authorized or under or by reason of any of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or Guarantees or to be implied herefrom or therefrom, and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of this Indenture and the issuance of the Securities and the Guarantees. ------------------------- 85 This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. PPL CAPITAL FUNDING, INC. By: -------------------------------- Name: Title: [SEAL] ATTEST: - ------------------------------ PPL CORPORATION By: -------------------------------- Name: Title: [SEAL] ATTEST: - ------------------------------ THE CHASE MANHATTAN BANK, as Trustee By: -------------------------------- Name: Title: [SEAL] ATTEST: - ------------------------------ 86 EX-4 15 0015.txt EXHIBIT 4.17 EXHIBIT 4.17 PPL CAPITAL FUNDING, INC., ISSUER AND PPL CORPORATION, GUARANTOR TO THE CHASE MANHATTAN BANK, TRUSTEE --------- SUPPLEMENTAL INDENTURE NO. 1 DATED AS OF --------------------- SUPPLEMENTAL TO THE SUBORDINATED INDENTURE DATED AS OF ---------------------- ESTABLISHING A SERIES OF SECURITIES DESIGNATED % SUBORDINATED DEBENTURES, SERIES -- --- LIMITED IN AGGREGATE PRINCIPAL AMOUNT TO $ ----------- SUPPLEMENTAL INDENTURE NO. 1, dated as of among ------------------- PPL CAPITAL FUNDING, INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company"), PPL CORPORATION, a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania (herein called the "Guarantor"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as Trustee (herein called the "Trustee"), under the Subordinated Indenture dated as of (hereinafter called the -------------- "Original Indenture"), this Supplemental Indenture No. 1 being supplemental thereto. The Original Indenture and any and all indentures and instruments supplemental thereto are hereinafter sometimes collectively called the "Indenture." RECITALS OF THE COMPANY AND THE GUARANTOR The Original Indenture was authorized, executed and delivered by the Company and the Guarantor to provide for the issuance by the Company from time to time of its Securities (such term and all other capitalized terms used herein without definition having the meanings assigned to them in the Original Indenture), to be issued in one or more series as contemplated therein, and for the Guarantee by the Guarantor of the payment of the principal, premium, if any, and interest, if any, on such Securities. As contemplated by Sections 301 and 1201(f) of the Original Indenture, the Company wishes to establish a series of Securities to be designated " % -- Subordinated Debentures, Series " to be limited in aggregate principal amount --- (except as contemplated in Section 301(b) of the Original Indenture) to $ , such series of Securities to be hereinafter sometimes called ----------- "Series No. 1." As contemplated by Section 201 and 1415 of the Original Indenture, the Guarantor wishes to establish the form and terms of the Guarantees to be endorsed on the Securities of Series No. 1. [The Company and the Guarantor wish to issue the Securities to (the "Trust") to evidence loans made to the ------- Company [and the Guarantor] of the proceeds of Preferred Securities and common beneficial ownership interests in the assets of the Trust to be issued to the Guarantor ("Common Securities").] The Company has duly authorized the execution and delivery of this Supplemental Indenture No. 1 to establish the Securities of Series No. 1 and has duly authorized the issuance of such Securities; the Guarantor has duly authorized the execution and delivery of this Supplemental Indenture No. 1 and has duly authorized its Guarantees of the Securities of Series No. 1; and all acts necessary to make this Supplemental Indenture No. 1 a valid agreement of the Company and the Guarantor, to make the Securities of Series No. 1 valid obligations of the Company, and to make the Guarantees valid obligations of the Guarantor, have been performed. NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE NO. 1 WITNESSETH: For and in consideration of the premises and of the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities of Series No. 1, as follows: ARTICLE ONE FIRST SERIES OF SECURITIES SECTION 1. There is hereby created a series of Securities designated " % Subordinated Debentures, Series " and limited in aggregate -- ---- principal amount (except as contemplated in Section 301(b) of the Original Indenture) to $ . The forms and terms of the Securities of Series No. ----------- 1 shall be established in an Officer's Certificate of the Company, as contemplated by Section 301 of the Original Indenture. SECTION 2. The Company hereby agrees that, if the Company shall make any deposit of money and/or Eligible Obligations with respect to any Securities of Series No. 1, or any portion of the principal amount thereof, as contemplated by Section 701 of the Indenture, the Company shall not deliver an Officer's Certificate described in clause (z) in the first paragraph of said Section 701 unless the Company shall also deliver to the Trustee, together with such Officer's Certificate, either: (A) an instrument wherein the Company, notwithstanding the satisfaction and discharge of its indebtedness in respect of such Securities, shall assume the obligation (which shall be absolute and unconditional) to irrevocably deposit with the Trustee or Paying Agent such additional sums of money, if any, or additional Eligible Obligations (meeting the requirements of Section 701), if any, or any combination thereof, at such time or times, as shall be necessary, together with the money and/or Eligible Obligations theretofore so deposited, to pay when due the principal of and premium, if any, and interest due and to become due on such Securities or portions thereof, all in accordance with and subject to the provisions of said Section 701; provided, however, that such instrument may state that the obligation of the Company to make additional deposits as aforesaid shall be subject to the delivery to the Company by the Trustee of a notice asserting the deficiency accompanied by an opinion of an independent public accountant of nationally recognized standing, selected by the Trustee, showing the calculation thereof (which opinion shall be obtained at the expense of the Company); or (B) an Opinion of Counsel to the effect that the Holders of such Securities, or portions of the principal amount thereof, will not recognize income, gain or loss for United States federal income tax purposes as a result of the satisfaction and discharge of the Company's indebtedness in respect thereof and will be subject to United States federal income tax on the same amounts, at the same times and in the same manner as if such satisfaction and discharge had not been effected. [Additional provisions relating to Trust, if Securities are issued in connection with Preferred Securities] 2 [Additional provisions relating to Remarketing and interest rate reset if Securities are issued in connection with Stock Purchase Units] ARTICLE TWO FORM OF GUARANTEE Guarantees to be endorsed on the Securities of Series No. 1 shall be in substantially the form set forth below: [FORM OF GUARANTEE] PPL Corporation, a corporation organized under the laws of the Commonwealth of Pennsylvania (the "Guarantor", which term includes any successor under the Indenture (the "Indenture") referred to in the Security upon which this Guarantee is endorsed), for value received, hereby unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed, the due and punctual payment of the principal of, and premium, if any, and interest, if any, on such Security when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption, or otherwise, in accordance with the terms of such Security and of the Indenture. In case of the failure of PPL Capital Funding, Inc., a corporation organized under the laws of the State of Delaware (the "Company", 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, call for redemption or otherwise, and as if such payment were made by the Company. 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 Security or the Indenture, any failure to enforce the provisions of such Security or the Indenture, or any waiver, modification or indulgence granted to the Company with respect thereto, by the Holder of such Security 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 Security, or increase the interest rate thereon, or change any redemption provisions thereof (including any change to increase any premium payable upon redemption thereof) or change the Stated Maturity thereof. The Guarantor hereby waives the benefits of diligence, presentment, demand for payment, any requirement that the Trustee or the Holder of such Security exhaust any right or take any action against the Company or any other Person, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding 3 first against the Company, protest or notice with respect to such Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged in respect of such Security except by complete performance of the obligations contained in such Security 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 premium, if any, or interest, if any, on such Security, whether at its Stated Maturity, by declaration of acceleration, call for redemption, or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Security, subject to the terms and conditions set forth in the Indenture, directly against the Guarantor to enforce this Guarantee without first proceeding against the Company. The obligations of the Guarantor hereunder with respect to such Security shall be continuing and irrevocable until the date upon which the entire principal of, premium, if any, and interest, if any, on such Security has been, or has been deemed pursuant to the provisions of Article Seven of the Indenture to have been, paid in full or otherwise discharged. The obligations evidenced by this Guarantee are, to the extent provided in the Indenture, subordinated and subject in right of payment to the prior payment in full of all Senior Indebtedness (as defined in the Indenture) of the Guarantor, and this Guarantee is issued subject to the provisions of the Indenture with respect thereto. Each Holder of a Security upon which this Guarantee is endorsed, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination so provided and (c) appoints the Trustee his attorney-in fact for any and all such purposes. Each Holder hereof, by his acceptance hereof, hereby waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such Holder upon said provisions. The Guarantor shall be subrogated to all rights of the Holder of such Security upon which this Guarantee is endorsed against the Company in respect of any amounts paid by the Guarantor on account of such Security 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 of, and premium, if any, and interest, if any, on all Securities 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 Company for liquidation or reorganization, the Company 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 Company's assets, and 4 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 Security 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 Security, 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 Security, such Security 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. This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of the Security 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 deemed to be a contract made under the laws of the State of New York, and for all purposes 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 THREE [PAYMENT OF TRUST COSTS AND EXPENSES] [SECTION 1. In connection with the issuance of the Securities to the Trust, and the loan of the proceeds of the Preferred Securities and Common Securities to the Company and the Guarantor, the Guarantor hereby covenants to pay to the Trust, and reimburse the Trust for, the full amount of any costs, expenses or liabilities of the Trust (other than obligations of the Trust to pay the Holders of any Preferred Securities or Common Securities) including, without limitation, any taxes, duties or other governmental charges of whatever nature (other than withholding taxes) imposed on the Trust by the United States or any taxing authority. Such payment obligation includes any such costs, expenses or liabilities of the Trust that are required by applicable law to be satisfied in connection with a termination of the Trust. The obligations of the Guarantor to pay all debts, obligations, costs and expenses of the Trust (other than with 5 respect to amounts owing under the Common Securities and the Preferred Securities) shall survive the satisfaction and discharge of the Indenture.] ARTICLE FOUR MISCELLANEOUS PROVISIONS SECTION 1. This Supplemental Indenture No. 1 is a supplement to the Original Indenture. As supplemented by this Supplemental Indenture No. 1, the Indenture is in all respects ratified, approved and confirmed, and the Original Indenture and this Supplemental Indenture No. 1 shall together constitute one and the same instrument. SECTION 2. The recitals contained in this Supplemental Indenture No. 1 shall be taken as the statements of the Company and the Guarantor, and the Trustee assumes no responsibility for their correctness and makes no representations as to the validity or sufficiency of this Supplemental Indenture No. 1. SECTION 3. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 6 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture No. 1 to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first written above. PPL CAPITAL FUNDING, INC. By: Name: Title: [SEAL] ATTEST: PPL CORPORATION By: Name: Title: [SEAL] ATTEST: THE CHASE MANHATTAN BANK, as Trustee By: Name: Title: [SEAL] ATTEST: 7 EX-4 16 0016.txt EXHIBIT 4.18 EXHIBIT 4.18 OFFICERS' CERTIFICATE (UNDER SECTION 301 OF THE SUBORDINATED INDENTURE OF PPL CAPITAL FUNDING, INC. AND PPL CORPORATION) The undersigned , of PPL CAPITAL FUNDING, -------------- ------------ INC. (the "Company"), in accordance with Section 301 of the Subordinated Indenture, dated as of , 2000, as heretofore supplemented (the ---------- "Subordinated Indenture", capitalized terms used herein and not defined herein having the meanings specified in the Subordinated Indenture), of the Company and PPL CORPORATION (the "Guarantor"), to The Chase Manhattan Bank, as Trustee (the "Trustee"), does hereby establish for the series of Securities established in Supplemental Indenture No. 1, dated as of (the "Supplemental ---------------- Indenture"), the following terms and characteristics (the lettered clauses set forth below corresponding to the lettered clauses of Section 301 of the Indenture), and the undersigned , of the Guarantor, ------------- -------------- does hereby approve of such terms and characteristics on behalf of the Guarantor: (a) the title of the Securities of such series shall be " % --- Subordinated Deferrable Notes, Series " (the "Notes"); [The Notes are - to be issued to the "Property Trustee" of PPL Capital Funding Trust I, a statutory business trust (the "Trust").] ------- (b) the aggregate principal amount of Notes which may be authenticated and delivered under the Subordinated Indenture shall be limited to $ , except as contemplated in Section 301(b) of the ----------- Subordinated Indenture; (c) subject to the provisions of Section 307 of the Subordinated Indenture, interest on the Notes (other than interest payable at Maturity) shall be payable to the Person or Persons in whose name the Notes are registered at the close of business on the Regular Record Date for such interest, which shall be the fifteenth day (whether or not a Business Day) of the month in which the corresponding Interest Payment Date occurs; provided, however, that if the Notes are held by a securities depositary in a book-entry only form, the Regular Record Date will be one Business Day preceding the corresponding Interest Payment Date; and provided, further, that the Company shall have the right to change the Regular Record Date by one or more Officer's Certificates; interest payable at Maturity shall be paid to the Person to whom principal shall be paid; (d) the Stated Maturity of the principal of the Notes shall be and any accrued and theretofore unpaid interest on the -------------- Notes shall be due and payable at such date; provided, however, that upon the occurrence and continuation of a Tax Event relating to non-deductibility of interest payments on the Securities of this series, in lieu of redeeming the Securities of this series, at its option, the Company may shorten the Stated Maturity of the Securities of this series to a date not earlier than . The ---------------- Trustee may conclusively rely on an Officer's Certificate setting forth a changed Stated Maturity of the Securities of this series. (e) the Notes shall bear interest at the rate of % per annum, from ---- or from the most recent Interest Payment Date (as ------------ hereinafter defined) to which interest has been paid or duly provided for; interest shall be payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year (each, an "Interest Payment Date") commencing , 2000[, subject to the right of ---------- the Company to extend interest payment periods, as described below]. [With respect to the Notes, the term "Interest Period" shall mean each period from, and including, an Interest Payment Date to, but excluding, the next succeeding Interest Payment Date, except that the first Interest Period shall commence on the date of original issuance.]; the amount of interest payable for any Interest Period will be computed on the basis of a 360-day year of twelve 30-day months, and with respect to any period less than a full calendar month, on the basis of the actual number of days elapsed during such period; [Pursuant to Section 312 of the Subordinated Indenture, the Company shall have the right, at any time and from time to time during the term of the Notes, [so long as no Event of Default has occurred and shall be continuing,] to extend the interest payment period to a period not exceeding [20] consecutive quarterly periods (an "Extension Period"); provided that no Extension Period shall extend beyond the Stated Maturity or end on a day other than an Interest Payment Date. At the end of the Extension Period, the Company shall pay all interest accrued and unpaid (together with interest thereon at the rate specified for the Notes, compounded [quarterly], to the extent permitted by applicable law). Prior to the termination of any such Extension Period, the Company may further extend the interest payment period, provided that such Extension Period together with all such previous and further extensions thereof shall not exceed [20] consecutive quarterly periods at any one time or extend beyond the Stated Maturity of the Notes. Upon the termination of any such Extension Period and the payment of all amounts then due, including interest on deferred interest payments, the Company may elect to begin a new Extension Period, subject to the above requirements. No interest shall be due and payable during an Extension Period, except at the end thereof, but the Company may prepay at any time all or any portion of interest accrued during an Extended Interest Payment Period. The Company will give the 2 Trust and the Trustee notice of its election of an Extension Period before the Business Day prior to the record date for the distribution which would occur but for such election and will cause the Trust to send notice of such election to the holders of Preferred Trust Securities]; (f) the Corporate Trust Office of the Trustee in New York, New York shall be the office or agency of the Company at which the principal of and any premium and interest, on the Notes shall be payable, at which registration of transfer and exchange of Notes may be effected and at which notices and demands to or upon the Company or the Guarantor in respect of the Notes or any Tranche thereof and the Subordinated Indenture may be served; provided, however, that the Company and the Guarantor each reserve the right to change, by one or more Officers' Certificates supplemental to this Officers' Certificate, any such office or agency; and provided, further, that the Company and the Guarantor each reserve the right to designate, by one or more Officers' Certificates supplemental to this Officers' Certificate, its principal office in Allentown, Pennsylvania or the office of the Guarantor or the Guarantor's subsidiary, PPL Electric Utilities Corporation in Allentown, Pennsylvania, as any such office or agency; the Trustee shall be the initial Security Registrar and Paying Agent for the Notes; provided, that the Company and the Guarantor reserve the right, by one or more Officers' Certificates supplemental to this Officers' Certificate, to designate any additional Paying Agent (which in each case, may be the Company, the Guarantor or any Affiliate of either of them) and to remove and replace any Security Registrar or Paying Agent; (g) [Insert provisions for Redemption, if any] [the Notes shall be redeemable in whole or in part, at the option of the Company, at any time on or after , 200 at a redemption price equal to ---------- -- - 100% of the aggregate principal amount of such Notes to be redeemed plus any accrued but unpaid interest, [including additional Interest, if any,] thereon to the date fixed for redemption in the manner provided in the Indenture;] [If at any time a Tax Event (as defined below) shall occur and be continuing and either (i) in the opinion of counsel to the Company experienced in such matters, there would in all cases, after effecting the termination of the Trust, after satisfaction of liabilities to creditors of the Trust, if any, as provided by applicable law, and the distribution of the Notes to the holders of the Preferred Trust Securities issued by the Trust (the "Preferred Trust Securities"), in exchange therefor, be more than an insubstantial risk that an Adverse Tax Consequence (as defined below) would continue to exist or (ii) the Notes are not held by the Trust, then the Company shall have the right to redeem the Notes, in whole but not in part, at any time within 90 days following the occurrence of the Tax Event, at 100% of the principal amount thereof plus accrued and unpaid interest thereon to the Redemption Date. "Tax Event" means the receipt by the Trust or the Company of an opinion of counsel experienced in such matters to the effect that, as a result of (a) any amendment to, clarification of, or change 3 (including any announced prospective change) in, the laws or treaties (or any regulations thereunder) of the United states or any political subdivision or taxing authority thereof or therein affecting taxation, (b) any judicial decision or any official administrative pronouncement, ruling, regulatory procedure, notice or announcement (including any notice or announcement of intent to issue or adopt any such administrative pronouncement, ruling, regulatory procedure or regulation) (each, an "Administrative Action"), or (c) any amendment to, clarification of, or change in the official position or the interpretation of any such Administrative Action or judicial decision or any interpretation or pronouncement that provides for a position with respect to such Administrative Action or judicial decision that differs from the theretofore generally accepted position, in each case by any legislative body, court, governmental authority or regulatory body, irrespective of the time or manner in which such amendment, clarification or change is introduced or made known, which amendment, clarification, or change is effective, which Administrative Action is taken or which judicial decision is issued, in each case on or after the date of issuance of the Preferred Trust Securities, there is more than an insubstantial risk that (i) the Trust is, or will be, subject to United states federal income tax with respect to interest received on the Notes, (ii) interest payable by the Company on the Notes is not, or will not be, fully deductible by the Company for United States federal income tax purposes, or (iii) the Trust is, or will be, subject to more than a de minimis amount of other taxes, duties or other governmental charges (each of the circumstances described in clauses (i), (ii) or (iii) being an "Adverse Tax Consequence";] (h) [insert provisions for other mandatory redemption or repurchase at option of the Holder;] (i) the Notes shall be issued in denominations of $25 and integral multiples thereof; (j) [not applicable]; (k) [not applicable]; (l) [not applicable]; (m) [not applicable]; (n) [not applicable]; (o) [not applicable]; (p) [not applicable]; (q) the only obligations or instruments which shall be considered Eligible Obligations in respect of the Notes shall be Government 4 Obligations; and the provisions of Section 701 and 702 of the Indenture and Section 2 of the Supplemental Indenture shall apply to the Notes; (r) [in the event that, at any time subsequent to the initial authentication and delivery of the Notes, the Notes are to be held in global form by a securities depositary, the Company may at such time establish the matters contemplated in clause (r) in the second paragraph of Section 301 of the Indenture in an Officer's Certificate supplemental to this Certificate;] (s) [not applicable]; (t) [reference is made to clause (r) above;] no service charge shall be made for the registration of transfer or exchange of Notes; provided, however, that the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the exchange or transfer; (u) [insert alternative holiday provisions, if any]; (v) the Notes shall be entitled to the benefits of Article Fourteen of the Subordinated Indenture and the Guarantees to be endorsed on the Notes shall be substantially in the form established in the Supplemental Indenture; (w) [as provided in clause (a) above, is ------------------------ designated as the Trust;] [at any time, the Company will have the right to dissolve the Trust and, after satisfaction of liabilities to creditors, if any, of the Trust as provided by applicable law, cause the Notes to be distributed to the holders of the Preferred Trust Securities;] (x) (i) except as otherwise determined by the proper officers of the Company and communicated to the Trustee in a Company Order or as established in one or more Officers' Certificates supplemental to this Officers' Certificate, the Notes shall be substantially in the form of Note attached hereto and hereby authorized and approved and shall have such further terms as are set forth in such form; (ii) [interest rate reset provisions, if any]; (iii) [remarketing provisions, if any]; and (iv) [other provisions, if any]. IN WITNESS WHEREOF, we have hereunto signed our names this day of . - -------------- PPL CAPITAL FUNDING, INC. ---------------------------------- Name: Title: 5 PPL CORPORATION ---------------------------------- Name: Title: 6 EX-4 17 0017.txt EXHIBIT 4.19 EXHIBIT 4.19 TRUST SECURITIES GUARANTEE AGREEMENT Among PPL Corporation (as Guarantor) and The Chase Manhattan Bank (as Guarantee Trustee) Relating to PPL Capital Funding Trust I dated as of ------------ TABLE OF CONTENTS ----------------- Page ---- ARTICLE I DEFINITIONS SECTION 1.01 Definitions.................................................1 ARTICLE II TRUST INDENTURE ACT SECTION 2.01 Trust Indenture Act; Application............................4 SECTION 2.02 Lists of Holders of [Preferred Trust] Securities............4 SECTION 2.03 Reports by the Guarantee Trustee............................4 SECTION 2.04 Periodic Reports to Guarantee Trustee.......................4 SECTION 2.05 Evidence of Compliance with Conditions Precedent............5 SECTION 2.06 Events of Default; Waiver...................................5 SECTION 2.07 Event of Default; Notice....................................5 SECTION 2.08 Conflicting Interests.......................................5 ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE SECTION 3.01 Powers and Duties of the Guarantee Trustee..................6 SECTION 3.02 Certain Rights of Guarantee Trustee.........................7 SECTION 3.03 Not Responsible for Recitals or Issuance of Guarantee.......9 ARTICLE IV GUARANTEE TRUSTEE SECTION 4.01 Guarantee Trustee; Eligibility..............................9 SECTION 4.02 Compensation, Reimbursement and Indemnity..................10 SECTION 4.03 Appointment, Removal and Resignation of Guarantee Trustee....................................................10 ARTICLE V GUARANTEE SECTION 5.01 Guarantee..................................................11 SECTION 5.02 Waiver of Notice and Demand................................11 SECTION 5.03 Obligations Not Affected...................................11 SECTION 5.04 Rights of Holders..........................................12 SECTION 5.05 Guarantee of Payment.......................................12 (i) SECTION 5.06 Subrogation................................................13 SECTION 5.07 Independent Obligations....................................13 ARTICLE VI SUBORDINATION SECTION 6.01 Subordination..............................................13 ARTICLE VII TERMINATION SECTION 7.01 Termination................................................14 ARTICLE VIII MISCELLANEOUS SECTION 8.01 Successors and Assigns.....................................14 SECTION 8.02 Amendments.................................................14 SECTION 8.03 Notices....................................................14 SECTION 8.04 Benefit....................................................15 SECTION 8.05 Interpretation.............................................15 SECTION 8.06 Governing Law..............................................16 SECTION 8.07 Counterparts...............................................16 (ii) CROSS-REFERENCE TABLE* --------------------- Section of Section of Trust Indenture Act Guarantee of 1939, as amended Agreement - ------------------- --------- 310(a)..........................................................4.01(a) 310(b)..........................................................4.01(c), 2.08 310(c)..........................................................Inapplicable 311(a)..........................................................2.02(b) 311(b)..........................................................2.02(b) 311(c)..........................................................Inapplicable 312(a)..........................................................2.02(a) 312(b)..........................................................2.02(b) 313.............................................................2.03 314(a)..........................................................2.04 314(b)..........................................................Inapplicable 314(c)..........................................................2.05 314(d)..........................................................Inapplicable 314(e)..........................................................1.01, 2.05, 3.02 314(f)..........................................................2.01 315(a)..........................................................3.01, 3.02 315(b)..........................................................2.07 315(c)..........................................................3.01 315(d)..........................................................3.01(c) 316(a)..........................................................5.04, 2.06 316(b)..........................................................5.03 316(c)..........................................................8.02 317(a)..........................................................Inapplicable 317(b)..........................................................Inapplicable 318(a)..........................................................2.01(b) 318(b)..........................................................2.01 318(c)..........................................................2.01(a) - ------------- * This Cross-Reference Table does not constitute part of the Guarantee Agreement and shall not affect the interpretation of any of its terms or provisions. (iii) TRUST SECURITIES GUARANTEE AGREEMENT This TRUST SECURITIES GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of , is executed and delivered by PPL Corporation, a ------------ Pennsylvania corporation (the "Guarantor"), and The Chase Manhattan Bank, as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Preferred Trust Securities [and Common Trust Securities] ([each] as defined herein [and together, the "Securities"]) of PPL Capital Funding Trust I, a Delaware statutory business trust (the "Issuer"). WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust Agreement"), dated as of among the Trustees named therein, ------------- PPL Corporation, as Depositor and Trust Securities Guarantor and the several Holders (as defined therein), the Issuer is issuing as of the date hereof $ aggregate Liquidation Amount of its % ------------- -- Securities (the "Preferred Trust Securities") - --------------------------- representing undivided beneficial interests in the assets of the Issuer and having the terms set forth in the Trust Agreement; WHEREAS, the Preferred Trust Securities are to be issued for sale by the Issuer and the proceeds [thereof, together with the proceeds from the issuance of the Issuer's Common Trust Securities (as defined herein)] are to be invested in $ principal amount of Debentures (as defined in the Trust ----------- Agreement) [of the Debenture Issuer, which Debentures will be deposited with The Chase Manhattan Bank, as Property Trustee under the Trust Agreement, as trust assets]; and WHEREAS, as an incentive for Holders to purchase Preferred Trust Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth herein, to pay to the Holders the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the purchase of Debentures, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the benefit of the Holders from time to time. ARTICLE I DEFINITIONS SECTION 1.01 DEFINITIONS. As used in this Guarantee Agreement, the terms set forth below shall, unless the context otherwise requires, have the following meanings. Capitalized or otherwise defined terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Trust Agreement as in effect on the date hereof. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. ["Common Trust Securities" means the common securities representing undivided beneficial interests in the assets of the Issuer that will be issued to PPL Corporation, as Depositor.] "Event of Default" means a default by the Guarantor on any of its payment or other obligations under this Guarantee Agreement; provided, however, that, except with respect to a default in payment of any Guarantee Payments, the Guarantor shall have received notice of default from the Guarantee Trustee or any Holder (with a copy to the Guarantee Trustee) and shall not have cured such default within 90 days after receipt of such notice. "Guarantee Payments" means the following payments or distributions, without duplication, with respect to the [Preferred Trust] Securities, to the extent not paid or made by or on behalf of the Issuer: (i) any accrued and unpaid Distributions that are required to be paid on such [Preferred Trust] Securities but only if and to the extent that the Property Trustee has available in the Payment Account funds sufficient to make such payment at such time, (ii) the redemption price (the "Redemption Price"), and all accrued and unpaid Distributions to the date of redemption, with respect to the [Preferred Trust] Securities called for redemption by the Issuer but only if and to the extent that the Property Trustee has available in the Payment Account funds sufficient to make such payment, (iii) upon a voluntary or involuntary dissolution, winding-up or termination of the Issuer (other than in connection with the distribution of Debentures to the Holders in exchange for [Preferred Trust] Securities as provided in the Trust Agreement or upon a redemption of all of the [Preferred Trust] Securities upon maturity or redemption of the Debentures as provided in the Trust Agreement), the lesser of (a) the aggregate of the Liquidation Amount of all [Preferred Trust] Securities and all accrued and unpaid Distributions on the [Preferred Trust] Securities to the date of payment but only if and to the extent that the Property Trustee has available in the Payment Account funds sufficient to make such payment at such time, and (b) the amount of assets of the Issuer remaining available for distribution to Holders in liquidation of the Issuer after satisfaction of liabilities to creditors of the Issuer as required by applicable law (in either case, the "Liquidation Distribution"). "Guarantee Trustee" means The Chase Manhattan Bank, until a Successor Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee Agreement and thereafter means each such Successor Guarantee Trustee. "Holder" means a Person in whose name a [Preferred Trust] Security or [Preferred Trust] Securities is registered in the Securities Register; provided, however, that in determining whether the holders of the requisite percentage of [Preferred Trust] Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of the Guarantor. "Majority in Liquidation Amount of the [Preferred Trust] Securities" means a vote by Holders, voting separately as a class, of more than 50% of the aggregate Liquidation Amount of all then outstanding [Preferred Trust] Securities. 2 "Officer's Certificate" means a certificate signed by the Chairman or a Vice Chairman of the Board of Directors, the President, any Vice President, the Treasurer, or any Assistant Treasurer of the Guarantor, and delivered to the Guarantee Trustee. Any Officer's Certificate or Opinion of Counsel delivered with respect to compliance with a condition or covenant provided for in this Guarantee Agreement shall include: (a) a statement that the officer or counsel signing the Officer's Certificate or the Opinion of Counsel has read the covenant or condition and the definitions relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officer's Certificate or the Opinion of Counsel; (c) a statement that each such officer or counsel has made such examination or investigation as, in such officer's or counsel's opinion, is necessary to enable such officer or counsel to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such officer or counsel, such condition or covenant has been complied with. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Guarantee Trustee or the Guarantor or an Affiliate of the Guarantor, or an employee or any thereof, who shall be acceptable to the Guarantee Trustee. "Person" means any individual, corporation, partnership, joint venture, trust, limited liability company, unincorporated organization or government, or any agency or political subdivision thereof, or any other entity of whatever nature. "Responsible Officer" means, with respect to the Guarantee Trustee, any vice-president, any assistant vice-president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any senior trust officer, any trust officer or assistant trust officer or any other officer in the Corporate Trust Department of the Guarantee Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject. "Subordinated Indenture" means the Indenture dated as of , ------------ , among the Guarantor, the Debenture Issuer and The Chase Manhattan Bank, as - ---- trustee pursuant to which the Debentures are issued, together with any indenture supplemental thereto. "Successor Guarantee Trustee" means a successor Guarantee Trustee possessing the qualifications to act as Guarantee Trustee under Section 4.01. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended. 3 ARTICLE II TRUST INDENTURE ACT SECTION 2.01 TRUST INDENTURE ACT; APPLICATION. (a) This Guarantee Agreement is subject to the provisions of the Trust Indenture Act that are required or deemed to be part of this Guarantee Agreement and shall, to the extent applicable, be governed by such provisions; and (b) if and to the extent that any provision of this Guarantee Agreement limits, qualifies or conflicts with the duties imposed by Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. SECTION 2.02 LISTS OF HOLDERS OF [PREFERRED TRUST] SECURITIES. (a) The Guarantor shall furnish or cause to be furnished to the Guarantee Trustee (a) semiannually, not later than and in each year, a list, in -------- -- ---- -- such form as the Guarantee Trustee may reasonably require, of the names and addresses of the Holders ("List of Holders") as of a date not more than 15 days prior to the delivery thereof, and (b) at such other times as the Guarantee Trustee may request in writing, within 30 days after the receipt by the Guarantor of any such request, a List of Holders as of a date not more than 15 days prior to the time such list is furnished; provided that, the Guarantor shall not be obligated to provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Guarantee Trustee by the Guarantor. The Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. (b) The Guarantee Trustee shall comply with its obligations under Section 311(a) of the Trust Indenture Act, subject to the provisions of Section 311(b) of the Trust Indenture Act, and Section 312(b) of the Trust Indenture Act. SECTION 2.03 REPORTS BY THE GUARANTEE TRUSTEE. Within 60 days after each , commencing , the Guarantee Trustee shall ------------ ---------------- provide to the Holders such reports, if any, as are required by Section 313(a) of the Trust Indenture Act in the form and in the manner provided by Section 313(a) of the Trust Indenture Act. Any such report shall be dated as of the next preceding . The Guarantee Trustee shall also comply with the other ------------ requirements of Section 313 of the Trust Indenture Act. SECTION 2.04 PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor shall provide to the Guarantee Trustee, the Securities and Exchange Commission and the Holders such documents, reports and information, if any, as required by Section 314 of the Trust Indenture Act and the compliance certificate required by Section 314(a)(4) of the Trust Indenture Act in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act, provided that such compliance certificate shall be delivered annually on or before --------- in each year, beginning . ------------- SECTION 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The Guarantor shall provide to the Guarantee Trustee such evidence of compliance with any conditions precedent provided for in this Guarantee Agreement as and to the extent required by Section 314(c) of the Trust Indenture Act. Any 4 certificate or opinion required to be given by an officer pursuant to Section 314(c) of the Trust Indenture Act may be given in the form of an Officer's Certificate. SECTION 2.06 EVENTS OF DEFAULT; WAIVER. (a) The Holders of a Majority in Liquidation Amount of [Preferred Trust] Securities may, by vote, on behalf of all of the Holders, waive any past Event of Default and its consequences. Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Guarantee Agreement, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. (b) The right of any Holder to receive payment of the Guarantee Payments in accordance with this Guarantee Agreement, or to institute suit for the enforcement of any such payment, shall not be impaired without the consent of each such Holder. SECTION 2.07 EVENT OF DEFAULT; NOTICE. (a) The Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first class postage prepaid, to the Holders, a notice of such Event of Default known to the Guarantee Trustee, unless such default shall have been cured or waived before the giving of such notice, provided that, except in the case of a default in the payment of a Guarantee Payment, the Guarantee Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors or Responsible Officers of the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders. (b) The Guarantee Trustee shall not be deemed to have knowledge of any Event of Default unless the Guarantee Trustee shall have received written notice, or a Responsible Officer of the Guarantee Trustee charged with the administration of this Guarantee Agreement shall have received written notice, in each case from the Guarantor or a Holder, of such Event of Default. SECTION 2.08 CONFLICTING INTERESTS. The Trust Agreement, the Subordinated Indenture and the securities of any series issued thereunder [OTHERS] shall be deemed to be specifically described in this Guarantee Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE SECTION 3.01 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE. (a) This Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of the Holders, and the Guarantee Trustee shall not transfer this Guarantee Agreement or any rights hereunder to any Person except a Holder exercising his or her rights pursuant to Section 5.04 or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall automatically vest in any Successor Guarantee Trustee, and such vesting and cessation of title shall be effective whether or not conveyancing 5 documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee. (b) The Guarantee Trustee, prior to the occurrence of any Event of Default and after the curing or waiving of all Events of Default that may have occurred, shall undertake to perform such duties and only such duties as are specifically set forth in this Guarantee Agreement, and no implied covenants or obligations shall be read into this Guarantee Agreement against the Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.06), the Guarantee Trustee shall exercise such of the rights and powers vested in it by this Guarantee Agreement, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (c) No provision of this Guarantee Agreement shall be construed to relieve the Guarantee Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Guarantee Trustee shall be determined solely by the express provisions of this Guarantee Agreement, and the Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee Agreement; and (B) in the absence of bad faith on the part of the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Guarantee Trustee and conforming to the requirements of this Guarantee Agreement; but in the case of any such certificates or opinions that by any provision hereof or of the Trust Indenture Act are specifically required to be furnished to the Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Guarantee Agreement; (ii) the Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Guarantee Trustee, unless it shall be proved that the Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) the Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a Majority in Liquidation Amount of the [Preferred Trust] Securities relating to the time, method and place of conducting any proceeding for any remedy 6 available to the Guarantee Trustee, or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv) no provision of this Guarantee Agreement shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if the Guarantee Trustee shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Guarantee Agreement or adequate indemnity, reasonably satisfactory to the Guarantee Trustee, against such risk or liability is not reasonably assured to it. SECTION 3.02 CERTAIN RIGHTS OF GUARANTEE TRUSTEE. (a) Subject to the provisions of Section 3.01: (i) the Guarantee Trustee may rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been signed, sent or presented by the proper party or parties; (ii) any direction or act of the Guarantor contemplated by this Guarantee Agreement shall be sufficiently evidenced by an Officer's Certificate, or as otherwise expressly provided herein; (iii) whenever, in the administration of this Guarantee Agreement, the Guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting to take any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and rely upon an Officer's Certificate which, upon receipt of such request from the Guarantee Trustee, shall be promptly delivered by the Guarantor; (iv) the Guarantee Trustee may consult with counsel of its choice, and the written advice or Opinion of Counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion; such counsel may be counsel to the Guarantee Trustee, the Guarantor or any of its Affiliates and may include any of its employees; the Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee Agreement from any court of competent jurisdiction; (v) the Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Guarantee Agreement at the request or direction of any Holder, unless such Holder shall have provided to the Guarantee Trustee such adequate security and indemnity as would satisfy a reasonable person in the 7 position of the Guarantee Trustee, against the costs, expenses (including attorneys' fees and expenses) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Guarantee Trustee; provided that, nothing contained in this Section 3.02(a)(v) shall be taken to relieve the Guarantee Trustee, upon the occurrence and continuance of an Event of Default, of its obligation under the last sentence of Section 3.01(b) to exercise the rights and powers vested in it by this Guarantee Agreement; (vi) the Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Guarantee Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit; (vii) the Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by it hereunder; (viii) whenever in the administration of this Guarantee Agreement the Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Guarantee Trustee (1) may request instructions from the Holders of a Majority in Liquidation Amount of the Preferred Trust Securities, (2) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (3) shall be protected in relying on or acting in accordance with such instructions; (ix) the Guarantee Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any tax or securities form) (or any rerecording, refiling or re-registration thereof); and (x) the Guarantee Trustee shall not be liable for any action taken, suffered or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Guarantee Agreement. (c) No provision of this Guarantee Agreement shall be deemed to impose any duty or obligation on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Guarantee Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts or to exercise any such right, power, duty or 8 obligation. No permissive power or authority available to the Guarantee Trustee shall be construed to be a duty to act in accordance with such power or authority. SECTION 3.03 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE. The recitals contained in this Guarantee Agreement shall be taken as the statements of the Guarantor, and the Guarantee Trustee does not assume any responsibility for their correctness. The Guarantee Trustee makes no representation as to the validity or sufficiency of this Guarantee Agreement. ARTICLE IV GUARANTEE TRUSTEE SECTION 4.01 GUARANTEE TRUSTEE; ELIGIBILITY. (a) There shall at all times be a Guarantee Trustee which shall: (i) not be an Affiliate of the Guarantor; and (ii) be a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or Person permitted by the Securities and Exchange Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by Federal, State, Territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then, for the purposes of this Section 4.01(a)(ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) If at any time the Guarantee Trustee shall cease to be eligible to so act under Section 4.01(a), the Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 4.03(c). (c) If the Guarantee Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. SECTION 4.02 COMPENSATION, REIMBURSEMENT AND INDEMNITY. The Guarantor agrees to pay to the Guarantee Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), to reimburse the Guarantee Trustee upon request for all reasonable expenses, disbursements and advances (including the reasonable fees and expenses of its attorneys and agents) incurred or made by the Guarantee Trustee in accordance with any provision of this Guarantee Agreement and to indemnify each of the Guarantee Trustee and any predecessor Guarantee Trustee for, and to hold it harmless against, any and all loss, damage, claim, liability 9 or expense, including taxes (other than taxes based upon the income of the Guarantee Trustee) incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance of the trusts created by, or the administration of, this Guarantee Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligations of the Guarantor under this Section shall survive the termination of this Guarantee Agreement and the resignation or removal of the Guarantee Trustee. SECTION 4.03 APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE TRUSTEE. (a) Subject to Section 4.03(b), the Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor. (b) The Guarantee Trustee shall not be removed until a Successor Guarantee Trustee has been appointed by the Guarantor and has accepted such appointment by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor. (c) The Guarantee Trustee appointed to office shall hold office until a Successor Guarantee Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee. (d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.02 within 60 days after delivery to the Guarantor of an instrument of resignation or removal, the Guarantee Trustee resigning or being removed may petition any court of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee. (e) No Guarantee Trustee shall be liable for the acts or omissions to act of any Successor Guarantee Trustee. ARTICLE V GUARANTEE SECTION 5.01 GUARANTEE. The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by or on behalf of the Issuer), as and when due, regardless of any defense, right of set-off or counterclaim which the Issuer may have or assert. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to the Holders. SECTION 5.02 WAIVER OF NOTICE AND DEMAND. The Guarantor hereby waives notice of acceptance of this Guarantee Agreement and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a 10 proceeding first against the Guarantee Trustee, Issuer or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. SECTION 5.03 OBLIGATIONS NOT AFFECTED. The obligation of the Guarantor to make the Guarantee Payments under this Guarantee Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the [Preferred Trust] Securities to be performed or observed by the Issuer; (b) the extension of time for the payment by the Issuer of all or any portion of the Distributions, Redemption Price, Liquidation Distribution or any other sums payable under the terms of the [Preferred Trust] Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the [Preferred Trust] Securities (other than an extension of time for payment of Distributions, Redemption Price, Liquidation Distribution or other sum payable that results from the extension of any interest payment period on the Debentures permitted by the Subordinated Indenture); (c) any failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the terms of the [Preferred Trust] Securities, or any action on the part of the Issuer granting indulgence or extension of any kind; (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the assets of the Issuer; (e) any invalidity of, or defect or deficiency in, the [Preferred Trust] Securities; (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 5.03 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. There shall be no obligation of the Holders to give notice to, or obtain consent of, the Guarantor with respect to the happening of any of the foregoing. 11 SECTION 5.04 RIGHTS OF HOLDERS. The Guarantor expressly acknowledges that: (i) this Guarantee Agreement will be deposited with the Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in Liquidation Amount of the [Preferred Trust] Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement, provided, however, that, subject to Section 3.01, the Guarantee Trustee shall have the right to decline to follow any such direction if the Guarantee Trustee being advised by counsel determines that the action so directed may not lawfully be taken, or if the Guarantee Trustee in good faith shall, by a Responsible Officer or Officers of the Guarantee Trustee, determine that the proceedings so directed would be illegal or involve it in personal liability or be unduly prejudicial to the rights of Holders not party to such direction, and provided further that nothing in this Trust Agreement shall impair the right of the Guarantee Trustee to take any action deemed proper by the Guarantee Trustee which is not inconsistent with such direction; and (iv) any Holder may enforce this Guarantee Agreement, or institute a legal proceeding directly against the Guarantor to enforce the Guarantee Trustee's rights under this Guarantee Agreement without first instituting a legal proceeding against the Issuer, the Guarantee Trustee, or any other Person. SECTION 5.05 GUARANTEE OF PAYMENT. This Guarantee Agreement creates a guarantee of payment and not of collection. This Guarantee Agreement will not be discharged except by payment of the Guarantee Payments in full (without duplication) or upon the distribution of Debentures as provided in the Trust Agreement. SECTION 5.06 SUBROGATION. The Guarantor shall be subrogated to all, if any, rights of the Holders against the Issuer in respect of any amounts paid to the Holders by the Guarantor under this Guarantee Agreement; provided, however, that the Guarantor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights which it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee Agreement, if, at the time of any such payment, any amounts of Guarantee Payments are due and unpaid under this Guarantee Agreement. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders. SECTION 5.07 INDEPENDENT OBLIGATIONS. The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the [Preferred Trust] Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 5.03. 12 ARTICLE VI SUBORDINATION SECTION 6.01 SUBORDINATION. This Guarantee Agreement will constitute an unsecured obligation of the Guarantor and will rank (i) subordinate and junior in right of payment to all other liabilities of the Guarantor, including the guarantee of the Debentures, except those made pari passu or subordinate by their terms, (ii) pari passu with the most senior preferred or preference stock now or hereafter issued by the Guarantor and with any guarantee now or hereafter entered into by the Guarantor in respect of any preferred or preference stock of any Affiliate of the Guarantor, and (iii) senior to all common stock of the Guarantor. [When a Debenture Event of Default (as defined in the Trust Agreement) occurs and is continuing, the rights of holders of the Common Trust Securities to payment in respect of Distributions and payments upon liquidation, redemption or otherwise are subordinated to the rights to payment of holders of Preferred Trust Securities.] Each Person, by virtue of having become a Holder of a Security, shall be deemed to have expressly assented and agreed to the terms of, and shall be bound by, this Guarantee Agreement, the Trust Agreement and the Subordinated Indenture. ARTICLE VII TERMINATION SECTION 7.01 TERMINATION. This Guarantee Agreement shall terminate and be of no further force and effect upon: (i) full payment of the Redemption Price of all [Preferred Trust] Securities, and all accrued and unpaid Distributions to the date of redemption, (ii) the distribution of Debentures to Holders in exchange for all of the [Preferred Trust] Securities, or (iii) full payment of the amounts payable in accordance with the Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee Agreement will continue to be effective or will be reinstated, as the case may be, if at any time any Holder must restore payment of any sums paid with respect to [Preferred Trust] Securities or under this Guarantee Agreement. ARTICLE VIII MISCELLANEOUS SECTION 8.01 SUCCESSORS AND ASSIGNS. All guarantees and agreements contained in this Guarantee Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the [Preferred Trust] Securities then outstanding. Except in connection with a consolidation, merger or sale involving the Guarantor that is permitted under Article Eleven of the Subordinated Indenture and pursuant to which the assignee agrees in writing to perform the Guarantor's obligations hereunder, the Guarantor shall not assign its obligations hereunder. SECTION 8.02 AMENDMENTS. This Guarantee Agreement may be amended only by an instrument in writing entered into by the Guarantor and the Guarantee Trustee. Except with respect to any changes which do not materially adversely affect the rights of Holders (in which case no consent of Holders will be 13 required), this Guarantee Agreement may only be amended with the prior approval of the Holders of not less than a majority in aggregate Liquidation Amount of all the outstanding [Preferred Trust] Securities. Any such consent shall be deemed to be on behalf of the holders of all the [Preferred Trust] Securities. The provisions of Article VI of the Trust Agreement concerning meetings or consents of Holders shall apply to the giving of such approval. SECTION 8.03 NOTICES. Any notice, request or other communication required or permitted to be given hereunder shall be in writing, duly signed by the party giving such notice, and delivered, telecopied or mailed by first class mail as follows: (a) if given to the Guarantor, to the address set forth below or such other address or facsimile number or to the attention of such other Person as the Guarantor may give notice of to the Guarantee Trustee and the Holders of the Preferred Trust Securities: PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18101-1179 Facsimile No: 610-774-5106 Attention: Treasurer (b) if given to the Issuer, in care of the Administrative Trustees, at the Issuer's (and the Administrative Trustees') address set forth below or such other address or facsimile number or to the attention of such other Person as the Administrative Trustees on behalf of the Issuer may give notice of to the Guarantee Trustee and the Holders: PPL Capital Funding Trust I c/o PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18101-1179 Facsimile No: 610-774-5100 Attention: Administrative Trustees (c) if given to the Guarantee Trustee, to the address set forth below or such other address or facsimile number or to the attention of such other Person as the Guarantee Trustee may give notice of to the Guarantor and the Holders of the Preferred Trust Securities: The Chase Manhattan Bank 450 West 33rd Street, 15th Floor New York, New York 10001 Facsimile No: 212-946-8158 Attention: Capital Markets Fiduciary Services (d) if given to any Holder, at the address set forth on the books and records of the Issuer. 14 All notices hereunder shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid, except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. SECTION 8.04 BENEFIT. This Guarantee Agreement is solely for the benefit of the Holders and, subject to Section 3.01(a), is not separately transferable from the Preferred Trust Securities. SECTION 8.05 INTERPRETATION. In this Guarantee Agreement, unless the context otherwise requires: (a) a term defined anywhere in this Guarantee Agreement has the same meaning throughout; (b) all references to "the Guarantee Agreement" or "this Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented or amended from time to time; (c) all references in this Guarantee Agreement to Articles and Sections are to Articles and Sections of this Guarantee Agreement unless otherwise specified; (d) a term defined in the Trust Indenture Act has the same meaning when used in this Guarantee Agreement unless otherwise defined in this Guarantee Agreement or unless the context otherwise requires; (e) a reference to the singular includes the plural and vice versa; and (f) the masculine, feminine or neuter genders used herein shall include the masculine, feminine and neuter genders. SECTION 8.06 GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. SECTION 8.07 COUNTERPARTS. This Guarantee Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 15 THIS GUARANTEE AGREEMENT is executed as of the day and year first above written. PPL CORPORATION, As Guarantor By: ------------------------------------ Name: Title: THE CHASE MANHATTAN BANK, as Guarantee Trustee By: ------------------------------------ Name: Title: 16 EX-4 18 0018.txt EXHIBIT 4.21 EXHIBIT 4.21 [Specimen Stock Certificate] COMMON STOCK INCORPORATED UNDER THE LAWS OF PAR VALUE $.01 THE COMMONWEALTH OF PENNSYLVANIA NUMBER [image] SHARES - --------- ---------- THIS CERTIFICATE IS CUSIP 69351T 10 6 TRANSFERABLE IN MINNEAPOLIS, SEE REVERSE FOR CERTAIN MINNESOTA, DEFINITIONS NEW YORK, NEW YORK OR ALLENTOWN, PENNSYLVANIA PPL CORPORATION THIS IS TO CERTIFY THAT PPL IS THE OWNER OF FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF PPL Corporation (hereinafter referred to as the "Company") transferable on the books of the Company by the holder hereof in person or by duly authorized attorney upon surrender of this certificate properly endorsed. This certificate and the shares represented hereby are issued and shall be held subject to all of the provisions of the Articles of Incorporation, as restated and amended, of the Company (a copy of which is on file with the Transfer Agent), to all of which the holder, by acceptance hereof, assents. This certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar. Witness the facsimile seal of the Company and the facsimile signatures of its authorized officers. Dated [seal] COUNTERSIGNED AND REGISTERED: PPL ELECTRIC UTILITIES CORPORATION ALLENTOWN, PA. TRANSFER AGENT AND REGISTRAR BY AUTHORIZED SIGNATURE SECRETARY CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER PPL CORPORATION THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SHARE OWNER WHO SO REQUESTS A STATEMENT OF THE DESIGNATIONS, TERMS, RELATIVE RIGHTS, PRIVILEGES, LIMITATIONS, PREFERENCES AND VOTING POWERS AND THE PROHIBITIONS, RESTRICTIONS AND QUALIFICATIONS OF THE VOTING AND OTHER RIGHTS AND POWERS OF THE SHARES OF EACH CLASS OF STOCK WHICH THE COMPANY IS AUTHORIZED TO ISSUE AND OF THE VARIATIONS IN THE RELATIVE RIGHTS AND PREFERENCES BETWEEN THE SHARES OF EACH SERIES OF EACH CLASS OF STOCK WHICH THE COMPANY IS AUTHORIZED TO ISSUE IN SERIES INSOFAR AS THE SAME HAVE BEEN FIXED AND DETERMINED, AND OF THE AUTHORITY OF THE BOARD OF DIRECTORS TO FIX AND DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF SUBSEQUENT SERIES. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants UNIF GIFT MIN ACT - TEN ENT in common Custodian JT TEN - as tenants by ---------- ----------- the entireties (Cust) (Minor) - as joint under Uniform Gifts to Minors tenants with Act right of --------------------------- survivorship (State) and not as tenants in common Additional abbreviations may also be used though not in the above list. For value received, hereby sell, assign and transfer unto ---------- PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OR ASSIGNEE ------------------------------------------------------------------------ - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint --------------------------------------- Attorney to transfer the said stock on the books of the within-named Company with full power of substitution in the premises. Dated, --------------- X ---------------------------------------- X ---------------------------------------- NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. Signature(s) Guaranteed By -------------------------------------- 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 S.E.C. RULE 17Ad-15 EX-5 19 0019.txt EXHIBIT 5.1 EXHIBIT 5.1 MICHAEL A. MCGRAIL Senior Counsel PPL Two North Ninth Street Allentown, PA 18101-1179 Tel. 610.774.5644 Fax 610.774.6726 mamcgrail@pplweb.com January 26, 2001 PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18101 Ladies and Gentlemen: I am Senior Counsel of PPL Services Corporation, the principal subsidiary of PPL Corporation, a corporation organized under the laws of the Commonwealth of Pennsylvania ("the Guarantor"). I have acted as counsel to the Guarantor in connection with: (a) the proposed issuance and sale from time to time of up to $800,000,000 in aggregate principal amount of securities (the "Securities") including (i) shares of the Guarantor's Common Stock, par value $.01 per share ("Common Stock"); (ii) shares of the Guarantor's Preferred Stock, par value $.01 per share ("Preferred Stock"); (iii) contracts to purchase shares of Common Stock ("Stock Purchase Contracts"); and (iv) Stock Purchase Units, each representing either (A) a Stock Purchase Contract, or (B) a Stock Purchase Contract and debt or preferred securities pledged to secure holders' obligations to purchase Common Stock under the Stock Purchase Contracts ("Stock Purchase Units"); and (b) guarantees (the "Securities Guarantees") by the Guarantor as to (i) payment of principal, interest and premium, if any, on unsecured and unsubordinated debt securities ("Debt Securities") of PPL Capital Funding, Inc. (the "Company"), a corporation organized under the laws of the State of Delaware (the "Guarantees") and unsecured subordinated debt securities ("Subordinated Debt Securities") of the Company (the "Subordinated Guarantees") and (ii) the obligations of PPL Capital Funding Trust I, a PPL Corporation January 26, 2001 Page 2 statutory business trust formed under the laws of the State of Delaware (the "Trust") under the preferred trust securities ("Preferred Trust Securities") of the Trust (the "Preferred Securities Guarantees"); such Debt Securities and such Guarantees to be issued under an Indenture, as amended and supplemented by one or more supplements (the "Indenture"), of the Company and the Guarantor to The Chase Manhattan Bank, as trustee (the "Trustee"); such Subordinated Debt Securities and such Subordinated Guarantees to be issued under a Subordinated Indenture (the "Subordinated Indenture"), of the Company and the Guarantor to The Chase Manhattan Bank, as trustee (the "Subordinated Indenture Trustee"); such Stock Purchase Contracts and Stock Purchase Units to be issued under a Purchase Contract Agreement (the "Purchase Contract Agreement"), of the Guarantor to The Chase Manhattan Bank, as Purchase Contract Agent and trustee (the "Purchase Contract Agent"); such Preferred Trust Securities to be issued under an Amended and Restated Trust Agreement of the Trust and The Chase Manhattan Bank, as Property Trustee (the "Trust Agreement"); and such Preferred Securities Guarantees to be issued under a Trust Securities Guarantee Agreement of the Guarantor to The Chase Manhattan Bank (the "Trust Securities Guarantee Agreement"), all as contemplated by the Registration Statement on Form S-3 (the "Registration Statement") proposed to be filed by the Company, the Guarantor and the Trust with the Securities and Exchange Commission on or about the date hereof for the registration of the Securities and the Securities Guarantees under the Securities Act of 1933, as amended (the "Act"), and for the qualification under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the Indenture, the Subordinated Indenture, the Trust Agreement, the Trust Securities Guarantee Agreement and, to the extent necessary, the Purchase Contract Agreement. I have examined such corporate records, certificates and other documents and have reviewed such questions of law as I have considered necessary or appropriate for purposes of the opinions expressed below. Based on such examination and review, I advise you as follows: I am of the opinion that the Guarantor is a corporation duly organized and validly existing under the laws of the Commonwealth of Pennsylvania. I am also of the opinion that the Common Stock will be validly issued, fully paid and non-assessable when: (a) the Registration Statement, as it may be amended, shall have become effective under the Act; PPL Corporation January 26, 2001 Page 3 (b) the Finance Committee of the Guarantor's Board of Directors, or a duly authorized committee thereof (the "Guarantor Finance Committee"), shall have taken such action as may be necessary to authorize the Guarantor's issuance and sale of the Common Stock on the terms set forth in or contemplated by the Registration Statement, as it may be amended, and any prospectus supplement relating to Common Stock; and (c) the Common Stock shall have been issued and delivered for the consideration contemplated by, and otherwise in conformity with, the acts and proceedings referred to above. I am also of the opinion that the Preferred Stock will be validly issued, fully paid and non-assessable when: (a) The Registration Statement, as it may be amended, shall have become effective under the Act; (b) The Guarantor Finance Committee shall have taken such action as may be necessary to establish the relative rights and preferences of the Preferred Stock, as set forth in or contemplated by the Registration Statement, the exhibits thereto and any prospectus supplement relating to the Preferred Stock, and shall have taken any other action necessary to the consummation of the issuance and sale of the Preferred Stock; (c) a statement with respect to the shares establishing the Preferred Stock shall have been filed with the Department of State of the Commonwealth of Pennsylvania in the form and manner required by law; and (d) the Preferred Stock shall have been issued and delivered for the consideration contemplated by, and otherwise in conformity with, the acts, proceedings and documents referred to above. I am also of the opinion that all requisite action necessary to make any Stock Purchase Contracts and Stock Purchase Units valid, legal and binding obligations of the Guarantor will have been taken when: (a) the Registration Statement, as it may be amended, shall have become effective under the Act and the Purchase Contract Agreement shall have become qualified under the Trust Indenture Act, to the extent required; (b) the Guarantor Finance Committee shall have taken such action as may be necessary to authorize the Guarantor's issuance and sale thereof on the terms set forth in or contemplated by the Registration Statement, as it PPL Corporation January 26, 2001 Page 4 may be amended, and any prospectus supplement relating to the Stock Purchase Contracts and Stock Purchase Units; (c) the Purchase Contract Agreement shall have been duly executed and delivered by the Company and the Purchase Contract Agent in accordance with the foregoing corporate authorizations; and (d) such Stock Purchase Contracts or Stock Purchase Units, as the case may be shall have been issued, sold and delivered in accordance with the terms and provisions thereof and for the consideration contemplated by, and otherwise in conformity with, the acts, documents and proceedings referred to above. I am further of the opinion that the Securities Guarantees will be legal, valid and binding obligations of the Guarantor, each enforceable in accordance with its terms, subject, as to enforcement, to laws relating to or affecting generally the enforcement of creditors' rights, including, without limitation, bankruptcy and insolvency laws, and to general principles of equity, when: (a) the Registration Statement, as it may be amended, shall have become effective under the Act, and the Indenture, the Subordinated Indenture and the Trust Securities Guarantee Agreement shall have become qualified under the Trust Indenture Act; (b) the Guarantor Finance Committee shall have taken such action as may be necessary to authorize the Guarantor's issuance of the Securities Guarantees on the terms set forth in or contemplated by the Registration Statement, as it may be amended, and any prospectus supplement relating to the Indenture, the Subordinated Indenture and the Trust Securities Guarantee; (c) the Subordinated Indenture and the Purchase Contract Agreement shall have been duly executed and delivered by the Guarantor and the trustees thereunder in accordance with the foregoing authorizations; (d) the Guarantor shall have duly executed and delivered the Securities Guarantees in accordance with the applicable provisions of the Indenture, the Subordinated Indenture and the Trust Securities Guarantee and all necessary corporate authorization; (e) the Trustee shall have duly authenticated the Debt Securities and the Guarantees endorsed thereon, in accordance with the applicable provisions of the Indenture; the Subordinated Indenture Trustee shall have duly authenticated the Subordinated Debt Securities and the Subordinated Guarantees endorsed thereon, in accordance with the applicable provisions of the Subordinated PPL Corporation January 26, 2001 Page 5 Indenture and the Trust shall have duly issued the Preferred Trust Securities in accordance with the Trust Agreement; and (f) the Securities Guarantees shall have been issued and delivered all as contemplated by, and in conformity with, the acts, proceedings and documents referred to above. I have also reviewed those statements of law and legal conclusions stated to be made upon my authority in the Registration Statement and the documents incorporated by reference therein, and, in my opinion, such statements are correct. The foregoing opinions do not pass upon the validity of the Securities or the matter of compliance with "blue sky" laws or similar laws relating to the sale or distribution of the Securities by any underwriters or agents. I hereby authorize and consent to the use of this opinion as Exhibit 5.1 to the Registration Statement, and authorize and consent to the references to me under the captions "Experts" and "Validity of the Securities and the Securities Guarantees" in the Registration Statement and in the prospectus constituting a part thereof. I am a member of the Pennsylvania Bar and do not hold myself out as an expert on the laws of any other state. As to all matters governed by the laws of the State of New York, I have relied upon the opinion of even date herewith of Thelen Reid & Priest LLP, counsel for the Company, the Guarantor and the Trust, which is being filed as Exhibit 5.2 to the Registration Statement. In rendering their opinions, Simpson Thacher & Bartlett and Thelen Reid & Priest LLP may rely upon this opinion as to matters of Pennsylvania law addressed herein as if this opinion were addressed directly to them. Except as aforesaid, without my prior written consent, this opinion may not be furnished or quoted to, or relied upon by, any other person or entity for any purpose. Very truly yours, /s/ Michael A. McGrail Michael A. McGrail EX-5 20 0020.txt EXHIBIT 5.2 EXHIBIT 5.2 THELEN REID & PRIEST LLP NEW YORK ATTORNEYS AT LAW SAN FRANCISCO 40 WEST 57TH STREET WASHINGTON, D.C. NEW YORK, N.Y. 10019-4097 LOS ANGELES TEL (212) 603-2000 FAX (212) 603-2001 SILICON VALLEY www. thelenreid.com MORRISTOWN, N.J. New York, New York January 26, 2001 PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18101 PPL Capital Funding, Inc. Two North Ninth Street Allentown, Pennsylvania 18101 Ladies and Gentlemen: We are acting as special counsel for PPL Corporation, a corporation organized under the laws of the Commonwealth of Pennsylvania (the "Guarantor") and PPL Capital Funding, Inc., a corporation organized under the laws of the State of Delaware (the "Company"), in connection with (a) the proposed issuance and sale from time to time of up to $800,000,000 in aggregate principal amount of securities (the "Securities") including (i) shares of the Guarantor's Common Stock, par value $.01 per share ("Common Stock"); (ii) contracts to purchase shares of Common Stock ("Stock Purchase Contracts"); (iii) Stock Purchase Units, each representing either (A) a Stock Purchase Contract, or (B) a Stock Purchase Contract and debt or preferred trust securities pledged to secure holders' obligations to purchase Common Stock under the Stock Purchase Contracts ("Stock Purchase Units"); (iv) unsecured and unsubordinated debt securities of the Company ("Debt Securities"); (v) unsecured subordinated debt securities of the Company ("Subordinated Debt Securities"); and (vi) preferred trust securities ("Preferred Trust Securities") of PPL Capital Funding Trust I, a statutory business trust formed under the laws of the State of Delaware (the "Trust"); and (b) guarantees (the "Securities Guarantees") by the Guarantor as to (i) payment of principal, interest and premium, if any, on the Debt Securities (the "Guarantees") and the Subordinated Debt Securities (the "Subordinated Guarantees") and (ii) the Trust's obligations under the Preferred Trust Securities (the "Preferred Securities Guarantee"); such Debt Securities and such Guarantees to be issued under an Indenture, as amended and supplemented by one or more supplements (the "Indenture"), of the Company and the Guarantor to The Chase Manhattan Bank, as trustee (the "Trustee"); such Subordinated Debt Securities and such Subordinated Guarantees to be issued under a Subordinated Indenture (the "Subordinated Indenture"), of the Company and the Guarantor to The Chase Manhattan Bank, as trustee (the "Subordinated Indenture Trustee"); such Stock Purchase Contracts and Stock Purchase Units to be issued under a Purchase Contract Agreement (the "Purchase Contract Agreement"), of the Guarantor to The Chase Manhattan Bank, as Purchase Contract Agent and trustee (the "Purchase Contract Agent"); such Preferred Trust Securities to be issued under an Amended and Restated Trust Agreement of the Trust and The Chase Manhattan Bank, as Property Trustee (the "Trust Agreement"); and such Preferred Securities Guarantee to be issued under a Trust Securities Guarantee Agreement of the Guarantor to The Chase Manhattan Bank (the "Trust Securities Guarantee Agreement"), all as contemplated by the Registration Statement on Form S-3 (the "Registration Statement") proposed to be filed by the Company, the Guarantor and the Trust with the Securities and Exchange Commission on or about the date hereof for the registration of the Securities and the Securities Guarantees under the Securities Act of 1933, as amended (the "Act"), and for the qualification under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") of the Indenture, the Subordinated Indenture, the Trust Agreement, the Trust Securities Guarantee Agreement and, to the extent necessary, the Purchase Contract Agreement. We have examined such corporate records, certificates and other documents and have reviewed such questions of law as we have considered necessary or appropriate for purposes of the opinions expressed below. Based on such examination and review, we advise you as follows: We are of the opinion that the Company is a corporation duly organized and validly existing under the laws of the State of Delaware. We are further of the opinion that the Debt Securities will be legal, valid and binding obligations of the Company and that the Guarantees will be legal, valid and binding obligations of the Guarantor, each enforceable in accordance with its terms, subject, as to enforcement, to laws relating to or affecting generally the enforcement of creditors' rights, including, without limitation, bankruptcy and insolvency laws, and to general principles of equity, when: (a) the Registration Statement, as it may be amended, shall have become effective under the Act, and the Indenture shall have become qualified under the Trust Indenture Act; (b) the Company's Board of Directors, or a duly authorized committee thereof ("Company Board"), shall have taken such action as may be necessary to authorize the Company's issuance and sale of the Debt Securities and the Finance Committee of the Guarantor's Board of Directors ("Guarantor Finance Committee") shall have taken such action as may be necessary to authorize the Guarantees, in each case on the terms set forth in or contemplated by the Registration Statement, as it may be amended, and any prospectus supplements relating to the Debt Securities, and to authorize the proper officers of the Company and Guarantor to take such other action as may be necessary in connection with the consummation of the issuance and sale of the Debt Securities from time to time; (c) the Company shall have duly established the terms of the Debt Securities and executed the Debt Securities in accordance with the applicable provisions of the Indenture and all necessary corporate authorizations; 2 (d) the Guarantor shall have duly executed and delivered the Guarantees in accordance with the applicable provisions of the Indenture and all necessary corporate authorizations; (e) the Trustee shall have duly authenticated the Debt Securities and the Guarantees endorsed thereon, in accordance with the applicable provisions of the Indenture; and (f) the Company shall have issued, sold and delivered the Debt Securities to the purchasers thereof against payment therefor, all as contemplated by, and in conformity with, the acts, proceedings and documents referred to above. We are further of the opinion that the Subordinated Debt Securities will be legal, valid and binding obligations of the Company and that the Subordinated Guarantees will be legal, valid and binding obligations of the Guarantor, each enforceable in accordance with its terms, subject, as to enforcement, to laws relating to or affecting generally the enforcement of creditors' rights, including, without limitation, bankruptcy and insolvency laws, and to general principles of equity, when: (a) the Registration Statement, as it may be amended, shall have become effective under the Act, and the Subordinated Indenture shall have become qualified under the Trust Indenture Act; (b) the Company Board shall have taken such action as may be necessary to authorize the Company's issuance and sale of the Subordinated Debt Securities, and the Guarantor Finance Committee shall have taken such action as may be necessary to authorize the Subordinated Guarantees, in each case on the terms set forth in or contemplated by the Registration Statement, as it may be amended, and any prospectus supplement relating to the Subordinated Debt Securities, and to authorize the proper officers of the Company and Guarantor to take such other action as may be necessary in connection with the consummation of the issuance and sale of the Subordinated Debt Securities from time to time; (c) the Subordinated Indenture shall have been duly executed and delivered by the Company, the Guarantor and the Subordinated Indenture Trustee in accordance with the foregoing corporate authorizations; (d) the Company shall have duly established the terms of the Subordinated Debt Securities and executed the Subordinated Debt Securities in accordance with the applicable provisions of the Subordinated Indenture and all necessary corporate authorizations; (e) the Guarantor shall have duly executed and delivered the Subordinated Guarantees in accordance with the applicable provisions of the Subordinated Indenture and all necessary corporate authorizations; (f) the Subordinated Indenture Trustee shall have duly authenticated the Subordinated Debt Securities and the Subordinated Guarantees endorsed thereon, in accordance with the applicable provisions of the Subordinated Indenture; and 3 (g) the Company shall have issued, sold and delivered the Subordinated Debt Securities to the purchasers thereof against payment therefor, all as contemplated by, and in conformity with, the acts, proceedings and documents referred to above. We are further of the opinion that the Preferred Securities Guarantee will be a legal, valid and binding obligation of the Guarantor, enforceable in accordance with its terms, subject, as to enforcement, to laws relating to or affecting generally the enforcement of creditors' rights, including, without limitation, bankruptcy and insolvency laws, and to general principles of equity, when: (a) the Registration Statement, as it may be amended, shall have become effective under the Act, and the Trust Securities Guarantee Agreement shall have become qualified under the Trust Indenture Act; (b) the Guarantor Finance Committee shall have taken such action as may be necessary to authorize the Preferred Securities Guarantee, on the terms set forth in or contemplated by the Registration Statement, as it may be amended, and any prospectus supplement relating to the Preferred Trust Securities; (c) the Guarantor shall have duly executed and delivered the Trust Securities Guarantee Agreement and all necessary corporate authorizations; and (d) the Trust shall have issued, sold and delivered the Preferred Trust Securities to the purchasers thereof against payment therefor, on the terms set forth in or contemplated by the Registration Statement, as it may be amended, and any prospectus supplement relating to the Preferred Trust Securities. We are further of the opinion that all requisite action necessary to make any Stock Purchase Contracts and Stock Purchase Units valid, legal and binding obligations of the Guarantor, each enforceable in accordance with its terms (subject, as to enforcement, to laws relating to or affecting generally the enforcement of creditors' rights, including, without limitation, bankruptcy and insolvency laws, and to general principles of equity), and to make any Common Stock issued upon the settlement thereof validly issued, fully paid and nonassessable, will have been taken when: (a) the Registration Statement, as it may be amended, shall have become effective under the Act and the Purchase Contract Agreement shall have become qualified under the Trust Indenture Act, to the extent required; (b) the Guarantor Finance Committee shall have taken such action as may be necessary to authorize the Guarantor's issuance and sale of such securities on the terms set forth in or contemplated by the Registration Statement, as it may be amended, and any prospectus supplement relating to the Stock Purchase Contracts and Stock Purchase Units; (c) the Purchase Contract Agreement shall have been duly executed and delivered by the Guarantor and the Purchase Contract Agent in accordance with the foregoing corporate authorizations; (d) such Stock Purchase Contracts or Stock Purchase Units, as the case may be shall have been issued, sold and delivered in accordance with the terms and provisions thereof and for the consideration contemplated by, 4 and otherwise in conformity with, the acts, documents and proceedings referred to above; and (e) the Common Stock shall have been issued and delivered for the consideration contemplated by, and otherwise in conformity with, the acts, proceedings and documents referred to above. The foregoing opinions do not pass upon the matter of compliance with "blue sky" laws or similar laws relating to the sale or distribution of the Securities by any underwriters or agents. We hereby authorize and consent to the use of this opinion as Exhibit 5.2 to the Registration Statement, and authorize and consent to the reference to our firm in the Registration Statement and in the prospectus constituting a part thereof. We are members of the New York Bar and do not hold ourselves out as experts on the laws of any other state. As to matters of Delaware law we have examined or caused to be examined such documents and satisfied ourselves as to such matters of law as we have deemed necessary in order to render this opinion. As to all matters governed by the laws of the Commonwealth of Pennsylvania, we have relied upon the opinion of even date herewith of Michael A. McGrail, Senior Counsel of PPL Electric Utilities Corporation, Inc., the Guarantor's principal subsidiary, which is being filed as Exhibit 5.1 to the Registration Statement. In rendering his opinion, Mr. McGrail may rely upon this opinion as to all matters of New York law addressed herein as if this opinion were addressed directly to him. Except as aforesaid, without our prior written consent, this opinion may not be furnished or quoted to, or relied upon by, any other person or entity for any purpose. Very truly yours, /s/ THELEN REID & PRIEST LLP THELEN REID & PRIEST LLP 5 EX-5 21 0021.txt EXHIBIT 5.3 EXHIBIT 5.3 SIMPSON THACHER & BARTLETT 425 Lexington Avenue New York, N.Y. 10017-3954 (212) 455-2000 Facsimile (212) 455-2502 January 26, 2001 PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18101 Ladies and Gentlemen: We have acted as counsel to PPL Corporation, a Pennsylvania corporation (the "Company"), in connection with the Registration Statement on Form S-3 (the "Registration Statement") filed by the Company with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), relating to the issuance by the Company of common stock of the Company par value $.01 per share (the "Common Shares") and preferred stock of the Company par value $.01 per share (the "Preferred Shares" and together with the Common Shares, the "Shares"), among other securities of the Company (together with the Shares, the "Securities"). The Securities may be issued and sold or delivered from time to time as set forth in the Registration Statement, any amendment thereto, the prospectus contained therein (the "Prospectus") and supplements to the Prospectus (the "Prospectus Supplements") and pursuant to Rule 415 under the Act for an aggregate initial offering price not to exceed $800,000,000. We have examined the Registration Statement and a form of the share certificate relating to the Common Shares and the Amended Articles of the Company which includes designation relating to the Preferred Shares, each of PPL Corporation -2- January 26, 2001 which have been filed with the Commission as exhibits to the Registration Statement. We also have examined the originals, or duplicates or certified or conformed copies, of such records, agreements, instruments and other documents and have made such other and further investigations as we have deemed relevant and necessary in connection with the opinions expressed herein. As to questions of fact material to this opinion, we have relied upon certificates of public officials and of officers and representatives of the Company. In rendering the opinion set forth below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies, and the authenticity of the originals of such latter documents. Based upon the foregoing, and subject to the qualifications and limitations stated herein, we are of the opinion that assuming (a) the taking by the Board of Directors of the Company of all necessary corporate action to authorize and approve the issuance of the Shares and (b) due issuance and delivery of the Shares, upon payment therefor in accordance with the applicable definitive underwriting agreement approved by the Board of Directors of the Company and upon compliance with applicable regulatory requirements, the Shares will be validly issued, fully paid and nonassessable. Insofar as the opinion expressed herein relates to or is dependent upon matters governed by the laws of the Commonwealth of Pennsylvania, we have relied upon the opinion of Michael A. McGrail dated the date hereof. PPL Corporation -3- January 26, 2001 We are members of the Bar of the State of New York, and we do not express any opinion herein concerning any law other than the law of the State of New York and, to the extent set forth herein, the law of the Commonwealth of Pennsylvania. We hereby consent to the filing of this opinion letter as Exhibit 5 to the Registration Statement and to the use of our name under the caption "Validity of the Securities and the Securities Guarantees" in the Prospectus included in the Registration Statement. Very truly yours, /s/ SIMPSON THACHER & BARTLETT SIMPSON THACHER & BARTLETT EX-5 22 0022.txt EXHIBIT 5.4 EXHIBIT 5.4 RICHARDS, LAYTON & FINGER A Professional Association One Rodney Square P.O. Box 551 Wilmington, Delaware 19899 Telephone: (302) 658-6541 Telecopier: (302) 658-6548 Website: www.rlf.com January 26, 2001 PPL Capital Funding Trust I Two North Ninth Street Allentown, Pennsylvania 18101 Re: PPL Capital Funding Trust I --------------------------- Ladies and Gentlemen: We have acted as special Delaware counsel for PPL Corporation, a Pennsylvania corporation (the "Company"), PPL Capital Funding, Inc., a Delaware corporation ("PPL Funding"), and PPL Capital Funding Trust I, a Delaware business trust (the "Trust"), in connection with the matters set forth herein. At your request, this opinion is being furnished to you. For purposes of giving the opinions hereinafter set forth, our examination of documents has been limited to the examination of originals or copies of the following: (a) The Certificate of Trust of the Trust, dated September 21, 1999, as filed in the office of the Secretary of State of the State of Delaware (the "Secretary of State") on September 21, 1999; (b) The Trust Agreement of the Trust, dated as of September 21, 1999, among the Company and the trustees of the Trust named therein; (c) The Certificate of Amendment to the Certificate of Trust of the Trust, dated May 22, 2000, as filed in the office of the Secretary of State on May 23, 2000; PPL Capital Funding Trust I January 26, 2001 Page 2 (d) The Removal and Appointment of Trustee and Amendment of Trust Agreement of the Trust, dated as of August 15, 2000, among the Company, The Chase Manhattan Bank, a New York banking corporation ("Chase"), as trustee, James E. Abel, an individual ("Abel"), as trustee, and Chase Manhattan Bank USA, National Association, a national association ("Chase USA"), as an additional trustee; (e) The Amended and Restated Certificate of Trust of the Trust, dated as of August 15, 2000 (the "Certificate"), as filed in the office of the Secretary of State on August 17, 2000; (f) A form of Amended and Restated Trust Agreement of the Trust, (including Exhibits A, B and C thereto) (the "Trust Agreement"), among the Company, the trustees of the Trust named therein, and the holders, from time to time, of undivided beneficial interests in the assets of the Trust; (g) The Registration Statement on Form S-3 (the "Registration Statement"), including a prospectus (the "Prospectus"), relating to the preferred trust securities of the Trust, representing undivided beneficial interests in the assets of the Trust (each, a "Preferred Trust Security" and collectively, the "Preferred Trust Securities"), as proposed to be filed by the Company, the Trust and PPL Funding with the Securities and Exchange Commission on or about the date hereof; and (h) A Certificate of Good Standing for the Trust obtained from the Secretary of State on January 25, 2001. Initially capitalized terms used herein and not otherwise defined are used as defined in the Trust Agreement. For purposes of this opinion, we have not reviewed any documents other than the documents listed in paragraphs (a) through (h) above. In particular, we have not reviewed any document (other than the documents listed in paragraphs (a) through (h) above) that is referred to in or incorporated by reference into the documents reviewed by us. We have assumed that there exists no provision in any document that we have not reviewed that is inconsistent with the opinions stated herein. We have conducted no independent factual investigation of our own but rather have relied solely upon the foregoing documents, the statements and information set forth therein and the additional matters recited or assumed herein, all of which we have assumed to be true, complete and accurate in all material respects. PPL Capital Funding Trust I January 26, 2001 Page 3 With respect to all documents examined by us, we have assumed (i) the authenticity of all documents submitted to us as authentic originals, (ii) the conformity with the originals of all documents submitted to us as copies or forms, and (iii) the genuineness of all signatures. For purposes of this opinion, we have assumed (i) that the Trust Agreement and the Certificate are in full force and effect and have not been amended, (ii) except to the extent provided in paragraph 1 below, that each of the parties to the documents examined by us has been duly created, organized or formed, as the case may be, and is validly existing in good standing under the laws of the jurisdiction governing its creation, organization or formation, (iii) the legal capacity of natural persons who are signatories to the documents examined by us, (iv) that each of the parties to the documents examined by us has the power and authority to execute and deliver, and to perform its obligations under, such documents, (v) that each of the parties to the documents examined by us has duly authorized, executed and delivered such documents, (vi) the receipt by each Person to whom a Preferred Trust Security is to be issued by the Trust (collectively, the "Preferred Trust Security Holders") of a Preferred Trust Securities Certificate for such Preferred Trust Security and the payment for the Preferred Trust Security acquired by it, in accordance with the Trust Agreement and the Registration Statement, and (vii) that the Preferred Trust Securities are issued and sold to the Preferred Trust Security Holders in accordance with the Trust Agreement and the Registration Statement. We have not participated in the preparation of the Registration Statement and assume no responsibility for its contents. To the extent that Section 10.05 of the Trust Agreement provides that the Trust Agreement is governed by laws other than the laws of the State of Delaware, we express no opinion concerning the effect of Section 10.05 of the Trust Agreement on the opinions set forth herein. This opinion is limited to the laws of the State of Delaware (excluding the securities laws of the State of Delaware), and we have not considered and express no opinion on the laws of any other jurisdiction, including federal laws and rules and regulations relating thereto. Our opinions are rendered only with respect to Delaware laws and rules, regulations and orders thereunder that are currently in effect. Based upon the foregoing, and upon our examination of such questions of law and statutes of the State of Delaware as we have considered necessary or appropriate, and subject to the assumptions, qualifications, limitations and exceptions set forth herein, we are of the opinion that: PPL Capital Funding Trust I January 26, 2001 Page 4 1. The Trust has been duly created and is validly existing in good standing as a business trust under the Delaware Business Trust Act. 2. The Preferred Trust Securities will represent valid and, subject to the qualifications set forth in paragraph 3 below, fully paid and nonassessable undivided beneficial interests in the assets of the Trust. 3. The Preferred Trust Security Holders, as beneficial owners of the Trust, will be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware. We note that the Preferred Trust Security Holders may be obligated to make payments as set forth in the Trust Agreement. We consent to the filing of this opinion with the Securities and Exchange Commission as an exhibit to the Registration Statement. In addition, we hereby consent to the use of our name under the heading "Validity of the Securities and the Securities Guarantees" in the Prospectus. In giving the foregoing consents, we do not thereby admit that we come within the category of Persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder. Very truly yours, /s/ Richards, Layton & Finger, P.A. BJK/MSC EX-12 23 0023.txt EXHIBIT 12.2 EXHIBIT 12.2 PPL CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (Millions of Dollars)
12 MONTHS ENDED 12 Months Ended SEPTEMBER 30, December 31, ------------- -------------------------------------------------------- 2000 1999 (b) 1998 (b) 1997 (b) 1996 (b) 1995 (b) ------------- ---------- ---------- ---------- ----------- ----------- Fixed charges, as defined: Interest on long-term debt ........... $299 $233 $203 $196 $207 $213 Interest on short-term debt and other interest ................ 57 47 33 26 17 18 Amortization of debt discount, expense and premium - net................... 5 4 2 2 2 2 Interest on capital lease obligations Charged to expense ............... 6 9 8 9 13 15 Capitalized ...................... 1 2 2 2 2 Estimated interest component of operating rentals .................. 23 20 18 15 8 8 Preferred stock dividend requirement.. 31 30 31 33 47 50 ------------- ---------- ---------- ---------- ----------- ----------- Total fixed charges .......... $421 $344 $297 $283 $296 $308 ============= ========== ========== ========== =========== =========== Earnings, as defined: Net income (a)........................ $509 $478 $379 $296 $329 $323 Dividends on Preferred Stock.......... 26 26 25 24 28 28 Less undistributed income of equity method investments .......... 62 56 3 (25) 8 ------------- ---------- ---------- ---------- ----------- ----------- 473 448 401 345 349 351 Formula! Add (Deduct): Income taxes ......................... 296 174 259 238 253 286 Amortization of capitalized interest on capital leases.................. 2 2 2 2 4 5 Total fixed charges as above (excluding (capitalized interest on capital lease obligations and preferred stock dividend requirement)............... 390 313 264 248 247 257 ------------- ---------- ---------- ---------- ----------- ----------- Total earnings ............... $1,161 $937 $926 $833 $853 $899 Formula! ============= ========== ========== ========== =========== =========== Ratio of earnings to fixed charges (b)........................... 2.76 2.72 3.12 2.94 2.88 2.92 Formula! ============= ========== ========== ========== =========== ===========
(a) 2000, 1999 and 1998 net income excluding extraordinary items. (b) Ratio of earnings to fixed charges for years 1999 and prior were recalculated to give proper effect of undistributed earnings of equity method investments. EX-23 24 0024.txt EXHIBIT 23.5 EXHIBIT 23.5 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated January 31, 2000 relating to the consolidated financial statements and financial statement schedules, which appears in the PPL Corporation's Annual Report on Form 10-K, as amended by Form 10-K/A filed on June 28, 2000, for the year ended December 31, 1999. We also consent to the reference to us under the heading "Experts" in such Registration Statement. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Philadelphia, Pennsylvania January 29, 2001 EX-23 25 0025.txt EXHIBIT 23.6 EXHIBIT 23.6 PRICEWATERHOUSECOOPERS - -------------------------------------------------------------------------------- PricewaterhouseCoopers One Kingsway Cardiff CF10 3PW Telephone +44 (0) 29 2023 7000 Facsimile +44 (0) 29 2080 2400 CONSENT OF PRICEWATERHOUSECOOPERS We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated July 12, 2000, except for the contents of Note 45 which is as of August 18, 2000, relating to the financial statements and financial statements schedules of Hyder plc, which appears in PPL Corporation's Current Report on Form 8-K dated October 20, 2000. We also consent to the reference to us under the heading "EXPERTS" in such Registration Statement. /s/ PricewaterhouseCoopers PricewaterhouseCoopers Cardiff, United Kingdom 29 January 2001 EX-23 26 0026.txt EXHIBIT 23.7 EXHIBIT 23.7 CONSENT OF ARTHUR ANDERSEN As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated June 15, 2000 relating to the consolidated financial statements and financial statement schedules of Southern Investments UK plc, which appear in PPL Corporation's Annual Report on Form 10-K for the year ended December 31, 1999, as amended by Form 10K/A filed with the Securities and Exchange Commission on June 28, 2000. We also consent to the reference to us under the heading "EXPERTS" in such Registration Statement. /s/ Arthur Andersen ARTHUR ANDERSEN Bristol, England 26 January 2001 EX-24 27 0027.txt EXHIBIT 24.1 EXHIBIT 24.1 PPL CORPORATION OMNIBUS SHELF REGISTRATION STATEMENT POWER OF ATTORNEY ----------------- The undersigned directors of PPL Corporation, a Pennsylvania corporation, hereby appoint William F. Hecht, John R. Biggar and Robert J. Grey their true and lawful attorney, and each of them their true and lawful attorney, with power to act without the other and with full power of substitution and resubstitution, to execute for the undersigned directors and in their names to file with the Securities and Exchange Commission, Washington, D.C., under provisions of the Securities Act of 1933, as amended, a registration statement or registration statements for the registration under provisions of the Securities Act of 1933, as amended, and any other rules, regulations or requirements of the Securities and Exchange Commission in respect thereof, of not in excess of $1.2 billion of securities of PPL Corporation or its subsidiaries, which securities may include guaranties by PPL Corporation of the securities of such subsidiaries, and any and all amendments thereto, whether said amendments add to, delete from or otherwise alter any such registration statement or registration statements, or add or withdraw any exhibits or schedules to be filed therewith and any and all instruments in connection therewith. The undersigned hereby grant to said attorneys and each of them full power and authority to do and perform in the name of and on behalf of the undersigned, and in any and all capabilities, any act and thing whatsoever required or necessary to be done in and about the premises, as fully and to all intents and purposes as the undersigned might do, hereby ratifying and approving the acts of said attorneys and each of them. IN WITNESS WHEREOF, the undersigned have hereunto set their hands and seals this 17th day of November, 2000. /s/ Frederick M. Bernthal L.S. /s/ William F. Hecht L.S. - ---------------------------------- ---------------------------------- Frederick M. Bernthal William F. Hecht /s/ John W. Conway L.S. /s/ Stuart Heydt L.S. - ---------------------------------- ---------------------------------- John W. Conway Stuart Heydt /s/ E. Allen Deaver L.S. /s/ Frank A. Long L.S. - ---------------------------------- ---------------------------------- E. Allen Deaver Frank A. Long /s/ William J. Flood L.S. /s/ Keith W. Smith L.S. - ---------------------------------- ---------------------------------- William J. Flood Keith W. Smith /s/ Elmer D. Gates L.S. - ---------------------------------- Elmer D. Gates 2 EX-25 28 0028.txt EXHIBIT 25.1 Exhibit 25.1 ------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---- ---------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- PPL CORPORATION PPL CAPITAL FUNDING , INC. (Exact name of obligor as specified in its charter) PENNSYLVANIA 23-2758192 DELAWARE 23-2926644 (State or other jurisdiction of (I.R.S. employer incorporation or organization) Identification No.) TWO NORTH NINTH STREET 18101-1179 ALLENTOWN, PENNSYLVANIA (Zip Code) (Address of principal executive offices) ------------------------------------------------------------------- GUARANTEES OF PPL CAPITAL FUNDING, INC. DEBT SECURITIES DEBT SECURITIES (Title of the indenture securities) ------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligors. If an obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on 26th the day of January, 2001. THE CHASE MANHATTAN BANK By /s/ Francine Springer ------------------------------------------- Francine Springer, Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ........................................ $ 17,515 Interest-bearing balances ................................ 4,770 Securities: ................................................. Held to maturity securities................................... 598 Available for sale securities................................. 62,624 Federal funds sold and securities purchased under agreements to resell ..................................... 30,503 Loans and lease financing receivables: Loans and leases, net of unearned income $155,252 Less: Allowance for loan and lease losses 2,445 Less: Allocated transfer risk reserve ......... 0 -------- Loans and leases, net of unearned income, allowance, and reserve ................................... 152,807 Trading Assets ............................................... 51,438 Premises and fixed assets (including capitalized leases)................................................... 4,205 Other real estate owned....................................... 17 Investments in unconsolidated subsidiaries and associated companies...................................... 379 Customers' liability to this bank on acceptances outstanding .............................................. 491 Intangible assets ............................................ 4,386 Other assets ................................................. 16,471 ------ TOTAL ASSETS ................................................. $ 346,204 ========= -4- LIABILITIES Deposits In domestic offices ...................................... $119,935 Noninterest-bearing .......................... $46,678 Interest-bearing ............................. 73,257 In foreign offices, Edge and Agreement subsidiaries and IBF's ................................... 92,814 Noninterest-bearing .............................. $ 6,054 Interest-bearing ............................. 86,760 Federal funds purchased and securities sold under agree- ments to repurchase .......................................... 51,959 Demand notes issued to the U.S. Treasury ..................... 750 Trading liabilities .......................................... 35,146 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less ............ 5,226 With a remaining maturity of more than one year through three years................................ 0 With a remaining maturity of more than three years..... 95 Bank's liability on acceptances executed and outstanding...... 491 Subordinated notes and debentures ............................ 5,874 Other liabilities ............................................ 12,460 TOTAL LIABILITIES ............................................ 324,750 EQUITY CAPITAL Perpetual preferred stock and related surplus 0 Common stock ................................................. 1,211 Surplus (exclude all surplus related to preferred stock)..... 12,991 Undivided profits and capital reserves ....................... 8,278 Net unrealized holding gains (losses) on available-for-sale securities ............................. (1,043) Accumulated net gains (losses) on cash flow hedges............ 0 Cumulative foreign currency translation adjustments .......... 17 TOTAL EQUITY CAPITAL ......................................... 21,454 ------ TOTAL LIABILITIES AND EQUITY CAPITAL ......................... $346,204 ========== I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the in- structions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) HANS W. BECHERER )DIRECTORS H. LAURANCE FULLER ) -5- EX-25 29 0029.txt EXHIBIT 25.2 Exhibit 25.2 ------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) --- ---------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- PPL CORPORATION PPL CAPITAL FUNDING , INC. (Exact name of obligor as specified in its charter) DELAWARE 23-2758192 DELAWARE 23-2926644 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) TWO NORTH NINTH STREET 18101-1179 ALLENTOWN, PENNSYLVANIA (Zip Code) (Address of principal executive offices) ------------------------------------------------------------------- GUARANTEES OF PPL CAPITAL FUNDING, INC. SUBORDINATED DEBT SECURITIES SUBORDINATED DEBT SECURITIES (Title of the indenture securities) ------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligors. If an obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 26th day of January, 2001. THE CHASE MANHATTAN BANK By /s/ Francine Springer ------------------------------------------ Francine Springer, Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ........................................ $ 17,515 Interest-bearing balances ................................ 4,770 Securities: ................................................. Held to maturity securities.................................................... 598 Available for sale securities................................. 62,624 Federal funds sold and securities purchased under agreements to resell ..................................... 30,503 Loans and lease financing receivables: Loans and leases, net of unearned income $155,252 Less: Allowance for loan and lease losses 2,445 Less: Allocated transfer risk reserve ....... 0 -------- Loans and leases, net of unearned income, allowance, and reserve ................................... 152,807 Trading Assets ............................................... 51,438 Premises and fixed assets (including capitalized leases)...... 4,205 Other real estate owned....................................... 17 Investments in unconsolidated subsidiaries and associated companies...................................... 379 Customers' liability to this bank on acceptances outstanding .............................................. 491 Intangible assets ............................................ 4,386 Other assets ................................................. 16,471 TOTAL ASSETS ................................................. $346,204 ========= -4- LIABILITIES Deposits In domestic offices ...................................... $119,935 Noninterest-bearing ......................... $46,678 Interest-bearing ............................ 73,257 In foreign offices, Edge and Agreement subsidiaries and IBF's .............................................................. 92,814 Noninterest-bearing ............................. $ 6,054 Interest-bearing ............................ 86,760 Federal funds purchased and securities sold under agree- ments to repurchase .......................................... 51,959 Demand notes issued to the U.S. Treasury ..................... 750 Trading liabilities .......................................... 35,146 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less ............ 5,226 With a remaining maturity of more than one year through three years................................ 0 With a remaining maturity of more than three years..... 95 Bank's liability on acceptances executed and outstanding...... 491 Subordinated notes and debentures ............................ 5,874 Other liabilities ............................................ 12,460 TOTAL LIABILITIES ............................................ 324,750 EQUITY CAPITAL Perpetual preferred stock and related surplus 0 Common stock ................................................. 1,211 Surplus (exclude all surplus related to preferred stock)..... 12,991 Undivided profits and capital reserves ....................... 8,278 Net unrealized holding gains (losses) on available-for-sale securities.............................. (1,043) Accumulated net gains (losses) on cash flow hedges............ 0 Cumulative foreign currency translation adjustments .......... 17 TOTAL EQUITY CAPITAL ......................................... 21,454 ------ TOTAL LIABILITIES AND EQUITY CAPITAL ......................... $346,204 ========== I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the in- structions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) HANS W. BECHERER )DIRECTORS H. LAURANCE FULLER ) -5- EX-25 30 0030.txt EXHIBIT 25.3 Exhibit 25.3 ------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---- ---------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- PPL CAPITAL FUNDING TRUST I (Exact name of obligor as specified in its charter) DELAWARE APPLIED FOR (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) TWO NORTH NINTH STREET 18101-1179 ALLENTOWN, PENNSYLVANIA (Zip Code) (Address of principal executive offices) ------------------------------------------------------------------- PREFERRED TRUST SECURITIES (Title of the indenture securities) ------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligors. If an obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 26th day of January, 2001. THE CHASE MANHATTAN BANK By /s/ Francine Springer ------------------------------------------ Francine Springer, Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ........................................ $ 17,515 Interest-bearing balances ................................ 4,770 Securities: ................................................. Held to maturity securities.................................................... 598 Available for sale securities................................. 62,624 Federal funds sold and securities purchased under agreements to resell ..................................... 30,503 Loans and lease financing receivables: Loans and leases, net of unearned income $155,252 Less: Allowance for loan and lease losses 2,445 Less: Allocated transfer risk reserve ....... 0 -------- Loans and leases, net of unearned income, allowance, and reserve ................................... 152,807 Trading Assets ............................................... 51,438 Premises and fixed assets (including capitalized leases)...... 4,205 Other real estate owned....................................... 17 Investments in unconsolidated subsidiaries and associated companies...................................... 379 Customers' liability to this bank on acceptances outstanding .............................................. 491 Intangible assets ............................................ 4,386 Other assets ................................................. 16,471 TOTAL ASSETS ................................................. $346,204 ========= -4- LIABILITIES Deposits In domestic offices ...................................... $119,935 Noninterest-bearing ......................... $ 46,678 Interest-bearing ............................ 73,257 In foreign offices, Edge and Agreement subsidiaries and IBF's .............................................................. 92,814 Noninterest-bearing ............................. $ 6,054 Interest-bearing ............................ 86,760 Federal funds purchased and securities sold under agree- ments to repurchase .......................................... 51,959 Demand notes issued to the U.S. Treasury ..................... 750 Trading liabilities .......................................... 35,146 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less ............ 5,226 With a remaining maturity of more than one year through three years................................ 0 With a remaining maturity of more than three years..... 95 Bank's liability on acceptances executed and outstanding 491 Subordinated notes and debentures ............................ 5,874 Other liabilities ............................................ 12,460 TOTAL LIABILITIES ............................................ 324,750 EQUITY CAPITAL Perpetual preferred stock and related surplus 0 Common stock ................................................. 1,211 Surplus (exclude all surplus related to preferred stock)..... 12,991 Undivided profits and capital reserves ....................... 8,278 Net unrealized holding gains (losses) on available-for-sale securities .............................................................. (1,043) Accumulated net gains (losses) on cash flow hedges............ 0 Cumulative foreign currency translation adjustments .......... 17 TOTAL EQUITY CAPITAL ......................................... 21,454 ------ TOTAL LIABILITIES AND EQUITY CAPITAL ......................... $346,204 ========== I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the in- structions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) HANS W. BECHERER )DIRECTORS H. LAURANCE FULLER ) -5- EX-25 31 0031.txt EXHIBIT 25.4 Exhibit 25.4 ------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) --- ---------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- PPL CORPORATION (Exact name of obligor as specified in its charter) PENNSYLVANIA 23-2758192 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) TWO NORTH NINTH STREET 18101-1179 ALLENTOWN, PENNSYLVANIA (Zip Code) (Address of principal executive offices) ------------------------------------------------------------------- GUARANTEES OF PPL CAPITAL FUNDING TRUST I PREFERRED TRUST SECURITIES (Title of the indenture securities) ------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligors. If an obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 26th day of January, 2001. THE CHASE MANHATTAN BANK By /s/ Francine Springer ------------------------------------------ Francine Springer, Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ........................................ $ 17,515 Interest-bearing balances ................................ 4,770 Securities: ................................................. Held to maturity securities.................................................... 598 Available for sale securities................................. 62,624 Federal funds sold and securities purchased under agreements to resell ..................................... 30,503 Loans and lease financing receivables: Loans and leases, net of unearned income $155,252 Less: Allowance for loan and lease losses 2,445 Less: Allocated transfer risk reserve ....... 0 -------- Loans and leases, net of unearned income, allowance, and reserve ................................... 152,807 Trading Assets ............................................... 51,438 Premises and fixed assets (including capitalized leases)...... 4,205 Other real estate owned....................................... 17 Investments in unconsolidated subsidiaries and associated companies...................................... 379 Customers' liability to this bank on acceptances outstanding .............................................. 491 Intangible assets ............................................ 4,386 Other assets ................................................. 16,471 TOTAL ASSETS ................................................. $346,204 ========= -4- LIABILITIES Deposits In domestic offices ...................................... $119,935 Noninterest-bearing ......................... $46,678 Interest-bearing ............................ 73,257 In foreign offices, Edge and Agreement subsidiaries and IBF's.................................... 92,814 Noninterest-bearing ............................. $ 6,054 Interest-bearing ............................ 86,760 Federal funds purchased and securities sold under agree- ments to repurchase .......................................... 51,959 Demand notes issued to the U.S. Treasury ..................... 750 Trading liabilities .......................................... 35,146 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less ............ 5,226 With a remaining maturity of more than one year through three years................................ 0 With a remaining maturity of more than three years..... 95 Bank's liability on acceptances executed and outstanding 491 Subordinated notes and debentures ............................ 5,874 Other liabilities ............................................ 12,460 TOTAL LIABILITIES ............................................ 324,750 EQUITY CAPITAL Perpetual preferred stock and related surplus 0 Common stock ................................................. 1,211 Surplus (exclude all surplus related to preferred stock)..... 12,991 Undivided profits and capital reserves ....................... 8,278 Net unrealized holding gains (losses) on available-for-sale securities .............................................................. (1,043) Accumulated net gains (losses) on cash flow hedges............ 0 Cumulative foreign currency translation adjustments .......... 17 TOTAL EQUITY CAPITAL ......................................... 21,454 ------ TOTAL LIABILITIES AND EQUITY CAPITAL ......................... $346,204 ========== I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the in- structions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) HANS W. BECHERER )DIRECTORS H. LAURANCE FULLER ) -5- EX-25 32 0032.txt EXHIBIT 25.5 Exhibit 25.5 ------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) --- ---------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- PPL CORPORATION (Exact name of obligor as specified in its charter) PENNSYLVANIA 23-2758192 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) TWO NORTH NINTH STREET 18101-1179 ALLENTOWN, PENNSYLVANIA (Zip Code) (Address of principal executive offices) ------------------------------------------------------------------- STOCK PURCHASE CONTRACTS STOCK PURCHASE UNITS (Title of the indenture securities) ------------------------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligors. If an obligor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank). 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 26th day of January, 2001. THE CHASE MANHATTAN BANK By /s/ Francine Springer ------------------------------------------ Francine Springer, Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF The Chase Manhattan Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business September 30, 2000, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ........................................ $ 17,515 Interest-bearing balances ................................ 4,770 Securities: ................................................. Held to maturity securities.................................................... 598 Available for sale securities................................. 62,624 Federal funds sold and securities purchased under agreements to resell ..................................... 30,503 Loans and lease financing receivables: Loans and leases, net of unearned income $155,252 Less: Allowance for loan and lease losses 2,445 Less: Allocated transfer risk reserve ....... 0 -------- Loans and leases, net of unearned income, allowance, and reserve ................................... 152,807 Trading Assets ............................................... 51,438 Premises and fixed assets (including capitalized leases)...... 4,205 Other real estate owned....................................... 17 Investments in unconsolidated subsidiaries and associated companies...................................... 379 Customers' liability to this bank on acceptances outstanding .............................................. 491 Intangible assets ............................................ 4,386 Other assets ................................................. 16,471 TOTAL ASSETS ................................................. $346,204 ========= -4- LIABILITIES Deposits In domestic offices ...................................... $119,935 Noninterest-bearing ...................................... $46,678 Interest-bearing ......................................... 73,257 In foreign offices, Edge and Agreement subsidiaries and IBF's.................................... 92,814 Noninterest-bearing ............................. $ 6,054 Interest-bearing ............................ 86,760 Federal funds purchased and securities sold under agree- ments to repurchase .......................................... 51,959 Demand notes issued to the U.S. Treasury ..................... 750 Trading liabilities .......................................... 35,146 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less ............ 5,226 With a remaining maturity of more than one year through three years................................ 0 With a remaining maturity of more than three years..... 95 Bank's liability on acceptances executed and outstanding 491 Subordinated notes and debentures ............................ 5,874 Other liabilities ............................................ 12,460 TOTAL LIABILITIES ............................................ 324,750 EQUITY CAPITAL Perpetual preferred stock and related surplus 0 Common stock ................................................. 1,211 Surplus (exclude all surplus related to preferred stock)..... 12,991 Undivided profits and capital reserves ....................... 8,278 Net unrealized holding gains (losses) on available-for-sale securities.............................. (1,043) Accumulated net gains (losses) on cash flow hedges............ 0 Cumulative foreign currency translation adjustments .......... 17 TOTAL EQUITY CAPITAL ......................................... 21,454 ------ TOTAL LIABILITIES AND EQUITY CAPITAL ......................... $346,204 ========== I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the in- structions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) HANS W. BECHERER )DIRECTORS H. LAURANCE FULLER ) -5- -----END PRIVACY-ENHANCED MESSAGE-----