S-3

As filed with the Securities and Exchange Commission on June 17, 2003

Registration No. 333-            

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

PPL CORPORATION	PPL ENERGY SUPPLY, LLC
(Exact name of registrant as specified in its charter)	(Exact name of registrant as specified in its charter)
Pennsylvania	Delaware
(State or other jurisdiction of incorporation or organization)	(State or other jurisdiction of incorporation or organization)
23-2758192	23-3074920
(I.R.S. Employer Identification Number)	(I.R.S. Employer Identification Number)
Two North Ninth Street Allentown, Pennsylvania 18101 (610) 774-5151	Two North Ninth Street Allentown, Pennsylvania 18101 (610) 774-5151
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)	(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 of agent for service)

with a copy to:

Vincent Pagano, Jr.

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

(212) 455-2000

     Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement as determined based on market conditions and other factors.

     If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.    o

     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, please check the following box.    þ

     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.    o

     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.    o

     If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.    o

CALCULATION OF REGISTRATION FEE

		Proposed maximum	Proposed maximum
Title of each class of	Amount to be	offering price	aggregate offering	Amount of
securities to be registered	registered	per unit(a)	price(a)	registration fee
2 5/8% Convertible Senior Notes due 2023 of PPL Energy Supply, LLC	$400,000,000	100%	$400,000,000	$32,360
Guarantee of PPL Corporation	(b)	(b)	(b)	(b)
Common Stock, par value $0.01 per share, of PPL Corporation	8,044,240(c)	N/A	N/A	N/A

(a)	Estimated solely for the purpose of determining the registration fee based on Rule 457 under the Securities Act of 1933, as amended.
(b)	PPL Corporation has fully and unconditionally guaranteed all payments, including principal and interest, on the notes being registered hereunder. Pursuant to Rule 457(n) under the Securities Act of 1933, as amended, no registration fee is required with respect to this guarantee.
(c)	Reflects the number of shares of PPL Corporation common stock issuable upon conversion of the notes being registered hereunder at the initial rate of 20.1106 common shares per $1,000 principle amount of the notes under certain conditions specified herein. Pursuant to Rule 416 under the Securities Act of 1933, as amended, this registration statement also registers such additional number of common shares of the registrant as may become deliverable upon conversion of the notes to prevent dilution resulting from stock splits, stock dividends and similar transactions. No additional registration fee is required pursuant to Rule 457(i) under the Securities Act.

     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.

The information in this prospectus is not complete and may be changed. The selling securityholders may not sell these securities or accept any offer to buy 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 jurisdiction where the offer or sale is not permitted.

Subject to Completion Dated June 17, 2003

PROSPECTUS

$400,000,000

PPL Energy Supply, LLC

2 5/8% Convertible Senior Notes due 2023

Fully and Unconditionally Guaranteed by

and Convertible into Common Stock of

PPL Corporation

          PPL Energy Supply, LLC issued the notes in a private placement in May 2003. Selling securityholders identified in this prospectus may use this prospectus to resell from time to time up to $400,000,000 of notes and the shares of common stock of PPL Corporation issuable upon conversion of the notes.

      PPL Energy Supply, LLC and PPL Corporation will not receive any proceeds from the sales of the notes or the shares of PPL Corporation common stock issuable upon conversion of the notes by any of the selling securityholders. The notes and the shares of PPL Corporation common stock may be offered in negotiated transactions or otherwise, at market prices prevailing at the time of sale or at negotiated prices.

      The notes bear interest at a rate of 2 5/8% per year and will mature on May 15, 2023. Interest is payable semi-annually in arrears on May 15 and November 15 of each year, commencing on November 15, 2003.

      Holders may convert the notes into shares of PPL Corporation common stock at a conversion rate of 20.1106 shares per $1,000 principal amount of notes, subject to adjustment, before the close of business on May 15, 2023 only under the following circumstances: (1) during any fiscal quarter commencing after June 30, 2003, if the closing sale price of PPL Corporation common stock exceeds 120% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter; (2) if the credit ratings assigned to the notes decline below the levels specified in this prospectus; (3) if the notes have been called for redemption; or (4) upon the occurrence of certain specified corporate events described in this prospectus.

      Beginning May 20, 2008, we may redeem any of the notes at 100% of their principal amount, plus accrued and unpaid interest. Holders may require us to purchase the notes at 100% of their principal amount, plus accrued and unpaid interest, on May 15, 2008, May 15, 2013 and May 15, 2018.

      The notes are our senior unsecured debt and rank equally in right of payment with all of PPL Energy Supply’s other senior unsecured indebtedness. The notes are fully and unconditionally guaranteed on a senior unsecured basis by PPL Corporation, the indirect parent company of PPL Energy Supply. PPL Corporation’s guarantee ranks equally in right of payment with its other unsecured and unsubordinated indebtedness and guarantees.

      The notes are not listed on any securities exchange. The common stock is listed on the New York Stock Exchange under the symbol “PPL.” On June 16, 2003, the last reported sale price of the common stock on the New York Stock Exchange was $43.65 per share.

       Investing in the notes involves risks. See “Risk Factors” beginning on page 9.

       Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

                    , 2003

TABLE OF CONTENTS

	Page
Forward-Looking Information		ii
Summary		1
Risk Factors		9
Use of Proceeds		20
Ratios of Earnings to Fixed Charges		20
Price Range of Common Stock		21
Dividend Policy		21
Capitalization		22
Selling Securityholders		23
Description of Notes		24
Registration Rights		39
Description of PPL Corporation’s Capital Stock		41
Certain United States Federal Income Tax Considerations		43
Plan of Distribution		48
Validity of the Securities		50
Experts		50
Where You Can Find More Information		51

      As used in this prospectus, the terms “company,” “we,” “our,” “ours” and “us” may, depending on the context, refer to PPL Energy Supply, PPL Corporation, to one or more of PPL Corporation’s consolidated subsidiaries or to all of them taken as a whole.

      You should rely only on the information contained in this prospectus and those documents incorporated by reference herein. PPL Energy Supply and PPL Corporation have not authorized any other person to provide you with different or additional information. If anyone provides you with different or additional information, you should not rely on it. We are offering to sell, and are seeking offers to buy, the notes only in jurisdictions where offers and sales are permitted. This prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any note offered by this prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation. Neither the delivery of this prospectus nor any sale made under it implies that there has been no change in our affairs or that the information in this prospectus is correct as of any date after the date of this prospectus.

      This prospectus has been prepared based on information provided by us and other sources we believe to be reliable. We do not represent that information provided by other sources is accurate or complete. In making an investment decision, prospective investors must rely on their own examinations of PPL Energy Supply and PPL Corporation, and the terms of the offering, including the merits and risks involved.

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FORWARD-LOOKING INFORMATION

      Certain statements included or incorporated by reference in this prospectus, including statements with respect to future earnings, energy supply and demand, costs, subsidiary performance, growth, new technology, project development, energy prices, strategic initiatives, and generating capacity and performance, are “forward-looking statements” within the meaning of the federal securities laws. Although we believe that the expectations and assumptions reflected in these statements are reasonable, there can be no assurance that these expectations will prove to be correct. These forward-looking statements involve a number of risks and uncertainties, and actual results may differ materially from the results discussed in the forward-looking statements. In addition to the specific factors discussed in the “Risk Factors” sections in this prospectus and our reports that are incorporated by reference, the following are among the important factors that could cause actual results to differ materially from the forward-looking statements:

• market demand and prices for energy, capacity and fuel;

• weather variations affecting customer energy usage;

• competition in retail and wholesale power markets;

• effect of any business or industry restructuring;

• profitability and liquidity of PPL Energy Supply, PPL Corporation and our subsidiaries;

• new accounting requirements or new interpretations or applications of existing requirements;

• operation of existing facilities and operating costs of PPL Energy Supply, PPL Corporation and our subsidiaries;

• environmental conditions and requirements;

• transmission and distribution system conditions and operating costs;

• development of new projects, markets and technologies;

• performance of new ventures;

• political, regulatory or economic conditions in states, regions or countries where PPL Energy Supply, PPL Corporation or our subsidiaries conduct business;

• receipt and renewals of necessary governmental permits and approvals;

• impact of state or federal investigations applicable to us or our industry;

• outcome of litigation against us;

• capital markets conditions and decisions regarding capital structure;

• stock price performance of PPL Corporation;

• market prices of equity securities and resultant cash funding requirements for defined benefit pension plans;

• securities and credit ratings of PPL Energy Supply, PPL Corporation and our subsidiaries;

• state and federal regulatory developments;

• foreign exchange rates;

• new state or federal legislation;

• national or regional economic conditions, including any potential effects arising from the September 11, 2001 terrorist attacks in the United States, the situation in Iraq and any consequential hostilities or other hostilities; and

• commitments and liabilities of PPL Energy Supply, PPL Corporation and our subsidiaries.

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Any such forward-looking statements should be considered in light of such important factors and in conjunction with other documents of PPL Energy Supply, PPL Corporation and our subsidiaries that are on file with the SEC.

      New factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time to time, and it is not possible for us to predict all of such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. Any forward-looking statement speaks only as of the date on which such statement is made, and we do not undertake any obligation to update the information contained in such statement to reflect subsequent developments or information.

      We caution you that any one of these factors or other factors described under the heading “Risk Factors” in this prospectus, or a combination of these factors, could materially affect our future results of operations and whether our forward-looking statements ultimately prove to be accurate. These forward-looking statements are not guarantees of our future performance, and our actual results and future performance may differ materially from those suggested in our forward-looking statements. When considering these forward-looking statements, you should keep in mind the factors described under the heading “Risk Factors” in this prospectus and other cautionary statements in this prospectus and the documents we have incorporated by reference.

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SUMMARY

      This summary contains basic information about us and the securities. Because it is a summary, it does not contain all of the information that you should consider before investing. You should read this entire prospectus carefully, including the section entitled “Risk Factors” and our financial statements and the related notes, contained elsewhere or incorporated by reference in this prospectus before making an investment decision.

PPL CORPORATION

Overview

      PPL Corporation is an energy and utility holding company that, through its subsidiaries, is primarily engaged in the generation and marketing of electricity in the northeastern and western United States and in the delivery of electricity in Pennsylvania, the United Kingdom and Latin America. As of December 31, 2002, we owned or controlled 11,488 megawatts, or MW, of low-cost and diverse power generation capacity. We are also developing or constructing 690 MW of new electric generation capacity in Pennsylvania (the 690 MW includes our 45 MW share of an upgrade to Unit 2 at our Susquehanna nuclear facility in Pennsylvania completed in April 2003). Additionally, we provide energy-related services to businesses primarily in the mid-Atlantic and northeastern United States.

      Approximately 6,500 MW of our total generation capacity is currently committed to meeting the obligation of our Pennsylvania delivery company to provide electricity through the year 2009 under fixed-price tariffs pursuant to Pennsylvania’s Customer Choice Act. We have another 450 MW of generation capacity committed to providing electricity to a delivery company in Montana through June 2007. These two commitments, combined with other contractual sales to other counterparties for terms of various lengths, commits, on average, over 70% of our expected annual output for the period 2003 through 2007. These arrangements are consistent with and are an integral part of our overall business strategy, which includes the use of long-term energy supply contracts to capture profits while reducing our exposure to movements in energy prices.

      We operate through three principal lines of business:

     Energy supply

      We are a leading supplier of competitively priced energy in the United States through our subsidiaries, PPL Generation and PPL EnergyPlus, and acquire and develop U.S. generation projects through our PPL Global subsidiary. These entities are direct, wholly-owned subsidiaries of PPL Energy Supply.

• PPL Generation owns or controls a portfolio of domestic power generation assets, with a total capacity of 11,488 MW as of December 31, 2002. These power plants are located in Pennsylvania (8,534 MW), Montana (1,157 MW), Arizona (750 MW), Illinois (540 MW), Connecticut (252 MW), New York (159 MW) and Maine (96 MW) and use well-diversified fuel sources including coal, nuclear, natural gas, oil and hydro. In April 2003, we completed an upgrade to Unit 2 at our Susquehanna nuclear facility in Pennsylvania, which added up to an additional 45 MW to our portfolio.

• PPL EnergyPlus markets electricity produced by PPL Generation, along with purchased power and natural gas, in competitive wholesale and deregulated retail markets, primarily in the northeastern and western portions of the United States. PPL EnergyPlus also provides energy-related products and services, such as engineering and mechanical contracting, construction and maintenance services, to commercial and industrial customers.

• PPL Global (domestic operations) acquires and develops U.S. generation projects that are, in turn, operated by PPL Generation as part of its portfolio of generation assets.

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     Energy delivery

      We provide energy delivery services in the mid-Atlantic regions of the United States through our subsidiaries, PPL Electric Utilities and PPL Gas Utilities, and in the United Kingdom and Latin America through our PPL Global subsidiary.

• PPL Electric Utilities is a regulated public utility company, incorporated in 1920, providing electricity delivery services to approximately 1.3 million customers in eastern and central Pennsylvania.

• PPL Gas Utilities is a regulated public utility providing gas delivery services to approximately 103,000 customers in Pennsylvania and Maryland.

     International operations

      We acquire and hold international energy projects that are primarily focused on the distribution of electricity through our PPL Global subsidiary.

• PPL Global (international operations) currently owns and operates energy delivery businesses serving approximately 3.5 million customers in the United Kingdom and Latin America. In September 2002, PPL Global acquired a controlling interest in, and consequently gained 100% ownership of, Western Power Distribution Holdings Limited and WPD Investment Holdings Limited, which together we refer to as WPD. WPD operates two electric distribution companies in the U.K., which together serve approximately 2.5 million end-users. WPD delivered 28,074 million kWh of electricity in 2002.

      Our significant operating subsidiaries are depicted below:

PPL ENERGY SUPPLY, LLC

      PPL Energy Supply, a wholly-owned subsidiary of PPL Corporation, is a Delaware limited liability company that serves as the holding company for PPL Corporation’s competitive businesses. These operating subsidiaries include PPL Generation, PPL EnergyPlus and PPL Global, whose operations are described above.

Strategy of PPL Corporation and its subsidiaries

          A key objective of our strategy is to be a leading, asset-based provider of retail and wholesale energy and energy-related products and services. We plan to achieve this objective by generating and selling competitively priced electricity primarily in the northeastern and western United States markets using a disciplined approach to growth while minimizing exposure to commodity price and supply risk by matching our generation capacity to long-term contracts with creditworthy counterparties. Another key objective of our strategy is to own and operate high-quality energy delivery businesses in selected regions around the world. Our strategy is reinforced by our ongoing commitment to operating excellence and customer satisfaction in the generation and delivery of

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electricity. We believe that the successful achievement of these objectives will provide strong returns to our shareowners while reducing our risk exposure to adverse movements in energy prices.

          The key elements of our strategy are as follows:

     Operate a diverse and low-cost portfolio of generation assets

          We seek to operate an efficient and low-cost portfolio of generation assets that is diversified as to geography, fuel source, cost structure and operating characteristics. Our current generation facilities, together with our generation projects under development, provide us with a geographically diverse presence in the northeastern and western United States, helping to mitigate the risks resulting from regional price differences. Our current portfolio of generation assets is also well diversified by fuel type, with 39% coal, 34% natural gas/oil, 18% nuclear, 7% hydro and 2% qualifying facilities as of December 31, 2002. Our coal-fired capacity is located in the eastern and western United States and benefits from our low fuel transportation costs due to the proximity of our plants to coal fields, our extensive experience in acquiring coal at competitive prices and our highly-efficient coal-fired plant technology. With respect to cost structure and operating characteristics, our current generation portfolio is weighted towards base-load and/or low variable cost generation units which help reduce the variability of our revenues. Our primary remaining development project involves a combined-cycle generation unit.

     Pursue stable cash flows and earnings through long-term contracts

          We have in place and intend to continue to pursue long-term contracts and other means to mitigate the risk associated with adverse changes in the difference, or margin, between the cost to produce electricity and the price at which we sell it. These contracts can take a number of forms and include the use of fixed-price fuel supply contracts and contracts under which we agree to provide electricity and generation capacity to third parties for extended periods at contracted prices for a large portion of our generation capacity. Currently, we have approximately 6,500 MW of our total generation capacity committed to our Pennsylvania delivery company through 2009, 450 MW committed to a delivery company in Montana through June 2007. These two commitments, combined with other contractual sales to other counterparties for terms of various lengths, commits, on average, over 70% of our expected annual output for the period 2003 through 2007. We believe that our use of long-term contracts will provide stability to our cash flows and earnings.

     Maintain a disciplined, asset-based approach to marketing and trading opportunities

      We use our expertise in energy marketing and trading to optimize the financial performance of our generation assets and minimize our exposure to commodity price volatility. Given our asset-based strategy, we seek to execute contractual commitments for energy sales that do not exceed our ability to produce the energy required. We believe that our ability to market and trade around our physical portfolio of generation assets through our integrated generation, marketing and trading functions will provide us with opportunities to grow our cash flows and earnings. We also utilize our extensive market knowledge to capture regional arbitrage opportunities and maximize the value of our generation capacity. In pursuing these opportunities, we limit our financial exposure by following a comprehensive risk management program. In addition, we seek to capture a diverse stream of revenues and avoid over-reliance on any one market or type of customer.

     Continue to pursue a disciplined approach to adding generation facilities in key markets

      As of December 31, 2002, we owned or controlled 11,488 MW of generation capacity in Pennsylvania, Montana, Arizona, Illinois, Connecticut, New York and Maine. In addition, we are developing or constructing an additional 690 MW of new power projects in Pennsylvania which we expect to complete in 2004 (the 690 MW includes our 45 MW share of an upgrade to Unit 2 at our Susquehanna nuclear facility in Pennsylvania completed in April 2003). Our current development program will be complete upon the commercial operation of these facilities. We will continue to evaluate opportunities to acquire operating generation facilities in key markets using a disciplined strategy that balances growth in generation capacity with growth in retail load or the use of long-term contracts. We believe that the northeastern and western regions of the United States are particularly

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attractive markets because of favorable supply and demand dynamics for power in these regions and our understanding of these markets.

     Operate our transmission and distribution businesses to high standards of customer service and reliability

      We have over 80 years of experience in operating and managing rate-regulated electric transmission and distribution businesses and we use this experience to seek to achieve high standards of customer service and reliability in a cost-effective manner. We believe that by achieving our customer-focused objectives, we can also deliver strong returns to our shareowners. We have applied this philosophy both domestically to our Pennsylvania delivery business as well as to our international investments in the United Kingdom and Latin America (Argentina, Bolivia, Chile, El Salvador and Peru) and have won customer service awards in the United States and the United Kingdom.

      The address of our principal executive offices is Two North Ninth Street, Allentown, Pennsylvania 18101-1179 and our telephone number is (610) 774-5151.

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The Offering

Issuer	PPL Energy Supply, LLC
Guarantor	PPL Corporation
Securities Offered	PPL Energy Supply, LLC issued $400,000,000 principal amount of 2 5/8% Convertible Senior Notes due 2023 in a private placement in May 2003. The selling securityholders identified in this prospectus may offer from time to time up to $400,000,000 of notes and shares of PPL Corporation common stock issuable upon conversion of the notes.
Issue Price	Each note was issued at a price of $1,000 per note.
Maturity	May 15, 2023, unless earlier converted, redeemed or purchased by us.
Interest	2 5/8% per annum on the principal amount, payable semi-annually in arrears in cash on May 15 and November 15 of each year, beginning November 15, 2003. The initial interest payment will include accrued interest from May 21, 2003.
Ranking	The notes are senior and unsecured obligations of PPL Energy Supply and rank equally in right of payment with PPL Energy Supply’s other senior and unsecured indebtedness.
Guarantee	All payments on the notes, including principal and interest, and additional amounts, if any, and our conversion obligations under the notes, will be fully, unconditionally and irrevocably guaranteed by PPL Corporation. PPL Corporation’s guarantee ranks equally in right of payment with its other senior unsecured and unsubordinated indebtedness and guarantees.
Conversion	You may convert the notes into shares of PPL Corporation common stock at a conversion rate of 20.1106 shares per $1,000 principal amount of notes, subject to adjustment, prior to the close of business on the final maturity date under any of the following circumstances:
	• during any fiscal quarter commencing after June 30, 2003 if the closing sale price of PPL Corporation common stock exceeds 120% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter; or
	• during any period that (i) the long-term credit rating assigned to the notes by both Moody’s Investors Services, Inc. and Standard & Poor’s Ratings Services is lower than “Ba2” and “BB,” respectively, (ii) both Moody’s and Standard & Poor’s no longer rate the notes or have withdrawn their ratings with respect to the notes, or (iii) either Moody’s or Standard & Poor’s no longer rate the notes or have withdrawn or suspended such rating and the remaining rating is lower than “Ba2” or “BB,” as applicable; or
	• if the notes have been called for redemption; or
	• upon the occurrence of specified corporate events described under “Description of Notes.”

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	In lieu of delivery of shares of PPL Corporation common stock upon conversion of the notes, we may elect to pay an amount in cash per note equal to the applicable stock price (as defined herein) multiplied by the conversion rate in effect on the conversion date. See “Description of Notes—Conversion of Notes.”
Sinking Fund	None.
Redemption	We may redeem any of the notes beginning May 20, 2008, by giving you at least 30 days’ notice. We may redeem the notes either in whole or in part at a redemption price of 100% of their principal amount, plus accrued and unpaid interest.
Fundamental Change	If a fundamental change (as described under “Description of Notes—Purchase at Option of the Holder Upon a Fundamental Change”) occurs prior to maturity, you may require us to purchase all or part of your notes at a purchase price equal to 100% of their principal amount, plus accrued and unpaid interest.
Purchase at Option of the Holder	You may require us to purchase the notes on May 15, 2008, May 15, 2013 and May 15, 2018 at a purchase price equal to 100% of their principal amount, plus accrued and unpaid interest. We may elect to pay all of the purchase price in PPL Corporation common stock instead of cash, subject to certain conditions. See “Description of Notes—Purchase at Option of the Holder.”
Registration Rights	PPL Energy Supply and PPL Corporation have filed with the SEC a shelf registration statement, of which this prospectus is a part, for the resale of the notes and the common stock of PPL Corporation issuable upon conversion of the notes. We have agreed to use our reasonable best efforts to keep the shelf registration statement effective until such time as specified in “Registration Rights.” Additional amounts are payable on the notes and PPL Corporation common stock, as the case may be, during any period in which PPL Energy Supply and PPL Corporation are not in compliance with their obligations as specified in “Registration Rights.”
DTC Eligibility	The notes have been issued only in book-entry form, such that the notes will be represented by one or more permanent global securities registered in the name of The Depository Trust Company (DTC) or its nominee. The global securities have been deposited with the trustee as custodian for DTC.
Certain United States Federal Income Tax Considerations	You will recognize gain or loss upon conversion of your notes into PPL Corporation common stock in an amount equal to the fair market value of the common stock received plus any cash received in lieu of a fractional share and your adjusted tax basis in the note being converted. Prospective investors should carefully review the information regarding tax considerations relevant to an investment in the notes under “Certain United States Federal Income Tax Considerations” and are also urged to consult their own tax advisors prior to investing in the notes.
Trading of the Notes	The notes have not been listed on any securities exchange or included in any automated quotation system. However, the notes issued in the initial placement are eligible for trading on the PORTAL market.

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No Prior Market	The notes are new securities for which there is no market. Although the initial purchasers have informed PPL Energy Supply that they intend to make a market in the notes, they are not obligated to do so and may discontinue market-making at any time without notice. Accordingly, PPL Energy Supply cannot assure you that a liquid market will develop or be maintained.
Use of Proceeds	We will not receive any of the proceeds from this offering. See “Use of Proceeds.”
New York and Philadelphia Stock Exchange Symbol	The common stock of PPL Corporation is listed on the New York Stock Exchange and the Philadelphia Stock Exchange under the symbol “PPL.”

For a complete description of the terms of the notes, please refer to “Description of Notes.” For a complete description of PPL Corporation’s common stock, please refer to “Description of PPL Corporation’s Capital Stock.”

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PPL Corporation Summary Financial Data

The summary financial data set forth below should be read in conjunction with our financial statements and related notes and other financial and operating data incorporated by reference in this prospectus. The Statement of Income Data, Balance Sheet Data, Basic EPS (loss) and Diluted EPS (loss) for the years ended December 31, 2002, 2001 and 2000 have been derived from the audited consolidated financial statements incorporated by reference in this prospectus, and for the three months ended March 31, 2003 and 2002 have been derived from the unaudited consolidated financial statements incorporated by reference in this prospectus. Some previously reported amounts have been reclassified to conform with the current period presentation.

		Three Months
		Ended						Year Ended
		March 31,						December 31,
		2003			2002			2002		2001		2000
Statement of Income Data— $ millions:
Operating revenues		$	1,487		$	1,354		$	5,429	$	5,077	$	4,545
Operating income			357			400			1,240		849		1,194
Income before cumulative effect of a change in accounting principle(a)			189			165			425		221		524
Net income (loss)(a)			239			(3	)		208		179		498
Balance Sheet Data— $ millions (end of period):
Cash and cash equivalents			397			486			245		933		480
Property, plant and equipment, net			9,699			6,092			9,563		5,947		5,948
Recoverable transition costs			1,875			2,119			1,946		2,172		2,425
Total assets			15,953			12,368			15,547		12,562		12,360
Short-term debt, including current maturities of long-term debt			1,200	(b)		691			1,309		616		1,354
Long-term debt, excluding current maturities			6,195	(b)		4,940			5,901		5,081		4,467
Company-obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely company debentures			661			825			661		825		250
Preferred stock			82			82			82		82		97
Shareowners’ common equity			2,470			1,814			2,224		1,857		2,012
Other Data:
Number of shares outstanding—thousands
	Period-end		167,723			147,122			165,736		146,580		145,041
	Average		166,506			146,753			152,492		145,974		144,350
Basic EPS (loss)(a)		$	1.43		$	(0.02	)	$	1.37	$	1.23	$	3.45
Diluted EPS (loss)(a)			1.43			(0.02	)		1.36		1.22		3.44
Dividends declared per share			0.385			0.36			1.44		1.06		1.06
Sales Data—Millions of Kilowatt-Hours:
Electric energy supplied—retail			11,207			11,146			42,065		43,470		41,493
Electric energy supplied—wholesale			10,047			7,649			37,060		27,683		40,925
Electric energy delivered—retail(c)			18,817			18,358			69,105		41,453		37,642

(a)	On January 1, 2003, we adopted the provisions of SFAS 143, “Accounting for Asset Retirement Obligations.” See Note 13 to our financial statements included in our Form 10-Q for the quarter ended March 31, 2003, which is incorporated herein by reference. On January 1, 2002, we adopted the provisions of SFAS 142, “Goodwill and Other Intangible Assets,” which provides that goodwill no longer be amortized. See Note 18 to our financial statements included in our Form 10-K for the year ended December 31, 2002, which is also incorporated herein by reference.
(b)	Includes the reclassification of $393 million of WPD short-term debt, as described in Note 6 to our financial statements included in our Form 10-Q for the quarter ended March 31, 2003, which is incorporated herein by reference.
(c)	Deliveries for 2002 include the electricity deliveries of WPD for the full year and of Companhia Energética do Maranhão, or CEMAR, prior to deconsolidation in August 2002. See Note 7 to our financial statements included in our Form 10-Q for our quarter ended March 31, 2003, which is incorporated herein by reference.

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RISK FACTORS

      You should carefully consider the risks associated with PPL Corporation, PPL Energy Supply and their subsidiaries described below before making an investment decision. The risks described below are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations.

      Our business, financial condition or results of operations could be materially adversely affected by any of these risks. The trading price of the PPL Energy Supply notes and PPL Corporation common stock could decline due to any of these risks, and you may lose all or part of your investment.

      This prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this prospectus.

Risks Related to Our Supply Businesses

Changes in commodity prices may increase the cost of producing power or decrease the amount we receive from selling power, which could adversely affect our financial performance.

      Changes in power prices or fuel costs may impact our financial results and financial position by increasing the cost of producing power or decreasing the amount we receive from the sale of power. The market prices for these commodities may fluctuate substantially over relatively short periods of time. Among the factors that could influence such prices are:

• prevailing market prices for coal, natural gas, fuel oil and other fuels used in our generation facilities, including associated transportation costs and supplies of such commodities;

• demand for energy and the extent of additional supplies of energy available from current or new competitors;

• capacity and transmission service into, or out of, our markets;

• changes in the regulatory framework for wholesale power markets;

• liquidity in the general wholesale electricity market; and

• weather conditions impacting demand for electricity.

      In the absence of long-term power sales agreements, we must sell the energy, capacity and other products from our facilities into the competitive wholesale power markets. Unlike most other commodities, electric power cannot be stored and must be produced at the time of use. As a result, the wholesale power markets are subject to significant price fluctuations over relatively short periods of time and can be unpredictable. In addition, power prices may not change at the same rate as changes in fuel and other costs. Given the volatility and potential for material differences between actual power prices and fuel and other costs, if we cannot secure or maintain long-term power sales and fuel purchase agreements for our power generation facilities, our revenues will be subject to increased volatility and our financial results may be materially adversely affected.

Our facilities may not operate as planned, which may increase our expenses or decrease our revenues and, thus, have an adverse effect on our financial performance.

      Operation of power plants involves many risks, including the breakdown or failure of equipment or processes, accidents, labor disputes, fuel interruption and performance below expected levels. In addition, weather-related incidents and other natural disasters can disrupt both generation and transmission delivery systems. Operation of our power plants below expected capacity levels may result in lost revenues or increased expenses, including higher maintenance costs and, if we are unable to perform our contractual obligations as a result, penalties or damages.

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We may not be able to obtain adequate fuel supplies, which could adversely affect our ability to operate our facilities.

      We purchase fuel from a number of suppliers. Disruption in the delivery of fuel, including disruptions as a result of weather, labor relations or environmental regulations affecting our fuel suppliers, could adversely affect our ability to operate our facilities and, thus, our results of operations.

We have agreed to provide electricity to PPL Electric Utilities in amounts sufficient to satisfy its “provider of last resort,” or PLR, obligations at prices which may be below our cost, which could adversely affect our financial condition.

      PPL Electric Utilities has PLR obligations to serve those electric retail customers that did not select an alternate supplier under the Customer Choice Act. PPL EnergyPlus has entered into long-term contracts to supply PPL Electric Utilities’ PLR requirements at agreed prices through 2009. This obligation currently represents a significant portion of the normal operating capacity of our existing generation assets. The prices we receive are established under the contracts and may not have any relationship to the cost to us of supplying this power. This means that we are required to absorb increasing costs, including the risk of fuel price increases and increased costs of production.

      The PLR contract obligations do not provide us with any guaranteed level of sales. If the customers of PPL Electric Utilities obtain service from alternate suppliers, which they are entitled to do at any time, our sales of power under the contract may decrease. Alternatively, customers could switch back to PPL Electric Utilities from alternative suppliers, which may increase demand above our facilities’ available capacity. Any such switching by customers could have a material adverse effect on our results of operations or financial position.

We are subject to the risks of nuclear generation, including the risk that our Susquehanna nuclear plant could become subject to revised safety requirements that would increase our capital and operating expenditures, and uncertainties associated with decommissioning our plant at the end of its licensed life.

      Nuclear generation accounts for about 20% of our generation capacity. The risks of nuclear generation generally include:

• the potential harmful effects on the environment and human health resulting from the operation of nuclear facilities and the storage, handling and disposal of radioactive materials;

• limitations on the amounts and types of insurance commercially available to cover losses and liabilities that might arise in connection with nuclear operations; and

• uncertainties with respect to the technological and financial aspects of decommissioning nuclear plants at the end of their licensed lives.

      The Nuclear Regulatory Commission, or NRC, has broad authority under federal law to impose licensing and safety-related requirements for the operation of nuclear generation facilities. In the event of non-compliance, the NRC has the authority to impose fines or shut down a unit, or both, depending upon its assessment of the severity of the situation, until compliance is achieved. In addition, revised safety requirements promulgated by the NRC could necessitate substantial capital or operating expenditures at our Susquehanna nuclear plant. In addition, although we have no reason to anticipate a serious nuclear incident at our Susquehanna plant, if an incident did occur, it could have a material adverse effect on our results of operations or financial condition.

We have a limited history of operating many of our generation facilities in a competitive environment, in which we are not assured of any return on our investment.

      Many of our facilities were historically operated within vertically-integrated, regulated utilities that sold electricity to consumers at prices based on predetermined rates set by state public utility commissions. Unlike regulated utilities, we are not assured any rate of return on our capital investments through predetermined rates, and our revenues and results of operations are likely to depend, in large part, upon prevailing market prices for

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electricity in our regional markets and other competitive markets, the volume of demand, capacity factors and ancillary services.

Changes in technology may impair the value of our power plants.

      A basic premise of our business is that generating power at central power plants achieves economies of scale and produces electricity at a relatively low price. There are other technologies that produce electricity, most notably fuel cells, microturbines, windmills and photovoltaic (solar) cells. Research and development activities are ongoing to seek improvements in the alternate technologies. It is possible that advances will reduce the cost of alternate methods of electric production to a level that is equal to or below that of most central station electric production. If this were to happen, the value of our power plants may be significantly impaired.

We are exposed to operational, price and credit risks associated with selling and marketing products in the wholesale power markets.

      We purchase and sell power at the wholesale level under market-based tariffs authorized by the Federal Energy Regulatory Commission, or FERC, throughout the United States and also enter into short-term agreements to market available energy and capacity from our generation assets with the expectation of profiting from market price fluctuations. If we are unable to deliver firm capacity and energy under these agreements, we could be required to pay damages. These damages would generally be based on the difference between the market price to acquire replacement capacity or energy and the contract price of the undelivered capacity or energy. Depending on price volatility in the wholesale energy markets, such damages could be significant. Extreme weather conditions, unplanned power plant outages, transmissions disruptions, and other factors could affect our ability to meet our obligations, or cause significant increases in the market price of replacement capacity and energy. We also face credit risk that parties with whom we contract will default in their performance, in which case we may have to sell our power into a lower-priced market or make purchases in a higher priced market than existed at the time of contract. Although we attempt to mitigate these risks, there can be no assurance that we will be able to fully meet our obligations, that we will not be required to pay damages for failure to perform or that we will not experience counterparty non-performance.

     We do not always hedge against risks associated with energy and fuel price volatility.

      We attempt to mitigate risks associated with satisfying our contractual power sales arrangements by reserving generation capacity to deliver electricity to satisfy our net firm sales contracts and, when necessary, by purchasing firm transmission service. We also routinely enter into contracts, such as fuel and power purchase and sale commitments, to hedge our exposure to weather conditions, fuel requirements and other energy-related commodities. We may not, however, hedge the entire exposure of our operations from commodity price volatility. To the extent we fail to hedge against commodity price volatility, our results of operations and financial position may be affected unfavorably.

Our trading, marketing and risk management policies may not work as planned and we may suffer economic losses despite such policies.

      We actively manage the market risk inherent in our energy and fuel, debt and foreign currency positions. Nonetheless, adverse changes in energy and fuel prices, interest rates and foreign currency exchange rates may result in losses in our earnings or cash flows and adversely affect our balance sheet. Our trading, marketing and risk management procedures may not always be followed or may not work as planned. As a result, we cannot always predict the impact that our trading, marketing and risk management decisions may have on our business, operating results or financial position.

      In addition, our trading, marketing and risk management activities are exposed to the credit risk that counterparties that owe us money or energy will breach their obligations. We have established risk management policies and programs, including credit policies to evaluate counterparty credit risk. However, if counterparties to these arrangements fail to perform, we may be forced to enter into alternative hedging arrangements or honor

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underlying commitments at then-current market prices. In that event, our financial results are likely to be adversely affected.

Our operating results may fluctuate on a seasonal and quarterly basis.

      Electrical power supply may be seasonal. For example, in some parts of the country, demand for, and market prices of, electricity peak during the hot summer months, while in other parts of the country such peaks occur in the cold winter months. As a result, our overall operating results in the future may fluctuate substantially on a seasonal basis. The pattern of this fluctuation may change depending on the nature and location of the facilities we acquire or develop and the terms of our contracts to sell electricity.

We rely on transmission and distribution assets that we do not own or control to deliver our wholesale electricity and natural gas. If transmission is disrupted, or if capacity is inadequate, our ability to sell and deliver power may be hindered.

      We depend on transmission and distribution facilities owned and operated by utilities and other energy companies to deliver the electricity and natural gas we sell to the wholesale market, as well as the natural gas we purchase for use in our electric generation facilities. If transmission is disrupted, or if capacity is inadequate, our ability to sell and deliver products and satisfy our contractual obligations may be hindered.

      The FERC has issued regulations that require wholesale electric transmission services to be offered on an open-access, non-discriminatory basis. Although these regulations are designed to encourage competition in wholesale market transactions for electricity, there is the potential that fair and equal access to transmission systems will not be available or that sufficient transmission capacity will not be available to transmit electric power as we desire. We cannot predict the timing of industry changes as a result of these initiatives or the adequacy of transmission facilities in specific markets.

Risks Related to Our Business Generally and to Our Industry

A downgrade in our or our subsidiaries’ credit ratings could negatively affect our ability to access capital and increase the cost of maintaining our credit facilities and any new debt.

      On May 13, 2003, Moody’s Investors Service, Inc. downgraded by one notch the credit ratings on PPL Energy Supply’s senior unsecured debt, to “Baa2” from “Baa1,” PPL Electric Utilities’ senior secured debt, to “Baa1” from “A3,” and PPL Capital Funding’s senior unsecured debt, to “Baa3” from “Baa2.” Also on May 13, Fitch Ratings downgraded by one notch the ratings of PPL Capital Funding’s senior unsecured debt, to “BBB” from “BBB+,” and placed PPL Corporation, PPL Energy Supply and PPL Capital Funding on negative outlook. In addition, on April 29, 2003, Standard & Poor’s Ratings Services, a Division of the McGraw-Hill Companies, affirmed its “BBB” corporate credit ratings for PPL Corporation and PPL Energy Supply, downgraded by one notch the rating of PPL Capital Funding’s senior unsecured debt, to “BBB-” from “BBB,” and placed PPL Electric Utilities on negative outlook. Standard & Poor’s also indicated that PPL Corporation and PPL Energy Supply remain on negative outlook. While we do not expect these recent ratings decisions to limit our ability to fund our short-term liquidity needs and we expect these ratings decisions to have an immaterial impact on the cost to maintain our credit facilities and to access any new long-term debt, any future ratings downgrades, including downgrades to our short-term debt ratings, could negatively affect our ability to fund our short-term liquidity needs and more significantly impact the cost to maintain our credit facilities and to access new long-term debt.

We face intense competition in our energy supply and development businesses, which may adversely affect our ability to operate profitably.

      The electric power industry has experienced a significant increase in the level of competition in the energy markets in response to federal and state deregulation initiatives. This competition may negatively impact our ability to sell energy and related products and the prices which we may charge for such products, which could adversely affect our results of operations and our ability to grow our business.

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      In addition, while demand for electricity is generally increasing throughout the United States, the rate of construction and development of new electric assets may exceed the increase in demand in some regional markets. The commencement of commercial operation of new facilities in the regional markets where we own or control generation capacity will likely increase the competitiveness of the wholesale power market in those regions, which could have a material adverse effect on our business and financial condition.

Our investments and projects located outside of the United States expose us to risks related to laws of other countries, taxes, economic conditions, fluctuations in currency rates, political conditions and policies of foreign governments. These risks may delay or reduce our realization of value from our international projects.

      We have operations outside of the United States. The acquisition, financing, development and operation of projects outside the United States entail significant financial risks, which vary by country, including:

• changes in foreign laws or regulations relating to foreign operations, including tax laws and regulations;

• changes in United States laws related to foreign operations, including tax laws and regulations;

• changes in government policies, personnel or approval requirements;

• changes in general economic conditions affecting each country;

• regulatory reviews of tariffs for local distribution companies;

• changes in labor relations in foreign operations;

• limitations on foreign investment or ownership of projects and returns or distributions to foreign investors;

• limitations on ability of foreign companies to borrow money from foreign lenders and lack of local capital or loans;

• fluctuations in currency exchange rates and difficulty in converting our foreign funds to U.S. dollars, which can increase our expenses and/or impair our ability to meet such expenses, and difficulty moving funds out of the country in which the funds were earned;

• limitations on ability to import or export property and equipment;

• compliance with United States foreign corrupt practices laws;

• political instability and civil unrest; and

• expropriation and confiscation of assets and facilities.

      Our international operations are subject to regulation by various foreign governments and regulatory authorities. The laws and regulations of some countries may limit our ability to hold a majority interest in some of the projects that we may develop or acquire, thus limiting our ability to control the development, construction and operation of those projects. In addition, the legal environment in foreign countries in which we currently own assets or projects or may develop projects in the future could make it more difficult for us to enforce our rights under agreements relating to such projects. Our international projects may also be subject to risks of being delayed, suspended or terminated by the applicable foreign governments or may be subject to risks of contract invalidation by commercial or governmental entities. In addition, WPD is a regulated regional monopoly distribution business in Great Britain subject to control on the prices it can charge and the quality of supply it must provide. The current distribution price control formula that governs WPD’s allowed revenue is scheduled to operate until 2005. Any significant lowering of rates implemented by the regulatory authority upon the 2005 regulatory review could lower the amount of revenue WPD generates in relation to its operational costs and could materially lower the income of WPD.

      Despite contractual protections we have against many of these risks for our international operations or potential investments in the future, our actual results and the value of our investment may be adversely affected by the occurrence of any of these events.

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We operate in competitive segments of the electric power industry created by deregulation initiatives at the state and federal levels. If the present trend towards competition is reversed, discontinued or delayed, our business prospects and financial condition could be materially adversely affected.

      Some restructured markets have recently experienced supply problems and price volatility. In some of these markets, government agencies and other interested parties have made proposals to delay market restructuring or even re-regulate areas of these markets that have previously been deregulated. In California, legislation has been passed placing a moratorium on the sale of generation plants by public utilities regulated by the California Public Utilities Commission. In 2001, the FERC instituted a series of price controls designed to mitigate (or cap) prices in the entire western U.S. to address the extreme volatility in the California energy markets. These price controls have had the effect of significantly lowering spot and forward energy prices in the western market.

      In addition, the independent system operators, or ISOs, that oversee the transmission systems in certain wholesale power markets have from time to time been authorized to impose price limitations and other mechanisms to address volatility in the power markets. These types of price limitations and other mechanisms may adversely impact the profitability of our wholesale power marketing and trading business.

      Other proposals to re-regulate our industry may be made, and legislative or other action affecting the electric power restructuring process may cause the process to be delayed, discontinued or reversed in the states in which we currently, or may in the future, operate. If the current trend towards competitive restructuring of the wholesale and retail power markets is delayed, discontinued or reversed, our business prospects and financial condition could be materially adversely affected.

We cannot predict the outcome or extent of any investigations or litigation associated with our capacity transactions described in the PJM Market Monitor report and related matters, which could result in penalties, an obligation to pay damages, or other liabilities.

      In November 2001, the Market Monitor of PJM Interconnection, LLC, or PJM, publicly released a report prepared for the Pennsylvania Public Utility Commission, or PUC, entitled “Capacity Market Questions” relating to the pricing of installed capacity in the PJM daily market during the first quarter of 2001. The report concluded that PPL EnergyPlus was able to exercise market power to raise the market-clearing price above the competitive level during that period. In November 2001, the PUC issued an investigation order directing its Law Bureau to conduct an investigation into the PJM capacity market and the allegations in the Market Monitor’s report. PPL EnergyPlus does not agree with the Market Monitor’s conclusions that it exercised market power; in addition, the Market Monitor acknowledged in his report that PJM’s standards and rules did not prohibit PPL EnergyPlus’ conduct. In June 2002, the PUC issued an “investigation report” alleging, among other things, that PPL Corporation had “unfairly manipulated electricity markets in early 2001,” and that “there was an unlawful exercise of market power and market rules gaming by PPL” that was damaging to wholesale and retail electricity markets in Pennsylvania. The PUC stated that it was not authorized to, and was not attempting to, adjudicate the merits of PPL Corporation’s defenses to these charges, but has referred the matter to the U.S. Department of Justice—Antitrust Division, or DOJ, the FERC and the Pennsylvania Attorney General.

      In July 2002, PPL Corporation appealed the PUC order to the Commonwealth Court of Pennsylvania. Since the PUC clarified that its report has no precedential value and should be given no weight in any future proceedings, PPL Corporation consented to having its appeal dismissed by the Commonwealth Court. Accordingly, the Commonwealth Court dismissed the appeal in September 2002. Although we believe that the PUC’s report is inaccurate, that its conclusions are groundless, and that we acted ethically and legally, in compliance with all applicable laws and regulations, we cannot predict the outcome or extent of any investigations, litigation or other proceedings related to this matter.

      In late 2002, we were served with complaints filed by Ultimax.com, Inc., which was a member of PJM, and a group of 14 Pennsylvania boroughs that are wholesale customers of PPL Electric Utilities, alleging, among other things, violations of the federal antitrust laws in connection with the capacity transactions described in the PJM Market Monitor report. Although we believe the claims under these complaints are without merit and intend to defend the actions vigorously, we cannot predict the outcome of these matters.

      Finally, several parties filed interventions and protests at FERC requesting that, in light of the PJM Market Monitor’s report, PPL EnergyPlus be required to provide additional information demonstrating that it has met the

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FERC’s market power tests necessary for PPL EnergyPlus to continue its authority to make wholesale sales of electric power and related products at market-based rates. We have responded that the FERC does not require the economic test suggested by the intervenors and that, in any event, we would meet such economic test if required by the FERC. We cannot predict the outcome of this matter.

We may be adversely affected by legal proceedings arising out of the electricity supply situation in California and other western states, which could result in refund or other liabilities.

      Litigation arising out of the California electricity supply situation has been filed with the FERC and in California courts against sellers of energy to the California ISO. The plaintiffs and intervenors in these proceedings allege abuse of market power, manipulation of market prices, unfair trade practices and violations of state antitrust laws, among other things, and seek price caps on wholesale sales in California and other western power markets, refunds of excess profits allegedly earned on these sales of energy, and other relief, including treble damages and attorneys’ fees. While PPL Corporation’s subsidiaries have not been named by the plaintiffs in the proceedings alleging abuses of market power, manipulation of market prices, unfair trade practices and violations of state antitrust laws, PPL Montana was named by a defendant in its cross-complaint in a consolidated court proceeding, which combined into one master proceeding several of the lawsuits alleging antitrust violations and unfair trade practices. This generator denies that any unlawful, unfair or fraudulent conduct occurred but asserts that, if it is found liable, the other generators and power marketers, including PPL Montana, caused, contributed to and/or participated in the plaintiffs’ alleged losses.

      In May 2003, the Port of Seattle filed a lawsuit in federal district court in Seattle against eighteen defendants, including PPL Montana. The lawsuit asserts claims against all defendants under the federal and state antitrust laws, the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”) and for common law fraud. The complaint centers on many of the same alleged activities that are the basis for the litigation arising out of the California electricity supply situation described above. The Port of Seattle is seeking actual, trebled and punitive damages, as well as attorneys’ fees.

      The FERC has determined that all sellers of energy into markets operated by the California ISO and the California Power Exchange, including PPL Montana, should be subject to refund liability for the period beginning October 2, 2000 through June 20, 2001 and has initiated an evidentiary hearing concerning refund amounts. In April 2003, the FERC changed the manner in which this refund liability is to be computed and ordered further proceedings to determine the exact amount that the sellers, including PPL Montana, would be required to refund. The FERC also is considering whether to order refunds for spot market bilateral sales made in the Pacific Northwest, including sales made by PPL Montana during the period December 2000 through June 2001. The FERC Administrative Law Judge assigned to the Pacific Northwest proceeding has recommended that no refunds be ordered for such sales into the Pacific Northwest. The FERC presently is considering this recommendation. The FERC discussed the Pacific Northwest issues at a meeting in April 2003, but has not yet issued any orders on this matter. The FERC has been conducting an additional investigation of alleged price manipulation in power markets in California and the western U.S. In connection with this investigation, the FERC has served several sets of data requests on sellers of energy in those markets, including PPL Montana. Finally, attorneys general in several western states, including California, have begun investigations related to the electricity supply situation in California and other western states.

      PPL Montana sold only a small amount of electricity into the California market during 2000 and 2001, and it did not sell any electricity into the California market during 2002. In response to FERC data requests concerning trading strategies, PPL Montana and PPL EnergyPlus have each explained that they did not engage in, and that they do not engage in, “wash trades” or other improper trading strategies. In April 2003, as a result of its investigation, the FERC issued several orders that could result in the revocation of market-based rate authority from several companies. Our subsidiaries were not included in these orders.

      While we believe that we have not engaged in any improper trading practices, we cannot predict whether, or the extent to which, any of our subsidiaries will be the target of any additional governmental investigations or named in other lawsuits or refund proceedings, the outcome of any such lawsuits or proceedings or whether the ultimate impact on us of the electricity supply situation in California and other western states will be material.

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Our business is subject to extensive regulation, which may increase our costs, reduce our revenues, or prevent or delay operation of our facilities.

      Our U.S. generation subsidiaries are exempt wholesale generators, or EWGs, which sell electricity into the wholesale market. Generally, our EWGs and our marketing subsidiaries are subject to regulation by the FERC. The FERC has authorized us to sell generation from our facilities and power from our marketing subsidiaries at market-based prices. The FERC retains the authority to modify or withdraw our market-based rate authority and to impose “cost of service” rates if it determines that the market is not workably competitive, that we possess market power or that we are not charging just and reasonable rates. Any reduction by the FERC of the rate we may receive or any unfavorable regulation of our business by state regulators could materially adversely affect our results of operations.

      The acquisition, ownership and operation of power generation facilities require numerous permits, approvals, licenses and certificates from federal, state and local governmental agencies. We may not be able to obtain or maintain all required regulatory approvals. If there is a delay in obtaining any required regulatory approvals or if we fail to obtain or maintain any required approval or comply with any applicable law or regulation, the operation of our assets and our sales of electricity could be prevented or delayed or become subject to additional costs.

Our costs of compliance with environmental laws are significant and the costs of compliance with new environmental laws could adversely affect our profitability.

      Our operations are subject to extensive federal, state, local and foreign statutes, rules and regulations relating to environmental protection. To comply with these legal requirements, we must spend significant sums on environmental monitoring, pollution control and emission fees.

      New environmental laws and regulations affecting our operations, and new interpretations of existing laws and regulations, may be adopted or become applicable to us. For example, the laws governing air emissions from coal-burning plants are being re-interpreted by federal and state authorities. These re-interpretations could result in the imposition of substantially more stringent limitations on these emissions than those currently in effect.

      We may not be able to obtain or maintain all environmental regulatory approvals necessary to our business. If there is a delay in obtaining any required environmental regulatory approval or if we fail to obtain, maintain or comply with any such approval, operations at our affected facilities could be halted or subjected to additional costs. Further, at some of our older facilities it may be uneconomical for us to install the necessary equipment, which may cause us to shut down those generation units.

Our business development activities may not be successful and our projects under construction may not commence operation as scheduled, which could increase our costs and impair our ability to recover our investment.

      The acquisition, development and construction of generating facilities involves numerous risks. We may be required to expend significant sums for preliminary engineering, permitting, fuel supply, resource exploration, legal and other expenses in preparation for competitive bids which we may not win or before it can be established whether a project is feasible, economically attractive or capable of being financed. Our success in developing a particular project is contingent upon, among other things, negotiation of satisfactory engineering, construction, fuel supply and power sales contracts, receipt of required governmental permits and timely implementation and satisfactory completion of construction. If we were unable to complete the development of a facility, we would generally not be able to recover our investment in the project.

      Currently, we have power plants with 645 MW of generation capacity under development or construction and we intend to continue to evaluate opportunities to acquire and develop new, low-cost and efficient electric power generation facilities in key northeastern and western markets. Successful completion of these facilities is subject to numerous factors, including:

• changes in market prices of power and fuel;

• our ability to obtain permits and approvals and comply with applicable regulations;

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• availability and timely delivery of gas turbine generators and other equipment;

• unforeseen engineering problems;

• construction delays and contractor performance shortfalls;

• shortages and inconsistent quality of equipment, material and labor;

• work stoppages;

• adverse weather conditions;

• environmental and geological conditions; and

• unanticipated cost increases.

      Any of these factors could give rise to delays, cost overruns or the termination of a project.

      The failure to complete construction according to specifications and on time can result in cost overruns, liabilities, reduced plant efficiency, higher operating and other costs and reduced earnings.

Risks Related to Corporate and Financial Structure

Our cash flow and ability to meet debt obligations largely depend on the performance of our subsidiaries and affiliates, some of which we do not control.

      PPL Corporation and PPL Energy Supply are holding companies and conduct their operations primarily through wholly-owned subsidiaries. Substantially all of our consolidated assets are held by these subsidiaries. Accordingly, our cash flow and our ability to meet our obligations under the notes are largely dependent upon the earnings of our subsidiaries and the distribution or other payment of such earnings to us in the form of dividends or loans or advances and repayment of loans or advances from us. The subsidiaries are separate and distinct legal entities and have no obligation to pay any amounts due on the notes or to make any funds available for such payment.

      Because PPL Corporation and PPL Energy Supply are holding companies, their obligations under the notes will be effectively subordinated to all existing and future liabilities of their respective subsidiaries. Therefore, their rights and the rights of their creditors, including the rights of the holders of the notes, 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 either PPL Corporation or PPL Energy Supply may be a creditor with recognized claims against any such subsidiary, their claims would still be effectively subordinated to any security interest in, or mortgages or other liens on, the assets of such subsidiary and would be subordinated to any indebtedness or other liabilities of such subsidiary senior to that held by them. Although certain agreements to which PPL Corporation and PPL Energy Supply and their respective subsidiaries are parties limit the incurrence of additional indebtedness, PPL Corporation and PPL Energy Supply and their respective subsidiaries retain the ability to incur substantial additional indebtedness and other liabilities.

      The debt agreements of some of our subsidiaries and affiliates restrict their ability to pay dividends, make distributions or otherwise transfer funds to us prior to the payment of other obligations, including operating expenses, debt service and reserves. Further, if we elect to receive distributions of earnings from our foreign operations, we may incur United States taxes, net of any available foreign tax credits, on such amounts. Distributions to us from our international projects are, in some countries, also subject to withholding taxes.

We may need significant additional financing to pursue growth opportunities.

      We continually review potential acquisitions and development projects and may enter into significant acquisitions or development projects in the future. Any acquisition or development project will likely require access to substantial capital from outside sources on acceptable terms. We can give no assurance that we will obtain the substantial debt and equity capital required to invest in, acquire and develop new generation projects or to refinance existing projects. We may also need external financing to fund capital expenditures, including capital expenditures necessary to comply with environmental regulations or other regulatory requirements.

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      Our ability to arrange financing and our cost of capital are dependent on numerous factors, including:

• general economic conditions, including the conditions in the energy industry;

• credit availability from banks and other financial institutions;

• market prices for electricity and fuels;

• our capital structure and the maintenance of acceptable credit ratings;

• our financial performance;

• the success of current projects and the perceived quality of new projects; and

• provisions of relevant tax and securities laws.

      Inability to obtain sufficient financing on terms that are acceptable to us could adversely affect our ability to pursue acquisition and development opportunities and fund capital expenditures.

Risks Related to the Notes

We may not have the ability to raise the funds necessary to purchase the notes upon a fundamental change or other purchase date, as required by the indenture governing the notes.

      On May 15, 2008, May 15, 2013 and May 15, 2018, holders of the notes may require us to purchase their notes for cash. In addition, holders of the notes also may require us to purchase their notes upon a fundamental change as described under “Description of Notes—Purchase at Option of the Holder Upon a Fundamental Change.” A fundamental change also may constitute an event of default, and result in the acceleration of the maturity of our then existing indebtedness, under another indenture or other agreement. We cannot assure you that we would have sufficient financial resources, or would be able to arrange financing, to pay the purchase price for the notes tendered by holders. Failure by us to purchase the notes when required will result in an event of default with respect to the notes.

Conversion of the notes into common stock of PPL Corporation will require U.S. holders to recognize taxable gains or losses.

      Upon the conversion of a note into PPL Corporation common stock, a U.S. holder generally will be required to recognize taxable gain or loss equal to the difference between the fair market value of the common stock received plus any cash received in lieu of a fractional share and such holder’s adjusted tax basis in the note being converted. Prospective investors should carefully review the information regarding tax considerations relevant to an investment in the notes set forth under “Certain United States Federal Income Tax Considerations” and are also urged to consult their own tax advisors prior to investing in the notes.

The trading prices for the notes will be directly affected by the trading prices of our common stock.

      The trading prices of the notes in the secondary market will be directly affected by the trading prices of our common stock, the general level of interest rates and our credit quality. It is impossible to predict whether the price of our common stock or interest rates will rise or fall. Trading prices of our common stock will be influenced by our operating results and prospects and by economic, financial and other factors. In addition, general market conditions, including the level of, and fluctuations in, the trading prices of stocks generally, and sales of substantial amounts of common stock by us in the market after the offering of the notes, or the perception that such sales could occur, could affect the price of our common stock. Fluctuations in interest rates may give rise to arbitrage opportunities based upon changes in the relative value of our common stock. In addition, changes to our credit rating could negatively affect the trading price of our common stock and the notes. Any other arbitrage could, in turn, affect the trading prices of the notes.

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We cannot assure you that an active trading market for the notes will be sustained.

      The notes were issued on May 21, 2003. We do not plan to list the notes on any securities exchange or to include them in any automated quotation system. Although the initial purchasers of the notes have advised us that they intend to make a market in the notes, they are not obligated to do so. We cannot assure you that an active trading market for the notes will be maintained or as to the liquidity or sustainability of any such market, your ability to sell the notes or the price at which you will be able to sell your notes. Future trading prices of the notes will depend on many factors, including, among other things, prevailing interest rates, our operating results, the price of our common stock and the market for similar securities.

If you hold notes, you will not be entitled to any rights with respect of our common stock, but you will be subject to any changes made with respect to our common stock.

      If you hold notes, you will not be entitled to any rights with respect to our common stock (including, without limitation, voting rights and rights to receive any dividends or other distributions on our common stock), but you will be subject to all changes affecting our common stock. You will only be entitled to rights on the common stock if and when we deliver shares of common stock to you in exchange for your notes and in limited cases under the anti-dilution adjustment provisions of the notes. For example, in the event that an amendment is proposed to our articles of incorporation or by-laws requiring stockholder approval and the record date for determining the stockholders of record entitled to vote on the amendment occurs prior to delivery of the common stock, you will not be entitled to vote on the amendment, although you will nevertheless be subject to any changes in the powers, preferences or special rights of our common stock.

We may issue additional shares of common stock and thereby materially and adversely affect the price of our common stock.

      We are not restricted from issuing additional common stock during the life of the notes and have no obligation to consider your interests for any reason in this regard. If we issue additional shares of common stock, it may materially and adversely affect the price of our common stock and, in turn, the notes.

Our articles of incorporation and by-laws provisions, and several other factors, could limit another party’s ability to acquire us and could deprive you of the opportunity to obtain a takeover premium for your shares of common stock.

      A number of provisions that are in our articles of incorporation and by-laws and Pennsylvania law will make it difficult for another company to acquire us and for you to receive any related takeover premium for our common stock. See “Possible Anti-Takeover Effects of the Articles and Bylaws” under “Description of PPL Corporation’s Capital Stock.”

PPL Energy Supply and PPL Corporation are holding companies, and we will depend upon funds from our subsidiaries to meet our obligations under the notes and the guarantee.

      PPL Energy Supply and PPL Corporation are holding companies, and their only significant assets are their respective investments in their subsidiaries. As holding companies, they are each dependent upon dividends, loans or advances, or other intercompany transfers of funds from subsidiaries to meet their obligations, including their obligations under the notes and the guarantee. The ability of their subsidiaries to pay dividends and make other payments to them may be restricted by, among other things, applicable laws as well as agreements to which those subsidiaries may be party. Therefore, PPL Energy Supply’s ability to make payments with respect to the notes and PPL Corporation’s ability to make payments with respect to the guarantee may be limited.

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USE OF PROCEEDS

      We will not receive any proceeds from the resale of the notes or the shares of PPL Corporation common stock which are issuable upon conversion of the notes. We received net proceeds from the sale of the notes in the initial offering of approximately $390.7 million, after deducting discounts and commissions and estimated expenses payable by us. The net proceeds to PPL Corporation from the concurrent common stock offering was approximately $260.8 million, after deducting expenses and underwriting discounts and commissions and estimated expenses payable by us. We expect to use the net proceeds from the initial offering and the concurrent common stock offering to repurchase commercial paper of PPL Energy Supply and for general corporate purposes. As of March 31, 2003, PPL Energy Supply had $635 million of commercial paper outstanding which had a weighted average interest rate of 1.55%, had weighted average days to maturity of approximately 40 days and was incurred for the retirement and early redemption of long-term debt and other general corporate purposes. We have not determined the amount we plan to spend for each such purpose or the timing of such expenditures, and the allocation of the net proceeds for these purposes will be subject to the discretion of our management.

RATIOS OF EARNINGS TO FIXED CHARGES

      The following table sets forth our ratios of earnings to fixed charges for the periods indicated:

											Twelve Months
	Year Ended December 31,										Ended
	1998		1999		2000		2001		2002		March 31, 2003
Ratio of Earnings to Fixed Charges(a)		3.1		2.7		2.5		1.7		1.9		1.9

(a)  Computed using earnings and fixed charges of PPL Corporation and its subsidiaries. Fixed charges consist of interest on short- and long-term debt, other interest charges, interest on capital lease obligations and the estimated interest component of other rentals.

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PRICE RANGE OF COMMON STOCK

      PPL Corporation common stock is traded on the New York Stock Exchange under the symbol “PPL.” The following table sets forth, for the periods indicated, the range of high and low sale prices for PPL Corporation common stock. On June 16, 2003, the last reported sale price for PPL Corporation common stock was $43.65 per share.

	Common Stock
	Price
	High		Low
Year Ended December 31, 2001
First Quarter	$	46.75	$	33.88
Second Quarter		62.36		44.03
Third Quarter		56.50		30.99
Fourth Quarter		37.65		31.20
Year Ended December 31, 2002
First Quarter	$	39.85	$	31.40
Second Quarter		39.95		28.97
Third Quarter		37.60		26.00
Fourth Quarter		36.26		26.47
Year Ending December 31, 2003
First Quarter	$	38.10	$	31.65
Second Quarter (through June 16, 2003)		43.68		35.04

      As of June 2, 2003, there were 83,669 holders of record of PPL Corporation common stock.

DIVIDEND POLICY

      PPL Corporation has paid quarterly cash dividends on its common stock in every year since 1946. The annual dividends paid per share in 2002 and in 2001 were $1.44 and $1.06, respectively. In February 2003, PPL Corporation increased its dividend level to an annualized rate of $1.54 per share ($0.385 per share on a quarterly basis). Future dividends, declared at the discretion of PPL Corporation’s board of directors, will be dependent upon future earnings, cash flows, financial requirements and other factors.

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CAPITALIZATION

      The following table sets forth PPL Corporation’s historical unaudited consolidated capitalization as of March 31, 2003:

• on an actual basis;

• on an as adjusted basis to give effect to the net proceeds of approximately $390.7 million from the sale by us of the notes in the initial offering and the application of the net proceeds as described under “Use of Proceeds;” and

• on an as further adjusted basis to give effect to the net proceeds of approximately $260.8 million from the sale by PPL Corporation of common stock in the concurrent offering and the application of the net proceeds as described under “Use of Proceeds.”

      This table should be read in conjunction with our consolidated financial statements, the notes related thereto and the other financial and operating data incorporated by reference into this prospectus.

			As of March 31, 2003
						As		As Further
			Actual			Adjusted		Adjusted
			(in millions)
Short-term debt, including current maturities of long-term debt			$	1,200		$	809	$	548
Long-term debt, excluding current maturities			$	6,195		$	6,595	$	6,595
Company-obligated mandatorily redeemable preferred securities of subsidiary trusts holding solely company debentures				661			661		661
Preferred stock, including current sinking fund obligations				82			82		82
Shareowners’ common equity:
Common stock, $0.01 par value; 390,000,000 shares authorized; 167,723,463 shares issued and outstanding as of March 31, 2003, actual; and 174,223,463 shares issued and outstanding as of March 31, 2003, as further adjusted				2			2		2
	Capital in excess of par value			2,612			2,612		2,882
	Treasury stock			(836	)		(836)		(836	)
	Earnings reinvested			1,187			1,187		1,187
	Accumulated other comprehensive income (loss)			(437	)		(437)		(437	)
	Capital stock expense and other			(58	)		(58)		(67	)
		Total shareowners’ common equity		2,470			2,470		2,731
		Total capitalization	$	9,408		$	9,808	$	10,069

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SELLING SECURITYHOLDERS

      We originally issued the notes in a private placement that closed on May 21, 2003. The initial purchasers of the notes have advised us that the notes were resold in transactions exempt from the registration requirements of the Securities Act to “qualified institutional buyers,” as defined in Rule 144A of the Securities Act. Selling securityholders may offer and sell the notes and/or shares of PPL Corporation common stock issuable upon conversion of the notes pursuant to this prospectus.

      The selling securityholders are offering notes and shares of PPL Corporation common stock issuable upon conversion of the notes under this prospectus pursuant to existing registration rights conferred by the registration rights agreement, dated as of May 21, 2003, among PPL Energy Supply, LLC, PPL Corporation and Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wachovia Securities, Inc., as representatives of the several other initial purchasers named therein. The following table sets forth information, as of June 17, 2003, with respect to the selling securityholders and the principal amounts of notes and number of shares of PPL Corporation common stock issuable upon conversion of the notes beneficially owned by each selling securityholder that may be offered under this prospectus. The information is based on information provided by or on behalf of the selling securityholders. The selling securityholders may offer all, some or none of the notes or PPL Corporation common stock issuable upon conversion of the notes. Because the selling securityholders may offer all or some portion of the notes or the PPL Corporation common stock, no estimate can be given as to the amount of the notes or the PPL Corporation common stock that will be held by the selling securityholders upon termination of any sales. In addition, the selling securityholders identified below may have sold, transferred or otherwise disposed of all or a portion of their notes in transactions exempt from the registration requirements of the Securities Act or pursuant to the shelf registration statement and amendments or supplements thereto. Selling securityholders, including their transferees, pledgees or donees or their successors, may from time to time offer and sell pursuant to this prospectus any or all of the notes and PPL Corporation common stock issuable upon conversion of the notes. Identification of any additional selling securityholders who exercise their registration rights, if any, will be made in the applicable prospectus supplement.

	Principal Amount
	of Notes Beneficially		Percentage of			Number of Shares of		Percentage of
Name and Address of Selling	Owned That May		Notes			Common Stock That		Common Stock
Securityholder	be Sold		Outstanding			May be Sold(1)		Outstanding(2)
Unnamed securityholders or any future transferees, pledges, donees or successors of or from any such unnamed securityholder (3)	$	400,000,000		100	%		8,044,240		4.4	%
Total	$	400,000,000		100	%		8,044,240		4.4	%

*	Less than 1%.
(1)	Assumes conversion of all of the holder’s notes at an initial conversion rate of 20.1106 shares of PPL Corporation common stock per $1,000 principal amount of the notes. However, this conversion rate will be subject to adjustment as described under “Description of Notes—Conversion of Notes—Conversation Rate Adjustments.” As a result, the amount of PPL Corporation common stock issuable upon conversion of the notes may increase or decrease in the future.
(2)	Calculated based on 176,603,122 shares of PPL Corporation common stock outstanding as of May 31, 2003. In calculating this amount, we treated as outstanding that number of shares of PPL Corporation common stock issuable upon conversion of all of a particular holder’s notes. However, we did not assume the conversion of any other holder’s notes.
(3)	Information about other selling securityholders will be set forth in prospectus supplements or amendments to this prospectus, if required.

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DESCRIPTION OF NOTES

      The notes were issued under an indenture, dated May 21, 2003, among PPL Energy Supply, as issuer, PPL Corporation, as guarantor, and JPMorgan Chase Bank, as trustee. You may request a copy of the indenture from us.

      The following description is a summary of the material provisions of the notes and the indenture. It does not purport to be complete. This summary is subject to and is qualified by reference to all the provisions of the indenture, including the definitions of certain terms used in the indenture. Wherever particular provisions or defined terms of the indenture or form of note are referred to, these provisions or defined terms are incorporated in this prospectus by reference.

General

      The notes are senior unsecured debt and rank on a parity with all of our other existing and future senior unsecured debt and prior to all of our subordinated debt. The notes are convertible into common stock as described under “—Conversion of Notes.”

      The notes are fully, unconditionally and irrevocably guaranteed by PPL Corporation, which guarantee ranks equally in right of payment with all other existing and future unsecured and unsubordinated indebtedness and obligations of PPL Corporation.

      The notes are limited to $400,000,000 aggregate principal amount. The notes are issued only in denominations of $1,000 and multiples of $1,000. The notes will mature on May 15, 2023 unless earlier converted, redeemed or purchased by us.

      Neither we nor any of our subsidiaries are subject to any financial covenants under the indenture. In addition, neither we nor any of our subsidiaries are restricted under the indenture from paying dividends, incurring debt, or issuing or purchasing our securities.

      You are not afforded protection under the indenture in the event of a highly leveraged transaction or a change in control of PPL Energy Supply or PPL Corporation except to the extent described below under “—Purchase at Option of the Holder Upon a Fundamental Change.”

      We will pay interest on May 15 and November 15 of each year, beginning November 15, 2003, to record holders at the close of business on the preceding May 1 and November 1, as the case may be.

      We will maintain an office in the Borough of Manhattan, The City of New York, for the payment of interest, which shall initially be an office or agency of the trustee. In our discretion, we may change the place of payment on the notes, and may remove any paying agent and may appoint one or more additional paying agents (including us or any affiliate). We may pay interest either:

• by check mailed to your address as it appears in the note register, provided that if you are a holder with an aggregate principal amount in excess of $2.0 million, you shall be paid, at your written election, by wire transfer in immediately available funds; or

• by transfer to an account maintained by you in the United States.

      However, payments to The Depository Trust Company, New York, New York, which we refer to as DTC, will be made by wire transfer of immediately available funds to the account of DTC or its nominee. Interest will be computed on the basis of a 360-day year composed of twelve 30-day months.

      If any interest payment date, redemption date, purchase date or the maturity of a note falls on a day that is not a Business Day, the required payment of principal and/or interest will 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 such interest payment date, redemption date, purchase date or the maturity, as the case may be, to the date of such payment on the next succeeding Business Day. “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

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or required by law, regulation or executive order to close in The City of New York or other city in which any paying agent for the notes is located.

Conversion of Notes

      You may convert any of your notes, in whole or in part, into PPL Corporation common stock prior to the close of business on the final maturity date of the notes, subject to prior redemption or purchase of the notes, only under the following circumstances:

• upon satisfaction of a market price condition;

• upon a credit ratings event;

• upon notice of redemption; or

• upon specified corporate transactions.

      The number of shares of common stock you will receive upon conversion of your notes will be determined by multiplying the number of $1,000 principal amount notes you convert by the conversion rate on the date of conversion. You may convert your notes in part so long as such part is $1,000 principal amount or an integral multiple of $1,000. In lieu of delivery of shares of PPL Corporation common stock upon conversion of any notes, we may elect to pay holders surrendering notes an amount in cash per note (or a portion of a note) equal to the applicable stock price (as defined below) multiplied by the conversion rate in effect on the conversion date. We will inform the holders through the trustee no later than two business days following the conversion date of our election to deliver shares of PPL Corporation common stock or to pay cash in lieu of delivery of the shares. Shares of PPL Corporation common stock deliverable upon conversion (and cash for fractional shares) will be delivered through the conversion agent no later than the third business day following the determination of the applicable stock price. If we elect to pay all of such payment in cash, the payment will be made to holders surrendering notes no later than the tenth business day following the applicable conversion date. If an event of default as described below (other than a default in a cash payment upon conversion of the notes) has occurred and is continuing, we may not pay cash upon conversion of any notes or portion of the notes (other than cash for fractional shares). The “applicable stock price” shall mean the average of the closing sale prices of PPL Corporation common stock over the five trading day period starting the third trading day following the conversion date of the notes.

      If we call any notes for redemption, you may convert the notes until the close of business on the business day immediately preceding the redemption date unless we fail to pay the full redemption price. If you have submitted your notes for purchase upon a fundamental change, you may convert your notes only if you withdraw your purchase election. Similarly, if you exercise your option to require us to purchase your notes other than upon a fundamental change, those notes may be converted only if you withdraw your election to exercise your option in accordance with the terms of the indenture.

      Upon conversion of notes, a holder will not receive any cash payment of interest (unless such conversion occurs between a regular record date and the interest payment date to which it relates). Our delivery to the holder of the full number of shares of PPL Corporation common stock into which the note is convertible, together with any cash payment for such holder’s fractional shares, or cash in lieu thereof, will be deemed to satisfy our obligation to pay:

• the principal amount of the note; and

• accrued but unpaid interest attributable to the period from the most recent interest payment date to the conversion date.

      As a result, accrued but unpaid interest to the conversion date is deemed to be paid in full rather than cancelled, extinguished or forfeited.

      Notwithstanding the preceding paragraph, if notes are converted after a record date but prior to the next succeeding interest payment date, holders of such notes at the close of business on the record date will receive the interest payable on such notes on the corresponding interest payment date notwithstanding the conversion. Such notes, upon surrender for conversion, must be accompanied by funds equal to the amount of interest payable on the notes so converted; provided that no such payment need be made if (1) we have specified a redemption date that is after a record date and prior to the next interest payment date, (2) we have specified a purchase date

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following a fundamental change that is during such period or (3) only to the extent of overdue interest, any overdue interest exists at the time of conversion with respect to such note.

Conversion Upon Satisfaction of Market Price Condition

      You may surrender your note for conversion into PPL Corporation common stock prior to close of business on the maturity date during any fiscal quarter commencing after June 30, 2003 if the closing sale price of PPL Corporation common stock exceeds 120% of the conversion price for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter.

      The “closing sale price” of PPL Corporation common stock on any date means the closing per share sale price (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on such date as reported in composite transactions for the principal United States securities exchange on which PPL Corporation common stock is traded or, if PPL Corporation common stock is not listed on a United States national or regional securities exchange, as reported by the Nasdaq System or by the National Quotation Bureau Incorporated. The “conversion price” as of any day will equal $1,000 divided by the number of shares of common stock issuable upon a conversion of a note.

Conversion Upon Credit Ratings Event

      You may surrender your notes for conversion into our common stock prior to close of business on the maturity date in which (i) the long-term credit rating assigned to the notes by both Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services is lower than “Ba2” and “BB,” respectively, (ii) both Moody’s and Standard & Poor’s no longer rate the notes or have withdrawn their ratings with respect to the notes, or (iii) either Moody’s or Standard & Poor’s no longer rate the notes or have withdrawn or suspended such rating and the remaining rating is lower than “Ba2” and “BB,” as applicable. References to Moody’s and Standard & Poor’s shall include any successors to these entities.

Conversion Upon Notice of Redemption

      If we call any notes for redemption, you may convert the notes until the close of business on the business day immediately preceding the redemption date. After such time, your right to convert will expire unless we default in the payment of the full redemption price.

Conversion Upon Specified Corporate Transactions

      If we elect to:

• distribute to all holders of PPL Corporation common stock certain rights entitling them to purchase, for a period expiring within 45 days, PPL Corporation common stock at less than the current market price (measured by averaging the closing prices for the 10 preceding trading days); or

• distribute to all holders of PPL Corporation common stock, assets, debt securities or certain rights to purchase our securities, which distribution has a per share value exceeding 10% of the closing sale price of PPL Corporation common stock on the day preceding the declaration date for such distribution;

we must notify you at least 20 days prior to the ex-dividend date for such distribution. Once we have given such notice, you may surrender your notes for conversion at any time until the earlier of close of business on the business day prior to the ex-dividend date or any announcement by us that such distribution will not take place. No adjustment to your ability to convert will be made if you will otherwise participate in the distribution without conversion.

      In addition, if we are a party to a consolidation, merger, binding share exchange or sale of all or substantially all of our assets, in each case pursuant to which PPL Corporation common stock would be converted into cash, securities or other property, you may surrender your notes for conversion at any time from and after the date which is 15 days prior to the anticipated effective date of the transaction until and including the date which is 15 days after the actual date of such transaction. If we are a party to a consolidation, merger, binding share

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exchange or sale of all or substantially all of our assets, in each case pursuant to which PPL Corporation common stock is converted into cash, securities, or other property, then at the effective time of the transaction, your right to convert a note into PPL Corporation common stock will be changed into a right to convert it into the kind and amount of cash, securities and other property which you would have received if you had converted your notes immediately prior to the transaction. If the transaction also constitutes a fundamental change, you can require us to purchase all or a portion of your notes as described under “—Purchase at Option of the Holder Upon a Fundamental Change.”

Conversion Procedures

      The initial conversion rate for the notes is 20.1106 shares of common stock per $1,000 principal amount of notes, subject to adjustment as described below. We will not issue fractional shares of common stock upon conversion of notes. Instead, we will pay cash equal to the closing price of the common stock on the trading day prior to the conversion date. Except as described below, you will not receive any accrued interest or dividends upon conversion.

      To convert your note into common stock you must:

• complete and manually sign the conversion notice on the back of the note or facsimile of the conversion notice and deliver this notice to the conversion agent;

• surrender the note to the conversion agent;

• if required, furnish appropriate endorsements and transfer documents;

• if required, pay all transfer or similar taxes; and

• if required, pay funds equal to interest payable on the next interest payment date.

      The date you comply with these requirements is the conversion date under the indenture.

Conversion Rate Adjustments

      We will adjust the conversion rate if any of the following events occurs:

      (1) the payment of dividends or distributions of PPL Corporation common stock on PPL Corporation common stock;

      (2) the issuance to all holders of PPL Corporation common stock of rights, warrants or options (other than pursuant to any dividend reinvestment or stock purchase plans) entitling them, for a period of up to 45 days from the date of issuance of the rights, warrants or options, to subscribe for or purchase PPL Corporation common stock at less than the current market price thereof;

      (3) subdivisions, splits and combinations of PPL Corporation common stock;

      (4) distributions to all holders of PPL Corporation common stock of evidences of our indebtedness, shares of capital stock, securities, cash, property or assets (excluding any dividend or distribution covered by clause (1) or (2) above and any dividend or distribution paid exclusively in cash); in the event that PPL Corporation makes a distribution to all holders of the PPL Corporation common stock consisting of capital stock of, or similar equity interests in, a subsidiary or other business unit of PPL Corporation, the conversion rate will be adjusted based on the market value of the securities so distributed relative to the market value of PPL Corporation common stock, in each case based on the average closing sales prices of those securities for the 10 trading days commencing on and including the fifth trading day after the date on which “ex-dividend trading” commences for such dividend or distribution on the New York Stock Exchange or such other national or regional exchange or market on which the securities are then listed or quoted;

      (5) distributions to all holders of PPL Corporation common stock consisting exclusively of cash, excluding any dividend or distribution in connection with the liquidation, dissolution or winding up of PPL

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Corporation or any quarterly cash dividend on the PPL Corporation common stock to the extent that the dividend per share of common stock in any quarter does not exceed the greater of:

• the amount per share of PPL Corporation common stock of the next preceding quarterly cash dividend on the PPL Corporation common stock to the extent that the preceding quarterly dividend did not require an adjustment to the conversion rate pursuant to this clause, as adjusted to reflect subdivisions or combinations of the PPL Corporation common stock; and

• 1.25% of the average of the closing sale price of the PPL Corporation common stock during the ten trading days immediately preceding the declaration date of the dividend.

If an adjustment is required to be made under this clause as a result of a distribution that is a quarterly dividend, the adjustment would be based upon the amount by which the distribution exceeds the amount of the quarterly cash dividend permitted to be excluded pursuant to this clause. If an adjustment is required to be made under this clause as a result of a distribution that is not a quarterly cash dividend, the adjustment would be based upon the full amount of the distribution; or

      (6) the payment in respect of a tender or exchange offer by PPL Corporation or any of its subsidiaries for shares of PPL Corporation common stock to the extent that the cash and value of any other consideration included in the payment per share of PPL Corporation common stock exceeds the current market price per share of PPL Corporation common stock on the trading day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer.

      The “current market price” per share of PPL Corporation common stock on any day means the average of the daily closing sale prices for the five consecutive trading days ending on the earlier of the day in question (including upon the occurrence of a fundamental change) and the day before the “ex-dividend trading” with respect to the issuance or distribution requiring the computation.

      For purposes of this prospectus, the term “ex-dividend trading,” when used with respect to any issuance or distribution, will mean the first date on which the common stock trades regular way on the applicable exchange or in the applicable market without the right to receive the issuance or distribution.

      To the extent that PPL Corporation has a rights plan in effect upon conversion of the notes into PPL Corporation common stock, you will receive, in addition to the common stock, the rights under the rights plan unless the rights have separated from the PPL Corporation common stock at the time of conversion, in which case the conversion rate will be adjusted as if PPL Corporation distributed to all holders of the PPL Corporation common stock, shares of PPL Corporation capital stock, evidences of indebtedness or assets as described above, subject to readjustment in the event of the expiration, termination or redemption of such rights.

      In the event of:

• any reclassification of PPL Corporation common stock;

• a consolidation, merger or combination involving PPL Corporation; or

• a sale or conveyance to another person or entity of all or substantially all of PPL Corporation’s property and assets;

in which holders of PPL Corporation common stock would be entitled to receive stock, other securities, other property, assets or cash for their common stock, upon conversion of your notes you will be entitled to receive the same type of consideration which you would have been entitled to receive if you had converted the notes into PPL Corporation common stock immediately prior to any of these events.

      You may in certain situations be deemed to have received a distribution subject to United States federal income tax as a dividend in the event of any taxable distribution to holders of common stock or in certain other situations requiring a conversion rate adjustment. See “Certain United States Federal Income Tax Considerations.”

      We may, from time to time, increase the conversion rate if our board of directors has made a determination that this increase would be in our best interests. Any such determination by our board will be conclusive. In

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addition, we may increase the conversion rate if our board of directors deems it advisable to avoid or diminish any income tax to holders of PPL Corporation common stock resulting from any stock or rights distribution. See “Certain United States Federal Income Tax Considerations.”

      We will not be required to make an adjustment in the conversion rate unless the adjustment would require a change of at least 1% in the conversion rate. However, we will carry forward any adjustments that are less than 1% of the conversion rate. Except as described above in this section, we will not adjust the conversion rate for any issuance of PPL Corporation common stock or convertible or exchangeable securities or rights to purchase PPL Corporation common stock or convertible or exchangeable securities.

Optional Redemption by PPL Energy Supply

      Beginning May 20, 2008, we may redeem the notes in whole or in part at a redemption price of 100% of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date. If the redemption date is an interest payment date, interest shall be paid to the record holder on the relevant record date. We are required to give notice of redemption by mail to holders not more than 60 but not less than 30 days prior to the redemption date.

      If less than all of the outstanding notes are to be redeemed, the trustee will select the notes to be redeemed in principal amounts of $1,000 or multiples of $1,000 by lot, pro rata or by another method the trustee considers fair and appropriate. If a portion of your notes is selected for partial redemption and you convert a portion of your notes, the converted portion will be deemed to be of the portion selected for redemption.

      We may not redeem the notes if we have failed to pay any interest on the notes and such failure to pay is continuing.

Purchase at Option of the Holder

      You have the right to require us to purchase the notes on May 15, 2008, May 15, 2013 and May 15, 2018. We will be required to purchase any outstanding note for which you deliver a written purchase notice to the paying agent. This notice must be delivered during the period beginning at any time from the opening of business on the date that is 20 business days prior to the purchase date until the close of business on the purchase date. If a purchase notice is given and withdrawn during that period, we will not be obligated to purchase the notes listed in the notice. Our purchase obligation will be subject to certain additional conditions.

      The purchase price payable for a note will be equal to 100% of the principal amount, plus accrued and unpaid interest to, but excluding, the purchase date. We may, at our option, elect to pay the entire purchase price in cash or shares of PPL Corporation common stock. For a discussion of the tax treatment of note holders receiving cash or shares of PPL Corporation common stock, see “Certain United States Federal Income Tax Considerations.”

      If we elect to pay the purchase price in shares of PPL Corporation common stock, the number of shares to be delivered in exchange for the purchase price to be paid in PPL Corporation common stock will be equal to the purchase price divided by the market price (as defined below) of PPL Corporation common stock. We will not, however, deliver fractional shares in purchases using shares of PPL Corporation common stock as consideration. Note holders who would otherwise be entitled to receive fractional shares will instead receive cash in an amount equal to the market price of a share of PPL Corporation common stock multiplied by such fraction.

      Your right to require us to purchase notes is exercisable by delivering a written purchase notice to the paying agent within 20 business days of the purchase date. The paying agent initially will be the trustee.

      The purchase notice must state:

      (1) if certificated notes have been issued, the note certificate numbers (or, if your notes are not certificated, your purchase notice must comply with appropriate DTC procedures);

      (2) the portion of the principal amount of notes to be purchased, which must be in $1,000 multiples;

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      (3) that the notes are to be purchased by us pursuant to the applicable provisions of the notes and the indenture; and

      (4) your election, in the event that we decide to pay all of the purchase price in shares of PPL Corporation common stock but prove unable to satisfy the conditions for common stock payment and ultimately have to pay cash, to:

• withdraw your purchase notice with respect to all the notes listed therein; or

• receive cash for the entire purchase price for all the notes listed in your purchase notice.

      If you fail to indicate your election under item (4) above, you will be deemed to have elected to receive cash for the entire purchase price for all the notes listed in your purchase notice.

      You may withdraw any written purchase notice by delivering a written notice of withdrawal to the paying agent prior to the close of business of the purchase date. The withdrawal notice must state:

• the principal amount of the withdrawn notes;

• if certificated notes have been issued, the certificate numbers of the withdrawn notes (or, if your notes are not certificated, your withdrawal notice must comply with appropriate DTC procedures); and

• the principal amount, if any, which remains subject to the purchase notice.

      We must give notice of an upcoming purchase date to all note holders not less than 20 business days prior to the purchase date at their addresses shown in the register of the registrar. We will also give notice to beneficial owners as required by applicable law. This notice will state, among other things:

• whether we will pay the purchase price of the notes in cash or shares of PPL Corporation common stock;

• if we elect to pay the purchase price in shares of PPL Corporation common stock, the method by which we are required to calculate “market price” of the common stock; and

• the procedures that holders must follow to require us to purchase their notes.

      The “market price” means the average sale price of PPL Corporation common stock for the five trading days ending on the third business day prior to the applicable purchase date (assuming the third business day prior to the applicable purchase date is a trading day, or if not, the five trading days ending on the last trading day prior to the third business day), appropriately adjusted to take into account the occurrence of certain events that would result in an adjustment of the conversion rate with respect to PPL Corporation common stock.

      The “sale price” of PPL Corporation common stock on any date means the closing sale price per share of PPL Corporation common stock on that date (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) as reported on the Nasdaq’s National Market or, if PPL Corporation common stock is listed on a United States national or regional securities exchange, as reported in composite transactions for the principal United States securities exchange on which PPL Corporation common stock is traded.

      Because the market price of PPL Corporation common stock will be determined prior to the applicable purchase date, note holders bear the market risk that PPL Corporation common stock will decline in value between the date the market price is calculated and the purchase date. We may pay the purchase price in shares of PPL Corporation common stock only if PPL Corporation common stock is listed on a United States national securities exchange or quoted in an inter-dealer quotation system of any registered United States national securities association.

      Upon determination of the actual number of shares of PPL Corporation common stock to be issued in accordance with the foregoing provisions, if required, we will notify the securities exchanges or quotation systems on which PPL Corporation common stock is then listed or quoted and disseminate the number of shares to be issued on our website or through another public medium.

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      Our right to purchase your notes with shares of PPL Corporation common stock is subject to various conditions, including:

• registration of the shares of PPL Corporation common stock to be issued upon purchase under the Securities Act and the Exchange Act, if required; and

• qualification or registration of the shares of PPL Corporation common stock to be issued upon purchase under applicable state securities laws, if necessary, or the availability of an exemption therefrom.

      If these conditions are not satisfied by a purchase date, we will pay the purchase price of the notes to be purchased in cash. We may not change the form of consideration to be paid for the notes once we have given the note holders the required notice, except as described in the preceding sentence.

      Payment of the purchase price for a note for which a purchase notice has been delivered and not withdrawn is conditioned upon book-entry transfer or delivery of the note, together with necessary endorsements, to the paying agent at its office in the Borough of Manhattan, The City of New York, or any other office of the paying agent, at any time after delivery of the purchase notice. Payment of the purchase price for the note will be made promptly following the later of the purchase date and the time of book-entry transfer or delivery of the note. If the paying agent holds money or securities sufficient to pay the purchase price of the note on the business day following the purchase date, then, on and after the date:

• the note will cease to be outstanding;

• interest will cease to accrue; and

• all other rights of the holder will terminate.

      This will be the case whether or not book-entry transfer of the note has been made or the note has been delivered to the paying agent, and all other rights of the note holder will terminate, other than the right to receive the purchase price upon delivery of the note.

      Our ability to purchase notes with cash may be limited by the terms of our then-existing borrowing agreements. Even though we become obligated to purchase any outstanding note on a purchase date, we may not have sufficient funds to pay the purchase price on that purchase date. If this were to occur, we could be required to issue shares of PPL Corporation common stock to pay the purchase price at valuations based on then prevailing market prices for all notes tendered by their holders.

      We will comply with the provisions of Rule 13e-4 and any other tender offer rules under the Exchange Act that may be applicable at the time of the tender offer. We will file a Schedule TO or any other schedule required in connection with any offer by us to purchase the notes.

Purchase at Option of the Holder Upon a Fundamental Change

      If a fundamental change of PPL Corporation occurs at any time prior to the maturity of the notes, you may require PPL Energy Supply to purchase your notes, in whole or in part, on a purchase date that is 30 days after the date of our notice of the fundamental change. The notes will be purchased in integral multiples of $1,000 principal amount.

      PPL Energy Supply will purchase the notes at a price equal to 100% of the principal amount to be purchased, plus accrued and unpaid interest to, but excluding, the purchase date. If the purchase date is an interest payment date, PPL Energy Supply will pay interest to the record holder on the relevant record date.

      PPL Energy Supply will mail to all record holders a notice of a fundamental change within 10 days after it has occurred. PPL Energy Supply is also required to deliver to the trustee a copy of the fundamental change notice. If you elect to have your notes purchased, you must deliver to PPL Energy Supply or its designated agent, on or before the 30th day after the date of the fundamental change notice, your purchase notice and any notes to be purchased, duly endorsed for transfer. PPL Energy Supply will promptly pay the purchase price for notes surrendered for purchase following the purchase date.

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      A “fundamental change” is any transaction or event (whether by means of an exchange offer, liquidation, tender offer, consolidation, merger, combination, reclassification, recapitalization or otherwise) in connection with which all or substantially all of PPL Corporation common stock is exchanged for, converted into, acquired for or constitutes solely the right to receive, consideration which is not all or substantially all common stock (including American Depositary Receipts) that:

• is listed on, or immediately after the transaction or event will be listed on, a United States national securities exchange, or

• is approved, or immediately after the transaction or event will be approved, for quotation on the NASDAQ National Market or any similar United States system of automated dissemination of quotations of securities prices.

      We will comply with any applicable provisions of Rule 13e-4 and any other tender offer rules under the Exchange Act in the event of a fundamental change.

      These fundamental change purchase rights could discourage a potential acquirer. However, this fundamental change purchase feature is not the result of management’s knowledge of any specific effort to obtain control of PPL Corporation by means of a merger, tender offer or solicitation, or part of a plan by management to adopt a series of anti-takeover provisions. The term “fundamental change” is limited to specified transactions and may not include other events that might adversely affect our financial condition or business operations. PPL Energy Supply’s obligation to offer to purchase the notes upon a fundamental change would not necessarily afford you protection in the event of a highly leveraged transaction, reorganization, merger or similar transaction involving PPL Corporation.

      PPL Energy Supply may be unable to purchase the notes in the event of a fundamental change. If a fundamental change were to occur, PPL Energy Supply may not have enough funds to pay the purchase price for all tendered notes. Any future credit agreements or other agreements relating to PPL Energy Supply’s indebtedness may contain provisions prohibiting purchase of the notes under certain circumstances, or expressly prohibit PPL Energy Supply’s purchase of the notes upon a fundamental change or may provide that a fundamental change constitutes an event of default under that agreement. If a fundamental change occurs at a time when PPL Energy Supply is prohibited from purchasing notes, PPL Energy Supply could seek the consent of its lenders to purchase the notes or attempt to refinance this debt. If PPL Energy Supply does not obtain consent, PPL Energy Supply would not be permitted to purchase the notes. Failure to purchase tendered notes would constitute an event of default under the indenture, which might constitute a default under the terms of PPL Energy Supply’s other indebtedness.

Merger and Sale of Assets by PPL Energy Supply and PPL Corporation

      The indenture provides that neither PPL Energy Supply nor PPL Corporation may consolidate with or merge with or into any other person or convey, transfer or lease its properties and assets substantially as an entirety to another person, unless among other items:

• PPL Energy Supply or PPL Corporation, as applicable, is the surviving person, or the resulting, surviving or transferee person, if other than PPL Energy Supply or PPL Corporation, as applicable, is organized and existing under the laws of the United States, any state thereof or the District of Columbia;

• the successor person assumes all of PPL Energy Supply’s or PPL Corporation’s obligations, as applicable, under the notes, or the guarantee thereof, as applicable, and the indenture; and

• PPL Energy Supply or PPL Corporation, as applicable, or such successor person will not be in default under the indenture immediately after the transaction.

      When such a person assumes PPL Energy Supply’s or PPL Corporation’s obligations in such circumstances, subject to certain exceptions, PPL Energy Supply or PPL Corporation, as applicable, shall be discharged from all obligations under the notes, or the guarantee thereof, as applicable, and the indenture.

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Guarantee

      PPL Corporation will fully, unconditionally and irrevocably guarantee to each holder and the trustee (i) the full and prompt payment of principal of and interest on the notes and additional amounts, if any, when and as the same become due and payable, whether at maturity, upon redemption or purchase, by declaration of acceleration or otherwise and (ii) the conversion obligations of PPL Energy Supply under the notes.

      The guarantee will be an unsecured and unsubordinated obligation of PPL Corporation and will rank equally in right of payment with all other existing and future unsecured and unsubordinated indebtedness and obligations of PPL Corporation. The guarantee will effectively rank junior in right of payment to any secured indebtedness of PPL Corporation to the extent of the assets securing such indebtedness and to all indebtedness and other liabilities of its subsidiaries.

Events of Default; Notice and Waiver

      Each of the following will be an event of default under the indenture:

• the default in any payment of interest on the notes within 30 days of the due date;

• the default in any payment of principal on the notes on its due date;

• either PPL Energy Supply or PPL Corporation remains in breach of any of the covenants or warranties in the indenture for 60 days after it receives a written notice of default stating it is 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 notes (with a copy to the trustee); the trustee or such holders can agree to extend the 60-day period and such an agreement to extend will be automatically deemed to occur if the defaulting party is diligently pursuing action to correct the default;

• a matured event of default, as defined in any of PPL Energy Supply’s or PPL Corporation’s instruments under which there may be issued or evidenced any debt of either company that has resulted in the acceleration of such debt, in excess of $40 million or any default in payment of debt in excess of $40 million at final maturity (and after the expiration of any applicable grace or cure periods); provided that the waiver or cure of any such default under any such instrument shall constitute a waiver and cure of the corresponding event of default under the indenture and the rescission and annulment of the consequences thereof shall constitute a rescission and annulment of the corresponding consequences under the indenture;

• we fail to deliver PPL Corporation common stock upon exercise of the conversion right in the notes; or

• PPL Energy Supply or PPL Corporation files for bankruptcy or certain other similar events in bankruptcy, insolvency, receivership or reorganization occur.

Remedies

Acceleration

      If an event of default occurs and is continuing with respect to the notes, then either the trustee or the holders of 25% in principal amount of the outstanding notes may declare the principal amount of all of the notes to be due and payable immediately.

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

• we pay or deposit with the trustee a sum sufficient to pay:

• all overdue interest;

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• the principal which has become due otherwise than by such declaration of acceleration and overdue interest thereon;

• interest on overdue interest to the extent lawful; and

• all amounts due to the trustee under the indenture; and

• 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.

      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 notes occurs and is continuing, the holders of a majority in principal amount of the outstanding notes of that series will have the right to:

• direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or

• exercise any trust or power conferred on the trustee with respect to the notes.

      These rights of holders to make direction are subject to the following limitations:

• the holders’ directions may not conflict with any law or the indenture; and

• 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 not inconsistent with the holders’ direction.

      In addition, the indenture provides that no holder of any notes 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:

• that holder has previously given the trustee written notice of a continuing event of default;

• the holders of 25% in aggregate principal amount of the outstanding notes, 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

• 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 holders of a majority in aggregate principal amount of outstanding notes.

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.

      However, each holder has an absolute and unconditional right to receive payment when due and to bring a suit to enforce that right.

Notice of Default

      The trustee is required to give the holders of the notes 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 under the fourth bullet under “—Events of Default; Notice and Waiver” no such notice shall be given to such holders until at least 45 days after the occurrence thereof. 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 our compliance with the conditions and covenants in the indenture.

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Waiver of Default and of Compliance

      The holders of a majority in aggregate principal amount of the outstanding notes may waive, on behalf of the holders of all notes, any past default under the indenture, except a default in the payment of principal 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 note affected.

      Compliance with certain covenants in the indenture or otherwise provided with respect to the notes may be waived by the holders of a majority in aggregate principal amount of the affected notes, considered as one class.

Modification of Indenture

Without Holder Consent

      Without the consent of any holders of the notes, we and the trustee may enter into one or more supplemental indentures for any of the following purposes:

• to evidence the succession of another entity to us;

• to add one or more covenants or other provisions for the benefit of the holders of the notes, or to surrender any right or power conferred upon us;

• to add any additional events of default for the notes;

• 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;

• to provide security for the notes;

• to provide for the issuance of bearer notes;

• to evidence and provide for the acceptance of appointment of a separate or successor trustee;

• to provide for the procedures required to permit the utilization of a noncertificated system of registration for the notes;

• to change conversion rights to the extent described under “Conversion of Notes—Conversion Rate Adjustments” above in connection with a reclassification of PPL Corporation common stock, a consolidation, merger or combination involving PPL Corporation or a sale or conveyance to another person or entity of all or substantially all of PPL Corporation’s property and assets;

• to change any place or places where:

• we may pay principal and interest,

• notes may be surrendered for transfer or exchange, and

• notices and demands to or upon us may be served; or

• 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 we and the trustee may, without the consent of any holders, enter into one or more supplemental indentures to effect or evidence such amendment.

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With Holder Consent

      Except as provided above, the consent of the holders of at least a majority in aggregate principal amount of the notes is generally required for the purpose of adding to, changing or eliminating any of the provisions of the indenture pursuant to a supplemental indenture.

      However, no amendment or modification may, without the consent of the Holder of each outstanding note directly affected thereby:

• change the stated maturity of the principal or interest on the notes (other than pursuant to the terms thereof), or reduce the principal amount or interest payable or change the currency in which the notes are payable, or impair the right to bring suit to enforce any payment;

• 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;

• modify certain of the provisions in the indenture relating to conversion rights; or

• modify certain of the provisions in the indenture relating to supplemental indentures and waivers of certain covenants and past defaults.

Satisfaction and Discharge

      The indenture will be deemed satisfied and discharged when no notes remain outstanding and when we have paid all other sums payable by us under the indenture.

      All moneys we pay to the trustee or any paying agent on the notes which remain unclaimed at the end of two years after payments have become due may be paid to or upon our order. Thereafter, the holder of such note may look only to us for payment.

Form, Denomination and Registration

      The notes were issued:

• in fully registered form;

• without interest coupons; and

• in denominations of $1,000 principal amount and integral multiples of $1,000.

Global Note, Book-Entry Form

      Notes sold in this offering are evidenced by one or more global notes. We have deposited the global note or notes with the trustee, as custodian for DTC, and registered the global notes in the name of Cede & Co. as DTC’s nominee. Except as set forth below, a global note may be transferred, in whole or in part, only to another nominee of DTC or to a successor of DTC or its nominee.

      Purchasers may hold their interests in a global note directly through DTC if such holder is a participant in DTC, or indirectly through organizations that are participants in DTC, called “participants.” Transfers between participants will be effected in the ordinary way in accordance with DTC rules and will be settled in clearing house funds. The laws of some states require that certain persons take physical delivery of securities in definitive form. As a result, the ability to transfer beneficial interests in the global note to such persons may be limited.

      Purchasers who are not participants may beneficially own interests in a global note held by DTC only through participants, or certain banks, brokers, dealers, trust companies and other parties that clear through or maintain a custodial relationship with a participant, either directly or indirectly, called “indirect participants.” So long as Cede & Co., as the nominee of DTC, is the registered owner of a global note, Cede & Co. for all purposes will be considered the sole holder of such global note. Except as provided below, owners of beneficial interests in a global note:

• are not entitled to have certificates registered in their names;

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• will not receive physical delivery of certificates in definitive registered form; and

• will not be considered holders of the global note.

      We will pay interest on and the redemption price of a global note to Cede & Co., as the registered owner of the global note, by wire transfer of immediately available funds on each interest payment date or the redemption or purchase date, as the case may be. Neither we, the trustee nor any paying agent will be responsible or liable:

• for 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 the beneficial ownership interests.

      We have been informed that DTC’s practice is to credit participants’ accounts on that payment date with payments in amounts proportionate to their respective beneficial interests in the principal amount represented by a global note as shown in the records of DTC, unless DTC has reason to believe that it will not receive payment on that payment date. Payments by participants to owners of beneficial interests in the principal amount represented by a global note held through participants will be the responsibility of the participants, as is now the case with securities held for the accounts of customers registered in “street name.”

      Because DTC can only act on behalf of participants, who in turn act on behalf of indirect participants, the ability of a person having a beneficial interest in the principal amount represented by the global note to pledge such interest to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate evidencing its interest.

      Neither we, the trustee, registrar, paying agent nor conversion agent will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations. DTC has advised us that it will take any action permitted to be taken by a holder of notes, including the presentation of notes for exchange, only at the direction of one or more participants to whose account with DTC interests in the global note are credited, and only in respect of the principal amount of the notes represented by the global note as to which the participant or participants has or have given such direction.

      DTC has advised us that it is:

• a limited purpose trust company organized under the laws of the State of New York, and a member of the Federal Reserve System;

• a “clearing corporation” within the meaning of the Uniform Commercial Code; and

• a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act.

      DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes to the accounts of its participants. Participants include securities brokers, dealers, banks, trust companies and clearing corporations and other organizations. Some of the participants or their representatives, together with other entities, own DTC. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly.

      DTC has agreed to the foregoing procedures to facilitate transfers of interests in a global note among participants. However, DTC is under no obligation to perform or continue to perform these procedures, and may discontinue these procedures at any time. If (i) DTC is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by us within 90 days or (ii) we, at our option, elect to terminate use of the book-entry system through DTC, we will issue notes in certificated form in exchange for global notes.

Resignation and Removal of the Trustee; Deemed Resignation

      The trustee may resign at any time by giving written notice to us.

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      The trustee may also be removed by act of the Holders of a majority in principal amount of the then outstanding notes.

      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.

Information Concerning the Trustee

      We have appointed JPMorgan Chase Bank, the trustee under the indenture, as paying agent, conversion agent, note registrar and custodian for the notes. JPMorgan Chase Bank and its affiliates maintain banking relationships with us.

      The indenture contains certain limitations on the rights of the trustee, if it or any of its affiliates is then our creditor, to obtain payment of claims in certain cases or to realize on certain property received on any claim as security or otherwise. The trustee and its affiliates will be permitted to engage in other transactions with us. However, if the trustee or any affiliate continues to have any conflicting interest and a default occurs with respect to the notes, the trustee must eliminate such conflict or resign.

Governing Law

      The notes, the guarantee and the indenture will be governed by, and construed in accordance with, the laws of the State of New York.

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REGISTRATION RIGHTS

      PPL Energy Supply and PPL Corporation entered into a registration rights agreement with the initial purchasers pursuant to which we have, at our expense, for the benefit of the holders, filed with the SEC a shelf registration statement, of which this prospectus is a part, covering resale of the notes and the shares of PPL Corporation common stock issuable upon conversion of the notes. We will use reasonable best efforts to cause the shelf registration statement to become effective within 180 days of the date of original issuance of the notes, and to keep the shelf registration statement effective until the earlier of (i) the sale pursuant to Rule 144 under the Securities Act or the shelf registration statement of all the securities registered thereunder, and (ii) the expiration of the holding period applicable to such securities held by persons that are not affiliates of ours under Rule 144(k) under the Securities Act or any successor provision, subject to permitted exceptions.

      We may suspend the use of the prospectus under certain circumstances relating to pending corporate developments, public filings with the SEC and similar events. Any suspension period shall not exceed 30 days in any 3-month period (or 60 days in any 3-month period if a second notice is given) or 90 days in any 12-month period.

      We will pay predetermined additional amounts as described herein to holders of transfer restricted securities, if a shelf registration statement is not timely filed or declared effective or if the prospectus is unavailable for periods in excess of those permitted above. Such additional amounts shall accrue until such failure to file or become effective or unavailability is cured:

•   on the notes at an annual rate equal to 0.25% of the aggregate principal amount of the notes outstanding during the first 90-day period following such registration default, increasing by an additional 0.25% per annum during each subsequent 90-day period, up to a maximum of 0.50%, until the applicable registration default is cured; and

•   on the common stock that has been issued on conversion of the notes, at an annual rate per share equal to 0.25% of an amount equal to $1,000 divided by the conversion rate in effect on the first day of any such period during the first 90-day period following such registration default, increasing by an additional 0.25% per annum during each subsequent 90-day period, up to a maximum of 0.50%, until the applicable registration default is cured.

      So long as the failure to file or become effective or unavailability continues, we will pay additional amounts in cash on each interest payment date for the notes to the holder of record on the record date immediately preceding the applicable interest payment date. When such registration default is cured, accrued and unpaid additional amounts will be paid in cash to the record holder as of the date of such cure.

      A holder who sells notes or shares of PPL Corporation common stock issued upon conversion of the notes pursuant to the shelf registration statement generally will be required to:

•   be named as a selling securityholder in the related prospectus,

•   deliver a prospectus to purchasers, and

•   be bound by certain provisions of the registration rights agreement that are applicable to such holder, including certain indemnification provisions, and will be subject to certain civil liability provisions under the Securities Act.

      Under the registration rights agreement, we will:

•   provide copies of such prospectus to each holder that has notified us of its acquisitions of notes or shares of PPL Corporation common stock issued upon conversion of the notes,

•   notify each such holder when the shelf registration statement has become effective, and

•   take certain other actions as are required to permit, subject to the foregoing, unrestricted resales of the notes and the shares of PPL Corporation common stock issued upon conversion of the notes.

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      We have agreed in the registration rights agreement to give notice to holders of the filing and effectiveness of the shelf registration statement. Holders are required to complete and deliver a questionnaire at least 10 business days prior to the effectiveness of the shelf registration statement in order to be named as a selling securityholder in the related prospectus at the time of effectiveness. Upon receipt of a complete questionnaire after that time, together with such other information as we may reasonably request from a holder, we will, within 10 business days, file such amendments to the shelf registration statement or supplements to a related prospectus as are necessary to permit such holder to deliver such prospectus to purchasers of notes or shares of PPL Corporation common stock issuable upon conversion of the notes, subject to our right to suspend the use of the prospectus as described above. We will pay the predetermined additional amounts described above to the holder if we fail to make the filing in the time required or, if such filing is a post-effective amendment to the shelf registration statement required to be declared effective under the Securities Act, if such amendment is not declared effective within 30 days of the filing. Any holder that does not complete and deliver a questionnaire or provide such other information will not be named as a selling securityholder in the prospectus and therefore will not be permitted to sell notes or shares of PPL Corporation common stock issuable upon conversion of the notes pursuant to the shelf registration statement.

      In no event may the method of distribution of the notes or shares of PPL Corporation common stock take the form of an underwritten offering without our prior agreement.

      The summary herein of certain provisions of the registration rights agreement is subject to, and is qualified in its entirety by reference to, all the provisions of the registration rights agreement, a copy of which is available from us upon request.

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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, or BCL, and the Restated Articles of Incorporation and Bylaws 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 as set forth in “Where You Can Find More Information,” 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 $0.01 per share and 10,000,000 shares of preferred stock, par value $0.01 per share.

Common Stock

      As of May 31, 2003, 176,603,122 shares of common stock were issued and outstanding and, as of June 2, 2003, the outstanding shares of common stock were held by 83,669 registered holders. 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 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. 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.

      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 the holders of common stock or a majority vote of disinterested directors to approve certain business combinations and other major transactions involving PPL Corporation. See “—Possible Anti-Takeover Effects of the Articles and Bylaws” below for additional information.

      Liquidation Rights. After satisfaction of the preferential liquidation rights of any preferred stock, the holders of 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;

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      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;

      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.

      Unless otherwise provided when a series of preferred stock is created, 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. See “—Possible Anti-Takeover Effects of the Articles and Bylaws” below for additional information.

Possible Anti-Takeover Effects of the Articles and Bylaws

      Certain provisions of the Articles and Bylaws may have the effect of discouraging unilateral tender offers or other attempts to takeover and acquire the business of PPL Corporation. As permitted by the BCL, our Articles and Bylaws:

      a)  do not provide for cumulative voting in the election of directors,

      b)  restrict shareholders from bringing any business before a special meeting of shareowners,

      c)  require prior written notice of any business to be brought by a shareowner before the annual meeting and

      d)  require advance notice for shareowner nominations for directors.

In addition, the Articles and Bylaws authorize the board of directors to create and issue a new class or series of preferred stock, provide for a classified board of directors, and include certain fair price provisions and super-majority voting requirements relating to business combinations, removal of directors and amendments to the Articles and Bylaws. These provisions in our Articles and Bylaws may limit the ability of individuals to bring matters before shareowner meetings, change the composition of the board of directors and pursue a merger, takeover, business combination or tender offer involving PPL Corporation, which, under certain circumstances, could encourage a potentially interested purchaser to negotiate with the board of directors rather than pursue a non-negotiated takeover attempt, including one which shareowners might favor, and could reduce the market value of our common stock.

Listing

      The outstanding shares of PPL Corporation common stock are, and the shares of PPL Corporation common stock issuable upon conversion of the notes offered hereby will be, listed on the New York and Philadelphia Stock Exchanges.

Transfer Agents and Registrars

      The Transfer Agents and Registrars for the PPL Corporation common stock are PPL Services Corporation and Wells Fargo Bank Minnesota, N.A., St. Paul, Minnesota.

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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

      The following summary discusses the material U.S. federal income tax considerations relating to the purchase, ownership and disposition of the notes and the shares of PPL Corporation common stock into which the notes may be converted. Except where noted, this summary deals only with notes and shares of PPL Corporation common stock held as capital assets. Additionally, this summary does not deal with special situations. For example, this summary does not address:

• tax consequences to holders who may be subject to special tax treatment, such as dealers in securities or currencies, financial institutions, tax-exempt entities, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings or insurance companies;

• tax consequences to persons holding notes or shares of PPL Corporation common stock as part of a hedging, integrated, constructive sale, or conversion transaction or a straddle;

• tax consequences to holders of notes or shares of PPL Corporation common stock whose “functional currency” is not the U.S. dollar;

• alternative minimum tax consequences, if any; or

• any state, local or foreign tax consequences.

      The discussion below is based upon the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), and regulations, rulings and judicial decisions as of the date hereof. Those authorities may be changed, perhaps retroactively, so as to result in U.S. federal income tax consequences different from those discussed below.

      If a partnership holds our notes or shares of PPL Corporation common stock, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our notes or shares of PPL Corporation common stock, you should consult your tax advisor.

      If you are considering the purchase of notes, you should consult your own tax advisors concerning the U.S. federal income and estate tax consequences to you and any consequences arising under the laws of any state, local, foreign or other taxing jurisdiction.

Consequences to U.S. Holders

      The following is a summary of the U.S. federal tax consequences that will apply to you if you are a U.S. holder of notes or shares of PPL Corporation common stock. Certain consequences to “non-U.S. holders” of notes and shares of PPL Corporation common stock are described under “—Consequences to Non-U.S. Holders” below. “U.S. holder” means a beneficial owner of a note that is:

• a citizen or resident of the United States;

• a corporation or partnership created or organized in or under the laws of the United States or any political subdivision of the United States;

• an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

• a trust if (1) it is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust, or (2) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

Registration of Notes

      The registration of the notes will not constitute a taxable event to holders. Consequently, (i) no gain or loss will be recognized by a holder upon such registration, (ii) the holding period of the registered note will include the holding period of the unregistered note and (iii) the basis of the registered note will be the same as the basis of the unregistered note immediately before the registration of such note.

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Payments of Interest on the Notes

      Stated interest on the notes will generally be taxable to you as ordinary income at the time it is paid or accrues in accordance with your method of accounting for tax purposes.

Market Discount

      If you purchase a note for an amount that is less than its stated redemption price at maturity, the amount of the difference will be treated as “market discount” for United States federal income tax purposes, unless the difference is less than a specified de minimis amount. Under the market discount rules, you will be required to treat any payment, other than qualified stated interest, on, or any gain on the sale, exchange, retirement or other disposition of, a note as ordinary income to the extent of the market discount that you have not previously included in income and you are treated as having accrued on the note at the time of its payment or disposition.

      In addition, you may be required to defer, until the maturity of the note or its earlier disposition in a taxable transaction, the deduction of all or a portion of the interest expense on any indebtedness attributable to the note. In certain circumstances, you may elect, on a bond-by-bond basis, to deduct the deferred interest expense in a tax year prior to the year of disposition. You should consult your own tax advisor before making this election.

      Any market discount will be considered to accrue ratably during the period from the date of acquisition to the maturity date of the note, unless you elect to accrue on a constant interest method. Your election to accrue market discount on a constant interest method is to be made for the taxable year in which you acquired the note, applies only to that note, and may not be revoked. You may elect to include market discount in income currently as it accrues, on either a ratable or constant interest method, in which case the rule described above regarding deferral of interest deductions will not apply. Your election to include market discount in income currently, once made, applies to all market discount obligations acquired by you on or after the first taxable year to which your election applies and may not be revoked without the consent of the Internal Revenue Service (“IRS”). You should consult your own tax advisor before making either election described in this paragraph.

Amortizable Bond Premium

      If you purchase a note for an amount in excess of the sum of all amounts payable on the note after the purchase date other than qualified stated interest, you will be considered to have purchased the note at a “premium.” You generally may elect to amortize the premium over the remaining term of the note on a constant yield method as an offset to interest when includible in income under your regular accounting method. If you do not elect to amortize bond premium, that premium will decrease the gain or increase the loss you would otherwise recognize on disposition of the note. Your election to amortize premium on a constant yield method will also apply to all debt obligations held or subsequently acquired by you on or after the first day of the first taxable year to which the election applies. You may not revoke the election without the consent of the IRS. You should consult your own tax advisor before making this election.

Constructive Distributions

      The conversion rate of the notes will be adjusted in certain circumstances. Under Section 305(c) of the Code, adjustments (or failures to make adjustments) that have the effect of increasing your proportionate interest in PPL Corporation’s assets or earnings may in some circumstances result in a deemed distribution to you. Any deemed distributions will be taxable as a dividend, return of capital or capital gain in accordance with the earnings and profits rules under the Code.

Sale, Exchange, Purchase and Redemption of Notes

      You will generally recognize gain or loss upon the sale, exchange, purchase, redemption or other disposition of a note equal to the difference between the amount realized upon the sale, exchange, purchase, redemption or other disposition (less an amount equal to any accrued but unpaid interest not previously included in income, which will be taxable as interest income) and your adjusted tax basis in the note. The amount realized includes

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the fair market value of any PPL Corporation common stock received. Your adjusted tax basis in a note will generally be equal to the amount you paid for the note increased by market discount that you previously included in income and reduced by any amortized premium. Except as described above, with respect to market discount, any gain or loss recognized on a disposition of the note will be capital gain or loss. Your holding period for any shares of PPL Corporation common stock received will begin on the day you acquire the shares. If you are an individual and have held the note for more than one year, such capital gain will be subject to reduced rates of taxation. The deductibility of net capital losses by individuals and corporations is subject to limitations.

Exchange of Notes for Shares of PPL Corporation Common Stock or Cash

      The receipt of shares of PPL Corporation common stock or cash upon conversion of the notes will generally be treated as a sale or exchange of the notes (see “—Sale, Exchange, Purchase and Redemption of Notes”). Accordingly, you will generally recognize gain or loss on the exchange of your notes into shares of PPL Corporation common stock or cash. The amount of gain or loss will be equal to the difference between your amount realized and your adjusted tax basis in the note. Your amount realized will include either (a) the fair market value of PPL Corporation common stock received plus any cash received in lieu of a fractional share or (b) the cash you receive. Your amount realized will not include an amount equal to any accrued but unpaid interest not previously included in income, which will be taxable as interest income. The tax basis of any shares received upon an exchange will equal the fair market value of such shares received at the time of the exchange. Your holding period for the shares of PPL Corporation common stock will begin on the day you acquire the shares.

      You should contact your tax advisors concerning the tax treatment on the ownership of shares of PPL Corporation common stock.

Consequences to Non-U.S. Holders

      The following is a summary of the U.S. federal tax consequences that will apply to you if you are a non-U.S. holder of notes or shares of PPL Corporation common stock. The term “non-U.S. holder” means a beneficial owner of a note that is not a U.S. holder.

      Special rules may apply to certain non-U.S. holders such as “controlled foreign corporations,” “passive foreign investment companies” and “foreign personal holding companies.” Such entities should consult their own tax advisors to determine the U.S. federal, state, local and other tax consequences that may be relevant to them.

Payment of Interest

      The 30% U.S. federal withholding tax will not apply to any payment to you of principal or interest on a note owned by a non-U.S. holder under the “portfolio interest rule,” provided that:

• interest paid on the note is not effectively connected with your conduct of a trade or business in the United States;

• you do not actually or constructively own 10% or more of the total combined voting power of all classes of our stock that are entitled to vote within the meaning of section 871(h)(3) of the Code;

• you are not a controlled foreign corporation that is related to us (actually or constructively) through stock ownership;

• you are not a bank whose receipt of interest on a note is described in section 881(c)(3)(A) of the Code; and

• (a) you provide your name and address, and certify, under penalties of perjury, that you are not a U.S. person (which certification may be made on an IRS W-8BEN (or successor form)) or (b) you hold your notes through certain foreign intermediaries or certain foreign partnerships, and you satisfy the certification requirements of applicable Treasury regulations. Special rules apply to non-U.S. holders that are pass-through entities rather than corporations or individuals.

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      If you cannot satisfy the requirements described above, payments of interest will be subject to the 30% U.S. federal withholding tax, unless you provide us with a properly executed (1) IRS Form W-8BEN (or successor form) claiming an exemption from or reduction in withholding under the benefit of an applicable income tax treaty or (2) IRS Form W-8ECI (or successor form) stating that interest paid on the note is not subject to withholding tax because it is effectively connected with your conduct of a trade or business in the United States.

      If you are engaged in a trade or business in the United States and interest on a note is effectively connected with the conduct of that trade or business, you will be subject to U.S. federal income tax on that interest on a net income basis (although exempt from the 30% withholding tax, provided you comply with certain certification and disclosure requirements discussed in the fifth bullet point above) in the same manner as if you were a United States person as defined under the Code. In addition, if you are a foreign corporation, you may be subject to a branch profits tax equal to 30% (or lower applicable income tax treaty rate) of your earnings and profits for the taxable year, subject to adjustments, that are effectively connected with your conduct of a trade or business in the United States. For this purpose, interest will be included in the earnings and profits of such foreign corporation.

     Dividends

      Any dividends paid to you with respect to the shares of PPL Corporation common stock (and any deemed dividends resulting from certain adjustments, or failure to make adjustments, to the number of shares of common stock to be issued on conversion generally, see “—Constructive Distributions” above) will be subject to withholding tax at a 30% rate or such lower rate as specified by an applicable income tax treaty. However, dividends that are effectively connected with the conduct of a trade or business within the United States and, where an applicable tax treaty so provides, are attributable to a U.S. permanent establishment, are not subject to the withholding tax, but instead are subject to U.S. federal income tax on a net income basis at applicable graduated individual or corporate rates. Certain certification and disclosure requirements must be complied with in order for effectively connected income to be exempt from withholding. Any such effectively connected dividends received by a foreign corporation may, under certain circumstances, be subject to an additional branch profits tax at a 30% rate or such lower rate as specified by an applicable income tax treaty.

      A non-U.S. holder of shares of PPL Corporation common stock who wishes to claim the benefit of an applicable treaty rate is required to satisfy applicable certification and other requirements. If you are eligible for a reduced rate of U.S. withholding tax pursuant to an income tax treaty, you may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund with the Internal Revenue Service.

      As more fully described under “Registration Rights,” upon the occurrence of certain enumerated events we may be required to pay additional amounts to you. Payments of such additional amounts may be subject to federal withholding.

Sale, Exchange, Conversion, Purchase, Redemption or Other Disposition of Notes or Shares of PPL Corporation

      Any gain realized upon the sale, exchange, conversion, purchase, redemption or other disposition of a note (other than gain representing accrued but unpaid interest, which will be treated as such) or share of PPL Corporation common stock generally will not be subject to U.S. federal income tax unless:

• that gain is effectively connected with the conduct of a trade or business in the United States by you,

• you are an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other conditions are met, or

• we are or have been a “U.S. real property holding corporation” for U.S. federal income tax purposes.

      An individual non-U.S. holder described in the first bullet point above will be subject to U.S. federal income tax on the net gain derived from the sale. An individual non-U.S. holder described in the second bullet point above will be subject to a flat 30% U.S. federal income tax on the gain derived from the sale, which may be offset by U.S. source capital losses, even though the holder is not considered a resident of the United States. A

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non-U.S. holder that is a foreign corporation and is described in the first bullet point above will be subject to tax on gain under regular graduated U.S. federal income tax rates and, in addition, may be subject to a branch profits tax at a 30% rate or a lower rate if so specified by an applicable income tax treaty.

      We have not determined whether we are a “U.S. real property holding corporation” for U.S. federal income tax purposes. If we are or become a “U.S. real property holding corporation,” for so long as our common stock is and continues to be regularly traded on an established securities market:

• you will not be subject to U.S. federal income tax on the disposition of your notes if you hold or held (at any time during the shorter of the five-year period preceding the date of disposition or your holding period) less than or equal to (i) 5% of the fair market value of the total outstanding notes (only if the notes are regularly traded) and (ii) 5% of the total outstanding shares of our common stock; and

• you will not be subject to U.S. federal income tax on the disposition of your shares of PPL Corporation common stock if you hold or held (at any time during the shorter of the five-year period preceding the date of disposition or your holding period) less than or equal to 5% of the total outstanding shares of our common stock.

U.S. Federal Estate Tax

      Your estate will not be subject to U.S. federal estate tax on notes beneficially owned by you at the time of your death, provided that any payment to you on the notes would be eligible for exemption from the 30% U.S. federal withholding tax under the “portfolio interest rule” described above under “—Payment of Interest” without regard to the statement requirement described in the last bullet point. However, shares of PPL Corporation common stock held by you at the time of your death will be included in your gross estate for U.S. federal estate tax purposes unless an applicable estate tax treaty provides otherwise.

Information Reporting and Backup Withholding

      Generally, we must report to the IRS and to you the amount of interest and dividends paid to you and the amount of tax, if any, withheld with respect to those payments. Copies of the information returns reporting such interest and dividend payments and any withholding may also be made available to the tax authorities in the country in which you reside under the provisions of an applicable income tax treaty.

      In general, you will not be subject to backup withholding with respect to payments that we make to you provided that we do not have actual knowledge or reason to know that you are a United States person, as defined under the Code, and you have provided the statement described above in the fifth bullet point under “—Consequences to Non-U.S. Holders—Payment of Interest.”

      You will be subject to information reporting and, depending on the circumstances, backup withholding with respect to the proceeds of the sale of a note within the United States or conducted through certain U.S.-related financial intermediaries, unless the payor of the proceeds receives the statement described above and does not have actual knowledge or reason to know that you are a United States person, as defined under the Code, or you otherwise establish an exemption.

      Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your U.S. federal income tax liability provided the required information is furnished to the IRS.

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PLAN OF DISTRIBUTION

      PPL Energy Supply and PPL Corporation are registering the notes and the PPL Corporation common stock issuable upon conversion of the notes covered by this prospectus to permit securityholders to conduct public secondary trading of these securities from time to time after the date of this prospectus. We will not receive any of the proceeds of the sale of the notes and the PPL Corporation common stock issuable upon conversion of the notes offered by this prospectus.

      The selling securityholders and their successors, including their transferees, pledgees or donees or their successors, may sell the notes and the shares of PPL Corporation common stock issuable upon conversion of the notes directly to purchasers or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions or commissions from the selling securityholders or the purchasers. These discounts, concessions or commissions as to any particular underwriter, broker-dealer or agent may be in excess of those customary in the types of transactions involved.

      The notes and the shares of PPL Corporation common stock issuable upon conversion of the notes may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market prices, at varying prices determined at the time of sale or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions:

• on any national securities exchange or U.S. inter-dealer system of a registered national securities association on which the notes or the PPL Corporation common stock may be listed or quoted at the time of sale;

• in the over-the-counter market;

• in transactions otherwise than on these exchanges or systems or in the over-the-counter market;

• through the writing of options, whether the options are listed on an options exchange or otherwise; or

• through the settlement of short sales.

      In connection with the sale of the notes and the shares of PPL Corporation common stock issuable upon conversion of the notes or otherwise, the selling securityholders may enter into hedging transactions with the broker-dealers or other financial institutions, which may in turn engage in short sales of the notes or the PPL Corporation common stock issuable upon conversion of the notes in the course of hedging the positions they assume. The selling securityholders may also sell the notes or the PPL Corporation common stock short and deliver these securities to close out their short positions, or loans or pledge the notes or the shares of PPL Corporation common stock issuable upon conversion of the notes to broker-dealers that in turn may sell these securities.

      The aggregate proceeds to the selling securityholders from the sale of the notes or shares of PPL Corporation common stock issuable upon conversion of the notes offered by them will be the purchase price of the notes or shares of PPL Corporation common stock less discounts and commissions, if any. Each of the selling securityholders reserves the right to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of notes or shares of PPL Corporation common stock to be made directly or through agents.

      To our knowledge, there are currently no plans, arrangements or understandings between any selling securityholders and any underwriter, broker-dealer or agent regarding the sale of the notes and the underlying common stock by the selling securityholders. Selling securityholders may decide not to sell all or a portion of the notes and the PPL Corporation common stock offered by them pursuant to this prospectus or may decide not to sell notes or the PPL Corporation common stock under this prospectus. In addition, any selling securityholders may transfer, devise or give the notes and the PPL Corporation common stock by other means not described in this prospectus. Any notes or PPL Corporation common stock covered by this prospectus that qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule 144A rather than pursuant to this prospectus.

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      PPL Corporation common stock is listed for trading on the New York and Philadelphia Stock Exchanges. We do not intend to list the notes on any national market or exchange. Although the initial purchasers of the notes have advised us that they intend to make a market in the notes, they are not obligated to do so. Therefore, we cannot assure you of the liquidity of the trading market for the notes.

      In order to comply with the securities laws of some states, if applicable, the notes and shares of PPL Corporation common stock issuable upon conversion of the notes may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the notes and the PPL Corporation common stock issuable upon conversion of the notes may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

      The selling securityholders and any underwriters, broker-dealers or agents that participate in the sale of the notes and PPL Corporation common stock issuable upon conversion of the notes may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act. Selling securityholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act. The selling securityholders have acknowledged that they understand their obligations to comply with the provisions of the Exchange Act and the rules thereunder relating to stock manipulation, particularly Regulation M.

      To the extent required, the specific notes or PPL Corporation common stock to be sold, the names of the selling securityholders, the respective purchase prices and public offering prices, the names of any agent, dealer or underwriter, and any applicable commission or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement of which this prospectus is a part.

      Under the registration rights agreement that has been filed as an exhibit to this registration statement, we agreed to use our reasonable best efforts to keep the registration statement of which this prospectus is a part effective until the earlier of:

• the sale pursuant to Rule 144 under the Securities Act or the shelf registration statement of all the securities registered thereunder; and

• the expiration of the holding period applicable to such securities held by persons that are not affiliates of ours under Rule 144(k) under the Securities Act or any successor provision, subject to permitted exceptions.

      We are permitted to prohibit offers and sales of securities pursuant to this prospectus under certain circumstances and subject to certain conditions for a period not to exceed 30 days in any 3-month period (or 60 days in any 3-month period if a second notice is given) or 90 days in any 12-month period. During the time periods when the use of this prospectus is suspended, each selling securityholder has agreed not to sell notes or shares of PPL Corporation common stock issuable upon conversion of the notes. We also agreed to pay additional amounts to certain securityholders of the notes and shares of PPL Corporation common stock issuable upon conversion of the notes if the prospectus is unavailable for periods in excess of those permitted.

      Under the registration rights agreement, we and the selling securityholders will each indemnify the other against certain liabilities, including certain liabilities under the Securities Act, or will be entitled to contribution in connection with these liabilities.

      We have agreed to pay substantially all of the expenses incidental to the registration, offering and sale of the notes and the underlying common stock to the public other than commissions, fees and discounts of underwriters, brokers, dealers and agents.

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VALIDITY OF THE SECURITIES

      Certain legal matters with respect to the validity of the notes and the offering of the notes and the common stock issuable upon conversion will be passed on for us by Thomas D. Salus, Esq., Senior Counsel of PPL Services Corporation. The validity of the notes and the common stock issuable upon conversion will be passed upon for PPL Corporation by Simpson Thacher & Bartlett LLP, New York, New York. In rendering their opinions, Simpson Thacher & Bartlett LLP will rely on the opinion of Mr. Salus as to matters involving the law of the Commonwealth of Pennsylvania.

EXPERTS

      The consolidated financial statements incorporated in this prospectus by reference to the Annual Reports on Form 10-K of PPL Corporation and its subsidiaries and of PPL Energy Supply, LLC and its subsidiaries for the year ended December 31, 2002 have been so incorporated in reliance on the reports of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

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WHERE YOU CAN FIND MORE INFORMATION

Available Information

      PPL Corporation and PPL Energy Supply file reports, proxy statements and other information with the SEC. You may read and obtain copies of this information by mail from the Public Reference Room of the SEC, 450 Fifth Street, N.W., 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.

      PPL Corporation’s Internet website is www.pplweb.com. On the Investor Center page of that website, PPL Corporation provides access to all SEC filings of PPL Corporation registrants free of charge, as soon as reasonably practicable after filing with the SEC. Additionally, PPL Corporation registrants’ filings are available at the SEC’s website (www.sec.gov).

      PPL Corporation’s common stock is listed on the New York Stock Exchange 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 New York Stock Exchange 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’s Internet site at www.pplweb.com 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

      We will “incorporate by reference” information into this prospectus by disclosing important information to you by referring you to another document that is 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 and PPL Energy Supply.

SEC Filings (File Nos. 1-11459 and 333-74794)	Period/Date
Annual Report on Form 10-K	Year ended December 31, 2002
Quarterly Report on Form 10-Q	Quarter ended March 31, 2003
Current Reports on Form 8-K	April 2 and May 16, 2003
PPL Corporation’s Registration Statement on Form 8-B	April 27, 1995

      We are also incorporating by reference additional documents that PPL Energy Supply and PPL Corporation file with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, between the date of this offering memorandum supplement and the termination of the offering of the notes.

      PPL Corporation and PPL Energy Supply 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
          PPL Energy Supply
          Two North Ninth Street
          Allentown, Pennsylvania 18101-1179
          Attention: Investor Services Department
          Telephone: 1-800-345-3085

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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.     Other Expenses of Issuance and Distribution.

Securities and Exchange Commission registration fee		$	32,360
Printing and engraving expenses			40,000
Legal fees and expenses			50,000
Accounting fees and expenses			5,500
Trustee’s fees and expenses			20,000
Miscellaneous			7,140
	Total	$	155,000

      All of the above except the Securities and Exchange Commission registration fee are estimated.

Item 15.     Indemnification of Directors And Officers.

      Section 18-108 of the Delaware Limited Liability Company Act permits a Delaware limited liability company to indemnify and hold harmless any member, manager or other person from and against any and all claims and demands whatsoever, subject only to the standards and restrictions, if any, as may be set forth in the company’s limited liability agreement. PPL Energy Supply’s Limited Liability Company Agreement contains provisions which limit liability to the fullest extent permitted by applicable law.

      Section 6.2 of the Limited Liability Company Agreement of PPL Energy Supply provides, in part, as follows:

      “To the fullest extent permitted by law, the Company shall indemnify and hold harmless each Member, Manager or any officer director, stockholder, partner, employee, representative, member, counsel or agent of any of the foregoing, or any officer, employee, representative, counsel, director, stockholder, partner or agent of the Company or any of its affiliates (each a “Covered Person”) from and against any and all losses, claims, demands, liabilities, expenses, judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative (“Claims”), in which the Covered Person may be involved, or threatened to be involved, as a party or otherwise, by reason of its management of the affairs of the Company or which relates to or arises out of the Company or its property, business or affairs. A Covered Person shall not be entitled to indemnification under this Section 6.2 with respect to (i) any Claim with respect to which such Covered Person has engaged in fraud, willful misconduct, bad faith or gross negligence or (ii) any Claim initiated by such Covered Person unless such Claim (or part thereof) (A) was brought to enforce such Covered Person’s rights to indemnification hereunder or (B) was authorized or consented to by the Board. Expenses incurred by a Covered Person in defending any Claim shall be paid by the Company in advance of the final disposition of such Claim upon receipt by the Company of an undertaking by or on behalf of such Covered Person to repay such amount if it shall be ultimately determined that such Covered Person is not entitled to be indemnified by the Company as authorized by this Section 6.2.”

      “Any repeal or modification of this Article VI by the Member shall not adversely affect any rights of such Covered Person pursuant to this Article VI, including the right to indemnification and to the advancement of expenses of a Covered Person existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.”

      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

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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.

      (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.

      PPL Energy Supply and PPL Corporation presently have insurance policies which, among other things, include liability insurance coverage for their officers and directors and officers and directors of PPL Corporation’s subsidiaries 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,

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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.

Item 16.     Exhibits.

      Reference is made to the information contained in the Exhibit Index filed as part of this Registration Statement, which information is incorporated herein by reference pursuant to Rule 411 of the Securities and Exchange Commission’s Rules and Regulations under the Securities Act of 1933.

Item 17.     Undertakings.

      The undersigned registrants hereby undertake:

      (1) To file, during any period in which offers or sales are being made of the securities registered hereby, 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 (the “Securities Act”);

      (ii) to reflect in the prospectus any facts or events arising after the effective date of this 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 this 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 this Registration Statement or any material change to such information in this Registration Statement;

provided, however, that the undertakings set forth in paragraphs (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) that are incorporated by reference in this Registration Statement.

      (2) That, for the purpose of determining any liability under the Securities Act, 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 a post-effective amendment any of the securities being registered hereby which remain unsold at the termination of the offering.

      The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of the registrants’ annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act 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 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding)

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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 of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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POWER OF ATTORNEY

      Each manager 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 17th day of June, 2003.

PPL ENERGY SUPPLY, LLC

By:  /s/ WILLIAM F. HECHT

William F. Hecht

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 17th day of June, 2003.

Signature	Title
/s/ WILLIAM F. HECHT William F. Hecht President	Principal Executive Officer and Manager
/s/ JAMES E. ABEL James E. Abel Treasurer	Principal Financial Officer and Manager
/s/ JOSEPH J. MCCABE Joseph J. McCabe Controller	Principal Accounting Officer and Manager
/s/ JOHN R. BIGGAR John R. Biggar	Manager
/s/ LAWRENCE E. DE SIMONE Lawrence E. De Simone	Manager
/s/ ROBERT J. GREY Robert J. Grey	Manager

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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 17th day of June, 2003.

PPL CORPORATION

By:  /s/ WILLIAM F. HECHT

William F. Hecht

Chairman, President and Chief Executive Officer

      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 17th day of June, 2003.

Signature		Title
/s/ WILLIAM F. HECHT William F. Hecht, Chairman, President and Chief Executive Officer		Principal Executive Officer and Director
/s/ JOHN R. BIGGAR John R. Biggar, Executive Vice President and Chief Financial Officer		Principal Financial Officer and Director
/s/ JOSEPH J. MCCABE Joseph J. McCabe, Vice President and Controller		Principal Accounting Officer
Frederick M. Bernthal, John W. Conway, E. Allen Deaver, Louise K. Goeser, Stuart Heydt, W. Keith Smith and Susan M. Stalnecker		Directors
By:	/s/ WILLIAM F. HECHT William F. Hecht, Attorney-in-fact

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EXHIBIT INDEX

      The following Exhibits indicated by an asterisk preceding the Exhibit number are filed herewith. The balance of the Exhibits have heretofore been filed with the Commission and pursuant to Rule 411 are incorporated herein by reference.

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 (Exhibit 3.2 to PPL Corporation Form S-3 (Registration Statement Nos. 333-54504, 333-54504-01 and 333-54504-02))
3.3	By-laws of PPL Corporation (Exhibit 3(ii)(a) to PPL Corporation Form 10-Q Report for the quarter ended September 30, 1998)
3.4	Certificate of Formation of PPL Energy Supply, LLC (Exhibit 3.1 to PPL Energy Supply, LLC Form S-4 (Registration Statement No. 333-74794))
3.5	Limited Liability Company Agreement of PPL Energy Supply, LLC, dated March 20, 2001 (Exhibit 3.2 to PPL Energy Supply, LLC Form S-4 (Registration Statement No. 333-74794))
4.1	Form of Common Stock Certificate (Exhibit 4.21 to PPL Corporation Form S-3 (Registration Statement Nos. 333-54504, 333-54504-01 and 333-54504-02))
*4.2	Registration Rights Agreement, dated May 21, 2003, among PPL Energy Supply, LLC, PPL Corporation and Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wachovia Securities, Inc. as representatives of the several other Initial Purchasers named therein
*4.3	Indenture, dated as of May 21, 2003, among PPL Energy Supply, LLC, PPL Corporation, as guarantor, and JPMorgan Chase Bank, as trustee
*4.4	Form of 2 5/8% Convertible Senior Notes due 2023 (Incorporated by reference to Exhibit A to the Indenture in Exhibit 4.3)
*5.1	Opinion of Thomas D. Salus, Esq. with respect to legality of securities being registered hereunder
*5.2	Opinion of Simpson Thacher & Bartlett LLP with respect to legality of securities being registered hereunder
12	Statement of Computation of Ratio of Earnings to Fixed Charges (Exhibit 12(a) to PPL Corporation 10-Q Report for the quarter ended March 31, 2003)
*23.1	Consent of PricewaterhouseCoopers LLP
*23.2	Consent of Thomas D. Salus, Esq. (Reference is made to Exhibit 5.1 filed herewith)
*23.3	Consent of Simpson Thacher & Bartlett LLP (Reference is made to Exhibit 5.2 filed herewith)
*24.1	Power of Attorney of PPL Energy Supply, LLC (Reference is made to the signature page of PPL Energy Supply, LLC)
*24.2	Power of Attorney of PPL Corporation
*25	Statement of Eligibility of Trustee on Form T-1

EX-4.2

                                                                     Exhibit 4.2







                          REGISTRATION RIGHTS AGREEMENT

                                     BETWEEN

                             PPL ENERGY SUPPLY, LLC,

                                   AS ISSUER,

                                PPL CORPORATION,

                                  AS GUARANTOR,

                                       AND

                       MORGAN STANLEY & CO. INCORPORATED,

               MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

                                       AND

                           WACHOVIA SECURITIES, INC.,

                  AS REPRESENTATIVES OF THE INITIAL PURCHASERS

                            DATED AS OF MAY 21, 2003

         REGISTRATION RIGHTS AGREEMENT, dated as of May 21, 2003, among PPL
Energy Supply, LLC, a Delaware limited liability company (the "COMPANY"), PPL
Corporation, a Pennsylvania corporation (the "GUARANTOR"), and Morgan Stanley &
Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Wachovia Securities, Inc., as representatives (the "REPRESENTATIVES") of the
initial purchasers (the "INITIAL PURCHASERS") pursuant to the Purchase
Agreement, dated May 15, 2003 (the "PURCHASE AGREEMENT"), among the Company, the
Guarantor and the Initial Purchasers. In order to induce the Initial Purchasers
to enter into the Purchase Agreement, the Company and the Guarantor have jointly
and severally agreed to provide the registration rights set forth in this
Agreement. The execution of this Agreement is a condition to the closing under
the Purchase Agreement.

         The Company and the Guarantor, jointly and severally, agree with the
Initial Purchasers, (i) for their benefit as Initial Purchasers and (ii) for the
benefit of the beneficial owners (including the Initial Purchasers) from time to
time of the Notes (as defined herein) and the beneficial owners from time to
time of the Underlying Common Stock (as defined herein) issued upon conversion
of the Notes (each of the foregoing a "HOLDER" and together the "HOLDERS"), as
follows:

         SECTION 1. Definitions. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:

         "AFFILIATE" means with respect to any specified person, an "affiliate,"
as defined in Rule 144, of such person.

         "AMENDMENT EFFECTIVENESS DEADLINE DATE" has the meaning set forth in
Section 2(d)(i) hereof.

         "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.

         "COMMON STOCK" means the shares of common stock, par value $.01 per
share, of the Guarantor and any other shares of common stock as may constitute
"Common Stock" for purposes of the Indenture, including the Underlying Common
Stock.

         "COMPANY" has the meaning set forth in the preamble hereof.

         "CONVERSION PRICE" has the meaning assigned such term in the Indenture.

         "ADDITIONAL AMOUNTS ACCRUAL PERIOD" has the meaning set forth in
Section 2(e) hereof.

         "ADDITIONAL AMOUNTS PAYMENT DATE" means each May 15 and November 15.

         "DEFERRAL NOTICE" has the meaning set forth in Section 3(h) hereof.

         "DEFERRAL PERIOD" has the meaning set forth in Section 3(h) hereof.


                                       2

         "EFFECTIVENESS DEADLINE DATE" has the meaning set forth in Section 2(a)
hereof.

         "EFFECTIVENESS PERIOD" means the period commencing on the date hereof
and ending on the date that all Registrable Securities have ceased to be
Registrable Securities.

         "EVENT" has the meaning set forth in Section 2(e) hereof.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.

         "FILING DEADLINE DATE" has the meaning set forth in Section 2(a)
hereof.

         "GUARANTOR" has the meaning set forth in the preamble hereof.

         "HOLDER" has the meaning set forth in the second paragraph of this
Agreement.

         "INDENTURE" means the Indenture, dated as of May 21, 2003, among the
Company, the Guarantor and JPMorgan Chase Bank, as trustee, pursuant to which
the Notes are being issued.

         "INITIAL PURCHASERS" has the meaning set forth in the preamble hereof.

         "INITIAL SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 2(a) hereof.

         "ISSUE DATE" means May 21, 2003.

         "ADDITIONAL AMOUNT" has the meaning set forth in Section 2(e) hereof.

          "MATERIAL EVENT" has the meaning set forth in Section 3(h) hereof.

          "NOTES" means the 2 5/8% Convertible Senior Notes Due 2023 of the
Company and guaranteed by the Guarantor to be purchased pursuant to the Purchase
Agreement.

         "NOTICE AND QUESTIONNAIRE" means a written notice delivered to the
Company and the Guarantor containing substantially the information called for by
the Selling Securityholder Notice and Questionnaire attached as Annex A to the
Offering Memorandum, dated May 15, 2003, relating to the Notes.

         "NOTICE HOLDER" means, on any date, any Holder that has delivered a
Notice and Questionnaire to the Company and the Guarantor on or prior to such
date.

         "PURCHASE AGREEMENT" has the meaning set forth in the preamble hereof.

         "PROSPECTUS" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such
Prospectus.


                                       3

         "RECORD HOLDER" means with respect to any Additional Amounts Payment
Date relating to any Notes or Underlying Common Stock as to which any Additional
Amount has accrued, the registered holder of such Note or Underlying Common
Stock on the May 1 immediately preceding an Additional Amounts Payment Date
occurring on a May 15, and on the November 1 immediately preceding an Additional
Amounts Payment Date occurring on a November 15.

         "REGISTRABLE SECURITIES" means the Notes until such Notes have been
converted into or exchanged for the Underlying Common Stock and, at all times
subsequent to any such conversion, the Underlying Common Stock and any
securities into or for which such Underlying Common Stock has been converted or
exchanged, and any security issued with respect thereto upon any stock dividend,
split or similar event until, in the case of any such security, (A) the earliest
of (i) its effective registration under the Securities Act and resale in
accordance with the Registration Statement covering it, (ii) expiration of the
holding period that would be applicable thereto under Rule 144(k), or (iii) its
sale to the public pursuant to Rule 144 (or any similar provision then in force,
but not Rule 144A) under the Securities Act, and (B) as a result of the event or
circumstance described in any of the foregoing clauses (A)(i) through (A)(iii),
the legend with respect to transfer restrictions required under the Indenture is
removed or removable in accordance with the terms of the Indenture or such
legend, as the case may be.

         "REGISTRATION STATEMENT" means any registration statement of the
Company and/or the Guarantor that covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such registration statement, including
post-effective amendments, all exhibits and all materials incorporated by
reference or explicitly deemed to be incorporated by reference in such
registration statement.

         "REPRESENTATIVES" has the meaning set forth in the preamble hereof.

         "RESTRICTED SECURITIES" means "restricted securities" as defined in
Rule 144.

         "RULE 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

         "RULE 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.

         "SEC" means the Securities and Exchange Commission.

         "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.

         "SHELF REGISTRATION STATEMENT" has the meaning set forth in Section
2(a) hereof.

         "SPECIAL COUNSEL" means Sullivan & Cromwell LLP or one such other
successor counsel as shall be specified by the Holders of a majority of all
Registrable Securities, but which may, with the written consent of the
Representatives (which shall not be unreasonably withheld), be another
nationally recognized law firm experienced in securities law matters designated
by the Company and the Guarantor, the reasonable fees and expenses of which will
be paid by the Company or the Guarantor pursuant to Section 5 hereof. Throughout
this Agreement, for


                                       4

purposes of determining the holders of a majority of Registrable Securities in
this definition, Holders of Notes shall be deemed to be the Holders of the
number of shares of Underlying Common Stock into which such Notes are or would
be convertible as of the date the consent is requested.

         "SUBSEQUENT SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 2(b) hereof.

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

         "TRUSTEE" means JPMorgan Chase Bank, the Trustee under the Indenture.

         "UNDERLYING COMMON STOCK" means the Common Stock into which the Notes
are convertible or issued upon any such conversion.

         SECTION 2. Shelf Registration. (a) The Company and the Guarantor shall,
jointly and severally, use their reasonable best efforts to prepare and file or
cause to be prepared and filed with the SEC, as soon as practicable but in any
event by the date (the "FILING DEADLINE DATE") ninety (90) days after the Issue
Date, a Registration Statement for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 of the Securities Act (a "SHELF
REGISTRATION STATEMENT") registering the resale from time to time by Holders
thereof of all of the Registrable Securities (the "INITIAL SHELF REGISTRATION
STATEMENT"). The Initial Shelf Registration Statement shall be on Form S-3 or
another appropriate form permitting registration of such Registrable Securities
for resale by such Holders in accordance with the methods of distribution
elected by the Holders and set forth in the Initial Shelf Registration
Statement. The Company and the Guarantor shall, jointly and severally, use their
reasonable best efforts to cause the Initial Shelf Registration Statement to be
declared effective under the Securities Act as promptly as is practicable but in
any event by the date (the "EFFECTIVENESS DEADLINE DATE") that is one hundred
eighty (180) days after the Issue Date, and to keep the Initial Shelf
Registration Statement (or any Subsequent Shelf Registration Statement)
continuously effective under the Securities Act until the expiration of the
Effectiveness Period. At the time the Initial Shelf Registration Statement is
declared effective, each Holder that became a Notice Holder on or prior to the
date ten (10) Business Days prior to such time of effectiveness shall be named
as a selling securityholder in the Initial Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of Registrable Securities in accordance with applicable
law. None of the Company's or the Guarantor's securityholders (other than the
Holders of Registrable Securities) shall have the right to include any of the
Company's or the Guarantor's securities in the Shelf Registration Statement.

         (b) If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period (other than because all Registrable Securities
registered thereunder shall have been resold pursuant thereto or shall have
otherwise ceased to be Registrable Securities), the Company and the Guarantor
shall, jointly and severally, use their reasonable best efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof,


                                       5

and in any event shall within thirty (30) days of such cessation of
effectiveness amend the Shelf Registration Statement in a manner reasonably
expected to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional Shelf Registration Statement covering all of the
securities that as of the date of such filing are Registrable Securities (a
"SUBSEQUENT SHELF REGISTRATION STATEMENT"). If a Subsequent Shelf Registration
Statement is filed, the Company and the Guarantor shall, jointly and severally,
use their reasonable best efforts to cause the Subsequent Shelf Registration
Statement to become effective as promptly as is practicable after such filing
and to keep such Registration Statement (or subsequent Shelf Registration
Statement) continuously effective until the end of the Effectiveness Period.

         (c) The Company and the Guarantor shall supplement and amend the Shelf
Registration Statement if required by the rules, regulations or instructions
applicable to the registration form used by the Company or the Guarantor for
such Shelf Registration Statement, if required by the Securities Act or as
necessary to name a Notice Holder as a selling securityholder pursuant to
Section (d) below.

         (d) Each Holder agrees that if such Holder wishes to sell Registrable
Securities pursuant to a Shelf Registration Statement and related Prospectus, it
will do so only in accordance with this Section 2(d) and Section 3(h) hereof.
Following the date that the Initial Shelf Registration Statement is declared
effective, each Holder wishing to sell Registrable Securities pursuant to a
Shelf Registration Statement and related Prospectus agrees to deliver a Notice
and Questionnaire to the Company and the Guarantor at least ten (10) Business
Days prior to any intended distribution of Registrable Securities under the
Shelf Registration Statement. Each holder who elects to sell Registrable
Securities pursuant to a Shelf Registration Statement agrees, by submitting a
Notice and Questionnaire to the Company and the Guarantor, it will be bound by
the terms and conditions of the Notice and Questionnaire and this Agreement.
From and after the date the Initial Shelf Registration Statement is declared
effective, the Company and the Guarantor shall, as promptly as reasonably
practicable after the date a Notice and Questionnaire is delivered pursuant to
Section 8(c) hereof, and in any event upon the later of (x) ten (10) Business
Days after such date or (y) ten (10) Business Days after the expiration of any
Deferral Period in effect when the Notice and Questionnaire is delivered or put
into effect within ten (10) Business Days of such delivery date:

                  (i) if required by applicable law, file with the SEC a
         post-effective amendment to the Shelf Registration Statement or prepare
         and, if required by applicable law, file a supplement to the related
         Prospectus or a supplement or amendment to any document incorporated
         therein by reference or file any other required document so that the
         Holder delivering such Notice and Questionnaire is named as a selling
         securityholder in the Shelf Registration Statement and the related
         Prospectus in such a manner as to permit such Holder to deliver such
         Prospectus to purchasers of the Registrable Securities in accordance
         with applicable law and, if the Company and the Guarantor shall file a
         post-effective amendment to the Shelf Registration Statement, use their
         reasonable best efforts to cause such post-effective amendment to be
         declared effective under the Securities Act as promptly as is
         practicable, but in any event by the date (the "AMENDMENT EFFECTIVENESS
         DEADLINE DATE") that is thirty (30) days after the date such
         post-effective amendment is required by this clause to be filed;

                  (ii) provide such Holder copies of any documents filed
         pursuant to Section 2(d)(i) hereof; and


                                       6

                  (iii) notify such Holder as promptly as practicable after the
         effectiveness under the Securities Act of any post-effective amendment
         filed pursuant to Section 2(d)(i) hereof;

provided, that if such Notice and Questionnaire is delivered during a Deferral
Period, the Company and the Guarantor shall so inform the Holder delivering such
Notice and Questionnaire and shall take the actions set forth in clauses (i),
(ii) and (iii) above upon expiration of the Deferral Period in accordance with
Section 3(h) hereof. Notwithstanding anything contained herein to the contrary,
(i) neither the Company nor the Guarantor shall be under any obligation to name
any Holder that is not a Notice Holder as a selling securityholder in any
Registration Statement or related Prospectus and (ii) the Amendment
Effectiveness Deadline Date shall be extended by up to ten (10) Business Days
from the expiration of a Deferral Period (and neither the Company nor the
Guarantor shall incur any obligation to pay Additional Amounts during such
extension or during such Deferral Period) if such Deferral Period shall be in
effect on the Amendment Effectiveness Deadline Date.

         (e) If any of the following events occur, the Company and the
Guarantor, jointly and severally, shall pay to the Record Holders of Registrable
Securities Additional Amounts (as defined below) as described in more detail
below.

                  (i) the Initial Shelf Registration Statement has not been
         filed on or prior to the Filing Deadline Date,

                  (ii) the Initial Shelf Registration Statement has not been
         declared effective under the Securities Act on or prior to the
         Effectiveness Deadline Date,

                  (iii) the Company or the Guarantor has failed to perform its
         obligations set forth in Section 2(d)(i) hereof within the time period
         required therein,

                  (iv) any post-effective amendment to a Shelf Registration
         Statement filed pursuant to Section 2(d)(i) hereof has not become
         effective under the Securities Act on or prior to the Amendment
         Effectiveness Deadline Date, or

                  (v) the aggregate duration of Deferral Periods in any period
         exceeds the number of days permitted in respect of such period pursuant
         to Section 3(h) hereof.

Each event described in any of the foregoing clauses (i) through (v) is
individually referred to herein as an "EVENT." For purposes of this Agreement,
each Event set forth above shall begin and end on the dates set forth in the
table set forth below:



        Type of
       Event by                                 Beginning                             Ending
        Clause                                    Date                                 Date
        ------                                    ----                                 ----
                                                                         
         (i)                            Filing Deadline Date                   the date the Initial Shelf
                                                                               Registration Statement is filed



                                       7



        Type of
       Event by                                 Beginning                             Ending
        Clause                                    Date                                 Date
        ------                                    ----                                 ----
                                                                         
         (ii)                           Effectiveness Deadline Date            the date the Initial Shelf
                                                                               Registration Statement becomes
                                                                               effective under the Securities
                                                                               Act

         (iii)                          the date by which the Company and      the date the Company and the
                                        the Guarantor are required to          Guarantor perform their
                                        perform their  obligations under       obligations set forth in Section
                                        Section 2(d) hereof                    2(d) hereof


         (iv)                           the Amendment Effectiveness Deadline   the date the applicable
                                        Date                                   post-effective amendment to a
                                                                               Shelf Registration Statement
                                                                               becomes effective under the
                                                                               Securities Act

         (v)                            the date on which the aggregate        termination of the Deferral
                                        duration of Deferral Periods in any    Period that caused the limit on
                                        period exceeds the number of days      the aggregate duration of
                                        permitted by Section 3(h) hereof       Deferral Periods to be exceeded


For purposes of this Agreement, Events shall begin on the dates set forth in the
table above and shall continue until the ending dates set forth in the table
above.

         Commencing on (and including) any date that an Event has begun and
ending on (but excluding) the next date on which there are no Events that have
occurred and are continuing (an "ADDITIONAL AMOUNTS ACCRUAL PERIOD"), the
Company and the Guarantor, jointly and severally, shall pay to Record Holders of
Registrable Securities an amount (the "ADDITIONAL AMOUNT") accruing, for each
day in the Additional Amounts Accrual Period, (i) in respect of any Note, at a
rate per annum equal to 0.25% of the aggregate principal amount of such Note and
(ii) in respect of each share of Underlying Common Stock at a rate per annum
equal to 0.25% of the Conversion Price on such date, as the case may be, during
the first 90 days of each Additional Amounts Accrual Period and thereafter at a
rate per annum equal to 0.50% in each of the case of (i) and (ii) of this
sentence; provided, that in the case of an Additional Amounts Accrual Period
that is in effect solely as a result of an Event of the type described in clause
(iii) or (iv) of the preceding paragraph, such Additional Amount shall be paid
only to the Holders (as set forth in the succeeding paragraph) that have
delivered Notices and Questionnaires that caused the Company and the Guarantor
to incur the obligations set forth in Section 2(d) hereof the non-performance of
which is the basis of such Event. In calculating the Additional Amount on any
date on which no Notes are outstanding, the Conversion Price and the Additional
Amount


                                       8

payable with respect to shares of Common Stock which are Registrable Securities,
shall be calculated as if the Notes were still outstanding. Notwithstanding the
foregoing, no Additional Amount shall accrue as to any Registrable Security from
and after the earlier of (x) the date such security is no longer a Registrable
Security and (y) expiration of the Effectiveness Period. The rate of accrual of
the Additional Amount with respect to any period shall not exceed 0.50%
notwithstanding the occurrence of multiple concurrent Events.

         The Additional Amount shall accrue from the first day of the applicable
Additional Amounts Accrual Period, and shall be payable on each Additional
Amounts Payment Date during the Additional Amounts Accrual Period (and on the
Additional Amounts Payment Date next succeeding the end of the Additional
Amounts Accrual Period if the Additional Amounts Accrual Period does not end on
a Additional Amounts Payment Date) to the Record Holders of the Registrable
Securities entitled thereto; provided that any Additional Amount accrued with
respect to any Note or portion thereof redeemed by the Company on a redemption
date or converted into Underlying Common Stock on a conversion date prior to the
Additional Amounts Payment Date, shall, in any such event, be paid instead to
the Holder who submitted such Note or portion thereof for redemption or
conversion on the applicable redemption date or conversion date, as the case may
be, on such date (or promptly following the conversion date, in the case of
conversion); provided further that, in the case of an Event of the type
described in clause (iii) or (iv) of the first paragraph of this Section 2(e),
such Additional Amount shall be paid only to the Holders entitled thereto
pursuant to such first paragraph by check mailed to the address set forth in the
Notice and Questionnaire delivered by such Holder. The Trustee shall be
entitled, on behalf of registered holders of Notes or Underlying Common Stock,
to seek any available remedy for the enforcement of this Agreement, including
for the payment of such Additional Amount. Notwithstanding the foregoing, the
parties agree that the sole damages payable for a violation of the terms of this
Agreement with respect to which additional amounts are expressly provided shall
be such additional amounts. Nothing shall preclude any Holder from pursuing or
obtaining specific performance or other equitable relief with respect to this
Agreement.

         All of the Company's and the Guarantor's obligations set forth in this
Section 2(e) that are outstanding with respect to any Registrable Security at
the time such security ceases to be a Registrable Security shall survive until
such time as all such obligations with respect to such security have been
satisfied in full (notwithstanding termination of this Agreement pursuant to
Section 8(k) hereof).

         The parties hereto agree that the additional amounts provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.

         SECTION 3. Registration Procedures. In connection with the registration
obligations of the Company and the Guarantor under Section 2 hereof, during the
Effectiveness Period, the Company and the Guarantor, jointly and severally,
shall:

                  (a) Prepare and file with the SEC a Registration Statement or
         Registration Statements on any appropriate form under the Securities
         Act available for the sale of the


                                       9

         Registrable Securities by the Holders thereof in accordance with the
         intended method or methods of distribution thereof, and use their
         reasonable best efforts to cause each such Registration Statement to
         become effective and remain effective as provided herein; provided that
         before filing any Registration Statement or Prospectus or any
         amendments or supplements thereto with the SEC (but excluding reports
         filed with the SEC under the Exchange Act), furnish to the
         Representatives and the Special Counsel of such offering, if any,
         copies of all such documents proposed to be filed at least five (5)
         Business Days prior to the filing of such Registration Statement or
         amendment thereto or Prospectus or supplement thereto.

                  (b) Subject to Section 3(h) hereof, prepare and file with the
         SEC such amendments and post-effective amendments to each Registration
         Statement as may be necessary to keep such Registration Statement
         continuously effective for the applicable period specified in Section
         2(a) hereof; cause the related Prospectus to be supplemented by any
         required prospectus supplement, and as so supplemented to be filed
         pursuant to Rule 424 (or any similar provisions then in force) under
         the Securities Act; and use their reasonable best efforts to comply
         with the provisions of the Securities Act applicable to them with
         respect to the disposition of all securities covered by such
         Registration Statement during the Effectiveness Period in accordance
         with the intended methods of disposition by the sellers thereof set
         forth in such Registration Statement as so amended or such Prospectus
         as so supplemented.

                  (c) As promptly as practicable give notice to the Notice
         Holders, the Representatives and the Special Counsel, (i) when any
         Prospectus, prospectus supplement, Registration Statement or
         post-effective amendment to a Registration Statement has been filed
         with the SEC and, with respect to a Registration Statement or any
         post-effective amendment, when the same has been declared effective,
         (ii) of any request, following the effectiveness of the Initial Shelf
         Registration Statement under the Securities Act, by the SEC or any
         other federal or state governmental authority for amendments or
         supplements to any Registration Statement or related Prospectus or for
         additional information relating to the Shelf Registration Statement,
         (iii) of the issuance by the SEC or any other federal or state
         governmental authority of any stop order suspending the effectiveness
         of any Registration Statement or the initiation or threatening of any
         proceedings for that purpose, (iv) of the receipt by the Company or the
         Guarantor of any notification with respect to the suspension of the
         qualification or exemption from qualification of any of the Registrable
         Securities for sale in any jurisdiction or the initiation or
         threatening of any proceeding for such purpose, (v) of the occurrence
         of, but not the nature of or details concerning, a Material Event and
         (vi) of the determination by the Company and the Guarantor that a
         post-effective amendment to a Registration Statement will be filed with
         the SEC, which notice may, at the discretion of the Company and the
         Guarantor (or as required pursuant to Section 3(h) hereof), state that
         it constitutes a Deferral Notice, in which event the provisions of
         Section 3(h) hereof shall apply.

                  (d) Use their reasonable best efforts to obtain the withdrawal
         of any order suspending the effectiveness of a Registration Statement
         or the lifting of any suspension of the qualification (or exemption
         from qualification) of any of the Registrable Securities for sale in
         any jurisdiction in which they have been qualified for sale, in either
         case at the


                                       10

         earliest possible moment, and provide immediate notice to each Notice
         Holder, the Special Counsel and each Representative of the withdrawal
         of any such order.

                  (e) As promptly as practicable furnish to each Notice Holder,
         the Special Counsel and each Representative, upon request and without
         charge, at least one (1) conformed copy of the Registration Statement
         and any amendment thereto, including exhibits and if requested, all
         documents incorporated or deemed to be incorporated therein by
         reference.

                  (f) Deliver to each Notice Holder, the Special Counsel and
         each Initial Purchaser, in connection with any sale of Registrable
         Securities pursuant to a Registration Statement, without charge, as
         many copies of the Prospectus or Prospectuses relating to such
         Registrable Securities (including each preliminary prospectus) and any
         amendment or supplement thereto as such Notice Holder may reasonably
         request; and the Company and the Guarantor each hereby consents (except
         during such periods that a Deferral Notice is outstanding and has not
         been revoked) to the use of such Prospectus or each amendment or
         supplement thereto by each Notice Holder in connection with any
         offering and sale of the Registrable Securities covered by such
         Prospectus or any amendment or supplement thereto in the manner set
         forth therein.

                  (g) Prior to any public offering of the Registrable Securities
         pursuant to a Registration Statement, use their reasonable best efforts
         to register or qualify or cooperate with the Notice Holders and the
         Special Counsel in connection with the registration or qualification
         (or exemption from such registration or qualification) of such
         Registrable Securities for offer and sale under the securities or Blue
         Sky laws of such jurisdictions within the United States as any Notice
         Holder reasonably requests in writing (which request may be included in
         the Notice and Questionnaire); prior to any public offering of the
         Registrable Securities pursuant to the Shelf Registration Statement,
         use their reasonable best efforts to keep each such registration or
         qualification (or exemption therefrom) effective during the
         Effectiveness Period in connection with such Notice Holder's offer and
         sale of Registrable Securities pursuant to such registration or
         qualification (or exemption therefrom) and do any and all other acts or
         things reasonably necessary or advisable to enable the disposition in
         such jurisdictions of such Registrable Securities in the manner set
         forth in the relevant Registration Statement and the related
         Prospectus; provided that neither the Company nor the Guarantor will be
         required to (i) qualify as a foreign corporation or as a dealer in
         securities in any jurisdiction where it would not otherwise be required
         to qualify but for this Agreement or (ii) take any action that would
         subject it to general service of process in suits or to taxation in any
         such jurisdiction where it is not then so subject.

                  (h) Upon (A) the issuance by the SEC of a stop order
         suspending the effectiveness of the Shelf Registration Statement or the
         initiation of proceedings with respect to the Shelf Registration
         Statement under Section 8(d) or 8(e) of the Securities Act, (B) the
         occurrence of any event or the existence of any fact (a "MATERIAL
         EVENT") as a result of which any Registration Statement shall contain
         any untrue


                                       11

         statement of a material fact or omit to state any material fact
         required to be stated therein or necessary to make the statements
         therein not misleading, or any Prospectus shall contain any untrue
         statement of a material fact or omit to state any 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, or (C) the occurrence or existence of any pending
         corporate development that, in the reasonable discretion of the Company
         and the Guarantor, makes it appropriate to suspend the availability of
         the Shelf Registration Statement and the related Prospectus:

                           (i) in the case of clause (B) above, subject to the
                  next sentence, as promptly as practicable prepare and file, if
                  necessary pursuant to applicable law, a post-effective
                  amendment to such Registration Statement or a supplement to
                  the related Prospectus or any document incorporated therein by
                  reference or file any other required document that would be
                  incorporated by reference into such Registration Statement and
                  Prospectus so that such Registration Statement does not
                  contain any untrue statement of a material fact or omit to
                  state any material fact required to be stated therein or
                  necessary to make the statements therein not misleading, and
                  such Prospectus does not contain any untrue statement of a
                  material fact or omit to state any 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, as thereafter delivered to the purchasers of
                  the Registrable Securities being sold thereunder, and, in the
                  case of a post-effective amendment to a Registration
                  Statement, subject to the next sentence, use their reasonable
                  best efforts to cause it to be declared effective as promptly
                  as is practicable, and

                           (ii) give notice to the Notice Holders, the Special
                  Counsel and the Representatives that the availability of the
                  Shelf Registration Statement is suspended (a "DEFERRAL
                  NOTICE") and, upon receipt of any Deferral Notice, each Notice
                  Holder agrees not to sell any Registrable Securities pursuant
                  to the Registration Statement until such Notice Holder's
                  receipt of copies of the supplemented or amended Prospectus
                  provided for in clause (i) above, or until it is advised in
                  writing by the Company and the Guarantor that the Prospectus
                  may be used, and has received copies of any additional or
                  supplemental filings that are incorporated or deemed
                  incorporated by reference in such Prospectus.

         The Company and the Guarantor will use their reasonable best efforts to
         ensure that the use of the Prospectus may be resumed (x) in the case of
         clause (A) above, as promptly as is practicable, (y) in the case of
         clause (B) above, as soon as, in the judgment of the Company and the
         Guarantor, public disclosure of such Material Event would not be
         prejudicial to or contrary to the interests of the Company and the
         Guarantor or, if necessary to avoid unreasonable burden or expense, as
         soon as practicable thereafter and (z) in the case of clause (C) above,
         as soon as in the reasonable discretion of the Company and the
         Guarantor, such suspension is no longer appropriate. The Company and
         the Guarantor shall be entitled to exercise their right under this
         Section 3(h) to suspend the availability of the Shelf Registration
         Statement or any Prospectus, without incurring or accruing any
         obligation to pay additional amounts pursuant to Section 2(e) hereof
         (the "DEFERRAL PERIOD"); provided that the aggregate duration of any
         Deferral Periods shall not exceed thirty (30) days in any three (3)
         month period (or sixty (60) days


                                       12

         in any three (3) month period in the event of a Material Event pursuant
         to which the Company and the Guarantor have delivered a second notice
         as required below) or ninety (90) days in any twelve (12) month period;
         provided that in the case of a Material Event relating to an
         acquisition or a probable acquisition or financing, recapitalization,
         business combination or other similar transaction, the Company and the
         Guarantor may, without incurring any obligation to pay additional
         amounts pursuant to Section 2(e) hereof, deliver to Notice Holders a
         second notice to the effect set forth above, which shall have the
         effect of extending the Deferral Period by up to an additional thirty
         (30) days, or such shorter period of time as is specified in such
         second notice.

                  (i) If reasonably requested in writing in connection with a
         disposition of Registrable Securities pursuant to a Registration
         Statement, make reasonably available for inspection during normal
         business hours by a representative for the Notice Holders of such
         Registrable Securities, any broker-dealers, underwriters, attorneys and
         accountants retained by such Notice Holders, and any attorneys or other
         agents retained by a broker-dealer or underwriter engaged by such
         Notice Holders, all relevant financial and other records and pertinent
         corporate documents and properties of the Guarantor, the Company and
         their respective subsidiaries, and cause the appropriate officers,
         directors and employees of the Guarantor and the Company and their
         respective subsidiaries to make reasonably available for inspection
         during normal business hours on reasonable notice all relevant
         information reasonably requested by such representative for the Notice
         Holders, or any such broker-dealers, underwriters, attorneys or
         accountants in connection with such disposition, in each case as is
         customary for similar "due diligence" examinations; provided that such
         persons shall first agree in writing with the Company and the Guarantor
         that any information that is reasonably designated by the Company and
         the Guarantor as confidential at the time of delivery of such
         information shall be kept confidential by such persons and shall be
         used solely for the purposes of exercising rights under this Agreement,
         unless (i) disclosure of such information is required by court or
         administrative order or is necessary to respond to inquiries of
         regulatory authorities, (ii) disclosure of such information is required
         by law (including any disclosure requirements pursuant to federal
         securities laws in connection with the filing of any Registration
         Statement or the use of any prospectus referred to in this Agreement),
         (iii) such information becomes generally available to the public other
         than as a result of a disclosure or failure to safeguard by any such
         person, or (iv) such information becomes available to any such person
         from a source other than the Company or the Guarantor and such source
         is not bound by a confidentiality agreement, and provided further that
         the foregoing inspection and information gathering shall, to the
         greatest extent possible, be coordinated on behalf of all the Notice
         Holders and the other parties entitled thereto by the counsel referred
         to in Section 5 hereof. Any person legally compelled to disclose any
         such confidential information made available for inspection shall
         provide the Company and the Guarantor with prompt prior written notice
         of such requirement so that the Company or the Guarantor may seek a
         protective order or other appropriate remedy. Notwithstanding anything
         herein to the contrary, any party to this Agreement (and any employee,
         representative, or other agent of any party to this Agreement) may
         disclose to any and all persons, without limitation of any kind, the
         U.S. federal income tax treatment and tax structure of the transactions
         contemplated by this Agreement (the "Transactions") and all materials
         of any kind (including opinions or other tax analyses) that are
         provided


                                       13

         to it relating to such tax treatment and tax structure; provided,
         however, that neither party (nor any employee, representative or other
         agent thereof) shall disclose any information (a) that is not relevant
         to an understanding of the U.S. federal income tax treatment or tax
         structure of the Transactions or (b) to the extent such disclosure
         could result in a violation of any federal or state securities laws.

                  (j) Comply with all applicable rules and regulations of the
         SEC and make generally available to their securityholders earning
         statements (which need not be audited) satisfying the provisions of
         Section 11(a) of the Securities Act and Rule 158 thereunder (or any
         similar rule promulgated under the Securities Act) for a twelve (12)
         month period commencing on the first day of the first fiscal quarter of
         the Company and the Guarantor commencing after the effective date of a
         Registration Statement, which statements shall be made available no
         later than forty-five (45) days after the end of the twelve (12) month
         period or ninety (90) days if the twelve (12) month period coincides
         with the fiscal year of the Company and the Guarantor.

                  (k) Cooperate with each Notice Holder to facilitate the timely
         preparation and delivery of certificates representing Registrable
         Securities sold or to be sold pursuant to a Registration Statement,
         which certificates shall not bear any restrictive legends, and cause
         such Registrable Securities to be in such denominations as are
         permitted by the Indenture and registered in such names as such Notice
         Holder may request in writing at least two (2) Business Days prior to
         any sale of such Registrable Securities.

                  (l) Provide a CUSIP number for all Registrable Securities
         covered by each Registration Statement not later than the effective
         date of such Registration Statement and provide the Trustee and the
         transfer agent for the Common Stock with printed certificates for the
         Registrable Securities that are in a form eligible for deposit with The
         Depository Trust Company.

                  (m) Cooperate and assist in any filings required to be made
         with the National Association of Securities Dealers, Inc.

                  (n) In the case of a Shelf Registration Statement involving an
         underwritten offering, the Company and the Guarantor shall enter into
         such customary agreements (including, if requested, an underwriting
         agreement in customary form) and take all such other action, if any, as
         Holders of a majority of the Registrable Securities being sold or any
         managing underwriters shall reasonably request in order to facilitate
         any disposition of Notes and Underlying Common Stock pursuant to such
         Shelf Registration Statement, including, without limitation, (i) using
         their reasonable best efforts to cause their counsel to deliver an
         opinion or opinions in customary form, (ii) using their reasonable best
         efforts to cause their officers to execute and deliver all customary
         documents and certificates and (iii) using their reasonable best
         efforts to cause their independent public accountants to provide a
         comfort letter or letters in customary form.

                  (o) Upon (i) the filing of the Initial Shelf Registration
         Statement and (ii) the effectiveness of the Initial Shelf Registration
         Statement, announce the same, in each case by release to Reuters
         Economic Services and Bloomberg Business News.


                                       14

         SECTION 4. Holder's Obligations. Each Holder agrees, by acquisition of
the Registrable Securities, that no Holder shall be entitled to sell any of such
Registrable Securities pursuant to a Registration Statement or to receive a
Prospectus relating thereto, unless such Holder has furnished the Company and
the Guarantor with a Notice and Questionnaire as required pursuant to Section
2(d) hereof (including the information required to be included in such Notice
and Questionnaire) and the information set forth in the next sentence. Each
Notice Holder agrees promptly to furnish to the Company and the Guarantor all
information required to be disclosed in order to make the information previously
furnished to the Company and the Guarantor by such Notice Holder not misleading
and any other information regarding such Notice Holder and the distribution of
such Registrable Securities as the Company and the Guarantor may from time to
time reasonably request. Any sale of any Registrable Securities by any Holder
shall constitute a representation and warranty by such Holder that the
information relating to such Holder and its plan of distribution is as set forth
in the Prospectus delivered by such Holder in connection with such disposition,
that such Prospectus does not as of the time of such sale contain any untrue
statement of a material fact relating to or provided by such Holder or its plan
of distribution and that such Prospectus does not as of the time of such sale
omit to state any material fact relating to or provided by such Holder or its
plan of distribution necessary to make the statements in such Prospectus, in the
light of the circumstances under which they were made, not misleading.

         SECTION 5. Registration Expenses. The Company and the Guarantor shall,
jointly and severally, bear all fees and expenses incurred in connection with
the performance by the Company and the Guarantor of their obligations under
Sections 2 and 3 of this Agreement whether or not any Registration Statement is
declared effective. Such fees and expenses shall include, without limitation,
(i) all registration and filing fees (including, without limitation, fees and
expenses (x) with respect to filings required to be made with the National
Association of Securities Dealers, Inc. and (y) of compliance with federal and
state securities or Blue Sky laws (including, without limitation, reasonable
fees and disbursements of the Special Counsel in connection with Blue Sky
qualifications of the Registrable Securities under the laws of such
jurisdictions as Notice Holders of a majority of the Registrable Securities
being sold pursuant to a Registration Statement may designate), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities in a form eligible for deposit with The Depository Trust
Company), (iii) duplication expenses relating to copies of any Registration
Statement or Prospectus delivered to any Holders hereunder, (iv) fees and
disbursements of counsel for the Company and the Guarantor in connection with
the Shelf Registration Statement, (v) reasonable fees and disbursements of the
Trustee and their counsel and of the registrar and transfer agent for the Common
Stock, and (vi) any Securities Act liability insurance obtained by the Company
and the Guarantor in their discretion. In addition, the Company and the
Guarantor shall pay their internal expenses (including, without limitation, all
salaries and expenses of officers and employees performing legal or accounting
duties), the expense of any annual audit, the fees and expenses incurred in
connection with the listing by the Guarantor of the Registrable Securities on
any securities exchange on which similar securities of the Guarantor are then
listed and the fees and expenses of any person, including special experts,
retained by the Company and the Guarantor. Notwithstanding the provisions of
this Section 5, each seller of Registrable Securities shall pay selling
expenses, including any underwriting discount and commissions, and all
registration expenses to the extent required by applicable law.


                                       15

         SECTION 6. Indemnification and Contribution.

         (a) Indemnification by the Company. The Company and the Guarantor,
jointly and severally, agree to indemnify and hold harmless each Holder, each
person, if any, who controls any Holder within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with defending or
investigating any such loss, claim, damage or liability) arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Company and the Guarantor shall have furnished any amendments or supplements
thereto), or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except to the extent that such losses,
claims, damages or liabilities arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Holder furnished to the Company or the Guarantor in
writing by such Holder expressly for use therein; provided that the
indemnification contained in this paragraph shall not inure to the benefit of
any Holder (or to the benefit of any person controlling such Holder) on account
of any such losses, claims, damages or liabilities arising out of or based upon
any untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus, provided in each case the Company and the
Guarantor have performed their obligations under Section 3(a) hereof, if either
(A) (i) such Holder failed to send or deliver a copy of the Prospectus with or
prior to the delivery of written confirmation of the sale by such Holder to the
person asserting the claim from which such losses, claims, damages or
liabilities arise and (ii) the Prospectus would have corrected such untrue
statement or alleged untrue statement or such omission or alleged omission, or
(B) (x) such untrue statement or alleged untrue statement, omission or alleged
omission is corrected in an amendment or supplement to the Prospectus and (y)
having previously been furnished by or on behalf of the Company and the
Guarantor with copies of the Prospectus as so amended or supplemented, such
Holder thereafter fails to deliver such Prospectus as so amended or
supplemented, with or prior to the delivery of written confirmation of the sale
of a Registrable Security to the person asserting the claim from which such
losses, claims, damages or liabilities arise. In connection with any
underwritten offering pursuant to Section 8 hereof, the Company and the
Guarantor, jointly and severally, will also indemnify the underwriters, if any,
their officers and directors and each person who controls such underwriters
(within the meaning of the Securities Act and the Exchange Act) to the same
extent as provided herein with respect to the indemnification of the Holders, if
requested in connection with any Registration Statement.

         (b) Indemnification by Holders. Each Holder agrees severally and not
jointly to indemnify and hold harmless the Company, the Guarantor and their
directors, officers and each person, if any, who controls the Company or the
Guarantor (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) or any other Holder, to the same extent as the
foregoing indemnity from the Company and the Guarantor to such Holder, but only
with reference to information relating to such Holder furnished to the Company
or the Guarantor in writing by such Holder expressly for use in such
Registration Statement or Prospectus or amendment or supplement thereto. In no
event shall the liability of any Holder hereunder be greater in amount than the
dollar amount of the proceeds received by such Holder upon the sale


                                       16

of the Registrable Securities pursuant to the Registration Statement giving rise
to such indemnification obligation. In connection with any underwritten offering
pursuant to Section 8 hereof, each Holder will also indemnify the underwriters,
if any, their officers and directors and each person who controls such
underwriters (within the meaning of the Securities Act and the Exchange Act) to
the same extent as provided herein with respect to the indemnification of the
Company and the Guarantor, if requested in connection with any Registration
Statement.

         (c) Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 6(a) or
6(b) hereof, such person (the "INDEMNIFIED PARTY") shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the reasonable fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the indemnified party has reasonably concluded
(based on advice of counsel) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party. It is understood that the indemnifying
party shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by, in the case of parties indemnified pursuant to Section
6(a) hereof, the Holders of a majority (with Holders of Notes deemed to be the
Holders, for purposes of determining such majority, of the number of shares of
Underlying Common Stock into which such Notes are or would be convertible as of
the date on which such designation is made) of the Registrable Securities
covered by the Registration Statement held by Holders that are indemnified
parties pursuant to Section 6(a) hereof and, in the case of parties indemnified
pursuant to Section 6(b) hereof, the Company and the Guarantor. No indemnifying
party shall be liable for any settlement of any proceeding effected without its
written consent. No indemnifying party shall, without the prior written consent
of the indemnified party, 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 6 (whether or not the indemnified party is an actual or
potential party thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of such 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 such indemnified party.

         (d) Contribution. To the extent that the indemnification provided for
in Section 6(a) or 6(b) hereof is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the


                                       17

amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party or parties on
the one hand and the indemnified party or parties on the other hand or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the indemnifying
party or parties on the one hand and of the indemnified party or parties on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Guarantor
shall be deemed to be equal to the total net proceeds from the initial placement
pursuant to the Purchase Agreement (before deducting expenses) of the
Registrable Securities to which such losses, claims, damages or liabilities
relate. The relative benefits received by any Holder shall be deemed to be equal
to the value of receiving Registrable Securities that are registered under the
Securities Act. The relative fault of the Holders on the one hand and the
Company and the Guarantor on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Holders or by the Company and the Guarantor, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Holders' respective
obligations to contribute pursuant to this paragraph 6 are several in proportion
to the respective number of Registrable Securities they have sold pursuant to a
Registration Statement, and not joint.

         The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding this Section 6, no indemnifying party that is a selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities sold by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such indemnifying party has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

         (e) The remedies provided for in this Section 6 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to an
indemnified party at law or in equity, hereunder, under the Purchase Agreement
or otherwise.

         (f) The indemnity and contribution provisions contained in this Section
6 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder, any person controlling any Holder or any affiliate of any Holder or
by or on behalf of the Company, the Guarantor, their officers or


                                       18

directors or any person controlling the Company or the Guarantor and (iii) the
sale of any Registrable Securities by any Holder.

         SECTION 7. Information Requirements. The Company and the Guarantor,
jointly and severally, covenant that, if at any time before the end of the
Effectiveness Period, the Company or the Guarantor is not subject to the
reporting requirements of the Exchange Act, it will cooperate with any Holder
and take such further reasonable action as any Holder may reasonably request in
writing (including, without limitation, making such reasonable representations
as any such Holder may reasonably request), all to the extent required from time
to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 and Rule 144A under the Securities Act and customarily
taken in connection with sales pursuant to such exemptions. Upon the written
request of any Holder, the Company and the Guarantor shall deliver to such
Holder a written statement as to whether they have complied with such filing
requirements, unless such a statement has been included in the Company's and the
Guarantor's most recent report filed pursuant to Section 13 or Section 15(d) of
Exchange Act. Notwithstanding the foregoing, nothing in this Section 7 shall be
deemed to require the Company or the Guarantor to register any of their
securities (other than the Common Stock) under any section of the Exchange Act.

         SECTION 8. Underwritten Registrations. The Holders of Registrable
Securities covered by a Shelf Registration Statement who desire to do so may
sell such Registrable Securities to an underwriter in an underwritten offering
for reoffering to the public. If any of the Registrable Securities covered by
any Shelf Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority of such
Registrable Securities included in such offering, subject to the consent of the
Company and the Guarantor (which shall not be unreasonably withheld or delayed),
and such Holders shall be responsible for all underwriting commissions and
discounts and any transfer taxes in connection therewith. No person may
participate in any underwritten registration hereunder unless such person (i)
agrees to sell such person's Registrable Securities on the basis reasonably
provided in any underwriting arrangements approved by the persons entitled
hereunder to approve such arrangements and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.

         SECTION 9. Miscellaneous.

         (a) No Conflicting Agreements. Neither the Company nor the Guarantor
is, as of the date hereof, a party to, nor shall either of them, on or after the
date of this Agreement, enter into, any agreement with respect to its securities
that conflicts with the rights granted to the Holders in this Agreement. The
Company and the Guarantor each represents and warrants that the rights granted
to the Holders hereunder do not in any way conflict with the rights granted to
the holders of the Company's or the Guarantor's securities under any other
agreements.

         (b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company and the


                                       19

Guarantor have obtained the written consent of Holders of a majority of the then
outstanding Underlying Common Stock constituting Registrable Securities (with
Holders of Notes deemed to be the Holders, for purposes of this Section, of the
number of outstanding shares of Underlying Common Stock into which such Notes
are or would be convertible as of the date on which such consent is requested).
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders whose securities are being sold pursuant to a Registration Statement and
that does not directly or indirectly affect the rights of other Holders may be
given by Holders of at least a majority of the Registrable Securities being sold
by such Holders pursuant to such Registration Statement; provided that the
provisions of this sentence may not be amended, modified or supplemented except
in accordance with the provisions of the immediately preceding sentence.
Notwithstanding the foregoing sentence, (i) this Agreement may be amended by
written agreement signed by the Company, the Guarantor and the Representatives,
without the consent of the Holders of Registrable Securities, to cure any
ambiguity or to correct or supplement any provision contained herein that may be
defective or inconsistent with any other provision contained herein, or to make
such other provisions in regard to matters or questions arising under this
Agreement that shall not adversely affect the interests of the Holders of
Registrable Securities. Each Holder of Registrable Securities outstanding at the
time of any such amendment, modification, supplement, waiver or consent or
thereafter shall be bound by any such amendment, modification, supplement,
waiver or consent effected pursuant to this Section 8(b), whether or not any
notice, writing or marking indicating such amendment, modification, supplement,
waiver or consent appears on the Registrable Securities or is delivered to such
Holder.

         (c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by facsimile, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:

                  (i) if to a Holder, at the most current address given by such
         Holder to the Company and the Guarantor in a Notice and Questionnaire
         or any amendment thereto;

                  (ii) if to the Company, to:

                          PPL Energy Supply, LLC
                          Two North Ninth Street
                          Allentown, Pennsylvania 18101
                          Facsimile:  (610) 774-6726

                          and

                          Simpson Thacher & Bartlett
                          425 Lexington Avenue
                          New York, New York 10017


                                       20

                          Attention:  Vincent Pagano
                          Facsimile:  (212) 455-2502;

                  (iii) if to the Guarantor, to:

                          PPL Corporation
                          Two North Ninth Street
                          Allentown, Pennsylvania 18101
                          Facsimile:  (610) 774-6726

                          and

                          Simpson Thacher & Bartlett
                          425 Lexington Avenue
                          New York, New York 10017
                          Attention:  Vincent Pagano
                          Facsimile:  (212) 455-2502

                  (iv) if to the Initial Purchasers, to:

                          Morgan Stanley & Co. Incorporated
                          1585 Broadway
                          New York, New York
                          Attention:  Equity Capital Markets
                          Telecopy No.: (212) 761-0538

or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.

         (d) Approval of Holders. Whenever the consent or approval of Holders of
a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company, the Guarantor or their affiliates
(as such term is defined in Rule 405 under the Securities Act) (other than the
Initial Purchasers or subsequent Holders if such subsequent Holders are deemed
to be such affiliates solely by reason of their holdings of such Registrable
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.

         (e) Successors and Assigns. Any person who purchases any Registrable
Securities from the Initial Purchasers shall be deemed, for purposes of this
Agreement, to be an assignee of the Initial Purchasers. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding upon each Holder
of any Registrable Securities, provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Indenture. If any transferee of any Holder
shall acquire Registrable Securities, in any manner, whether by operation of law
or otherwise, such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities,
such person shall be conclusively deemed to have agreed to be bound by and to


                                       21

perform all of the terms and provisions of this Agreement and such person shall
be entitled to receive the benefits hereof.

         (f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.

         (g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

         (h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

         (i) Severability. If any term provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction, it being intended that all of the rights and privileges of the
parties shall be enforceable to the fullest extent permitted by law.

         (j) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company and the Guarantor with respect to the Registrable
Securities. Except as provided in the Purchase Agreement, there are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, with respect to the registration rights granted by the
Company and the Guarantor with respect to the Registrable Securities. This
Agreement supersedes all prior agreements and undertakings among the parties
with respect to such registration rights. No party hereto shall have any rights,
duties or obligations other than those specifically set forth in this Agreement.

         (k) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for additional amounts under Section
2(e) hereof to the extent such additional amounts accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.


                                       22

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                          PPL ENERGY SUPPLY, LLC



                                          By: /s/ James E. Abel
                                              --------------------
                                              Name:  James E. Abel
                                              Title:  Treasurer

                                          PPL CORPORATION



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

Confirmed and accepted as of the date first above written:

MORGAN STANLEY & CO. INCORPORATED
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
WACHOVIA SECURITIES, INC.

By:  Morgan Stanley & Co. Incorporated

By:  /s/ David P. Sun
     --------------------------
     Name:  David P. Sun
     Title:  Executive Director



                                             23

EX-4.3

                                                                     Exhibit 4.3







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


                            PPL ENERGY SUPPLY, LLC,
                                   AS ISSUER




                                PPL CORPORATION,
                                  AS GUARANTOR


                                       TO


                              JPMORGAN CHASE BANK,
                                   AS TRUSTEE


                                   ---------




                                   INDENTURE


                            DATED AS OF MAY 21, 2003

                    2 5/8% CONVERTIBLE SENIOR NOTES DUE 2023


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

                               TABLE OF CONTENTS



                                                                                                            PAGE
                                                                                                         
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.....................................       1

     SECTION 101.   Definitions.........................................................................       1
     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 or Company.................................................      13
     SECTION 106.   Notice to Holders of Securities; Waiver.............................................      14
     SECTION 107.   Conflict with Trust Indenture Act...................................................      14
     SECTION 108.   Effect of Headings and Table of Contents............................................      14
     SECTION 109.   Successors and Assigns..............................................................      14
     SECTION 110.   Separability Clause.................................................................      14
     SECTION 111.   Benefits of Indenture...............................................................      15
     SECTION 112.   GOVERNING LAW.......................................................................      15
     SECTION 113.   Legal Holidays......................................................................      15

ARTICLE TWO THE SECURITIES..............................................................................      15

     SECTION 201.   Title and Terms.....................................................................      15
     SECTION 202.   Legends.............................................................................      17
     SECTION 203.   Execution, Authentication, Delivery and Dating......................................      22
     SECTION 204.   Form of Trustee's Certificate of Authentication.....................................      22
     SECTION 205.   Temporary Securities................................................................      23
     SECTION 206.   Registration, Registration of Transfer and Exchange.................................      23
     SECTION 207.   Mutilated, Destroyed, Lost and Stolen Securities....................................      24
     SECTION 208.   Payment of Interest; Interest Rights Preserved......................................      25
     SECTION 209.   Persons Deemed Owners...............................................................      26
     SECTION 210.   Book-Entry Provisions for the Global Securities.....................................      26
     SECTION 211.   Special Transfer Provisions.........................................................      28
     SECTION 212.   Cancellation........................................................................      31
     SECTION 213.   Computation of Interest.............................................................      32

ARTICLE THREE COVENANTS.................................................................................      32

     SECTION 301.   Payment of Principal and Interest...................................................      32
     SECTION 302.   Maintenance of Office or Agency.....................................................      32
     SECTION 303.   Money for Securities Payments to Be Held in Trust...................................      33
     SECTION 304.   Existence as a Limited Liability Company............................................      35
     SECTION 305.   Annual Officer's Certificate........................................................      35

ARTICLE FOUR REDEMPTION OF SECURITIES AT THE OPTION OF THE COMPANY......................................      35

     SECTION 401.   Redemption of Securities at the Option of the Company...............................      35



                                       i



                                                                                                            PAGE
                                                                                                         
     SECTION 402.   Applicability of Article............................................................      35
     SECTION 403.   Election to Redeem; Notice to Trustee...............................................      35
     SECTION 404.   Selection by Trustee of Securities to Be Redeemed...................................      36
     SECTION 405.   Notice of Redemption................................................................      36
     SECTION 406.   Deposit of Redemption Price.........................................................      37
     SECTION 407.   Securities Payable on Redemption Date...............................................      37
     SECTION 408.   Securities Redeemed in Part.........................................................      38

ARTICLE FIVE PURCHASE OF SECURITIES AT THE OPTION OF HOLDERS............................................      38

     SECTION 501.   Purchase of Securities at Option of Holders Upon Purchase Dates.....................      38
     SECTION 502.   Purchase of Securities at the Option of Holders Upon a Fundamental Change...........      41
     SECTION 503.   Terms of Purchase...................................................................      44

ARTICLE SIX SATISFACTION AND DISCHARGE..................................................................      45

     SECTION 601.   Satisfaction and Discharge of Indenture.............................................      45

ARTICLE SEVEN EVENTS OF DEFAULT; REMEDIES...............................................................      46

     SECTION 701.   Events of Default...................................................................      46
     SECTION 702.   Acceleration of Stated Maturity; Rescission and Annulment...........................      47
     SECTION 703.   Collection of Indebtedness and Suits for Enforcement by Trustee.....................      48
     SECTION 704.   Trustee May File Proofs of Claim....................................................      48
     SECTION 705.   Trustee May Enforce Claims Without Possession of Securities.........................      49
     SECTION 706.   Application of Money Collected......................................................      49
     SECTION 707.   Limitation on Suits.................................................................      50
     SECTION 708.   Unconditional Right of Holders to Receive Principal and Interest....................      50
     SECTION 709.   Restoration of Rights and Remedies..................................................      50
     SECTION 710.   Rights and Remedies Cumulative......................................................      51
     SECTION 711.   Delay or Omission Not Waiver........................................................      51
     SECTION 712.   Control by Holders of Securities....................................................      51
     SECTION 713.   Waiver of Past Defaults.............................................................      51
     SECTION 714.   Undertaking for Costs...............................................................      52
     SECTION 715.   Waiver of Usury, Stay or Extension Laws.............................................      52

ARTICLE EIGHT THE TRUSTEE...............................................................................      52

     SECTION 801.   Certain Duties and Responsibilities.................................................      52
     SECTION 802.   Notice of Defaults..................................................................      53
     SECTION 803.   Certain Rights of Trustee...........................................................      54
     SECTION 804.   Not Responsible for Recitals or Issuance of Securities..............................      55
     SECTION 805.   May Hold Securities.................................................................      55
     SECTION 806.   Money Held in Trust.................................................................      55
     SECTION 807.   Compensation and Reimbursement......................................................      56
     SECTION 808.   Disqualification; Conflicting Interests.............................................      56
     SECTION 809.   Corporate Trustee Required; Eligibility.............................................      56



                                       ii



                                                                                                            PAGE
                                                                                                         
     SECTION 810.   Resignation and Removal; Appointment of Successor...................................      57
     SECTION 811.   Acceptance of Appointment by Successor..............................................      58
     SECTION 812.   Merger, Conversion, Consolidation or Succession to Business.........................      59
     SECTION 813.   Preferential Collection of Claims Against Company...................................      59
     SECTION 814.   Appointment of Authenticating Agent.................................................      59

ARTICLE NINE GUARANTEE..................................................................................      61

     SECTION 901.   Guarantee...........................................................................      61
     SECTION 902.   Subrogation.........................................................................      62
     SECTION 903.   Consideration.......................................................................      62

ARTICLE TEN CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER OF GUARANTOR............................      63

     SECTION 1001.   Guarantor May Consolidate, Etc., Only on Certain Terms.............................      63
     SECTION 1002.   Successor Person Substituted.......................................................      63
     SECTION 1003.   Limitations........................................................................      64

ARTICLE ELEVEN CONVERSION OF SECURITIES.................................................................      64

     SECTION 1101.   Conversion Privilege...............................................................      64
     SECTION 1102.   Conversion Procedure...............................................................      64
     SECTION 1103.   Fractional Shares..................................................................      66
     SECTION 1104.   Taxes on Conversion................................................................      66
     SECTION 1105.   Guarantor To Provide Shares of Common Stock........................................      66
     SECTION 1106.   Adjustment of Conversion Rate......................................................      67
     SECTION 1107.   When Adjustment May Be Deferred....................................................      70
     SECTION 1108.   When No Adjustment Required........................................................      71
     SECTION 1109.   Notice of Adjustment...............................................................      71
     SECTION 1110.   Voluntary Increase.................................................................      71
     SECTION 1111.   Notice of Certain Transactions.....................................................      72
     SECTION 1112.   Trustee's Adjustment Disclaimer....................................................      72
     SECTION 1113.   Successive Adjustments.............................................................      73
     SECTION 1114.   Calculations in Respect of the Securities..........................................      73
     SECTION 1115.   Future Stockholder Rights Plans....................................................      74

ARTICLE TWELVE HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY........................................      74

     SECTION 1201.   Lists of Holders...................................................................      74
     SECTION 1202.   Reports by Trustee and Company.....................................................      74

ARTICLE THIRTEEN CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER OF THE COMPANY.....................      75

     SECTION 1301.   Company May Consolidate, Etc., Only on Certain Terms...............................      75
     SECTION 1302.   Successor Person Substituted.......................................................      75
     SECTION 1303.   Limitations........................................................................      76



                                      iii



                                                                                                            PAGE
                                                                                                         
ARTICLE FOURTEEN SUPPLEMENTAL INDENTURES................................................................      76

     SECTION 1401.   Supplemental Indentures Without Consent of Holders.................................      76
     SECTION 1402.   Supplemental Indentures With Consent of Holders....................................      78
     SECTION 1403.   Execution of Supplemental Indentures...............................................      78
     SECTION 1404.   Effect of Supplemental Indentures..................................................      79
     SECTION 1405.   Conformity With Trust Indenture Act................................................      79
     SECTION 1406.   Reference in Securities to Supplemental Indentures.................................      79

ARTICLE FIFTEEN IMMUNITY OF MEMBERS, OFFICERS, DIRECTORS AND MANAGERS...................................      79

     SECTION 1501.   Liability Limited..................................................................      79

Exhibit A     Form of 2 5/8% Convertible Senior Note due 2023



                                       iv

                             PPL ENERGY SUPPLY, LLC

           Reconciliation and tie between Trust Indenture Act of 1939
                    and Indenture, dated as of May 21, 2003



Trust Indenture Act Section                               Indenture Section
                                                       
Section 310 (a)(1)..............................          809
            (a)(2)...............................         809
            (a)(3)...............................         Not Applicable
            (a)(4)...............................         Not Applicable
            (b)..................................         808
                                                          810
Section 311 (a)..................................         813
            (b)..................................         813
            (c)..................................         Not Applicable
Section 312 (a)..................................         1201
            (b)..................................         1201
            (c)..................................         1201
Section 313 (a)..................................         1202
            (b)(1)...............................         Not Applicable
            (b)(2)...............................         1202
            (c)..................................         1202
            (d)..................................         1202
Section 314 (a)..................................         1202
            (a)(4)...............................         305
            (b)..................................         Not Applicable
            (c)(1)...............................         102
            (c)(2)...............................         102
            (c)(3)...............................         Not Applicable
            (d)..................................         Not Applicable
            (e)..................................         102
Section 315 (a)..................................         801(a)
            (b)..................................         802
            (c)..................................         801(b)
            (d)..................................         801(c)
            (d)(1)...............................         801(a)(1), 801(c)(1)
            (d)(2)...............................         801(c)(2)
            (d)(3)...............................         801(c)(3)
            (e)..................................         714
Section 316 (a)..................................         712
                                                          713
            (a)(1)(A)............................         702
                                                          712
            (a)(1)(B)............................         713
            (a)(2)...............................         Not Applicable



                                       v

                                                       
            (b)..................................         708
Section 317 (a)(1)...............................         703
            (a)(2)...............................         704
            (b)..................................         303
Section 318 (a)..................................         107



Note: This reconciliation table shall not, for any purpose, be deemed to be part
of this Indenture.


                                       vi

            INDENTURE, dated as of May 21, 2003 among PPL ENERGY SUPPLY, LLC, a
limited liability company 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, as issuer, PPL
CORPORATION, a Pennsylvania corporation (the "GUARANTOR"), as guarantor, and
JPMORGAN CHASE BANK, a New York banking corporation, having its principal
corporate trust office at 4 New York Plaza, New York, New York 10004, as Trustee
(herein called the "TRUSTEE").

                                     RECITAL

            The Company and the Guarantor have duly authorized the execution and
delivery of this Indenture to provide for the issuance of the Company's 2 5/8%
Convertible Senior Notes due 2023 (herein called the "SECURITIES"), to be issued
as contemplated herein; and all acts necessary to make this Indenture a valid
agreement of the Company and 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 (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 Section 101 have the meanings assigned
      to them in this Section 101 and include the plural as well as the
      singular;

            (b) all terms used herein without definition 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.

            "ACT," when used with respect to any Holder of a Security, has the
meaning specified in Section 104(a) hereof.

            "ADDITIONAL AMOUNTS" means all amounts, if any, payable pursuant to
Section 2(e) of the Registration Rights Agreement.

            "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.

            "AGENT MEMBERS" has the meaning specified in Section 210(a) hereof.

            "APPLICABLE STOCK PRICE" of Common Stock on any date means the
average of the Closing Sale Price for the five consecutive Trading Days starting
the third Trading Day following the applicable Conversion Date.

            "AUTHENTICATING AGENT" means any Person or Persons authorized by the
Trustee to act on behalf of the Trustee to authenticate the Securities.

            "AUTHORIZED OFFICER" means the President, any Vice President, the
Treasurer, or any other Person duly authorized by the Company or the Guarantor,
as applicable, to act in respect of matters relating to this Indenture.

            "BOARD OF DIRECTORS" means either the board of directors of the
Guarantor or any committee thereof duly authorized to act in respect of matters
relating to this Indenture.

            "BOARD OF MANAGERS" means either the board of managers of the
Company or any committee thereof duly authorized to act in respect of matters
relating to this Indenture.

            "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
may be, to have been duly adopted by the Board of Directors of the Guarantor or
the Board of Managers of the Company, as the case may be, and to be in full
force and effect on the date of such certification, and delivered to the
Trustee.

            "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 any Paying Agent is located.


                                       2

            "CASH SETTLEMENT NOTICE PERIOD" has the meaning specified in Section
1102 hereof.

            "CLOSING SALE PRICE" of the Common Stock on any date means the
closing per share sale price (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average ask prices) on such date as reported
in composite transactions for the principal United States securities exchange on
which the Common Stock is traded or, if the Common Stock is not listed on a
United States national or regional securities exchange, as reported by the
Nasdaq System or by the National Quotation Bureau Incorporated.

            "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 STOCK" means the Common Stock, par value $0.01 per share, of
the Guarantor.

            "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 thereof and delivered to the Trustee.

            "COMPANY PURCHASE NOTICE" has the meaning specified in Section
501(d) hereof.

            "CONVERSION AGENT" means the Trustee or such other office or agency
designated by the Company where Securities may be presented for conversion.

            "CONVERSION DATE" has the meaning specified in Section 1102 hereof.

            "CONVERSION PRICE" has the meaning specified in Section 1101 hereof.

            "CONVERSION RATE" has the meaning specified in Section 1101 hereof.

            "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 4 New York Plaza, New York, New York 10004, Attention: Institutional Trust
Services.

            "CORPORATION" means a corporation, association, company, joint stock
company, limited liability company or business trust, and references to
"corporate" and other derivations of "corporation" herein shall be deemed to
include appropriate derivations of such entities.


                                       3

            "CURRENT MARKET PRICE" per share of Common Stock on any day means
the average of the daily closing per share sale price (or if no closing sale
price is reported, the average of the bid and ask prices or, if more than one in
either case, the average of the average bid and the average ask prices) on such
date as reported in composite transactions for the principal United States
securities exchange on which the Common Stock is traded or, if the Common Stock
is not listed on a United States national or regional securities exchange, as
reported by the Nasdaq System or by the National Quotation Bureau Incorporated
for the five consecutive Trading Days ending on the earlier of the day in
question (including upon the occurrence of a Fundamental Change) and the day
before the "ex-dividend trading" with respect to the issuance or distribution
requiring such computation.

            "DEFAULTED INTEREST" has the meaning specified in Section 208
hereof.

            "DEFINITIVE SECURITY" means, any Security that is not a Global
Security.

            "DEPOSITARY" means, with respect to Securities issuable or issued in
whole or in part in the form of one or more Global Securities, DTC or any other
clearing agency registered under the Exchange Act and appointed as such pursuant
to Section 210(d).

            "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.

            "DTC" means The Depository Trust Company.

            "EVENT OF DEFAULT" has the meaning specified in Section 701 hereof.

            "EX-DATE" or "EX-DIVIDEND TRADING" means, when used with respect to
any issuance or distribution, the first date on which the Common Stock trades
regular way on the applicable exchange or in the applicable market without the
right to receive the issuance or distribution.

            "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

            "EXPIRATION TIME" has the meaning specified in Section 1106(a)(6)
hereof.

            "FUNDAMENTAL CHANGE" is any transaction or event (whether by means
of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) in connection with
which all or substantially all of the Common Stock is exchanged for, converted
into, acquired for or constitutes solely the right to receive, consideration
which is not all or substantially all common stock (including American
Depositary Receipts) that (i) is listed on, or immediately after the transaction
or event will be listed on, a United States national securities exchange, or
(ii) is approved, or immediately after the transaction or event will be
approved, for quotation on the Nasdaq National Market or any similar United
States system of automated dissemination of quotations of securities prices.

            "FUNDAMENTAL CHANGE NOTICE" has the meaning provided in Section
502(b) hereof.


                                       4

            "FUNDAMENTAL CHANGE PAYMENT" has the meaning provided in Section
502(a) hereof.

            "FUNDAMENTAL CHANGE PURCHASE DATE" has the meaning provided in
Section 502(a) hereof.

            "FUNDAMENTAL CHANGE PURCHASE NOTICE" has the meaning provided in
Section 502(c)(1) hereof.

            "FUNDAMENTAL CHANGE PURCHASE PRICE" has the meaning provided in
Section 502(a) hereof.

            "GLOBAL SECURITY" means a Security evidencing all or part of the
Securities, issued to the Depositary or its nominee and registered in the name
of the Depositary or its nominee.

            "GLOBAL SECURITY LEGEND" has the meaning provided in Section 202(b)
hereof.

            "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 payment of the Securities and
certain other monetary obligations of the Company pursuant to Article Nine and
the guarantee of the obligations of the Company to deliver shares of Common
Stock upon conversion of the Securities pursuant to Section 1105 by the
Guarantor.

            "GUARANTOR" means the Person named as the "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 mean such successor person.

            "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, including, for all purposes of
this instrument, the provisions of the Trust Indenture Act that are deemed to be
a part of and govern this Indenture.


                                       5

            "IAI" means an institutional "accredited investor" as described in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

            "INITIAL PURCHASERS" means the several initial purchasers party to
the Purchase Agreement.

            "INTEREST," where the context requires, shall include Additional
Amounts, if any.

            "INTEREST PAYMENT DATE" means each May 15 and November 15 of each
year, commencing November 15, 2003.

            "MARKET PRICE" means, with respect to the Common Stock, the average
of the Closing Sale Prices for the five Trading Days ending on the third
Business Day prior to the applicable Purchase Date, or, if such Business Day is
not a Trading Day, then on the last Trading Day prior to such Business Day,
appropriately adjusted to take into account the occurrence of certain events
that would result in an adjustment of the Conversion Rate.

            "MONETARY OBLIGATIONS" has the meaning specified in Section 901
hereof.

            "NOTICE OF DEFAULT" means a written notice of the kind specified in
Section 701(c).

            "OBLIGATIONS" has the meaning specified in Section 901 hereof.

            "OFFICER'S CERTIFICATE" means a certificate signed by an Authorized
Officer of the Company or the Guarantor, as applicable, 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.

            "ORIGINAL ISSUE DATE" means May 21, 2003.

            "OUTSTANDING," when used with respect to the 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 for whose payment or redemption, or for whose
      purchase pursuant to Article Five, money in the necessary amount has been
      theretofore deposited with the Trustee or the Paying Agent (other than the
      Company or the Guarantor) in trust or set aside and segregated in trust by
      the Company or the Guarantor (if the Company or the Guarantor shall act as
      Paying Agent) for the Holders of such Securities; provided, however, that
      if such Securities are to redeemed, notice of such redemption has been
      duly given pursuant to this Indenture or provision therefor satisfactory
      to the Trustee has been made; and

            (c) Securities which have been paid pursuant to Section 207 or in
      exchange for or in lieu of which other Securities have been authenticated
      and delivered pursuant to this


                                       6

      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;

provided, however, that in determining whether or not the Holders of the
requisite principal amount of the Securities Outstanding under this Indenture
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, 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, determined without regard to this clause) 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.

            "PAYING AGENT" means any Person, including the Company or the
Guarantor, authorized by the Company or Guarantor, as applicable, to pay the
principal of, or interest on, any Securities on behalf of the Company or any
Guarantees on behalf of the Guarantor.

            "PERSON" means any individual, corporation, partnership, limited
liability partnership, 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 means
the place or places, at which, subject to Section 302, principal of, and
interest on, the Securities 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 207 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.

            "PURCHASE AGREEMENT" means the Purchase Agreement, dated as of May
15, 2003, among the Company, the Guarantor and Morgan Stanley & Co.
Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wachovia
Securities, Inc., as the representatives of the Initial Purchasers.

            "PURCHASE DATE" has the meaning specified in Section 501(a) hereof.

            "PURCHASE PRICE" has the meaning specified in Section 501(a) hereof.

            "PURCHASE NOTICE" has the meaning specified in Section 501(e)(1)
hereof.


                                       7

            "PURCHASED SHARES" has the meaning specified in Section 1106(a)(6)
hereof.

            "QIB" means any "qualified institutional buyer" (as term is defined
in Rule 144A).

            "REDEMPTION DATE" has the meaning specified in Section 401 hereof.

            "REDEMPTION PRICE" has the meaning specified in Section 401 hereof.

            "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of May 21, 2003, among the Company, the Guarantor and Morgan
Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Wachovia Securities, Inc., as the representatives of the Initial Purchasers.

            "REGULAR RECORD DATE" for the interest on the Securities and
Additional Amounts, if any, means the May 1 (whether or not a Business Day) next
preceding an Interest Payment Date on May 15 and the November 1 (whether or not
a Business Day) next preceding an Interest Payment Date on November 15.

            "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
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.

            "RESTRICTED SECURITIES" has the meaning specified in Section 202(a)
hereof.

            "RESTRICTED SECURITIES LEGEND" has the meaning specified in Section
202(a) hereof.

            "RULE 144A" means Rule 144A under the Securities Act.

            "SALE PRICE" of Common Stock on any date means the closing sale
price per share of the Common Stock on that date (or if no closing sale price is
reported, the average of the bid and ask prices or, if more than one in either
case, the average of the average bid and the average ask prices) as reported on
the Nasdaq National Market or, if the Common Stock is listed on a United States
national or regional securities exchange, as reported in composite transactions
for the principal United States securities exchange on which Common Stock is
traded.

            "SECURITIES" has the meaning stated in the recital of this Indenture
and more particularly means any securities authenticated and delivered under
this Indenture.

            "SECURITIES ACT" means the Securities Act of 1933, as amended.


                                       8

            "SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective
meanings specified in Section 206.

            "SHELF REGISTRATION STATEMENT" shall have the meaning contemplated
by and in accordance with the terms of the Registration Rights Agreement.

            "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 208(a).

            "SPIN-OFF MARKET PRICE" per share of Common Stock of the Guarantor
or the capital stock of, or similar equity interests in, a Subsidiary or other
business unit of the Guarantor on any day means the average of the daily Closing
Sale Price of such securities for the 10 consecutive Trading Days commencing on
and including the fifth Trading Day after the "ex date" with respect to the
issuance or distribution requiring such computation.

            "STATED MATURITY" means May 15, 2023.

            "STOCK OBLIGATIONS" has the meaning specified in Section 901 hereof.

            "SUBSIDIARY" means any corporation, company, limited liability
company or other business entity of which the requisite number of shares of
stock or other equity ownership interests having ordinary voting power (without
regard to the occurrence of any contingency) to elect a majority of the
directors, managers or trustees thereof, or any partnership of which more than
50% of the partners' equity interests (considering all partners' equity
interests as a single class) is, in each case, at the time owned or controlled,
directly or indirectly, by the Guarantor, one or more of the Subsidiaries, or
any combination thereof.

            "TRADING DAY" means (a) if the applicable security is listed,
admitted for trading or quoted on the New York Stock Exchange, the Nasdaq
National Market or another U.S. national or regional securities exchange, a day
on which the New York Stock Exchange, the Nasdaq National Market or such other
national or regional securities exchange, as the case may be, is open for
business or (b) if the applicable security is not so listed, admitted for
trading or quoted, any Business Day.

            "TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder.

            "TRUST INDENTURE ACT" means, as of any time, the Trust Indenture Act
of 1939 as in force at such time.

            "UNITED STATES" means the United States of America, its territories,
its possessions and other areas subject to its jurisdiction.

SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.


                                       9

            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 or the Guarantor,
as the case may be, shall 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.

            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


                                       10

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
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 or the Guarantor 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 or Guarantees issued
under the authority of such defective document or instrument shall nevertheless
be the valid obligations of the Company or the Guarantor, as the case may be,
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. Except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company or the
Guarantor, as applicable. 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, or of the
holding by any Person of a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 801) conclusive in favor of the Trustee, the
Company and the Guarantor, if made in the manner provided in this Section.


                                       11

            (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
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, the Company and the Guarantor 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 and register 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 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, 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 authenticated and delivered by the Trustee in exchange for
Outstanding Securities.

            (g) The Company may, at its option, by Company Order, 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 the Company shall have no obligation to do so; provided,
however, that the Company may not 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 702,
any request to institute proceedings referred to in Section 707 or any direction
referred to in Section 712. 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 as of the record date) and/or (ii)
which Holders


                                       12

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 OR COMPANY.

            Any request, demand, authorization, direction, notice, consent,
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, (a) the Trustee
by any Holder, by the Company or by the Guarantor, or (b) 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 either party hereto may from time to
time designate:

                  If to the Company and/or the Guarantor, to:

                  PPL Energy Supply, LLC
                  Two North Ninth Street
                  Allentown, Pennsylvania  18101

                  Attention: Treasurer
                  Telephone: (610) 774-5987
                  Telecopy:  (610) 774-5235

                  and

                  PPL Corporation
                  Two North Ninth Street
                  Allentown, Pennsylvania  18101

                  Attention: Vice President-Finance and Treasurer
                  Telephone: (610) 774-5987
                  Telecopy:  (610) 774-5235

                  If to the Trustee, to:

                  JPMorgan Chase Bank
                  4 New York Plaza,
                  New York, New York 10004

                  Attention: Institutional Trust Services
                  Telephone: (212) 623-5181
                  Telecopy:  (212) 683-6216


                                       13

            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.

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.
For purposes of this Section, the Indenture shall be deemed to be at all times
qualified under the Trust Indenture Act.

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 each of the
Company or the Guarantor shall bind its successors and assigns, whether so
expressed or not.

SECTION 110. SEPARABILITY CLAUSE.


                                       14

            In case any provision in this Indenture or the Securities 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 or the Securities, express or implied,
shall give to any Person, other than the parties hereto, their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.

SECTION 112. GOVERNING LAW.

            THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

SECTION 113. LEGAL HOLIDAYS.

            In any case where any Interest Payment Date, Redemption Date,
Purchase Date or Fundamental Change Purchase 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 which specifically states that such
provision shall apply in lieu of this Section) payment of interest or principal
or Additional Amounts 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
with the same force and effect as if made on the Interest Payment Date,
Redemption Date, Purchase Date or Fundamental Change Purchase 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, Purchase Date or Fundamental
Change Purchase Date or Stated Maturity, as the case may be, to such Business
Day.

                                  ARTICLE TWO

                                 THE SECURITIES

SECTION 201. TITLE AND TERMS.

            (a) The Securities shall be known and designated as the "2 5/8%
CONVERTIBLE SENIOR NOTES DUE 2023" of the Company. The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is limited to $400,000,000, except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of
other Securities pursuant to Sections 205, 206, 207, 408, 503, 1102 or 1406. The
Securities shall be issuable in denominations of $1,000 or integral multiples
thereof.

            (b) The Securities shall mature on the date of Stated Maturity.

            (c) Interest on the Securities shall accrue at the rate of 2 5/8%
per annum from and including the Original Issue Date until the principal thereof
is paid or made available for payment. Interest shall be paid semi-annually in
arrears on each Interest Payment Date. In


                                       15

addition, Additional Amounts may accrue on the Securities and be payable at the
times and in the circumstances described in the Registration Rights Agreement.

            (d) A Holder of any Security at the close of business on a Regular
Record Date shall be entitled to receive interest and Additional Amounts, if
any, on such Security on the corresponding Interest Payment Date. Holders of
Securities at the close of business on a Regular Record Date shall receive
payment of interest payable on the corresponding Interest Payment Date
notwithstanding the conversion of such Securities at any time after the close of
business on such Regular Record Date. Securities surrendered for conversion
during the period from the close of business on any Regular Record Date to the
opening of business on the corresponding Interest Payment Date (except with
respect to Securities in respect of which a Redemption Date or Fundamental
Change Purchase Date has been set that falls within this period or on such
Interest Payment Date or to the extent any overdue interest exists at the time
of such conversion) must be accompanied by payment in funds acceptable to the
Company of an amount equal to the interest that the Holder is to receive on the
Securities. Except where Securities surrendered for conversion must be
accompanied by payment as described above, no interest on converted Securities
will be payable by the Company on any Interest Payment Date subsequent to the
date of conversion.

            (e) Principal of, interest, and Additional Amounts, if any, on
Global Securities shall be payable to DTC in immediately available funds.

            (f) Principal on Definitive Securities shall be payable in
immediately available funds or, at the option of the Company, at the office or
agency of the Company maintained for such purpose, initially the Corporate Trust
Office of the Trustee. Interest and Additional Amounts, if any, on Definitive
Securities shall be payable at the Company's option (A) to Holders having an
aggregate principal amount of Securities of $2,000,000 or less, by check mailed
to the Holders of such Securities at the address therefore set forth in the
Security Register and (B) to Holders having an aggregate principal amount of
Securities of more than $2,000,000, either by check mailed to each such Holder
at the address therefore set forth in the Security Register or, upon application
by any such Holder to the Security Registrar not later than the relevant Regular
Record Date, by wire transfer in immediately available funds to that Holder's
account within the United States specified in such application, which
application shall remain in effect until the Holder notifies, in writing, the
Security Registrar to the contrary.

            (g) The Securities shall be redeemable at the option of the Company
as provided in Article Four.

            (h) The Securities shall be purchasable by the Company at the option
of Holders as provided in Article Five.

            (i) The Securities shall be convertible at the option of the Holders
as provided in Article Eleven.

            (j) The Securities shall be guaranteed as to payment and performance
of conversion rights by the Guarantor as provided in Article Nine; provided that
nothing herein shall require the Guarantee to be endorsed on any Security and
the failure to so endorse a


                                       16

Guarantee thereon shall not impair the validity or enforceability of the
Guarantee with respect to any such Security.

            (k) The Securities shall initially be issued in the form of one or
more Global Securities.

            (l) The Securities shall be in substantially the form of Exhibit A
hereto with such appropriate insertions, omissions, legends, 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, as evidenced by their execution of the
Securities.

SECTION 202. LEGENDS.

            (a) Restricted Securities Legends.

            Each Security issued hereunder shall, upon issuance, bear the legend
set forth in Section 202(a)(1), and each Common Stock certificate representing
shares of the Common Stock issued upon conversion of any Security issued
hereunder, shall, upon issuance, bear the legend set forth in Section 202(a)(2)
(each such legend, a "RESTRICTED SECURITIES LEGEND"), and such legend shall not
be removed except as provided in Section 202(a)(3). Each Security that bears or
is required to bear the Restricted Securities Legend set forth in Section
202(a)(1) (together with each Common Stock certificate representing shares of
the Common Stock issued upon conversion of such Security that bears or is
required to bear the Restricted Securities Legend set forth in Section
202(a)(2), collectively, the "RESTRICTED SECURITIES") shall be subject to the
restrictions on transfer set forth in this Section 202(a) (including the
applicable Restricted Securities Legend set forth below), and the Holder of each
such Restricted Security, by such Holder's acceptance thereof, shall be deemed
to have agreed to be bound by all such restrictions on transfer.

            As used in this Section 202(a), the term "TRANSFER" encompasses any
sale, pledge, transfer or other disposition whatsoever of any Restricted
Security.

                  (1) Restricted Securities Legend for Securities.

                  Except as provided in Section 202(a)(3), any certificate
      evidencing a Security (and all Securities issued in exchange therefor or
      substitution thereof, other than stock certificates representing shares of
      the Common Stock, if any, issued upon conversion thereof which shall bear
      the legend set forth in Section 202(a)(2), if applicable) shall bear a
      Restricted Securities Legend in substantially the following form:

            "THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
            NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
            AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE
            OR ANY OTHER JURISDICTION. THIS NOTE AND ANY COMMON STOCK ISSUABLE
            ON CONVERSION OF THIS NOTE AND ANY INTEREST OR PARTICIPATION


                                       17

            HEREIN MAY NOT BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
            ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
            REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
            SUBJECT TO, SUCH REGISTRATION.

            THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN
            BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS
            PURCHASED NOTES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE OR
            ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES, PRIOR TO THE
            DATE (THE "RESALE RESTRICTION TERMINATION DATE") THAT IS TWO YEARS
            AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE
            ON WHICH PPL ENERGY SUPPLY, LLC (THE "COMPANY") OR ANY AFFILIATE OF
            THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR HEREOF),
            ONLY (A) TO THE COMPANY OR PPL CORPORATION, AS GUARANTOR, (B)
            PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
            EFFECTIVE UNDER THE SECURITIES ACT, (C) IF ELIGIBLE FOR RESALE
            PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
            REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
            IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN
            ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
            WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
            RULE 144A, (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
            MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
            THAT IS ACQUIRING THE NOTES OR ANY COMMON STOCK ISSUABLE UPON
            CONVERSION OF THIS NOTE FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
            SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
            TRANSACTION INVOLVING A MINIMUM PRINCIPAL AMOUNT OF THE NOTES OF
            $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR
            OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF
            THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
            FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
            THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
            PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION
            OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
            IT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
            THE RESALE RESTRICTION TERMINATION DATE. THE INDENTURE CONTAINS A
            PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER
            OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTION."


                                       18

                  (2) Restricted Securities Legend for the Common Stock Issued
            Upon Conversion of the Securities.

                  Each stock certificate representing shares of Common Stock
            issued upon conversion of the Securities will bear the following
            legend (unless such Common Stock has been sold pursuant to Rule 144
            or pursuant to a registration statement that has been declared
            effective under the Securities Act):

            "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
            1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF
            ANY STATE OR ANY OTHER JURISDICTION. THIS SECURITY MAY NOT BE
            REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
            OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
            SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
            REGISTRATION.

            THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS
            OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS
            PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
            SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION
            DATE") THAT IS TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
            SECURITY BY PPL CORPORATION (THE "COMPANY"), ONLY (A) TO THE
            COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
            DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) IF ELIGIBLE FOR
            RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON
            IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
            DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
            OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
            WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
            RULE 144A, (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
            MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
            THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
            ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
            PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION
            WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E)
            PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
            REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT
            PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR
            (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
            AND/OR OTHER INFORMATION SATISFACTORY TO IT. THIS LEGEND WILL BE
            REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
            TERMINATION DATE."


                                       19

                  (3) Removal of the Restricted Securities Legends.

                  Each Security and each Common Stock certificate representing
            shares of the Common Stock issued upon conversion of any Security
            (other than a Common Stock certificate representing shares of the
            Common Stock issued upon conversion of a Security that previously
            has been sold pursuant to a registration statement that has been
            declared effective under the Securities Act and which continues to
            be effective at the time of such sale) shall bear the applicable
            Restricted Securities Legend set forth in Section 202(a)(1) or
            202(a)(2), as the case may be, until the earlier of:

                        (i)   the date which is the later of two years after the
                  original issuance date of such Security and the last date that
                  the Company, the Guarantor or any of either of their
                  Affiliates was the owner of such Security;

                        (ii)  and the date such Security has, or such shares of
                  the Common Stock have been sold pursuant to a registration
                  statement that has been declared effective under the
                  Securities Act (and which continues to be effective at the
                  time of such sale).

            The Holder must give notice thereof to the Trustee and any transfer
            agent for the Common Stock, as applicable.

                  Notwithstanding the foregoing, the Restricted Securities
            Legend may only be removed from any Security or any Common Stock
            certificate representing shares of the Common Stock issued upon
            conversion of any Security if there is delivered to the Company and
            the Trustee such satisfactory evidence, which may include an opinion
            of counsel, as may be reasonably required by the Company, that
            neither such legend nor the restrictions on transfer set forth
            therein are required to ensure that transfers of such Security or
            shares of the Common Stock issued upon conversion of Securities, as
            the case may be, will not violate the registration requirements of
            the Securities Act or the qualification requirements under any state
            securities laws. Upon provision of such satisfactory evidence, at
            the written direction of the Company, (i) in the case of a Security,
            the Trustee shall authenticate and deliver in exchange for such
            Security another Security or Securities having an equal aggregate
            principal amount that does not bear such legend or (ii) in the case
            of a Common Stock certificate representing shares of the Common
            Stock, the transfer agent for the Common Stock shall authenticate
            and deliver in exchange for the Common Stock certificate or
            certificates representing such shares of Common Stock bearing such
            legend, one or more new Common Stock certificates representing a
            like aggregate number of shares of Common Stock that do not bear
            such legend. If the Restricted Securities Legend has been removed
            from a Security or a Common Stock certificate representing shares of
            the Common Stock issued upon conversion of any Security as provided
            above, no other Security issued in exchange for all or any part of
            such Security or Common


                                       20

            Stock certificate representing shares of the Common Stock issued
            upon conversion of such Security shall bear such legend, unless the
            Company has reasonable cause to believe that such other Security is
            a "restricted security" (or such shares of Common Stock are
            "restricted securities") within the meaning of Rule 144 and
            instructs the Trustee in writing to cause a Restricted Securities
            Legend to appear thereon.

                  Any Security (or Security issued in exchange or substitution
            therefor) as to which such restrictions on transfer shall have
            expired in accordance with their terms or as to which the conditions
            for removal of the Restricted Securities Legend set forth in Section
            202(a)(1) as set forth therein have been satisfied may, upon
            surrender of such Security for exchange to the Security Registrar in
            accordance with the provisions of Section 206, be exchanged for a
            new Security or Securities, of like tenor and aggregate principal
            amount, which shall not bear the Restricted Securities Legend
            required by Section 202(a)(1).

                  Any Common Stock certificate representing shares of the Common
            Stock issued upon conversion of any Security as to which such
            restrictions on transfer shall have expired in accordance with their
            terms or as to which the conditions for removal of the Restricted
            Securities Legend set forth in Section 202(a)(2) as set forth
            therein have been satisfied may, upon surrender of the Common Stock
            certificates representing such shares of Common Stock for exchange
            in accordance with the procedures of the transfer agent for the
            Common Stock, be exchanged for a new Common Stock certificate or
            certificates representing a like aggregate number of shares of
            Common Stock, which shall not bear the Restricted Securities Legend
            required by Section 202(a)(2).

            (b) Global Security Legend.

                  Each Global Security shall also bear the following legend (the
            "GLOBAL SECURITY LEGEND") on the face thereof:

            "UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
            REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
            CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT
            FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
            CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
            SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
            DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
            AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
            TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
            ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
            & CO., HAS AN INTEREST HEREIN.


                                       21

            TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
            WHOLE, BUT NOT IN PART, TO DTC, NOMINEES OF DTC OR TO A SUCCESSOR
            THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF THIS GLOBAL
            SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
            RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE
            HEREOF."

SECTION 203. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

            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.

            A Security shall not be valid until an authorized officer of the
Trustee manually authenticates the Security. The signature of the Trustee on a
Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture. A Security shall be dated
the date of its authentication.

            The Trustee shall authenticate and make available for delivery
Securities for issue on the Original Issue Date in an aggregate principal amount
of $400,000,000 upon a Company Order. Such Company Order shall specify the
amount of the Securities to be authenticated and the date on which the issue of
Securities is to be authenticated. The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture is limited to
$400,000,000 outstanding, except for Securities authenticated and delivered upon
registration or transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Sections 205, 206, 207, 408, 503, 1102 or 1406 hereof.
Notwithstanding anything to the contrary contained in this Indenture, the
Securities will be treated as a single class of securities under this Indenture.
Without limiting the generality of the foregoing sentence, all Securities issued
under this Indenture shall consent together on all matters as one class and no
Securities will have the right to consent as a separate class on any matter.

SECTION 204. 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 referred to in the within-mentioned
Indenture.


                                       22

                                                JPMorgan Chase Bank,
                                                as Trustee


                                                By: ____________________________
                                                         Authorized Officer

SECTION 205. TEMPORARY SECURITIES.

            Pending the preparation of definitive Securities, the Company may
execute, and upon Company 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, with such
appropriate insertions, omissions, substitutions and other variations as any
officer executing such Securities may determine, as evidenced by such officer's
execution of such Securities; provided, however, that temporary Securities need
not recite specific redemption, sinking fund, conversion or exchange provisions.

            If temporary Securities are issued, the Company shall cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities, upon surrender of the temporary
Securities at the office or agency of the Company maintained pursuant to Section
302 in a Place of Payment, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor definitive
Securities, of authorized denominations and of like tenor and aggregate
principal amount.

            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 like tenor authenticated and delivered
hereunder.

SECTION 206. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.

            The Company shall cause to be kept in one of the offices or agencies
designated pursuant to Section 302, with respect to the Securities, 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 and
the registration of transfer thereof. The Company shall designate one Person to
maintain the Security Register for the Securities, and such Person is referred
to herein, as the "SECURITY REGISTRAR." The Company hereby designates the
Trustee at its Corporate Trust Office as the initial Security Registrar.
Anything herein to the contrary notwithstanding, the Company may designate one
of its offices or an office of any Affiliate as the office in which the Security
Register with respect to the Securities shall be maintained, and the Company may
designate itself or any Affiliate as the Security Registrar with respect to the
Securities. The Security Register shall be open for inspection by the Trustee
and the Company at all reasonable times.

            Upon surrender for registration of transfer of any Security at the
office or agency of the Company maintained pursuant to Section 302 in a Place of
Payment for such Securities, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the


                                       23

designated transferee or transferees, one or more new Securities, of authorized
denominations and of like tenor and aggregate principal amount.

            Any Security may be exchanged at the option of the Holder for one or
more new Securities, 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, which the Holder making the exchange is entitled to receive.

            All Securities delivered upon any registration of transfer or
exchange of Securities shall be valid obligations of the Company, evidencing the
same obligation, and entitled to the same benefits under this Indenture, as the
Securities 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 or the Trustee) be duly
endorsed or shall be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee, duly executed by the Holder thereof
or his attorney duly authorized in writing.

            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 205, 207, 408, 503, 1102 or 1406 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, during a period
of 15 days immediately preceding the date notice is to be given identifying the
register numbers of the Securities 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. In addition, the Security Registrar need
not register the transfer of or exchange any Securities in respect of which a
Purchase Notice or Fundamental Change Purchase Notice has been given and not
withdrawn (except, in the case of a Security to be purchased in part, the
portion of the Security not to be purchased).

SECTION 207. 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 like tenor and principal amount and bearing a number
not contemporaneously outstanding.

            If there shall be delivered to the Company 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 the Guarantor and any agent of either
of them harmless, then, in the absence of notice to the Company 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


                                       24

destroyed, lost or stolen Security, a new Security of like tenor and principal
amount 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 in its discretion may, instead of issuing a new Security,
pay such Security.

            Upon the issuance of any new Security under this Section 207, 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 issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, 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 duly issued 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 Securities.

SECTION 208. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.

            Unless otherwise provided as contemplated by Section 201 with
respect to the Securities, 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.

            Any interest on any Security 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, at its election in each case, as
provided in clause (a) or (b) below:

            (a) The Company may elect to make payment of any Defaulted Interest
      to the Persons in whose names the Securities (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 shall notify the
      Trustee in writing of the amount of Defaulted Interest proposed to be paid
      on each Security and the date of the proposed payment, and at the same
      time the Company 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


                                       25

      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 of such Special Record Date and, in the name and at the
      expense of the Company, 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 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 (or their respective Predecessor
      Securities) are registered at the close of business on such Special Record
      Date.

            (b) The Company may make payment of any Defaulted Interest on the
      Securities 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 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 208, 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 209. PERSONS DEEMED OWNERS.

            Prior to due presentment of a 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 such Security is registered as the absolute owner of
such Security for the purpose of receiving payment of principal of and (subject
to Sections 206 and 208) 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 Trustee or any agent of the Company, or the Trustee shall be
affected by notice to the contrary.

SECTION 210. BOOK-ENTRY PROVISIONS FOR THE GLOBAL SECURITIES.

            (a) The Global Securities initially shall:

                  (A) be registered in the name of DTC (or a nominee thereof);

                  (B) be delivered to the Trustee as custodian for DTC;

                  (C) bear the Restricted Securities Legend set forth in Section
            202(a)(1); and

                  (D) bear the Global Security Legend set forth in Section
            202(b).


                                       26

            Members of, or participants in, DTC ("AGENT MEMBERS") shall have no
rights under this Indenture with respect to any Global Security held on their
behalf by DTC, or the Trustee as its custodian, or under such Global Security,
and DTC may be treated by the Company, the Trustee and any agent of the Company
or the Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing contained herein shall
prevent the Company, the Trustee or any agent of the Company or Trustee from
giving effect to any written certification, proxy or other authorization
furnished by DTC or impair, as between DTC and the Agent Members, the operation
of customary practices governing the exercise of the rights of a Holder of any
Security.

            (b) The Holder of a Global Security may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.

            (c) A Global Security may not be transferred, in whole or in part,
to any Person other than the Depositary (or a nominee thereof), and no such
transfer to any such other Person may be registered. Beneficial interests in a
Global Security may be transferred in accordance with the rules and procedures
of the Depositary and the provisions of Section 211.

            (d) If at any time:

                  (1) DTC notifies the Company in writing that it is unwilling
            or unable to continue to act as Depositary for the Global Securities
            (including if DTC ceases to be registered as a "clearing agency"
            under the Exchange Act) and a successor depositary for the Global
            Securities is not appointed by the Company within 90 days of such
            notice; or

                  (2) the Company, at its option, notifies the Trustee in
            writing that it elects to cause the issuance of Definitive
            Securities under this Indenture in exchange for all or any part of
            the Securities represented by a Global Security;

DTC shall surrender such Global Security or Global Securities to the Trustee for
cancellation and the Company shall execute, and the Trustee, upon receipt of an
Officer's Certificate and Company Order for the authentication and delivery of
Securities, shall authenticate and deliver in exchange for such Global Security
or Global Securities, Definitive Securities in an aggregate principal amount
equal to the aggregate principal amount of such Global Security or Global
Securities. Such Definitive Securities shall be registered in such names as the
Depositary shall identify in writing as the beneficial owners of the Securities
represented by such Global Security or Global Securities (or any nominee
thereof).

            (e) Notwithstanding the foregoing, in connection with any transfer
of beneficial interests in a Global Security to the beneficial owners thereof
pursuant to Section 210(d), the Registrar shall reflect on its books and records
the date and a decrease in the principal amount of such Global Security in an
amount equal to the principal amount of the beneficial interests in such Global
Security to be transferred.

            (f) No Obligation of the Trustee.


                                       27

                  (1) The Trustee shall have no responsibility or obligation to
            any beneficial owner of a Global Security, a member of, or a
            participant in, DTC or other Person with respect to the accuracy of
            the records of DTC or its nominee or of any participant or member
            thereof, with respect to any ownership interest in the Securities or
            with respect to the delivery to any participant, member, beneficial
            owner or other Person (other than DTC) of any notice (including any
            notice of redemption) or the payment of any amount or delivery of
            any Securities (or other security or property) under or with respect
            to such Securities. All notices and communications to be given to
            the Holders and all payments to be made to Holders in respect of the
            Securities shall be given or made only to or upon the order of the
            registered Holders (which shall be DTC or its nominee in the case of
            a Global Security). The rights of beneficial owners in any Global
            Security shall be exercised only through DTC subject to the
            applicable rules and procedures of DTC. The Trustee may rely and
            shall be fully protected in relying upon information furnished by
            DTC with respect to its members, participants and any beneficial
            owners.

                  (2) The Trustee shall have no obligation or duty to monitor,
            determine or inquire as to compliance with any restrictions on
            transfer imposed under this Indenture or under applicable law with
            respect to any transfer of any interest in any Security (including
            any transfers between or among DTC participants, members or
            beneficial owners in any Global Security) other than to require
            delivery of such certificates and other documentation or evidence as
            are expressly required by, and to do so if and when expressly
            required by, the terms of this Indenture, and to examine the same to
            determine substantial compliance as to form with the express
            requirements hereof.

SECTION 211. SPECIAL TRANSFER PROVISIONS.

            Unless a Security is (i) transferred after the time period referred
to in Rule 144(k) under the Securities Act or (ii) sold pursuant to a
registration statement that has been declared effective under the Securities Act
(and which continues to be effective at the time of such sale), the following
provisions shall apply to any sale, pledge or other transfer of Securities:

            (a) Transfer of Securities to a QIB.

            The following provisions shall apply with respect to the
registration of any proposed transfer of Securities to a QIB:

                  (i)   If the Securities to be transferred consist of a
            beneficial interest in the Global Securities, the transfer of such
            interest may be effected only through the book-entry systems
            maintained by DTC.

                  (ii)  If the Securities to be transferred consist of
            Definitive Securities, the Security Registrar shall register the
            transfer if such transfer is being made by a proposed transferor who
            has checked the box provided for on the form of Security stating (or
            has otherwise advised the Company and the Security Registrar in


                                       28

            writing) that the sale has been made in compliance with the
            provisions of Rule 144A to a transferee who has signed a
            certification stating or has otherwise advised the Company and the
            Security Registrar in writing that:

                  (1) it is purchasing the Securities for its own account or an
            account with respect to which it exercises sole investment
            discretion, in each case for investment and not with a view to
            distribution;

                  (2) it and any such account is a QIB within the meaning of
            Rule 144A;

                  (3) it is aware that the sale to it is being made in reliance
            on Rule 144A;

                  (4) it acknowledges that it has received such information
            regarding the Company as it has requested pursuant to Rule 144A or
            has determined not to request such information; and

                  (5) it is aware that the transferor is relying upon its
            foregoing representations in order to claim the exemption from
            registration provided by Rule 144A.

            In addition, the Security Registrar shall reflect on its books and
records the date and, if applicable, an increase in the principal amount of the
Global Securities in an amount equal to the aggregate principal amount of the
Definitive Securities to be transferred, and the Trustee shall cancel the
Definitive Securities so transferred.

            (b) Transfer of Securities to an IAI. A form in substantially the
      form below shall be delivered to the Company in connection with any
      transfer of a Definitive Security to an IAI:

                                                                  [Date]

PPL Energy Supply, LLC
PPL Corporation
c/o JPMorgan Chase Bank, as Trustee
4 New York Plaza
New York, New York 10004
Attention: Institutional Trust Services

Dear Sirs:

            This certificate is delivered to request a transfer of $_________
principal amount of the 2 5/8% Convertible Senior Notes due 2023 (the
"Securities") of PPL Energy Supply, LLC (the "Company") fully and
unconditionally guaranteed by and convertible into common stock (the "Common
Stock") of PPL Corporation (the "Guarantor").

            Upon transfer, the Securities would be registered in the name of the
new beneficial owner as follows:

            Name: ___________________________________


                                       29

            Address: ________________________________

            Payment Instructions: _____________________

            Taxpayer ID Number: _____________________

            The undersigned represents and warrants to you that:

            1.    We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "Securities Act")) purchasing for our own account or for the account of
such an institutional "accredited investor" at least $250,000 principal amount
of the Securities, and we are acquiring the Securities not with a view to, or
for offer or sale in connection with, any distribution in violation of the
Securities Act. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risk of our investment in
the Securities and we invest in or purchase securities similar to the Securities
in the normal course of our business. We and any accounts for which we are
acting are each able to bear the economic risk of our or its investment.

            2.    We understand that the Securities and the Common Stock
issuable upon conversion of the Securities have not been registered under the
Securities Act or the securities laws of any state or other jurisdiction and,
unless so registered, may not be sold except as permitted in the following
sentence. We agree on our own behalf and on behalf of any investor account for
which we are purchasing Securities to offer, sell or otherwise transfer such
Securities or Common Stock issuable upon conversion of the Securities prior to
the date that is two years after the later of the date of original issue and the
last date on which the Company or any affiliate of the Company was the owner of
such Securities (or any predecessor thereto) (the "Resale Restriction
Termination Date") only (a) to the Company or the Guarantor, (b) pursuant to a
registration statement which has been declared effective under the Securities
Act, (c) in a transaction complying with the requirements of Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer as defined Rule 144A (a "QIB") under the Securities Act that purchases for
its own account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) to an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act that is purchasing for its own account or for the
account of such an institutional "accredited investor," in each case in a
transaction involving a minimum principal amount of the Securities of $250,000,
for investment purposes and not with a view to or for offer or sale in
connection with any distribution in violation of the Securities Act, or (e)
pursuant to another available exemption from the registration requirements of
the Securities Act, subject to (x) the Company's right prior to any such offer,
sale or transfer pursuant to clauses (d) or (e) to require the delivery of an
opinion of counsel, certification and/or other information satisfactory to it
and (y) in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made pursuant to clause (d)
above prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this letter to
the Company and the Trustee, which shall provide, among other


                                       30

things, that the transferee is an institutional "accredited investor" (within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and
that it is acquiring such Securities for investment purposes and not for
distribution in violation of the Securities Act.

            TRANSFEREE:______________________



            BY:______________________________


            (c) Other Exchanges.

            In the event that Global Securities are exchanged for Securities in
definitive registered form pursuant to Section 210(d) prior to the effectiveness
of a Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with the provisions of clause (a)
above (including the certification requirements intended to ensure that such
transfers comply with Rule 144A) and such other procedures as may from time to
time be adopted by the Company.

            (d) General.

            By its acceptance of any Security bearing the Restricted Securities
Legend, each Holder of such a Security acknowledges the restrictions on transfer
of such Security set forth in this Indenture and agrees that it will transfer
such Security only as provided in this Indenture. The Security Registrar shall
not register a transfer of any Security unless such transfer complies with the
restrictions on transfer of such Security set forth in this Indenture. The
Security Registrar shall be entitled to receive and rely on written instructions
from the Company verifying that such transfer complies with such restrictions on
transfer. In connection with any transfer of Securities, each Holder agrees by
its acceptance of the Securities to furnish the Security Registrar or the
Company such certifications, legal opinions or other information as either of
them may reasonably require to confirm that such transfer is being made pursuant
to an exemption from, or a transaction not subject to, the registration
requirements of the Securities Act; provided that the Security Registrar shall
not be required to determine (but may rely on a determination made by the
Company with respect to) the sufficiency of any such certifications, legal
opinions or other information.

            The Security Registrar shall retain copies of all certifications,
letters, notices and other written communications received pursuant to Section
202 hereof or this Section 211. The Company shall have the right to inspect and
make copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Security
Registrar.

SECTION 212. CANCELLATION.

            All Securities surrendered for payment, redemption, registration of
transfer or exchange or conversion shall, if surrendered to any Person other
than the Trustee, be delivered to


                                       31

the Trustee and, if not theretofore canceled, shall be promptly canceled by the
Trustee. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
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 212, 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 213. COMPUTATION OF INTEREST.

            Interest on the Securities of each series shall be computed on the
basis of a three hundred sixty (360) day year consisting of twelve (12) thirty
(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.

                                 ARTICLE THREE

                                   COVENANTS

SECTION 301. PAYMENT OF PRINCIPAL AND INTEREST.

            The Company shall pay the principal of, and interest on, the
Securities in accordance with the terms of the Securities and this Indenture.
Whenever in this Indenture there is mentioned, in any context, the payment of
interest on any Security, such mention shall be deemed to include mention of the
payment of Additional Amounts to the extent that, in such context, Additional
Amounts are, were or would be payable in respect thereof pursuant to the
provisions of the Registration Rights Agreement and express mention of the
payment of Additional Amounts (if applicable) in any provisions hereof shall not
be construed as excluding Additional Amounts in those provisions hereof where
such express mention is not made.

SECTION 302. MAINTENANCE OF OFFICE OR AGENCY.

            The Company shall maintain in each Place of Payment for the
Securities, an office or agency where payment of such Securities shall be made
or surrendered for payment, where Securities may be surrendered for conversion,
where registration of transfer or exchange of Securities may be effected and
where notices and demands to or upon the Company in respect of Securities and
this Indenture may be served. The Company 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 shall fail to maintain any
such required office or agency in respect of Securities or shall fail to furnish
the Trustee with the address thereof, payment of Securities may be made,
Securities may be surrendered for conversion, registration of transfer or
exchange thereof may be effected and notices and demands in respect thereby may
be served at the


                                       32

Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent for all such purposes in any such event.

            The Company may also from time to time designate one or more other
offices or agencies with respect to the Securities for any or all of the
foregoing 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 for such
purposes in each Place of Payment for such Securities in accordance with the
requirements set forth above. The Company 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.

            The Guarantor shall maintain in each Place of Payment for the
Securities, an office or agency where payment of the Guarantees shall be made
and where notices and demands to or upon the Guarantor in respect of the
Guarantees and this Indenture may be served. 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 Guarantor
shall fail to maintain any such required office or agency in respect of the
Guarantees or shall fail to furnish the Trustee with the address thereof,
payment of the Guarantees may be made and notices and demands in respect thereby
may be served at the Corporate Trust Office of the Trustee, and the Guarantor
hereby appoints the Trustee as its agent for all such purposes in any such
event.

            The Guarantor may also from time to time designate one or more other
offices or agencies with respect to the Guarantees for any or all of the
foregoing purposes and may from time to time rescind such designations;
provided, however, that, no such designation or rescission shall in any manner
relieve the Guarantor of its obligation to maintain an office or agency for such
purposes in each Place of Payment for the Guarantees in accordance with the
requirements set forth above. 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 302 may be maintained at an office of the
Company or any Affiliate of the Company, in which event the Company or such
Affiliate, as the case may be, shall perform all functions to be performed at
such office or agency.

            The Company and the Guarantor hereby appoint the Trustee at its
Corporate Trust Office as agent for all the foregoing purposes.

SECTION 303. 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, it shall, on or before each due date of the principal
of 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 or interest so becoming due until such sums shall be paid to such


                                       33

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, it shall, prior to each due date of the principal of or interest, if
any, on such Securities, deposit with such Paying Agents sums sufficient
(without duplication) to pay the principal or interest so becoming due, such sum
to be held in trust for the benefit of the Persons entitled to such principal 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, 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 303, that such Paying Agent shall:

            (a) hold all sums held by it for the payment of the principal of, or
      interest, if any, on Securities 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) in the making of any payment of
      principal of, or interest on, the Securities; 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 Six; 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.

            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, or interest,
if any, on any Security and remaining unclaimed for two years after such
principal, 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, upon such payment or discharge, the Holder of such Security
shall thereafter, as an unsecured general creditor and not as the Holder of an
Outstanding Security, look only to the Company for payment of the amount so due
and payable and remaining unpaid, 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


                                       34

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 304. EXISTENCE AS A LIMITED LIABILITY COMPANY.

            Subject to the rights of the Company under Article Thirteen, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence as a limited liability company;
provided that the Company may convert into a corporation pursuant to the laws of
the jurisdiction of its organization.

SECTION 305. ANNUAL OFFICER'S CERTIFICATE.

            Not later than May 15 in each year, commencing May 15, 2004, the
Company and the Guarantor shall deliver to the Trustee an Officer's Certificate
which need not comply with Section 102, and which need only be 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.

                                  ARTICLE FOUR

             REDEMPTION OF SECURITIES AT THE OPTION OF THE COMPANY

SECTION 401. REDEMPTION OF SECURITIES AT THE OPTION OF THE COMPANY.

            On or after May 20, 2008, the Securities may be redeemed for cash at
any time as a whole or from time to time in part the option of the Company on
any date (a "REDEMPTION DATE"), at a redemption price equal to 100% of the
principal amount of the Securities to be redeemed plus accrued and unpaid
interest, if any, to, but excluding the Redemption Date (the "REDEMPTION
PRICE"). If the Redemption Date is an Interest Payment Date, interest shall be
paid to the record holder on the relevant Regular Record Date.

SECTION 402. APPLICABILITY OF ARTICLE.

            Redemption of Securities at the election of the Company, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article Four.

SECTION 403. ELECTION TO REDEEM; NOTICE TO TRUSTEE.

            The election of the Company to redeem any Securities pursuant to
Section 401 hereof shall be evidenced by a Board Resolution of the Company. In
case of any redemption at the election of the Company, the Company shall, at
least 45 days prior to the Redemption Date


                                       35

fixed by the Company (unless a shorter period shall be acceptable to the
Trustee), notify the Trustee of such Redemption Date and of the principal amount
of Securities to be redeemed and shall deliver to the Trustee such documentation
and records as shall enable the Trustee to select the Securities to be redeemed
pursuant to Section 404 hereof.

SECTION 404. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.

            If less than all the Securities are to be redeemed at any time, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the outstanding Securities not
previously called for redemption, on a pro rata basis, by lot or by such other
method as the Trustee shall deem fair and appropriate and which may provide for
the selection for redemption of portions of the principal of the Securities
equal to $1,000 or integral multiples thereof.

            The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.

            If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed, to
the fullest extent practicable, to be the portion selected for redemption.
Securities which have been converted during a selection of Securities to be
redeemed, may be treated by the Trustee as Outstanding for the purpose of such
selection.

            For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.

SECTION 405. NOTICE OF REDEMPTION.

            Notice of redemption shall be given in the manner provided for in
Section 106 hereof not less than 30 days nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed. The Trustee shall
give notice of redemption in the Company's name and at the Company's expense;
provided, however, that the Company shall deliver to the Trustee, at least 15
days prior to the date the notice of redemption is to be given (unless a shorter
period shall be acceptable to the Trustee), an Officer's Certificate requesting
that the Trustee give such notice and setting forth the information to be stated
in such notice as provided in the following items.

            All notices of redemption shall state:

            (a) the Redemption Date,

            (b) the Redemption Price (and the amount of accrued and unpaid
interest to the Redemption Date), the Conversion Rate and the Conversion Price,


                                       36

            (c) that Securities called for redemption may be converted at any
time before the close of business on the Business Day immediately preceding the
Redemption Date, unless the Company defaults in making the payment due on the
Redemption Date, in which case the conversion right shall terminate at the time
such payment is made,

            (d) that Holders that want to convert their Securities must satisfy
the requirements set forth in paragraphs 9 and 10 of the reverse of the form of
Securities set forth as Exhibit A hereto,

            (e) if less than all outstanding Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Securities to be redeemed and the
aggregate principal amount of Securities to be outstanding after such partial
redemption,

            (f) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the Holder will receive, without charge,
a new Security or Securities of authorized denominations for the principal
amount thereof remaining unredeemed,

            (g) that on the Redemption Date the Redemption Price (plus accrued
and unpaid interest, if any, to, but excluding the Redemption Date) will become
due and payable upon each such Security, or the portion thereof, to be redeemed,
and, unless the Company defaults in paying the Redemption Price, that interest
on Securities called for redemption (or the portion thereof) will cease to
accrue on and after said date,

            (h) the place or places where such Securities are to be surrendered
for payment of the Redemption Price,

            (i) the name and address of the Paying Agent and the Conversion
Agent,

            (j) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price, and

            (k) the CUSIP and ISIN numbers, and, if desired, that no
representation is made as to the accuracy or correctness of the CUSIP or ISIN
number listed in such notice or printed on the Securities.

SECTION 406. DEPOSIT OF REDEMPTION PRICE.

            Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 303 hereof) an amount
of money sufficient to pay the Redemption Price of all the Securities which are
to be redeemed on that date.

SECTION 407. SECURITIES PAYABLE ON REDEMPTION DATE.

            Notice of redemption having been given as aforesaid, the Securities
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price


                                       37

therein specified (together with accrued and unpaid interest to the Redemption
Date), and from and after such date (unless the Company shall default in the
payment of the Redemption Price or accrued and unpaid interest to the Redemption
Date) such Securities shall cease to bear interest. Upon surrender of any such
Security for redemption in accordance with said notice, such Security shall be
paid by the Company at the Redemption Price (together with accrued and unpaid
interest, if any, to, but excluding the Redemption Date) (subject to the rights
of Holders of record on the relevant Regular Record Date to receive interest due
on the relevant Interest Payment Date).

            If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal, shall, until paid, bear
interest from the Redemption Date at the rate borne by the Securities.

SECTION 408. SECURITIES REDEEMED IN PART

            Any Security which is to be redeemed only in part (pursuant to the
provisions of this Article Four) shall be surrendered at the office or agency of
the Company maintained for such purpose pursuant to Section 302 hereof (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
make available for delivery to the Holder of such Security at the expense of the
Company, a new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered, provided that each such new Security will be in a principal amount
of $1,000 or integral multiples thereof.

                                  ARTICLE FIVE

                PURCHASE OF SECURITIES AT THE OPTION OF HOLDERS

SECTION 501. PURCHASE OF SECURITIES AT OPTION OF HOLDERS UPON PURCHASE DATES.

            (a) Each Holder of Securities shall have the right to require the
Company to purchase all or any part (equal to $1,000 in principal amount or an
integral multiple thereof) of such Holder's Securities on May 15, 2008, May 15,
2013 and May 15, 2018 (each, a "PURCHASE DATE"), at 100% of the principal amount
thereof (the "PURCHASE PRICE"), plus accrued and unpaid interest, if any, to,
but excluding, such Purchase Date.

            (b) The Company will have the option to pay the Purchase Price for
Securities delivered by Holders for purchase pursuant to this Section 501 by
delivering shares of Common Stock in lieu of cash, subject to the conditions set
forth in Section 501(c) hereof. Upon election to pay the Purchase Price of the
Securities in shares of Common Stock, and the delivery of a Company Purchase
Notice of such election, the Company may not change the form of the Purchase
Price, unless the conditions to deliver shares of Common Stock set forth in
Section 501(c) are not satisfied. In all cases, the Company will pay any accrued
and unpaid interest on the Securities purchased on any Purchase Date in cash.


                                       38

            In the event that the Company elects to pay the Purchase Price by
delivery of shares of Common Stock pursuant to this Section 501(b), the Company
shall deliver to the Paying Agent on behalf of the Holders a number of shares of
Common Stock equal to the Purchase Price divided by the Market Price of the
shares of Common Stock (as adjusted to take into account any occurrence which
results in an adjustment to the Conversion Price pursuant to Section 1106).
Fractional shares of Common Stock will not be issued upon the purchase by the
Company of a Security; the Company will pay cash based on the then-current
Market Price for all fractional shares.

            (c) The Company shall only have the right to pay the Purchase Price
in connection with any purchase of Securities pursuant to this Section 501 by
delivery of shares of Common Stock if, on the applicable Purchase Date, the
shares of Common Stock to be delivered as payment of the Purchase Price:

                  (1) are registered under the Securities Act and the Exchange
            Act, if required by applicable law; and

                  (2) are qualified or registered as necessary under any
            applicable state or other securities law or are eligible for an
            available exemption therefrom.

            If the foregoing conditions are not satisfied with respect to a
Holder prior to the close of Business on the applicable Purchase Date, the
Company shall pay the Purchase Price of the Securities of such Holder entirely
in cash.

            (d) In connection with any purchase of Securities pursuant to this
Section 501, the Company shall give notice (the "COMPANY PURCHASE NOTICE") to
each Holder of Securities in the manner provided for in Section 106 hereof and
to each beneficial owner of Securities as required by applicable law no fewer
than 20 Business Days prior to any Purchase Date to each Holder of Securities.
The Trustee shall give such notice in the Company's name and at the Company's
expense; provided, however, that the Company shall deliver to the Trustee, not
less than 30 Business Days prior to the applicable Purchase Date, an Officer's
Certificate requesting that the Trustee give the Company Purchase Notice,
setting forth the address of each beneficial owner to whom the notice is to be
sent (which address may be the address of the Depositary) and having attached
thereto the form thereof, which shall set forth, among other things:

                  (1) the Purchase Date, the Purchase Price (and the amount of
            accrued and unpaid interest, if any, to, but excluding, the Purchase
            Date), the Conversion Rate and the Conversion Price;

                  (2) whether the Company elects to pay the Purchase Price of
            the Securities in cash or shares of Common Stock;

                  (3) if the Company elects to pay the Purchase Price in shares
            of Common Stock, the method by which the Market Price is calculated
            and a brief description of the calculation of the number of shares
            of Common Stock to be delivered in payment of the Purchase Price;


                                       39

                  (4) that any Securities (or portion thereof) accepted for
            payment (and duly paid on the Purchase Date) shall cease to accrue
            interest on the Purchase Date;

                  (5) that any Securities (or portion thereof) not properly
            submitted will continue to accrue interest;

                  (6) that Securities must be surrendered to the Paying Agent to
            collect payment;

                  (7) the name and address of the Paying Agent and the
            Conversion Agent;

                  (8) that Securities as to which a Purchase Notice has been
            given may be converted if they are otherwise convertible only in
            accordance with Article Eleven hereof and paragraph 5 of the reverse
            of the Security only if the applicable Purchase Notice has been
            withdrawn in accordance with the terms of this Indenture;

                  (9) that the Purchase Price for (plus accrued and unpaid
            interest, if any, to, but excluding, the Purchase Date) any Security
            as to which a Purchase Notice has been given and not withdrawn will
            be paid promptly following the later of the Purchase Date and the
            time of surrender of such Security as described in (7);

                  (10) the procedures that Holders must follow in order to
            tender their Securities (or portions thereof) for payment and the
            procedures that Holders must follow in order to withdraw an election
            to tender Securities (or portions thereof) for payment;

                  (11) a brief description of the conversion rights of the
            Securities;

                  (12) the CUSIP and ISIN numbers, and, if desired, that no
            representation is made as to the accuracy or correctness of the
            CUSIP or ISIN number listed in such notice or printed on the
            Securities; and

                  (13) all other instructions and materials necessary to enable
            Holders to submit Securities on the Purchase Date.

            (e) Purchases of Securities under this Section 501 shall be made, at
the option of the Holder thereof, upon:

                  (1) delivery to the Paying Agent by the Holder of a written
            notice of purchase (a "PURCHASE NOTICE") during the period beginning
            at any time from the opening of business on the date that is 20
            Business Days prior to the relevant Purchase Date until the close of
            business on the Purchase Date stating:

                        a. if Definitive Securities have been issued, the
                  certificate number of the Security which the Holder will
                  deliver to be purchased;


                                       40

                        b. the principal amount of the Security (or portion
                  thereof) which the Holder will deliver to be purchased (which
                  must be in principal amounts of $1,000 or an integral multiple
                  thereof, if less than all of the Securities are being
                  delivered);

                        c. that such Security shall be purchased by the Company
                  as of the Purchase Date pursuant to the terms and conditions
                  specified herein; and

                        d. whether, in the event that the Company elects,
                  pursuant to the Company Purchase Notice, to pay the Purchase
                  Price in shares of Common Stock, but the Purchase Price is
                  ultimately paid to the Holder entirely in cash because any of
                  the conditions to payment of the Purchase Price in shares of
                  Common Stock is not satisfied prior to the close of business
                  on the Purchase Date pursuant to Section 501(c), the Holder
                  elects: (i) to withdraw the Purchase Notice as to some or all
                  of the Securities as to which such Purchase Notice relates
                  (stating the principal amount and certificate numbers, if any,
                  of the Securities as to which such withdrawal shall relate),
                  or (ii) to receive cash in respect of the entire Purchase
                  Price for all Securities or portions of Securities subject to
                  such Purchase Notice; provided that if the Purchase Notice
                  states no such election, the Holder will be deemed to have
                  made the election set forth in clause (ii) above; and

                  (2) delivery of such Security to the Paying Agent prior to, on
            or after the Purchase Date (together with all necessary
            endorsements) at the offices of the Paying Agent, such delivery
            being a condition to receipt by the Holder of the Purchase Price
            therefor; provided, however, that such Purchase Price shall be so
            paid pursuant to this Section 501 only if the Security so delivered
            to the Paying Agent shall conform in all material respects to the
            description thereof in the related Purchase Notice, as determined by
            the Company.

            Any purchase by the Company contemplated pursuant to the provisions
of this Section 501 shall be consummated by the delivery of the cash or shares
of Common Stock to be received by the Holder promptly following the later of the
Purchase Date and the time of delivery of the Security.

            The Paying Agent shall promptly notify the Company of the receipt by
it of any Purchase Notice or written notice of withdrawal thereof.

SECTION 502. PURCHASE OF SECURITIES AT THE OPTION OF HOLDERS UPON A FUNDAMENTAL
             CHANGE.

            (a) Upon the occurrence of a Fundamental Change on or prior to the
Stated Maturity, each Holder of Securities shall have the right, at such
Holder's option, to require the Company to purchase any or all of such Holder's
Securities for cash on the date that is no later than 30 days after the date of
the Fundamental Change Notice (as defined below) of the occurrence of such
Fundamental Change (subject to extension to comply with applicable law, as


                                       41

provided in Section 503(e)) (the "FUNDAMENTAL CHANGE PURCHASE DATE"). The
Company shall purchase such Securities at a price (the "FUNDAMENTAL CHANGE
PURCHASE PRICE") equal to 100% of the principal amount of the Securities to be
purchased plus any accrued and unpaid interest to, but excluding, the
Fundamental Change Purchase Date (the "FUNDAMENTAL CHANGE PAYMENT"). No
Securities may be purchased at the option of the Holders due to a Fundamental
Change if there has occurred and is continuing an Event of Default (other than
an Event of Default that is cured by the payment of the Fundamental Change
Purchase Price of such Securities).

            (b) Notice of a Fundamental Change (the "FUNDAMENTAL CHANGE NOTICE")
shall be given within 10 days following any Fundamental Change, to each Holder
of Securities. The Trustee shall give the Fundamental Change Notice in the
Company's name and at the Company's expense; provided, however, that the Company
shall deliver to the Trustee, no more than 5 days following the Fundamental
Change, an Officer's Certificate requesting that the Trustee give such notice
and having attached thereto the form thereof, which shall set forth, among other
things:

                  (1) that a Fundamental Change has occurred and a Fundamental
            Change Notice is being made pursuant to this Indenture and that all
            Securities (or portions thereof) properly tendered will be accepted
            for payment;

                  (2) the Fundamental Change Purchase Price (and the amount of
            accrued and unpaid interest to, but excluding, the Fundamental
            Change Purchase Date) and the Fundamental Change Purchase Date;

                  (3) the Conversion Rate and the Conversion Price;

                  (4) that the Securities which have been tendered for payment
            may be converted if they are otherwise convertible pursuant to
            Article Eleven hereof only if the election to tender has been
            properly withdrawn in accordance with the terms of this Indenture;

                  (5) that any Security (or portion thereof) accepted for
            payment (and duly paid on the Fundamental Change Purchase Date)
            shall cease to accrue interest on the Fundamental Change Purchase
            Date;

                  (6) that any Securities (or portions thereof) not properly
            tendered will continue to accrue interest;

                  (7) that Securities must be surrendered to the Paying Agent to
            collect payment;

                  (8) the name and address of the Paying Agent and the
            Conversion Agent;

                  (9) a brief description of the transaction or transactions
            constituting the Fundamental Change;


                                       42

                  (10) the procedures that Holders of Securities must follow in
            order to tender their Securities (or portions thereof) for payment
            and the procedures that Holders of Securities must follow in order
            to withdraw an election to tender Securities (or portions thereof)
            for payment;

                  (11) a brief description of the conversion rights of the
            Securities;

                  (12) the CUSIP and ISIN numbers, and, if desired, that no
            representation is made as to the accuracy or correctness of the
            CUSIP or ISIN number listed in such notice or printed on the
            Securities; and

                  (13) all other instructions and materials necessary to enable
            Holders to tender Securities pursuant to the Fundamental Change
            Notice.

            (c) Purchases of Securities upon a Fundamental Change under this
Section 502 shall be made upon:

                  (1) delivery to the Paying Agent by the Holder of a written
            notice of purchase (a "FUNDAMENTAL CHANGE PURCHASE NOTICE") at any
            time on or prior to the 30th day after the date the Company delivers
            the Fundamental Change Notice stating:

                        a.    if Definitive Securities have been issued, the
                              certificate number of the Security which the
                              Holder will deliver to be purchased;

                        b.    the principal amount of the Security (or portion
                              thereof) which the Holder will deliver to be
                              purchased, which must be in principal amounts of
                              $1,000 or an integral multiple thereof, if less
                              than all of the Securities are being delivered;
                              and

                        c.    that such Security shall be purchased by the
                              Company pursuant to the terms and conditions
                              specified herein; and

                  (2) delivery of such Security to the Paying Agent prior to, on
            or after the Fundamental Change Purchase Date (together with all
            necessary endorsements) at the offices of the Paying Agent, such
            delivery being a condition to receipt by the Holder of the
            Fundamental Change Payment therefor; provided, however, that such
            Fundamental Change Payment shall be so paid pursuant to this Section
            502 only if the Security so delivered to the Paying Agent shall
            conform in all respects to the description thereof in the related
            Fundamental Change Purchase Notice, as determined by the Company.

            Any purchase by the Company contemplated pursuant to the provisions
of this Section 502 shall be consummated by the delivery of the cash to be
received by the Holder promptly following the later of the Fundamental Change
Purchase Date and the time of delivery of the Security.


                                       43

            The Paying Agent shall promptly notify the Company of the receipt by
it of any Fundamental Change Purchase Notice or written notice of withdrawal
thereof.

            The Company shall not be required to give a Fundamental Change
Notice upon a Fundamental Change if a third party gives the Fundamental Change
Notice in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Fundamental Change
Notice made by the Company and purchases all Securities validly tendered and not
withdrawn under such Fundamental Change Notice.

SECTION 503. TERMS OF PURCHASE.

            (a) Holders shall be entitled to withdraw their election under
Section 501 or 502, with respect to the entire principal amount of the Security
subject to such election or any portion thereof in integral multiples of $1,000,
if the Paying Agent receives not later than one Business Day prior to the
Purchase Date or Fundamental Change Purchase Date, as applicable, a telegram,
telex, facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Security which was delivered for purchase by the
Holder and a statement that such Holder is withdrawing his election to have all
or portion of such Security purchased.

            (b) On or prior to each Purchase Date or the Fundamental Change
Purchase Date, as applicable, the Company shall irrevocably deposit with the
Trustee or with the Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 303 hereof) an amount
of money, or arrange for the delivery of shares of Common Stock (in the case of
a Purchase Date), to the Trustee or the Paying Agent to be held on behalf of the
Holders, as applicable, sufficient to pay the aggregate Purchase Price or the
Fundamental Change Purchase Price, as applicable, plus an amount of money
sufficient to pay accrued and unpaid interest, if any, payable to the Holders
entitled thereto, to be held for payment in accordance with this Section 503. In
the event that shares of Common Stock are delivered to the Trustee or the Paying
Agent as payment of the Purchase Price, the Trustee or the Paying Agent shall
mail or deliver such shares of Common Stock to the Holders of Securities
delivered for purchase on or promptly after the Purchase Date.

            (c) The Trustee or Paying Agent, as applicable, shall, on or
promptly after the Purchase Date or Fundamental Change Purchase Date, as
applicable, mail or deliver payment to each tendering Holder of the Purchase
Price or the Fundamental Change Purchase Price, as applicable, of the Securities
of such Holder delivered for purchase. In the event that the aggregate Purchase
Price (plus accrued and unpaid interest, if any, to the Purchase Date or
Fundamental Change Purchase Date, as applicable) delivered by the Company to the
Trustee is less than the amount deposited with the Trustee or the Paying Agent,
the Trustee or the Paying Agent shall deliver the excess to the Company upon
Company Request promptly after the Purchase Date or Fundamental Change Purchase
Date, as applicable.

            (d) Any Security that is tendered only in part (pursuant to the
provisions of this Article Five) shall be surrendered at the office or agency of
the Company maintained for such purpose pursuant to Section 302 hereof (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or such Holder's attorney duly authorized in


                                       44

writing), and the Company shall execute, and the Trustee shall authenticate and
make available for delivery to the Holder of such Security at the expense of the
Company, a new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and in
exchange for the unpurchased portion of the principal of the Security so
surrendered, provided that each such new Security will be in a principal amount
of $1,000 or integral multiple thereof.

            (e) The Guarantor and the Company will (i) comply with Rules 13e-4
and 14e-1 (and any successor provisions thereto) under the Exchange Act, if
applicable, (ii) file the related Schedule TO (or any successor schedule, form
or report) under the Exchange Act, if applicable and (iii) otherwise comply with
all applicable federal and state securities laws so as to permit the rights and
obligations under Sections 501, 502 or this Section 503 to be exercised in the
manner specified in Sections 501, 502 or this Section 503. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions relating to the Purchase Date or Fundamental Change Notice, the
Guarantor and the Company shall comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations described
above by virtue thereof.

                                  ARTICLE SIX

                           SATISFACTION AND DISCHARGE

SECTION 601. 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 has paid or caused to be paid all other sums payable
      hereunder by the Company.

            Notwithstanding the satisfaction and discharge of this Indenture as
aforesaid, the obligations of the Company and the Trustee under Sections 205,
206, 207, 302, 303, 807 and 814 and this Article shall survive.

            Upon satisfaction and discharge of this Indenture as provided in
this Section 601, 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 (except for money held pursuant to the last paragraph
of Section 303) and shall execute and deliver to the Company such instruments
as, in the judgment of the Company, shall be necessary, desirable or appropriate
to effect or evidence the satisfaction and discharge of this Indenture.


                                       45

                                 ARTICLE SEVEN

                          EVENTS OF DEFAULT; REMEDIES

SECTION 701. EVENTS OF DEFAULT.

            "EVENT OF DEFAULT," means any one of the following events:

            (a) the Company defaults in the payment of any interest on any
      Security when it becomes due and payable and continuance of such default
      for a period of 30 days; or

            (b) the Company defaults in the payment of the principal of any
      Security when it becomes due and payable at its Stated Maturity, upon
      redemption or acceleration, or upon the exercise by a Holder of its option
      to require the Company to purchase such Holder's Securities pursuant to
      Section 501 or pursuant to the Company's obligation to purchase Securities
      upon the occurrence of a Fundamental Change pursuant to Section 502; 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 701 specifically dealt with) and
      continuance of such default or breach for a period of 60 days after there
      has been given, by registered or certified mail, to the Company or the
      Guarantor, as applicable, by the Trustee, or to the Company or the
      Guarantor, as applicable, and the Trustee by the Holders of at least 25%
      in principal amount of the Outstanding 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, unless the
      Trustee, or the Holders of a principal amount of Securities 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
      Holders of such principal amount of Securities, 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) a matured event of default, as defined in any of the Company's
      or the Guarantor's instruments under which there may be issued or
      evidenced any debt of the Company that has resulted in the acceleration of
      such debt, in excess of $40,000,000 or any default in payment of debt in
      excess of $40,000,000 at the final maturity (and after the expiration of
      any applicable grace or cure periods); provided that the waiver or cure of
      any default under any such instrument and the rescission and annulment of
      the consequences thereof shall constitute a waiver or cure of the
      corresponding default under this Indenture and a rescission and annulment
      of the corresponding consequences under this Indenture;

            (e) the Company fails to deliver Common Stock upon exercise of the
      conversion right in the Securities;


                                       46

            (f) 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 60
      consecutive days; or

            (g) 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 Managers of the Company
      or Board of Directors of the Guarantor.

SECTION 702. ACCELERATION OF STATED MATURITY; RESCISSION AND ANNULMENT.

            If an Event of Default shall have occurred and be continuing, then
in every such case the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities may declare the principal amount of all of
the Securities to be due and payable immediately, 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 shall become
immediately due and payable.

            At any time after such a declaration of acceleration with respect to
the Securities 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 shall have paid or deposited with the Trustee a sum
      sufficient to pay:


                                       47

                  (1) all overdue interest, if any, on all Outstanding
            Securities;

                  (2) the principal on any Outstanding Securities which have
            become due otherwise than by such declaration of acceleration and
            overdue interest thereon;

                  (3) to the extent that payment of such interest is lawful,
            interest upon overdue interest at the rate borne by the Securities;

                  (4) all amounts due to the Trustee under Section 807;

            and

            (b) all Events of Default with respect to the Securities, other than
      the nonpayment of the principal of Securities which shall have become due
      solely by such declaration of acceleration, shall have been cured or
      waived as provided in Section 713.

No such rescission shall affect any subsequent Event of Default or impair any
right consequent thereon.

SECTION 703. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

            If an Event of Default described in clause (a) or (b) of Section 701
shall have occurred, the Company shall, upon demand of the Trustee, pay to it,
for the benefit of the Holders of the Securities, the whole amount then due and
payable on the Securities for principal and interest, with interest on any
overdue principal and interest, at the rate borne by the Securities, and, in
addition thereto, such further amount as shall be sufficient to cover any
amounts due to the Trustee under Section 807.

            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 or any other obligor upon the Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon the
Securities, wherever situated.

            If an Event of Default with respect to the Securities 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 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 704. 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 any other obligor upon the
Securities or the property of the Company or of such


                                       48

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 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 and
      interest 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 807) 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 807.

            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 705. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.

            All rights of action and claims under this Indenture or the
Securities 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 706. 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 interest 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
      807;


                                       49

            SECOND: To the payment of the amounts then due and unpaid upon the
      Securities for principal and interest 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 the Securities for principal and interest, 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 707. 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:

            (a) such Holder shall have previously given written notice to the
      Trustee of a continuing Event of Default;

            (b) the Holders of not less than 25% in aggregate principal amount
      of the Outstanding Securities 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;

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 708. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL 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 (subject to Section 208) interest on,
such Security on the Stated Maturity (or, in the case of redemption, on the
Redemption Date or, in the case of purchase, on the Purchase Date or Fundamental
Change Purchase Date, as applicable) and to institute suit for the enforcement
of any such payment, and such rights shall not be impaired without the consent
of such Holder.

SECTION 709. RESTORATION OF RIGHTS AND REMEDIES.


                                       50

            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
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 710. RIGHTS AND REMEDIES CUMULATIVE.

            Except as otherwise provided in the last paragraph of Section 207,
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 711. 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 712. CONTROL BY HOLDERS OF SECURITIES.

            If an Event of Default shall have occurred and be continuing, the
Holders of a majority in principal amount of the Outstanding Securities 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; provided, however, that

            (a) such direction shall not be in conflict with any rule of law or
      with this Indenture, and

            (b) may not involve the Trustee in personal liability in
      circumstances where indemnity would not, in the Trustee's sole discretion,
      be adequate.

SECTION 713. WAIVER OF PAST DEFAULTS.

            The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all of the Securities
waive any past default hereunder and its consequences, except a default

            (a) in the payment of the principal or interest, or


                                       51

            (b) in respect of a covenant or provision hereof which under Section
      1402 cannot be modified or amended without the consent of the Holder of
      each Outstanding Security.

            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 714. UNDERTAKING FOR COSTS.

            The Company 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 714 shall not
be deemed to authorize any court to require such an undertaking in and shall not
apply to, any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in aggregate
principal amount of the Outstanding Securities, or to any suit instituted by any
Holder for the enforcement of the payment of the principal of, or interest, if
any, on any Security on or after the Stated Maturity expressed in such Security
(or in the case of redemption, on or after the Redemption Date or, in the case
of purchase, on or after the Purchase Date or Fundamental Change Purchase Date,
as applicable).

SECTION 715. WAIVER OF USURY, 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 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 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 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.

                                 ARTICLE EIGHT

                                  THE TRUSTEE

SECTION 801. CERTAIN DUTIES AND RESPONSIBILITIES.

            (a) Except during the continuance of an Event of Default,


                                       52

                  (1) the Trustee undertakes to perform, 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
            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 shall have occurred and be
continuing, the Trustee shall exercise 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 801;

                  (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, 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; 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 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 802. NOTICE OF DEFAULTS.


                                       53

            The Trustee shall give notice of any default hereunder to the
Holders of the Securities 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 701(c), no such notice to Holders shall be given until at least 45 days
after the occurrence thereof. For the purpose of this Section 802, 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.

SECTION 803. CERTAIN RIGHTS OF TRUSTEE.

            Subject to the provisions of Section 801 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 mentioned herein shall
      be sufficiently evidenced by a Company Request or Company Order, as the
      case may be, or as otherwise expressly provided herein, and any resolution
      of the Board of Managers of the Company may be sufficiently evidenced by a
      Board Resolution thereof and any resolution of the Board of Directors of
      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;

            (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;

            (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 security or indemnity reasonably
      satisfactory to the Trustee 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


                                       54

      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,
      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;

            (h) the Trustee shall not be charged with knowledge of any Event of
      Default unless either (1) a Responsible Officer of the Trustee assigned to
      the Corporate Trust Office 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 any other obligor on the
      Securities, or by any Holder of the Securities; and

            (i) the Trustee shall not be charged with knowledge of the
      commencement of any period during which Additional Amounts are to accrue
      or of the termination of any such period or as to the amount of any such
      Additional Amounts payable at any time and may rely conclusively on an
      Officer's Certificate of the Company as to such matters, which Officer's
      Certificate the Company agrees to provide the Trustee upon the
      commencement or termination of any such period and prior to any date that
      such Additional Amounts are payable.

SECTION 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

            The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) shall be taken as the statements of
the Company and the Guarantor 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. Neither Trustee nor any Authenticating Agent shall be accountable
for the use or application by the Company or the Guarantor of Securities or the
proceeds thereof.

SECTION 805. 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, subject to Sections 808 and 813, may otherwise deal with the Company or the
Guarantor with the same rights it would have if it were not the Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.

SECTION 806. 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


                                       55

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.

SECTION 807. COMPENSATION AND REIMBURSEMENT.

            The Company agrees:

            (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
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.

SECTION 808. 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. To the extent permitted by the Trust Indenture Act, the Trustee shall
not be deemed to have a conflicting interest under Section 310(b)(1) thereof by
virtue of being a trustee under this Indenture and under the following
indentures: the Indenture dated as of November 1, 1997 with PPL Capital Funding,
Inc. and the Guarantor, and the Indenture dated as of October 1, 2001 with the
Company.

SECTION 809. 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


                                       56

      $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 Eight 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 809, 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 809 and the Trust Indenture Act, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article Eight.

SECTION 810. 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 Eight shall become effective until
the acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 811.

            (b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 811 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.

            (c) The Trustee may be removed at any time by Act of the Holders of
a majority in principal amount of the Outstanding Securities delivered to the
Trustee and the Company.

            (d) If at any time:

                  (1) the Trustee shall fail to comply with Section 808 after
            written request therefor by the Company 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 809
            or Section 310(a) of the Trust Indenture Act and shall fail to
            resign after written request therefor by the Company 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


                                       57

            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 by Board Resolution may remove the
Trustee or (y) subject to Section 714, 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 and the appointment of a successor Trustee.

            (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),
the Company, by Board Resolution, shall promptly appoint a successor Trustee (it
being understood that at any time there shall be only one Trustee) and shall
comply with the applicable requirements of Section 811. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities shall be appointed
by Act of the Holders of a majority in principal amount of the Outstanding
Securities 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 811, become the successor
Trustee and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 811, 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 Trustee.

            (f) The Company shall give notice of each resignation and each
removal of the Trustee or Authenticating Agent and each appointment of a
successor Trustee or Authenticating Agent to all Holders of Securities in the
manner provided in Section 106. Each notice shall include the name of the
successor Trustee or Authenticating Agent and the address of its Corporate Trust
Office.

SECTION 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

            (a) In case of the appointment hereunder of a successor Trustee,
every such successor Trustee so appointed shall execute, acknowledge and deliver
to the Company 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; provided on the request of the Company 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) Upon request of any such successor Trustee, the Company 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) of this Section.


                                       58

            (c) 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 812. 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 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

            If the Trustee shall be or become a creditor of the Company 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, 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.

SECTION 814. APPOINTMENT OF AUTHENTICATING AGENT.

            The Trustee may appoint an Authenticating Agent or Agents with
respect to the Securities, which shall be authorized to act on behalf of the
Trustee to authenticate Securities issued upon original issuance, exchange,
registration of transfer or partial redemption thereof or pursuant to Section
207, 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 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


                                       59

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 and the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and the Company. 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. 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.

            The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.

            The provisions of Sections 209, 804 and 805 shall be applicable to
each Authenticating Agent.

            If an Authenticating Agent is appointed pursuant to this Section,
the Securities may have endorsed thereon, in addition to the Trustee's
certificate of authentication, an alternate certificate of authentication in the
following form:

                  This is one of the Securities referred to in the
within-mentioned Indenture:

                                                    JPMorgan Chase Bank,
                                                    as Trustee

                                                    By: _______________________,
                                                    as Authenticating Agent

                                                    By: ________________________
                                                        Authorized Signatory


                                       60

                                  ARTICLE NINE

                                   GUARANTEE

SECTION 901. GUARANTEE.

            The Guarantor hereby fully, unconditionally and irrevocably
guarantees, as primary obligor and not merely as surety, to each Holder of the
Securities and the Trustee (i) as set forth in Section 1105, the obligations of
the Company to deliver shares of Common Stock pursuant to Sections 501 and 1101
hereof (the "STOCK OBLIGATIONS") and (ii) the full and punctual payment when
due, whether at maturity, by acceleration, by redemption, by purchase or
otherwise, of the principal of, and interest on, the Securities and all other
monetary obligations of the Company under this Indenture (all the foregoing
under this clause (ii) being hereinafter collectively called the "MONETARY
OBLIGATIONS" and, together with the Stock Obligations, the "OBLIGATIONS"). The
Guarantee will be unsecured debt of the Guarantor, not subordinated by its terms
to any other obligations of the Guarantor. The Guarantor further agrees (to the
extent permitted by law) that the Obligations may be extended or renewed, in
whole or in part, without notice or further assent from it, and that it will
remain bound under this Article Nine notwithstanding any extension or renewal of
any Obligation.

            The Guarantor waives presentation to, demand of payment from and
protest to the Company of any of the Monetary Obligations and also waives notice
of protest for nonpayment. The Guarantor waives notice of any default under the
Securities or the Obligations. The obligations of the Guarantor hereunder shall
not be affected by (a) the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any right or remedy against the Company or any
other Person under this Indenture, the Securities or any other agreement or
otherwise; (b) any extension or renewal of any thereof; (c) any rescission,
waiver, amendment or modification of any of the terms or provisions of this
Indenture, the Securities or any other agreement; (d) the release of any
security held by any Holder or the Trustee for the Monetary Obligations or any
of them; or (e) any change in the ownership of the Company.

            The Guarantor further agrees that the Guarantee herein constitutes a
guarantee of payment when due (and not a guarantee of collection) and waives any
right to require that any resort be had by any Holder or the Trustee to any
security held for payment of the Monetary Obligations.

            The obligations of the Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason (other than
payment or performance of the Obligations in full), including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense of setoff, counterclaim, recoupment or termination whatsoever or
by reason of the invalidity, illegality or unenforceability of the Obligations
or otherwise. Without limiting the generality of the foregoing, the obligations
of the Guarantor herein shall not be discharged or impaired or otherwise
affected by the failure of any Holder to assert any claim or demand or to
enforce any remedy under this Indenture, the Securities or any other agreement,
by any waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Obligations, or by any other act
or thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent


                                       61

vary the risk of the Guarantor or would otherwise operate as a discharge of the
Guarantor as a matter of law or equity.

            The Guarantor further agrees that the Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of, or interest on any of the
Monetary Obligations is rescinded or must otherwise be restored by any Holder
upon the bankruptcy or reorganization of the Company or otherwise.

            In furtherance of the foregoing and not in limitation of any other
right which any Holder has at law or in equity against the Guarantor by virtue
hereof, upon the failure of the Company to pay any of the Monetary Obligations
when and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, the Guarantor hereby promises to and will, upon receipt
of written demand by the Trustee, forthwith pay, or cause to be paid, in cash,
to the Trustee an amount equal to the sum of (i) the unpaid amount of such
Monetary Obligations then due and owing and (ii) accrued and unpaid interest on
such Monetary Obligations then due and owing (but only to the extent not
prohibited by law).

            The Guarantor further agrees that, as between the Guarantor, on the
one hand, and the Holders, on the other hand, (x) the maturity of the Monetary
Obligations guaranteed hereby may be accelerated as provided in this Indenture
for the purposes of the Guarantee herein, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the Monetary
Obligations guaranteed hereby and (y) in the event of any such declaration of
acceleration of such Monetary Obligations, such Monetary Obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantor for
the purposes of this Guarantee.

            The Guarantor also agrees to pay any and all reasonable costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or the
Holders in enforcing any rights under this Section 901.

SECTION 902. SUBROGATION.

            Notwithstanding any payment or payments made by the Guarantor
hereunder, the Guarantor shall not be entitled to be subrogated to any of the
rights of the Trustee or any Holder against the Company or any collateral
security or guarantee or right of offset held by the Trustee or any Holder for
the payment of the Monetary Obligations, nor shall the Guarantor seek or be
entitled to seek any contribution or reimbursement from the Company in respect
of payments made by the Guarantor hereunder, until all amounts owing to the
Trustee and the Holders, by the Company on account of the Monetary Obligations
are paid in full. If any amount shall be paid to the Guarantor on account of
such subrogation rights at any time when all of the Monetary Obligations shall
not have been paid in full, such amount shall be held by the Guarantor in trust
for the Trustee and the Holders, segregated from other funds of the Guarantor,
and shall, forthwith upon receipt by the Guarantor, be turned over to the
Trustee in the exact form received by the Guarantor (duly indorsed by the
Guarantor to the Trustee, if required), to be applied against the Monetary
Obligations.

SECTION 903. CONSIDERATION.


                                       62

            The Guarantor has received, or will receive, direct or indirect
benefits from the making of the Guarantee.

                                  ARTICLE TEN

        CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER OF GUARANTOR

SECTION 1001. GUARANTOR MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.

            The Guarantor shall not 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
      Guarantor is merged or the Person which acquires by conveyance or
      transfer, or which leases, the properties and assets of the Guarantor,
      substantially as an entirety shall be a corporation 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 Guarantee under Sections 901 and 1105 and the performance of
      every obligation of the Guarantor under this Indenture on the part of the
      Guarantor to be performed or observed;

            (b) immediately after giving effect to such transaction, no Event of
      Default with respect to the Guarantor, and no event which, after notice or
      lapse of time or both, would become an Event of Default with respect to
      the Guarantor, shall have occurred and be continuing; and

            (c) the Guarantor 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 1002. SUCCESSOR PERSON SUBSTITUTED.

            Upon any consolidation by the Guarantor with or merger by the
Guarantor into any other Person or any conveyance or other transfer or lease of
the properties and assets of the Guarantor substantially as an entirety in
accordance with Section 1001, the successor Person formed by such consolidation
or into which the Guarantor 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 Guarantor under this Indenture with
the same effect as if such successor Person had been named as the Guarantor
herein, and thereafter, except in the case of a lease, the predecessor Person
shall be relieved of and released from all obligations under the Guarantee
pursuant to this Indenture, this Indenture and the Securities Outstanding
hereunder (unless the predecessor Person shall have delivered to the Trustee an
instrument waiving such


                                       63

relief and release), and the Trustee shall acknowledge in writing that the
predecessor Person has been so relieved and released.

SECTION 1003. LIMITATIONS.

            For purposes of clarification and not in limitation of the
provisions of Section 1001, nothing in this Indenture shall be deemed to prevent
or restrict:

            (a) any consolidation or merger after the consummation of which the
      Guarantor would be the surviving or resulting corporation, or

            (b) any conveyance or other transfer, or lease of any part of the
      properties of the Guarantor which does not constitute the entirety, or
      substantially the entirety, thereof, or

            (c) the approval by the Guarantor of, or the consent by the
      Guarantor to, any consolidation or merger of any direct or indirect
      subsidiary or affiliate of the Guarantor, or any conveyance, transfer or
      lease by any such subsidiary or affiliate of any of its assets.

                                 ARTICLE ELEVEN

                            CONVERSION OF SECURITIES

SECTION 1101. CONVERSION PRIVILEGE.

            Subject to and upon compliance with the provisions of this
Indenture, a Holder of a Security may convert such Security into shares of
Common Stock, at any time prior to close of business on the date of Stated
Maturity, in accordance with the terms of this Article Eleven and only in the
circumstances set forth in the fifth paragraph on the reverse of the Securities.
The Company shall notify the Trustee (which shall in turn notify the Holders
promptly upon receipt of such notification from the Company) of any date on
which the Securities become convertible (and, if the Securities cease to be
convertible at any time or from time to time, of the first date thereafter on
which the Securities again become convertible), which notification shall set
forth the calculations on which such determination was made.

            The rate at which shares of Common Stock shall be delivered upon
conversion (the "CONVERSION RATE") shall be initially 20.1106 shares of Common
Stock for each $1,000 principal amount of Securities. The Conversion Rate shall
be adjusted in certain circumstances as provided in this Article Eleven. The
price at which shares of Common Stock shall be issued and delivered upon
conversion (the "CONVERSION PRICE") shall at any time be equal to $1,000 divided
by the then applicable Conversion Rate (and rounded to the nearest cent).

            A Holder may convert a portion of the principal amount of a Security
if the portion converted is in a $1,000 principal amount or an integral multiple
of $1,000. Provisions of this Indenture or of the Security that apply to
conversion of all of a Security also apply to conversion of a portion of a
Security.

SECTION 1102. CONVERSION PROCEDURE.


                                       64

            To convert a Security, a Holder must satisfy the requirements in the
ninth paragraph on the reverse of the Securities. The first Business Day on
which the Holder satisfies all those requirements and submits such Holder's
Securities for conversion is hereinafter referred to as the "CONVERSION DATE."

            As soon as practicable after the Conversion Date, the Company shall
deliver to the Holder, through the transfer agent for the shares of Common
Stock, a certificate for, or a beneficial interest in a global certificate
representing, the number of shares of Common Stock issuable upon the conversion
or exchange and cash in lieu of any fractional share determined pursuant to
Section 1103. The Company shall take all necessary actions to ensure that the
Person in whose name the certificate is registered is entered into the
Guarantor's share register as a shareholder of record as of the close of
business on the Conversion Date, or as soon thereafter as is possible. Upon
conversion by a Holder of a Security in its entirety, such person shall no
longer be a Holder of such Security.

            No payment or adjustment will be made for dividends on, or other
distributions with respect to, any shares of Common Stock except as provided in
this Article Eleven. Upon conversion of a Security, except as provided in
Section 201(d) with respect to interest payable on Securities or portions
thereof converted after a Regular Record Date, that portion of accrued and
unpaid interest on the converted Securities attributable to the period from the
most recent Interest Payment Date through the Conversion Date shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through delivery of the shares of Common Stock
(together with the cash payment, if any, in lieu of fractional shares) for the
Security being converted pursuant to the provisions hereof. The Company will not
adjust the Conversion Rate to account for accrued interest, if any. If the
Holder converts more than one Security at the same time, the number of shares of
Common Stock issuable upon the conversion shall be based on the total principal
amount of the Securities converted.

            In the event that a Holder elects to convert all or any portion of a
Security into shares of Common Stock as set forth in Section 1101, the Company
may elect to pay an amount in cash per Security equal to the product of the (x)
the Applicable Stock Price and (y) the Conversion Rate in effect on the
Conversion Date to satisfy all of its conversion obligation if the Company
notifies such Holder through the Trustee its election to satisfy its conversion
obligation by payment of cash at any time on or before the date that is two
Business Days following the Conversion Date (such period, the "CASH SETTLEMENT
NOTICE PERIOD"). If the Company timely elects to pay cash for the shares of
Common Stock otherwise issuable to the Holder, the Holder may retract the
Conversion Notice at any time during the two Business Day period beginning on
the day after the final day of the Cash Settlement Notice Period. No such
retraction may be made (and a conversion notice shall be irrevocable) if the
Company does not elect to deliver cash in lieu of shares (other than cash in
lieu of fractional shares). If the conversion notice has not been retracted,
then settlement (in cash) will occur within 10 Business Days following the
applicable Conversion Date. The Company shall notify the Trustee and the
Conversion Agent of the amount of cash payable for each $1,000 principal amount
of the Securities in accordance with this paragraph promptly after the
determination thereof. If an Event of Default (except a default in payment of
cash upon conversion of the Securities) shall have occurred and be continuing,
the Company may not pay cash to Holders of Securities under this Section 1102
(except as provided under Section 1103).


                                       65

            If the last day on which a Security may be converted is not a
Business Day, the Security may be surrendered on the next succeeding day that is
a Business Day.

            Upon surrender of a Security that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder, a
new Security in an authorized denomination equal in principal amount to the
unconverted portion of the Security surrendered.

SECTION 1103. FRACTIONAL SHARES.

            The Company will not deliver fractional shares of Common Stock upon
conversion of a Security. Instead, the Company will pay cash based on the
then-current market value for all fractional shares on the New York Stock
Exchange or other principal United States securities exchange upon which the
shares of Common Stock are then listed or, if not so listed, on the Nasdaq
National Market. The current market value of a fractional share of Common Stock
shall be determined, to the nearest 1/1,000th of a share, by multiplying the
Sale Price on the last trading day immediately prior to the Conversion Date, of
a full share by the fractional amount and rounding the product to the nearest
whole cent. In the event that a Holder elects to have more than one Security
converted, the number of shares of Common Stock shall be based on the aggregate
principal amount of Securities to be converted.

SECTION 1104. TAXES ON CONVERSION.

            If a Holder submits a Security for conversion, the Company shall pay
all documentary, transfer or stamp taxes or duties and all other taxes or
duties, if any, which may be imposed by the United States or any political
subdivision thereof or taxing authority thereof or therein with respect to the
issuance of shares of Common Stock upon the conversion. However, the Holder
shall pay any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder's name. The Conversion Agent may refuse
to deliver the certificates representing the shares of Common Stock being issued
in a name other than the Holder's name until the Conversion Agent receives a sum
sufficient to pay any tax which will be due because the shares of Common Stock
are to be issued in a name other than the Holder's name. Nothing herein shall
preclude any tax withholding required by law or regulations.

SECTION 1105. GUARANTOR TO PROVIDE SHARES OF COMMON STOCK.

            The Guarantor shall, prior to delivery by the Company of shares of
Common Stock under this Article Eleven or Section 501, and from time to time as
may be necessary, reserve out of its authorized but unissued shares of Common
Stock a sufficient number of shares of Common Stock to permit the conversion or
purchase of the Securities in accordance with their terms.

            The Guarantor hereby fully, unconditionally and irrevocably
guarantees the obligations of the Company to deliver the shares of Common Stock
pursuant to Sections 501 and 1101 to each Holder of the Securities and the
Trustee. Any Holder of the Securities and the Trustee shall have the right to
proceed directly against the Guarantor without first proceeding against the
Company to enforce the Company's rights under Sections 501 and 1101 to receive
shares of Common Stock or to obtain delivery of any shares of Common Stock owed
to the Holders of the Securities upon purchase or conversion of the Securities.


                                       66

            All shares of Common Stock issued and delivered upon conversion by
the Company of the Securities shall be newly issued shares, shall be duly and
validly issued and fully paid and nonassessable, and shall be free from
preemptive rights and free of any lien or adverse claim. The Company and the
Guarantor will endeavor promptly to comply with all U.S. federal and state
securities laws regulating the offer and the issuance and delivery of shares of
Common Stock upon conversion of Securities, if any, and will list or cause to
have quoted such shares of Common Stock on each national securities exchange or
in the over-the-counter market or such other market on which the shares of
Common Stock are then listed or quoted.

SECTION 1106. ADJUSTMENT OF CONVERSION RATE.

            (a) Adjustments for Dividends, Distributions, Stock Splits, Etc.

                  (1) In case the Guarantor shall pay or make a dividend or
            other distribution on the Common Stock in Common Stock, the
            Conversion Rate, as in effect at the opening of business on the day
            following the date fixed for the determination of stockholders
            entitled to receive such dividend or other distribution, shall be
            increased by dividing such Conversion Rate by a fraction of which
            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 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 Section 1106(a)(1),
            the number of shares of Common Stock at any time outstanding shall
            not include shares held in treasury by the Guarantor but shall
            include any shares issuable in respect of any scrip certificates
            issued in lieu of fractions of shares of Common Stock. The Guarantor
            will not pay any dividend or make any distribution on shares of
            Common Stock held in treasury by the Guarantor.

                  (2) In case the Guarantor shall issue rights, warrants or
            options (other than pursuant to a dividend reinvestment plan or
            share purchase plan) to all holders of its Common Stock entitling
            them, for a period expiring within 45 days after the date of
            issuance of 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 the Common Stock on such date of
            issuance, the Conversion Rate in effect at the opening of business
            on such date of issuance shall be increased by dividing such
            Conversion Rate by a fraction of which the numerator shall be the
            number of shares of Common Stock outstanding at the close of
            business on such date of issuance plus the number of shares of
            Common Stock which the aggregate 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 the denominator
            shall be the number of shares of Common Stock outstanding at the
            close of business on such date of issuance 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 such date of issuance. For the
            purposes of this Section 1106(a)(2), the number of shares of


                                       67

            Common Stock at any time outstanding shall not include shares held
            in treasury by the Guarantor but shall include any shares issuable
            in respect of any scrip certificates issued in lieu of fractions of
            shares of Common Stock. The Guarantor shall not issue any such
            rights, options or warrants in respect of shares of Common Stock
            held in treasury by the Guarantor.

                  (3) In case outstanding shares of Common Stock shall be
            subdivided or split into a greater number of shares of Common Stock,
            the Conversion 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 Conversion 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 Guarantor shall, by dividend or otherwise,
            distribute to all holders of its Common Stock evidences of
            indebtedness of the Guarantor or any of its subsidiaries, shares of
            capital stock, securities, cash, property or other assets (but
            excluding any rights, options or warrants referred to in Section
            1106(a)(2), any dividend or distribution paid exclusively in cash
            and any dividend or distribution referred to in Section 1106(a)(1)),
            the Conversion Rate shall be adjusted by dividing the Conversion
            Rate in effect immediately prior to the close of business on the
            date fixed for the determination of stockholders entitled to receive
            such distribution by a fraction of which the numerator shall be the
            Current Market Price per share of the 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) on such date of the
            portion of the evidences of indebtedness, shares of capital stock,
            securities, cash or other property so distributed applicable to one
            share of Common Stock and the denominator shall be such Current
            Market Price per share of the 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 stockholders
            entitled to receive such distribution; provided, however, that in
            the event that the distribution referred to in this Section
            1006(a)(4) consists of capital stock of, or similar equity interests
            in, a Subsidiary or other business unit of the Guarantor, the
            Conversion Rate shall be adjusted by dividing the Conversion Rate in
            effect immediately prior to the close of business on the date fixed
            for the determination of stockholders entitled to receive such
            distribution by a fraction of which the numerator shall be the
            Spin-off Market Price per share of the Common Stock on the date
            fixed for such determination less the Spin-off Market Price per
            share or similar equity interest of the Subsidiary or other business
            unit of the Guarantor on such date and the denominator shall be the
            Spin-off Market Price per share of the Common Stock, such adjustment
            to become effective 10 trading days after the effective date of such
            distribution of


                                       68

            capital stock of, or similar equity interest in, a Subsidiary or
            other business unit of the Guarantor. In any case in which this
            Section 1106(a)(4) is applicable, Sections 1106(a)(1) and 1106(a)(2)
            shall not be applicable.

                  (5) In case the Guarantor shall, by dividend or otherwise,
            distribute to all holders of its Common Stock cash (excluding (x)
            any quarterly cash dividend on the Common Stock to the extent the
            aggregate cash dividend per share of Common Stock in any fiscal
            quarter does not exceed the greater of (A) the amount per share of
            Common Stock of the next preceding quarterly cash dividend on the
            Common Stock to the extent that such preceding quarterly dividend
            did not require any adjustment of the Conversion Rate pursuant to
            this Section 1106(a)(5) (as adjusted to reflect subdivisions, splits
            or combinations of the Common Stock), and (B) 1.25% of the
            arithmetic average of the Closing Sale Price during the ten Trading
            Days immediately prior to the date of declaration of such dividend,
            and (y) any dividend or distribution in connection with the
            liquidation, dissolution or winding up of the Guarantor, whether
            voluntary or involuntary), then, in such case, the Conversion Rate
            shall be increased so that the same shall equal the rate determined
            by multiplying the Conversion Rate in effect immediately prior to
            the close of business on such record date by a fraction, (i) the
            numerator of which shall be the Current Market Price on such record
            date; and (ii) the denominator of which shall be the Current Market
            Price on such record date less the amount of cash so distributed
            (less any portion of a quarterly cash dividend permitted to be
            excluded pursuant to clause (x) above) applicable to one share of
            Common Stock, such adjustment to be effective immediately prior to
            the opening of business on the day following the record date;
            provided that if the portion of the cash so distributed applicable
            to one share of Common Stock is equal to or greater than the Current
            Market Price on the record date, in lieu of the foregoing
            adjustment, adequate provision shall be made so that each Holder
            shall have the right to receive upon conversion the amount of cash
            such Holder would have received had such Holder converted each
            Security on the record date. If such dividend or distribution is not
            so paid or made, the Conversion Rate shall again be adjusted to be
            the Conversion Rate that would then be in effect if such dividend or
            distribution had not been declared.

                  (6) In case a tender or exchange offer made by the Guarantor
            or any Subsidiary of the Guarantor for all or any portion of the
            Common Stock shall expire and such tender or exchange offer (as
            amended upon the expiration thereof) shall require the payment to
            stockholders (based on the acceptance (up to any maximum specified
            in the terms of the tender or exchange offer) of Purchased Shares
            (as defined below)) of 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 as of the last time (the "EXPIRATION TIME") tenders
            or exchanges may be made pursuant to such tender or exchange offer
            (as it may be amended) exceeds the Closing Sale Price of a share of
            Common Stock on the Trading Day next succeeding the Expiration Time,
            the Conversion Rate shall be adjusted so that the same shall equal
            the rate determined by dividing the Conversion Rate in effect
            immediately prior to the


                                       69

            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 the Common Stock as of the Expiration Time and (II) the number of
            shares of Common Stock outstanding (including any tendered shares)
            as of the Expiration Time less (B) the amount of cash plus the fair
            market value (determined as aforesaid) of the aggregate
            consideration payable to stockholders in the tender or exchange
            offer (assuming 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 the 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").

            All adjustments to the Conversion 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).

            (b) Effect of Reclassification, Consolidation, Merger, Combination
      or Sale.

            In the event of (i) any reclassification or change of outstanding
shares of Common Stock, (ii) any consolidation, merger or combination of the
Guarantor with another Person as a result of which holders of Common Stock shall
be entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock or (iii) any sale or
conveyance of all or substantially all of the property and assets of the
Guarantor to any other Person as a result of which holders of Common Stock shall
be entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock, then the Conversion
Rate will not be adjusted. If any of the events described in the preceding
sentence occur, the Guarantor or the successor or purchasing Person, as the case
may be, shall execute with the Trustee a supplemental indenture or otherwise
amend the terms of the Securities, to provide that each Security shall be
convertible into the kind and amount of shares of stock, other securities or
property or assets (including cash) that the Holder of the Security would have
received upon such reclassification, change, consolidation, merger, combination,
sale or conveyance if such Holder had converted such Security into the number of
shares of Common Stock issuable upon conversion of such Security immediately
prior to such reclassification, change, consolidation, merger, combination, sale
or conveyance. Such supplemental indenture or other amendment to the Securities
shall provide for adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 1106. The above
provisions of this Section 1106(b) shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances. If this Section 1106(b) applies to any event or occurrence, Section
1106(a) shall not apply.

SECTION 1107. WHEN ADJUSTMENT MAY BE DEFERRED.


                                       70

            No adjustment in the Conversion Rate need be made unless the
adjustment would require an increase or decrease of at least 1% in the
Conversion Rate. Any adjustments that are not made shall be carried forward and
taken into account in any subsequent adjustment.

SECTION 1108. WHEN NO ADJUSTMENT REQUIRED.

            Notwithstanding any provision of this Indenture to the contrary
herein, no adjustment to the Conversion Rate need be made as a result of:

            (a) (i) the issuance of the rights; (ii) the distribution of
separate certificates representing the rights; (iii) the exercise or redemption
of the rights in accordance with any rights agreement; or (iv) the termination,
expiration or invalidation of the rights, in each case, pursuant to any
Guarantor newly adopted stockholders rights plans;

            (b) the issuance of any shares of Common Stock pursuant to any
present or future plan providing for the capitalization or reinvestment of
dividends or interest payable on securities of the Guarantor and the investment
of additional optional amounts in shares of Common Stock under any such plan;

            (c) the issuance of any shares of Common Stock or options or rights
to purchase those shares pursuant to any present or future employee, director or
consultant benefit plan or program of or assumed by the Guarantor or any of its
Subsidiaries; or

            (d) the issuance of any shares of Common Stock pursuant to any
option, warrant, right, or exercisable, exchangeable or convertible security
outstanding as of the Original Issue Date.

            No adjustment need be made for a change in the par value of the
shares of Common Stock.

            To the extent the Securities become convertible pursuant to this
Article Eleven in whole or in part into cash, assets or property (other than
capital stock or securities to which Section 1106(b) applies), no adjustment
need be made thereafter as to the cash, assets or property. Interest will not
accrue on such cash, assets or property.

SECTION 1109. NOTICE OF ADJUSTMENT.

            Whenever the Conversion Rate is adjusted, the Company and the
Guarantor shall promptly mail to Holders a notice of the adjustment. The Company
and the Guarantor shall file with the Trustee and the Conversion Agent such
notice briefly stating the facts requiring the adjustment and the manner of
computing it. The certificate shall be conclusive evidence that the adjustment
is correct. Neither the Trustee nor any Conversion Agent shall be under any duty
or responsibility with respect to any such certificate except to exhibit the
same to any Holder desiring inspection thereof.

SECTION 1110. VOLUNTARY INCREASE.


                                       71

            (a) The Guarantor from time to time may increase the Conversion Rate
if the Board of Directors has made a determination that such increase would be
in the Guarantor's best interests (whose determination shall be conclusive) by
any amount at any time for at least 20 days, so long as the increase is
irrevocable during such period. Whenever the Conversion Rate is increased, the
Company shall mail to the Holders and file with the Trustee and the Conversion
Agent a notice of the increase. The Company shall mail the notice at least 15
days before the date the increased Conversion Rate takes effect. The notice
shall state the increased Conversion Rate and the period it will be in effect. A
voluntary increase of the Conversion Rate does not change or adjust the
Conversion Rate otherwise in effect for purposes of Section 1106(a).

            (b) The Guarantor may make such increases in the Conversion Rate, in
addition to those required by Section 1106(a), 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 reasons.

SECTION 1111. NOTICE OF CERTAIN TRANSACTIONS.

            If:

            (a) the Guarantor takes any action that would require an adjustment
in the Conversion Rate pursuant to Section 1106(a) (unless no adjustment is to
occur pursuant to Sections 1107 or 1108); or

            (b) the Guarantor takes any action that would require a supplemental
indenture pursuant to Section 1106(b); or

            (c) there is a liquidation or dissolution of the Guarantor;

then the Company shall, subject to all applicable laws, mail to the Holders and
file with the Trustee and the Conversion Agent a notice stating the proposed
record date for a dividend or distribution or the proposed effective date of a
combination, subdivision, reclassification, consolidation, merger, amalgamation,
binding share exchange, transfer, liquidation or dissolution. The Company shall
file and mail the notice at least 15 days before such date. Failure to file or
mail the notice or any defect in it shall not affect the validity of the
transaction.

SECTION 1112. TRUSTEE'S ADJUSTMENT DISCLAIMER.

            The Trustee and any other Conversion Agent shall not at any time be
under any duty or responsibility to any Holder to either calculate the
Conversion Rate or determine whether any facts exist which may require any
adjustment of the Conversion Rate, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed herein, or in any supplemental indenture provided to be employed, in
making the same and shall be protected in relying upon an Officer's Certificate
with respect to the same. The Trustee and any other Conversion 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 (including cash),
which may at any time be issued or delivered upon the conversion of any
Securities and the Trustee and any other Conversion Agent make no
representations with respect


                                       72

thereto. Neither the Trustee nor any Conversion Agent shall be responsible for
any failure of the Guarantor or the Company to issue, transfer or deliver any
shares of Common Stock or stock certificates or other securities or property or
cash upon the surrender of any Securities for the purpose of conversion or to
comply with any of the duties, responsibilities or covenants of the Company or
the Guarantor contained in this Article Eleven. Without limiting the generality
of the foregoing, neither the Trustee nor any Conversion Agent shall be under
any responsibility to determine the correctness of any provisions contained in
any supplemental indenture entered into pursuant to Section 1106(b) relating
either to the kind or amount of shares of stock or securities or other property
or assets (including cash) receivable by Holders upon the conversion of their
Securities after any event referred to in such Section 1106(b) or to any
adjustment to be made with respect thereto, but, subject to the provisions of
Article Eight of the Indenture, may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon, the
Officer's Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto. Neither the Trustee nor the Conversion Agent shall be responsible for
determining whether any event contemplated by the fifth paragraph of the reverse
of the form of Securities has occurred which makes the Securities eligible for
conversion or no longer eligible therefor until the Company has delivered to the
Trustee and the Conversion Agent an Officer's Certificate stating that such
event has occurred, on which certificate the Trustee and the Conversion Agent
may conclusively rely, and the Company agrees to deliver such Officer's
Certificate to the Trustee and the Conversion Agent immediately after the
occurrence of any such event. Such Officer's Certificate may be combined with
the notice to the Trustee provided for in Section 1101.

SECTION 1113. SUCCESSIVE ADJUSTMENTS.

            After an adjustment to the Conversion Rate under this Article
Eleven, any subsequent event requiring an adjustment under this Article Eleven
shall cause an adjustment to the Conversion Rate as so adjusted.

SECTION 1114. CALCULATIONS IN RESPECT OF THE SECURITIES.

            The Guarantor will be responsible for making all calculations called
for under the Securities. These calculations include, but are not limited to,
determination of the Applicable Stock Price, Current Market Price, Closing Sale
Price, Spin-off Market Price, Market Price, Sale Price, accrued interest payable
(including Additional Amounts) on the Securities and the Conversion Rate of the
Securities. The Guarantor will make these calculations in good faith and, absent
manifest error, these calculations will be final and biding on the Holders.
Promptly after the calculation thereof, the Guarantor will provide to each of
the Trustee, the Paying Agent and the Conversion Agent an Officer's Certificate
setting forth a schedule of its calculations and each of the Trustee, the Paying
Agent and the Conversion Agent is entitled to conclusively rely upon the
accuracy of such calculations without independent verification. The Trustee, the
Paying Agent and the Conversion Agent shall not be responsible for making any
calculation or determination referred to in this Section 1114. The Trustee will
forward the Guarantor's calculations to any Holder upon the request of such
Holder.


                                       73

SECTION 1115. FUTURE STOCKHOLDER RIGHTS PLANS.

            If the Guarantor hereafter adopts any stockholder rights plan, upon
conversion of the Securities into shares of Common Stock pursuant to this
Article Eleven, a Holder shall be entitled to receive upon conversion of its
Securities, in addition to the shares of Common Stock issuable upon conversion,
the related rights for the Common Stock unless the rights have separated from
the Common Stock at the time of conversion, in which case the Conversion Rate
will be adjusted as if the Guarantor distributed to all holders of Common Stock,
shares of capital stock, evidences of indebtedness or assets, as described in
Section 1106(a)(4), subject to readjustment in the event of the expiration,
termination or redemption of such rights.

                                 ARTICLE TWELVE

               HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 1201. LISTS OF HOLDERS.

            Semiannually, not later than May 1 and November 1 in each year, and
at such other times as the Trustee may request in writing, the Company 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 1202. REPORTS BY TRUSTEE AND COMPANY.

            The Trustee shall transmit to the 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 May 15 in each calendar year with
respect to the 12-month period ending on the preceding March 15, commencing
March 15, 2004. A copy of each such report shall, at the time of such
transmission to the Holders, be filed by the Trustee with each stock exchange
upon which any Securities are listed, with the Commission and with the Company.
The Company 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.


                                       74

                                ARTICLE THIRTEEN

       CONSOLIDATION, MERGER, CONVEYANCE OR OTHER TRANSFER OF THE COMPANY

SECTION 1301. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.

            The Company shall not 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 is merged or the Person which acquires by conveyance or transfer,
      or which leases, the properties and assets of the Company, substantially
      as an entirety shall be a corporation 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 interest on, all Outstanding
      Securities and the performance of every covenant of this Indenture on the
      part of the Company 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 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 Thirteen and that
      all conditions precedent herein provided for relating to such transactions
      have been complied with.

SECTION 1302. SUCCESSOR PERSON SUBSTITUTED.

            Upon any consolidation by the Company with or merger by the Company
into any other Person or any conveyance or other transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 1301, the successor Person formed by such consolidation or into
which the Company 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 under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of and released from all obligations and covenants under this Indenture
and the Securities Outstanding hereunder (unless the predecessor Person shall
have delivered to the Trustee an instrument waiving such relief and release),
and the Trustee shall acknowledge in writing that the predecessor Person has
been so relieved and released.


                                       75

SECTION 1303. LIMITATIONS.

            For purposes of clarification and not in limitation of the
provisions of Section 1301, nothing in this Indenture shall be deemed to prevent
or restrict:

            (a) any consolidation or merger after the consummation of which the
      Company would be the surviving or resulting corporation, or

            (b) any conveyance or other transfer, or lease of any part of the
      properties of the Company which does not constitute the entirety, or
      substantially the entirety, thereof, or

            (c) the approval by the Company of, or the consent by the Company
      to, any consolidation or merger of any direct or indirect subsidiary or
      affiliate of the Company, or any conveyance, transfer or lease by any such
      subsidiary or affiliate of any of its assets.

                                ARTICLE FOURTEEN

                            SUPPLEMENTAL INDENTURES

SECTION 1401. 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 guarantees of the
      Guarantor, as the case may be, herein and in the Securities or the
      guarantees of the Guarantor, as the case may be, all as provided in
      Articles Ten and Thirteen; or

            (b) to add one or more covenants of the Company or the Guarantor or
      other provisions for the benefit of the Holders of the Securities or to
      surrender any right or power herein conferred upon the Company or the
      Guarantor; or

            (c) to add any additional Events of Default hereunder; 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 Outstanding on the date of such supplemental
      indenture in any material respect, such change, elimination or addition
      shall become effective with respect to the Securities only pursuant to the
      provisions of Section 1402 hereof; or

            (e) to provide collateral security for the Securities; or


                                       76

            (f) 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

            (g) to evidence and provide for the acceptance of appointment
      hereunder by a successor Trustee; or

            (h) to provide for the procedures required to permit the Company to
      utilize, at its option, a non certificated system of registration for the
      Securities; or

            (i) to change conversion rights in accordance with Section 1106(b)
      of this Indenture;

            (j) to change any place or places where (1) the principal of, and
      interest on, the Securities shall be payable, (2) the Securities may be
      surrendered for registration of transfer, (3) the Securities may be
      surrendered for exchange or conversion and (4) notices and demands to or
      upon the Company or the Guarantor in respect of the Securities 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 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, 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.


                                       77

SECTION 1402. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.

            Subject to the provisions of Section 1401, with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities under this Indenture by Act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by a Board Resolution,
the Guarantor, when authorized by an Officer's Certificate, 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; and provided, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security so
directly affected,

            (a) change the Stated Maturity of the principal of, or any
      installment of principal of, or interest on, 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 coin or currency (or other property), in which any
      Security 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, in the case of purchase, on or after the Purchase Date
      or Fundamental Change Purchase Date, as applicable), or

            (b) reduce the percentage in principal amount of the Outstanding
      Securities, 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 any default hereunder and its consequences, or

           (c) make any change that adversely affects the rights of conversion
      of any Security in accordance with Article Eleven of this Indenture and
      paragraphs 5 through 11 on the reverse of the Securities;

            (d) modify any of the provisions of this Section 1402, or Section
      713 with respect to the Securities, 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.

            It shall not be necessary for any Act of Holders under this Section
1402 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.

SECTION 1403. EXECUTION OF SUPPLEMENTAL INDENTURES.

            In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article Fourteen or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 801) shall be fully protected in relying
upon, an Opinion of Counsel and an Officer's Certificate 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


                                       78

affects the Trustee's own rights, duties, immunities or liabilities under this
Indenture or otherwise.

SECTION 1404. EFFECT OF SUPPLEMENTAL INDENTURES.

            Upon the execution of any supplemental indenture under this Article
Fourteen 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 Fourteen 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 1405. 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 1406. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.

            Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Fourteen 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 shall so
determine, new Securities, so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company, and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.

                                ARTICLE FIFTEEN

             IMMUNITY OF MEMBERS, OFFICERS, DIRECTORS AND MANAGERS

SECTION 1501. LIABILITY LIMITED.

            No recourse shall be had for the payment of the principal of, or
interest on, any Securities 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
officer, member, manager or director, as such, past, present or future of the
Company, the Guarantor or of any predecessor or successor of the Company or the
Guarantor (either directly or through the Company, the Guarantor or a
predecessor or successor of the Company or the Guarantor), 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 are solely obligations of the
Company, and the Guarantee is solely the obligation of the Guarantor and that no
personal liability whatsoever shall attach to, or be incurred by, officer,
member, manager or director, past, present or future, of the Company, the
Guarantor or of any predecessor or successor of the Company or the Guarantor,
either directly or indirectly through the Company, the Guarantor or any
predecessor or successor of the Company or the Guarantor, because of the
indebtedness


                                       79

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 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.

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

            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.


                                       80

            IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective seals to be hereunto affixed and
attested, all as of the day and year first above written.

                                       PPL ENERGY SUPPLY, LLC


                                       By:   /s/ James E. Abel
                                           -------------------------------------
                                           Name:  James E. Abel
                                           Title: Treasurer


[SEAL]

ATTEST:

  /s/ Diane M. Koch
- ----------------------------------
Name:  Diane M. Koch
Title: Assistant Secretary


                                       PPL CORPORATION


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


[SEAL]

ATTEST:

  /s/ Diane M. Koch
- ----------------------------------
Name:  Diane M. Koch
Title: Assistant Secretary


                                       JPMORGAN CHASE BANK,
                                         as Trustee


                                       By:   /s/ Alfia Monastra
                                           -------------------------------------
                                           Name:  Alfia Monastra
                                           Title: Vice President


[SEAL]

ATTEST:

  /s/ James M. Foley
- ----------------------------------
Name:  James M. Foley
Title: Assistant Vice President


                                       81

                                                                       EXHIBIT A

                           [FORM OF FACE OF SECURITY]

                         [Global Legend, if applicable]

           [Restrictive Securities Restrictive Legend, if applicable]




                             PPL ENERGY SUPPLY, LLC
                    2 5/8% CONVERTIBLE SENIOR NOTE DUE 2023
            FULLY AND UNCONDITIONALLY GUARANTEED BY PPL CORPORATION


Original Issue Date:       May 21, 2003

Stated Maturity:           May 15, 2023

Interest Rate:             2 5/8%

Interest Payment Dates:    May 15 and November 15

Regular Record Dates:      May 1 and November 1 (whether or not a Business Day)



Principal Amount $                                               No.
                                                                 CUSIP 69352JAD9

      PPL ENERGY SUPPLY, LLC, a limited liability company 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 shown above
and to pay interest thereon from the Original Issue Date shown above, or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually in arrears on each Interest Payment Date as
specified above, commencing on November 15, 2003 and on the Stated Maturity at
the rate per annum shown above (the "Interest Rate") until the principal hereof
is paid or made available for payment and on any overdue principal and on any
overdue installment of interest. In addition, Additional Amounts may accrue on
this Security in the circumstances described in the Registration Rights
Agreement. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this 2 5/8% Convertible Senior Note due 2023 (this
"Security") is registered at the close of business on the Regular Record Date as
specified above next preceding such Interest Payment Date. Except as otherwise
provided in the Indenture, any such interest not so


                                      A-1

punctually paid or duly provided for will 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 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 whereof shall be given to Holders of the Securities 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, if
any, on which the Securities shall be listed, and upon such notice as may be
required by any such exchange, all as more fully provided in the Indenture.

      Payments of interest on this Security will include interest accrued to but
excluding the respective Interest Payment Dates. Payments of interest for this
Security shall be computed and paid on the basis of a 360-day year consisting of
twelve 30-day months and will accrue from May 21, 2003 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for. In
the event that any date on which interest is payable on this Security is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
payment in respect of any such delay) with the same force and effect as if made
on the date the payment was originally payable. "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 any
Paying Agent is located.

      Payment of principal of and interest on the Securities shall be made in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts.

      The Securities shall be redeemable, in whole or from time to time in part,
at the option of the Company on any date on or after May 20, 2008 (a "Redemption
Date"), at a Redemption Price equal to 100% of the principal amount of the
Securities to be redeemed plus any accrued and unpaid interest on the principal
amount to be redeemed to but excluding the Redemption Date. Notice of any
redemption by the Company will be mailed at least 30 days but not more than 60
days before any Redemption Date to each Holder of Securities to be redeemed. If
Notice of a redemption is provided and funds are deposited as required, interest
will cease to accrue on and after the Redemption Date on the Securities or
portions of Securities called for redemption. In the event that any Redemption
Date is not a Business Day, the Company will pay the Redemption Price on the
next Business Day without any additional interest or other payment due. If less
than all the Securities are to be redeemed at the option of the Company, the
Trustee shall select, in such manner as it shall deem fair and appropriate, the
Securities to be redeemed in whole or in part. The Trustee may select for
redemption Securities and portions of the Securities of this series in amounts
of whole multiples of $1,000.

      A Holder shall have the option to require the Company to purchase any or
all of the Securities held by such Holder on May 15, 2008, May 15, 2013 and May
15, 2018 (each, a "Purchase Date") at a purchase price (the "Purchase Price")
equal to the principal amount of the Securities to be purchased plus any accrued
and unpaid interest to, but excluding, the Purchase Date, upon delivery of a
Purchase Notice containing the information set forth in the Indenture, from the
opening of business on the date that is 20 Business Days prior to such Purchase
Date


                                      A-2

until the close of business on the Purchase Date and upon delivery of the
Securities to the Paying Agent by the Holder as set forth in the Indenture. The
Company may, at its option, elect to pay the entire Purchase Price in cash or
shares of Common Stock.

      If a Fundamental Change shall occur at any time prior to Stated Maturity,
each Holder shall have the right, at such Holder's option and subject to the
terms and conditions of the Indenture, to require the Company to purchase any or
all of such Holder's Securities or any portion of the principal amount thereof
that is equal to $1,000 or an integral multiple of $1,000 on the day that is 30
days after the date of the Fundamental Change Notice of the occurrence of the
Fundamental Change (subject to extension to comply with applicable law) for a
Fundamental Change Purchase Price equal to 100% of the principal amount of
Securities purchased plus accrued and unpaid interest to the Fundamental Change
Purchase Date upon delivery of a Fundamental Change Purchase Notice containing
the information set forth in the Indenture.

      Holders have the right to withdraw any Purchase Notice or Fundamental
Change Purchase Notice, as the case may be, by delivery to the Paying Agent of a
written notice of withdrawal in accordance with the provisions of the Indenture.

      If cash, or if applicable, shares of Common Stock, sufficient to pay a
Fundamental Change Purchase Price or Purchase Price, as the case may be, of all
Securities or portions thereof to be purchased as of the Fundamental Change
Purchase Date or the Purchase Date, as the case may be, is deposited with the
Paying Agent on the Business Day following the Fundamental Change Purchase Date
or the Purchase Date, as the case may be, interest shall cease to accrue on such
Securities (or portions thereof) on and after such date, and the Holder thereof
shall have no other rights as such (other than the right to receive the
Fundamental Change Purchase Price or Purchase Price, as the case may be, upon
surrender of such Security).

      The Securities shall not have a sinking fund.

      The Securities shall constitute the direct unsecured and unsubordinated
debt obligations of the Company and shall rank equally in priority with the
Company's existing and future unsecured and unsubordinated indebtedness.

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


                                      A-3

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

                                               PPL ENERGY SUPPLY, LLC


                                               By: _____________________________
                                                   Name:
                                                   Title:

[SEAL

ATTEST:

________________________________]



TRUSTEE'S CERTIFICATE OF
  AUTHENTICATION

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

JPMORGAN CHASE BANK,
   as Trustee,


By: ____________________________
    Authorized Officer

Date:


                                      A-4

                             (Reverse of Security)

                    2 5/8% Convertible Senior Note due 2023

      1. This 2 5/8% Convertible Senior Note due 2023 is one of a duly
authorized issue of Securities of the Company (the "Securities"), issued and
issuable under an Indenture, dated as of May 21, 2003 (the "Indenture"), between
the Company, PPL Corporation, as guarantor (the "Guarantor"), and JPMorgan Chase
Bank, as Trustee (the "Trustee," which term includes any successor trustee under
the Indenture), to which Indenture reference is hereby made for a statement of
the respective rights, limitation of rights, duties and immunities thereunder of
the Company, the Guarantor, the Trustee and the Holders of the Securities issued
thereunder and of the terms upon which said Securities are, and are to be,
authenticated and delivered. The 2 5/8% Convertible Senior Notes due 2023 are
issuable in the aggregate principal amount of $400,000,000. Capitalized terms
used herein for which no definition is provided herein shall have the meanings
set forth in the Indenture.

      2. To guarantee the full and punctual payment of the principal of, and
interest on, the Securities and all other amounts payable by the Company under
the Indenture and the Securities when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture, the Guarantor has unconditionally guaranteed such
obligations pursuant to the terms of the Indenture. The Guarantee is an
unsecured and unsubordinated obligation of the Guarantor and ranks equally with
all other unsecured and unsubordinated indebtedness and obligations of the
Guarantor. In addition, the Guarantor has unconditionally guaranteed the
conversion obligations of the Company to deliver shares of Common Stock pursuant
to the Indenture and this Security.

      3. Principal on Definitive Securities shall be payable in immediately
available funds or, at the option of the Company, at the office or agency of the
Company maintained for such purpose, initially the Corporate Trust Office of the
Trustee. Interest and Additional Amounts, if any, on Definitive Securities will
be payable at the Company's option (A) to Holders having an aggregate principal
amount of Securities of $2,000,000 or less, by check mailed to the Holders of
such Securities at the address therefore in the Security Register and (B) to
Holders having an aggregate principal amount of Securities of more than
$2,000,000, either by check mailed to each such Holder at the address therefore
in the Security Register or, upon application by any such Holder to the Security
Registrar not later than the relevant Regular Record Date, by wire transfer in
immediately available funds to that Holder's account within the United States
specified in such application, which application shall remain in effect until
the Holder notifies, in writing, the Security Registrar to the contrary.

      4. Initially, JPMorgan Chase Bank will act as Trustee, Paying Agent,
Conversion Agent and Security Registrar. The Company may appoint and change any
Paying Agent, Conversion Agent, Security Registrar or co-registrar without
notice to any Holder. The Guarantor, the Company or any other Subsidiary of the
Guarantor or the Company may act as Paying Agent, Security Registrar or
co-registrar.


                                      A-5

      5. Holders may surrender any of their Securities for conversion into
shares of Common Stock, on the terms and subject to the conditions of the
Indenture and this Security, in only the following circumstances:

            (a) A Holder may surrender for conversion a Security prior to close
      of business on the date of Stated Maturity during any fiscal quarter
      commencing after June 30, 2003, if the Closing Sales Price of the shares
      of Common Stock for at least 20 Trading Days in the 30 consecutive Trading
      Day period ending on the last Trading Day of the immediately preceding
      fiscal quarter exceeds 120% of the applicable Conversion Price per share
      of Common Stock on the last Trading Day of the immediately preceding
      fiscal quarter.

            (b) After the earlier of (x) the date the Securities are rated by
      both Moody's Investors Service, Inc. and Standard & Poor's Ratings
      Services and (y) May 31, 2003, a Holder may surrender for conversion a
      Security prior to the close of business on the date of Stated Maturity
      during any period in which (i) the long-term credit rating assigned to the
      Securities by both Moody's Investors Service, Inc. and Standard & Poor's
      Ratings Services is lower than "Ba2" or "BB", respectively; (ii) both
      Moody's Investors Service, Inc. and Standard & Poor's Ratings Services no
      longer rate the Securities or have withdrawn their ratings with respect to
      the Securities; or (iii) either Moody's Investors Service, Inc. or
      Standard & Poor's Ratings Services no longer rates the Securities or have
      withdrawn or suspended such rating and the remaining rating is lower than
      "Ba2" or "BB", as applicable.

            (c) In the event that the Company calls any Securities for
      redemption, a Holder may surrender for conversion a Security prior to the
      close of business on the Business Day immediately preceding the Redemption
      Date, after which time the right of the Holder to convert will expire
      unless the Company defaults in the payment of the Redemption Price, in
      which case the conversion right shall terminate at the time such payment
      is made.

            (d) In the event the Guarantor is a party to a consolidation,
      merger, binding share exchange or sale of all or substantially all of its
      assets, pursuant to which the shares of Common Stock would be converted
      into cash, securities or other property, the Securities may be surrendered
      for conversion at any time from and after the date which is 15 days prior
      to the date the Guarantor announces as the anticipated effective date for
      such transaction until and including the date which is 15 days after the
      actual date of such transaction. If the Guarantor is a party to a
      consolidation, merger, binding share exchange or sale of all or
      substantially all of its assets, in each case pursuant to which Common
      Stock is converted into cash, securities, or other property, then at the
      effective time of the transaction, the Holder's right to convert a
      Security into Common Stock will be changed into a right to convert it into
      the kind and amount of cash, securities or other property which the Holder
      would have received if such Holder had converted its Securities
      immediately prior to the transaction.

            (e) If the Guarantor elects to (1) distribute any rights or warrants
      to all holders of shares of Common Stock entitling them to purchase, for a
      period expiring within 45


                                      A-6

      days, shares of Common Stock at less than the average of the Sale Prices
      of a share of Common Stock for the 10 consecutive Trading Days ending on
      the Trading Day immediately preceding the date of declaration for such
      distribution; or (2) distributes to all holders of shares of Common Stock
      any of its debt, securities or assets or any rights, warrants or options
      to purchase securities of the Guarantor, which distribution has a per
      share value exceeding 10% of the Sale Price of a share of Common Stock on
      the Trading Day immediately preceding the declaration date for such
      distribution. In the case of the foregoing clauses (1) and (2), the
      Company must notify the Holders at least 20 Business Days prior to the
      ex-dividend date for such distribution. Once the Company has given such
      notice, Holders may surrender their Securities for conversion at any time
      thereafter until the earlier of close of business on the Business Day
      prior to the ex-dividend date or any announcement by the Guarantor that
      such distribution will not take place. No adjustment to a Holder's ability
      to convert will be made if such Holder will otherwise participate in the
      distribution without conversion.

      6. No payment or adjustment will be made for dividends on, or other
distributions with respect to, any shares of Common Stock except as provided in
Article Eleven of the Indenture. Upon conversion of a Security, except as
provided in the Indenture with respect to interest payable on Securities or
portions thereof converted after a Regular Record Date, that portion of accrued
and unpaid interest on the converted Securities attributable to the period from
the most recent Interest Payment Date through the Conversion Date shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through delivery of the shares of Common Stock
(together with the cash payment, if any, in lieu of fractional shares) for the
Security being converted pursuant to the provisions hereof. The Company will not
adjust the Conversion Rate to account for accrued interest, if any.

      7. A Security in respect of which a Holder has delivered a Purchase Notice
or Fundamental Change Purchase Notice exercising the option of such Holder to
require the Company to purchase such Security may be converted only if such
notice of exercise is withdrawn in accordance with the terms of the Indenture.

      8. The initial Conversion Rate is 20.1106 shares of Common Stock per
$1,000 principal amount of Securities, subject to adjustment in certain events
described in the Indenture. A Holder that surrenders Securities for conversion
will receive cash in lieu of any fractional shares of Common Stock.

      9. To surrender a Security for conversion, a Holder must (1) complete and
manually sign the irrevocable (except as provided in Section 1102 of the
Indenture) conversion notice substantially in the form attached hereto (or
complete and manually sign a facsimile of such notice) and deliver such notice
to the Conversion Agent, (2) surrender the Security to the Conversion Agent, (3)
if required, furnish appropriate endorsements and transfer documents, (4) if
required, pay any transfer or similar tax, and (5) if required, pay funds equal
to interest payable on the next Interest Payment Date.

      10. A Holder may convert a portion of a Security if the principal amount
of such portion is $1,000 or an integral multiple of $1,000. No payment or
adjustment will be made for dividends on the shares of Common Stock except as
provided in the Indenture. On conversion of


                                      A-7

a Security, the Holder will not receive any cash payment representing accrued
interest with respect to the converted Securities. Instead, upon conversion the
Company will deliver to the Holder a fixed number of shares of Common Stock and
any cash payment to account for fractional shares. Accrued interest will be
deemed paid in full rather than canceled, extinguished or forfeited. Neither the
Company nor the Guarantor will adjust the Conversion Rate to account for accrued
interest.

      11. The Conversion Rate will be adjusted as provided in Article Eleven of
the Indenture.

      12. The Securities are in registered form without coupons in denominations
of $1,000 and multiples of $1,000. A Holder may transfer or exchange Securities
in accordance with the Indenture. The Security Registrar may require a Holder,
among other things, to furnish appropriate endorsements or transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. In
the event of any redemption of fewer than all of the outstanding Securities, the
Security Registrar need not register the transfer of or exchange any Securities
selected for redemption (except, in the case of a Security to be redeemed in
part, the portion of the Security not to be redeemed) or issue, register the
transfer of or exchange any Securities for a period of 15 days before the
mailing of the redemption notice. In addition, the Security Registrar need not
register the transfer of or exchange any Securities in respect of which a
Purchase Notice or Fundamental Change Purchase Notice has been given and not
withdrawn (except, in the case of a Security to be purchased in part, the
portion of the Security not to be purchased).

      13. The registered Holder of this Security may be treated as the owner of
it for all purposes (subject to Section 208 of the Indenture).

      14. The Trustee and the Paying Agent shall return to the Company upon
Company Request any money or property held by them for the payment of any amount
with respect to the Securities that remains unclaimed for two years, 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.

      15. The Indenture or the Securities may be amended with the written
consent of the Holders of at least a majority in principal amount of the then
outstanding Securities; provided, however, that the consent of each Holder
affected is required to (i) change the stated maturity of the principal or
interest on the Security, or reduce the principal amount or interest payable or
change the currency in which the Securities are payable, or impair the right to
bring suit to enforce any payment, (ii) reduce the percentage of holders whose
consent is required for any supplemental indenture or waiver, (iii) modify
certain terms of the conversion rights under the


                                      A-8

Indenture as set forth in the Indenture, or (iv) modify the provisions of the
Indenture relating to supplemental indentures and waivers of past defaults.

      16. Subject to certain exceptions set forth in the Indenture, without the
consent of any Holder, the Company, the Guarantor and the Trustee may amend the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Articles Ten and Thirteen of the Indenture, or
to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add additional provisions for the benefit of the
Holders, or to add additional covenants of the Company or the Guarantor, or
surrender rights and powers conferred on the Company or the Guarantor, or to
comply with any request of the SEC in connection with qualifying the Indenture
under the Trust Indenture Act, to make provisions with respect to the conversion
right in the event of an occurrence pursuant to Articles Ten or Thirteen of the
Indenture, or to make any change that does not adversely affect the rights of
any Holder.

      17. Subject to certain exceptions set forth in the Indenture, any default
(other than with respect to nonpayment or in respect of a provision that cannot
be amended without the written consent of each Holder affected) may be waived
with the written consent of the Holders of a majority in principal amount of the
then outstanding Securities.

      18. Under the Indenture, Events of Default include (1) default for 30 days
in payment of interest when due on the Securities; (2) default in payment of
principal on the Securities at Stated Maturity, upon required repurchase or upon
optional redemption, upon declaration or otherwise; (3) the failure to deliver
shares of Common Stock upon the due exercise of the conversion right in the
Securities; (4) default in the performance of, or breach of, any covenant or
warranty of the Company or the Guarantor in the Indenture and continuance of
such default or breach for a period of 60 days after there has been given, a
written notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default"; (5) a matured event of
default, as defined in any of the Company's or Guarantor's instruments under
which there may be issued or evidenced any debt of the Company or the Guarantor,
as applicable, that has resulted in the acceleration of such debt, in excess of
$40,000,000 or any default in payment of debt in excess of $40,000,000 at the
final maturity (and after the expiration of any applicable grace or cure
periods); provided that the waiver or cure of any default under any such
instrument and the rescission and annulment of the consequences thereof shall
constitute a waiver or cure of the corresponding default under the Indenture and
a rescission and annulment of the corresponding consequences under the
Indenture; (6) certain events of bankruptcy, insolvency or reorganization of the
Company or the Guarantor (the "bankruptcy events"). However, a default under
clause (4) will not constitute an Event of Default until the Trustee or the
Holders of at least 25% in principal amount of the outstanding Securities notify
the Company or the Guarantor, as the case may be, of the default and the Company
or the Guarantor, as the case may be, does not cure such default within the time
specified in clause (4) hereof after receipt of such notice.

      19. If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities by written notice to the Company to be due and payable
immediately.


                                      A-9

      20. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security reasonably satisfactory
to the Trustee. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders notice of any continuing
default or Event of Default (except a default or Event of Default in payment of
principal or interest) if it determines that withholding notice is in their
interest.

      21. Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.

      22. The Guarantor will be responsible for making all calculations called
for under the Securities. These calculations include, but are not limited to,
determination of the Applicable Stock Price, Current Market Price, Closing Sale
Price, Spin-off Market Price, Market Price, Sale Price, accrued interest payable
(including Additional Amounts) on the Securities and the Conversion Rate of the
Securities. The Guarantor will make these calculations in good faith and, absent
manifest error, these calculations will be final and biding on the Holders. The
Guarantor will be required to deliver to each of the Trustee, the Paying Agent
and the Conversion Agent a schedule of its calculations and each of the Trustee,
the Paying Agent and the Conversation Agent will be entitled to rely upon the
accuracy of such calculations without independent verification. The Trustee will
forward the Guarantor's calculations to any Holder upon the request of such
Holder.

      23. No recourse shall be had for the payment of the principal of, or
interest on, any Securities 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
officer, member, manager or director, as such, past, present or future of the
Company, the Guarantor or of any predecessor or successor of the Company or the
Guarantor (either directly or through the Company, the Guarantor or a
predecessor or successor of the Company or the Guarantor), 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 are solely obligations of the
Company, and the Guarantees are solely obligations of the Guarantor and that no
personal liability whatsoever shall attach to, or be incurred by, officer,
member, manager or director, past, present or future, of the Company, the
Guarantor or of any predecessor or successor of the Company or the Guarantor,
either directly or indirectly through the Company, the Guarantor or any
predecessor or successor of the Company or the Guarantor, 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 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.


                                      A-10

      24. This Security shall not be valid until an authorized officer of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.

      THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.

      The Company will furnish to any Holder upon written request and without
charge to the Holder a copy of the Indenture. Requests may be made to:

            PPL Energy Supply, LLC
            Two North Ninth Street
            Allentown, Pennsylvania 18101-1179
            Attention: Vice President-Finance and Treasurer


                                      A-11

                                ASSIGNMENT FORM

            To assign this Security, fill in the form below:

            I or we assign and transfer this Security to

            _________________________________________________________
              (Print or type assignee's name, address and zip code)

                _________________________________________________
                  (Insert assignee's soc. sec. or tax I.D. No.)

      and irrevocably appoint ___________ agent to transfer this Security on the
      books of the Company. The agent may substitute another to act for him.

________________________________________________________________________________

Date:____________________            Your Signature: ___________________________

Signature Guarantee:____________________________________________________________
                         (Signature must be guaranteed)

________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.

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.

In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Securities and the last date, if
any, on which such Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Securities are being:

CHECK ONE BOX BELOW:

[ ]   1           acquired for the undersigned's own account, without transfer;
                  or

[ ]   2           transferred to the Company; or

[ ]   3           transferred pursuant to and in compliance with Rule 144A under
                  the Securities Act of 1933, as amended (the "Securities Act");
                  or

[ ]   4           transferred pursuant to an effective registration statement
                  under the Securities Act; or

[ ]   5           transferred to an institutional "accredited investor" (as
                  defined in Rule 501(a)(1), (2), (3) or (7) under the
                  Securities Act), that has furnished to the Trustee a signed
                  letter containing certain


                                      A-12

                  representations and agreements (the form of which letter
                  appears as Section 211(b) of the Indenture); or

[ ]   6           transferred pursuant to another available exemption from the
                  registration requirements of the Securities Act of 1933.

Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (5) or (6) is
checked, the Company may require, prior to registering any such transfer of the
Securities, in its sole discretion, such legal opinions, certifications and
other information as the Company may reasonably request to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, such as
the exemption provided by Rule 144 under such Act.

                                                 _______________________________
                                                 Signature
Signature Guarantee:

______________________________                   _______________________________
(Signature must be guaranteed)                   Signature

________________________________________________________________________________

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.

TO BE COMPLETED BY PURCHASER IF (1) OR (3) ABOVE IS CHECKED.

            The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.

______________________________
Dated:


                                      A-13

                            FORM OF CONVERSION NOTICE

To:   PPL Energy Supply, LLC

      The undersigned registered holder of this Security hereby exercises the
option to convert this Security, or portion hereof (which is $1,000 principal
amount or an integral multiple thereof) designated below, for shares of Common
Stock of PPL Corporation in accordance with the terms of the Indenture referred
to in this Security, and directs that the shares, if any, issuable and
deliverable upon such conversion, together with any check for cash in lieu of
fractional shares deliverable upon such conversion, and any Securities
representing any unconverted principal amount hereof, be issued and delivered to
the registered holder hereof unless a different name has been indicated below.
If shares or any portion of this Security not converted are to be issued in the
name of a Person other than the undersigned, the undersigned shall pay all
transfer taxes payable with respect thereto.

      This notice shall be deemed to be an irrevocable exercise of the option to
convert this Security.

Dated:                         _________________________________________________

                               _________________________________________________
                                                 Signature(s)

                               Signature(s) must be guaranteed by a commercial
                               bank or trust company or a member firm of a major
                               stock exchange if shares of Common Stock are to
                               be issued, or Securities to be delivered, other
                               than to or in the name of the registered holder.

                               _________________________________________________
                                               Signature Guarantee

Fill in for registration of shares
if to be delivered, and Securities
if to be issued other than to and
in the name of registered holder:

_________________________________
(Name)                                  Certificate No.(s) of Securities (not
                                        required for Global Securities)
                                        _________________


_________________________________
(Street Address)                        Principal amount to be converted
                                        (if less than all): $__________,000


_________________________________       ________________________________________
(City state and zip code)               Social Security or Other Taxpayer Number
Please print name and address


                                      A-14

                   FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE

To:   PPL Energy Supply, LLC

      The undersigned registered holder of this Security hereby acknowledges
receipt of a notice from PPL Energy Supply, LLC (the "Company") as to the
occurrence of a Fundamental Change with respect to the PPL Corporation and
requests and instructs the Company to repurchase this Security, or the portion
hereof (which is $1,000 principal amount or a integral multiple thereof)
designated below, in accordance with the terms and conditions specified in this
Security and the Indenture referred to in this Security and directs that the
check in payment for this Security or the portion thereof and any Securities
representing any unrepurchased principal amount hereof, be issued and delivered
to the registered holder hereof unless a different name has been indicated
below. If any portion of this Security not repurchased is to be issued in the
name of a Person other than the undersigned, the undersigned shall pay all
transfer taxes payable with respect thereto.

Dated:                         _________________________________________________

                               _________________________________________________
                                                 Signature(s)

                               Signature(s) must be guaranteed by a commercial
                               bank or trust company or a member firm of a major
                               stock exchange if Securities are to be delivered,
                               other than to or in the name of the registered
                               holder.

                               _________________________________________________
                                               Signature Guarantee

Fill in for registration of Securities if to be issued other than to and in the
name of registered holder:

_________________________________
(Name)                                  Certificate No.(s) of Securities (not
                                        required for Global Securities)
                                        __________________


_________________________________
(Street Address)                        Principal amount to be purchased
                                        (if less than all): $__________,000


_________________________________       ________________________________________
(City state and zip code)               Social Security or Other Taxpayer Number
Please print name and address


                                      A-15

                             FORM OF PURCHASE NOTICE

To:   PPL Energy Supply, LLC

      The undersigned registered holder of this Security hereby acknowledges
receipt of a notice from PPL Energy Supply, LLC (the "Company") as to the
holder's option to require the Company to repurchase this Security and requests
and instructs the Company to repurchase this Security, or the portion hereof
(which is $1,000 principal amount or a integral multiple thereof) designated
below, in accordance with the terms and conditions specified in this Security
and the Indenture referred to in this Security and directs that the check or
shares of Common Stock in payment for this Security or the portion thereof and
any Securities representing any unrepurchased principal amount hereof, be issued
and delivered to the registered holder hereof unless a different name has been
indicated below. If any portion of this Security not repurchased is to be issued
in the name of a Person other than the undersigned, the undersigned shall pay
all transfer taxes payable with respect thereto.

Dated:                         _________________________________________________

                               _________________________________________________
                                                 Signature(s)

                               Signature(s) must be guaranteed by a commercial
                               bank or trust company or a member firm of a major
                               stock exchange if Securities are to be delivered,
                               other than to or in the name of the registered
                               holder.

                               _________________________________________________
                                               Signature Guarantee

Fill in for registration of Securities if to be issued other than to and in the
name of registered holder:

_________________________________
(Name)                                  Certificate No.(s) of Securities (not
                                        required for Global Securities)
                                        _________________


_________________________________
(Street Address)                        Principal amount to be purchased
                                        (if less than all): $__________,000


_________________________________       ________________________________________
(City state and zip code)               Social Security or Other Taxpayer Number
Please print name and address


                                      A-16

In the event PPL Corporation decides to pay all of the purchase price in shares
of PPL Corporation Common Stock but proves unable to satisfy the conditions for
Common Stock payment and ultimately has to pay cash, I wish to:

____  Withdraw this purchase notice with respect to all or a portion of the
      Securities listed therein (set forth principal amount and certificate
      numbers, if any, of the Securities as to which such withdrawal relates
      ______________________________________________________________).

____  Receive cash for the entire Purchase Price for all the Securities listed
      in this purchase notice.


                                      A-17

                     [TO BE ATTACHED TO GLOBAL SECURITIES]

             SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

  The following increases or decreases in this Global Security have been made:



  Date of      Amount of decrease in      Amount of increase in    Principal Amount of this    Signature of authorized
  Exchange    Principal Amount of this   Principal Amount of this  Global Security following   signatory of Trustee or
                  Global Security            Global Security       such decrease or increase     Securities Custodian
- ------------  ------------------------   ------------------------  -------------------------  --------------------------
                                                                                  





                                      A-18

EX-5.1

                                                                     EXHIBIT 5.1

                                                                 THOMAS D. SALUS
                                                                  Senior Counsel

                                                                             PPL
                                                          Two North Ninth Street
                                                        Allentown, PA 18101-1179
                                              Tel. 610.774.5644 Fax 610.774.6726
                                                              tdsalus@pplweb.com

                                                June 17, 2003



PPL Energy Supply, LLC
PPL Corporation
Two North Ninth Street
Allentown, Pennsylvania 18101

Ladies and Gentlemen:

      I am Senior Counsel of PPL Services Corporation, a wholly owned subsidiary
of PPL Corporation, a Pennsylvania corporation (the "Guarantor"), and an
affiliate of PPL Energy Supply, LLC, a Delaware limited liability company (the
"Company"), and as such, am familiar with their affairs, including the
Registration Statement on Form S-3 (the "Registration Statement") to be filed by
the Company and the Guarantor on or about the date hereof with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), relating to the resale by certain selling security holders
of up to $400,000,000 aggregate principal amount of the Company's 2-5/8%
Convertible Senior Notes due 2023 (the "Notes") and 8,044,240 shares of the
Guarantor's Common Stock, par value $0.01 per share (the "Shares"), initially
issuable upon conversion thereof and the guarantee issued in connection with the
Notes (the "Guarantee"). The Notes were issued under an indenture (the

PPL Energy Supply, LLC                -2-                         June 17, 2003
PPL Corporation

"Indenture") dated as of May 21, 2003, among the Company, the Guarantor and
JPMorgan Chase Bank (the "Trustee").

      The Notes were initially sold by the Company in reliance on Section 4(2)
of the Act and may be resold or delivered from time to time as set forth in the
Registration Statement, any amendment thereto and the prospectus contained
therein (the "Prospectus") pursuant to Rule 415 under the Act.

      In rendering the opinions below, I have assumed that the Indenture is the
valid and legally binding obligation of the Trustee.

      I have examined the Registration Statement, the Indenture, the Notes and a
form of the share certificate relating to the Shares, which have been filed with
the Commission as exhibits to the Registration Statement. I have also examined
or caused to be examined on my behalf, or there have been examined by
predecessors of mine, the franchises under which the Guarantor operates,
consisting of charter rights from the Commonwealth of Pennsylvania and local
consents. Based upon such examination, upon my familiarity with the Company and
the Guarantor, and upon an examination of such other documents and questions of
law as I have deemed appropriate for purposes of this opinion, I am of the
opinion that:

      (1) Each of the Company and the Guarantor is validly organized and
existing as a limited liability company (in the case of the Company) or
corporation (in the case of the Guarantor) in good standing under the laws of
the jurisdiction of its organization and is duly qualified to carry on the
business which it is now conducting.

PPL Energy Supply, LLC                -3-                         June 17, 2003
PPL Corporation

      (2) The Notes have been duly authorized, executed and issued by the
Company and, assuming that they have been duly authenticated by the Trustee,
constitute valid and legally binding obligations of the Company and the
Guarantor, enforceable against the Company and the Guarantor in accordance with
their terms.

      (3) The Shares initially issuable upon conversion of the Notes have been
duly authorized and, when issued and delivered in accordance with the provisions
of the Notes and the Indenture, will be validly issued, fully paid and
nonassesable.

      (4) The Guarantee has been duly authorized by the Guarantor and, assuming
that the Indenture is the valid and legally binding obligation of the Trustee,
is the valid and binding obligation of the Guarantor enforceable in accordance
with its terms as contained in the Indenture.

      My opinions set forth in paragraphs 2 and 4 above are subject to (i) the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, (ii) general equitable principles (whether considered in a proceeding
in equity or at law) and (iii) an implied covenant of good faith and fair
dealing.


PPL Energy Supply, LLC                -4-                         June 17, 2003
PPL Corporation

      I am a member of the Pennsylvania Bar and the Delaware Bar and do not hold
myself out as an expert on the laws of any other jurisdiction. Insofar as the
opinions herein relate to or are dependent upon matters governed by laws of the
State of New York, I have relied upon the opinion of Simpson Thacher & Bartlett
LLP dated the date hereof.

      I hereby consent to the use of this opinion as an exhibit to said
Registration Statement and to the use of my name in the Registration Statement
and in the Prospectus constituting a part thereof under the caption "Validity of
the Securities." I also hereby give my consent to the use of my name in the
opinion of Simpson Thacher & Bartlett LLP, filed as Exhibit 5.2 to said
Registration Statement.

      In rendering its opinion, Simpson Thacher & Bartlett 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/ Thomas D. Salus

                                              Thomas D. Salus

EX-5.2

                                                                     EXHIBIT 5.2

                         Simpson Thacher & Bartlett LLP
                              425 Lexington Avenue
                          New York, New York 10017-3954


                                                      June 17, 2003



PPL Energy Supply, LLC
PPL Corporation
Two North Ninth Street
Allentown, Pennsylvania 18101

Ladies and Gentlemen:

            We have acted as counsel to PPL Energy Supply, LLC, a Delaware
limited liability company (the "Company"), and to PPL Corporation, a
Pennsylvania corporation (the "Guarantor"), in connection with the Registration
Statement on Form S-3 (the "Registration Statement") filed by the Company and
the Guarantor with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), relating to the resale
by certain selling security holders of up to $400,000,000 aggregate principal
amount of the Company's 2-5/8% Convertible Senior Notes due 2023 (the "Notes")
and 8,044,240 shares of the Guarantor's Common Stock, par value $0.01 per share
(the "Shares"), initially issuable upon conversion thereof and the guarantee
issued in connection with the Notes (the "Guarantee"). The Notes were issued
under an indenture (the "Indenture") dated as of May 21, 2003, among the
Company, the Guarantor and JPMorgan Chase Bank (the "Trustee").

            The Notes were initially sold by the Company in reliance on Section
4(2) of the Act and may be resold or delivered from time to time as set forth in
the Registration Statement, any amendment thereto and the prospectus contained
therein (the "Prospectus") pursuant to Rule 415 under the Act.

                                       2

            We have examined the Registration Statement, the Indenture, the
Notes and a form of the share certificate relating to the Shares, 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 and the Guarantor.

            In rendering the opinions 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. We also have assumed that the Indenture is the valid and legally
binding obligation of the Trustee.

            Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:

            1. The Notes have been duly authorized, executed and issued by the
Company and, assuming that they have been duly authenticated by the Trustee,
constitute valid and legally binding obligations of the Company and the
Guarantor, enforceable against the Company and the Guarantor in accordance with
their terms.

                                       3

            2. The Shares initially issuable upon conversion of the Notes have
been duly authorized and, when issued and delivered in accordance with the
provisions of the Notes and the Indenture, will be validly issued, fully paid
and nonassesable.

            3. The Guarantee has been duly authorized by the Guarantor and,
assuming that the Indenture is the valid and legally binding obligation of the
Trustee, is the valid and binding obligation of the Guarantor enforceable in
accordance with its terms as contained in the Indenture.

            Our opinions set forth in paragraphs 1 and 3 above are subject to
(i) the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, (ii) general equitable principles (whether
considered in a proceeding in equity or at law) and (iii) an implied covenant of
good faith and fair dealing.

            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 Thomas D. Salus, Esq., Senior Counsel of PPL Services
Corporation, dated the date hereof.

            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 Delaware Limited
Liability Company Act, the law of the State of New York, the federal law of the
United States and, to the extent set forth herein, the laws of the Commonwealth
of Pennsylvania.

                                       4

            We hereby consent to the filing of this opinion letter as Exhibit
5.2 to the Registration Statement and to the use of our name under the caption
"Validity of the Securities" in the Prospectus included in the Registration
Statement.

                                Very truly yours,

                                /s/ SIMPSON THACHER & BARTLETT LLP

                                SIMPSON THACHER & BARTLETT LLP

EX-23.1

                                                                    EXHIBIT 23.1


                       CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 3, 2003 relating to the
consolidated financial statements and financial statement schedule, which
appears in the PPL Corporation Annual Report on Form 10-K for the year ended
December 31, 2002. In addition, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-3 of our report dated
February 3, 2003 relating to the consolidated financial statements and financial
statement schedule, which appears in the PPL Energy Supply, LLC Annual Report on
Form 10-K for the year ended December 31, 2002. We also consent to the reference
to us under the heading "Experts" in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Philadelphia, PA
June 17, 2003

EX-24.2

                                                                    EXHIBIT 24.2

                                 PPL CORPORATION

                                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 common stock and guarantees of
PPL Corporation issued in connection with the convertible debt securities of PPL
Energy Supply, LLC, 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
15th day of May, 2003.




/s/ Frederick M. Bernthal                     /s/ Stuart Heydt
- -----------------------------------------     ----------------------------------
Frederick M. Bernthal                         Stuart Heydt

/s/ John W. Conway                            /s/ W. Keith Smith
- -----------------------------------------     ----------------------------------
John W. Conway                                W. Keith Smith

/s/ E. Allen Deaver                           /s/ Susan M. Stalnecker
- -----------------------------------------     ----------------------------------
E. Allen Deaver                               Susan M. Stalnecker

/s/ Louise K. Goeser
- -----------------------------------------
Louise K. Goeser

                                        2

EX-25

                                                                      EXHIBIT 25

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

                       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)
                    ----------------------------------------
                               JPMORGAN CHASE 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 ENERGY SUPPLY, LLC
               (Exact name of obligor as specified in its charter)

PENNSYLVANIA                                                          23-2758192
DELAWARE                                                              23-3074920
(State or other jurisdiction of                                 (I.R.S. employer
incorporation or organization)                               identification No.)

TWO NORTH NINTH STREET
ALLENTOWN, PENNSYLVANIA                                                    18101
(Address of principal executive offices)                              (Zip Code)

                          GUARANTEE OF PPL CORPORATION
       2 5/8% CONVERTIBLE SENIOR NOTES DUE 2023 OF PPL ENERGY SUPPLY, LLC

                       (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 Obligor and Guarantors.

      If the obligor or any Guarantor 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 Restated Organization Certificate of the Trustee dated
March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see
Exhibit 1 to Form T-1 filed in connection with Registration Statement No.
333-76894, 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 November 11,
2001, in connection with the merger of The Chase Manhattan Bank and Morgan
Guaranty Trust Company of New York, the surviving corporation was renamed
JPMorgan Chase 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. 333-76894, 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 November 11, 2001, in
connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust
Company of New York, the surviving corporation was renamed JPMorgan Chase 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.


                                      - 3 -

                                    SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee,
JPMorgan Chase 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 17th day of June, 2003.

                                          JPMORGAN CHASE BANK


                                             By    /s/ Alfia Monastra
                                                --------------------------------
                                                   Alfia Monastra
                                                   Vice President

                              Exhibit 7 to Form T-1


                                Bank Call Notice

                             RESERVE DISTRICT NO. 2
                       CONSOLIDATED REPORT OF CONDITION OF

                               JPMorgan Chase 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 March 31, 2003, 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 ......................................        $ 21,415
     Interest-bearing balances ..............................           6,882
Securities:
Held to maturity securities .................................             334
Available for sale securities ...............................          80,076
Federal funds sold and securities purchased under
     agreements to resell ...................................
     Federal funds sold in domestic offices .................          14,044
     Securities purchased under agreements to resell ........          73,060
Loans and lease financing receivables:
     Loans and leases held for sale .........................          25,832
     Loans and leases, net of unearned income  $161,345
     Less: Allowance for loan and lease losses    3,823
     Loans and leases, net of unearned income and
     allowance ..............................................         157,522
Trading Assets ..............................................         189,427
Premises and fixed assets (including capitalized leases) ....           6,186
Other real estate owned .....................................             131
Investments in unconsolidated subsidiaries and
     associated companies ...................................             691
Customers' liability to this bank on acceptances
     outstanding ............................................             225
Intangible assets
        Goodwill ............................................           2,180
        Other Intangible assets .............................           3,314
Other assets ................................................          40,377
TOTAL ASSETS ................................................        $621,696
                                                                     ========


                                                                  
                                                   LIABILITIES
Deposits
     In domestic offices .....................................          $174,351
     Noninterest-bearing .....................................          $ 70,991
     Interest-bearing ........................................           103,360
     In foreign offices, Edge and Agreement
     subsidiaries and IBF's ..................................           125,789
     Noninterest-bearing......................................          $  7,531
     Interest-bearing ........................................           118,258

Federal funds purchased and securities sold under
agreements to repurchase:
     Federal funds purchased in domestic offices..............             5,929
     Securities sold under agreements to repurchase...........           113,903
Trading liabilities ..........................................           116,329
Other borrowed money (includes mortgage indebtedness
     and obligations under capitalized leases)................            10,758
Bank's liability on acceptances executed and outstanding......               225
Subordinated notes and debentures ............................             8,306
Other liabilities ............................................            29,735
TOTAL LIABILITIES ............................................           585,325
Minority Interest in consolidated subsidiaries................                97

                                               EQUITY CAPITAL

Perpetual preferred stock and related surplus.................                 0
Common stock .................................................             1,785
Surplus  (exclude all surplus related to preferred stock).....            16,304
Retained earnings.............................................            17,228
Accumulated other comprehensive income........................               957
Other equity capital components...............................                 0
TOTAL EQUITY CAPITAL .........................................            36,274
                                                                        --------
TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL                $621,696
                                                                        ========



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 instructions
issued by the appropriate Federal regulatory authority and is true and correct.

                                    WILLIAM B. HARRISON, JR.    )
                                    HELENE L. KAPLAN            )DIRECTORS
                                    WILLIAM H. GRAY, III        )