-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HhysG+qEpCwYE1OGB5kNWnFYZsrl1WxwAiN7tMCa24OTis31ruwqfke3ASd45eEH JGbyTXZNZLZaFNpd1sEQaQ== 0000950123-01-502284.txt : 20010514 0000950123-01-502284.hdr.sgml : 20010514 ACCESSION NUMBER: 0000950123-01-502284 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20010509 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PPL CORP CENTRAL INDEX KEY: 0000922224 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 232758192 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11459 FILM NUMBER: 1630994 BUSINESS ADDRESS: STREET 1: TWO N NINTH ST CITY: ALLENTOWN STATE: PA ZIP: 18101 BUSINESS PHONE: 6107745151 MAIL ADDRESS: STREET 1: TWO N NINTH ST CITY: ALLENTOWN STATE: PA ZIP: 18101-1179 FORMER COMPANY: FORMER CONFORMED NAME: PP&L RESOURCES INC DATE OF NAME CHANGE: 19941123 8-K 1 y49005e8-k.txt PPL CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): May 9, 2001 PPL Corporation --------------- (Exact Name of Registrant as Specified in Its Charter)
Pennsylvania 1-11459 23-2758192 ------------ ------- ---------- (State or other jurisdiction (Commission File Number) (IRS Employer Identification No.) of Incorporation)
Two North Ninth Street, Allentown, Pennsylvania 18101-1179 ---------------------------------------------------------- (Address of Principal Executive Offices) Registrant's Telephone Number, including Area Code: (610) 774-5151 -------------- (Former name or former address, if changed since last report) 2 2 Item 5. Other Items On January 29, 2001, PPL Corporation (the "Corporation") filed pursuant to Rule 415 under the Securities Act of 1933 (the "Act"), a registration statement on Form S-3 (File No. 333-54504), which was declared effective on February 9, 2001. On May 7, 2001, the Corporation filed a Prospectus Supplement, dated May 3, 2001, which included the Prospectus dated February 9, 2001, relating to the offering of $500,000,000 of the Corporation's Premium Equity Participating Security Units ("PEPS"). Each PEP will include (1) a purchase contract under which the purchaser will agree to purchase from PPL Corporation and PPL Corporation will agree to sell shares of common stock of PPL Corporation no later than May 18, 2004 and (2) a Trust Preferred Security of PPL Capital Funding Trust I. In this connection, the Corporation is filing certain exhibits as part of this Form 8-K. See "Item 7. Exhibits." Item 7. Exhibits. The following exhibits are filed with reference to the Registration Statement on Form S-3 (Registration No. 333-54504) of PPL Corporation, the Registration Statement on Form S-3 (Registration No. 333-54504-01) of PPL Capital Funding, Inc. and the Registration Statement on Form S-3 (Registration No. 333-54504-02) of PPL Capital Funding Trust I.
Exhibit No. Description - ----------- ----------- 4.1 Form of Subordinated Indenture. 4.2 Form of Supplemental Indenture No. 1. 4.3 Form of Subordinated Notes (included in Exhibit 4.2). 4.4 Form of Purchase Contract Agreement. 4.5-A Form of PEPS Units Certificate (included as Exhibit A to Exhibit 4.4). 4.5-B Form of Treasury PEPS Units Certificate (included as Exhibit B to Exhibit 4.4). 4.6 Form of Pledge Agreement. 4.7 Form of Remarketing Agreement. 4.8 Form of Amended and Restated Trust Agreement. 4.9-A Form of Trust Common Security (included as Exhibit B to
3 3 Exhibit 4.8). 4.9-B Form of Trust Preferred Security (included as Exhibit C to Exhibit 4.8). 4.10 Form of Trust Securities Guarantee Agreement. 8.1 Tax Opinion of Simpson Thacher & Bartlett.
4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PPL CORPORATION By: /s/ Joseph J. McCabe ------------------------------ Joseph J. McCabe Vice-President and Controller Dated: May 9, 2001 5 INDEX TO EXHIBITS
Exhibit No. Description - ----------- ----------- 4.1 Form of Third Supplemental Indenture. 4.2 Form of Supplemental Indenture No. 1. 4.3 Form of Subordinated Notes (included in Exhibit 4.2). 4.4 Form of Purchase Contract Agreement. 4.5-A Form of PEPS Units Certificate (included as Exhibit A to Exhibit 4.4). 4.5-B Form of Treasury Units Certificate (included as Exhibit B to Exhibit 4.4). 4.6 Form of Pledge Agreement. 4.7 Form of Remarketing Agreement. 4.8 Form of Amended and Restated Trust Agreement 4.9-A Form of Trust Common Security (included as Exhibit B to Exhibit 4.8). 4.9-B Form of Trust Preferred Security (included as Exhibit C to Exhibit 4.8). 4.10 Form of Trust Securities Guarantee Agreement. 8.1 Tax Opinion of Simpson Thacher & Bartlett.
EX-4.1 2 y49005ex4-1.txt FORM OF SUBORDINATED INDENTURE 1 [EXECUTION COPY] EXHIBIT 4.1 PPL CAPITAL FUNDING, INC., ISSUER AND PPL CORPORATION, GUARANTOR TO THE CHASE MANHATTAN BANK, TRUSTEE --------- SUBORDINATED INDENTURE DATED AS OF MAY 9, 2001 2 TABLE OF CONTENTS PARTIES .....................................................................................1 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, Company or Guarantor..............................12 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.........................................................15 SECTION 111. Benefits of Indenture.......................................................15 SECTION 112. Governing Law...............................................................15 SECTION 113. Legal Holidays..............................................................15 ARTICLE TWO SECURITY FORMS .................................................................16 SECTION 201. Forms Generally.............................................................16 SECTION 202. Form of Trustee's Certificate of Authentication.............................16 ARTICLE THREE THE SECURITIES ...............................................................17 SECTION 301. Amount Unlimited; Issuable in Series........................................17 SECTION 302. Denominations...............................................................20 SECTION 303. Execution, Authentication, Delivery and Dating..............................20 SECTION 304. Temporary Securities........................................................24 SECTION 305. Registration, Registration of Transfer and Exchange.........................24 SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities............................25 SECTION 307. Payment of Interest; Interest Rights Preserved..............................26 SECTION 308. Persons Deemed Owners.......................................................27 SECTION 309. Cancellation................................................................28 SECTION 310. Computation of Interest.....................................................28 SECTION 311. Payment to Be in Proper Currency............................................28 SECTION 312. Extension of Interest Payment...............................................28 ARTICLE FOUR REDEMPTION OF SECURITIES.......................................................29 SECTION 401. Applicability of Article....................................................29 SECTION 402. Election to Redeem; Notice to Trustee.......................................29 SECTION 403. Selection of Securities to Be Redeemed......................................29 SECTION 404. Notice of Redemption........................................................30 SECTION 405. Securities Payable on Redemption Date.......................................31 SECTION 406. Securities Redeemed in Part.................................................31 ARTICLE FIVE SINKING FUNDS .................................................................32 SECTION 501. Applicability of Article....................................................32
-i- 3 SECTION 502. Satisfaction of Sinking Fund Payments with Securities.......................32 SECTION 503. Redemption of Securities for Sinking Fund...................................32 ARTICLE SIX COVENANTS ......................................................................33 SECTION 601. Payment of Principal, Premium and Interest..................................33 SECTION 602. Maintenance of Office or Agency.............................................33 SECTION 603. Money for Securities Payments to Be Held in Trust...........................34 SECTION 604. Corporate Existence.........................................................35 SECTION 605. Annual Officer's Certificate................................................35 SECTION 606. Waiver of Certain Covenants.................................................36 SECTION 607. Restriction on Payment of Dividends.........................................36 SECTION 608. Maintenance of Trust Existence..............................................37 SECTION 609. Rights of Holders of Preferred Securities...................................37 SECTION 610. Payment of Trust Costs and Expenses.........................................37 ARTICLE SEVEN SATISFACTION AND DISCHARGE....................................................38 SECTION 701. Satisfaction and Discharge of Securities....................................38 SECTION 702. Satisfaction and Discharge of Indenture.....................................40 SECTION 703. Application of Trust Money..................................................41 SECTION 704. Reinstatement...............................................................41 ARTICLE EIGHT EVENTS OF DEFAULT; REMEDIES...................................................41 SECTION 801. Events of Default...........................................................41 SECTION 802. Acceleration of Maturity; Rescission and Annulment..........................43 SECTION 803. Collection of Indebtedness and Suits for Enforcement by Trustee.............44 SECTION 804. Trustee May File Proofs of Claim............................................45 SECTION 805. Trustee May Enforce Claims Without Possession of Securities.................46 SECTION 806. Application of Money Collected..............................................46 SECTION 807. Limitation on Suits.........................................................46 SECTION 808. Unconditional Right of Holders to Receive Principal, Premium and Interest...47 SECTION 809. Restoration of Rights and Remedies..........................................47 SECTION 810. Rights and Remedies Cumulative..............................................48 SECTION 811. Delay or Omission Not Waiver................................................48 SECTION 812. Control by Holders of Securities............................................48 SECTION 813. Waiver of Past Defaults.....................................................48 SECTION 814. Undertaking for Costs.......................................................49 SECTION 815. Waiver of Usury, Stay or Extension Laws.....................................49 ARTICLE NINE THE TRUSTEE ...................................................................50 SECTION 901. Certain Duties and Responsibilities.........................................50 SECTION 902. Notice of Defaults..........................................................51 SECTION 903. Certain Rights of Trustee...................................................51 SECTION 904. Not Responsible for Recitals or Issuance of Securities......................52 SECTION 905. May Hold Securities.........................................................52 SECTION 906. Money Held in Trust.........................................................53 SECTION 907. Compensation and Reimbursement..............................................53 SECTION 908. Disqualification; Conflicting Interests.....................................53
-ii- 4 SECTION 909. Corporate Trustee Required; Eligibility.....................................54 SECTION 910. Resignation and Removal; Appointment of Successor...........................54 SECTION 911. Acceptance of Appointment by Successor......................................56 SECTION 912. Merger, Conversion, Consolidation or Succession to Business.................57 SECTION 913. Preferential Collection of Claims Against Company...........................57 SECTION 914. Appointment of Authenticating Agent.........................................58 SECTION 915. Co-trustee and Separate Trustees............................................59 ARTICLE TEN HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND GUARANTOR....................61 SECTION 1001. Lists of Holders...........................................................61 SECTION 1002. Reports by Trustee, Company and Guarantor..................................61 ARTICLE ELEVEN CONSOLIDATION, MERGER, CONVEYANCE, OR OTHER TRANSFER.........................61 SECTION 1101. Company or Guarantor May Consolidate, Etc., Only on Certain Terms..........61 SECTION 1102. Successor Person Substituted...............................................62 SECTION 1103. Limitation.................................................................62 ARTICLE TWELVE SUPPLEMENTAL INDENTURES......................................................63 SECTION 1201. Supplemental Indentures Without Consent of Holders.........................63 SECTION 1202. Supplemental Indentures With Consent of Holders............................65 SECTION 1203. Execution of Supplemental Indentures.......................................66 SECTION 1204. Effect of Supplemental Indentures..........................................66 SECTION 1205. Conformity With Trust Indenture Act........................................67 SECTION 1206. Reference in Securities to Supplemental Indentures.........................67 SECTION 1207. Modification Without Supplemental Indenture................................67 ARTICLE THIRTEEN MEETINGS OF HOLDERS; ACTION WITHOUT MEETING................................67 SECTION 1301. Purposes for Which Meetings May Be Called..................................67 SECTION 1302. Call, Notice and Place of Meetings.........................................68 SECTION 1303. Persons Entitled to Vote at Meetings.......................................68 SECTION 1304. Quorum; Action.............................................................69 SECTION 1305. Attendance at Meetings; Determination of Voting Rights; Conduct and Adjournment of Meetings...........................................69 SECTION 1306. Counting Votes and Recording Action of Meetings............................70 SECTION 1307. Action Without Meeting.....................................................71 ARTICLE FOURTEEN GUARANTEE .................................................................71 SECTION 1401. Guarantee..................................................................71 SECTION 1402. Guarantee Subordinate to Senior Indebtedness of the Guarantor..............72 SECTION 1403. Payment Over of Proceeds of Securities.....................................73 SECTION 1404. Disputes with Holders of Certain Senior Indebtedness of the Guarantor......75 SECTION 1405. Subrogation................................................................75 SECTION 1406. Obligation of the Guarantor Unconditional..................................75 SECTION 1407. Priority of Senior Indebtedness of the Guarantor Upon Maturity.............76 SECTION 1408. Trustee as Holder of Senior Indebtedness of the Guarantor..................76
-iii- 5 SECTION 1409. Notice to Trustee to Effectuate Subordination..............................76 SECTION 1410. Modification, Extension, Etc. of Senior Indebtedness of the Guarantor......77 SECTION 1411. Trustee Has No Fiduciary Duty to Holders of Senior Indebtedness of the Guarantor.........................................................77 SECTION 1412. Paying Agents Other Than the Trustee.......................................78 SECTION 1413. Rights of Holders of Senior Indebtedness of the Guarantor Not Impaired.....78 SECTION 1414. Effect of Subordination Provisions; Termination............................78 SECTION 1415. Execution and Delivery of Guarantee........................................78 ARTICLE FIFTEEN SUBORDINATION OF SECURITIES.................................................79 SECTION 1501. Securities Subordinate to Senior Indebtedness of the Company...............79 SECTION 1502. Payment Over of Proceeds of Securities.....................................79 SECTION 1503. Disputes with Holders of Certain Senior Indebtedness of the Company........81 SECTION 1504. Subrogation................................................................81 SECTION 1505. Obligation of the Company Unconditional....................................82 SECTION 1506. Priority of Senior Indebtedness of the Company Upon Maturity...............83 SECTION 1507. Trustee as Holder of Senior Indebtedness of the Company....................83 SECTION 1508. Notice to Trustee to Effectuate Subordination..............................83 SECTION 1509. Modification, Extension, etc. of Senior Indebtedness of the Company........83 SECTION 1510. Trustee Has No Fiduciary Duty to Holders of Senior Indebtedness of the Company...........................................................84 SECTION 1511. Paying Agents Other Than the Trustee.......................................84 SECTION 1512. Rights of Holders of Senior Indebtedness of the Company Not Impaired.......84 SECTION 1513. Effect of Subordination Provisions; Termination............................84 ARTICLE SIXTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS.....................................................85 SECTION 1601. Liability Solely Corporate.................................................85 TESTIMONIUM ................................................................................85 SIGNATURES AND SEALS .......................................................................85
-iv- 6 PPL CAPITAL FUNDING, INC. Reconciliation and tie between Trust Indenture Act of 1939 and this Subordinated Indenture, dated as of May 9, 2001 Trust Indenture Act Section Indenture Section Section 310 (a)(1) 909 (a)(2) 909 (a)(3) 915 (a)(4) Not Applicable (b) 908 910 Section 311 (a) 913 (b) 913 (c) Not Applicable Section 312 (a) 1001 (b) 1001 (c) 1001 Section 313 (a) 1002 (b)(1) Not Applicable (b)(2) 1002 (c) 1002 (d) 1002 Section 314 (a) 1002 (a)(4) 605 (b) Not Applicable (c)(1) 102 (c)(2) 102 (c)(3) Not Applicable (d) Not Applicable (e) 102 Section 315 (a) 901(a) (b) 902 (c) 901(b) (d) 901(c) (d)(1) 901(a)(1), 901(c)(1) (d)(2) 901(c)(2) (d)(3) 901(c)(3) (e) 814 Section 316 (a) 812 813 (a)(1)(A) 802 812 (a)(1)(B) 813 (a)(2) Not Applicable (b) 808 Section 317 (a)(1) 803
-v- 7 Trust Indenture Act Section Indenture Section (a)(2) 804 (b) 603 Section 318 (a) 107
-vi- 8 SUBORDINATED INDENTURE, dated as of May 9, 2001 (the "Indenture") among PPL CAPITAL FUNDING, INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company"), having its principal office at Two North Ninth Street, Allentown, Pennsylvania 18101-1179, PPL CORPORATION, a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania (herein called the "Guarantor"), having its principal office at Two North Ninth Street, Allentown, Pennsylvania 18101-1179, and The Chase Manhattan Bank, a New York banking corporation, having its principal corporate trust office at 450 West 33rd Street, 15th Floor, New York, New York 10001, as Trustee (herein called the "Trustee"). RECITAL OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured subordinated debentures, notes or other evidences of indebtedness (herein called the "Securities"), to be issued in one or more series as contemplated herein, with Guarantees endorsed thereon, in exchange for the issuance from time to time by one or more Trusts (as defined below) of undivided beneficial ownership interests in the assets of such Trusts and all acts necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been performed. RECITAL OF THE GUARANTOR The Guarantor has duly authorized the execution and delivery of this Indenture to provide for the Guarantee of the Securities provided for herein; and all acts necessary to make this Indenture a valid agreement of the Guarantor, in accordance with its terms, have been performed. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof (except as otherwise contemplated herein), as follows: ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 101. DEFINITIONS. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (b) all terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; 9 (c) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States of America, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States of America at the date of such computation; (d) any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Indenture; and (e) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. Certain terms, used principally in Article Nine, are defined in that Article. "ACT", when used with respect to any Holder of a Security, has the meaning specified in Section 104. "AFFILIATE" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "CONTROL" when used with respect to any specified Person means the power to direct generally the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the foregoing. "AUTHENTICATING AGENT" means any Person or Persons authorized by the Trustee to act on behalf of the Trustee to authenticate the Securities of one or more series. "AUTHORIZED OFFICER" means the Chairman of the Board, the President, any Vice President, the Treasurer, or any other Person duly authorized by the Company or the Guarantor, as the case requires, to act in respect of matters relating to this Indenture. "BOARD OF DIRECTORS" means either the board of directors of the Company or the Guarantor, as the case requires, or any committee of that board duly authorized to act in respect of matters relating to this Indenture (including, in the case of the Guarantor, the finance committee of the board of directors of the Guarantor). "BOARD RESOLUTION" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company or the Guarantor, as the case requires, to have been duly adopted by the Board of Directors of the Company or the Guarantor, as the case requires, and to be in full force and effect on the date of such certification, and delivered to the Trustee. "BUSINESS DAY", when used with respect to a Place of Payment or any other particular location specified in the Securities or this Indenture, means any day, other than a Saturday or Sunday, which is not a day on which banking institutions or trust companies in such Place of Payment or other location are generally authorized or required by law, regulation or -2- 10 executive order to remain closed, except as may be otherwise specified as contemplated by Section 301. "COMMISSION" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the date of execution and delivery of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body, if any, performing such duties at such time. "COMMON SECURITIES" means any common trust interests issued by a Trust or similar securities issued by permitted successors to such Trust in accordance with the Trust Agreement pertaining to such Trust. "COMPANY" means the Person named as the "Company" in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "COMPANY ORDER" or "COMPANY REQUEST" mean, respectively, a written order or request, as the case may be, signed in the name of the Company by an Authorized Officer and delivered to the Trustee. "CORPORATE TRUST OFFICE" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of execution of this Indenture is located at 450 West 33rd Street, 15th Floor, New York, New York 10001. "CORPORATION" means a corporation, association, company, joint stock company or business trust. "DEFAULTED INTEREST" has the meaning specified in Section 307. "DISCOUNT SECURITY" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 802. "DOLLAR" or "$" means a dollar or other equivalent unit in such coin or currency of the United States of America as at the time shall be legal tender for the payment of public and private debts. "Eligible Obligations" means: (a) with respect to Securities denominated in Dollars, Government Obligations; or (b) with respect to Securities denominated in a currency other than Dollars or in a composite currency, such other obligations or instruments as shall be specified with respect to such Securities, as contemplated by Section 301. -3- 11 "EVENT OF DEFAULT" has the meaning specified in Section 801. "EXCHANGE ACT" means the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, as amended from time to time. "GOVERNMENT OBLIGATIONS" means securities which are (a) (i) direct obligations of the United States where the payment or payments thereunder are supported by the full faith and credit of the United States or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States where the timely payment or payments thereunder are unconditionally guaranteed as a full faith and credit obligation by the United States or (b) depository receipts issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such Government Obligation or a specific payment of interest on or principal of or other amount with respect to any such Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Obligation or the specific payment of interest on or principal of or other amount with respect to the Government Obligation evidenced by such depository receipt. "GUARANTEE" means any guarantee of the Guarantor endorsed on a Security authenticated and delivered pursuant to this Indenture and shall include the guarantee set forth in Section 1401. "GUARANTOR" means the Person named as "Guarantor" in the first paragraph of this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Guarantor" shall include such successor Person. "GUARANTOR ORDER" or "GUARANTOR REQUEST" mean, respectively, a written order or request, as the case may be, signed in the name of the Guarantor by an Authorized Officer of the Guarantor and delivered to the Trustee. "HOLDER" means a Person in whose name a Security is registered in the Security Register. "INDENTURE" means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Indenture and any such supplemental indenture, respectively. The term "Indenture" shall also include the terms of particular series of Securities established as contemplated by Section 301. "INTEREST", when used with respect to a Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity. "INTEREST PAYMENT DATE", when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security. -4- 12 "MATURITY", when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as provided in such Security or in this Indenture, whether at the Stated Maturity, by declaration of acceleration, upon call for redemption or otherwise. "NOTICE OF DEFAULT" means a written notice of the kind specified in Section 801(c). "OFFICER'S CERTIFICATE" means a certificate signed by two Authorized Officers of the Company or the Guarantor, as the case requires, one of whom must be the principal financial officer and delivered to the Trustee. "OPINION OF COUNSEL" means a written opinion of counsel, who may be counsel for the Company or the Guarantor, and who shall be acceptable to the Trustee. "OUTSTANDING", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (a) Securities theretofore canceled or delivered to the Trustee for cancellation; (b) Securities deemed to have been paid for all purposes of this Indenture in accordance with Section 701 (whether or not the Company's indebtedness in respect thereof shall be satisfied and discharged for any other purpose); and (c) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it and the Company that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that in determining whether or not the Holders of the requisite principal amount of the Securities Outstanding under this Indenture, or the Outstanding Securities of any series or Tranche, have given any request, demand, authorization, direction, notice, consent or waiver hereunder or whether or not a quorum is present at a meeting of Holders of Securities, (x) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor (unless the Company, such Affiliate or such obligor owns all Securities Outstanding under this Indenture, or all Outstanding Securities of each such series and each such Tranche, as the case may be, determined without regard to this clause (x)) shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver or upon any such determination as to the presence of a quorum, only Securities which the Trustee knows to be so owned shall be so disregarded; provided, however, that Securities so owned -5- 13 which have been pledged in good faith may be regarded as Outstanding if it is established to the reasonable satisfaction of the Trustee that the pledgee, and not the Company, or any such other obligor or Affiliate of either thereof, has the right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor; (y) the principal amount of a Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the Maturity thereof pursuant to Section 802; and (z) the principal amount of any Security which is denominated in a currency other than Dollars or in a composite currency that shall be deemed to be Outstanding for such purposes shall be the amount of Dollars which could have been purchased by the principal amount (or, in the case of a Discount Security, the Dollar equivalent on the date determined as set forth below of the amount determined as provided in (y) above) of such currency or composite currency evidenced by such Security, in each such case certified to the Trustee in an Officer's Certificate, based (i) on the average of the mean of the buying and selling spot rates quoted by three banks which are members of the New York Clearing House Association selected by the Company in effect at 11:00 A.M. (New York time) in The City of New York on the fifth Business Day preceding any such determination or (ii) if on such fifth Business Day it shall not be possible or practicable to obtain such quotations from such three banks, on such other quotations or alternative methods of determination which shall be as consistent as practicable with the method set forth in (i) above; provided, further, that in the case of any Security the principal of which is payable from time to time without presentment or surrender, the principal amount of such Security that shall be deemed to be Outstanding at any time for all purposes of this Indenture shall be the original principal amount thereof less the aggregate amount of principal thereof theretofore paid. "PAYING AGENT" means any Person, including the Company or the Guarantor, authorized by the Company to pay the principal of, and premium, if any, or interest, if any, on any Securities on behalf of the Company or the Guarantor. "PERIODIC OFFERING" means an offering of Securities of a series from time to time any or all of the specific terms of which Securities, including without limitation the rate or rates of interest, if any, thereon, the Stated Maturity or Maturities thereof and the redemption provisions, if any, with respect thereto, are to be determined by the Company or its agents from time to time subsequent to the initial request for the authentication and delivery of such Securities by the Trustee, as contemplated in Section 301 and clause (b) of Section 303. "PERSON" means any individual, corporation, partnership, limited liability company, joint venture, trust or unincorporated organization or any government or any political subdivision, instrumentality or agency thereof. -6- 14 "PLACE OF PAYMENT", when used with respect to the Securities of any series, or Tranche thereof, means the place or places, specified as contemplated by Section 301, at which, subject to Section 602, principal of and premium, if any, and interest, if any, on the Securities of such series or Tranche are payable. "PREDECESSOR SECURITY" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "PREFERRED SECURITIES" means any preferred trust interests issued by a Trust or similar securities issued by permitted successors to such Trust in accordance with the Trust Agreement pertaining to such Trust. "PROPERTY TRUSTEE" shall have the meaning set forth in the Trust Agreement. "REDEMPTION DATE", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "REDEMPTION PRICE", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "REGULAR RECORD DATE" for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301. "REQUIRED CURRENCY" has the meaning specified in Section 311. "RESPONSIBLE OFFICER", when used with respect to the Trustee, means any officer of the Trustee with direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer of the Trustee to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "SECURITIES" has the meaning stated in the first recital of this Indenture and more particularly means any securities authenticated and delivered under this Indenture. "SECURITIES ACT" means the Securities Act of 1933, and the rules and regulations promulgated thereunder, as amended from time to time. "SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings specified in Section 305. "SENIOR INDEBTEDNESS", when used with respect to the Company or the Guarantor, means all obligations (other than non-recourse obligations and the indebtedness issued under this Indenture) of, or guaranteed or assumed by, the Company or the Guarantor, as the case may be, for borrowed money, including both senior and subordinated indebtedness for borrowed money (other than the Securities), or for the payment of money relating to any lease -7- 15 which is capitalized on the consolidated balance sheet of the Company or the Guarantor, as the case may be, and its subsidiaries in accordance with generally accepted accounting principles as in effect from time to time, or evidenced by bonds, debentures, notes or other similar instruments, and in each case, amendments, renewals, extensions, modifications and refundings of any such indebtedness or obligations, whether existing as of the date of this Indenture or subsequently incurred by the Company or the Guarantor, as the case may be, unless, in the case of any particular indebtedness, renewal, extension or refunding, the instrument creating or evidencing the same or the assumption or guarantee of the same expressly provides that such indebtedness, renewal, extension or refunding is not superior in right of payment to or is pari passu with the Securities or the Guarantees, as the case may be; provided that the Guarantor's obligations under the Trust Securities Guarantee shall not be deemed to be Senior Indebtedness of the Guarantor, and provided further that Senior Indebtedness shall not include (i) any obligation of the Company to any of its subsidiaries or (ii) trade accounts payable or accrued liabilities arising in the ordinary course of business or (iii) any obligations to an employee. "SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the Securities of any series means a date fixed by the Trustee pursuant to Section 307. "STATED INTEREST RATE" means a rate (whether fixed or variable) at which an obligation by its terms is stated to bear simple interest. Any calculation or other determination to be made under this Indenture by reference to the Stated Interest Rate on a Security shall be made without regard to the effective interest cost to the Company of such Security and without regard to the Stated Interest Rate on, or the effective cost to the Company of, any other indebtedness the Company's obligations in respect of which are evidenced or secured in whole or in part by such Security. "STATED MATURITY", when used with respect to any Security or any obligation or any installment of principal thereof or interest thereon, means the date on which the principal of such obligation or such installment of principal or interest is stated to be due and payable (without regard to any provisions for redemption, prepayment, acceleration, purchase or extension). "SUBSIDIARY" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. "TRANCHE" means a group of Securities which (a) are of the same series and (b) have identical terms except as to principal amount and/or date of issuance. "TRUST" means PPL Capital Funding Trust I, a statutory business trust formed under the laws of the State of Delaware, or any other trust designated pursuant to Section 301 hereof or any permitted successor under the Trust Agreement pertaining to such Trust. -8- 16 "TRUST AGREEMENT" means the Amended and Restated Trust Agreement, dated as of May 9, 2001, relating to PPL Capital Funding Trust I, or an Amended and Restated Trust Agreement relating to a Trust designated pursuant to Section 301 hereof, in each case, among PPL Corporation, as Depositor and Trust Securities Guarantor, the trustees named therein and the several holders referred to therein, as such agreement or agreements, as the case may be, may be amended from time to time. "TRUSTEE" means the Person named as the "Trustee" in the first paragraph of this Indenture until a successor Trustee shall have become such with respect to one or more series of Securities pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. "TRUST INDENTURE ACT" means, as of any time, the Trust Indenture Act of 1939 as in force at such time. "TRUST SECURITIES GUARANTEE" means the Trust Securities Guarantee Agreement between the Guarantor, as Trust Securities Guarantor, and a guarantee trustee for the benefit of the holders of Preferred Securities issued by such Trust. "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. Except as otherwise expressly provided in this Indenture, upon any application or request by the Company or the Guarantor to the Trustee to take any action under any provision of this Indenture, the Company and the Guarantor shall each furnish to the Trustee an Officer's Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. 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; -9- 17 (c) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. (a) Any Officer's Certificate may be based (without further examination or investigation), insofar as it relates to or is dependent upon legal matters, upon an opinion of, or representations by, counsel, unless, in any case, such officer has actual knowledge that the certificate or opinion or representations with respect to the matters upon which such Officer's Certificate may be based as aforesaid are erroneous. Any Opinion of Counsel may be based (without further examination or investigation), insofar as it relates to or is dependent upon factual matters, information with respect to which is in the possession of the Company or the Guarantor, upon a certificate of, or representations by, an officer or officers of the Company or the Guarantor, as the case may be, unless such counsel has actual knowledge that the certificate or opinion or representations with respect to the matters upon which his opinion may be based as aforesaid are erroneous. In addition, any Opinion of Counsel may be based (without further examination or investigation), insofar as it relates to or is dependent upon matters covered in an Opinion of Counsel rendered by other counsel, upon such other Opinion of Counsel, unless such counsel has actual knowledge that the Opinion of Counsel rendered by such other counsel with respect to the matters upon which his Opinion of Counsel may be based as aforesaid are erroneous. If, in order to render any Opinion of Counsel provided for herein, the signer thereof shall deem it necessary that additional facts or matters be stated in any Officer's Certificate provided for herein, then such certificate may state all such additional facts or matters as the signer of such Opinion of Counsel may request. (b) In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Where (i) any 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, -10- 18 a new document or instrument may be substituted therefor in corrected form with the same force and effect as if originally filed in the corrected form and, irrespective of the date or dates of the actual execution and/or delivery thereof, such substitute document or instrument shall be deemed to have been executed and/or delivered as of the date or dates required with respect to the document or instrument for which it is substituted. Anything in this Indenture to the contrary notwithstanding, if any such corrective document or instrument indicates that action has been taken by or at the request of the Company which could not have been taken had the original document or instrument not contained such error or omission, the action so taken shall not be invalidated or otherwise rendered ineffective but shall be and remain in full force and effect, except to the extent that such action was a result of willful misconduct or bad faith. Without limiting the generality of the foregoing, any Securities issued under the authority of such defective document or instrument shall nevertheless be the valid obligations of the Company entitled to the benefits of this Indenture equally and ratably with all other Outstanding Securities, except as aforesaid. SECTION 104. ACTS OF HOLDERS. (a) Any request, demand, authorization, direction, notice, consent, election, waiver or other action provided by this Indenture to be made, given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing or, alternatively, may be embodied in and evidenced by the record of Holders voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders duly called and held in accordance with the provisions of Article Thirteen, or a combination of such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company and the Guarantor. Such instrument or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments and so voting at any such meeting. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of a Security, shall be sufficient for any purpose of this Indenture and (subject to Section 901) conclusive in favor of the Trustee, the Company and the Guarantor, if made in the manner provided in this Section. The record of any meeting of Holders shall be proved in the manner provided in Section 1306. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof or may be proved in any other manner which the Trustee and the Company deem sufficient. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. (c) The ownership, principal amount (except as otherwise contemplated in clause (y) of the first proviso to the definition of Outstanding) and serial numbers of Securities held by any Person, and the date of holding the same, shall be proved by the Security Register. -11- 19 (d) Any request, demand, authorization, direction, notice, consent, election, waiver or other Act of a Holder shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, the Company or the Guarantor in reliance thereon, whether or not notation of such action is made upon such Security. (e) Until such time as written instruments shall have been delivered to the Trustee with respect to the requisite percentage of principal amount of Securities for the action contemplated by such instruments, any such instrument executed and delivered by or on behalf of a Holder may be revoked with respect to any or all of such Securities by written notice by such Holder or any subsequent Holder, proven in the manner in which such instrument was proven. (f) Securities of any series, or any Tranche thereof, authenticated and delivered after any Act of Holders may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any action taken by such Act of Holders. If the Company shall so determine, new Securities of any series, or any Tranche thereof, so modified as to conform, in the opinion of the Company, to such action may be prepared and executed by the Company and the Guarantor and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series or Tranche. (g) Each of the Company and the Guarantor may, at its option, by Company Order or Guarantor Order, as appropriate, fix in advance a record date for the determination of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or other Act solicited by the Company, but neither the Company nor the Guarantor shall have any obligation to do so; provided, however, that neither the Company nor the Guarantor may fix a record date for the giving or making of any notice, declaration, request or direction referred to in the next sentence. In addition, the Trustee may, at its option, fix in advance a record date for the determination of Holders entitled to join in the giving or making of any Notice of Default, any declaration of acceleration referred to in Section 802, any request to institute proceedings referred to in Section 807 or any direction referred to in Section 812. If any such record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act, or such notice, declaration, request or direction, may be given before or after such record date, but only the Holders of record at the close of business on the record date shall be deemed to be Holders for the purposes of determining (i) whether Holders of the requisite proportion of the Outstanding Securities have authorized or agreed or consented to such Act (and for that purpose the Outstanding Securities shall be computed as of the record date) and/or (ii) which Holders may revoke any such Act (notwithstanding subsection (e) of this Section ); and any such Act, given as aforesaid, shall be effective whether or not the Holders which authorized or agreed or consented to such Act remain Holders after such record date and whether or not the Securities held by such Holders remain Outstanding after such record date. SECTION 105. NOTICES, ETC. TO TRUSTEE, COMPANY OR GUARANTOR. Any request, demand, authorization, direction, notice, consent, election, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, -12- 20 given or furnished to, or filed with, the Trustee by any Holder or by the Company or the Guarantor, or the Company or the Guarantor by the Trustee or by any Holder, shall be sufficient for every purpose hereunder (unless otherwise expressly provided herein) if in writing and delivered personally to an officer or other responsible employee of the addressee, or transmitted by facsimile transmission, telex or other direct written electronic means to such telephone number or other electronic communications address set forth for such party below or such other address as the parties hereto shall from time to time designate, or transmitted by registered mail, charges prepaid, to the applicable address set forth for such party below or to such other address as any party hereto may from time to time designate: If to the Trustee, to: The Chase Manhattan Bank 450 West 33rd Street 15th Floor New York, New York 10001 Attention: Institutional Trust Services Telephone: (212) 946-7557 Telecopy: (212) 946-8177 If to the Company, to: PPL Capital Funding, Inc. Two North Ninth Street Allentown, Pennsylvania 18101-1179 Attention: Treasurer Telephone: (610) 774-5987 Telecopy: (610) 774-5106 With a copy to: PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18101-1179 Attention: Treasurer Telephone: (610) 774-5987 Telecopy: (610) 774-5106 If to the Guarantor, to: PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18101-1179 Attention: Treasurer -13- 21 Telephone: (610) 774-5987 Telecopy: (610) 774-5106 Any communication contemplated herein shall be deemed to have been made, given, furnished and filed if personally delivered, on the date of delivery, if transmitted by facsimile transmission, telex or other direct written electronic means, on the date of transmission, and if transmitted by registered mail, on the date of receipt. SECTION 106. NOTICE TO HOLDERS OF SECURITIES; WAIVER. Except as otherwise expressly provided herein, where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given, and shall be deemed given, to Holders if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at the address of such Holder as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such Notice. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice to Holders by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Any notice required by this Indenture may be waived in writing by the Person entitled to receive such notice, either before or after the event otherwise to be specified therein, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION 107. CONFLICT WITH TRUST INDENTURE ACT. If any provision of this Indenture limits, qualifies or conflicts with another provision hereof which is required or deemed to be included in this Indenture by, or is otherwise governed by, any provision of the Trust Indenture Act, such other provision shall control; and if any provision hereof otherwise conflicts with the Trust Indenture Act, the Trust Indenture Act shall control. SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section headings in this Indenture and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 109. SUCCESSORS AND ASSIGNS. All covenants and agreements in this Indenture by the Company or the Guarantor shall bind its successors and assigns, whether so expressed or not. -14- 22 SECTION 110. SEPARABILITY CLAUSE. In case any provision in this Indenture or the Securities or the Guarantees shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 111. BENEFITS OF INDENTURE. Nothing in this Indenture, the Securities or the Guarantees, express or implied, shall give to any Person, other than the parties hereto, their successors hereunder, the Holders and the holders of Senior Indebtedness, any benefit or any legal or equitable right, remedy or claim under this Indenture , provided, however, that for so long as any Preferred Securities remain outstanding, the holders of such Preferred Securities, subject to certain limitations set forth in this Indenture, may enforce the Company's and the Guarantor's obligations hereunder, directly against the Company or the Guarantor, as the case may be, as third party beneficiaries of this Indenture without proceeding against the Trust issuing such Preferred Securities. SECTION 112. GOVERNING LAW. This Indenture, the Securities and the Guarantees shall be governed by and construed in accordance with the law of the State of New York (including without limitation Section 5-1401 of the New York General Obligations Law or any successor to such statute), except to the extent that the Trust Indenture Act shall be applicable. SECTION 113. LEGAL HOLIDAYS. In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities other than a provision in Securities of any series, or any Tranche thereof, or in the indenture supplemental hereto, Board Resolution or Officer's Certificate which establishes the terms of the Securities of such series or Tranche, which specifically states that such provision shall apply in lieu of this Section) payment of interest or principal and premium, if any, need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment, except that if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the Interest Payment Date, Redemption Date, or Stated Maturity, and, if such payment is made or duly provided for on such Business Day, no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to such Business Day. -15- 23 ARTICLE TWO SECURITY FORMS SECTION 201. FORMS GENERALLY. The definitive Securities of each series and the Guarantees to be endorsed thereon as contemplated by Article Fourteen shall be in substantially the form or forms thereof established in the indenture supplemental hereto establishing such series or in a Board Resolution establishing such series, or in an Officer's Certificate pursuant to such a supplemental indenture or Board Resolution, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities or Guarantees endorsed thereon, as the case may be, as evidenced by their execution thereof. If the form or forms of Securities of any series or Guarantees endorsed thereon are established in a Board Resolution or in an Officer's Certificate pursuant to a Board Resolution, such Board Resolution and Officer's Certificate, if any, shall be delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities. Unless otherwise specified as contemplated by Section 301 or 1201(g), the Securities of each series shall be issuable in registered form without coupons. The definitive Securities and Guarantees endorsed thereon shall be produced in such manner as shall be determined by the officers executing such Securities or Guarantees, as evidenced by their execution thereof. SECTION 202. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The Trustee's certificate of authentication shall be in substantially the form set forth below: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. The Chase Manhattan Bank, as Trustee By: ----------------------------- Authorized Officer -16- 24 ARTICLE THREE THE SECURITIES SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited ; provided, however, that all Securities shall be issued to a Trust to evidence loans by a Trust of the proceeds of the issuance of Preferred Securities and Common Securities of such Trust. The Securities may be issued in one or more series. Subject to the last paragraph of this Section, prior to the authentication and delivery of Securities of any series there shall be established by specification in a supplemental indenture or in a Board Resolution of the Company or in an Officer's Certificate of the Company (which need not, comply with Section 102) pursuant to a supplemental indenture or a Board Resolution: (a) the title of the Securities of such series (which shall distinguish the Securities of such series from Securities of all other series); (b) any limit upon the aggregate principal amount of the Securities of such series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of such series pursuant to Section 304, 305, 306, 406 or 1206 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder); (c) the Person or Persons (without specific identification) to whom any interest on Securities of such series, or any Tranche thereof, shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest; (d) the date or dates on which the principal of the Securities of such series or any Tranche thereof, is payable or any formulary or other method or other means by which such date or dates shall be determined, by reference to an index or other fact or event ascertainable outside of this Indenture or otherwise (without regard to any provisions for redemption, prepayment, acceleration, purchase or extension); (e) the rate or rates at which the Securities of such series, or any Tranche thereof, shall bear interest, if any (including the rate or rates at which overdue principal shall bear interest after Maturity if different from the rate or rates at which such Securities shall bear interest prior to Maturity, and, if applicable, the rate or rates at which overdue premium or interest shall bear interest, if any), or any formulary or other method or other means by which such rate or rates shall be determined by reference to an index or other fact or event ascertainable outside of this Indenture or otherwise, the date or dates from which such interest shall accrue; the Interest Payment Dates and the Regular Record Dates, if any, for the interest payable on such Securities on any Interest Payment Date; the right of the Company, if any, to extend the interest payment periods and the -17- 25 duration of any such extension as contemplated by Section 312; and the basis of computation of interest, if other than as provided in Section 310; (f) the place or places at which or methods (if other than as provided elsewhere in this Indenture) by which (i) the principal of and premium, if any, and interest, if any, on Securities of such series, or any Tranche thereof, shall be payable, (ii) registration of transfer of Securities of such series, or any Tranche thereof, may be effected, (iii) exchanges of Securities of such series, or any Tranche thereof, may be effected and (iv) notices and demands to or upon the Company in respect of the Securities of such series, or any Tranche thereof, and this Indenture may be served; the Security Registrar and any Paying Agent or Agents for such series or Tranche; and if such is the case, that the principal of such Securities shall be payable without presentment or surrender thereof; (g) the period or periods within which, or the date or dates on which, the price or prices at which and the terms and conditions upon which the Securities of such series, or any Tranche thereof, may be redeemed, in whole or in part, at the option of the Company and any restrictions on such redemptions; (h) the obligation, if any, of the Company to redeem or purchase or repay the Securities of such series, or any Tranche thereof, pursuant to any sinking fund or other mandatory redemption provisions or at the option of a Holder thereof and the period or periods within which or the date or dates on which, the price or prices at which and the terms and conditions upon which such Securities shall be redeemed or purchased or repaid, in whole or in part, pursuant to such obligation and applicable exceptions to the requirements of Section 404 in the case of mandatory redemption or redemption or repayment at the option of the Holder; (i) the denominations in which Securities of such series, or any Tranche thereof, shall be issuable if other than denominations of $25 and any integral multiple thereof; (j) if the principal of or premium, if any, or interest, if any, on the Securities of such series, or any Tranche thereof, are to be payable, at the election of the Company or a Holder thereof, in a coin or currency other than that in which the Securities are stated to be payable, the period or periods within which, and the terms and conditions upon which, such election may be made and the manner in which the amount of such coin or currency payable is to be determined; (k) the currency or currencies, including composite currencies, in which payment of the principal of and premium, if any, and interest, if any, on the Securities of such series, or any Tranche thereof, shall be payable (if other than Dollars) and the manner in which the equivalent of the principal amount thereof in Dollars is to be determined for any purpose, including for the purpose of determining the principal amount deemed to be Outstanding at any time; -18- 26 (l) if the principal of or premium, if any, or interest on the Securities of such series, or any Tranche thereof, are to be payable, or are to be payable at the election of the Company or a Holder thereof, in securities or other property, the type and amount of such securities or other property, or the formulary or other method or other means by which such amount shall be determined, and the period or periods within which, and the terms and conditions upon which, any such election may be made; (m) if the amount payable in respect of principal of or premium, if any, or interest, if any, on the Securities of such series, or any Tranche thereof, may be determined with reference to an index or other fact or event ascertainable outside this Indenture, the manner in which such amounts shall be determined to the extent not established pursuant to clause (e) of this paragraph; (n) if other than the entire principal amount thereof, the portion of the principal amount of Securities of such series, or any Tranche thereof, which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 802; (o) any Events of Default, in addition to those specified in Section 801, or any exceptions to those specified in Section 801, with respect to the Securities of such series, and any covenants of the Company or the Guarantor for the benefit of the Holders of the Securities of such series, or any Tranche thereof, in addition to those set forth in Article Six, or any exceptions to those set forth in Article Six; (p) the terms, if any, pursuant to which the Securities of such series, or any Tranche thereof, may be converted into or exchanged for shares of capital stock or other securities of the Company or any other Person; (q) the obligations or instruments, if any, which shall be considered to be Eligible Obligations in respect of the Securities of such series, or any Tranche thereof, denominated in a currency other than Dollars or in a composite currency, and any provisions for satisfaction and discharge of Securities of any series, in addition to those set forth in Section 701 and 702, or any exceptions to those set forth in Section 701 and 702; (r) if the Securities of such series, or any Tranche thereof, are to be issued in global form, (i) any limitations on the rights of the Holder or Holders of such Securities to transfer or exchange the same or to obtain the registration of transfer thereof, (ii) any limitations on the rights of the Holder or Holders thereof to obtain certificates therefor in definitive form in lieu of global form and (iii) any other matters incidental to such Securities; (s) if the Securities of such series, or any Tranche thereof, are to be issuable as bearer securities, any and all matters incidental thereto which are not specifically addressed in a supplemental indenture as contemplated by clause (g) of Section 1201; (t) to the extent not established pursuant to clause (r) of this paragraph, any limitations on the rights of the Holders of the Securities of such Series, or any Tranche thereof, to transfer or exchange such Securities or to obtain the registration of transfer -19- 27 thereof; and if a service charge will be made for the registration of transfer or exchange of Securities of such series, or any Tranche thereof, the amount or terms thereof; (u) any exceptions to Section 113, or variation in the definition of Business Day, with respect to the Securities of such series, or any Tranche thereof; (v) any terms of the Guarantees with respect to the Securities of such series, or any Tranche thereof, in addition to those set forth in Section 1401, or any exceptions to those set forth in Section 1401; and (w) the designation of the Trust to which Securities of such series are to be issued; (x) any other terms of the Securities of such series, or any Tranche thereof. With respect to Securities of a series subject to a Periodic Offering, the indenture supplemental hereto or the Board Resolution which establishes such series, or the Officer's Certificate pursuant to such supplemental indenture or Board Resolution, as the case may be, may provide general terms or parameters for Securities of such series and provide either that the specific terms of Securities of such series, or any Tranche thereof, shall be specified in a Company Order or that such terms shall be determined by the Company or its agents in accordance with procedures specified in a Company Order as contemplated in clause (b) of Section 303. All Securities of any one series shall be substantially identical, except as to principal amount and date of issue and except as may be set forth in the terms of such series as contemplated above. The Securities of each series shall be subordinated in right of payment to Senior Indebtedness of the Company as provided in Article Fifteen and rank without preference or priority among themselves and equally with the Company's existing and future subordinated indebtedness. The Guarantees relating to such Securities shall be subordinated in right of payment to Senior Indebtedness of the Guarantor as provided in Article Fourteen. Unless otherwise provided with respect to a series of Securities as contemplated in Section 301(b), the aggregate principal amount of a series of Securities may be increased and additional Securities of such series may be issued up to the maximum aggregate principal amount authorized with respect to such series as increased. SECTION 302. DENOMINATIONS. Unless otherwise provided as contemplated by Section 301 with respect to any series of Securities, or any Tranche thereof, the Securities of each series shall be issuable in denominations of $25 and any integral multiple thereof. SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. Unless otherwise provided as contemplated by Section 301 with respect to any series of Securities or any Tranche thereof, the Securities shall be executed on behalf of the Company by an Authorized Officer of the Company, and may have the corporate seal of the -20- 28 Company affixed thereto or reproduced thereon attested by its Secretary, one of its Assistant Secretaries or any other Authorized Officer. The signature of any or all of these officers on the Securities may be manual or facsimile. A Security bearing the manual or facsimile signature of an individual who was at the time of execution an Authorized Officer of the Company shall bind the Company, notwithstanding that any such individual has ceased to be an Authorized Officer prior to the authentication and delivery of the Security or did not hold such office at the date of such Security. Unless otherwise provided as contemplated by Section 301, with respect to any series of Securities or any Tranche thereof, Guarantees to be endorsed on any Securities shall be executed and delivered in accordance with the provisions of Section 1402. The Trustee shall authenticate and deliver Securities of a series, with the Guarantees endorsed thereon, for original issue, at one time or from time to time in accordance with the Company Order referred to below, upon receipt by the Trustee of: (a) the instrument or instruments establishing the form or forms and terms of the Securities of such series and the Guarantees to be endorsed thereon, as provided in Sections 201 and 301; (b) a Company Order requesting the authentication and delivery of such Securities, with the Guarantees endorsed thereon, and, to the extent that the terms of such Securities and Guarantees shall not have been established in an indenture supplemental hereto or in a Board Resolution, or in an Officer's Certificate pursuant to a supplemental indenture or Board Resolution, all as contemplated by Sections 201 and 301, either (i) establishing such terms or (ii) in the case of Securities of a series subject to a Periodic Offering, specifying procedures, acceptable to the Trustee, by which such terms are to be established (which procedures may provide, to the extent acceptable to the Trustee, for authentication and delivery pursuant to oral or electronic instructions from the Company or any agent or agents thereof, which oral instructions are to be promptly confirmed electronically or in writing), in either case in accordance with the instrument or instruments delivered pursuant to clause (a) above; (c) A Guarantor Order approving the terms and delivery of the Guarantees to be endorsed on such Securities as contemplated by the Company Order delivered pursuant to clause (b) above; (d) Securities of such series, each executed on behalf of the Company by an Authorized Officer of the Company and having a Guarantee endorsed thereon executed on behalf of the Guarantor by an Authorized Officer of the Guarantor; (e) an Opinion of Counsel to the effect that: (i) (A) the forms of such Securities have been duly authorized by the Company, (B) the forms of such Guarantees have been duly authorized by the -21- 29 Guarantor, and (C) the forms of the Securities and the Guarantees have been established in conformity with the provisions of this Indenture; (ii) (A) the terms of such Securities have been duly authorized by the Company, (B) the terms of such Guarantees have been duly authorized by the Guarantor and (C) the terms of the Securities and the Guarantees have been established in conformity with the provisions of this Indenture; and (iii) such Securities and the Guarantees endorsed thereon, when authenticated and delivered by the Trustee and issued and delivered by the Company and the Guarantor in the manner and subject to any conditions specified in such Opinion of Counsel, will have been duly issued under this Indenture and will constitute valid and legally binding obligations of the Company and the Guarantor, respectively, entitled to the benefits provided by this Indenture, and enforceable in accordance with their terms, subject, as to enforcement, to laws relating to or affecting generally the enforcement of creditors' rights, including, without limitation, bankruptcy and insolvency laws and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity as at law); provided, however, that, with respect to Securities of a series subject to a Periodic Offering, the Trustee shall be entitled to receive such Opinion of Counsel only once at or prior to the time of the first authentication and delivery of Securities of such series, and the Guarantees endorsed thereon, and that in lieu of the opinions described in clauses (ii) and (iii) above such Opinion of Counsel may, alternatively, state, respectively, (x) that, when the terms of such Securities and the Guarantees to be endorsed thereon shall have been established pursuant to a Company Order or Orders and, if applicable, a Guarantor Order or Orders or pursuant to such procedures as may be specified from time to time by a Company Order or Orders, and, if applicable, a Guarantor Order or Orders all as contemplated by and in accordance with the instrument or instruments delivered pursuant to clause (a) above, such terms will have been duly authorized by the Company and the Guarantor, respectively, and will have been established in conformity with the provisions of this Indenture; and (y) that such Securities, and the Guarantees endorsed thereon, when (1) executed by the Company or the Guarantor, as the case may be, (2) authenticated and delivered by the Trustee in accordance with this Indenture, (3) issued and delivered by the Company and the Guarantor and (4) paid for, all as contemplated by and in accordance with the aforesaid Company Order or Orders and, if applicable, a Guarantor Order or Orders or specified procedures, as the case may be, will have been duly issued under this Indenture and will constitute valid and legally binding obligations of the Company and the Guarantor, respectively, entitled to the benefits provided by the Indenture, and enforceable in accordance with their terms, subject, as to enforcement, to laws relating to or affecting generally the enforcement of creditors' rights, including, without -22- 30 limitation, bankruptcy and insolvency laws and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). With respect to Securities of a series subject to a Periodic Offering, the Trustee may conclusively rely, as to the authorization by the Company and the Guarantor of any of such Securities and Guarantees, the forms and terms thereof and the legality, validity, binding effect and enforceability thereof, upon the Opinion of Counsel and other documents delivered pursuant to Sections 201 and 301 and this Section, as applicable, at or prior to the time of the first authentication of Securities of such series, with the Guarantees endorsed thereon, unless and until such opinion or other documents have been superseded or revoked or expire by their terms. In connection with the authentication and delivery of Securities of a series, with Guarantees endorsed thereon, pursuant to a Periodic Offering, the Trustee shall be entitled to assume that the Company's instructions to authenticate and deliver such Securities, and the Guarantor's approval of the delivery of the Guarantees thereon, do not violate any applicable law or any applicable rule, regulation or order of any governmental agency or commission having jurisdiction over the Company or the Guarantor. If the forms or terms of the Securities of any series have been established by or pursuant to a Board Resolution or an Officer's Certificate as permitted by Sections 201 or 301, the Trustee shall not be required to authenticate such Securities if the issuance of such Securities pursuant to this Indenture will adversely affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. Except as otherwise specified as contemplated by Section 301 with respect to any series of securities, or any Tranche thereof, each Security, and any Guarantee endorsed thereon, shall each be dated the date of its authentication. Except as otherwise specified as contemplated by Section 301 with respect to any series of Securities, or any Tranche thereof, no Security or Guarantee endorsed thereon shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee or its agent by manual signature of an authorized officer thereof, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security or Guarantee endorsed thereon has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder to the Company, or any Person acting on its behalf, but shall never have been issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309 together with a written statement (which need not comply with Section 102 and need not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and sold by the Company, for all purposes of this Indenture such Security (including any Guarantee endorsed thereon) shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits hereof. -23- 31 SECTION 304. TEMPORARY SECURITIES. Pending the preparation of definitive Securities of any series, or any Tranche thereof, the Company may execute, and upon Company Order and a Guarantor Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued, having Guarantees endorsed thereon, with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities or Guarantees may determine, as evidenced by their execution of such Securities or Guarantees; provided, however, that temporary Securities need not recite specific redemption, sinking fund, conversion or exchange provisions. If temporary Securities of any series or Tranche are issued, the Company shall cause definitive Securities of such series or Tranche to be prepared without unreasonable delay. After the preparation of definitive Securities of such series or Tranche, the temporary Securities of such series or Tranche shall be exchangeable for definitive Securities of such series or Tranche, with the definitive Guarantees of the Guarantor endorsed thereon, upon surrender of the temporary Securities of such series or Tranche at the office or agency of the Company maintained pursuant to Section 602 in a Place of Payment for such series or Tranche, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series or Tranche, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor definitive Securities of the same series or Tranche, of authorized denominations and of like tenor and aggregate principal amount, with the definitive Guarantees of the Guarantor endorsed thereon. Until exchanged in full as hereinabove provided, temporary Securities shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of the same series and Tranche and of like tenor authenticated and delivered hereunder. SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. The Company shall cause to be kept in one of the offices or agencies designated pursuant to Section 602, with respect to the Securities of each series or any Tranche thereof, a register (the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities of such series or Tranche and the registration of transfer thereof. The Company shall designate one Person to maintain the Security Register for the Securities of each series, and such Person is referred to herein, with respect to such series, as the "Security Registrar." Anything herein to the contrary notwithstanding, the Company may designate one or more of its offices or an office of any Affiliate (including the Guarantor) as an office in which a register with respect to the Securities of one or more series, or any Tranche or Tranches thereof, shall be maintained, and the Company may designate itself or any Affiliate (including the Guarantor) as the Security Registrar with respect to one or more of such series. The Security Register shall be open for inspection by the Trustee and the Company at all reasonable times. Except as otherwise specified as contemplated by Section 301 with respect to the Securities of any series, or any Tranche thereof, upon surrender for registration of transfer of any -24- 32 Security of such series or Tranche at the office or agency of the Company maintained pursuant to Section 602 in a Place of Payment for such series or Tranche, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series and Tranche, of authorized denominations and of like tenor and aggregate principal amount, with the Guarantees of the Guarantor endorsed thereon. Except as otherwise specified as contemplated by Section 301 with respect to the Securities of any series, or any Tranche thereof, any Security of such series or Tranche may be exchanged at the option of the Holder for one or more new Securities of the same series and Tranche, of authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at any such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities, with the Guarantees of the Guarantor endorsed thereon, which the Holder making the exchange is entitled to receive. All Securities and Guarantees delivered upon any registration of transfer or exchange of Securities and the Guarantees endorsed thereon shall be valid obligations of the Company and the Guarantor, respectively, evidencing the same obligation, and entitled to the same benefits under this Indenture, as the Securities and Guarantees surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company, the Guarantor, or the Trustee) be duly endorsed or shall be accompanied by a written instrument of transfer in form satisfactory to the Company, the Guarantor and the Trustee, duly executed by the Holder thereof or his attorney duly authorized in writing. Unless otherwise specified as contemplated by Section 301, with respect to Securities of any series, or any Tranche thereof, no service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 406 or 1206 not involving any transfer. The Company shall not be required to execute or to provide for the registration of transfer of or the exchange of (a) Securities of any series, or any Tranche thereof, during a period of 15 days immediately preceding the date notice is to be given identifying the serial numbers of the Securities of such series or Tranche called for redemption or (b) any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same -25- 33 series and Tranche, and of like tenor and principal amount, having a Guarantee of the Guarantor endorsed thereon and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company, the Guarantor and the Trustee (a) evidence to their satisfaction of the ownership of and the destruction, loss or theft of any Security and (b) such security or indemnity as may be reasonably required by them to save each of them and any agent of any of them harmless, then, in the absence of notice to the Company, the Guarantor or the Trustee that such Security has been acquired by a protected purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and Tranche, and of like tenor and principal amount, having a Guarantee of the Guarantor endorsed thereon and bearing a number not contemporaneously outstanding. Notwithstanding the foregoing, in case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company or the Guarantor in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Trustee) in connection therewith. Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security and any Guarantee endorsed thereon shall constitute an original additional contractual obligation of the Company and the Guarantor, respectively, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone other than the Holder of such new security, and any such new Security shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of such series duly issued hereunder, and the Guarantees endorsed on such Securities. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Unless otherwise provided as contemplated by Section 301 with respect to the Securities of any series, or any Tranche thereof, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. Subject to Section 312, any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the related Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company or the Guarantor, at its election in each case, as provided in clause (a) or (b) below: -26- 34 (a) The Company or the Guarantor may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a date (a "Special Record Date") for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company or the Guarantor shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company or the Guarantor, as the case may be, shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company and the Guarantor of such Special Record Date and, in the name and at the expense of the Company or the Guarantor, shall promptly cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such series at the address of such Holder as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date. (b) The Company or the Guarantor may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company or the Guarantor to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section and Section 305, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. SECTION 308. PERSONS DEEMED OWNERS. Prior to due presentment of a Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may treat the Person in whose name such Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and premium, if any, and (subject to Sections 305 and 307) interest, if any, on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and none of the Company, the Guarantor, the Trustee or any agent of the Company, the Guarantor or the Trustee shall be affected by notice to the contrary. -27- 35 SECTION 309. CANCELLATION. All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and, if not theretofore canceled, shall be promptly canceled by the Trustee. The Company or the Guarantor may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company or the Guarantor may have acquired in any manner whatsoever or which the Company shall not have issued and sold, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Securities held by the Trustee shall be disposed of in accordance with the Trustee's customary procedures, unless, by a Company Order, the Company shall request a certificate of disposition or direct that canceled Securities be returned to it. SECTION 310. COMPUTATION OF INTEREST. Except as otherwise specified as contemplated by Section 301 for Securities of any series, or Tranche thereof, interest on the Securities of each series shall be computed on the basis of a 360-day year consisting of twelve 30-day months, and with respect to any period less than a full calendar month, on the basis of the actual number of days elapsed per 30-day month. SECTION 311. PAYMENT TO BE IN PROPER CURRENCY. In the case of any Security denominated in any currency other than Dollars or in a composite currency (the "Required Currency"), except as otherwise specified with respect to such Security as contemplated by Section 301, the obligation of the Company or the Guarantor to make any payment of the principal thereof, or the premium or interest thereon, shall not be discharged or satisfied by any tender by the Company or the Guarantor, or recovery by the Trustee, in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the Trustee timely holding the full amount of the Required Currency then due and payable. If any such tender or recovery is in a currency other than the Required Currency, the Trustee may take such actions as it considers appropriate to exchange such currency for the Required Currency. The costs and risks of any such exchange, including without limitation the risks of delay and exchange rate fluctuation, shall be borne by the Company and the Guarantor, the Company and the Guarantor shall remain fully liable for any shortfall or delinquency in the full amount of Required Currency then due and payable, and in no circumstances shall the Trustee be liable therefor except in the case of its negligence or willful misconduct. The Company and the Guarantor hereby waive any defense of payment based upon any such tender or recovery which is not in the Required Currency, or which, when exchanged for the Required Currency by the Trustee, is less than the full amount of Required Currency then due and payable. SECTION 312. EXTENSION OF INTEREST PAYMENT. The Company shall have the right at any time, so long as no Event of Default hereunder has occurred and is continuing with respect to the Securities of any series, to extend -28- 36 interest payment periods from time to time on all Securities of such series, if so specified as contemplated by Section 301 with respect to such Securities and upon such terms as may be specified as contemplated by Section 301 with respect to such Securities. ARTICLE FOUR REDEMPTION OF SECURITIES SECTION 401. APPLICABILITY OF ARTICLE. Securities of any series, or any Tranche thereof, which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities of such series or Tranche) in accordance with this Article. SECTION 402. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the Company to redeem any Securities shall be evidenced by a Board Resolution or an Officer's Certificate. The Company shall, at least 45 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee and in the case of Securities of a series held by a Trust, the Property Trustee under the related Trust Agreement in writing of such Redemption Date and of the principal amount of such Securities to be redeemed. In the case of any redemption of Securities (a) prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture or (b) pursuant to an election of the Company which is subject to a condition specified in the terms of such Securities, the Company and the Guarantor shall each furnish the Trustee with an Officer's Certificate evidencing compliance with such restriction or condition. SECTION 403. SELECTION OF SECURITIES TO BE REDEEMED. If less than all the Securities of any series, or any Tranche thereof, are to be redeemed, the particular Securities to be redeemed shall be selected by the Trustee from the Outstanding Securities of such series or Tranche not previously called for redemption, by such method as shall be provided for such particular series or Tranche, or in the absence of any such provision, by such method of random selection as the Trustee shall deem fair and appropriate and which may, in any case, provide for the selection for redemption of portions (equal to any authorized denomination for Securities of such series or Tranche) of the principal amount of Securities of such series or Tranche of a denomination larger than the minimum authorized denomination for Securities of such series or Tranche; provided, however, that if, as indicated in an Officer's Certificate, the Company shall have offered to purchase all or any principal amount of the Securities then Outstanding of any series, or any Tranche thereof, and less than all of such Securities as to which such offer was made shall have been tendered to the Company for such purchase, the Trustee, if so directed by Company Order, shall select for redemption all or any principal amount of such Securities which have not been so tendered. -29- 37 The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected to be redeemed in part, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. SECTION 404. NOTICE OF REDEMPTION. Notice of redemption shall be given in the manner provided in Section 106 to the Holders of Securities to be redeemed not less than 30 nor more than 60 days prior to the Redemption Date. All notices of redemption shall state: (a) the Redemption Date, (b) the Redemption Price, (c) if less than all the Securities of any series or Tranche are to be redeemed, the identification of the particular Securities to be redeemed and the portion of the principal amount of any Security to be redeemed in part, (d) that on the Redemption Date the Redemption Price, together with accrued interest, if any, to the Redemption Date, will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date, (e) the place or places where such Securities are to be surrendered for payment of the Redemption Price and accrued interest, if any, unless it shall have been specified as contemplated by Section 301 with respect to such Securities that such surrender shall not be required, (f) that the redemption is for a sinking or other fund, if such is the case, and (g) such other matters as the Company shall deem desirable or appropriate. Unless otherwise specified with respect to any Securities in accordance with Section 301, with respect to any notice of redemption of Securities at the election of the Company, unless, upon the giving of such notice, such Securities shall be deemed to have been paid in accordance with Section 701, such notice may state that such redemption shall be conditional upon the receipt by the Paying Agent or Agents for such Securities, on or prior to the date fixed for such redemption, of money sufficient to pay the principal of and premium, if any, and interest, if any, on such Securities and that if such money shall not have been so received such notice shall be of no force or effect and the Company shall not be required to redeem such Securities. In the event that such notice of redemption contains such a condition and such money -30- 38 is not so received, the redemption shall not be made and within a reasonable time thereafter notice shall be given, in the manner in which the notice of redemption was given, that such money was not so received and such redemption was not required to be made. Notice of redemption of Securities to be redeemed at the election of the Company, and any notice of non-satisfaction of a condition for redemption as aforesaid, shall be given by the Company or, on Company Request, by the Trustee in the name and at the expense of the Company. SECTION 405. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of redemption having been given as aforesaid, and the conditions, if any, set forth in such notice having been satisfied, the Securities or portions thereof so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless, in the case of an unconditional notice of redemption, the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Securities or portions thereof, if interest-bearing, shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with such notice, such Security or portion thereof shall be paid by the Company at the Redemption Price, together with accrued interest, if any, to the Redemption Date; provided, however, that no such surrender shall be a condition to such payment if so specified as contemplated by Section 301 with respect to such Security; and provided, further, that except as otherwise specified as contemplated by Section 301 with respect to such Security, any installment of interest on any Security the Stated Maturity of which installment is on or prior to the Redemption Date shall be payable to the Holder of such Security, or one or more Predecessor Securities, registered as such at the close of business on the related Regular Record Date according to the terms of such Security and subject to the provisions of Sections 305 and 307. SECTION 406. SECURITIES REDEEMED IN PART. Upon the surrender of any Security which is to be redeemed only in part at a Place of Payment therefor (with, if the Company, the Guarantor or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company, the Guarantor and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security, without service charge, a new Security or Securities of the same series and Tranche, of any authorized denomination requested by such Holder and of like tenor and in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered, with the Guarantee of the Guarantor endorsed thereon. -31- 39 ARTICLE FIVE SINKING FUNDS SECTION 501. APPLICABILITY OF ARTICLE. The provisions of this Article shall be applicable to any sinking fund for the retirement of the Securities of any series, or any Tranche thereof, except as otherwise specified as contemplated by Section 301 for Securities of such series or Tranche. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series, or any Tranche thereof, is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Securities of any series, or any Tranche thereof, is herein referred to as an "optional sinking fund payment". If provided for by the terms of Securities of any series, or any Tranche thereof, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 502. Each sinking fund payment shall be applied to the redemption of Securities of the series or Tranche in respect of which it was made as provided for by the terms of such Securities. SECTION 502. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES. The Company (a) may deliver to the Trustee Outstanding Securities (other than any previously called for redemption) of a series or Tranche in respect of which a mandatory sinking fund payment is to be made and (b) may apply as a credit Securities of such series or Tranche which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of such mandatory sinking fund payment; provided, however, that no Securities shall be applied in satisfaction of a mandatory sinking fund payment if such Securities shall have been previously so applied. Securities so applied shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such mandatory sinking fund payment shall be reduced accordingly. SECTION 503. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than 45 days prior to each sinking fund payment date for the Securities of any series, or any Tranche thereof, the Company shall deliver to the Trustee an Officer's Certificate specifying: (a) the amount of the next succeeding mandatory sinking fund payment for such series or Tranche; (b) the amount, if any, of the optional sinking fund payment to be made together with such mandatory sinking fund payment; (c) the aggregate sinking fund payment; -32- 40 (d) the portion, if any, of such aggregate sinking fund payment which is to be satisfied by the payment of cash; (e) the portion, if any, of such aggregate sinking fund payment which is to be satisfied by delivering and crediting Securities of such series or Tranche pursuant to Section 502 and stating the basis for such credit and that such Securities have not previously been so credited, and the Company shall also deliver to the Trustee any Securities to be so delivered. If the Company shall not deliver such Officer's Certificate, the next succeeding sinking fund payment for such series or Tranche shall be made entirely in cash in the amount of the mandatory sinking fund payment. Not less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 403 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 404. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 405 and 406. ARTICLE SIX COVENANTS SECTION 601. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. At or prior to 10 a.m., New York City time, on each date when payment is due, the Company shall pay the principal of and premium, if any, and interest, if any, on the Securities of each series in accordance with the terms of such Securities and this Indenture. SECTION 602. MAINTENANCE OF OFFICE OR AGENCY. The Company and the Guarantor shall maintain in each Place of Payment for the Securities of each series, or any Tranche thereof, an office or agency where payment of such Securities shall be made or surrendered for payment, where registration of transfer or exchange of such Securities may be effected and where notices and demands to or upon the Company or the Guarantor in respect of such Securities and this Indenture may be served. The Company and the Guarantor shall give prompt written notice to the Trustee of the location, and any change in the location, of each such office or agency and prompt notice to the Holders of any such change in the manner specified in Section 106. If at any time the Company or the Guarantor shall fail to maintain any such required office or agency in respect of Securities of any series, or any Tranche thereof, or shall fail to furnish the Trustee with the address thereof, payment of such Securities may be made, registration of transfer or exchange thereof may be effected and notices and demands in respect thereby may be served at the Corporate Trust Office of the Trustee, and each of the Company and the Guarantor hereby appoint the Trustee as its agent for all such purposes in any such event. The Company or the Guarantor may also from time to time designate one or more other offices or agencies with respect to the Securities of one or more series, or any Tranche thereof, for any or all of the foregoing purposes and may from time to time rescind such -33- 41 designations; provided, however, that, unless otherwise specified as contemplated by Section 301 with respect to the Securities of such series or Tranche, no such designation or rescission shall in any manner relieve the Company or the Guarantor of its obligation to maintain an office or agency for such purposes in each Place of Payment for such Securities in accordance with the requirements set forth above. The Company and the Guarantor shall give prompt written notice to the Trustee, and prompt notice to the Holders in the manner specified in Section 106, of any such designation or rescission and of any change in the location of any such other office or agency. Anything herein to the contrary notwithstanding, any office or agency required by this Section may be maintained at an office of the Company or the Guarantor or any Affiliate of either of them, in which event the Company, the Guarantor or such Affiliate, as the case may be, shall perform all functions to be performed at such office or agency. SECTION 603. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST. If the Company shall at any time act as its own Paying Agent with respect to the Securities of any series, or any Tranche thereof, it shall, on or before each due date of the principal of and premium, if any, or interest, if any, on any of such Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and premium or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and shall promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for the Securities of any series, or any Tranche thereof, it shall, prior to each due date of the principal of and premium, if any, or interest, if any, on such Securities, deposit with such Paying Agents sums sufficient (without duplication) to pay the principal and premium or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company shall promptly notify the Trustee of its action or failure so to act. The Company shall cause each Paying Agent for the Securities of any series, or any Tranche thereof, other than the Company or the Trustee, to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent shall: (a) hold all sums held by it for the payment of the principal of and premium, if any, or interest, if any, on Securities of such series or Tranche in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (b) give the Trustee notice of any default by the Company (or any other obligor upon the Securities of such series) in the making of any payment of principal of and premium, if any, or interest, if any, on the Securities of such series or Tranche; and -34- 42 (c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Company may at any time pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent and, if as stated in a Company Order delivered to the Trustee, in accordance with the provisions of Article Seven; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of and premium, if any, or interest, if any, on any Security and remaining unclaimed for two years after such principal and premium, if any, or interest has become due and payable shall be paid to the Company on Company Request, or, if then held by the Company, shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company and the Guarantor for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such payment to the Company, may at the expense of the Company, either (a) cause to be mailed, on one occasion only, notice to such Holder that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such mailing, any unclaimed balance of such money then remaining will be paid to the Company or (b) cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and that after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be paid to the Company. SECTION 604. CORPORATE EXISTENCE. Subject to the rights of the Company and the Guarantor under Article Eleven, each of the Company and the Guarantor shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence. SECTION 605. ANNUAL OFFICER'S CERTIFICATE Not later than April 30 in each year, commencing April 30, 2002, each of the Company and the Guarantor shall deliver to the Trustee an Officer's Certificate which need not comply with Section 102, executed by its principal executive officer, principal financial officer or principal accounting officer, as to such officer's knowledge of such obligor's compliance with all conditions and covenants under this Indenture, such compliance to be determined without regard to any period of grace or requirement of notice under this Indenture. -35- 43 SECTION 606. WAIVER OF CERTAIN COVENANTS. The Company may omit in any particular instance to comply with any term, provision or condition set forth in (a) Section 607, 608 or any covenant or restriction specified with respect to the Securities of any series, or any Tranche thereof, as contemplated by Section 301 or by Section 1201(b), if before the time for such compliance the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series and Tranches with respect to which compliance with such covenant or restriction is to be omitted, considered as one class, shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition; and (b) Section 604 or 1101(a) or (b), if before the time for such compliance the Holders of a majority in principal amount of Securities Outstanding under this Indenture shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition; but, in either case, no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect; provided, however, so long as a Trust holds Securities of any series, such Trust may not waive compliance or waive any default in compliance by the Company with any covenant or other term contained in this Indenture or the Securities of such series without the approval of the holders of at least a majority in aggregate liquidation preference of the outstanding Preferred Securities issued by such Trust affected, obtained as provided in the Trust Agreement pertaining to such Trust. SECTION 607. RESTRICTION ON PAYMENT OF DIVIDENDS. So long as any Preferred Securities of any series remain outstanding, if at such time (a) the Guarantor shall be in default with respect to its payment obligations under the Trust Securities Guarantee relating to such Preferred Securities, (b) there shall have occurred and be continuing an Event of Default (whether before or after expiration of any period of grace) resulting from a payment default hereunder or (c) the Company shall have elected to extend any interest payment period as provided in Section 312, and any such period, or any extension thereof, shall be continuing, then the Guarantor shall not (i) declare or pay any dividends or distributions on its capital stock, other than dividends paid in shares of capital stock of the Guarantor or dividends declared in connection with the implementation of a stockholders' rights plan or the redemption or repurchase of any such rights pursuant thereto, or (ii) redeem, purchase, acquire or make a liquidation payment with respect to any of the Guarantor's capital stock, or (iii) pay any principal, interest or premium on, or repay, repurchase or redeem any debt securities that are equal or junior in right of payment to the Guarantees, or (iv) make any payments with respect to any guarantee of debt securities by the Guarantor if such guarantee is equal or junior in right of payment to the Guarantees (other than payments under the Guarantee or the Trust Securities Guarantee relating to such Preferred Securities). -36- 44 SECTION 608. MAINTENANCE OF TRUST EXISTENCE. So long as Preferred Securities of any series remain outstanding, the Company shall (i) maintain direct or indirect ownership of all interests in the Trust which issued such Preferred Securities, other than such Preferred Securities, (ii) not voluntarily (to the extent permitted by law) dissolve, liquidate or wind up such Trust, except in connection with a distribution of the Securities to the holders of the Preferred Securities in liquidation of such Trust, (iii) remain the sole Depositor under the Trust Agreement (the "Depositor") of such Trust and timely perform in all material respects all of its duties as Depositor of such Trust, and (iv) use reasonable efforts to cause such Trust to remain a business trust and otherwise continue to be treated as a grantor trust for Federal income tax purposes, provided that any permitted successor to the Guarantor or the Company under this Indenture may succeed to the Guarantor's or the Company's duties as Depositor of such Trust; and provided further that the Guarantor or the Company may permit such Trust to consolidate or merge with or into another business trust or other permitted successor under the Trust Agreement pertaining to such Trust so long as the Guarantor agrees to comply with this Section 608 with respect to such successor business trust or other permitted successor. SECTION 609. RIGHTS OF HOLDERS OF PREFERRED SECURITIES. The Company agrees that, for so long as any Preferred Securities remain outstanding, its obligations under this Indenture will also be for the benefit of the holders from time to time of Preferred Securities, and the Company acknowledges and agrees that such holders will be entitled to enforce this Indenture, as third party beneficiaries, directly against the Company to the same extent as if such holders of Preferred Securities held a principal amount of Securities equal to the stated liquidation amount of the Preferred Securities held by such holders. SECTION 610. PAYMENT OF TRUST COSTS AND EXPENSES. Since each Trust is being formed solely to facilitate an investment in the Securities, the Company, in its capacity as the issuer of the Securities, hereby covenants to pay all debts and obligations (other than with respect to the Preferred Securities and Common Securities) and all costs and expenses of each Trust (including, but not limited to, all costs and expenses relating to the organization of the Trust, the fees and expenses of the Trustees and their counsels and all costs and expenses relating to the operation of the Trust) and to pay any and all taxes, duties, assessments or governmental charges of whatever nature (other than withholding taxes) imposed on the Trust by the United States, or any other taxing authority, so that the net amounts received and retained by the Trust and the Property Trustee after paying any such debts, obligations, costs, expenses, taxes, duties, assessments or other governmental charges will be equal to the amounts the Trust and the Property Trustee would have received had no such debts, obligations, costs, expenses, taxes, duties, assessments or other governmental charges been incurred by or imposed on the Trust. The obligations of the Company to pay all debts, obligations, costs, expenses, taxes, duties, assessments or other governmental charges of each Trust (other than with respect to the Preferred Securities and Common Securities) shall constitute additional indebtedness hereunder and shall survive the resignation or removal of the Trustees and the satisfaction and discharge of this Indenture. -37- 45 ARTICLE SEVEN SATISFACTION AND DISCHARGE SECTION 701. SATISFACTION AND DISCHARGE OF SECURITIES. Any Security or Securities, or any portion of the principal amount thereof, shall be deemed to have been paid for all purposes of this Indenture, and the entire indebtedness of the Company and the Guarantor in respect thereof shall be satisfied and discharged, if there shall have been irrevocably deposited with the Trustee or any Paying Agent (other than the Company or the Guarantor), in trust: (a) money in an amount which shall be sufficient, or (b) in the case of a deposit made prior to the Maturity of such Securities or portions thereof, Eligible Obligations, which shall not contain provisions permitting the redemption or other prepayment thereof at the option of the issuer thereof, the principal of and the interest on which when due, without any regard to reinvestment thereof, will provide moneys which, together with the money, if any, deposited with or held by the Trustee or such Paying Agent, shall be sufficient, or (c) a combination of (a) or (b) which shall be sufficient, to pay when due the principal of and premium, if any, and interest, if any, due and to become due on such Securities or portions thereof; provided, however, that in the case of the provision for payment or redemption of less than all the Securities of any series or Tranche, such Securities or portions thereof shall have been selected by the Trustee as provided herein and, in the case of a redemption, the notice requisite to the validity of such redemption shall have been given or irrevocable authority shall have been given by the Company to the Trustee to give such notice, under arrangements satisfactory to the Trustee; and provided, further, that the Company shall have delivered to the Trustee and such Paying Agent: (x) if such deposit shall have been made prior to the Maturity of such Securities, a Company Order stating that the money and Eligible Obligations deposited in accordance with this Section shall be held in trust, as provided in Section 603; (y) if Eligible Obligations shall have been deposited, an Opinion of Counsel to the effect that such obligations constitute Eligible Obligations and do not contain provisions permitting the redemption or other prepayment thereof at the option of the issuer thereof, and an opinion of an independent public accountant of nationally recognized standing, selected by the Company, to the effect that the other requirements set forth in clause (b) and (c) above have been satisfied; and (z) if such deposit shall have been made prior to the Maturity of such Securities, an Officer's Certificate stating the Company's intention that, upon delivery of such Officer's Certificate, its indebtedness in respect of such -38- 46 Securities or portions thereof will have been satisfied and discharged as contemplated in this Section. Upon the deposit of money or Eligible Obligations, or both, in accordance with this Section, together with the documents required by clauses (x), (y) and (z) above, the Trustee shall, upon Company Request, acknowledge in writing that such Securities or portions thereof are deemed to have been paid for all purposes of this Indenture and that the entire indebtedness of the Company in respect thereof has been satisfied and discharged as contemplated in this Section. In the event that all of the conditions set forth in the preceding paragraph shall have been satisfied in respect of any Securities or portions thereof except that, for any reason, the Officer's Certificate specified in clause (z) (if otherwise required) shall not have been delivered, such Securities or portions thereof shall nevertheless be deemed to have been paid for all purposes of this Indenture, and the Holders of such Securities or portions thereof shall nevertheless be no longer entitled to the benefits provided by this Indenture or of any of the covenants of the Company under Article Six (except the covenants contained in Sections 602 and 603) or any other covenants made in respect of such Securities or portions thereof as contemplated by Section 301 or Section 1201(b), but the indebtedness of the Company in respect of such Securities or portions thereof shall not be deemed to have been satisfied and discharged prior to Maturity for any other purpose; and, upon Company Request, the Trustee shall acknowledge in writing that such Securities or portions thereof are deemed to have been paid for all purposes of this Indenture. If payment at Stated Maturity of less than all of the Securities of any series, or any Tranche thereof, is to be provided for in the manner and with the effect provided in this Section, the Trustee shall select such Securities, or portions of principal amount thereof, in the manner specified by Section 403 for selection for redemption of less than all the Securities of a series or Tranche. In the event that Securities which shall be deemed to have been paid for purposes of this Indenture, and, if such is the case, in respect of which the Company's indebtedness shall have been satisfied and discharged, all as provided in this Section, do not mature and are not to be redeemed within the sixty (60) day period commencing with the date of the deposit of moneys or Eligible Obligations, as aforesaid, the Company shall, as promptly as practicable, give a notice, in the same manner as a notice of redemption with respect to such Securities, to the Holders of such Securities to the effect that such deposit has been made and the effect thereof. Notwithstanding that any Securities shall be deemed to have been paid for purposes of this Indenture, as aforesaid, the obligations of the Company, the Guarantor and the Trustee in respect of such Securities under Sections 304, 305, 306, 404, 602, 603, 907 and 914 and this Article shall survive. The Company shall pay, and shall indemnify the Trustee or any Paying Agent with which Eligible Obligations shall have been deposited as provided in this Section against, any tax, fee or other charge imposed on or assessed against such Eligible Obligations or the principal or interest received in respect of such Eligible Obligations, including, but not limited to, any such tax payable by any entity deemed, for tax purposes, to have been created as a result of such deposit. -39- 47 Anything herein to the contrary notwithstanding, (a) if, at any time after a Security would be deemed to have been paid for purposes of this Indenture, and, if such is the case, the Company's indebtedness in respect thereof would be deemed to have been satisfied and discharged, pursuant to this Section (without regard to the provisions of this paragraph), the Trustee or any Paying Agent, as the case may be, (i) shall be required to return the money or Eligible Obligations, or combination thereof, deposited with it as aforesaid to the Company or its representative under any applicable Federal or State bankruptcy, insolvency or other similar law, or (ii) are unable to apply any money in accordance with this Article with respect to any Securities by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, such Security shall thereupon be deemed retroactively not to have been paid and any satisfaction and discharge of the Company's indebtedness in respect thereof shall retroactively be deemed not to have been effected, and such Security shall be deemed to remain Outstanding and (b) any satisfaction and discharge of the Company's indebtedness in respect of any Security shall be subject to the provisions of the last paragraph of Section 603. SECTION 702. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall upon Company Request cease to be of further effect (except as hereinafter expressly provided), and the Trustee, at the expense of the Company, shall execute such instruments as the Company shall reasonably request to evidence and acknowledge the satisfaction and discharge of this Indenture, when: (a) no Securities remain Outstanding hereunder; and (b) the Company or the Guarantor has paid or caused to be paid all other sums payable hereunder by the Company or the Guarantor; provided, however, that if, in accordance with the last paragraph of Section 701, any Security, previously deemed to have been paid for purposes of this Indenture, shall be deemed retroactively not to have been so paid, this Indenture shall thereupon be deemed retroactively not to have been satisfied and discharged, as aforesaid, and to remain in full force and effect, and the Company shall execute and deliver such instruments as the Trustee shall reasonably request to evidence and acknowledge the same. Notwithstanding the satisfaction and discharge of this Indenture as aforesaid, the obligations of the Company, the Guarantor and the Trustee under Sections 304, 305, 306, 404, 602, 603, 907 and 914 and this Article shall survive. Upon satisfaction and discharge of this Indenture as provided in this Section, the Trustee shall turn over to the Company any and all money, securities and other property then held by the Trustee for the benefit of the Holders of the Securities (other than money and Eligible Obligations held by the Trustee pursuant to Section 703) and shall execute and deliver to the Company and the Guarantor such instruments as, in the judgment of the Company and the Guarantor, shall be necessary, desirable or appropriate to effect or evidence the satisfaction and discharge of this Indenture. -40- 48 SECTION 703. APPLICATION OF TRUST MONEY. Neither the Eligible Obligations nor the money deposited pursuant to Section 701, nor the principal or interest payments on any such Eligible Obligations, shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the principal of and premium, if any, and interest, if any, on the Securities or portions of principal amount thereof in respect of which such deposit was made, all subject, however, to the provisions of Section 603; provided, however, that any cash received from such principal or interest payments on such Eligible Obligations, if not then needed for such purpose, shall, to the extent practicable and upon Company Request and delivery to the Trustee of the documents referred to in clause (y) in the first paragraph of Section 701, be invested in Eligible Obligations of the type described in clause (b) in the first paragraph of Section 701 maturing at such times and in such amounts as shall be sufficient, together with any other moneys and the proceeds of any other Eligible Obligations then held by the Trustee, to pay when due the principal of and premium, if any, and interest, if any, due and to become due on such Securities or portions thereof on and prior to the Maturity thereof, and interest earned from such reinvestment shall be paid over to the Company as received, free and clear of any trust, lien or pledge under this Indenture (except the lien provided by Section 907); and provided, further, that any moneys held in accordance with this Section on the Maturity of all such Securities in excess of the amount required to pay the principal of and premium, if any, and interest, if any, then due on such Securities shall be paid over to the Company free and clear of any trust, lien or pledge under this Indenture (except the lien provided by Section 907); and provided, further, that if an Event of Default shall have occurred and be continuing, moneys to be paid over to the Company pursuant to this Section shall be held until such Event of Default shall have been waived or cured. SECTION 704. REINSTATEMENT. If the Trustee is unable to apply any money or Eligible Obligations in accordance with Section 701 or 702, as the case may be, by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's and the Guarantor's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 701 or 702, as the case may be, until such time as the Trustee is permitted to apply all such money or Eligible Obligations in accordance with Section 701 or 702, as the case may be; provided that, if the Company has made payment of principal of, or interest on any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Eligible Obligations held by the Trustee. ARTICLE EIGHT EVENTS OF DEFAULT; REMEDIES SECTION 801. EVENTS OF DEFAULT. "Event of Default", wherever used herein with respect to Securities of any series, means any one of the following events: -41- 49 (a) default in the payment of any interest on any Security of such series when it becomes due and payable (whether or not payment is prohibited by the subordination provisions of Article Fifteen or the subordination provisions of Article Fourteen hereof) and continuance of such default for a period of 30 days; provided, however, that a valid extension of the interest payment period by the Company as contemplated in Section 312 of this Indenture shall not constitute a default in the payment of interest for this purpose; or (b) default in the payment of the principal of or premium, if any, on any Security of such series when it becomes due and payable (whether or not payment is prohibited by the subordination provisions of Article Fifteen or the subordination provisions of Article Fourteen hereof); or (c) default in the performance of, or breach of, any covenant or warranty of the Company or the Guarantor in this Indenture (other than a covenant or warranty a default in the performance of which or breach of which is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of one or more series of Securities other than such series) and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company and the Guarantor by the Trustee, or to the Company, the Guarantor and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of such series, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder, unless the Trustee, or the Trustee and the Holders of a principal amount of Securities of such series not less than the principal amount of Securities the Holders of which gave such notice, as the case may be, shall agree in writing to an extension of such period prior to its expiration; provided, however, that the Trustee, or the Trustee and the Holders of such principal amount of Securities of such series, as the case may be, shall be deemed to have agreed to an extension of such period if corrective action is initiated by the Company or the Guarantor within such period and is being diligently pursued; or (d) except as provided by the terms hereof, the Securities of such series and the Guarantees endorsed thereon, the cessation of effectiveness of the Guarantee endorsed on a Security of such series or the finding by any judicial proceeding that the Guarantee endorsed on a Security of such series is unenforceable or invalid or the denial or disaffirmation by the Guarantor of its obligations under the Guarantee endorsed on a Security of such series; or (e) the entry by a court having jurisdiction in the premises of (1) a decree or order for relief in respect of the Company or the Guarantor in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (2) a decree or order adjudging the Company or the Guarantor a bankrupt or insolvent, or approving as properly filed a petition by one or more Persons other than the Company or the Guarantor seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or the Guarantor under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official for the Company or the Guarantor or for any -42- 50 substantial part of its property, or ordering the winding up or liquidation of its affairs, and any such decree or order for relief or any such other decree or order shall have remained unstayed and in effect for a period of 90 consecutive days; or (f) the commencement by the Company or the Guarantor of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by the Company or the Guarantor to the entry of a decree or order for relief in respect of the Company or the Guarantor in a case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against the Company or the Guarantor, or the filing by the Company or the Guarantor of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by the Company or the Guarantor to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or the Guarantor or of any substantial part of its property, or the making by the Company or the Guarantor of an assignment for the benefit of creditors, or the admission by the Company or the Guarantor in writing of its inability to pay its debts generally as they become due, or the authorization of such action by the Board of Directors of the Company or the Guarantor; or (g) any other Event of Default specified with respect to Securities of such series. SECTION 802. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an Event of Default shall have occurred and be continuing with respect to Securities of any series at the time Outstanding, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of such series may declare the principal amount (or, if any of the Securities of such series are Discount Securities, such portion of the principal amount of such Securities as may be specified in the terms thereof as contemplated by Section 301) of all of the Securities of such series to be due and payable immediately (provided that the payment of principal and interest on such Securities shall remain subordinated to the extent provided in this Indenture), by a notice in writing to the Company (and to the Trustee if given by Holders), and upon receipt by the Company of notice of such declaration such principal amount (or specified amount) shall become immediately due and payable; provided, however, that if an Event of Default shall have occurred and be continuing with respect to more than one series of Securities, the Trustee or the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities of all such series, considered as one class, may make such declaration of acceleration, and not the Holders of the Securities of any one of such series (provided that the payment of principal and interest on such Securities shall remain subordinated to the extent provided in this Indenture); provided, further, that, in the case of the Securities of a series issued to a Trust if, upon an Event of Default, the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series fail to declare the principal amount (or, if the Securities of that series are Discount Securities, such portion of the principal amount of such series as may be specified in the terms thereof as -43- 51 contemplated by Section 301) of all the Securities of that series to be immediately due and payable, the holders of at least 25% in aggregate liquidation amount of the Preferred Securities then outstanding shall have such right by a notice to the Company and the Trustee; and upon any such declaration such principal amount (or specified portion thereof) of and the accrued interest on all the Securities of such series shall become immediately due and payable. At any time after such a declaration of acceleration with respect to Securities of any series shall have been made and before a judgment or decree for payment of the money due shall have been obtained by the Trustee as hereinafter in this Article provided, such declaration and its consequences shall, without further act, be deemed to have been rescinded and annulled, if the Company or the Guarantor shall have paid or deposited with the Trustee a sum sufficient to pay (a) all overdue interest if any, on all Securities of such series then Outstanding; (1) the principal of and premium, if any, on any Securities of such series then Outstanding which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Securities; (2) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities; (3) all amounts due to the Trustee under Section 907; and (b) all Events of Default with respect to Securities of such series, other than the non-payment of the principal of Securities of such series which shall have become due solely by such declaration of acceleration, shall have been cured or waived as provided in Section 813. No such rescission shall affect any subsequent Event of Default or impair any right consequent thereon. SECTION 803. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE. If an Event of Default described in clause (a) or (b) of Section 801 shall have occurred, the Company or the Guarantor shall, upon demand of the Trustee, pay to it, for the benefit of the Holders of the Securities of the series with respect to which such Event of Default shall have occurred, the whole amount then due and payable on such Securities for principal and premium, if any, and interest, if any, and, to the extent permitted by law, interest on premium, if any, and on any overdue principal and interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover any amounts due to the Trustee under Section 907. -44- 52 If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company and the Guarantor or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company and the Guarantor or any other obligor upon such Securities, wherever situated. If an Event of Default with respect to Securities of any series shall have occurred and be continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or the Guarantor or any other obligor upon the Securities or the property of the Company or the Guarantor or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company or the Guarantor for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (a) to file and prove a claim for the whole amount of principal, premium, if any, and interest, if any, owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for amounts due to the Trustee under Section 907) and of the Holders allowed in such judicial proceeding, and (b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amounts due it under Section 907. 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. -45- 53 SECTION 805. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES. All rights of action and claims under this Indenture, the Securities or the Guarantees endorsed thereon may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders in respect of which such judgment has been recovered. SECTION 806. APPLICATION OF MONEY COLLECTED. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, to the extent permitted by law, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or premium, if any, or interest, if any, upon presentation of the Securities in respect of which or for the benefit of which such money shall have been collected and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 907; SECOND: Subject to the provisions of Articles Fourteen and Fifteen, to the payment of the amounts then due and unpaid upon the Securities for principal of and premium, if any, and interest, if any, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, premium, if any, and interest, if any, respectively; THIRD: To the payment of the remainder, if any, to the Company or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct. SECTION 807. LIMITATION ON SUITS. No Holder shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: (a) such Holder shall have previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of such series; (b) the Holders of 25% in aggregate principal amount of the Outstanding Securities of all series in respect of which an Event of Default shall have occurred and be continuing, considered as one class, shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; -46- 54 (c) such Holder or Holders shall have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have failed to institute any such proceeding; and (e) no direction inconsistent with such written request shall have been given to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series in respect of which an Event of Default shall have occurred and be continuing, considered as one class; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. SECTION 808. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and premium, if any, and (subject to Section 307 and 312) interest, if any, on such Security on the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. In addition, in the case of Securities of a series held by a Trust, a holder of Preferred Trust Securities may directly institute a proceeding for enforcement of payment to such holder of principal of or interest on the Securities having a principal amount equal to the aggregate liquidation preference amount of the Preferred Trust Securities of such holder on or after the due dates specified or provided for in the Securities. SECTION 809. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any Holder or any holder of Preferred Securities 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 or holder of Preferred Securities, then and in every such case, subject to any determination in such proceeding, the Company, the Guarantor, the Trustee and such Holder and such holder of Preferred Securities shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and such Holder and such holder of Preferred Securities shall continue as though no such proceeding had been instituted. -47- 55 SECTION 810. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 811. DELAY OR OMISSION NOT WAIVER. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders or the holders of Preferred Securities may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders or the holders of Preferred Securities, as the case may be. SECTION 812. CONTROL BY HOLDERS OF SECURITIES. If an Event of Default shall have occurred and be continuing in respect of a series of Securities, the Holders of a majority in principal amount of the Outstanding Securities of such series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series; provided, however, that if an Event of Default shall have occurred and be continuing with respect to more than one series of Securities, the Holders of a majority in aggregate principal amount of the Outstanding Securities of all such series, considered as one class, shall have the right to make such direction, and not the Holders of the Securities of any one of such series; and provided, further, that (a) such direction shall not be in conflict with any rule of law or with this Indenture, and could not involve the Trustee in personal liability in circumstances where indemnity would not, in the Trustee's sole discretion, be adequate, and (b) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. SECTION 813. WAIVER OF PAST DEFAULTS. Subject to Section 802, the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default (a) in the payment of the principal of or premium, if any, or interest, if any, on any Security of such series, or -48- 56 (b) in respect of a covenant or provision hereof which under Section 1202 cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected ; provided, however, that so long as a Trust holds the Securities of any series, such Trust may not waive any past default without the consent of at least a majority in aggregate liquidation preference of the outstanding Preferred Securities issued by such Trust affected, obtained as provided in the Trust Agreement pertaining to such Trust. Any such waiver by holders of a majority in aggregate liquidation preference of outstanding Preferred Securities issued by any such Trust shall be deemed to be on behalf of all holders of Preferred Securities issued by any such Trust. Upon any such waiver, such default shall cease to exist, and any and all Events of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION 814. UNDERTAKING FOR COSTS. The Company, the Guarantor and the Trustee agree, and each Holder by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant, in each case in the manner, to the extent, and subject to the exceptions provided in the Trust Indenture Act; provided, that the provisions of this Section shall not be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company or the Guarantor. SECTION 815. WAIVER OF USURY, STAY OR EXTENSION LAWS. Each of the Company and the Guarantor covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and each of the Company and the Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. -49- 57 ARTICLE NINE THE TRUSTEE SECTION 901. CERTAIN DUTIES AND RESPONSIBILITIES. (a) Except during the continuance of an Event of Default with respect to Securities of any series, (1) the Trustee undertakes to perform, with respect to Securities of such series, such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may, with respect to Securities of such series, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture. (b) In case an Event of Default with respect to Securities of any series shall have occurred and be continuing, the Trustee shall exercise, with respect to Securities of such series, such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that (1) this subsection shall not be construed to limit the effect of subsection (a) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities of any one or more series, as provided herein, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series; and -50- 58 (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 902. NOTICE OF DEFAULTS. The Trustee shall give notice of any default hereunder with respect to the Securities of any series to the Holders of Securities of such series in the manner and to the extent required to do so by the Trust Indenture Act, unless such default shall have been cured or waived; provided, however, that in the case of any default of the character specified in Section 801(c), no such notice to Holders shall be given until at least 90 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time, or both, would become, an Event of Default with respect to the Securities of such series. SECTION 903. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of Section 901 and to the applicable provisions of the Trust Indenture Act: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company or the Guarantor mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, or a Guarantor Request or Guarantor Order, as the case may be, or as otherwise expressly provided herein, and any resolution of the Board of Directors of the Company or the Guarantor may be sufficiently evidenced by a Board Resolution thereof; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer's Certificate of the Company or the Guarantor, as appropriate; (d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; -51- 59 (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any Holder pursuant to this Indenture, unless such Holder shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall (subject to applicable legal requirements) be entitled to examine, during normal business hours, the books, records and premises of the Company or the Guarantor, personally or by agent or attorney; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and (h) the Trustee shall not be charged with knowledge of any Event of Default with respect to the Securities of any series for which it is acting as Trustee unless either (1) a Responsible Officer of the Trustee assigned to the Corporate Trustee Administration Department of the Trustee (or any successor division or department of the Trustee) shall have actual knowledge of the Event of Default or (2) written notice of such Event of Default shall have been given to the Trustee by the Company or the Guarantor or any other obligor on such Securities, or by any Holder of such Securities. SECTION 904. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The recitals contained herein and in the Securities and the Guarantees endorsed thereon (except the Trustee's certificates of authentication) shall be taken as the statements of the Company and the Guarantor, as the case may be, and neither the Trustee nor any Authenticating Agent assumes responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities or the Guarantees endorsed thereon. Neither Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Securities or the proceeds thereof. SECTION 905. MAY HOLD SECURITIES. Each of the Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company or the Guarantor, in its individual or any other capacity, may become the owner or pledgee of Securities and/or Preferred Securities and, subject to Sections 908 and 913, may otherwise deal with the Company or the Guarantor with the same rights it would have if it were not the Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. -52- 60 SECTION 906. MONEY HELD IN TRUST. Money held by the Trustee in trust hereunder need not be segregated from other funds, except to the extent required by law. The Trustee shall be under no liability for interest on or investment of any money received by it hereunder except as expressly provided herein or otherwise agreed with, and for the sole benefit of, the Company or the Guarantor. SECTION 907. COMPENSATION AND REIMBURSEMENT. The Company and the Guarantor jointly and severally agree (a) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances reasonably incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence, willful misconduct or bad faith; and (c) to indemnify the Trustee and hold it harmless from and against, any loss, liability or expense reasonably incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. As security for the performance of the obligations of the Company and the Guarantor under this Section, the Trustee shall have a lien prior to the Securities upon all property and funds held or collected by the Trustee as such, other than property and funds held in trust under Section 703 (except moneys payable to the Company as provided in Section 703). When the Trustee incurs expenses or renders services after an Event of Default specified in Section 801, the expenses and compensation for the services (including the fees and expenses of its counsel) are intended to constitute expenses of administration under any bankruptcy Law. The provisions of this Section 907 shall survive the resignation or removal of the Trustee and the termination of this Indenture. SECTION 908. DISQUALIFICATION; CONFLICTING INTERESTS. If the Trustee shall have or acquire any conflicting interest within the meaning of the Trust Indenture Act, it shall either eliminate such conflicting interest or resign to the extent, in the manner and with the effect, and subject to the conditions, provided in the Trust Indenture Act and this Indenture. For purposes of Section 310(b)(1) of the Trust Indenture Act and to the -53- 61 extent permitted thereby, the Trustee, in its capacity as trustee in respect of the Securities of any series, shall not be deemed to have a conflicting interest arising from its capacity as trustee in respect of (i) the Securities of any other series, (ii) the Trust Agreement and the Trust Securities Guarantee Agreement pertaining to each Trust. SECTION 909. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all times be a Trustee hereunder which shall be (a) a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal, State or District of Columbia authority, or (b) if and to the extent permitted by the Commission by rule, regulation or order upon application, a corporation or other Person organized and doing business under the laws of a foreign government, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 or the Dollar equivalent of the applicable foreign currency and subject to supervision or examination by authority of such foreign government or a political subdivision thereof substantially equivalent to supervision or examination applicable to United States institutional trustees and, in either case, qualified and eligible under this Article and the Trust Indenture Act. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of such supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section and the Trust Indenture Act, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. SECTION 910. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 911. (b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company and the Guarantor. If the instrument of acceptance by a successor Trustee required by Section 911 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Trustee, the Company and the Guarantor; provided that so long as -54- 62 any Preferred Securities remain outstanding, the Trust which issued such Preferred Securities shall not execute any Act to remove the Trustee without the consent of the holders of a majority in aggregate liquidation preference of Preferred Securities issued by such Trust outstanding, obtained as provided in the Trust Agreement pertaining to such Trust. (d) If at any time: (1) the Trustee shall fail to comply with Section 908 after written request therefor by the Company, the Guarantor or by any Holder who has been a bona fide Holder for at least six months, or (2) the Trustee shall cease to be eligible under Section 909 or Section 310(a) of the Trust Indenture Act and shall fail to resign after written request therefor by the Company, the Guarantor or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (x) the Company and the Guarantor by Board Resolutions may remove the Trustee with respect to all Securities or (y) subject to Section 814, any Holder who has been a bona fide Holder for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause (other than as contemplated by clause (y) in subsection (d) or this Section), with respect to the Securities of one or more series, the Company and the Guarantor, by Board Resolutions, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time (subject to Section 915) there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 911. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 911, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company and the Guarantor. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company and the Guarantor or the Holders and accepted appointment in the manner required by Section 911, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. -55- 63 (f) So long as no event which is, or after notice or lapse of time, or both, would become, an Event of Default shall have occurred and be continuing, and except with respect to a Trustee appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities pursuant to subsection (e) of this Section, if the Company and the Guarantor shall have delivered to the Trustee (i) Board Resolutions of the Company and the Guarantor appointing a successor Trustee, effective as of a date specified therein, and (ii) an instrument of acceptance of such appointment, effective as of such date, by such successor Trustee in accordance with Section 911, the Trustee shall be deemed to have resigned as contemplated in subsection (b) of this Section, the successor Trustee shall be deemed to have been appointed by the Company and the Guarantor pursuant to subsection (e) of this Section and such appointment shall be deemed to have been accepted as contemplated in Section 911, all as of such date, and all other provisions of this Section and Section 911 shall be applicable to such resignation, appointment and acceptance except to the extent inconsistent with this subsection (f). (g) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. SECTION 911. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In case of the appointment hereunder of a successor Trustee with respect to the Securities of all series, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company, the Guarantor and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company, the Guarantor or the successor Trustee, such retiring Trustee shall, upon payment of all sums owed to it, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. (b) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the Guarantor, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee and (3) shall add to or change any of the provisions -56- 64 of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company, the Guarantor or any successor Trustee, such retiring Trustee, upon payment of all sums owed to it, shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. (c) Upon request of any such successor Trustee, the Company and the Guarantor shall execute any instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in subsection (a) or (b) of this Section, as the case may be. (d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. SECTION 912. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. SECTION 913. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If the Trustee shall be or become a creditor of the Company, the Guarantor or any other obligor upon the Securities (other than by reason of a relationship described in Section 311(b) of the Trust Indenture Act), the Trustee shall be subject to any and all applicable provisions of the Trust Indenture Act regarding the collection of claims against the Company, the Guarantor or such other obligor. For purposes of Section 311(b) of the Trust Indenture Act (a) the term "cash transaction" shall have the meaning provided in Rule 11b-4 under the Trust Indenture Act, and (b) the term "self-liquidating paper" shall have the meaning provided in Rule 11b-6 under the Trust Indenture Act. -57- 65 SECTION 914. APPOINTMENT OF AUTHENTICATING AGENT. The Trustee may appoint an Authenticating Agent or Agents with respect to the Securities of one or more series, or any Tranche thereof, which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series or Tranche issued upon original issuance, exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and the Guarantor and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State or territory thereof or the District of Columbia or the Commonwealth of Puerto Rico, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee, the Company and the Guarantor. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent, the Company and the Guarantor. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and the Guarantor. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section. -58- 66 The provisions of Sections 308, 904 and 905 shall be applicable to each Authenticating Agent. If an appointment with respect to the Securities of one or more series, or any Tranche thereof, shall be made pursuant to this Section, the Securities of such series or Tranche may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternate certificate of authentication substantially in the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. The Chase Manhattan Bank ------------------------------------------------ As Trustee By ---------------------------------- As Authenticating Agent By ---------------------------------- Authorized Officer If all of the Securities of a series may not be originally issued at one time, and if the Trustee does not have an office capable of authenticating Securities upon original issuance located in a Place of Payment where the Company wishes to have Securities of such series authenticated upon original issuance, the Trustee, if so requested by the Company in writing (which writing need not comply with Section 102 and need not be accompanied by an Opinion of Counsel), shall appoint, in accordance with this Section and in accordance with such procedures as shall be acceptable to the Trustee, an Authenticating Agent having an office in a Place of Payment designated by the Company with respect to such series of Securities. SECTION 915. CO-TRUSTEE AND SEPARATE TRUSTEES. At any time or times, for the purpose of meeting the legal requirements of any applicable jurisdiction, the Company, the Guarantor and the Trustee shall have power to appoint, and, upon the written request of the Trustee or of the Holders of at least 33% in principal amount of the Securities then Outstanding, the Company and the Guarantor shall for such purpose join with the Trustee in the execution and delivery of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Trustee either to act as co-trustee, jointly with the Trustee, or to act as separate trustee, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons, in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section. If the Company or the Guarantor does not join in such appointment within 15 days after the receipt by it of a request so to do, or if an Event of Default shall have occurred and be continuing, the Trustee alone shall have power to make such appointment. -59- 67 Should any written instrument or instruments from the Company or the Guarantor be required by any co-trustee or separate trustee to more fully confirm to such co-trustee or separate trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Company or the Guarantor, as the case may be. Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following conditions: (a) the Securities shall be authenticated and delivered, and all rights, powers, duties and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustee hereunder, shall be exercised solely, by the Trustee; (b) the rights, powers, duties and obligations hereby conferred or imposed upon the Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed either by the Trustee or by the Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee. (c) the Trustee at any time, by an instrument in writing executed by it, with the concurrence of the Company and the Guarantor, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section, and, if an Event of Default shall have occurred and be continuing, the Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Company or the Guarantor. Upon the written request of the Trustee, the Company and the Guarantor shall join with the Trustee in the execution and delivery of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section; (d) no co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Trustee, or any other such trustee hereunder, and the Trustee shall not be personally liable by reason of any act or omission of any such co-trustee or separate trustee; and (e) any Act of Holders delivered to the Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee. -60- 68 ARTICLE TEN HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND GUARANTOR SECTION 1001. LISTS OF HOLDERS. Semiannually, not later than June 30 and December 31 in each year, and at such other times as the Trustee may request in writing, the Company and the Guarantor shall furnish or cause to be furnished to the Trustee information as to the names and addresses of the Holders, and the Trustee shall preserve such information and similar information received by it in any other capacity and afford to the Holders access to information so preserved by it, all to such extent, if any, and in such manner as shall be required by the Trust Indenture Act; provided, however, that no such list need be furnished so long as the Trustee shall be the Security Registrar. SECTION 1002. REPORTS BY TRUSTEE, COMPANY AND GUARANTOR. The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the time and in the manner provided pursuant thereto. Reports so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than July 15 in each calendar year with respect to the 12-month period ending on the preceding May 15 commencing May 15, 2002. A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company and the Guarantor. The Company and the Guarantor will notify the Trustee when any Securities are listed on any stock exchange. The Company and the Guarantor shall file with the Trustee (within thirty (30) days after filing with the Commission in the case of reports that pursuant to the Trust Indenture Act must be filed with the Commission and furnished to the Trustee) and transmit to the Holders, such other information, reports and other documents, if any, at such times and in such manner, as shall be required by the Trust Indenture Act. ARTICLE ELEVEN CONSOLIDATION, MERGER, CONVEYANCE, OR OTHER TRANSFER SECTION 1101. COMPANY OR GUARANTOR MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. Neither the Company nor the Guarantor shall consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless (a) the Person formed by such consolidation or into which the Company or Guarantor, as the case may be, is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company or the Guarantor, as the case may be, substantially as an entirety shall be a Person organized and existing -61- 69 under the laws of the United States, any State thereof or the District of Columbia, and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and premium, if any, and interest, if any, on all Outstanding Securities (or the Guarantees endorsed thereon, as the case may be) and the performance of every covenant of this Indenture on the part of the Company or the Guarantor, as the case may be, to be performed or observed; (b) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and (c) the Company or the Guarantor, as the case may be, shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance or other transfer or lease and such indenture supplemental hereto complies with this Article and that all conditions precedent herein provided for relating to such transactions have been complied with. SECTION 1102. SUCCESSOR PERSON SUBSTITUTED. Upon any consolidation by the Company or the Guarantor with or merger by the Company or the Guarantor into any other Person or any conveyance or other transfer or lease of the properties and assets of the Company or the Guarantor substantially as an entirety in accordance with Section 1101, the successor Person formed by such consolidation or into which the Company or the Guarantor, as the case may be, is merged or the Person to which such conveyance, or other transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company or the Guarantor, as the case may be, under this Indenture with the same effect as if such successor Person had been named as the Company or the Guarantor, as the case may be, herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities Outstanding hereunder (or the Guarantees endorsed thereon, as the case may be). SECTION 1103. LIMITATION. Nothing in this Indenture shall be deemed to prevent or restrict: (a) any consolidation or merger after the consummation of which the Company or the Guarantor would be the surviving or resulting entity, (b) any consolidation of the Company with the Guarantor or any other Person all of the outstanding voting securities of which are owned, directly or indirectly, by the Guarantor; or any merger of any of such Persons into any other of such Persons; or any conveyance or other transfer, or lease, of its properties substantially as an entirety by any thereof to any other thereof, (c) any conveyance or other transfer, or lease, of any part of the properties of the Company or the Guarantor which does not constitute the entirety, or substantially the entirety, thereof or -62- 70 (d) the approval by the Company or the Guarantor of, or the consent by the Company or the Guarantor to, any consolidation or merger to which any direct or indirect subsidiary or affiliate of the Company or the Guarantor, as the case requires, may be a party or any conveyance, transfer or lease by any such subsidiary or affiliate of any of its assets. ARTICLE TWELVE SUPPLEMENTAL INDENTURES SECTION 1201. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without the consent of any Holders, the Company, the Guarantor and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (a) to evidence the succession of another Person to the Company or the Guarantor, as the case may be, and the assumption by any such successor of the covenants of the Company or the Guarantor, as the case may be, herein and in the Securities or the Guarantees endorsed thereon, all as provided in Article Eleven; or (b) to add one or more covenants of the Company or the Guarantor or other provisions for the benefit of the Holders of all or any series of Securities, or any Tranche thereof or to surrender any right or power herein conferred upon the Company or the Guarantor (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series); or (c) to add any additional Events of Default with respect to all or any series of Securities Outstanding hereunder (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such series); or (d) to change or eliminate any provision of this Indenture or to add any new provision to this Indenture; provided, however, that if such change, elimination or addition shall adversely affect the interests of the Holders of Securities of any series or Tranche Outstanding on the date of such supplemental indenture in any material respect, such change, elimination or addition shall become effective with respect to such series or Tranche only pursuant to the provisions of Section 1202 hereof or when no Security of such series or Tranche remains Outstanding; or (e) to provide collateral security for the Securities of any series; or (f) to establish the form or terms of Securities of any series or Tranche or any Guarantees as contemplated by Sections 201 and 301; or (g) to provide for the authentication and delivery of bearer securities and coupons appertaining thereto representing interest, if any, thereon and for the procedures -63- 71 for the registration, exchange and replacement thereof and for the giving of notice to, and the solicitation of the vote or consent of, the holders thereof, and for any and all other matters incidental thereto; or (h) to evidence and provide for the acceptance of appointment hereunder by a separate or successor Trustee or co-trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 911(b); or (i) to provide for the procedures required to permit the Company to utilize, at its option, a non certificated system of registration for all, or any series or Tranche of, the Securities; or (j) to change any place or places where (1) the principal of and premium, if any, and interest, if any, on all or any series of Securities, or any Tranche thereof, shall be payable, (2) all or any series of Securities, or any Tranche thereof, may be surrendered for registration of transfer, (3) all or any series of Securities, or any Tranche thereof, may be surrendered for exchange and (4) notices and demands to or upon the Company or the Guarantor in respect of all or any series of Securities, or any Tranche thereof, and this Indenture may be served; or (k) to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other changes to the provisions hereof or to add other provisions with respect to matters or questions arising under this Indenture, provided that such other changes or additions shall not adversely affect the interests of the Holders of Securities of any series or Tranche or, in the case of the Securities of a series issued to a Trust and for so long as any of the Preferred Securities issued by such Trust remain outstanding, the holder of such Preferred 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 -64- 72 to be contained herein or are contained herein to reflect any provision of the Trust Indenture Act as in effect at such date, this Indenture shall be deemed to have been amended to effect such changes or elimination, and the Company, the Guarantor and the Trustee may, without the consent of any Holders, enter into an indenture supplemental hereto to this Indenture to effect such changes or elimination or evidence such amendment. SECTION 1202. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. Subject to the provisions of Section 1201, with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities of all series then Outstanding under this Indenture, considered as one class, by Act of said Holders delivered to the Company, the Guarantor and the Trustee, the Company and the Guarantor, when authorized by Board Resolutions, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture; provided, however, that if there shall be Securities of more than one series Outstanding hereunder and if a proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such series, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all series so directly affected, considered as one class, shall be required; and provided, further, that if the Securities of any series shall have been issued in more than one Tranche and if the proposed supplemental indenture shall directly affect the rights of the Holders of Securities of one or more, but less than all, of such Tranches, then the consent only of the Holders of a majority in aggregate principal amount of the Outstanding Securities of all Tranches so directly affected, considered as one class, shall be required; and provided, further, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security of each series or Tranche so directly affected, (a) change the Stated Maturity of the principal of, or any installment of principal of or interest on (except as provided in Section 312 hereof), any Security (other than pursuant to the terms thereof), or reduce the principal amount thereof or the rate of interest thereon (or the amount of any installment of interest thereon) or change the method of calculating such rate or reduce any premium payable upon the redemption thereof, or reduce the amount of the principal of a Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 802, or change the coin or currency (or other property), in which any Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or (b) reduce the percentage in principal amount of the Outstanding Securities of any series (or, if applicable, in liquidation preference of any series of Preferred Securities) or any Tranche thereof, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with any provision of this Indenture or of any default hereunder and its consequences, or reduce the requirements of Section 1304 for quorum or voting, or -65- 73 (c) modify any of the provisions of this Section, Section 606 or Section 813 with respect to the Securities of any series or any Tranche thereof, except to increase the percentages in principal amount referred to in this Section or such other Sections or to provide that other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to "the Trustee" and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Sections 911(b) and 1201(h). Notwithstanding the foregoing, so long as any of the Preferred Securities remain outstanding, the Trustee may not consent to a supplemental indenture under this Section 1202 without the prior consent, obtained as provided in a Trust Agreement pertaining to a Trust which issued such Preferred Securities, of the holders of not less than a majority in aggregate liquidation preference of all Preferred Securities issued by such Trust affected, considered as one class, or, in the case of changes described in clauses (a), (b) and (c) above, 100% in aggregate liquidation preference of all such Preferred Securities then outstanding which would be affected thereby, considered as one class. A supplemental indenture which (x) changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of the Holders of, or which is to remain in effect only so long as there shall be Outstanding, Securities of one or more particular series, or one or more Tranches thereof, or (y) modifies the rights of the Holders of Securities of such series or Tranches with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series or Tranche. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 1203. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 901) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and that all conditions precedent have been complied with by the Company. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties, immunities or liabilities under this Indenture or otherwise. SECTION 1204. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any supplemental indenture under this Article this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Any supplemental indenture permitted by this Article may restate this Indenture in its entirety, and, upon the execution and -66- 74 delivery thereof, any such restatement shall supersede this Indenture as theretofore in effect for all purposes. SECTION 1205. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. SECTION 1206. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. Securities of any series, or any Tranche thereof, authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company and the Guarantor shall so determine, new Securities of any series, or any Tranche thereof, so modified as to conform, in the opinion of the Trustee, the Company and Guarantor, to any such supplemental indenture may be prepared and executed by the Company (with Guarantees of the Guarantor endorsed thereon), and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series or Tranche. SECTION 1207. MODIFICATION WITHOUT SUPPLEMENTAL INDENTURE. To the extent, if any, that the terms of any particular series of Securities shall have been established in or pursuant to a Board Resolution or an Officer's Certificate pursuant to a supplemental indenture or Board Resolution as contemplated by Section 301, and not in an indenture supplemental hereto, additions to, changes in or the elimination of any of such terms may be effected by means of a supplemental Board Resolution or Officer's Certificate, as the case may be, delivered to, and accepted by, the Trustee; provided, however, that such supplemental Board Resolution or Officer's Certificate shall not be accepted by the Trustee or otherwise be effective unless all conditions set forth in this Indenture which would be required to be satisfied if such additions, changes or elimination were contained in a supplemental indenture shall have been appropriately satisfied. Upon the acceptance thereof by the Trustee, any such supplemental Board Resolution or Officer's Certificate shall be deemed to be a "supplemental indenture" for purposes of Section 1204 and 1206. ARTICLE THIRTEEN MEETINGS OF HOLDERS; ACTION WITHOUT MEETING SECTION 1301. PURPOSES FOR WHICH MEETINGS MAY BE CALLED. A meeting of Holders of Securities of one or more, or all, series, or any Tranche or Tranches thereof, may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by Holders of Securities of such series or Tranches. -67- 75 SECTION 1302. CALL, NOTICE AND PLACE OF MEETINGS. (a) The Trustee may at any time call a meeting of Holders of Securities of one or more, or all, series, or any Tranche or Tranches thereof, for any purpose specified in Section 1301, to be held at such time and at such place in the Borough of Manhattan, The City of New York, as the Trustee shall determine, or, with the approval of the Company, at any other place. Notice of every such meeting, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 106, not less than 21 nor more than 180 days prior to the date fixed for the meeting. (b) If the Trustee shall have been requested to call a meeting of the Holders of Securities of one or more, or all, series, or any Tranche or Tranches thereof, by the Company, the Guarantor or by the Holders of 33% in aggregate principal amount of all of such series and Tranches, considered as one class, for any purpose specified in Section 1301, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have given the notice of such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company, the Guarantor or the Holders of Securities of such series and Tranches in the amount above specified, as the case may be, may determine the time and the place in the Borough of Manhattan, The City of New York, or in such other place as shall be determined or approved by the Company or the Guarantor, for such meeting and may call such meeting for such purposes by giving notice thereof as provided in subsection (a) of this Section. (c) Any meeting of Holders of Securities of one or more, or all, series, or any Tranche or Tranches thereof, shall be valid without notice if the Holders of all Outstanding Securities of such series or Tranches are present in person or by proxy and if representatives of the Company, the Guarantor and the Trustee are present, or if notice is waived in writing before or after the meeting by the Holders of all Outstanding Securities of such series, or by such of them as are not present at the meeting in person or by proxy, and by the Company, the Guarantor and the Trustee. SECTION 1303. PERSONS ENTITLED TO VOTE AT MEETINGS. To be entitled to vote at any meeting of Holders of Securities of one or more, or all, series, or any Tranche or Tranches thereof, a Person shall be (a) a Holder of one or more Outstanding Securities of such series or Tranches, or (b) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of such series or Tranches by such Holder or Holders. The only Persons who shall be entitled to attend any meeting of Holders of Securities of any series or Tranche shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and the Guarantor and their counsel. -68- 76 SECTION 1304. QUORUM; ACTION. The Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of the series and Tranches with respect to which a meeting shall have been called as hereinbefore provided, considered as one class, shall constitute a quorum for a meeting of Holders of Securities of such series and Tranches; provided, however, that if any action is to be taken at such meeting which this Indenture expressly provides may be taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Securities of such series and Tranches, considered as one class, the Persons entitled to vote such specified percentage in principal amount of the Outstanding Securities of such series and Tranches, considered as one class, shall constitute a quorum. In the absence of a quorum within one hour of the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such series and Tranches, be dissolved. In any other case the meeting may be adjourned for such period as may be determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for such period as may be determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Except as provided by Section 1305(e), notice of the reconvening of any meeting adjourned for more than 30 days shall be given as provided in Section 1302(a) not less than ten days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Securities of such series and Tranches which shall constitute a quorum. Except as limited by Section 1202, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in aggregate principal amount of the Outstanding Securities of the series and Tranches with respect to which such meeting shall have been called, considered as one class; provided, however, that, except as so limited, any resolution with respect to any action which this Indenture expressly provides may be taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Securities of such series and Tranches, considered as one class, may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified percentage in principal amount of the Outstanding Securities of such series and Tranches, considered as one class. Any resolution passed or decision taken at any meeting of Holders of Securities duly held in accordance with this Section shall be binding on all the Holders of Securities of the series and Tranches with respect to which such meeting shall have been held, whether or not present or represented at the meeting. SECTION 1305. ATTENDANCE AT MEETINGS; DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS. (a) Attendance at meetings of Holders of Securities may be in person or by proxy; and, to the extent permitted by law, any such proxy shall remain in effect and be binding upon any future Holder of the Securities with respect to which it was given -69- 77 unless and until specifically revoked by the Holder or future Holder of such Securities before being voted. (b) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities in regard to proof of the holding of such Securities and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Section 104 and the appointment of any proxy shall be proved in the manner specified in Section 104. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 104 or other proof. (c) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or the Guarantor or by Holders as provided in Section 1302(b), in which case the Company or the Guarantor or the Holders of Securities of the series and Tranches calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of all series and Tranches represented at the meeting, considered as one class. (d) At any meeting each Holder or proxy shall be entitled to one vote for each $1,000 principal amount of Securities held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security or proxy. (e) Any meeting duly called pursuant to Section 1302 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of all series and Tranches represented at the meeting, considered as one class; and the meeting may be held as so adjourned without further notice. SECTION 1306. COUNTING VOTES AND RECORDING ACTION OF MEETINGS. The vote upon any resolution submitted to any meeting of Holders shall be by written ballots on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities, of the series and Tranches with respect to which the meeting shall have been called, held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports of all votes cast at the meeting. A record, in duplicate, of the proceedings of each meeting of Holders -70- 78 shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 1302 and, if applicable, Section 1304. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company, and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. SECTION 1307. ACTION WITHOUT MEETING. In lieu of a vote of Holders at a meeting as hereinbefore contemplated in this Article, any request, demand, authorization, direction, notice, consent, waiver or other action may be made, given or taken by Holders by written instruments as provided in Section 104. ARTICLE FOURTEEN GUARANTEE SECTION 1401. GUARANTEE. The Guarantor hereby unconditionally guarantees to each Holder of a Security authenticated and delivered by the Trustee, and to the Trustee on behalf of such Holder, the due and punctual payment of the principal of, and premium, if any, and interest, if any, on the Securities of such series when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption, or otherwise, in accordance with the terms of such Security and of this Indenture. In case of the failure of the Company punctually to make any such payment, the Guarantor hereby agrees to cause such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Company. The Guarantor hereby agrees that its obligations hereunder shall be absolute and unconditional irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or this Indenture, any failure to enforce the provisions of such Security or this Indenture, or any waiver, modification or indulgence granted to the Company with respect thereto, by the Holder of such Security or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge or defense of a surety or guarantor; provided, however, that notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor, increase the principal amount of such Security, or increase the interest rate thereon, or change any redemption provisions thereof (including any change to increase any premium payable upon redemption thereof), or change the Stated Maturity thereof, or increase the principal amount of any Discount Security that would be due and payable upon a declaration of acceleration or the maturity thereof pursuant to Article Eight of this Indenture. -71- 79 The Guarantor hereby waives the benefits of diligence, presentment, demand for payment, any requirement that the Trustee or any of the Holders exhaust any right or take any action against the Company or any other Person, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to any Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged in respect of any Security except by complete performance of the obligations contained in such Security and in this Guarantee. This Guarantee shall constitute a guaranty of payment and not of collection. The Guarantor hereby agrees that, in the event of a default in payment of principal, or premium, if any, or interest, if any, on any Security, whether at its Stated Maturity, by declaration of acceleration, call for redemption, or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Security, subject to the terms and conditions set forth in this Indenture, directly against the Guarantor to enforce this Guarantee without first proceeding against the Company. The obligations of the Guarantor hereunder with respect to any Security shall be continuing and irrevocable until the date upon which the entire principal of, premium, if any, and interest on such Security has been, or has been deemed pursuant to the provisions of Article Seven of this Indenture to have been, paid in full or otherwise discharged. The Guarantor shall be subrogated to all rights of the Holders of the Securities upon which its Guarantee is endorsed against the Company in respect of any amounts paid by the Guarantor on account of such Securities pursuant to the provisions of its Guarantee or this Indenture; provided, however, that the Guarantor shall not be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until the principal of, and premium, if any, and interest, if any, on all Securities issued hereunder shall have been paid in full. This Guarantee shall remain in full force and effect and continue notwithstanding any petition filed by or against the Company for liquidation or reorganization, the Company becoming insolvent or making an assignment for the benefit of creditors or a receiver or trustee being appointed for all or any significant part of the Company's assets, and shall, to the fullest extent permitted by law, continue to be effective or reinstated, as the case may be, if at any time payment of any Security, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any Holder of such Security, whether as a "voidable preference," "fraudulent transfer," or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned on a Security, such Security shall, to the fullest extent permitted by law, be reinstated and deemed paid only by such amount paid and not so rescinded, reduced, restored or returned. SECTION 1402. GUARANTEE SUBORDINATE TO SENIOR INDEBTEDNESS OF THE GUARANTOR. The Guarantor, for itself, its successors and assigns, covenants and agrees, and each Holder of the Securities of each series, by its acceptance thereof, likewise covenants and agrees, that the payment under the Guarantee of the principal of and premium, if any, and interest, if any, on each and all of the Securities is hereby expressly subordinated and subject to -72- 80 the extent and in the manner set forth in this Article, in right of payment to the prior payment in full of all Senior Indebtedness of the Guarantor. Each Holder of the Securities of each series, by its acceptance thereof, authorizes and directs the Trustee on its behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article, and appoints the Trustee its attorney-in-fact for any and all such purposes. SECTION 1403. PAYMENT OVER OF PROCEEDS OF SECURITIES. In the event (a) of any insolvency or bankruptcy proceedings or any receivership, liquidation, reorganization or other similar proceedings in respect of the Guarantor or a substantial part of its property, or of any proceedings for liquidation, dissolution or other winding up of the Guarantor, whether or not involving insolvency or bankruptcy, or (b) subject to the provisions of Section 1404, that (i) a default shall have occurred with respect to the payment of principal of or interest on or other monetary amounts due and payable on any Senior Indebtedness of the Guarantor, or (ii) there shall have occurred a default (other than a default in the payment of principal or interest or other monetary amounts due and payable) in respect of any Senior Indebtedness of the Guarantor, as defined therein or in the instrument under which the same is outstanding, permitting the holder or holders thereof to accelerate the maturity thereof (with notice or lapse of time, or both), and such default shall have continued beyond the period of grace, if any, in respect thereof, and, in the cases of subclauses (i) and (ii) of this clause (b), such default shall not have been cured or waived or shall not have ceased to exist, or (c) that the principal of and accrued interest on the Securities of any series shall have been declared due and payable pursuant to Section 801 and such declaration shall not have been rescinded and annulled as provided in Section 802, then: (1) the holders of all Senior Indebtedness of the Guarantor shall first be entitled to receive payment of the full amount due thereon, or provision shall be made for such payment in money or money's worth, before the Holders of any of the Securities are entitled to receive a payment on account of the Guarantee of the principal of or interest on the indebtedness evidenced by the Securities, including, without limitation, any payments made pursuant to Articles Four and Five; (2) any payment by, or distribution of assets of, the Guarantor of any kind or character, whether in cash, property or securities, to which any Holder or the Trustee would be entitled except for the provisions of this Article, shall be paid or delivered by the Person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of such Senior Indebtedness of the Guarantor or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness of the Guarantor may have been issued, ratably according to the aggregate amounts remaining unpaid on account of such Senior Indebtedness of the Guarantor held or represented by each, to the extent necessary to make payment in full of all Senior Indebtedness of the Guarantor remaining unpaid after giving effect to any concurrent payment or -73- 81 distribution (or provision therefor) to the holders of such Senior Indebtedness of the Guarantor, before any payment or distribution is made to the Holders of the indebtedness evidenced by the Securities or to the Trustee under the Guarantee and this Indenture; and (3) in the event that, notwithstanding the foregoing, any payment by, or distribution of assets of, the Guarantor of any kind or character, whether in cash, property or securities, in respect of principal of or interest on the Securities or in connection with any repurchase by the Guarantor of the Securities, shall be received by the Trustee or any Holder before all Senior Indebtedness of the Guarantor is paid in full, or provision is made for such payment in money or money's worth, such payment or distribution in respect of principal of or interest on the Securities or in connection with any repurchase by the Guarantor of the Securities shall be paid over to the holders of such Senior Indebtedness of the Guarantor or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any such Senior Indebtedness of the Guarantor may have been issued, ratably as aforesaid, for application to the payment of all Senior Indebtedness of the Guarantor remaining unpaid until all such Senior Indebtedness of the Guarantor shall have been paid in full, after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Indebtedness of the Guarantor. Notwithstanding the foregoing, at any time after the 123rd day following the date of deposit of cash or Eligible Obligations pursuant to Section 701 or 702 (provided all conditions set out in such Section shall have been satisfied), the funds so deposited and any interest thereon will not be subject to any rights of holders of Senior Indebtedness of the Guarantor including, without limitation, those arising under this Article Fourteen; provided that no event described in clauses (e) and (f) of Section 801 with respect to the Guarantor has occurred during such 123-day period. For purposes of this Article only, the words "cash, property or securities" shall not be deemed to include shares of stock of the Guarantor as reorganized or readjusted, or securities of the Guarantor or any other corporation provided for by a plan or reorganization or readjustment which are subordinate in right of payment to all Senior Indebtedness of the Guarantor which may at the time be outstanding to the same extent as, or to a greater extent than, the Guarantee of the Securities are so subordinated as provided in this Article. The consolidation of the Guarantor with, or the merger of the Guarantor into, another corporation or the liquidation or dissolution of the Guarantor following the conveyance or transfer of its property as an entirety, or substantially as an entirety, to another corporation upon the terms and conditions provided for in Article Eleven hereof shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 1403 if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article Eleven hereof. Nothing in Section 1402 or in this Section 1403 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 907. -74- 82 SECTION 1404. DISPUTES WITH HOLDERS OF CERTAIN SENIOR INDEBTEDNESS OF THE GUARANTOR. Any failure by the Guarantor to make any payment on or perform any other obligation in respect of Senior Indebtedness of the Guarantor, other than any indebtedness incurred by the Guarantor or assumed or guaranteed, directly or indirectly, by the Guarantor for money borrowed (or any deferral, renewal, extension or refunding thereof) or any other obligation as to which the provisions of this Section shall have been waived by the Guarantor in the instrument or instruments by which the Guarantor incurred, assumed, guaranteed or otherwise created such indebtedness or obligation, shall not be deemed a default under clause (b) of Section 1403 if (i) the Guarantor shall be disputing its obligation to make such payment or perform such obligation and (ii) either (A) no final judgment relating to such dispute shall have been issued against the Guarantor which is in full force and effect and is not subject to further review, including a judgment that has become final by reason of the expiration of the time within which a party may seek further appeal or review, or (B) in the event that a judgment that is subject to further review or appeal has been issued, the Guarantor shall in good faith be prosecuting an appeal or other proceeding for review and a stay or execution shall have been obtained pending such appeal or review. SECTION 1405. SUBROGATION. Senior Indebtedness of the Guarantor shall not be deemed to have been paid in full unless the holders thereof shall have received cash (or securities or other property satisfactory to such holders) in full payment of such Senior Indebtedness of the Guarantor then outstanding. Upon the payment in full of all Senior Indebtedness of the Guarantor, the rights of the Holders of the Securities shall be subrogated to the rights of the holders of Senior Indebtedness of the Guarantor to receive any further payments or distributions of cash, property or securities of the Guarantor applicable to the holders of the Senior Indebtedness of the Guarantor until all amounts owing on the Securities shall be paid in full; and such payments or distributions of cash, property or securities received by the Holders of the Securities, by reason of such subrogation, which otherwise would be paid or distributed to the holders of such Senior Indebtedness of the Guarantor shall, as between the Guarantor, its creditors other than the holders of Senior Indebtedness of the Guarantor, and the Holders, be deemed to be a payment by the Guarantor to or on account of Senior Indebtedness of the Guarantor, it being understood that the provisions of this Article are and are intended solely for the purpose of defining the relative rights of the Holders, on the one hand, and the holders of the Senior Indebtedness of the Guarantor, on the other hand. SECTION 1406. OBLIGATION OF THE GUARANTOR UNCONDITIONAL. Nothing contained in this Article or elsewhere in this Indenture or in the Guarantee is intended to or shall impair, as among the Guarantor, its creditors other than the holders of Senior Indebtedness of the Guarantor and the Holders, the obligation of the Guarantor, which is absolute and unconditional, to pay to the Holders, pursuant to the terms of the Guarantee, the principal of and interest on the Securities as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Guarantor other than the holders of Senior Indebtedness of the -75- 83 Guarantor, nor shall anything herein or therein prevent the Trustee or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article of the holders of Senior Indebtedness of the Guarantor in respect of cash, property or securities of the Guarantor received upon the exercise of any such remedy. Upon any payment or distribution of assets or securities of the Guarantor referred to in this Article, the Trustee and the Holders shall be entitled to rely upon any order or decree of a court of competent jurisdiction in which such dissolution, winding up, liquidation or reorganization proceedings are pending for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Indebtedness of the Guarantor and other indebtedness of the Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon, and all other facts pertinent thereto or to this Article. The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness of the Guarantor (or a representative of such holder or a trustee under any indenture under which any instruments evidencing any such Senior Indebtedness of the Guarantor may have been issued) to establish that such notice has been given by a holder of such Senior Indebtedness of the Guarantor or such representative or trustee on behalf of such holder. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness of the Guarantor to participate in any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness of the Guarantor held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the right of such Person under this Article, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment or distribution. SECTION 1407. PRIORITY OF SENIOR INDEBTEDNESS OF THE GUARANTOR UPON MATURITY. Upon the maturity of the principal of any Senior Indebtedness of the Guarantor by lapse of time, acceleration or otherwise, all matured principal of Senior Indebtedness of the Guarantor and interest and premium, if any, thereon shall first be paid in full before any payment of principal or premium, if any, or interest, if any, is made upon the Securities under the Guarantee. SECTION 1408. TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS OF THE GUARANTOR. The Trustee shall be entitled to all rights set forth in this Article with respect to any Senior Indebtedness of the Guarantor at any time held by it, to the same extent as any other holder of Senior Indebtedness of the Guarantor. Nothing in this Article shall deprive the Trustee of any of its rights as such holder. SECTION 1409. NOTICE TO TRUSTEE TO EFFECTUATE SUBORDINATION. Notwithstanding the provisions of this Article or any other provision of the Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which -76- 84 would prohibit the making of any payment of moneys to or by the Trustee unless and until the Trustee shall have received written notice thereof from the Guarantor, from a Holder or from a holder of any Senior Indebtedness of the Guarantor or from any representative or representatives of such holder or any trustee or trustees under any indenture under which any instruments evidencing any such Senior Indebtedness of the Guarantor may have been issued and, prior to the receipt of any such written notice, the Trustee shall be entitled, subject to Section 901, in all respects to assume that no such facts exist; provided, however, that, if prior to the fifth Business Day preceding the date upon which by the terms hereof any such moneys may become payable for any purpose, or in the event of the execution of an instrument pursuant to Section 701 or 702 acknowledging that Securities or portions thereof are deemed to have been paid for all purposes of this Indenture, acknowledging that the entire indebtedness of the Company in respect thereof has been satisfied and discharged or acknowledging satisfaction and discharge of this Indenture, then if prior to the second Business Day preceding the date of such execution, the Trustee shall not have received with respect to such moneys the notice provided for in this Section, then, anything herein contained to the contrary notwithstanding, the Trustee may, in its discretion, receive such moneys and/or apply the same to the purpose for which they were received, and shall not be affected by any notice to the contrary, which may be received by it on or after such date; provided, however, that no such application shall affect the obligations under this Article of the Persons receiving such moneys from the Trustee. SECTION 1410. MODIFICATION, EXTENSION, ETC. OF SENIOR INDEBTEDNESS OF THE GUARANTOR. The holders of Senior Indebtedness of the Guarantor may, without affecting in any manner the subordination of the payment of the principal of and premium, if any, and interest, if any, on the Securities under the Guarantee, at any time or from time to time and in their absolute discretion, agree with the Guarantor to change the manner, place or terms of payment, change or extend the time of payment of, or renew or alter, any Senior Indebtedness of the Guarantor, or amend or supplement any instrument pursuant to which any Senior Indebtedness of the Guarantor is issued, or exercise or refrain from exercising any other of their rights under the Senior Indebtedness of the Guarantor including, without limitation, the waiver of default thereunder, all without notice to or assent from the Holders or the Trustee. SECTION 1411. TRUSTEE HAS NO FIDUCIARY DUTY TO HOLDERS OF SENIOR INDEBTEDNESS OF THE GUARANTOR. With respect to the holders of Senior Indebtedness of the Guarantor, the Trustee undertakes to perform or to observe only such of its covenants and objectives as are specifically set forth in this Indenture, and no implied covenants or obligations with respect to the holders of Senior Indebtedness of the Guarantor shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of the Guarantor, and shall not be liable to any such holders if it shall mistakenly pay over or deliver to the Holders or the Guarantor or any other Person, money or assets to which any holders of Senior Indebtedness of the Guarantor shall be entitled by virtue of this Article or otherwise. -77- 85 SECTION 1412. PAYING AGENTS OTHER THAN THE TRUSTEE. In case at any time any Paying Agent other than the Trustee shall have been appointed by the Guarantor and be then acting hereunder, the term "Trustee" as used in this Article shall in such case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; provided, however, that Sections 1408, 1409 and 1411 shall not apply to the Guarantor if it acts as Paying Agent. SECTION 1413. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS OF THE GUARANTOR NOT IMPAIRED. No right of any present or future holder of Senior Indebtedness of the Guarantor to enforce the subordination herein shall at any time or in any way be prejudiced or impaired by any act or failure to act on the part of the Guarantor or by any noncompliance by the Guarantor with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. SECTION 1414. EFFECT OF SUBORDINATION PROVISIONS; TERMINATION. Notwithstanding anything contained herein to the contrary, other than as provided in the immediately succeeding sentence, all the provisions of this Indenture shall be subject to the provisions of this Article, so far as the same may be applicable thereto. Notwithstanding anything contained herein to the contrary, the provisions of this Article Fourteen shall be of no further effect, and the Guarantee shall no longer be subordinated in right of payment to the prior payment of Senior Indebtedness of the Guarantor, if the Guarantor shall have delivered to the Trustee a notice to such effect. Any such notice delivered by the Guarantor shall not be deemed to be a supplemental indenture for purposes of Article Twelve. SECTION 1415. EXECUTION AND DELIVERY OF GUARANTEE. The Guarantee to be endorsed on the Securities of each series shall include the terms of the Guarantee set forth in this Article Fourteen and any other terms that may be set forth as established pursuant to Section 301. The Guarantor hereby agrees to execute its Guarantee, in a form established pursuant to Section 201, to be endorsed on each Security authenticated and delivered by the Trustee. The Guarantee shall be executed on behalf of the Guarantor by an Authorized Officer of the Guarantor. The signature of any such officer on the Guarantee may be manual or facsimile. A Guarantee bearing the manual or facsimile signature of an individual who was at the time of execution an Authorized Officer of the Guarantor shall bind the Guarantor, notwithstanding that any such individual has ceased to be an Authorized Officer prior to the -78- 86 authentication and delivery of the Security on which such Guarantee is endorsed or was not an Authorized Officer at the date of such Guarantee. The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee endorsed thereon on behalf of the Guarantor. The Guarantor hereby agrees that its Guarantee set forth in this Article Fourteen shall remain in full force and effect notwithstanding any failure to endorse a Guarantee on any Security. The Guarantor by its execution of this Indenture hereby authorizes the Company, in the name and on behalf of the Guarantor, to confirm the applicable Guarantee to the Holder of each Security authenticated and delivered hereunder by its execution and delivery of each such Security, with such Guarantee endorsed thereon, authenticated and delivered by the Trustee. ARTICLE FIFTEEN SUBORDINATION OF SECURITIES SECTION 1501. SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS OF THE COMPANY. The Company, for itself, its successors and assigns, covenants and agrees, and each Holder of the Securities of each series, by its acceptance thereof, likewise covenants and agrees, that the payment of the principal of and premium, if any, and interest, if any, on each and all of the Securities is hereby expressly subordinated and subject to the extent and in the manner set forth in this Article, in right of payment to the prior payment in full of all Senior Indebtedness of the Company. Each Holder of the Securities of each series, by its acceptance thereof, authorizes and directs the Trustee on its behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article, and appoints the Trustee its attorney-in-fact for any and all such purposes. SECTION 1502. PAYMENT OVER OF PROCEEDS OF SECURITIES. In the event (a) of any insolvency or bankruptcy proceedings or any receivership, liquidation, reorganization or other similar proceedings in respect of the Company or a substantial part of its property, or of any proceedings for liquidation, dissolution or other winding up of the Company, whether or not involving insolvency or bankruptcy, or (b) subject to the provisions of Section 1503, that (i) a default shall have occurred with respect to the payment of principal of or interest on or other monetary amounts due and payable on any Senior Indebtedness of the Company, or (ii) there shall have occurred a default (other than a default in the payment of principal or interest or other monetary amounts due and payable) in respect of any Senior Indebtedness of the Company, as defined therein or in the instrument under which the same is outstanding, permitting the holder or holders thereof to accelerate the maturity thereof (with notice or lapse of time, or both), and such default shall have continued beyond the period of grace, if any, in respect thereof, and, in the cases of subclauses (i) and (ii) of this clause (b), such default shall not have been cured or waived or shall not have ceased to exist, or (c) that the principal of and accrued interest on the Securities of any series shall have been declared due and -79- 87 payable pursuant to Section 801 and such declaration shall not have been rescinded and annulled as provided in Section 802, then: (1) the holders of all Senior Indebtedness of the Company shall first be entitled to receive payment of the full amount due thereon, or provision shall be made for such payment in money or money's worth, before the Holders of any of the Securities are entitled to receive a payment on account of the principal of or interest on the indebtedness evidenced by the Securities, including, without limitation, any payments made pursuant to Articles Four and Five; (2) any payment by, or distribution of assets of, the Company of any kind or character, whether in cash, property or securities, to which any Holder or the Trustee would be entitled except for the provisions of this Article, shall be paid or delivered by the Person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of such Senior Indebtedness of the Company or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness of the Company may have been issued, ratably according to the aggregate amounts remaining unpaid on account of such Senior Indebtedness of the Company held or represented by each, to the extent necessary to make payment in full of all Senior Indebtedness of the Company remaining unpaid after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Indebtedness of the Company, before any payment or distribution is made to the Holders of the indebtedness evidenced by the Securities or to the Trustee under this Indenture; and (3) in the event that, notwithstanding the foregoing, any payment by, or distribution of assets of, the Company of any kind or character, whether in cash, property or securities, in respect of principal of or interest on the Securities or in connection with any repurchase by the Company of the Securities, shall be received by the Trustee or any Holder before all Senior Indebtedness of the Company is paid in full, or provision is made for such payment in money or money's worth, such payment or distribution in respect of principal of or interest on the Securities or in connection with any repurchase by the Company of the Securities shall be paid over to the holders of such Senior Indebtedness of the Company or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any such Senior Indebtedness of the Company may have been issued, ratably as aforesaid, for application to the payment of all Senior Indebtedness of the Company remaining unpaid until all such Senior Indebtedness of the Company shall have been paid in full, after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Indebtedness of the Company. Notwithstanding the foregoing, at any time after the 123rd day following the date of deposit of cash or Eligible Obligations pursuant to Section 701 or 702 (provided all conditions set out in such Section shall have been satisfied), the funds so deposited and any interest thereon -80- 88 will not be subject to any rights of holders of Senior Indebtedness of the Company including, without limitation, those arising under this Article Fifteen; provided that no event described in clauses (e) and (f) of Section 801 with respect to the Company has occurred during such 123-day period. For purposes of this Article only, the words "cash, property or securities" shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other corporation provided for by a plan or reorganization or readjustment which are subordinate in right of payment to all Senior Indebtedness of the Company which may at the time be outstanding to the same extent as, or to a greater extent than, the Securities are so subordinated as provided in this Article. The consolidation of the Company with, or the merger of the Company into, another corporation or the liquidation or dissolution of the Company following the conveyance or transfer of its property as an entirety, or substantially as an entirety, to another corporation upon the terms and conditions provided for in Article Eleven hereof shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 1502 if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, comply with the conditions stated in Article Eleven hereof. Nothing in Section 1501 or in this Section 1502 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 907. SECTION 1503. DISPUTES WITH HOLDERS OF CERTAIN SENIOR INDEBTEDNESS OF THE COMPANY. Any failure by the Company to make any payment on or perform any other obligation in respect of Senior Indebtedness of the Company, other than any indebtedness incurred by the Company or assumed or guaranteed, directly or indirectly, by the Company for money borrowed (or any deferral, renewal, extension or refunding thereof) or any other obligation as to which the provisions of this Section shall have been waived by the Company in the instrument or instruments by which the Company incurred, assumed, guaranteed or otherwise created such indebtedness or obligation, shall not be deemed a default under clause (b) of Section 1502 if (i) the Company shall be disputing its obligation to make such payment or perform such obligation and (ii) either (A) no final judgment relating to such dispute shall have been issued against the Company which is in full force and effect and is not subject to further review, including a judgment that has become final by reason of the expiration of the time within which a party may seek further appeal or review, or (B) in the event that a judgment that is subject to further review or appeal has been issued, the Company shall in good faith be prosecuting an appeal or other proceeding for review and a stay or execution shall have been obtained pending such appeal or review. SECTION 1504. SUBROGATION. Senior Indebtedness of the Company shall not be deemed to have been paid in full unless the holders thereof shall have received cash (or securities or other property satisfactory to such holders) in full payment of such Senior Indebtedness of the Company then outstanding. Upon the payment in full of all Senior Indebtedness of the Company, the rights of the Holders of the Securities shall be subrogated to the rights of the holders of Senior Indebtedness of the Company to receive any further payments or distributions of cash, property or securities of the -81- 89 Company applicable to the holders of the Senior Indebtedness of the Company until all amounts owing on the Securities shall be paid in full; and such payments or distributions of cash, property or securities received by the Holders of the Securities, by reason of such subrogation, which otherwise would be paid or distributed to the holders of such Senior Indebtedness of the Company shall, as between the Company, its creditors other than the holders of Senior Indebtedness of the Company, and the Holders, be deemed to be a payment by the Company to or on account of Senior Indebtedness of the Company, it being understood that the provisions of this Article are and are intended solely for the purpose of defining the relative rights of the Holders, on the one hand, and the holders of the Senior Indebtedness of the Company, on the other hand. SECTION 1505. OBLIGATION OF THE COMPANY UNCONDITIONAL. Nothing contained in this Article or elsewhere in this Indenture or in the Securities is intended to or shall impair, as among the Company, its creditors other than the holders of Senior Indebtedness of the Company and the Holders, the obligation of the Company, which is absolute and unconditional, to pay to the Holders the principal of and interest on the Securities as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Company other than the holders of Senior Indebtedness of the Company, nor shall anything herein or therein prevent the Trustee or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article of the holders of Senior Indebtedness of the Company in respect of cash, property or securities of the Company received upon the exercise of any such remedy. Upon any payment or distribution of assets or securities of the Company referred to in this Article, the Trustee and the Holders shall be entitled to rely upon any order or decree of a court of competent jurisdiction in which such dissolution, winding up, liquidation or reorganization proceedings are pending for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Indebtedness of the Company and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon, and all other facts pertinent thereto or to this Article. The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness of the Company (or a representative of such holder or a trustee under any indenture under which any instruments evidencing any such Senior Indebtedness of the Company may have been issued) to establish that such notice has been given by a holder of such Senior Indebtedness of the Company or such representative or trustee on behalf of such holder. In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness of the Company to participate in any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness of the Company held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the right of such Person under this Article, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment or distribution. -82- 90 SECTION 1506. PRIORITY OF SENIOR INDEBTEDNESS OF THE COMPANY UPON MATURITY. Upon the maturity of the principal of any Senior Indebtedness of the Company by lapse of time, acceleration or otherwise, all matured principal of Senior Indebtedness of the Company and interest and premium, if any, thereon shall first be paid in full before any payment of principal or premium, if any, or interest, if any, is made upon the Securities or before any Securities can be acquired by the Company or any sinking fund payment is made with respect to the Securities (except that required sinking fund payments may be reduced by Securities acquired before such maturity of such Senior Indebtedness of the Company). SECTION 1507. TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS OF THE COMPANY. The Trustee shall be entitled to all rights set forth in this Article with respect to any Senior Indebtedness of the Company at any time held by it, to the same extent as any other holder of Senior Indebtedness of the Company. Nothing in this Article shall deprive the Trustee of any of its rights as such holder. SECTION 1508. NOTICE TO TRUSTEE TO EFFECTUATE SUBORDINATION. Notwithstanding the provisions of this Article or any other provision of the Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment of moneys to or by the Trustee unless and until the Trustee shall have received written notice thereof from the Company, from a Holder or from a holder of any Senior Indebtedness of the Company or from any representative or representatives of such holder or any trustee or trustees under any indenture under which any instruments evidencing any such Senior Indebtedness of the Company may have been issued and, prior to the receipt of any such written notice, the Trustee shall be entitled, subject to Section 901, in all respects to assume that no such facts exist; provided, however, that, if prior to the fifth Business Day preceding the date upon which by the terms hereof any such moneys may become payable for any purpose, or in the event of the execution of an instrument pursuant to Section 701 or 702 acknowledging that Securities or portions thereof are deemed to have been paid for all purposes of this Indenture, acknowledging that the entire indebtedness of the Company in respect thereof has been satisfied and discharged or acknowledging satisfaction and discharge of this Indenture, then if prior to the second Business Day preceding the date of such execution, the Trustee shall not have received with respect to such moneys the notice provided for in this Section, then, anything herein contained to the contrary notwithstanding, the Trustee may, in its discretion, receive such moneys and/or apply the same to the purpose for which they were received, and shall not be affected by any notice to the contrary, which may be received by it on or after such date; provided, however, that no such application shall affect the obligations under this Article of the persons receiving such moneys from the Trustee. SECTION 1509. MODIFICATION, EXTENSION, ETC. OF SENIOR INDEBTEDNESS OF THE COMPANY. The holders of Senior Indebtedness of the Company may, without affecting in any manner the subordination of the payment of the principal of and premium, if any, and interest, if any, on the Securities, at any time or from time to time and in their absolute discretion, agree with the Company to change the manner, place or terms of payment, change or extend the time -83- 91 of payment of, or renew or alter, any Senior Indebtedness of the Company, or amend or supplement any instrument pursuant to which any Senior Indebtedness of the Company is issued, or exercise or refrain from exercising any other of their rights under the Senior Indebtedness of the Company including, without limitation, the waiver of default thereunder, all without notice to or assent from the Holders or the Trustee. SECTION 1510. TRUSTEE HAS NO FIDUCIARY DUTY TO HOLDERS OF SENIOR INDEBTEDNESS OF THE COMPANY. With respect to the holders of Senior Indebtedness of the Company, the Trustee undertakes to perform or to observe only such of its covenants and objectives as are specifically set forth in this Indenture, and no implied covenants or obligations with respect to the holders of Senior Indebtedness of the Company shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness of the Company, and shall not be liable to any such holders if it shall mistakenly pay over or deliver to the Holders or the Company or any other Person, money or assets to which any holders of Senior Indebtedness of the Company shall be entitled by virtue of this Article or otherwise. SECTION 1511. PAYING AGENTS OTHER THAN THE TRUSTEE. In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall in such case (unless the context shall otherwise require) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; provided, however, that Sections 1507, 1508 and 1510 shall not apply to the Company if it acts as Paying Agent. SECTION 1512. RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS OF THE COMPANY NOT IMPAIRED. No right of any present or future holder of Senior Indebtedness of the Company to enforce the subordination herein shall at any time or in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. SECTION 1513. . EFFECT OF SUBORDINATION PROVISIONS; TERMINATION. Notwithstanding anything contained herein to the contrary, other than as provided in the immediately succeeding sentence, all the provisions of this Indenture shall be subject to the provisions of this Article, so far as the same may be applicable thereto. Notwithstanding anything contained herein to the contrary, the provisions of this Article Fifteen shall be of no further effect, and the Securities shall no longer be subordinated in right of payment to the prior payment of Senior Indebtedness of the Company, if the Company shall have delivered to the Trustee a notice to such effect. Any such notice delivered by the Company shall not be deemed to be a supplemental indenture for purposes of Article Twelve. -84- 92 ARTICLE SIXTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS SECTION 1601. LIABILITY SOLELY CORPORATE. No recourse shall be had for the payment of the principal of or premium, if any, or interest, if any, on any Securities, any Guarantees or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under this Indenture, against any incorporator, stockholder, officer or director, as such, past, present or future of the Company or the Guarantor or of any predecessor or successor of either of them (either directly or through the Company or the Guarantor, as the case may be, or a predecessor or successor of either of them), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that this Indenture and all the Securities and Guarantees are solely corporate obligations, and that no personal liability whatsoever shall attach to, or be incurred by, any incorporator, stockholder, officer or director, past, present or future, of the Company or of the Guarantor or of any predecessor or successor corporation, either directly or indirectly through the Company or the Guarantor or any predecessor or successor of either of them, because of the indebtedness hereby authorized or under or by reason of any of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or Guarantees or to be implied herefrom or therefrom, and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of this Indenture and the issuance of the Securities and the Guarantees. ------------------------- 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. -85- 93 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. PPL CAPITAL FUNDING, INC. By: /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 THE CHASE MANHATTAN BANK, as Trustee By: /s/ Annette M. Marsula ------------------------------------- Name: Annette M. Marsula Title: Vice President -86- EX-4.2 3 y49005ex4-2.txt FORM OF SUPPLEMENTAL INDENTURE NO. 1 1 [EXECUTION COPY] EXHIBIT 4.2 PPL CAPITAL FUNDING, INC., ISSUER AND PPL CORPORATION, GUARANTOR TO THE CHASE MANHATTAN BANK, TRUSTEE ------------------------------- 7.29% SUBORDINATED NOTES DUE 2006 ------------------------------- SUPPLEMENTAL INDENTURE NO. 1 DATED AS OF MAY 9, 2001 SUPPLEMENTAL TO THE SUBORDINATED INDENTURE DATED AS OF MAY 9, 2001 ESTABLISHING A SERIES OF SECURITIES DESIGNATED 7.29% SUBORDINATED NOTES LIMITED IN AGGREGATE PRINCIPAL AMOUNT TO $592,783,506 2 SUPPLEMENTAL INDENTURE NO. 1, dated as of May 9, 2001 among PPL CAPITAL FUNDING, INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company" or the "Issuer"), PPL CORPORATION, a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania (herein called the "Guarantor"), and THE CHASE MANHATTAN BANK, a New York banking corporation, as Trustee (herein called the "Trustee"), under the Subordinated Indenture dated as of May 9, 2001 (hereinafter called the "Original Indenture"), this Supplemental Indenture No. 1 being supplemental thereto. The Original Indenture and any and all indentures and instruments supplemental thereto are hereinafter sometimes collectively called the "Indenture." RECITALS OF THE COMPANY AND THE GUARANTOR The Original Indenture was authorized, executed and delivered by the Company and the Guarantor to provide for the issuance by the Company from time to time of certain of its subordinated debt securities (the "Securities") (such term and all other capitalized terms used herein without definition having the meanings assigned to them in the Original Indenture), to be issued in one or more series as contemplated therein, and for the Guarantee by the Guarantor of the payment of the principal, premium, if any, and interest, if any, on such Securities. As contemplated by Sections 301 and 1201(f) of the Original Indenture, the Company wishes to establish a series of Securities to be designated "7.29% Subordinated Notes due 2006" to be limited in aggregate principal amount (except as contemplated in Section 301(b) of the Original Indenture) to $592,783,506, such series of Securities to be hereinafter sometimes called "Securities of Series No. 1." As contemplated by Section 201 and 1415 of the Original Indenture, the Guarantor wishes to establish the form and terms of the Guarantees to be endorsed on the Securities of Series No. 1. The Company and the Guarantor wish to issue the Securities of Series No. 1 to PPL Capital Funding Trust I (the "Trust") in exchange for the undivided preferred beneficial ownership interests in the Assets of the Trust (the "Preferred Securities") and common beneficial ownership interests in the assets of the Trust to be issued to the Guarantor ("Common Securities" together with the Preferred Securities, the "Trust Securities"). The Company has duly authorized the execution and delivery of this Supplemental Indenture No. 1 to establish the Securities of Series No. 1 and has duly authorized the issuance of such Securities; the Guarantor has duly authorized the execution and delivery of this Supplemental Indenture No. 1 and has duly authorized its Guarantees of the Securities of Series No. 1; and all acts necessary to make this Supplemental Indenture No. 1 a valid agreement of the Company and the Guarantor, to make the Securities of Series No. 1 valid obligations of the Company, and to make the Guarantees valid obligations of the Guarantor, have been performed. NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE NO. 1 WITNESSETH: 3 For and in consideration of the premises and of the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities of Series No. 1, as follows: ARTICLE ONE DEFINITIONS SECTION 1. Unless the context otherwise requires: (A) a term not defined herein that is defined in the Original Indenture has the same meaning when used in this Supplemental Indenture No. 1; (B) a term defined anywhere in this Supplemental Indenture No. 1 has the same meaning throughout; (C) a reference to a Section or Article is to a Section or Article of this Supplemental Indenture No. 1; (D) the following terms have the meanings given to them in the Trust Agreement: (i) Common Trust Securities; (ii) Delaware Trustee; (iii) Liquidation Amount; (iv) Preferred Trust Securities; (v) Preferred Trust Securities Certificate; (vi) Property Trustee; (vii) Tax Event; (viii) Tax Event Redemption; (E) the following terms have the meanings given to them in the Purchase Contract Agreement: (i) Additional Remarketing (ii) Authorized Newspaper; (iii) Cash Settlement; (iv) Depositary; (v) Failed Final Remarketing; (vi) Final Remarketing; (vii) Final Remarketing Date; (viii) Global Certificate; (ix) Initial Remarketing Date; (x) PEPS Units; (xi) Purchase Contract; (xii) Purchase Contract Settlement Date; (xiii) Quotation Agent; (xiv) Redemption Amount; (xv) Redemption Price; (xvi) Reset Effective Date; (xvii) Remarketing Agent; (xviii) Remarketing Agreement; (xix) Remarketing Date; (xx) Reset Announcement Date; (xxi) Reset Rate; (xxii) Treasury PEPS Unit; (xxiii) Successful Initial Remarketing (xxiv) Treasury Portfolio; (xxv) Benchmark Treasury and (xxvi) Two-Year Benchmark Treasury; (F) the following terms have the meanings given to them in this Section 1: "Business Day" means any day other than a Saturday or Sunday or a day on which banking institutions in the city of New York, New York are authorized or required by law or executive order to remain closed or a day on which the principal corporate trust office of the Trustee or the Property Trustee is closed for business. "Coupon Rate" has the meaning specified in Article Two Section 5(B). "Direct Action" has the meaning specified in Article Five Section 2. 2 4 "Global Subordinated Note" has the meaning specified in Article Two Section 4(A). "Non Book-Entry Preferred Securities" has the meaning specified in Article Two Section 4(B). "Purchase Contract Agreement" means the Purchase Contract Agreement dated as of May 9, 2001, between the Guarantor and The Chase Manhattan Bank, as Purchase Contract Agent. "Remarketing" means the operation of the procedures for remarketing specified in Section 4.07 and Section 4.08 of the Trust Agreement and Sections 5.02 and 5.03 of the Purchase Contract Agreement. "Remarketing Procedures" has the meaning set forth in the Remarketing Agreement. "Trust Agreement" means the Amended and Restated Trust Agreement of the Trust, dated as of May 9, 2001, as amended and restated from time to time. ARTICLE TWO FIRST SERIES OF SECURITIES SECTION 1. There is hereby created a series of Securities designated "7.29% Subordinated Notes due 2006" and limited in aggregate principal amount (except as contemplated in Section 301(b) of the Original Indenture) equal to $592,783,506. The Securities of Series No. 1 shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, the terms, conditions and covenants of the Original Indenture and this Supplemental Indenture No. 1 (including the form of Subordinated Note set forth as Exhibits A and B hereto). The Securities of Series No. 1 shall initially be issued in certificated form to the Trust (the "Initial Securities of Series No. 1") and shall be substantially in the Form of Exhibit B attached hereto. The terms of such Securities of Series No. 1 are herein incorporated by reference and are part of the Supplemental Indenture No. 1. SECTION 2. The Company hereby agrees that, if the Company shall make any deposit of money and/or Eligible Obligations with respect to any Securities of Series No. 1, or any portion of the principal amount thereof, as contemplated by Section 701 of the Indenture, the Company shall not deliver an Officer's Certificate described in clause (z) in the first paragraph of said Section 701 unless the Company shall also deliver to the Trustee, together with such Officer's Certificate, either: (A) an instrument wherein the Company, notwithstanding the satisfaction and discharge of its indebtedness in respect of such Securities, shall assume the obligation (which shall be absolute and unconditional) to irrevocably deposit with the Trustee or Paying Agent such additional sums of money, if any, or additional Eligible Obligations (meeting the requirements of Section 701), if any, or any combination thereof, at such time or times, as shall be necessary, together with the money and/or Eligible Obligations 3 5 theretofore so deposited, to pay when due the principal of and premium, if any, and interest due and to become due on such Securities or portions thereof, all in accordance with and subject to the provisions of said Section 701; provided, however, that such instrument may state that the obligation of the Company to make additional deposits as aforesaid shall be subject to the delivery to the Company by the Trustee of a notice asserting the deficiency accompanied by an opinion of an independent public accountant of nationally recognized standing, selected by the Trustee, showing the calculation thereof (which opinion shall be obtained at the expense of the Company); or (B) an Opinion of Counsel to the effect that the Holders of such Securities, or portions of the principal amount thereof, will not recognize income, gain or loss for United States federal income tax purposes as a result of the satisfaction and discharge of the Company's indebtedness in respect thereof and will be subject to United States federal income tax on the same amounts, at the same times and in the same manner as if such satisfaction and discharge had not been effected. SECTION 3. The entire principal amount of the Securities of Series No. 1 will mature and become due and payable together with any accrued and unpaid interest thereon, on May 18, 2006 (the "Maturity Date"). SECTION 4. Upon a distribution of Trust Securities to holders in connection with the involuntary or voluntary liquidation and dissolution of the Trust: (A) If the Trust Securities are held in book-entry form, the Initial Securities of Series No. 1 may be presented to the Trustee by the Property Trustee in exchange for a Global Security in the form of Exhibit A in an aggregate principal amount equal to all Outstanding Securities of Series No. 1 (a "Global Subordinated Note"). The Depositary for the Global Subordinated Note will be The Depository Trust Company. The Global Subordinated Note will be registered in the name of the Depositary or its nominee, Cede & Co., and delivered by the Trustee to the Depositary or a custodian appointed by the Depositary for crediting to the accounts of its participants pursuant to the instructions of the Property Trustee. The Company upon any such presentation shall execute a Global Subordinated Note in such aggregate principal amount and deliver the same to the Trustee for authentication and delivery in accordance with the Original Indenture and this Supplemental Indenture No. 1. Payments on the Securities of Series No. 1 issued as a Global Subordinated Note will be made to the Depositary or its nominee. (B) If any Trust Securities are held in non book-entry certificated form ("Non Book-Entry Trust Securities"), the Initial Securities of Series No. 1 may be presented to the Trustee by the Property Trustee, and such Non Book-Entry Trust Securities will be deemed to represent beneficial interests in Securities of Series No. 1 presented to the Trustee by the Property Trustee having an aggregate principal amount equal to the aggregate liquidation amount of the Non Book-Entry Trust Securities until the Trust Security Certificates representing such Non Book-Entry Trust Securities are presented to the Security Registrar for transfer or reissuance, at which time such Trust Security Certificates will be canceled and a Subordinated Note in the form of Exhibit B registered in the name of the holder of the Trust Security Certificate or the transferee of the holder 4 6 of such Trust Security Certificate, as the case may be, with an aggregate principal amount equal to the aggregate liquidation amount of the Trust Security Certificate canceled will be executed by the Company and delivered to the Trustee for authentication and delivery in accordance with the Original Indenture and this Supplemental Indenture No. 1. On issue of such Securities of Series No. 1, Securities of Series No. 1 with an equivalent aggregate principal amount that were presented by the Property Trustee to the Trustee will be deemed to have been canceled. SECTION 5. a) The Regular Record Dates for the payment of interest on the Securities of Series No. 1 on any Interest Payment Date, shall be (i) as long as the Securities of Series No. 1 are represented by a Global Subordinated Note or the Initial Securities of Series No. 1, the Business Day preceding each Interest Payment Date or (ii) if the Securities of Series No. 1 are issued pursuant to Section 4(B) above, the fifteenth day (whether or not a Business Day) prior to each Interest Payment Date (as defined below). (A) Each Subordinated Note will bear interest initially at the rate of 7.29% per annum (the "Coupon Rate") from the original date of issuance through and including the day immediately preceding the Reset Effective Date or the Purchase Contract Settlement Date, as applicable, and at the Reset Rate thereafter until the principal thereof is paid or duly made available for payment and shall bear interest, to the extent permitted by law, compounded quarterly, on any overdue principal and premium, if any, and on any overdue installment of interest at the Coupon Rate through and including the day immediately preceding the Reset Effective Date and at the Reset Rate thereafter, payable quarterly in arrears on February 18, May 18, August 18 and November 18 of each year (each, an "Interest Payment Date") commencing on August 18, 2001, to the Person in whose name such Securities of Series No. 1, or any predecessor Subordinated Note, is registered at the close of business on the first day of the month in which the interest payment date falls for such interest installment. At the option of the Company the interest payment may be made by check. Original issue discount will accrue on the Subordinated Notes subject to contingent debt payment rules. (B) The interest rate on the Securities of Series No. 1 will be reset on the Initial Remarketing Date to the applicable Reset Rate (which Reset Rate will be effective on and after the Reset Effective Date). In the event of a Failed Final Remarketing, the interest rate on the Securities of Series No. 1 will be reset on the Final Remarketing Date to the applicable Reset Rate (which Reset Rate will be effective on and after the Purchase Contract Settlement Date). On the applicable Reset Announcement Date, the applicable Reset Spread and the Two-Year Benchmark Treasury or Benchmark Treasury, as applicable, will be announced by the Guarantor, such announcement to be made by a customary method, as determined by the Guarantor. On the Business Day immediately following such Reset Announcement Date, the Holders of Securities of Series No. 1 will be notified of such Reset Spread and Two-Year Benchmark Treasury or Benchmark Treasury, as applicable, by the Guarantor. Such notice shall be sufficiently given to such Holders of Securities of Series No. 1 if published in an Authorized Newspaper. (C) In the case of (a) the first Initial Remarketing on the third Business Day prior to February 18, 2004 or the Final Remarketing, not later than seven calendar days nor more than 15 calendar days immediately preceding the applicable Reset Announcement Date, and in the case of (b) any Additional Remarketing, as soon as practical after the Company has been 5 7 notified of an Additional Remarketing by the Remarketing Agent, the Guarantor will request that the Depositary or its nominee (or any successor depositary or its nominee) notify the Holders of Securities of Series No. 1 of such Reset Announcement Date and, in the case of a Final Remarketing, the procedures to be followed by such holders of Securities of Series No. 1 wishing to settle the related Purchase Contracts with separate cash on the fourth Business Day immediately preceding the Purchase Contract Settlement Date. (D) The amount of interest payable on the Securities of Series No. 1 for any period will be computed (i) for any full quarterly period on the basis of a 360-day year of twelve 30-day months and (ii) for any period shorter than a full quarterly period, on the basis of a 30-day month and, for any period less than a month, on the basis of the actual number of days elapsed per 30-day month. In the event that any date on which interest is payable on the Securities of Series No. 1 is not a Business Day, then payment of the interest payable on such date will be made on the next day that is a Business Day (and without interest or other payment in respect of any such delay), except that, if such Business Day is in the next calendar year, then such payment will be made on the preceding Business Day. SECTION 6. If a Tax Event occurs and is continuing, the Company may, at its option and upon not less than 30 nor more than 60 days' notice to the Holders of the Securities of Series No. 1, redeem the Securities of Series No. 1 in whole (but not in part) within 90 days following the occurrence of such Tax Event, at a price equal to, for each Subordinated Note, the Redemption Price. The aggregate Redemption Price shall be paid prior to 12:00 noon, New York City time, on the date of redemption (the "Tax Event Redemption Date") or such earlier time as the Company determines, provided that the Company shall have deposited with the Trustee an amount sufficient to pay the aggregate Redemption Price by 10:00 a.m. on the Tax Event Redemption Date. Such redemption shall otherwise be in accordance with the provisions of Article IV of the Original Indenture. Except as provided in this Section 6, the Company will have no right to redeem the Securities of Series No. 1. The Securities of Series No. 1 will not be subject to a sinking fund provision. SECTION 7. So long as the Securities of Series No. 1 are held by the Trust, it shall be an Event of Default with respect to the Securities of Series No. 1 if the Trust shall have voluntarily or involuntarily dissolved, wound up its business or otherwise terminated its existence except in connection with (i) the distribution of the Securities of Series No. 1 held by the Trust to the holders of the Preferred Securities and Common Securities in liquidation of their interests in the Trust, (ii) the redemption of all of the outstanding Preferred Securities and Common Securities or (iii) a consolidation, conversion, amalgamation, merger or other transaction involving the Trust that is permitted under Section 3.15 of the Trust Agreement. SECTION 8. If the Securities of Series No. 1 are issued in certificated form, the Paying Agent and the Security Registrar for the Securities of Series No. 1 shall be the Property Trustee. 6 8 SECTION 9. The Place of Payment will be initially the principal corporate trust office of the Trustee which at the date hereof is located at 450 West 33rd Street, New York, New York 10001, Attention: Institutional Trust Services. SECTION 10. Agreed Tax Treatment. Each Security issued hereunder shall provide that each of the Company and, by its acceptance of a Security or a beneficial interest therein, the Holder of, and any Person that acquires a beneficial interest in, such Security (i) intends that such Security constitutes indebtedness and agrees to treat such Security as indebtedness for United States federal, local and state tax purposes , (ii) agrees to treat such Security as indebtedness subject to Trea. Reg. Section 1.1275-4 (the "Contingent Debt Regulations") and to be bound by the Company's determination of the "comparable yield" and "projected payment schedule", within the meaning of the Contingent Debt Regulations, with respect to such Security. For purposes of the foregoing, the Company's determination of the "comparable yield" is 7.61% per annum, compounded quarterly, and the Company's determination of the "projected payment schedule" is $0.5012 for the period ending on August 18, 2001, $0.4556 for each quarter ending on or prior to the date that is three Business Days following a Successful Initial Remarketing and $0.4875 for each quarter ending after such date which includes the final interest payment. A Holder may also obtain the comparable yield and projected payment schedule by submitting a written request for it to the Company at the following address: Two North Ninth Street, Allentown, PA 18101. ARTICLE THREE FORM OF GUARANTEE Guarantees to be endorsed on the Securities of Series No. 1 shall be in substantially the form set forth below: [FORM OF GUARANTEE] PPL Corporation, a corporation organized under the laws of the Commonwealth of Pennsylvania (the "Guarantor", which term includes any successor under the Indenture (the "Indenture") referred to in the Security upon which this Guarantee is endorsed), for value received, hereby unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed, the due and punctual payment of the principal of, and premium, if any, and interest, if any, on such Security when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption, or otherwise, in accordance with the terms of such Security and of the Indenture. In case of the failure of PPL Capital Funding, Inc., a corporation organized under the laws of the State of Delaware (the "Company", which term includes any successor under the Indenture), punctually to make any such payment, the Guarantor hereby agrees to cause such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Company. 7 9 The Guarantor hereby agrees that its obligations hereunder shall be absolute and unconditional irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or the Indenture, any failure to enforce the provisions of such Security or the Indenture, or any waiver, modification or indulgence granted to the Company with respect thereto, by the Holder of such Security or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge or defense of a surety or guarantor; provided, however, that notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of the Guarantor, increase the principal amount of such Security, or increase the interest rate thereon, or change any redemption provisions thereof (including any change to increase any premium payable upon redemption thereof) or change the Stated Maturity thereof. The Guarantor hereby waives the benefits of diligence, presentment, demand for payment, any requirement that the Trustee or the Holder of such Security exhaust any right or take any action against the Company or any other Person, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to such Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged in respect of such Security except by complete performance of the obligations contained in such Security and in this Guarantee. This Guarantee shall constitute a guaranty of payment and not of collection. The Guarantor hereby agrees that, in the event of a default in payment of principal, or premium, if any, or interest, if any, on such Security, whether at its Stated Maturity, by declaration of acceleration, call for redemption, or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Security, subject to the terms and conditions set forth in the Indenture, directly against the Guarantor to enforce this Guarantee without first proceeding against the Company. The obligations of the Guarantor hereunder with respect to such Security shall be continuing and irrevocable until the date upon which the entire principal of, premium, if any, and interest, if any, on such Security has been, or has been deemed pursuant to the provisions of Article Seven of the Indenture to have been, paid in full or otherwise discharged. The obligations evidenced by this Guarantee are, to the extent provided in the Indenture, subordinated and subject in right of payment to the prior payment in full of all Senior Indebtedness (as defined in the Indenture) of the Guarantor, and this Guarantee is issued subject to the provisions of the Indenture with respect thereto. Each Holder of a Security upon which this Guarantee is endorsed, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination so provided and (c) appoints the Trustee his attorney-in fact for any and all such purposes. Each Holder hereof, by his acceptance hereof, hereby 8 10 waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such Holder upon said provisions. The Guarantor shall be subrogated to all rights of the Holder of such Security upon which this Guarantee is endorsed against the Company in respect of any amounts paid by the Guarantor on account of such Security pursuant to the provisions of this Guarantee or the Indenture; provided, however, that the Guarantor shall not be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until the principal of, and premium, if any, and interest, if any, on all Securities issued under the Indenture shall have been paid in full. This Guarantee shall remain in full force and effect and continue notwithstanding any petition filed by or against the Company for liquidation or reorganization, the Company becoming insolvent or making an assignment for the benefit of creditors or a receiver or trustee being appointed for all or any significant part of the Company's assets, and shall, to the fullest extent permitted by law, continue to be effective or reinstated, as the case may be, if at any time payment of the Security upon which this Guarantee is endorsed, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by the Holder of such Security, whether as a "voidable preference," "fraudulent transfer," or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned on such Security, such Security shall, to the fullest extent permitted by law, be reinstated and deemed paid only by such amount paid and not so rescinded, reduced, restored or returned. This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication of the Security upon which this Guarantee is endorsed shall have been manually executed by or on behalf of the Trustee under the Indenture. All terms used in this Guarantee which are defined in the Indenture shall have the meanings assigned to them in such Indenture. This Guarantee shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be governed by and construed in accordance with the laws of the State of New York. IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be executed as of the date first written above. PPL CORPORATION By: 9 11 [END OF FORM] ARTICLE FOUR PAYMENT OF TRUST COSTS AND EXPENSES SECTION 1. In connection with the offering, issuance of Securities of Series No. 1 to the Trust in exchange for the Preferred Securities and Common Securities and subsequent sale of the Preferred Securities by the Company, the Company, as borrower, hereby covenants to (a) pay to the Trust, and reimburse the Trust for, the full amount of any costs, expenses or liabilities of the Trust (other than obligations of the Trust to pay the Holders of any Preferred Securities or Common Securities) including, without limitation, any taxes, duties or other governmental charges of whatever nature (other than withholding taxes) imposed on the Trust by the United States or any taxing authority; and (b) be primarily liable for any indemnification obligations arising with respect to the Trust Agreement. Such payment obligation includes any such costs, expenses or liabilities of the Trust that are required by applicable law to be satisfied in connection with a termination of the Trust. The obligations of the Company to pay all debts, obligations, costs and expenses of the Trust (other than with respect to amounts owing under the Common Securities and the Preferred Securities) shall survive the satisfaction and discharge of the Indenture and the Trust Agreement. ARTICLE FIVE RIGHTS OF HOLDERS OF TRUST SECURITIES SECTION 1. Notwithstanding Section 807 of the Indenture, if the Property Trustee fails to enforce its rights under the Securities of Series No. 1 after a holder of Trust Securities has made a written request, the holder of Trust Securities may, to the fullest extent permitted by law, institute a legal proceeding directly against the Company or the Guarantor to enforce the Property Trustee's rights under the Indenture without first instituting any legal proceeding against the Property Trustee or any other Person. SECTION 2. Notwithstanding any other provision of the Indenture, for as long as any Trust Securities remain outstanding, to the fullest extent permitted by law, if an Event of Default has occurred and is continuing and such event is attributable to the failure of the Company to pay interest or principal on the Securities of Series No. 1 on the date such interest or principal is otherwise payable (or in the case of redemption, the redemption date), then a holder of Trust Securities may institute a proceeding directly against the Company or the Guarantor (a "Direct Action") to enforce payment to such holder of the principal or interest on Securities of Series No. 1 having an aggregate principal amount equal to the aggregate liquidation amount of the Trust Securities of such holder. SECTION 3. The Company will have the right to set off against its obligations to the Trust, as Holder of the Securities of Series No. 1, any payment made to a holder of Trust Securities in connection with a Direct Action. 10 12 SECTION 4. So long as any Trust Securities remain outstanding, (i) no amendment to the Indenture shall be made that adversely affects the holders of the Trust Securities in any material respect, and no termination of the Indenture shall occur, and no waiver of any Event of Default or compliance with any covenant under the Indenture shall be effective, without the prior consent of the holders of at least a majority in Liquidation Amount (as defined in the Trust Agreement) then outstanding unless and until the principal of (and premium, if any, on) the Securities of Series No. 1 and all accrued and unpaid interest thereon have been paid in full, and (ii) no amendment shall be made to this Article Five of this Supplemental Indenture No. 1 that would impair the rights of the holders of the Trust Securities without the prior consent of the holders of each Trust Security then outstanding unless and until the principal of (and premium, if any, on) the Securities of Series No. 1 and all accrued and unpaid interest thereon have been paid in full. ARTICLE SIX REMARKETING SECTION 1. Upon a distribution of the Securities of Series No. 1 upon the liquidation and dissolution of the Trust which occurs prior to the Remarketing of the Preferred Securities pursuant to the Trust Agreement, the Securities of Series No. 1 shall be Remarketed in accordance with the Remarketing Procedures of the Trust Agreement and the Purchase Contract Agreement where all references in the Remarketing Procedures to Preferred Securities shall be read as references to the Securities of Series No. 1, unless the context requires otherwise. Until such a distribution, or if such distribution occurs after the Remarketing of the Preferred Securities pursuant to the Trust Agreement, this Article Five will have no effect. ARTICLE SEVEN ACCELERATION OF MATURITY SECTION 1. Notwithstanding Section 802 of the Indenture, if an Event of Default with respect to the Securities of Series No. 1 specified in clauses (e) or (f) of Section 801 of the Indenture occurs and is continuing, the principal of the Securities of Series No. 1 shall become due and payable immediately, without any declaration, notice or other act on the part of the Trustee or any holder thereof. ARTICLE EIGHT MISCELLANEOUS PROVISIONS SECTION 1. This Supplemental Indenture No. 1 is a supplement to the Original Indenture. As supplemented by this Supplemental Indenture No. 1, the Indenture is in all respects ratified, approved and confirmed, and the Original Indenture and this Supplemental Indenture No. 1 shall together constitute one and the same instrument. SECTION 2. The recitals contained in this Supplemental Indenture No. 1 shall be taken as the statements of the Company and the Guarantor, and the Trustee assumes no 11 13 responsibility for their correctness and makes no representation as to the validity or sufficiency of this Supplemental Indenture No. 1. SECTION 3. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 12 14 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture No. 1 to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first written above. PPL CAPITAL FUNDING, INC. By: /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 THE CHASE MANHATTAN BANK, as Trustee By: /s/ Annette M. Marsula ------------------------------- Name: Annette M. Marsula Title: Vice President 15 EXHIBIT A [FORM OF FACE OF SUBORDINATED NOTE] THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES HEREINAFTER DESCRIBED AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY NOMINEE TO A SUCCESSOR OF THE DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR. REGISTERED REGISTERED PPL CAPITAL FUNDING, INC. 7.29% SUBORDINATED NOTES DUE 2006 $---------- PPL CAPITAL FUNDING, INC., a corporation duly organized and existing under the laws of Delaware (herein called the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to ____________, or registered assigns, the principal sum of ________________ Dollars on May 18, 2006, and to pay interest on said principal sum from May 9, 2001, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on February 18, May 18, August 18 and November 18 of each year (an "Interest Payment Date") commencing August 18, 2001, initially at the rate of 7.29% per annum through and including the day immediately preceding the Reset Effective Date, and at the Reset Rate thereafter until the principal hereof shall have been paid or duly made available for payment and, to the extent permitted by law, to pay interest, compounded quarterly, on any overdue principal and premium, if any, and on any overdue installment of interest at the rate per annum of 7.29% through and including the day immediately preceding the Reset Effective Date, and at the Reset Rate thereafter until May 18, 2006. The amount of interest payable for any period will be A-1 16 computed (1) for any full quarterly period on the basis of a 360-day year of twelve 30-day months and (2) for any period shorter than a full quarterly period, on the basis of a 30-day month and, for any period less than a month, on the basis of the actual number of days elapsed per 30-day month. In the event that any date on which interest is payable is not a Business Day, then payment of the interest payable on such date will be made on the next day that is a Business Day (and without any interest or other payment in respect of such delay), except that, if such Business Day is in the next calendar year, then such payment will be made on the preceding Business Day. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, referred to on the reverse side hereof, be paid to the Holder in whose name this Security (or one or more Predecessor Securities, as defined in said Indenture) is registered at the close of business on the Regular Record Date for such interest installment, which, shall be the close of business on the Business Day preceding such Interest Payment Date. Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and may be paid to the Holder in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date to be fixed by the Trustee referred to on the reverse side hereof for the payment of such defaulted interest, notice whereof shall be given to the Holders of the Security not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Security may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Payment of the principal of and premium, if any, and interest on this Security will be made at the office or agency of the Trustee maintained for that purpose in such coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts. The Company may pay principal and interest by check payable in such money mailed to the Holder's registered address or by wire transfer to a dollar account designated by the Holder. This Security is, to the extent provided in the Indenture, unsecured and will rank in right of payment on a parity with all other unsecured and subordinated obligations of the Company. Unless the Certificate of Authentication hereon has been executed by or on behalf of the Trustee, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. The provisions of this Security are continued on the reverse side hereof, and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. A-2 17 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. PPL CAPITAL FUNDING, INC. By: ------------------------------------ Name: Dated: Title Attest: By: ------------------------------------ Name: Title (FORM OF CERTIFICATE OF AUTHENTICATION) CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series referred to in the within-mentioned Indenture. THE CHASE MANHATTAN BANK, as Trustee By: ------------------------------------ Authorized Officer A-3 18 (FORM OF REVERSE OF SUBORDINATED NOTE) PPL CAPITAL FUNDING, INC. 7.29% SUBORDINATED NOTE DUE 2006 This Subordinated Note is one of a duly authorized series of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under a Subordinated Indenture, dated as of May 9, 2001, as amended and supplemented (as amended and supplemented, the "Indenture"), between the Company, PPL Corporation, as guarantor (herein called the "Guarantor", which term includes any successor guarantor under the Indenture) and The Chase Manhattan Bank, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof, limited in aggregate principal amount to $515,463,918 (or $592,783,506 if the over-allotment option referred to in the Indemnity Agreement is exercised in full). All terms used in this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Security is not subject to any sinking fund, nor may this Security be redeemed at the option of the Company prior to the Maturity Date except upon the occurrence of a Tax Event as described below. The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security upon compliance by the Company with certain conditions set forth therein. If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. If a Tax Event occurs and is continuing, the Company may, at its option and upon not less than 30 nor more than 60 days' notice to the Holders of the Securities, redeem the Securities in whole (but not in part) within 90 days following the occurrence of such Tax Event at the Redemption Price. The Redemption Price shall be paid prior to 12:00 noon, New York City time, on the Tax Event Redemption Date, by check or wire transfer in immediately available funds at such place and to such account as may be designated by each such Holder. A-4 19 If an Event of Default with respect to the Subordinated Notes shall occur and be continuing, the principal of the Subordinated Notes may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities at the time of all series to be affected (voting as a class). The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Outstanding Securities of each series at the time, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest, if any, on this Security at the times, place and rate, and in the coin or currency, herein prescribed. This Security shall be exchangeable for Securities registered in the names of Persons other than the Depositary with respect to such series or its nominee only as provided in this paragraph. This Security shall be so exchangeable if (x) the Depositary is at any time unwilling or unable to continue as Depositary for such series, (y) the Company executes and delivers to the Trustee a Company Order providing that this Security shall be so exchangeable or (z) there shall have occurred and be continuing an Event of Default with respect to the Securities of such series. Securities so issued in exchange for this Security shall be of the same series, having the same interest rate, if any, and maturity and having the same terms as this Security, in authorized denominations and in the aggregate having the same principal amount as this Security and registered in such names as the Depositary for such global Security shall direct. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of a Security of the series of which this Security is a part is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and premium, if any, and interest, if any, on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. A-5 20 The Securities of the series of which this Security is a part are issuable only in registered form without coupons in denominations of $25 and in integral multiples thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Holder in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. This Security shall be governed by and construed in accordance with the laws of the State of New York. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. A-6 21 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM --as tenants in common UNIF GIFT MIN ACT -- _______Custodian________ (Cust) (Minor) TEN ENT --as tenants by the entireties under Uniform Gifts to Minors Act __________________________ (State) JT TEN -- as joint tenants with rights of survivorship and not as tenants in common
Additional abbreviations may also be used though not on the above list. - ------------------------------------------------------------------------------- FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto _________(please insert Social Security or other identifying number of assignee) - ------------------------------------------------------------------------------- PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- the within Security and all rights thereunder, hereby irrevocably constituting and appointing - ------------------------------------------------------------------------------- agent to transfer said Security on the books of the Corporation, with full power of substitution in the premises. Dated: ------------------------------ ------------------------------ NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever. Signature Guarantee: SIGNATURE GUARANTEE Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. A-7 22 [TO BE ATTACHED TO GLOBAL CERTIFICATES AND PLEDGED SUBORDINATED NOTES] SCHEDULE OF INCREASES OR DECREASES THE FOLLOWING INCREASES OR DECREASES IN THE [GLOBAL CERTIFICATE] [PLEDGED SUBORDINATED NOTE] HAVE BEEN MADE:
- ------------------------------------------------------------------------------------------------ AMOUNT OF AMOUNT OF PRINCIPAL AMOUNT DECREASE IN INCREASE IN OF 2006 NOTE PRINCIPAL AMOUNT PRINCIPAL AMOUNT EVIDENCED BY THE OF 2006 NOTE OF 2006 NOTE [GLOBAL EVIDENCED BY THE EVIDENCED BY THE CERTIFICATE] [GLOBAL [GLOBAL [PLEDGED SIGNATURE OF CERTIFICATE] CERTIFICATE] SUBORDINATE NOTE] AUTHORIZED [PLEDGED [PLEDGED FOLLOWING SUCH OFFICER OF SUBORDINATED SUBORDINATED DECREASE OR TRUSTEE OR DATE NOTE] NOTE] INCREASE CUSTODIAL AGENT - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------
A-8 23 EXHIBIT B [FORM OF FACE OF SUBORDINATED NOTE] REGISTERED REGISTERED PPL CAPITAL FUNDING, INC. 7.29% SUBORDINATED NOTES DUE 2006 $---------- PPL CAPITAL FUNDING, INC., a corporation duly organized and existing under the laws of Delaware (herein called the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to _____________, or registered assigns, the principal sum of [-] Dollars on May 18, 2006, and to pay interest on said principal sum from May 9, 2001, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on February 18, May 18, August 18 and November 18 of each year (an "Interest Payment Date") commencing August 18, 2001, initially at the rate of 7.29% per annum through and including the day immediately preceding the Reset Effective Date, and at the Reset Rate thereafter until the principal hereof shall have been paid or duly made available for payment and, to the extent permitted by law, to pay interest, compounded quarterly, on any overdue principal and premium, if any, and on any overdue installment of interest at the rate per annum of 7.29% through and including the day immediately preceding the Reset Effective Date, and at the Reset Rate thereafter until May 18, 2006. The amount of interest payable for any period will be computed (1) for any full quarterly period on the basis of a 360-day year of twelve 30-day months and (2) for any period shorter than a full quarterly period, on the basis of a 30-day month and, for any period less than a month, on the basis of the actual number of days elapsed per 30-day month. In the event that any date on which interest is payable is not a Business Day, then payment of the interest payable on such date will be made on the next day that is a Business Day (and without any interest or other payment in respect of such delay), except that, if such Business Day is in the next calendar year, then such payment will be made on the preceding Business Day. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, referred to on the reverse side hereof, be paid to the Holder in whose name this Security (or one or more Predecessor Securities, as defined in said Indenture) is registered at the close of business on the Regular Record Date for such interest installment, which, shall be the close of business on the Business Day preceding such Interest Payment Date. Any such interest installment not punctually paid or duly provided for shall forthwith cease to be B-1 24 payable to the Holder on such Regular Record Date, and may be paid to the Holder in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date to be fixed by the Trustee referred to on the reverse side hereof for the payment of such defaulted interest, notice whereof shall be given to the Holders of the Security not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Security may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Payment of the principal of and premium, if any, and interest on this Security will be made at the office or agency of the Trustee maintained for that purpose in such coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts. The Company may pay principal and interest by check payable in such money mailed to the Holder's registered address or by wire transfer to a dollar account designated by the Holder. This Security is, to the extent provided in the Indenture, unsecured and will rank in right of payment on a parity with all other unsecured and subordinated obligations of the Company. Unless the Certificate of Authentication hereon has been executed by or on behalf of the Trustee, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. The provisions of this Security are continued on the reverse side hereof, and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. B-2 25 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. PPL CAPITAL FUNDING, INC. By: ------------------------------------- Name: Dated: Title Attest: By: ------------------------------------- Name: Title (FORM OF CERTIFICATE OF AUTHENTICATION) CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series referred to in the within-mentioned Indenture. THE CHASE MANHATTAN BANK, as Trustee By: ------------------------------------ Authorized Officer B-3 26 (FORM OF REVERSE OF SUBORDINATED NOTE) PPL CAPITAL FUNDING, INC. 7.29% SUBORDINATED NOTE DUE 2006 This Subordinated Note is one of a duly authorized series of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under a Subordinated Indenture, dated as of May 9, 2001, as amended and supplemented (as amended and supplemented, the "Indenture"), between the Company, PPL Corporation, as guarantor (herein called the "Guarantor", which term includes any successor guarantor under the Indenture) and The Chase Manhattan Bank, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof, limited in aggregate principal amount to $515,463,918 (or $592,783,506 if the over-allotment option referred to in the Indemnity Agreement is exercised in full). All terms used in this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Security is not subject to any sinking fund, nor may this Security be redeemed at the option of the Company prior to the Maturity Date except upon the occurrence of a Tax Event as described below. The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security upon compliance by the Company with certain conditions set forth therein. If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. If a Tax Event occurs and is continuing, the Company may, at its option and upon not less than 30 nor more than 60 days' notice to the Holders of the Securities, redeem the Securities in whole (but not in part) within 90 days following the occurrence of such Tax Event at the Redemption Price. The Redemption Price shall be paid prior to 12:00 noon, New York City time, on the Tax Event Redemption Date, by check or wire transfer in immediately available funds at such place and to such account as may be designated by each such Holder. B-4 27 If an Event of Default with respect to the Subordinated Notes shall occur and be continuing, the principal of the Subordinated Notes may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities at the time of all series to be affected (voting as a class). The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Outstanding Securities of each series at the time, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest, if any, on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of a Security of the series of which this Security is a part is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and premium, if any, and interest, if any, on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Securities of the series of which this Security is a part are issuable only in registered form without coupons in denominations of $1,000 and in integral multiples thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. B-5 28 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM --as tenants in common UNIF GIFT MIN ACT -- _______Custodian________ (Cust) (Minor) TEN ENT --as tenants by the entireties under Uniform Gifts to Minors Act __________________________ (State) JT TEN -- as joint tenants with rights of survivorship and not as tenants in common
Additional abbreviations may also be used though not on the above list. - -------------------------------------------------------------------------------- FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto (please insert Social Security or other identifying number of assignee) - -------------------------------------------------------------------------------- PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- the within Security and all rights thereunder, hereby irrevocably constituting and appointing - -------------------------------------------------------------------------------- agent to transfer said Security on the books of the Corporation, with full power of substitution in the premises. Dated: ------------------------------ ------------------------------ NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever. Signature Guarantee: SIGNATURE GUARANTEE Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. B-6 29 [TO BE ATTACHED TO GLOBAL CERTIFICATES AND PLEDGED SUBORDINATED NOTES] SCHEDULE OF INCREASES OR DECREASES THE FOLLOWING INCREASES OR DECREASES IN THE [GLOBAL CERTIFICATE] [PLEDGED SUBORDINATED NOTE] HAVE BEEN MADE:
AMOUNT OF AMOUNT OF PRINCIPAL AMOUNT DECREASE IN INCREASE IN OF 2006 NOTE PRINCIPAL AMOUNT PRINCIPAL AMOUNT EVIDENCED BY THE OF 2006 NOTE OF 2006 NOTE [GLOBAL EVIDENCED BY THE EVIDENCED BY THE CERTIFICATE] [GLOBAL [GLOBAL [PLEDGED SIGNATURE OF CERTIFICATE] CERTIFICATE] SUBORDINATE NOTE] AUTHORIZED [PLEDGED [PLEDGED FOLLOWING SUCH OFFICER OF SUBORDINATED SUBORDINATED DECREASE OR TRUSTEE OR DATE NOTE] NOTE] INCREASE CUSTODIAL AGENT - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------
B-7 EX-4.4 4 y49005ex4-4.txt FORM OF PURCHASE CONTRACT AGREEMENT 1 EXECUTION COPY EXHIBIT 4.4 =============================================================================== PPL CORPORATION and THE CHASE MANHATTAN BANK, as Purchase Contract Agent PURCHASE CONTRACT AGREEMENT Dated as of May 9, 2001 =============================================================================== 2 TABLE OF CONTENTS
PAGE ---- RECITALS...........................................................................1 ARTICLE 1 Definitions and Other Provisions of General Applications..............................................1 SECTION 1.01. Definitions.......................................................1 SECTION 1.02. Compliance Certificates and Opinions.............................17 SECTION 1.03. Form of Documents Delivered to Purchase Contract Agent...........18 SECTION 1.04. Acts of Holders; Record Dates....................................18 SECTION 1.05. Notices..........................................................20 SECTION 1.06. Notice to Holders; Waiver........................................21 SECTION 1.07. Effect of Headings and Table of Contents.........................21 SECTION 1.08. Successors and Assigns...........................................21 SECTION 1.09. Separability Clause..............................................21 SECTION 1.10. Benefits of Agreement............................................22 SECTION 1.11. Governing Law....................................................22 SECTION 1.12. Legal Holidays...................................................22 SECTION 1.13. Counterparts.....................................................22 SECTION 1.14. Inspection of Agreement..........................................23 SECTION 1.15. Appointment of Financial Institution as Agent for the Company....23 ARTICLE 2 Certificate Forms................................................23 SECTION 2.01. Forms of Certificates Generally..................................23 SECTION 2.02. Form of Purchase Contract Agent's Certificate of Authentication..24 ARTICLE 3 The Securities...................................................24 SECTION 3.01. Amount; Form and Denominations...................................24 SECTION 3.02. Rights and Obligations Evidenced by the Certificates.............25 SECTION 3.03. Execution, Authentication, Delivery and Dating...................26 SECTION 3.04. Temporary Certificates...........................................26 SECTION 3.05. Registration; Registration of Transfer and Exchange..............27 SECTION 3.06. Book-entry Interests.............................................28 SECTION 3.07. Notices to Holders...............................................29 SECTION 3.08. Appointment of Successor Depositary..............................29 SECTION 3.09. Definitive Certificates..........................................29 SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates...............30 SECTION 3.11. Persons Deemed Owners............................................31 SECTION 3.12. Cancellation.....................................................32 SECTION 3.13. Creation of Treasury PEPS Units by Substitution of Treasury Securities..............................32 SECTION 3.14. Reestablishment of PEPS Units....................................34 SECTION 3.15. Transfer of Collateral upon Occurrence of Termination Event......35 SECTION 3.16. No Consent to Assumption.........................................36
i 3 SECTION 3.17. CUSIP Numbers....................................................37 ARTICLE 4 The Preferred Securities, Subordinated Notes and Applicable Ownership Interest of the Treasury Portfolio..........37 SECTION 4.01. Distributions and Interest Payments; Rights to Distributions and Interest Payments Preserved....................37 SECTION 4.02. Notice and Voting................................................39 SECTION 4.03. Distribution of Subordinated Notes; Tax Event Redemption.........40 ARTICLE 5 The Purchase Contracts...........................................41 SECTION 5.01. Purchase of Shares of Common Stock...............................41 SECTION 5.02. Initial and Additional Remarketing...............................43 SECTION 5.02.A. Contract Adjustment Payments.....................................46 SECTION 5.03. Payment of Purchase Price; Final Remarketing.....................51 SECTION 5.03.A. Failed Final Remarketing.........................................56 SECTION 5.04. Issuance of Shares of Common Stock...............................56 SECTION 5.05. Adjustment of Settlement Rate....................................57 SECTION 5.06. Notice of Adjustments and Certain Other Events...................63 SECTION 5.07. Termination Event; Notice........................................64 SECTION 5.08. Early Settlement.................................................64 SECTION 5.09. No Fractional Shares.............................................66 SECTION 5.10. Charges and Taxes................................................67 ARTICLE 6 Remedies.........................................................67 SECTION 6.01. Unconditional Right of Holders to Receive Contract Adjustment Payments and to Purchase Shares of Common Stock.......67 SECTION 6.02. Restoration of Rights and Remedies...............................67 SECTION 6.03. Rights and Remedies Cumulative...................................68 SECTION 6.04. Delay or Omission Not Waiver.....................................68 SECTION 6.05. Undertaking for Costs............................................68 SECTION 6.06. Waiver of Stay or Extension Laws.................................68 ARTICLE 7 The Purchase Contract Agent......................................69 SECTION 7.01. Certain Duties and Responsibilities..............................69 SECTION 7.02. Notice of Default................................................70 SECTION 7.03. Certain Rights of Purchase Contract Agent........................70 SECTION 7.04. Not Responsible for Recitals or Issuance of Securities...........72 SECTION 7.05. May Hold Securities..............................................72 SECTION 7.06. Money Held in Custody............................................72 SECTION 7.07. Compensation and Reimbursement...................................72 SECTION 7.08. Corporate Purchase Contract Agent Required; Eligibility..........73 SECTION 7.09. Resignation and Removal; Appointment of Successor................73 SECTION 7.10. Acceptance of Appointment by Successor...........................75 SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business......75 SECTION 7.12. Preservation of Information; Communications to Holders...........76 SECTION 7.13. No Obligations of Purchase Contract Agent........................76 SECTION 7.14. Tax Compliance...................................................76
ii 4 ARTICLE 8 Supplemental Agreements..........................................77 SECTION 8.01. Supplemental Agreements Without Consent of Holders...............77 SECTION 8.02. Supplemental Agreements with Consent of Holders..................78 SECTION 8.03. Execution of Supplemental Agreements.............................79 SECTION 8.04. Effect of Supplemental Agreements................................79 SECTION 8.05. Reference to Supplemental Agreements.............................79 ARTICLE 9 Merger, Consolidation, Share Exchange, Sale or Conveyance........80 SECTION 9.01. Covenant Not to Merge, Consolidate, Enter into a Share Exchange, Sell or Convey Property Except Under Certain Conditions.....................................................80 SECTION 9.02. Rights and Duties of Successor Corporation.......................80 SECTION 9.03. Officers' Certificate and Opinion of Counsel Given to Purchase Contract Agent..........................................81 ARTICLE 10 Covenants........................................................81 SECTION 10.01. Performance under Purchase Contracts.............................81 SECTION 10.02. Maintenance of Office or Agency..................................81 SECTION 10.03. Company to Reserve Common Stock..................................82 SECTION 10.04. Covenants as to Common Stock.....................................82 SECTION 10.05. Statements of Officers of the Company as to Default..............82 SECTION 10.06. ERISA............................................................83 Exhibit A Face of PEPS Units Certificate Exhibit B Face of Treasury PEPS Certificate Exhibit C Instruction to Purchase Contract Agent Exhibit D Notice from Purchase Contract Agent to Holders Exhibit E Notice to Settle by Cash Exhibit F Notice from Purchase Contract Agent to Remarketing Agent, Collateral Agent and Indenture Trustee and the Company
iii 5 PURCHASE CONTRACT AGREEMENT, dated as of May 9, 2001, (the "AGREEMENT") between PPL CORPORATION, a Pennsylvania corporation (the "COMPANY"), and THE CHASE MANHATTAN BANK, a New York banking corporation, acting as purchase contract agent for the Holders of Securities (as defined herein) from time to time (the "PURCHASE CONTRACT AGENT"). RECITALS The Company has duly authorized the execution and delivery of this Agreement and the Certificates evidencing the Securities. All things necessary to make the Purchase Contracts, when the Certificates are executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Purchase Contract Agent, as provided in this Agreement, the valid obligations of the Company, and to constitute these presents a valid agreement of the Company, in accordance with its terms, have been done. For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed as follows: ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATIONS SECTION 1.01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular, and nouns and pronouns of the masculine gender include the feminine and neuter genders; (b) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States; (c) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, Exhibit or other subdivision; (d) the following terms have the meanings given to them in the Trust Agreement: (a) Tax Event Redemption; (b) Tax Event; (c)Trust; (d)Trust Agreement; (e) the following term has the meaning given to it in the Remarketing Agreement: (a) Remarketing; and (b) Remarketing Procedures; (f) the following terms have the meanings given to them in this Section 1.01(f): A-1 6 "ACT" has the meaning, with respect to any Holder, set forth in Section 1.04. "ADDITIONAL REMARKETING" has the meaning set forth in Section 5.02. "AFFILIATE" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "AGREEMENT" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof. "APPLICABLE AMOUNT" means the aggregate liquidation amount of the Preferred Securities or the aggregate principal amount of the Subordinated Notes which are components of PEPS Units on the Initial Remarketing Date. "APPLICABLE MARKET VALUE" has the meaning set forth in Section 5.01. "APPLICABLE OWNERSHIP INTEREST" means, with respect to a PEPS Unit and the U.S. Treasury securities in the Treasury Portfolio, (A) a 1/40, or 2.5%, undivided beneficial ownership interest in a $1,000 principal or interest amount of a principal or interest strip in a U.S. Treasury security included in such Treasury Portfolio which matures on or prior to May 17, 2004 and (B) for the scheduled interest payment date on the Preferred Securities or Subordinated Notes, as the case may be, that occurs on the Purchase Contract Settlement Date, in the case of a Successful Initial Remarketing, or for each scheduled interest payment date on the Preferred Securities or Subordinated Notes, as the case may be, that occurs after the Tax Event Redemption Date and on or before the Purchase Contract Settlement Date, in the case of a Tax Event Redemption, a 0.0456% undivided beneficial ownership interest in a $1,000 principal or interest amount of a principal or interest strip in a U.S. Treasury security included in the Treasury Portfolio that matures on or prior to that interest payment date. "APPLICABLE SPREAD" means the spread determined as set forth below, based on the Prevailing Rating of the Subordinated Notes in effect at the close of business on the Business Day immediately preceding the date of a Failed Final Remarketing. 2 7
PREVAILING RATING OF THE SUBORDINATED NOTES SPREAD ------------------------------------------- ------ AA/"Aa".......................................... 3.00% A/"a"............................................ 4.00% BBB/"Baa"........................................ 5.00% Below BBB/"Baa".................................. 7.00%
"APPLICANTS" has the meaning set forth in Section 7.12(b). "AUTHORIZED NEWSPAPER" means a daily newspaper, in the English language, customarily published on each day that is a Business Day in The City of New York, whether or not published on days that are legal holidays, and of general circulation in The City of New York. The Authorized Newspaper for the purposes of the Reset Announcement Date is currently anticipated to be The Wall Street Journal. "BANKRUPTCY CODE" means title 11 of the United States Code, or any other law of the United States that from time to time provides a uniform system of bankruptcy laws. "BENCHMARK TREASURY" means direct obligations of the United States (which may be obligations traded on a when-issued basis only) having a maturity comparable to the remaining term to maturity of the Subordinated Notes, as agreed upon by the Company and the Reset Agent. The rate for the Benchmark Treasury will be the bid side rate displayed at 10:00 A.M., New York City time, (i) in case of the first Initial Remarketing on the third Business Day immediately preceding February 18, 2004 and in the case of the Final Remarketing on the third Business day immediately preceding May 18, 2004, on the seventh Business Day immediately preceding the date of such remarketing, and (ii) and in the case of any Additional Remarketing on the fourth Business Day immediately preceding the date on which the Preferred Securities will be remarketed, in the Telerate system (or if the Telerate system is (a) no longer available on that date or (b) in the opinion of the Reset Agent (after consultation with the Company) no longer an appropriate system from which to obtain such rate, such other nationally recognized quotation system as, in the opinion of the Reset Agent (after consultation with the Company) is appropriate). If such rate is not so displayed, the rate for the Benchmark Treasury shall be, as calculated by the Reset Agent, the yield to maturity for the Benchmark Treasury, expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis, and computed by taking the arithmetic mean of the secondary market bid rates, as of 10:30 A.M., New York City time, (i) in case of the first Initial Remarketing on the third Business Day immediately preceding February 18, 2004 and in the case of the Final Remarketing on the third Business Day immediately preceding May 18, 2004, on the seventh Business Day immediately preceding the date of such remarketing, and (ii) in the case of any Additional Remarketing, on the fourth Business Day immediately preceding the date of such Remarketing, as applicable, of three leading United States government securities dealers selected by the Reset Agent (after consultation with the Company) (which may include the Reset Agent or an Affiliate thereof). 3 8 "BENEFICIAL OWNER" means, with respect to a Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry Interest as reflected on the books of the Depositary or on the books of a Person maintaining an account with such Depositary (directly as a Depositary Participant or as an indirect participant, in each case in accordance with the rules of such Depositary). "BOARD OF DIRECTORS" means the board of directors of the Company or a duly authorized committee of that board. "BOARD RESOLUTION" means one or more resolutions of the Board of Directors, a copy of which has been certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification and delivered to the Purchase Contract Agent. "BOOK-ENTRY INTEREST" means a beneficial interest in a Global Certificate, registered in the name of a Depositary or a nominee thereof, ownership and transfers of which shall be maintained and made through book entries by such Depositary as described in Section 3.06. "BUSINESS DAY" means any day other than a Saturday or Sunday or a day on which banking institutions in New York City are authorized or required by law or executive order to remain closed or a day on which the Indenture Trustee or the Property Trustee is closed for business; provided that for purposes of the second paragraph of Section 1.12 only, the term "Business Day" shall also be deemed to exclude any day on which trading on the New York Stock Exchange, Inc. is closed or suspended. "CASH" shall have the meaning set forth in Section 1.0 of the Pledge Agreement. "CASH SETTLEMENT" has the meaning set forth in Section 5.03(a)(i). "CERTIFICATE" means a PEPS Units Certificate or a Treasury PEPS Units Certificate. "CLEARING AGENCY" means an organization registered as a "Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as a depositary for the Securities and in whose name, or in the name of a nominee of that organization, shall be registered a Global Certificate and which shall undertake to effect book-entry transfers and pledges of the Securities. "CLOSING PRICE" has the meaning set forth in Section 5.01. "CODE" means the Internal Revenue Code of 1986, as amended. "COLLATERAL" has the meaning set forth in Section 1.01 of the Pledge Agreement. 4 9 "COLLATERAL ACCOUNT" has the meaning set forth in Section 1.01 of the Pledge Agreement. "COLLATERAL AGENT" means The Bank of New York, as Collateral Agent under the Pledge Agreement until a successor Collateral Agent shall have become such pursuant to the applicable provisions of the Pledge Agreement, and thereafter "Collateral Agent" shall mean the Person who is then the Collateral Agent thereunder. "COLLATERAL SUBSTITUTION" has the meaning set forth in Section 3.13. "COMMON STOCK" means the PPL Corporation common stock, par value $0.01 per share. "COMPANY" means the Person named as the "Company" in the first paragraph of this instrument until a successor shall have become such pursuant to the applicable provision of this Agreement, and thereafter "Company" shall mean such successor. "CONSTITUENT PERSON" has the meaning set forth in Section 5.05(b). "CONTRACT ADJUSTMENT PAYMENTS" means in the case of PEPS Units and Treasury PEPS Units the amount payable by the Company in respect of each Purchase Contract constituting a part of a PEPS Unit or Treasury PEPS Unit, equal to 0.46 % per annum of the Stated Amount, or $0.1150 per annum, in each case computed on the basis of a 360-day year of twelve 30-day months. "CORPORATE TRUST OFFICE" means the principal corporate trust office of the Purchase Contract Agent at which, at any particular time, its corporate trust business shall be administered, which office at the date hereof is located at 450 West 33rd Street, New York, New York 10001, Attention: Institutional Trust Services. "COUPON RATE" means the percentage rate per annum at which distributions are payable for each Preferred Security initially, or the percentage rate per annum at which each Subordinated Note will bear interest initially and, following a Successful Initial Remarketing or a Successful Final Remarketing, as the case may be, on and after the Reset Effective Date, the Reset Rate as calculated by the Reset Agent, or following a Failed Final Remarketing, on and after May 18, 2004, the Reset Rate that will be equal to the Two-Year Benchmark Treasury in effect on the Final Remarketing Date plus the Applicable Spread. "CURRENT MARKET PRICE" has the meaning set forth in Section 5.05(a)(8). "DEPOSITARY" means a clearing agency registered under the Exchange Act that is designated to act as Depositary for the Securities as contemplated by Sections 3.06, 3.07, 3.08 and 3.09. 5 10 "DEPOSITARY PARTICIPANT" means a broker, dealer, bank, other financial institution or other Person for whom from time to time the Depositary effects book entry transfers and pledges of securities deposited with the Depositary. "DTC" means The Depository Trust Company. "EARLY SETTLEMENT" has the meaning set forth in Section 5.08(a). "EARLY SETTLEMENT AMOUNT" has the meaning set forth in Section 5.08(a). "EARLY SETTLEMENT DATE" has the meaning set forth in Section 5.08(a). "EARLY SETTLEMENT RATE" has the meaning set forth in Section 5.08(b). "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and any statute successor thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder. "EXPIRATION DATE" has the meaning set forth in Section 1.04(e). "EXPIRATION TIME" has the meaning set forth in Section 5.05(a)(6). "FAILED FINAL REMARKETING" has the meaning set forth in Section 5.03(b). "FAILED INITIAL REMARKETING" has the meaning set forth in Section 5.02. "FINAL REMARKETING" has the meaning set forth in Section 5.03(b). "FINAL REMARKETING DATE" has the meaning set forth in Section 5.03(b). "GLOBAL CERTIFICATE" means a Certificate that evidences all or part of the Securities and is registered in the name of a Clearing Agency or a nominee thereof. "HOLDER" means, with respect to a Security, the Person in whose name the Security evidenced by a Certificate is registered in the Security Register; provided, however, that in determining whether the Holders of the requisite number of Securities have voted on any matter, then for the purpose of such determination only (and not for any other purpose hereunder), if the Security remains in the form of one or more Global Certificates and if the Depositary which is the registered holder of such Global Certificate has sent an omnibus proxy assigning voting rights to the Depositary Participants to whose accounts the Securities are credited on the record date, the term "Holder" shall mean such Depositary Participant acting at the direction of the Beneficial Owners. 6 11 "INDENTURE" means the Subordinated Indenture, dated as of May 9, 2001, between the Company and the Indenture Trustee (including any provisions of the TIA that are deemed incorporated therein), as supplemented by the Supplemental Indenture No. 1 dated as of May 9, 2001, pursuant to which the Subordinated Notes will be issued. "INDENTURE TRUSTEE" means The Chase Manhattan Bank, a New York banking corporation, as trustee under the Indenture, or any successor thereto in such capacity. "INITIAL REMARKETING" has the meaning set forth in Section 5.02. "INITIAL REMARKETING DATE" has the meaning set forth in Section 5.02. "ISSUER ORDER" or "ISSUER REQUEST" means a written order or request signed in the name of the Company by its Chairman of the Board, its President or one of its Vice Presidents, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Purchase Contract Agent. "New York Office" shall have the meaning set forth in Section 10.02. "NON-ELECTING SHARE" has the meaning set forth in Section 5.05(b). "NYSE" means the New York Stock Exchange, Inc. "OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the Board, its President or one of its Vice Presidents, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and delivered to the Purchase Contract Agent. Any Officers' Certificate delivered with respect to compliance with a condition or covenant provided for in this Agreement shall include: (i) a statement that each officer signing the Officers' Certificate has read the covenant or condition and the definitions relating thereto; (ii) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate; (iii) a statement that, in the opinion of each such officer, each such officer has made such examination or investigation as is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. "OPINION OF COUNSEL" means a written opinion of counsel, who may be counsel to the Company (and who may be an employee of the Company), and who shall be reasonably acceptable to the Purchase Contract Agent or in the case of an Opinion of 7 12 Counsel delivered under the Pledge Agreement, reasonably acceptable to the Collateral Agent, Securities Intermediary or Custodial Agent, as the case may be. An opinion of counsel may rely on certificates as to matters of fact. "OUTSTANDING SECURITIES" means, with respect to any Security and as of the date of determination, all Securities evidenced by Certificates theretofore authenticated, executed and delivered under this Agreement, except: (iii) If a Termination Event has occurred, (i) Treasury PEPS Units and (ii) PEPS Units for which the underlying Subordinated Notes have been theretofore deposited with the Purchase Contract Agent in trust for the Holders of such PEPS Units; (iv) Securities evidenced by Certificates theretofore cancelled by the Purchase Contract Agent or delivered to the Purchase Contract Agent for cancellation or deemed cancelled pursuant to the provisions of this Agreement; and (v) Securities evidenced by Certificates in exchange for or in lieu of which other Certificates have been authenticated, executed on behalf of the Holder and delivered pursuant to this Agreement, other than any such Certificate in respect of which there shall have been presented to the Purchase Contract Agent proof satisfactory to it that such Certificate is held by a protected purchaser in whose hands the Securities evidenced by such Certificate are valid obligations of the Company; provided, however, that in determining whether the Holders of the requisite number of the Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any Affiliate of the Company shall be disregarded and deemed not to be Outstanding Securities, except that, in determining whether the Purchase Contract Agent shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities that a Responsible Officer of the Purchase Contract Agent knows to be so owned shall be so disregarded. Securities so owned that have been pledged in good faith may be regarded as Outstanding Securities if the pledgee establishes to the satisfaction of the Purchase Contract Agent the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any Affiliate of the Company. "PAYMENT DATE" means for each year February 18, May 18, August 18, and November 18, commencing August 18, 2001. "PEPS UNIT" means the collective rights and obligations of a Holder of a PEPS Units Certificate in respect of a Preferred Security, the Subordinated Notes or an appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case may be, subject in each case to the Pledge thereof, and the related Purchase Contract; provided, 8 13 that the appropriate Applicable Ownership Interest (as specified in clause (B) of the definition of such term) of the Treasury Portfolio shall not be subject to the Pledge. "PEPS UNITS CERTIFICATE" means a certificate evidencing the rights and obligations of a Holder in respect of the number of PEPS Units specified on such certificate. "PERMITTED INVESTMENTS" has the meaning set forth in Section 1.01 of the Pledge Agreement. "PERSON" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or government or any agency or political subdivision thereof or any other entity of whatever nature. "PLAN" means an employee benefit plan that is subject to ERISA, a plan or individual retirement account that is subject to Section 4975 of the Code or any entity whose assets are considered assets of any such plan. "PLEDGE" means the pledge under the Pledge Agreement of the Preferred Securities, the Subordinated Notes, the Treasury Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, in each case constituting a part of the Securities. "PLEDGE AGREEMENT" means the Pledge Agreement, dated as of May 9, 2001, among the Company, the Collateral Agent, the Securities Intermediary and the Purchase Contract Agent, on its own behalf and as attorney-in-fact for the Holders from time to time of the Securities. "PLEDGED PREFERRED SECURITIES" has the meaning set forth in the Pledge Agreement. "PLEDGED SUBORDINATED NOTES" has the meaning set forth in the Pledge Agreement. "PPL CAPITAL FUNDING" means PPL Capital Funding, Inc., a Delaware corporation and the issuer of the Subordinated Notes, and its successors. "PREDECESSOR CERTIFICATE" means a Predecessor PEPS Units Certificate or a Predecessor Treasury PEPS Units Certificate. "PREDECESSOR PEPS UNITS CERTIFICATE" of any particular PEPS Units Certificate means every previous PEPS Units Certificate evidencing all or a portion of the rights and obligations of the Company and the Holder under the PEPS Units evidenced thereby; and, for the purposes of this definition, any PEPS Units Certificate authenticated and delivered under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or 9 14 stolen PEPS Units Certificate shall be deemed to evidence the same rights and obligations of the Company and the Holder as the mutilated, destroyed, lost or stolen PEPS Units Certificate. "PREDECESSOR TREASURY PEPS UNITS CERTIFICATE" of any particular Treasury PEPS Units Certificate means every previous Treasury PEPS Units Certificate evidencing all or a portion of the rights and obligations of the Company and the Holder under the Treasury PEPS Units evidenced thereby; and, for the purposes of this definition, any Treasury PEPS Units Certificate authenticated and delivered under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury PEPS Units Certificate shall be deemed to evidence the same rights and obligations of the Company and the Holder as the mutilated, destroyed, lost or stolen Treasury PEPS Units Certificate. "PREFERRED SECURITIES" means the Preferred Securities of the Trust, each having a stated liquidation amount of $25, representing undivided beneficial interests in the assets of the Trust. "PREVAILING RATING" with respect to the Subordinated Notes means: (1) AA/"Aa" if the Subordinated Notes have a credit rating of AA- or better by Standard & Poor's Ratings Services and "Aa3" or better by Moody's Investors Service Investors Service, Inc. or the equivalent of such ratings by such agencies or a substitute rating agency or substitute rating agencies selected by the Remarketing Agent (after consultation with the Company); (2) if not under clause (1) above, then A/"a" if the Subordinated Notes have a credit rating of A- or better by Standard & Poor's Rating Services and "A3" or better by Moody's Investors Service or the equivalent of such ratings by such agencies or a substitute rating agency or substitute rating agencies selected by the Remarketing Agent (after consultation with the Company); (3) if not under clauses (1) or (2) above, then BBB/"Baa" if the Subordinated Notes have a credit rating of BBB- or better by Standard & Poor's Rating Services and "Baa3" or better by Moody's Investors Service or the equivalent of such ratings by such agencies or a substitute rating agency or substitute rating agencies selected by the Remarketing Agent (after consultation with the Company); or (4) if not under clauses (1) through (3) above, then Below BBB/"Baa." Notwithstanding the foregoing, (A) if (i) the credit rating of the Subordinated Notes by Standard & Poor's Rating Services shall be on the "Credit Watch" of Standard & Poor's Rating Services with a designation of "negative implications" or "developing", or (ii) the credit rating of the Subordinated Notes by Moody's Investors Service shall be on the "Corporate Credit Watch List" of Moody's Investors Service with a designation of "downgrade" or "uncertain", or, in each case, on any successor list of Standard & Poor's 10 15 Rating Services or Moody's Investors Service with a comparable designation, the prevailing ratings of the Subordinated Notes shall be deemed to be within a range one full level lower in the above table than those actually assigned to the Subordinated Notes by Moody's Investors Service and Standard & Poor's Rating Services and (B) if the Subordinated Notes are rated by only one rating agency on or before the Remarketing Date, the prevailing rating will at all times be determined without reference to the rating of any other rating agency; provided that if no such rating agency shall have in effect a rating of the Subordinated Notes and the Remarketing Agent is unable to identify a substitute rating agency or rating agencies, the prevailing rating shall be Below BBB/"Baa." "PRIMARY TREASURY DEALER" means a primary U.S. government securities dealer in New York City. "PROCEEDS" has the meaning set forth in Section 1.01 of the Pledge Agreement. "PROPERTY TRUSTEE" means The Chase Manhattan Bank, as initial property trustee under the Trust Agreement, or any successors thereto in such capacity that is a financial institution unaffiliated with the Company. "PURCHASE CONTRACT" means, with respect to any Security, the contract forming a part of such Security and obligating the Company to (i) sell, and the Holder of such Security to purchase, shares of Common Stock and (ii) pay the Holder Contract Adjustment Payments, if any, on the terms and subject to the conditions set forth in Article Five hereof. "PURCHASE CONTRACT AGENT" means the Person named as the "Purchase Contract Agent" in the first paragraph of this Agreement until a successor Purchase Contract Agent shall have become such pursuant to the applicable provisions of this Agreement, and thereafter "Purchase Contract Agent" shall mean such Person. "PURCHASE CONTRACT SETTLEMENT DATE" means May 18, 2004. "PURCHASE CONTRACT SETTLEMENT FUND" has the meaning set forth in Section 5.04. "PURCHASE PRICE" has the meaning set forth in Section 5.01. "PURCHASED SHARES" has the meaning set forth in Section 5.05(a)(6). "QUOTATION AGENT" means (i) Morgan Stanley & Co. Incorporated and its respective successors, provided, however, that if the foregoing shall cease to be a Primary Treasury Dealer, the Company shall substitute therefore another Primary Treasury Dealer or (ii) any other Primary Treasury Dealer selected by the Company. 11 16 "RECORD DATE" for the interest payable on any Payment Date means, as to any Global Certificate, the Business Day next preceding such Payment Date, and as to any other Certificate, the fifteenth day prior to such Payment Date. "REDEMPTION AMOUNT" means, for each Subordinated Note, the product of (i) the principal amount of such Subordinated Note and (ii) a fraction whose numerator is the applicable Treasury Portfolio Purchase Price and whose denominator is the applicable Tax Event Redemption Amount. "REDEMPTION PRICE" means the redemption price per Subordinated Note equal to the Redemption Amount plus any accrued and unpaid interest on such Subordinated Note to the date of redemption. "REFERENCE DEALER" means a dealer engaged in trading of convertible securities. "REFERENCE PRICE" has the meaning set forth in Section 5.01. "REMARKETING AGENT" has the meaning set forth in Section 5.02. "REMARKETING AGREEMENT" means the Remarketing Agreement, dated as of May 9, 2001, among the Company, PPL Capital Funding, the Trust and the Remarketing Agent. "REMARKETING FEE" has the meaning set forth in Section 5.02. "REORGANIZATION EVENT" has the meaning set forth in Section 5.05(b). "RESET AGENT" means Morgan Stanley & Co. Incorporated or, if Morgan Stanley & Co. Incorporated is unwilling or unable to act, another nationally recognized investment banking firm chosen by the Company to determine the Reset Rate. "RESET ANNOUNCEMENT DATE" means, in the case of the Reset Rate to be determined on the first Initial Remarketing Date on the third Business Day immediately preceding February 18, 2004, the tenth Business Day immediately preceding the applicable Reset Effective Date and, in the case of the Reset Rate to be determined on the Final Remarketing Date, the tenth Business Day immediately preceding the Purchase Contract Settlement Date, and in the case of the Reset Rate to be determined on the date of any Additional Remarketing, the third Business Day immediately preceding the date of any such remarketing. "RESET EFFECTIVE DATE" means the third Business Day following a Successful Initial Remarketing or May 18, 2004. "RESET RATE" means the interest rate per annum (to be determined by the Reset Agent), rounded to the nearest one-thousandth (0.001) of one percent per annum, equal to the sum of (X) the Reset Spread and (Y) the rate of interest on (1) in the case of the Reset 12 17 Rate to be determined on the Initial Remarketing Date, the Benchmark Treasury in effect on the Initial Remarketing Date or (2) in the case of the Reset Rate to be determined on the Final Remarketing Date, (i) in the case of a Successful Final Remarketing, the Two-Year Benchmark Treasury in effect on the Final Remarketing Date, and (ii) in the case of a Failed Final Remarketing, the Two-Year Benchmark Treasury in effect on the Final Remarketing Date plus the Applicable Spread; provided, however, that the Reset Rate shall not exceed the maximum rate permitted by applicable law and provided further that the Reset Rate shall not be below the initial Coupon Rate. "RESET SPREAD" means (a) in the case of the Reset Rate to be determined on the Initial Remarketing Date, a spread amount to be determined by the Reset Agent on the applicable Reset Announcement Date as the appropriate spread so that the Reset Rate will be the distribution rate that the Preferred Securities should bear, or the interest rate that the Subordinated Notes should bear, in each case, in order for the Applicable Amount of Preferred Securities or Subordinated Notes, as the case may be, to have an approximate aggregate market value of 100.25% of the Treasury Portfolio Purchase Price on the Initial Remarketing Date, (b) in the case of the Reset Rate to be determined on the Initial Remarketing Date after a Successful Initial Remarketing, a spread amount determined by the Reset Agent on the applicable Reset Announcement Date as the appropriate spread so that the Reset Rate will be the distribution rate that the Preferred Securities should bear, or the interest rate that the Subordinated Notes should bear, in each case, in order for the Preferred Securities or Subordinated Notes, as the case may be, to have an approximate market value of 100.25% of their liquidation amount, or principal amount, as the case may be, on the Final Remarketing Date, and (c) in the case of the Reset Rate to be determined on the Final Remarketing Date after a Failed Final Remarketing, the Applicable Spread. "RESPONSIBLE OFFICER" means, with respect to the Purchase Contract Agent, any officer of the Purchase Contract Agent assigned by the Purchase Contract Agent to administer this Purchase Contract Agreement. "SECURITIES INTERMEDIARY" means The Bank of New York, as Securities Intermediary under the Pledge Agreement until a successor Securities Intermediary shall have become such pursuant to the applicable provisions of the Pledge Agreement, and thereafter "Securities Intermediary" shall mean such successor. "SECURITY" means a PEPS Unit or a Treasury PEPS Unit, as the case may be. "SECURITY REGISTER" and "SECURITIES REGISTRAR" have the respective meanings set forth in Section 3.05. "SENIOR INDEBTEDNESS" means indebtedness of any kind of the Company unless the instrument under which such indebtedness is incurred expressly provides that it is on a parity in right of payment with or subordinate in right of payment to the Contract Adjustment Payments; provided, however, that Senior Indebtedness does not include obligations to subsidiaries, obligations to employees or trade accounts payable. 13 18 "SETTLEMENT RATE" has the meaning set forth in Section 5.01. "STATED AMOUNT" means $25. "SUBORDINATED NOTES" means the series of Subordinated Notes issued by PPL Capital Funding under the Indenture and held by the Property Trustee. "SUCCESSFUL FINAL REMARKETING" has the meaning set forth in Section 5.03(b). "SUCCESSFUL INITIAL REMARKETING" has the meaning set forth in Section 5.02. "SUPPLEMENTAL REMARKETING AGREEMENT" means the Supplemental Remarketing Agreement between the Company and the Purchase Contract Agent in connection with the remarketing. "TAX EVENT REDEMPTION AMOUNT" means either (i) if the Tax Event Redemption Date occurs prior to a Successful Initial Remarketing, or , in the event of a Failed Initial Remarketing, prior to the Purchase Contract Settlement Date, the aggregate liquidation amount of the Preferred Securities, or the aggregate principal amount of the Subordinated Notes, as the case may be, which are components of PEPS Units on the Tax Event Redemption Date or (ii) if the Tax Event Redemption Date occurs on or after a Successful Initial Remarketing or, in the event of a Failed Initial Remarketing, on or after the Purchase Contract Settlement Date, the aggregate liquidation amount of the Preferred Securities or the aggregate principal amount of Subordinated Notes, as the case may be, outstanding on such Tax Event Redemption Date. "TERMINATION DATE" means the date, if any, on which a Termination Event occurs. "TERMINATION EVENT" means the occurrence of any of the following events: (i) at any time on or prior to the Purchase Contract Settlement Date, a judgment, decree or court order shall have been entered granting relief under the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as properly filed a petition seeking reorganization or liquidation of the Company or any other similar applicable Federal or State law, and, unless such judgment, decree or order shall have been entered within 60 days prior to the Purchase Contract Settlement Date, such decree or order shall have continued undischarged and unstayed for a period of 60 days; (ii) a judgment, decree or court order for the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the Company or of its property, or for the termination or liquidation of its affairs, shall have been entered, and, unless such judgment, decree or order shall have been entered within 60 days prior to the Purchase Contract Settlement Date, such judgment, decree or order shall have continued undischarged and unstayed for a period of 60 days; or 14 19 (iii) at any time on or prior to the Purchase Contract Settlement Date, the Company shall file a petition for relief under the Bankruptcy Code, or shall consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking reorganization or liquidation under the Bankruptcy Code or any other similar applicable Federal or State law, or shall consent to the filing of any such petition, or shall consent to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or of its property, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due. "THRESHOLD APPRECIATION PRICE" has the meaning set forth in Section 5.01. "TIA" means the Trust Indenture Act of 1939, as amended from time to time, or any successor legislation. "TRADING DAY" has the meaning set forth in Section 5.01. "TRANSFER AGENT" shall mean The Chase Manhattan Bank. "TREASURY PEPS UNIT" means, following the substitution of Treasury Securities for Preferred Securities or Subordinated Notes as collateral to secure a Holder's obligations under the Purchase Contract, the collective rights and obligations of a Holder of a Treasury PEPS Units Certificate in respect of such Treasury Securities, subject to the Pledge thereof, and the related Purchase Contract. "TREASURY PEPS UNITS CERTIFICATE" means a certificate evidencing the rights and obligations of a Holder in respect of the number of Treasury PEPS Units specified on such certificate. "TREASURY PORTFOLIO" means (1) in connection with the Initial Remarketing, a portfolio of zero-coupon U.S. Treasury securities consisting of (a) principal or interest strips of U.S. Treasury securities that mature on or prior to May 17, 2004 in an aggregate amount equal to the Applicable Amount and (b) with respect to the scheduled interest payment date on the Subordinated Notes that occurs on the Purchase Contract Settlement Date, principal or interest strips in U.S. Treasury securities that mature on or prior to such date in an aggregate amount equal to the aggregate interest payment that would be due on the Applicable Amount of the Subordinated Notes on such date if the applicable Coupon Rate on the Subordinated Notes were not reset to the Reset Rate as described in Section 4.1 and (2) in connection with a Tax Event Redemption, (a) if the Tax Event Redemption Date occurs prior to February 18, 2004 or prior to the date of any Additional Remarketing or, in the event of a Failed Initial Remarketing, prior to the Purchase Contract Settlement Date, a portfolio of zero-coupon U.S. Treasury securities consisting of (i) principal or interest strips of U.S. Treasury securities that mature on or prior to May 17, 2004 in an aggregate amount equal to the applicable Tax Event Redemption Amount and (ii) with respect to each scheduled interest payment date on the Subordinated Notes that occurs after the Tax Event Redemption Date and on or before the Purchase Contract Settlement 15 20 Date, principal or interest strips of U.S. Treasury securities that mature on or prior to such date in an aggregate amount equal to the aggregate interest payment that would be due on the applicable Tax Event Redemption Amount of the Subordinated Notes on such date, and (b) if the Tax Event Redemption Date occurs on or after February 18, 2004 or prior to the date of any Additional Remarketing in the case of a Successful Initial Remarketing or, in the event of a Failed Initial Remarketing, on or after the Purchase Contract Settlement Date, a portfolio of zero-coupon U.S. Treasury securities consisting of (i) principal or interest strips of U.S. Treasury securities that mature on or prior to May 17, 2006 in an aggregate amount equal to the applicable Tax Event Redemption Amount and (ii) with respect to each scheduled interest payment date on the Subordinated Notes that occurs after the Tax Event Redemption Date, principal or interest strips of such U.S. Treasury securities that mature on or prior to such date in an aggregate amount equal to the aggregate interest payment that would be due on the applicable Tax Event Redemption Amount of the Subordinated Notes on such date. "TREASURY PORTFOLIO CASH PAYMENT" shall have the meaning set forth in Section 7.4 of the Pledge Agreement. "TREASURY PORTFOLIO PURCHASE PRICE" means the lowest aggregate price quoted by the Primary Treasury Dealer to the Quotation Agent (a) in the case of a Tax Event Redemption, on the third Business Day immediately preceding the Tax Event Redemption Date for the purchase of the applicable Treasury Portfolio for settlement on the Tax Event Redemption Date and (b) in the case of any Initial Remarketing, on the Initial Remarketing Date for the purchase of the applicable Treasury Portfolio for settlement on February 18, 2004 or from time to time thereafter on the third Business Day immediately following the date of an Additional Remarketing that is successful. "TREASURY SECURITIES" means zero-coupon U.S. Treasury Securities (CUSIP No. 912820BJ5) which mature on May 17, 2004. "TRUST" means PPL Capital Funding Trust I, a statutory business trust formed under the laws of the State of Delaware, or any successor thereto by merger or consolidation. "TRUST AGREEMENT" means the Amended and Restated Trust Agreement of PPL Capital Funding Trust I, dated as of May 9, 2001, among the Company, as sponsor, the trustees named therein and the holders from time to time of individual beneficial interests in the assets of the Trust. "TWO-YEAR BENCHMARK TREASURY" means direct obligations of the United States (which may be obligations traded on a when-issued basis only) having a maturity comparable to the remaining term to maturity of the Subordinated Notes, as agreed upon by the Company and the Reset Agent. The rate for the Two-Year Benchmark Treasury will be the bid side rate displayed at 10:00 A.M., New York City time, on the Final Remarketing Date in the Telerate system (or if the Telerate system is (a) no longer available on the Final Remarketing Date or (b) in the opinion of the Reset Agent (after 16 21 consultation with the Company) no longer an appropriate system from which to obtain such rate, such other nationally recognized quotation system as, in the opinion of the Reset Agent (after consultation with the Company) is appropriate). If such rate is not so displayed, the rate for the Two-Year Benchmark Treasury shall be, as calculated by the Reset Agent, the yield to maturity for the Two-Year Benchmark Treasury, expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis, and computed by taking the arithmetic mean of the secondary market bid rates, as of 10:30 A.M., New York City time, on the Final Remarketing Date of three leading United States government securities dealers selected by the Reset Agent (after consultation with the Company) (which may include the Reset Agent or an Affiliate thereof). "UNDERWRITING AGREEMENT" means, the Underwriting Agreement, dated as of May 9, 2001, between the Company, the Trust, PPL Capital Funding and the Underwriters identified in Schedule 1 thereto. "VICE PRESIDENT" means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president." SECTION 1.02. Compliance Certificates and Opinions. Except as otherwise expressly provided by this Agreement, upon any application or request by the Company to the Purchase Contract Agent to take any action in accordance with any provision of this Agreement, the Company shall furnish to the Purchase Contract Agent an Officers' Certificate stating that all conditions precedent, if any, provided for in this Agreement relating to the proposed action have been complied with and, if requested by the Purchase Contract Agent, an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Agreement relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Agreement shall include: (i) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (ii) 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; (iii) a statement that, in the opinion of each such individual, he or she has made such examination or investigation as is necessary to enable such 17 22 individual to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION 1.03. Form of Documents Delivered to Purchase Contract Agent. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Agreement, they may, but need not, be consolidated and form one instrument. SECTION 1.04. Acts of Holders; Record Dates. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Agreement to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Purchase Contract Agent and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "ACT" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Agreement and (subject to Section 7.01) conclusive in favor of the Purchase Contract Agent and the Company, if made in the manner provided in this Section. 18 23 (b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Purchase Contract Agent deems sufficient. (c) The ownership of Securities shall be proved by the PEPS Units Register or the Treasury PEPS Units Register, as the case may be. (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Certificate evidencing such Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Purchase Contract Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Certificate. (e) The Company may set any date as a record date for the purpose of determining the Holders of Outstanding Securities entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Agreement to be given, made or taken by Holders of Securities. If any record date is set pursuant to this paragraph, the Holders of the Outstanding PEPS Units and the Outstanding Treasury PEPS Units, as the case may be, on such record date, and no other Holders, shall be entitled to take the relevant action with respect to the PEPS Units or the Treasury PEPS Units, as the case may be, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken prior to or on the applicable Expiration Date by Holders of the requisite number of Outstanding Securities on such record date. Nothing contained in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and be of no effect), and nothing contained in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite number of Outstanding Securities on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Purchase Contract Agent in writing and to each Holder of Securities in the manner set forth in Section 1.06. With respect to any record date set pursuant to this Section, the Company may designate any date as the "EXPIRATION DATE" and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the Purchase Contract Agent in writing, and to each Holder of Securities in the manner set forth in Section 1.06, prior to or on the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the Company shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as 19 24 provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date. SECTION 1.05. Notices. Any notice or communication is duly given if in writing and delivered in Person or mailed by first-class mail (registered or certified, return receipt requested), telecopier (with receipt confirmed) or overnight air courier guaranteeing next day delivery, to the others' address; provided that notice shall be deemed given to the Purchase Contract Agent only upon receipt thereof: If to the Purchase Contract Agent: The Chase Manhattan Bank 450 West 33rd Street New York, New York 10001 Telecopier No.: (212) 946-8177 Attention: Institutional Trust Services If to the Company: PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18101-1179 Telecopier No.: (610) 774-5106 Attention: Treasurer If to the Collateral Agent: The Bank of New York 101 Barclay Street, Floor 21 West New York, New York 10286 Telecopier No.: (212) 815-5915 Attention: Corporate Trust Administration- Corporate Finance Unit If to the Property Trustee: The Chase Manhattan Bank 450 West 33rd Street New York, New York 10001 Telecopier No.: (212) 946-8177 Attention: Institutional Trust Services 20 25 If to the Indenture Trustee: The Chase Manhattan Bank 450 West 33rd Street New York, New York 10001 Telecopier No.: (212) 946-8177 Attention: Institutional Trust Services SECTION 1.06. Notice to Holders; Waiver. Where this Agreement provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at its address as it appears in the applicable Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Agreement provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Purchase Contract Agent, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Purchase Contract Agent shall constitute a sufficient notification for every purpose hereunder. SECTION 1.07. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 1.08. Successors and Assigns. All covenants and agreements in this Agreement by the Company and the Purchase Contract Agent shall bind their respective successors and assigns, whether so expressed or not. SECTION 1.09. Separability Clause. In case any provision in this Agreement or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof and thereof shall not in any way be affected or impaired thereby. 21 26 SECTION 1.10. Benefits of Agreement. Nothing contained in this Agreement or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and, to the extent provided hereby, the Holders, any benefits or any legal or equitable right, remedy or claim under this Agreement. The Holders from time to time shall be beneficiaries of this Agreement and shall be bound by all of the terms and conditions hereof and of the Securities evidenced by their Certificates by their acceptance of delivery of such Certificates. SECTION 1.11. Governing Law. This Agreement and the Securities shall be governed by, and construed in accordance with, the laws of the State of New York. SECTION 1.12. Legal Holidays. In any case where any Payment Date shall not be a Business Day, then (notwithstanding any other provision of this Agreement or the Securities) payment of the Contract Adjustment Payments, if any, shall not be made on such date, but such payments shall be made on the next succeeding Business Day with the same force and effect as if made on such Payment Date, provided that no interest shall accrue or be payable by the Company or any Holder for the period from and after any such Payment Date unless there shall be a default in the payment due on such next succeeding Business Day, except that, if such next succeeding Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day with the same force and effect as if made on such Payment Date. In any case where any Purchase Contract Settlement Date or Early Settlement Date shall not be a Business Day (notwithstanding any other provision of this Agreement or the Securities), Purchase Contracts shall not be performed and Early Settlement shall not be effected on such date, but Purchase Contracts shall be performed or Early Settlement effected, as applicable, on the next succeeding Business Day with the same force and effect as if made on such Purchase Contract Settlement Date or Early Settlement Date, as applicable, provided that no interest shall accrue or be payable by the Company or to any Holder for the period from and after any such Purchase Contract Settlement Date or Early Settlement Date, as applicable, except that, if such next succeeding Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day with the same force and effect as if made on such Purchase Contract Settlement Date or Early Settlement Date, as applicable. SECTION 1.13. Counterparts. This Agreement may be executed in any number of counterparts by the parties hereto on separate counterparts, each of which, when so executed and delivered, shall be 22 27 deemed an original, but all such counterparts shall together constitute one and the same instrument. SECTION 1.14. Inspection of Agreement. A copy of this Agreement shall be available at all reasonable times during normal business hours at the Corporate Trust Office for inspection by any Holder or Beneficial Owner. SECTION 1.15. Appointment of Financial Institution as Agent for the Company. The Company may appoint a financial institution (which may be the Collateral Agent) to act as its agent in performing its obligations and in accepting and enforcing performance of the obligations of the Purchase Contract Agent and the Holders, under this Agreement and the Purchase Contracts, by giving notice of such appointment in the manner provided in Section 1.05 hereof. Any such appointment shall not relieve the Company in any way from its obligations hereunder. ARTICLE 2 CERTIFICATE FORMS SECTION 2.01. Forms of Certificates Generally. The Certificates (including the form of Purchase Contract forming part of each Security evidenced thereby) shall be in substantially the form set forth in Exhibit A hereto (in the case of Certificates evidencing PEPS Units) or Exhibit B hereto (in the case of Certificates evidencing Treasury PEPS Units), with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the Securities are listed or any depositary therefor, or as may, consistently herewith, be determined by the officers of the Company executing such Certificates, as evidenced by their execution of the Certificates. The definitive Certificates shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers of the Company executing the Securities evidenced by such Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof. Every Global Certificate authenticated, executed on behalf of the Holders and delivered hereunder shall bear a legend in substantially the following form: "THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE 23 28 NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REQUESTED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REGISTERED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN." SECTION 2.02. Form of Purchase Contract Agent's Certificate of Authentication. The form of the Purchase Contract Agent's certificate of authentication of the Securities shall be in substantially the form set forth on the form of the applicable Certificates. ARTICLE 3 THE SECURITIES SECTION 3.01. Amount; Form and Denominations. The aggregate number of Securities evidenced by Certificates authenticated, executed on behalf of the Holders and delivered hereunder is limited to 20,000,000 (subject to increase up to a maximum of 3,000,000 to the extent the over-allotment option granted to the Underwriters in the Underwriting Agreement is exercised), except for Certificates authenticated, executed and delivered upon registration of transfer of, in 24 29 exchange for, or in lieu of, other Certificates pursuant to Section 3.04, 3.05, 3.10, 3.13, 3.14, 5.08 or 8.05. The Certificates shall be issuable only in registered form and only in denominations of a single PEPS Unit or Treasury PEPS Unit and any integral multiple thereof. SECTION 3.02. Rights and Obligations Evidenced by the Certificates. Each PEPS Units Certificate shall evidence the number of PEPS Units specified therein, with each such PEPS Unit representing (1) the ownership by the Holder thereof of a beneficial interest in a Preferred Security, a Subordinated Note or the Applicable Ownership Interest of the Treasury Portfolio, as the case may be, subject to the Pledge of such Preferred Security, such Subordinated Note or the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be, by such Holder pursuant to the Pledge Agreement, and (2) the rights and obligations of the Holder thereof and the Company under one Purchase Contract. The Purchase Contract Agent as attorney-in-fact for, and on behalf of, the Holder of each PEPS Unit shall pledge, pursuant to the Pledge Agreement, the Preferred Security, the Subordinated Note or the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be, forming a part of such PEPS Unit, to the Collateral Agent and grant to the Collateral Agent a security interest in the right, title and interest of such Holder in such Preferred Security, such Subordinated Note or the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be, for the benefit of the Company, to secure the obligation of the Holder under each Purchase Contract to purchase shares of Common Stock. Upon the formation of a Treasury PEPS Unit pursuant to Section 3.13, each Treasury PEPS Units Certificate shall evidence the number of Treasury PEPS Units specified therein, with each such Treasury PEPS Unit representing (1) the ownership by the Holder thereof of a 1/40 undivided beneficial interest in a Treasury Security with a principal amount at maturity equal to $1,000, subject to the Pledge of such Treasury Security by such Holder pursuant to the Pledge Agreement, and (2) the rights and obligations of the Holder thereof and the Company under one Purchase Contract. Prior to the purchase of shares of Common Stock under each Purchase Contract, such Purchase Contracts shall not entitle the Holder of a Security to any of the rights of a holder of shares of Common Stock, including, without limitation, the right to vote or receive any dividends or other payments or to consent or to receive notice as a shareholder in respect of the meetings of shareholders or for the election of directors of the Company or for any other matter, or any other rights whatsoever as a shareholder of the Company. 25 30 SECTION 3.03. Execution, Authentication, Delivery and Dating. Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the execution and delivery of this Agreement, and at any time and from time to time thereafter, the Company may deliver Certificates executed by the Company to the Purchase Contract Agent for authentication, execution on behalf of the Holders and delivery, together with its Issuer Order for authentication of such Certificates, and the Purchase Contract Agent in accordance with such Issuer Order shall authenticate, execute on behalf of the Holders and deliver such Certificates. The Certificates shall be executed on behalf of the Company by its Chairman of the Board, its President, one of its Vice Presidents or its Treasurer. The signature of any of these officers on the Certificates may be manual or facsimile. Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Certificates or did not hold such offices at the date of such Certificates. No Purchase Contract evidenced by a Certificate shall be valid until such Certificate has been executed on behalf of the Holder by the manual signature of an authorized signatory of the Purchase Contract Agent, as such Holder's attorney-in-fact. Such signature by an authorized signatory of the Purchase Contract Agent shall be conclusive evidence that the Holder of such Certificate has entered into the Purchase Contracts evidenced by such Certificate. Each Certificate shall be dated the date of its authentication. No Certificate shall be entitled to any benefit under this Agreement or be valid or obligatory for any purpose unless there appears on such Certificate a certificate of authentication substantially in the form provided for herein executed by an authorized signatory of the Purchase Contract Agent by manual signature, and such certificate upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder. SECTION 3.04. Temporary Certificates. Pending the preparation of definitive Certificates, the Company shall execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu of such definitive Certificates, temporary Certificates which are in substantially the form set forth in Exhibit A or Exhibit B hereto, as the case may be, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the PEPS Units or Treasury PEPS Units, as the case may be, are 26 31 listed, or as may, consistently herewith, be determined by the officers of the Company executing such Certificates, as evidenced by their execution of the Certificates. If temporary Certificates are issued, the Company will cause definitive Certificates to be prepared without unreasonable delay. After the preparation of definitive Certificates, the temporary Certificates shall be exchangeable for definitive Certificates upon surrender of the temporary Certificates at the Corporate Trust Office, at the expense of the Company and without charge to the Holder. Upon surrender for cancellation of any one or more temporary Certificates, the Company shall execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, one or more definitive Certificates of like tenor and denominations and evidencing a like number of Securities as the temporary Certificate or Certificates so surrendered. Until so exchanged, the temporary Certificates shall in all respects evidence the same benefits and the same obligations with respect to the Securities, evidenced thereby as definitive Certificates. SECTION 3.05. Registration; Registration of Transfer and Exchange. The Purchase Contract Agent shall keep at the Corporate Trust Office a register (the "SECURITY REGISTER") in which, subject to such reasonable regulations as it may prescribe, the Purchase Contract Agent shall provide for the registration of Certificates and of transfers of Certificates (the Purchase Contract Agent, in such capacity, the "SECURITY REGISTRAR"). The Security Registrar shall record separately the registration and transfer of the Certificates evidencing PEPS Units and Treasury PEPS Units. Upon surrender for registration of transfer of any Certificate at the Corporate Trust Office, the Company shall execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of the designated transferee or transferees, and deliver, in the name of the designated transferee or transferees, one or more new Certificates of any authorized denominations, like tenor, and evidencing a like number of PEPS Units or Treasury PEPS Units, as the case may be. At the option of the Holder, Certificates may be exchanged for other Certificates, of any authorized denominations and evidencing a like number of PEPS Units or Treasury PEPS Units, as the case may be, upon surrender of the Certificates to be exchanged at the Corporate Trust Office. Whenever any Certificates are so surrendered for exchange, the Company shall execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver the Certificates which the Holder making the exchange is entitled to receive. All Certificates issued upon any registration of transfer or exchange of a Certificate shall evidence the ownership of the same number of PEPS Units or Treasury PEPS Units, as the case may be, and be entitled to the same benefits and subject to the same obligations, under this Agreement as the PEPS Units or Treasury PEPS Units, as 27 32 the case may be, evidenced by the Certificate surrendered upon such registration of transfer or exchange. Every Certificate presented or surrendered for registration of transfer or exchange shall (if so required by the Purchase Contract Agent) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Purchase Contract Agent duly executed, by the Holder thereof or its attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of a Certificate, but the Company and the Purchase Contract Agent may require payment from the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Certificates, other than any exchanges pursuant to Sections 3.06 and 8.05 not involving any transfer. Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall not be obligated to authenticate, execute on behalf of the Holder and deliver any Certificate in exchange for any other Certificate presented or surrendered for registration of transfer or for exchange on or after the Business Day immediately preceding the earlier of the Purchase Contract Settlement Date or the Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Purchase Contract Agent shall: (i) if the Purchase Contract Settlement Date has occurred, upon receipt of shares of Common Stock from the Company's Transfer Agent, deliver the shares of Common Stock issuable in respect of the Purchase Contracts forming a part of the Securities evidenced by such other Certificate; or (ii) if a Termination Event shall have occurred prior to the Purchase Contract Settlement Date, transfer the Preferred Securities, the Subordinated Notes, the Treasury Securities, or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case may be, evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Article Five hereof. SECTION 3.06. Book-entry Interests. The Certificates, on original issuance, will be issued in the form of one or more fully registered Global Certificates, to be delivered to the Depositary or its custodian by, or on behalf of, the Company. The Company hereby designates DTC as the initial Depositary. Such Global Certificates shall initially be registered on the books and records of the Company in the name of Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive a definitive Certificate representing such Beneficial Owner's interest in such Global Certificate, except as provided in Section 3.09. The 28 33 Purchase Contract Agent shall enter into an agreement with the Depositary if so requested by the Company. Unless and until definitive, fully registered Certificates have been issued to Beneficial Owners pursuant to Section 3.09: (i) the provisions of this Section 3.06 shall be in full force and effect; (ii) the Company and the Purchase Contract Agent shall be entitled to deal with the Depositary for all purposes of this Agreement (including the payment of Contract Adjustment Payments, if any, and receiving approvals, votes or consents hereunder) as the Holder of the Securities and the sole holder of the Global Certificates and shall have no obligation to the Beneficial Owners; (iii) to the extent that the provisions of this Section 3.06 conflict with any other provisions of this Agreement, the provisions of this Section 3.06 shall control; and (iv) the rights of the Beneficial Owners shall be exercised only through the Depositary and shall be limited to those established by law and agreements between such Beneficial Owners and the Depositary or the Depositary Participants. The Depositary will make book-entry transfers among Depositary Participants and receive and transmit payments of Contract Adjustment Payments, if any, to such Depositary Participants. SECTION 3.07. Notices to Holders. Whenever a notice or other communication to the Holders is required to be given under this Agreement, the Company or the Company's agent shall give such notices and communications to the Holders and, with respect to any Securities registered in the name of the Depositary or the nominee of the Depositary, the Company or the Company's agent shall, except as set forth herein, have no obligations to the Beneficial Owners. SECTION 3.08. Appointment of Successor Depositary. If the Depositary elects to discontinue its services as securities depositary with respect to the Securities, the Company may, in its sole discretion, appoint a successor Depositary with respect to the Securities. SECTION 3.09. Definitive Certificates. If: (i) the Depositary elects to discontinue its services as securities depositary with respect to the Securities and a successor Depositary is not appointed within 90 days after such discontinuance pursuant to Section 3.08; or 29 34 (ii) the Company elects after consultation with the Purchase Contract Agent to terminate the book-entry system for the Securities, then (x) definitive Certificates shall be prepared by the Company with respect to such Securities and delivered to the Purchase Contract Agent and (y) upon surrender of the Global Certificates representing the Securities by the Depositary, accompanied by registration instructions, the Company shall cause definitive Certificates to be delivered to Beneficial Owners in accordance with the instructions of the Depositary. The Company shall not be liable for any delay in delivery of such instructions and may conclusively rely on and shall be protected in relying on, such instructions. Each definitive Certificate so delivered shall evidence Securities of the same kind and tenor as the Global Certificate so surrendered in respect thereof. SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates. If any mutilated Certificate is surrendered to the Purchase Contract Agent, the Company shall execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, a new Certificate, evidencing the same number of PEPS Units or Treasury PEPS Units, as the case may be, and bearing a Certificate number not contemporaneously outstanding. If there shall be delivered to the Company and the Purchase Contract Agent (i) evidence to their satisfaction of the destruction, loss or theft of any Certificate, and (ii) such security or indemnity as may be required by them to hold each of them and any agent of any of them harmless, then, in the absence of notice to the Company or the Purchase Contract Agent that such Certificate has been acquired by a "protected" purchaser (as defined in Article 8 of the UCC), the Company shall execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver to the Holder, in lieu of any such destroyed, lost or stolen Certificate, a new Certificate, evidencing the same number of PEPS Units or Treasury PEPS Units, as the case may be, and bearing a Certificate number not contemporaneously outstanding. Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall not be obligated to authenticate, execute on behalf of the Holder, and deliver to the Holder, a Certificate on or after the Business Day immediately preceding the earlier of the Purchase Contract Settlement Date or the Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Purchase Contract Agent shall: (1) if the Purchase Contract Settlement Date has occurred, upon receipt of shares of Common Stock from the Company's Transfer Agent, deliver 30 35 the shares of Common Stock issuable in respect of the Purchase Contracts forming a part of the Securities evidenced by such Certificate; or (2) if a Termination Event shall have occurred prior to the Purchase Contract Settlement Date, transfer the Preferred Securities, the Subordinated Notes, the Treasury Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be, evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Article Five hereof. Upon the issuance of any new Certificate under this Section, the Company and the Purchase Contract Agent may require the payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Purchase Contract Agent) connected therewith. Every new Certificate issued pursuant to this Section in lieu of any destroyed, lost or stolen Certificate shall constitute an original additional contractual obligation of the Company and of the Holder in respect of the Security evidenced thereby, whether or not the destroyed, lost or stolen Certificate (and the Securities evidenced thereby) shall be at any time enforceable by anyone, and shall be entitled to all the benefits and be subject to all the obligations of this Agreement equally and proportionately with any and all other Certificates delivered hereunder. The provisions of this Section are exclusive and shall preclude, to the extent lawful, all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Certificates. SECTION 3.11. Persons Deemed Owners. Prior to due presentment of a Certificate for registration of transfer, the Company and the Purchase Contract Agent, and any agent of the Company or the Purchase Contract Agent, may treat the Person in whose name such Certificate is registered as the owner of the Security evidenced thereby, for the purpose of receiving distributions on the Preferred Securities, or interest on the Treasury Securities, the Subordinated Notes, or on the maturing quarterly interest strips of the Treasury Portfolio, as applicable, receiving payments of Contract Adjustment Payments, if any, performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any distributions on the Preferred Securities, or interest on the Treasury Securities, the Subordinated Notes, or Treasury Portfolio, as applicable, or the Contract Adjustment Payments, if any, payable in respect of the Purchase Contracts, constituting a part of the Security evidenced thereby, shall be overdue and notwithstanding any notice to the contrary, and neither the Company nor the Purchase Contract Agent, nor any agent of the Company or the Purchase Contract Agent, shall be affected by notice to the contrary. 31 36 Notwithstanding the foregoing, with respect to any Global Certificate, nothing contained herein shall prevent the Company, the Purchase Contract Agent or any agent of the Company or the Purchase Contract Agent, from giving effect to any written certification, proxy or other authorization furnished by the Depositary (or its nominee), as a Holder, with respect to such Global Certificate or impair, as between such Depositary and the related Beneficial Owner, the operation of customary practices governing the exercise of rights of the Depositary (or its nominee) as Holder of such Global Certificate. SECTION 3.12. Cancellation. All Certificates surrendered for delivery of shares of Common Stock on or after the Purchase Contract Settlement Date, upon the transfer of Preferred Securities, Subordinated Notes, the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of that term) of the Treasury Portfolio or Treasury Securities, as the case may be, after the occurrence of a Termination Event or pursuant to an Early Settlement, or upon the registration of transfer or exchange of a Security, or a Collateral Substitution or the reestablishment of PEPS Units shall, if surrendered to any Person other than the Purchase Contract Agent, be delivered to the Purchase Contract Agent and, if not already cancelled, shall be promptly cancelled by it. The Company may at any time deliver to the Purchase Contract Agent for cancellation any Certificates previously authenticated, executed and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Certificates so delivered shall, upon Issuer Order, be promptly cancelled by the Purchase Contract Agent. No Certificates shall be authenticated, executed on behalf of the Holder and delivered in lieu of or in exchange for any Certificates cancelled as provided in this Section, except as expressly permitted by this Agreement. All cancelled Certificates held by the Purchase Contract Agent shall be disposed of in accordance with its customary practices. If the Company or any Affiliate of the Company shall acquire any Certificate, such acquisition shall not operate as a cancellation of such Certificate unless and until such Certificate is delivered to the Purchase Contract Agent cancelled or for cancellation. SECTION 3.13. Creation of Treasury PEPS Units by Substitution of Treasury Securities. Subject to the conditions set forth in this Agreement, a Holder may separate the Preferred Securities or the Subordinated Notes, as applicable, from the related Purchase Contracts in respect of such Holder's PEPS Units by substituting for such Preferred Securities or the Subordinated Notes, as the case may be, Treasury Securities in an aggregate principal amount equal to the aggregate liquidation amount of such Preferred Securities or the aggregate principal amount of such Subordinated Notes, as applicable (a "COLLATERAL SUBSTITUTION"), at any time from and after the date of this Agreement and prior to or on the fifth Business Day immediately preceding the Purchase Contract Settlement Date. To effect such substitution, the Holder must: 32 37 (i) deposit with the Securities Intermediary Treasury Securities having an aggregate amount at maturity equal to the liquidation amount of the Preferred Securities or the aggregate principal amount of the Subordinated Notes; and (ii) transfer the related PEPS Units to the Purchase Contract Agent accompanied by a notice to the Purchase Contract Agent, substantially in the form of Exhibit C hereto, (i) stating that the Holder has transferred the relevant amount of Treasury Securities to the Securities Intermediary and (ii) requesting that the Purchase Contract Agent instruct the Collateral Agent to release the Preferred Securities or the Subordinated Notes, as the case may be, underlying such PEPS Units, whereupon the Purchase Contract Agent shall promptly provide an instruction to such effect to the Collateral Agent, substantially in the form of Exhibit A to the Pledge Agreement. Upon receipt of the Treasury Securities described in clause (i) above and the instruction described in clause (ii) above, in accordance with the terms of the Pledge Agreement, the Collateral Agent will cause the Securities Intermediary to effect the release of such Preferred Securities or the Subordinated Notes, as the case may be, from the Pledge, free and clear of the Company's security interest therein, and the transfer of such Preferred Securities or the Subordinated Notes, as the case may be, to the Purchase Contract Agent on behalf of the Holder. Upon receipt thereof, the Purchase Contract Agent shall promptly: (i) cancel the related PEPS Units; (ii) transfer the Preferred Securities or the Subordinated Notes, as the case may be, to the Holder; and (iii) authenticate, execute on behalf of such Holder and deliver a Treasury PEPS Units Certificate executed by the Company in accordance with Section 3.03 evidencing the same number of Purchase Contracts as were evidenced by the cancelled PEPS Units. Holders who elect to separate the Preferred Securities or the Subordinated Notes, as the case may be, from the related Purchase Contracts and to substitute Treasury Securities for such Preferred Securities or the Subordinated Notes, as the case may be, shall be responsible for any fees or expenses payable to the Collateral Agent for its services as Collateral Agent in respect of the substitution, and the Company shall not be responsible for any such fees or expenses. Holders may make Collateral Substitutions (i) only in integral multiples of 40 PEPS Units. If a Tax Event Redemption or a Successful Initial Remarketing has occurred, Holders may no longer convert their PEPS Units into Treasury PEPS Units. In the event a Holder making a Collateral Substitution pursuant to this Section 3.13 fails to effect a book-entry transfer of the PEPS Units or fails to deliver PEPS Units 33 38 Certificates to the Purchase Contract Agent after depositing Treasury Securities with the Collateral Agent, any distributions on the Preferred Securities or the Subordinated Notes constituting a part of such PEPS Units, as the case may be, shall be held in the name of the Purchase Contract Agent or its nominee in trust for the benefit of such Holder, until such PEPS Units are so transferred or the PEPS Units Certificate is so delivered, as the case may be, or, such Holder provides evidence satisfactory to the Company and the Purchase Contract Agent that such PEPS Units Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Purchase Contract Agent and the Company. Except as described in this Section 3.13, for so long as the Purchase Contract underlying a PEPS Unit remains in effect, such PEPS Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder in respect of the Preferred Securities or the Subordinated Notes or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case may be, and the Purchase Contract comprising such PEPS Unit may be acquired, and may be transferred and exchanged, only as a PEPS Unit. SECTION 3.14. Reestablishment of PEPS Units. Subject to the conditions set forth in this Agreement, a Holder of Treasury PEPS Units may reestablish PEPS Units at any time prior to or on the seventh Business Day immediately preceding the Purchase Contract Settlement Date, unless a Tax Event Redemption or a Successful Initial Remarketing has occurred, by: (i) depositing with the Securities Intermediary Preferred Securities or Subordinated Notes, as the case may be, having an aggregate liquidation amount (in the case of Preferred Securities) or aggregate principal amount (in the case of Subordinated Notes), as the case may be, equal to the aggregate principal amount at maturity of the Treasury Securities comprising part of the Treasury PEPS Units; and (ii) transferring the related Treasury PEPS Units to the Purchase Contract Agent accompanied by a notice to the Purchase Contract Agent, substantially in the form of Exhibit C hereto, (i) stating that the Holder has transferred the relevant amount of Preferred Securities or Subordinated Notes, as the case may be, to the Securities Intermediary and (ii) requesting that the Purchase Contract Agent instruct the Collateral Agent to release the Treasury Securities underlying such Treasury PEPS Units, whereupon the Purchase Contract Agent shall promptly provide an instruction to such effect to the Collateral Agent, substantially in the form of Exhibit C to the Pledge Agreement. Upon receipt of the Preferred Securities or the Subordinated Notes, as the case may be, described in clause (i) above and the instruction described in clause (ii) above, in accordance with the terms of the Pledge Agreement, the Collateral Agent will cause the Securities Intermediary to effect the release of the Treasury Securities having a corresponding aggregate principal amount at maturity from the Pledge, free and clear of 34 39 the Company's security interest therein, and the transfer to the Purchase Contract Agent on behalf of the Holder. Upon receipt thereof, the Purchase Contract Agent shall promptly: (i) cancel the related Treasury PEPS Units; (ii) transfer the Treasury Securities to the Holder; and (iii) authenticate, execute on behalf of such Holder and deliver a PEPS Units Certificate executed by the Company in accordance with Section 3.03 evidencing the same number of PEPS Units as were evidenced by the cancelled Treasury PEPS Units. Holders who elect to reestablish PEPS Units shall be responsible for any fees or expenses payable to the Collateral Agent for its services as Collateral Agent in respect of the reestablishment, and the Company shall not be responsible for any such fees or expenses. Holders of Treasury PEPS Units may only reestablish PEPS Units in integral multiples of 40 Treasury PEPS Units and only if a Tax Event Redemption or a Successful Initial Remarketing has not occurred. In the event a Holder re-establishing PEPS Units pursuant to this Section 3.14 fails to effect a book-entry transfer of the Treasury PEPS Units or fails to deliver a PEPS Certificate to the Purchase Contract Agent after depositing Preferred Securities or the Subordinated Notes, as the case may be, with the Collateral Agent, the Treasury PEPS Securities constituting a part of such Treasury PEPS Units shall be held in the name of the Purchase Contract Agent or its nominee in trust for the benefit of such Holder, until such Treasury PEPS Units are so transferred or the PEPS Certificate is so delivered, as the case may be, or, with respect to a Certificate for Treasury PEPS Units, such Holder provides evidence satisfactory to the Company and the Purchase Contract Agent that such Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Agent and the Company. Except as provided in this Section 3.14, for so long as the Purchase Contract underlying a Treasury PEPS Unit remains in effect, such Treasury PEPS Unit shall not be separable into its constituent parts and the rights and obligations of the Holder of such Treasury PEPS Unit in respect of the 1/40 of a Treasury Security and the Purchase Contract comprising such Treasury PEPS Unit may be acquired, and may be transferred and exchanged, only as a Treasury PEPS Unit. SECTION 3.15. Transfer of Collateral upon Occurrence of Termination Event. Upon the occurrence of a Termination Event and the transfer to the Purchase Contract Agent of the Preferred Securities, Subordinated Notes, the appropriate Applicable Ownership Interest of the Treasury Portfolio or the Treasury Securities, as the 35 40 case may be, underlying the PEPS Units and the Treasury PEPS Units, as the case may be, pursuant to the terms of the Pledge Agreement, the Purchase Contract Agent shall request transfer instructions with respect to such Preferred Securities, Subordinated Notes, the appropriate Applicable Ownership Interest of the Treasury Portfolio or Treasury Securities, as the case may be, from each Holder by written request, substantially in the form of Exhibit D hereto, mailed to such Holder at its address as it appears in the Security Register. Upon book-entry transfer of the PEPS Units or the Treasury PEPS Units or delivery of a PEPS Units Certificate or Treasury PEPS Units Certificate to the Purchase Contract Agent with such transfer instructions, the Purchase Contract Agent shall transfer the Preferred Securities, Subordinated Notes, the appropriate Applicable Ownership Interest of the Treasury Portfolio or Treasury Securities, as the case may be, underlying such PEPS Units or Treasury PEPS Units, as the case may be, to such Holder by book-entry transfer, or other appropriate procedures, in accordance with such instructions; provided, however, that, to the extent that a Holder of PEPS Units or Treasury PEPS Units would otherwise be entitled to receive less than $1,000 principal amount at maturity of the Treasury Portfolio or the Treasury Securities, the Purchase Contract Agent shall dispose of such securities for cash using a customary method (and shall have no liability relating to the amount of cash so received, unless any deficiency in the amount of such cash arose from the negligence, willful misconduct or bad faith of the Purchase Contract Agent), and transfer the appropriate amount of such cash to such Holder in accordance with such Holder's instructions. In the event a Holder of PEPS Units or Treasury PEPS Units fails to effect such transfer or delivery, the Preferred Securities, Subordinated Notes, the appropriate Applicable Ownership Interest of the Treasury Portfolio or Treasury Securities, as the case may be, underlying such PEPS Units or Treasury PEPS Units, as the case may be, and any distributions thereon, shall be held in the name of the Purchase Contract Agent or its nominee in trust for the benefit of such Holder, until the earlier to occur of: (i) the transfer of such PEPS Units or Treasury PEPS Units or surrender of the PEPS Units Certificate or Treasury PEPS Units Certificate or receipt by the Company and the Purchase Contract Agent from such Holder of satisfactory evidence that such PEPS Units Certificate or Treasury PEPS Units Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Purchase Contract Agent and the Company; and (ii) the expiration of the time period specified in the abandoned property laws of the relevant State. SECTION 3.16. No Consent to Assumption. Each Holder of a Security, by acceptance thereof, shall be deemed expressly to have withheld any consent to the assumption under Section 365 of the Bankruptcy Code or otherwise, of the Purchase Contract by the Company or its trustee, receiver, liquidator 36 41 or a person or entity performing similar functions in the event that the Company becomes the debtor under the Bankruptcy Code or subject to other similar state or Federal law providing for reorganization or liquidation. SECTION 3.17. CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Purchase Contract Agent shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Purchase Contract Agent of any changes in the "CUSIP" numbers. ARTICLE 4 THE PREFERRED SECURITIES, SUBORDINATED NOTES AND APPLICABLE OWNERSHIP INTEREST OF THE TREASURY PORTFOLIO SECTION 4.01. Distributions and Interest Payments; Rights to Distributions and Interest Payments Preserved. Any distribution on any Preferred Security, any interest payment on any Subordinated Note or on the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case may be, which is paid on any Payment Date shall, subject to receipt thereof by the Purchase Contract Agent from the Collateral Agent as provided by the terms of the Pledge Agreement, be paid to the Person in whose name the PEPS Units Certificate (or one or more Predecessor PEPS Units Certificates) of which such Preferred Security, such Subordinated Note or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case may be, is registered at the close of business on the Record Date for such Payment Date; provided, however, that if any such payment is received on a day that is not a Business Day or after 11:00 a.m. (New York City time) on a Business Day, then the Purchase Contract Agent shall use all commercially reasonable efforts to deliver any such payment not later than 10:30 a.m. (New York City time) on the next succeeding Business Day. Each PEPS Units Certificate evidencing Preferred Securities, Subordinated Notes or the appropriate Applicable Ownership Interest of the Treasury Portfolio delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of any other PEPS Units Certificate shall carry the right to distributions accumulated and unpaid or interest accrued and unpaid, and to accumulate distributions or accrue interest, which were carried by the Preferred Securities, Subordinated Notes or the appropriate Applicable Ownership Interest of the Treasury Portfolio underlying such other PEPS Units Certificate. 37 42 In the case of any PEPS Units with respect to which Cash Settlement of the underlying Purchase Contract is properly effected pursuant to Section 5.03 hereof, or with respect to which Early Settlement of the underlying Purchase Contract is properly effected pursuant to Section 5.08 hereof, or with respect to which a Collateral Substitution is effected, in each case on a date that is after any Record Date and prior to or on the next succeeding Payment Date, distributions on the Preferred Securities, Subordinated Notes or on the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case may be, underlying such PEPS Unit otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such Cash Settlement or Early Settlement or Collateral Substitution, and such distributions shall, subject to receipt thereof by the Purchase Contract Agent, be payable to the Person in whose name the PEPS Units Certificate (or one or more Predecessor PEPS Units Certificates) was registered at the close of business on the Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any PEPS Unit with respect to which Cash Settlement or Early Settlement of the underlying Purchase Contract is properly effected, or with respect to which a Collateral Substitution has been effected, distributions on the related Preferred Securities, Subordinated Notes or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case may be, that would otherwise be payable after the Purchase Contract Settlement Date or Early Settlement Date or Collateral Substitution shall not be payable hereunder to the Holder of such PEPS Units; provided, however, that to the extent that such Holder continues to hold separated Preferred Securities or Subordinated Notes that formerly comprised a part of such Holder's PEPS Unit, such Holder shall be entitled to receive distributions on such separated Preferred Securities or Subordinated Notes. The applicable Coupon Rate on the Subordinated Notes or the Preferred Securities, as the case may be, on and after February 18, 2004 will be reset in the case of a Successful Initial Remarketing or a Successful Final Remarketing to the applicable Reset Rate (such Reset Rate to be in effect on and after the applicable Reset Effective Date). In the event of a Failed Final Remarketing, the applicable Coupon Rate on the Subordinated Notes or the Preferred Securities, as the case may be, outstanding on and after the Purchase Contract Settlement Date will be reset on the Purchase Contract Settlement Date to the Reset Rate that will be equal to the Two-Year Benchmark Treasury plus the Applicable Spread. On the applicable Reset Announcement Date the Reset Spread and the Two-Year Benchmark Treasury or Benchmark Treasury, as applicable, to be used to determine the Reset Rate will be announced by the Company, such announcement to be made by a customary method, as determined by the Company. On the Business Day immediately following the Reset Announcement Date, the holders of the Preferred Securities or the Subordinated Notes, as the case may be, will be notified of such Reset Spread and Two-Year Benchmark Treasury or Benchmark Treasury, as applicable, by the Company. Such notice shall be sufficiently given to holders of the Preferred Securities or the Subordinated Notes, as the case may be, if published in an Authorized Newspaper. 38 43 In the case of (i) the first Initial Remarketing on the third Business Day prior to February 18, 2004 or the Final Remarketing, no later than 7 calendar days nor more than 15 calendar days prior to the Reset Announcement Date, and in the case of (ii) any Additional Remarketing, as soon as practical after the Company has been notified of an Additional Remarketing by the Remarketing Agent, the Company will request the Depositary or its nominee by first-class mail, postage prepaid, to notify the Beneficial Owners or Participants holding PEPS Units or Treasury PEPS Units of such Reset Announcement Date and, in the case of a Final Remarketing, the procedures to be followed by Holders of PEPS Units who intend to effect a Cash Settlement on the fourth Business Day immediately preceding the Purchase Contract Settlement Date. SECTION 4.02. Notice and Voting. Under the terms of the Pledge Agreement, the Purchase Contract Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Pledged Preferred Securities or Pledged Subordinated Notes, but only to the extent instructed in writing by the Holders as described below. Upon receipt of notice of any meeting at which holders of Preferred Securities or Subordinated Notes are entitled to vote or upon any solicitation of consents, waivers or proxies of holders of Preferred Securities or Subordinated Notes, the Purchase Contract Agent shall, as soon as practicable thereafter, mail, first class, postage pre-paid, to the Holders of PEPS Units a notice: (i) containing such information as is contained in the notice or solicitation; (ii) stating that each Holder on the record date set by the Purchase Contract Agent therefor (which, to the extent possible, shall be the same date as the record date for determining the holders of Preferred Securities or Subordinated Notes, as the case may be, entitled to vote) shall be entitled to instruct the Purchase Contract Agent as to the exercise of the voting rights pertaining to such Preferred Securities or Subordinated Notes underlying their PEPS Units; and (iii) stating the manner in which such instructions may be given. Upon the written request of the Holders of PEPS Units on such record date received by the Purchase Contract Agent at least six days prior to such meeting, the Purchase Contract Agent shall endeavor insofar as practicable to vote or cause to be voted, in accordance with the instructions set forth in such requests, the maximum number of Preferred Securities or Subordinated Notes, as the case may be, as to which any particular voting instructions are received. In the absence of specific instructions from the Holder of a PEPS Unit, the Purchase Contract Agent shall abstain from voting the Preferred Securities or Subordinated Notes underlying such PEPS Unit. The Company hereby agrees, if applicable, to solicit Holders of PEPS Units to timely instruct the Purchase Contract Agent in order to enable the Purchase Contract Agent to vote such Preferred 39 44 Securities or Subordinated Notes and the Trust shall covenant to this effect in the Trust Agreement. SECTION 4.03. Distribution of Subordinated Notes; Tax Event Redemption. Upon the dissolution and liquidation of the Trust in accordance with the Trust Agreement prior to the Purchase Contract Settlement Date, a principal amount at maturity of Subordinated Notes constituting the assets of the Trust and underlying the Preferred Securities equal to the aggregate liquidation amount of the Pledged Preferred Securities shall be delivered to the Securities Intermediary in exchange for the Pledged Preferred Securities. Thereafter, the Subordinated Notes will be substituted for the Pledged Preferred Securities as the Collateral, and will be held by the Securities Intermediary in the Collateral Account in accordance with the terms of the Pledge Agreement to secure the obligations of each Holder of a PEPS Unit to purchase the Common Stock of the Company under the Purchase Contracts constituting a part of such PEPS Unit. Following the dissolution and liquidation of the Trust, the Holders and the Collateral Agent shall have such security interests, rights and obligations with respect to the Subordinated Notes as the Holders and the Collateral Agent had in respect of the Preferred Securities subject to the Pledge thereof as provided in the Pledge Agreement. The Company may cause to be made in any PEPS Unit Certificates thereafter to be issued such change in phraseology and form (but not in substance) as may be appropriate to reflect the dissolution and liquidation of the Trust and the substitution of Subordinated Notes for Preferred Securities as Collateral. Upon the occurrence of a Tax Event Redemption prior to February 18, 2004 or any Additional Remarketing, or in the event of a Failed Initial Remarketing, prior to the Purchase Contract Settlement Date, the Redemption Price payable on such date with respect to the Applicable Amount shall be deposited in the Collateral Account in exchange for the Pledged Preferred Securities or the Pledged Subordinated Notes. Thereafter, pursuant to the terms of the Pledge Agreement, the Collateral Agent shall cause the Securities Intermediary to apply an amount equal to the Redemption Amount of such Redemption Price to purchase on behalf of the Holders of PEPS Units the Treasury Portfolio and promptly remit the remaining portion of such Redemption Price to the Purchase Contract Agent for payment to the Holders of such PEPS Units. The Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio will be substituted as Collateral for the Pledged Preferred Securities or the Pledged Subordinated Notes, as the case may be, and will be held by the Collateral Agent in accordance with the terms of the Pledge Agreement to secure the obligation of each Holder of a PEPS Unit to purchase the Common Stock of the Company under the Purchase Contract constituting a part of such PEPS Unit. Following the occurrence of a Tax Event Redemption prior to February 18, 2004, or any Additional Remarketing prior to the Purchase Contract Settlement Date, the Holders of PEPS Units and the Collateral 40 45 Agent shall have such security interest rights and obligations with respect to the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio as the Holders of PEPS Units and the Collateral Agent had in respect of the Preferred Securities or Subordinated Notes, as the case may be, subject to the Pledge thereof as provided in the Pledge Agreement, and any reference herein to the Preferred Securities or the Subordinated Notes shall be deemed to be reference to such Treasury Portfolio. The Company may cause to be made in any PEPS Unit Certificates thereafter to be issued such change in phraseology and form (but not in substance) as may be appropriate to reflect the liquidation of the Trust and the substitution of the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio for Preferred Securities or Subordinated Notes as Collateral. ARTICLE 5 THE PURCHASE CONTRACTS SECTION 5.01. Purchase of Shares of Common Stock. Each Purchase Contract shall, unless a Cash Settlement has occurred in accordance with Section 5.03 hereof or an Early Settlement has occurred in accordance with Section 5.08 hereof, obligate the Holder of the related Security to purchase, and the Company to sell, on the Purchase Contract Settlement Date at a price equal to the Stated Amount (the "PURCHASE PRICE"), a number of shares of Common Stock (subject to Section 5.09) equal to the Settlement Rate unless, prior to or on the Purchase Contract Settlement Date, there shall have occurred a Termination Event with respect to the Security of which such Purchase Contract is a part. The "SETTLEMENT RATE" is equal to: (i) if the Applicable Market Value (as defined below) is greater than or equal to $65.03 (the "THRESHOLD APPRECIATION PRICE"), 0.3845 shares of Common Stock per Purchase Contract; (ii) if the Applicable Market Value is less than the Threshold Appreciation Price but greater than $53.30 (the "REFERENCE PRICE"), the number of shares of Common Stock per Purchase Contract having a value, based on the Applicable Market Value, equal to the Stated Amount; and (iii) if the Applicable Market Value is less than or equal to the Reference Price, 0.4690 shares of Common Stock per Purchase Contract, in each case subject to adjustment as provided in Section 5.05 (and in each case rounded upward or downward to the nearest 1/10,000th of a share). The "APPLICABLE MARKET VALUE" means the average of the Closing Price per share of Common Stock on each of the 20 consecutive Trading Days ending on the third Trading Day immediately preceding the Purchase Contract Settlement Date. The "CLOSING PRICE" per share of Common Stock on any date of determination means: 41 46 (i) the closing sale price as of the 4:15 p.m. close of trading (or, if no closing price is reported, the last reported sale price) per share on the NYSE on such date; (ii) if the Common Stock is not listed for trading on the NYSE on any such date, the closing sale price per share as reported in the composite transactions for the principal United States securities exchange on which the Common Stock is so listed; (iii) if the Common Stock is not so listed on a United States national or regional securities exchange, the closing sale price per share as reported by The NASDAQ Stock Market, Inc.; (iv) if the Common Stock is not so reported, the last quoted bid price for the Common Stock in the over-the-counter market as reported by the National Quotation Bureau or similar organization; or (v) if such bid price is not available, the average of the mid-point of the last bid and ask prices of the Common Stock on such date from at least three nationally recognized independent investment banking firms retained for this purpose by the Company. A "TRADING DAY" means a day on which the Common Stock (1) is not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (2) has traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Stock. Each Holder of a PEPS Unit or a Treasury PEPS Unit, by its acceptance thereof: (i) irrevocably authorizes the Purchase Contract Agent to enter into and perform the related Purchase Contract on its behalf as its attorney-in- fact (including the execution of Certificates on behalf of such Holder); (ii) agrees to be bound by the terms and provisions thereof; (iii) covenants and agrees to perform its obligations under such Purchase Contracts; (iv) consents to the provisions hereof; (v) irrevocably authorizes the Purchase Contract Agent to enter into and perform this Agreement and the Pledge Agreement on its behalf as its attorney-in-fact; and 42 47 (vi) consents to, and agrees to be bound by, the Pledge of the Preferred Securities, Subordinated Notes, the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio or the Treasury Securities pursuant to the Pledge Agreement, provided that upon a Termination Event, the rights of the Holder of such Security under the Purchase Contract may be enforced without regard to any other rights or obligations. Each Holder of a PEPS Unit or a Treasury PEPS Unit, by its acceptance thereof, further covenants and agrees, that to the extent and in the manner provided in Section 5.03 and the Pledge Agreement, but subject to the terms thereof, payments in respect of the Preferred Securities or the Subordinated Notes or the proceeds from the Treasury Securities or the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio at maturity on the Purchase Contract Settlement Date, as the case may be, shall be paid by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such payments. Upon registration of transfer of a Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee) by the terms of this Agreement, the Purchase Contracts underlying such Certificate, the Trust Agreement and the Pledge Agreement and the transferor shall be released from the obligations under this Agreement, the Purchase Contracts underlying the Certificate so transferred and the Pledge Agreement. The Company covenants and agrees, and each Holder of a Certificate, by its acceptance thereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. SECTION 5.02. Initial and Additional Remarketing. Unless a Tax Event Redemption has occurred, the Company shall engage a nationally recognized investment bank (the "REMARKETING AGENT") pursuant to the Remarketing Agreement to sell the Preferred Securities or the Subordinated Notes, as the case may be, of the PEPS Unit Holders on the third Business Day immediately preceding February 18, 2004, and, in the event of a failed attempt to remarket on such date, the Remarketing Agent shall use its reasonable efforts in its discretion to remarket all of the Preferred Securities or Subordinated Notes, as the case may be, from time to time thereafter prior to the tenth Business Day preceding the Purchase Contract Settlement Date (each such additional remarketing being referred to as an "ADDITIONAL REMARKETING" and, any such Additional Remarketing and the first Remarketing on the third Business Day preceding February 18, 2004 being referred to as an "INITIAL REMARKETING", and each date on which an Initial Remarketing takes place being referred to as an "INITIAL REMARKETING DATE"). In order to facilitate the remarketing, the Purchase Contract Agent shall notify, by 11:00 a.m., New York City time, on the Business Day immediately preceding any Initial Remarketing Date, the Remarketing Agent and the Company, as the case 43 48 may be, of the aggregate liquidation amount of Preferred Securities or aggregate principal amount of Subordinated Notes, as the case may be, which constitute part of the PEPS Units to be remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the Pledge Agreement will present for remarketing such Preferred Securities or the Subordinated Notes, as the case may be, to the Remarketing Agent. Upon receipt of the notice from the Purchase Contract Agent and such Preferred Securities or the Subordinated Notes, as the case may be, from the Collateral Agent, the Remarketing Agent will, on any Initial Remarketing Date, use its reasonable efforts to remarket such Preferred Securities or the Subordinated Notes, as the case may be, on such date at a price of approximately 100.25% (but not less than 100%) of the Treasury Portfolio Purchase Price. If the Remarketing Agent is able to remarket the Preferred Securities or the Subordinated Notes, as the case may be, at a price equal to or greater than 100% of the Treasury Portfolio Purchase Price (a "SUCCESSFUL INITIAL REMARKETING"), the portion of the proceeds from such Successful Initial Remarketing equal to the Treasury Portfolio Purchase Price will be applied to purchase the Treasury Portfolio in accordance with Section 7.4 of the Pledge Agreement. In addition, the Remarketing Agent may deduct as a remarketing fee ("REMARKETING FEE") an amount not exceeding 25 basis points (0.25%) of the Treasury Portfolio Purchase Price from any amount of such proceeds in excess of the Treasury Portfolio Purchase Price. Any proceeds in excess of those required to pay the Treasury Portfolio Purchase Price and the Remarketing Fee will be remitted to the Purchase Contract Agent for a prompt payment to the Holders of the related PEPS Units to be made on a pro rata basis. PEPS Units Holders whose Preferred Securities or Subordinated Notes, as the case may be, are so remarketed will not otherwise be responsible for the payment of any Remarketing Fee in connection therewith. The Treasury Portfolio will be substituted for the Preferred Securities or Subordinated Notes, as the case may be, of PEPS Unit Holders and will be pledged to the Collateral Agent to secure the PEPS Unit Holders' obligation to pay the Purchase Price for the Common Stock under the related Purchase Contracts on the Purchase Contract Settlement Date. Following the occurrence of a Successful Initial Remarketing, the Holders of PEPS Units and the Collateral Agent shall have such security interests, rights and obligations with respect to the Treasury Portfolio as the Holder of PEPS Units and the Collateral Agent had in respect of the Preferred Securities or Subordinated Notes, as the case may be, subject to the Pledge thereof as provided in the Pledge Agreement, and any reference herein to the Preferred Securities or Subordinated Notes, as the case may be, shall be deemed to be a reference to such Treasury Portfolio and any reference herein to distributions on the Preferred Securities or interest on the Subordinated Notes, as the case may be, shall be deemed to be a reference to corresponding distributions on the Treasury Portfolio. The Company may cause to be made in any PEPS Units Certificates thereafter to be issued such change in phraseology and form (but not in substance) as may be appropriate to reflect the substitution of the Treasury Portfolio for Preferred Securities or Subordinated Notes, as the case may be, as collateral. If, (i) in spite of using its reasonable efforts, the Remarketing Agent cannot remarket the related Preferred Securities or Subordinated Notes, as the case may be (other than to the Company), of such Holders of PEPS Units at a price not less than 100% of the Treasury Portfolio Purchase Price, or (ii) the remarketing has not occurred because a 44 49 condition precedent to the remarketing has not been fulfilled, the remarketing will be deemed to have failed (a "FAILED INITIAL REMARKETING"). The Company will cause a notice of a Failed Initial Remarketing to be published on the Business Day immediately succeeding any Initial Remarketing Date in the Authorized Newspaper. Holders of and the holders of beneficial interest in the Securities shall be hereby deemed to agree that the obligations of the Remarketing Agent and the Reset Agent under the Remarketing Agreement and the related supplemental remarketing agreement are subject to satisfaction of conditions set forth in or incorporated by reference into any such agreement. Instead of participating in the first Initial Remarketing on the third Business Day immediately preceding February 18, 2004, the Holders of PEPS Units can deliver sufficient cash to the Remarketing Agent or its designated entity to make the Treasury Portfolio Cash Payment to purchase the Treasury Portfolio on their behalf on the fifth Business Day prior to such Remarketing as further described in Section 7.4 of the Pledge Agreement. In addition, instead of participating in an Additional Remarketing, the Holders of PEPS Units can deliver sufficient cash to the Remarketing Agent or its designated entity to make the Treasury Portfolio Cash Payment to purchase the Treasury Portfolio on their behalf on the second Business Day prior to any Additional Remarketing as further described in Section 7.4 of the Pledge Agreement. To effect a collateral substitution in connection with the Treasury Portfolio Cash Payment, a Holder shall give a notice to the Purchase Contract Agent, substantially in the form of Exhibit I to the Pledge Agreement, stating that the Holder has transferred the Treasury Portfolio Cash Payment to purchase the Applicable Ownership Interest in the Treasury consideration in respect of their PEPS Units to the Remarketing Agent, on or prior to 11:00 a.m., New York City time, on the second Business Day immediately preceding the date of any Additional Remarketing, and requesting that the Purchase Contract Agent instruct the Collateral Agent to release the Preferred Securities or the Subordinated Notes, as the case may be, underlying such PEPS Units, whereupon the Purchase Contract Agent shall give such instruction to the Collateral Agent substantially in the form of Exhibit J to the Pledge Agreement. If a Holder fails to deliver the Treasury Portfolio Cash Payment on or prior to 11:00 a.m., New York City time, on the fifth Business Day prior to February 18, 2004, on or prior to 11:00 a.m., New York City time, on the second Business Day immediately preceding the date of any Additional Remarketing, such Holder will be deemed to have consented to the remarketing and such Holder's Preferred Securities or the Subordinated Notes, as the case may be, will be remarketed by the Remarketing Agent. In the event of a Collateral substitution as described in this Section 5.02, the Preferred Securities or the Subordinated Notes, as the case may be, shall be released by the Securities Intermediary to the Purchase Contract Agent who shall deliver the Pledged Securities to the Holder upon satisfaction of the conditions precedent described in this 45 50 Section 5.02. The date of such release shall not be prior to the applicable Reset Effective Date. SECTION 5.02.A. Contract Adjustment Payments. (b) The Company shall pay, on each Payment Date, the Contract Adjustment Payments, if any, payable in respect of each Purchase Contract to the Person in whose name a Certificate (or one or more Predecessor Certificates) is registered at the close of business on the Record Date next preceding such Payment Date in such coin or currency of the United States as at the time of payment shall be legal tender for payments. The Contract Adjustment Payments, if any, will be payable at the New York Office maintained for that purpose or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person's address as it appears on the Securities Register or by wire transfer to the account designated by written notice by such Person delivered to the Purchase Contract Agent at least 15 days prior to the applicable Payment Date. Upon the occurrence of a Termination Event, the Company's obligation to pay Contract Adjustment Payments, if any, shall cease. Each Certificate delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of (including as a result of a Collateral Substitution or the re-establishment of a PEPS Unit) any other Certificate shall carry the rights to Contract Adjustment Payments, if any, accrued and unpaid, and to accrue Contract Adjustment Payments, if any, which were carried by the Purchase Contracts underlying such other Certificates. Subject to Section 5.08, in the case of any Security with respect to which Early Settlement of the underlying Purchase Contract is effected on an Early Settlement Date, or in respect of which Cash Settlement of the underlying Purchase Contract is effected on the Business Day immediately preceding the Purchase Contract Settlement Date, or with respect to which a Collateral Substitution or a reestablishment of PEPS Units pursuant to Section 3.14 is effected, in each case on a date that is after any Record Date and on or prior to the next succeeding Payment Date, Contract Adjustment Payments on the Purchase Contracts underlying such Securities otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such Cash Settlement, Early Settlement, Collateral Substitution or establishment or reestablishment of PEPS Units, and such Contract Adjustment Payments shall be paid to the Person in whose name the Certificate evidencing such Security (or one or more Predecessor Certificates) is registered at the close of business on such Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any Security with respect to which Cash Settlement or Early Settlement of the underlying Purchase Contract is effected on the Business Day immediately preceding the Purchase Contract Settlement Date or on an Early Settlement Date, as the case may be, or with respect to which a Collateral Substitution or an establishment or a reestablishment of PEPS Units has been 46 51 effected, Contract Adjustment Payments, if any, that would otherwise be payable after the Purchase Contract Settlement Date or Early Settlement Date, Collateral Substitution or such establishment or reestablishment with respect to such Purchase Contract shall not be payable. (c) The Company's obligations with respect to Contract Adjustment Payments, if any, will be subordinated and junior in right of payment to the Company's obligations under any Senior Indebtedness. (d) In the event (a) of any payment by, or distribution of assets of, the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution, winding-up, liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other proceedings, or (b) subject to the provisions of Subsection 5.02.A(e) below, that (i) a default shall have occurred and be continuing with respect to the payment of principal, interest or any other monetary amounts due and payable on any Senior Indebtedness and such default shall have continued beyond the period of grace, if any, specified in the instrument evidencing such Senior Indebtedness (and the Purchase Contract Agent shall have received written notice thereof from the Company or one or more holders of Senior Indebtedness or their representative or representatives or the trustee or trustees under any indenture pursuant to which any such Senior Indebtedness may have been issued), or (ii) the maturity of any Senior Indebtedness shall have been accelerated because of a default in respect of such Senior Indebtedness (and the Purchase Contract Agent shall have received written notice thereof from the Company or one or more holders of Senior Indebtedness or their representative or representatives or the trustee or trustees under any indenture pursuant to which any such Senior Indebtedness may have been issued), then: (i) the holders of all Senior Indebtedness shall first be entitled to receive, in the case of (a) above, payment of all amounts due or to become due upon all Senior Indebtedness and, in the case of subclauses (i) and (ii) of clause (b) above, payment of all amounts due thereon, or provision shall be made for such payment in money or money's worth, before the Holders of any of the Securities are entitled to receive any Contract Adjustment Payments on the Purchase Contracts underlying the Securities; (ii) any payment by, or distribution of assets of, the Company of any kind or character, whether in cash, property or securities, to which the Holders of any of the Securities would be entitled except for the provisions of Subsections 5.02.A(b) through (n), including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of such Contract Adjustment Payments on the Purchase Contracts underlying the Securities, shall be paid or delivered by the Person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of such Senior Indebtedness or their representative or representatives or to the 47 52 trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, ratably according to the aggregate amounts remaining unpaid on account of such Senior Indebtedness held or represented by each, to the extent necessary to make payment in full of all Senior Indebtedness remaining unpaid after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Indebtedness, before any payment or distribution is made of such Contract Adjustment Payments to the Holders of such Securities; and (iii) in the event that, notwithstanding the foregoing, any payment by, or distribution of assets of, the Company of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of Contract Adjustment Payments on the Purchase Contracts underlying the Securities, shall be received by the Purchase Contract Agent or the Holders of any of the Securities when such payment or distribution is prohibited pursuant to Subsections 5.02.A(b) through (n), such payment or distribution shall be paid over to the holders of such Senior Indebtedness or their representative or representatives or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any such Senior Indebtedness may have been issued, ratably as aforesaid, for application to the payment of all Senior Indebtedness remaining unpaid until all such Senior Indebtedness shall have been paid in full, after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Indebtedness. (e) For purposes of Subsections 5.02.A(b) through (n), the words "cash, property or securities" shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other Person provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in Subsections 5.02.A(b) through (n) with respect to such Contract Adjustment Payments on the Securities to the payment of all Senior Indebtedness which may at the time be outstanding; provided that (i) the indebtedness or guarantee of indebtedness, as the case may be, that constitutes Senior Indebtedness is assumed by the Person, if any, resulting from any such reorganization or readjustment, and (ii) the rights of the holders of the Senior Indebtedness are not, without the consent of each such holder adversely affected thereby, altered by such reorganization or readjustment; (f) Any failure by the Company to make any payment on or perform any other obligation under Senior Indebtedness, other than any indebtedness incurred by the Company or assumed or guaranteed, directly or indirectly, by the Company for money borrowed (or any deferral, renewal, extension or refunding thereof) or any indebtedness or obligation as to which the provisions of this subsection (e) shall have been waived by the Company in the instrument or instruments by which the Company incurred, assumed, guaranteed or otherwise created such indebtedness or obligation, shall not be deemed a 48 53 default or event of default if (i) the Company shall be disputing its obligation to make such payment or perform such obligation and (ii) either (A) no final judgment relating to such dispute shall have been issued against the Company which is in full force and effect and is not subject to further review, including a judgment that has become final by reason of the expiration of the time within which a party may seek further appeal or review, and (B) in the event of a judgment that is subject to further review or appeal has been issued, the Company shall in good faith be prosecuting an appeal or other proceeding for review and a stay of execution shall have been obtained pending such appeal or review. (g) Subject to the payment in full of all Senior Indebtedness, the Holders of the Securities shall be subrogated (equally and ratably with the holders of all obligations of the Company which by their express terms are subordinated to Senior Indebtedness of the Company to the same extent as payment of the Contract Adjustment Payments in respect of the Purchase Contracts underlying the Securities is subordinated and which are entitled to like rights of subrogation) to the rights of the holders of Senior Indebtedness to receive payments or distributions of cash, property or securities of the Company applicable to the Senior Indebtedness until all such Contract Adjustment Payments owing on the Securities shall be paid in full, and as between the Company, its creditors other than holders of such Senior Indebtedness and the Holders, no such payment or distribution made to the holders of Senior Indebtedness by virtue of Subsections 5.02.A(b) through (n) that otherwise would have been made to the Holders shall be deemed to be a payment by the Company on account of such Senior Indebtedness, it being understood that the provisions of Subsections 5.02.A(b) through (n) are and are intended solely for the purpose of defining the relative rights of the Holders, on the one hand, and the holders of Senior Indebtedness, on the other hand. (h) Nothing contained in Subsections 5.02.A(b) through (n) or elsewhere in this Agreement or in the Securities is intended to or shall impair, as among the Company, its creditors other than the holders of Senior Indebtedness and the Holders, the obligation of the Company, which is absolute and unconditional, to pay to the Holders such Contract Adjustment Payments on the Securities as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Company other than the holders of Senior Indebtedness, nor shall anything herein or therein prevent the Agent or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Agreement, subject to the rights, if any, under these Subsections 5.02.A(b) through (n), of the Holders of Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy. (i) Upon payment or distribution of assets of the Company referred to in these Subsections 5.02.A(b) through (n), the Purchase Contract Agent and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which any such dissolution, winding up, liquidation or reorganization proceeding affecting the affairs of the Company is pending or upon a certificate of the trustee in bankruptcy, receiver, assignee for the benefit of creditors, liquidating trustee or agent or 49 54 other person making any payment or distribution, delivered to the Purchase Contract Agent or to the Holders, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to these Subsections 5.02.A(b) through (n). (j) The Purchase Contract Agent shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness (or a trustee or representative on behalf of such holder) to establish that such notice has been given by a holder of Senior Indebtedness or a trustee or representative on behalf of any such holder or holders. In the event that the Purchase Contract Agent determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to Subsections 5.02.A(b) through (n), the Purchase Contract Agent may request such Person to furnish evidence to the reasonable satisfaction of the Purchase Contract Agent as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under Subsections 5.02.A(b) through (n), and, if such evidence is not furnished, the Purchase Contract Agent may defer payment to such Person pending judicial determination as to the right of such Person to receive such payment. (k) Nothing contained in Subsections 5.02.A(b) through (n) shall affect the obligations of the Company to make, or prevent the Company from making, payment of the Contract Adjustment Payments, except as otherwise provided in these Subsections 5.02.A(b) through (n). (l) Each Holder of Securities, by his acceptance thereof, authorizes and directs the Purchase Contract Agent in his, her or its behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in Subsections 5.02.A(b) through (n) and appoints the Purchase Contract Agent his, her or its attorney-in-fact, as the case may be, for any and all such purposes. (m) The Company shall give prompt written notice to the Purchase Contract Agent of any fact known to the Company which would prohibit the making of any payment of moneys to or by the Purchase Contract Agent in respect of the Securities pursuant to the provisions of this Section. Notwithstanding the provisions of Subsections 5.02.A(b) through (e) or any other provisions of this Agreement, the Purchase Contract Agent shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of moneys to or by the Agent, or the taking of any other action by the Purchase Contract Agent, unless and until the Purchase Contract Agent shall have received written notice thereof mailed or delivered to the Purchase Contract Agent at its Institutional Trust Services department from the Company, any Holder, any paying agent or the holder or representative of any Senior Indebtedness; provided that if at least two Business Days prior to the date upon which by the terms hereof any such moneys may 50 55 become payable for any purpose, the Purchase Contract Agent shall not have received with respect to such moneys the notice provided for in this Section, then, anything herein contained to the contrary notwithstanding, the Purchase Contract Agent shall have full power and authority to receive such moneys and to apply the same to the purpose for which they were received and shall not be affected by any notice to the contrary that may be received by it within two Business Days prior to or on or after such date. (n) The Purchase Contract Agent in its individual capacity shall be entitled to all the rights set forth in this Section with respect to any Senior Indebtedness at the time held by it, to the same extent as any other holder of Senior Indebtedness and nothing in this Agreement shall deprive the Purchase Contract Agent of any of its rights as such holder. (o) No right of any present or future holder of any Senior Indebtedness to enforce the subordination herein shall at any time or in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any noncompliance by the Company with the terms, provisions and covenants of this Agreement, regardless of any knowledge thereof which any such holder may have or be otherwise charged with. Nothing in this Section 5.02.A shall apply to claims of, or payments to, the Purchase Contract Agent under or pursuant to Section 7.7. With respect to the holders of Senior Indebtedness, (i) the duties and obligations of the Purchase Contract Agent shall be determined solely by the express provisions of this Agreement; (ii) the Purchase Contract Agent shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement; (iii) no implied covenants or obligations shall be read into this Agreement against the Agent; and (iv) the Purchase Contract Agent shall not be deemed to be a fiduciary as to such holders. SECTION 5.03. Payment of Purchase Price; Final Remarketing. (a) (i) Unless a Tax Event Redemption, Successful Initial Remarketing or Termination Event has occurred or a Holder of a PEPS Unit effects an Early Settlement of the underlying Purchase Contract in the manner described in Section 5.08, each Holder who intends to pay in cash to satisfy such Holder's obligations under the Purchase Contract shall notify the Purchase Contract Agent by use of a notice in substantially the form of Exhibit E hereto of his intention to pay in cash ("CASH SETTLEMENT") the Purchase Price for the shares of Common Stock to be purchased pursuant to the related Purchase Contract. Such notice shall be given prior to 5:00 p.m. (New York City time) on the fifth Business Day immediately preceding the Purchase Contract Settlement Date. Prior to 11:00 a.m. (New York City time) on the next succeeding Business Day, the Purchase Contract Agent shall notify the Collateral Agent and the Indenture Trustee of the receipt of such notices from Holders intending to make a Cash Settlement. (ii) A Holder of a PEPS Unit who has so notified the Purchase Contract Agent of his intention to effect a Cash Settlement in accordance with paragraph 5.03(a)(i) 51 56 above shall pay the Purchase Price to the Securities Intermediary for deposit in the Collateral Account prior to 11:00 a.m. (New York City time) on the fourth Business Day immediately preceding the Purchase Contract Settlement Date, in lawful money of the United States by certified or cashiers' check or wire transfer, in each case in immediately available funds payable to or upon the order of the Securities Intermediary. Any cash received by the Collateral Agent shall be invested promptly by the Securities Intermediary in Permitted Investments and paid to the Company on the Purchase Contract Settlement Date in settlement of the Purchase Contracts in accordance with the terms of this Agreement and the Pledge Agreement. Any funds received by the Securities Intermediary in respect of the investment earnings from such Permitted Investments in excess of the Purchase Price for the shares of Common Stock to be purchased by such Holder shall be distributed to the Purchase Contract Agent when received for payment to the Holder. (iii) If a Holder of a PEPS Unit fails to notify the Purchase Contract Agent of his intention to make a Cash Settlement in accordance with paragraph 5.03(a)(i) above, or has notified the Purchase Contract Agent but fails to pay the Purchase Price to the Securities Intermediary in accordance with paragraph 5.03(a)(ii) above, such Holder shall be deemed to have consented to the disposition of the Pledged Preferred Securities or the Pledged Subordinated Notes pursuant to the Remarketing as described in paragraph 5.03(b) below. (b) Unless a Tax Event Redemption or a Successful Initial Remarketing has occurred, the Preferred Securities or Subordinated Notes, as the case may be, of PEPS Unit Holders who have not notified the Purchase Contract Agent of their intention to effect a Cash Settlement as provided in paragraph (a)(i) above or have failed to pay the Purchase Price to the Securities Intermediary in accordance with paragraph 5.03 (a)(ii) above will be sold by the Remarketing Agent (the "FINAL REMARKETING") on the third Business Day immediately preceding the Purchase Contract Settlement Date (the "FINAL REMARKETING DATE"). The Purchase Contract Agent shall notify, by 11:00 a.m., New York City time, on the Business Day immediately preceding the Final Remarketing Date, the Remarketing Agent, the Collateral Agent, the Indenture Trustee and the Company of the liquidation amount of Preferred Securities or the aggregate principal amount of Subordinated Notes, as the case may be, that are part of PEPS Units to be remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the Pledge Agreement, will present for remarketing such Preferred Securities or Subordinated Notes, as the case may be, to the Remarketing Agent. Upon receipt of such notice from the Collateral Agent and such Preferred Securities or Subordinated Notes from the Collateral Agent, the Remarketing Agent will, on the Final Remarketing Date, use its reasonable efforts to remarket such Preferred Securities or Subordinated Notes, as the case may be, on such date at a price of approximately 100.25% (but not less than 100%) of the aggregate liquidation amount of such Preferred Securities or the aggregate principal amount of Subordinated Notes, as the case may be. If the Remarketing Agent is able to remarket the Preferred Securities or Subordinated Notes at a price equal to or greater than 100% of the aggregate liquidation amount of Preferred Securities or the aggregate principal amount of 52 57 the Subordinated Notes (a "SUCCESSFUL FINAL REMARKETING"), the Remarketing Agent will remit the entire amount of the proceeds from such Successful Final Remarketing to the Collateral Agent; provided, however, that the Remarketing Agent may deduct as the Remarketing Fee an amount not exceeding 25 basis points (0.25%) of the aggregate liquidation amount of the remarketed Preferred Securities or the aggregate principal amount of the remarketed Subordinated Notes from any amount of the proceeds of a Successful Final Remarketing in excess of the aggregate liquidation amount of the remarketed Preferred Securities or the aggregate principal amount of the remarketed Subordinated Notes. The portion of the proceeds equal to the aggregate principal amount of Preferred Securities or the aggregate principal amount of Subordinated Notes will automatically be applied by the Collateral Agent, in accordance with the Pledge Agreement, to satisfy in full such PEPS Units Holders' obligations to pay the Purchase Price for the Common Stock under the related Purchase Contracts on the Purchase Contract Settlement Date. Any proceeds in excess of those required to pay the Purchase Price and the Remarketing Fee will be remitted to the Purchase Contract Agent for payment to the Holders of the related PEPS Units. PEPS Units Holders whose Preferred Securities or Subordinated Notes, as the case may be, are so remarketed will not otherwise be responsible for the payment of any Remarketing Fee in connection therewith. If, (i) in spite of using its reasonable efforts, the Remarketing Agent cannot remarket the related Preferred Securities or Subordinated Notes, as the case may be (other than to the Company), of such Holders of PEPS Units at a price not less than 100% of the aggregate liquidation amount of the Preferred Securities or the aggregate principal amount of the Subordinated Notes, as the case may be, or (ii) the remarketing has not occurred because a condition precedent to the remarketing has not been fulfilled, the remarketing will be deemed to have failed (a "FAILED FINAL REMARKETING") and in accordance with the terms of the Pledge Agreement the Collateral Agent for the benefit of the Company will exercise its rights as a secured party with respect to such Preferred Securities or Subordinated Notes, as the case may be, including those actions specified in paragraph (c) below. The Company will cause a notice of such Failed Final Remarketing to be published on the second Business Day immediately preceding the Purchase Contract Settlement Date in the Authorized Newspaper. (c) With respect to Preferred Securities or Subordinated Notes, which are subject to a Failed Final Remarketing, the Collateral Agent for the benefit of the Company reserves all of its rights as a secured party with respect thereto and, subject to applicable law and paragraph (h) below, may, among other things, (i) retain the Preferred Securities or Subordinated Notes, as the case may be, or (ii) sell the Preferred Securities or Subordinated Notes, as the case may be, in one or more public or private sales, each in full satisfaction of the Holders' obligations under the Purchase Contracts. (d) Unless a Termination Event or an Early Settlement has occurred, the Purchase Contract underlying each Treasury Unit and, if a Tax Event Redemption or a Successful Initial Remarketing has occurred, each PEPS Unit will be settled with the Proceeds at maturity of the Treasury Security or the Applicable Ownership Interest (as defined in clause (A) of the definition of such term) of the Treasury Portfolio, as applicable. Upon 53 58 receipt of such Proceeds, the Collateral Agent will invest the Proceeds promptly in Permitted Investments and pay the Proceeds to the Company on the Purchase Contract Settlement Date in accordance with the terms of this Agreement and the Pledge Agreement. Any such Proceeds received by the Collateral Agent in excess of the Purchase Price and any funds received by the Collateral Agent in respect of the investment earnings from the investment in such Permitted Investments will be distributed to the Purchase Contract Agent when received for payment to the Holder. (e) Any distribution to Holders of excess funds and interest described above, shall be payable at the New York Office maintained for that purpose or, at the option of the Holder, by check mailed to the address of the Person entitled thereto at such address as it appears on the Security Register or, at the option of the Company, by wire transfer to the bank account designated by such Holder in writing, such payments to be made to the same Persons entitled to receive Common Stock with respect to Purchase Contracts referred to in Subsection (d) above. (f) (i) Unless a Holder of a Treasury PEPS Units or PEPS Units effects an Early Settlement of the underlying Purchase Contract through the early delivery of cash to the Purchase Contract Agent in the manner described in Section 5.08, each Holder of a Treasury PEPS Unit who intends to pay in cash shall notify the Purchase Contract Agent by use of a notice in substantially the form of Exhibit E hereto of his intention to pay in cash the Purchase Price for the shares of Common Stock to be purchased pursuant to the related Purchase Contract. Such notice shall be given prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding the Purchase Contract Settlement Date. Prior to 11:00 a.m. (New York City time) on the next succeeding Business Day, the Purchase Contract Agent shall notify the Collateral Agent of the receipt of such notices from such Holders intending to make a Cash Settlement. Treasury PEPS Unit holders may make Cash Settlements only in integral multiples of 40 Treasury PEPS Units. (ii) A Holder of a Treasury PEPS Unit who has so notified the Purchase Contract Agent of his intention to make a Cash Settlement in accordance with paragraph 5.03(f)(i) above shall pay the Purchase Price to the Securities Intermediary for deposit in the Collateral Account prior to 11:00 a.m. (New York City time) on the Business Day immediately preceding May 18, 2004, in lawful money of the United States by certified or cashiers' check or wire transfer, in each case in immediately available funds payable to or upon the order of the Securities Intermediary. Any cash received by the Collateral Agent shall be invested promptly by the Securities Intermediary in Permitted Investments and paid to the Company on the Purchase Contract Settlement Date in settlement of the Purchase Contract in accordance with the terms of this Agreement and the Pledge Agreement. Any funds received by the Securities Intermediary in respect of the investment earnings from the investment in such Permitted Investments in excess of the Purchase Price for the shares of common stock to be purchased by such Holder shall be distributed to the Purchase Contract Agent when received for payment to the Holder. 54 59 (iii) If a Holder of a Treasury PEPS Unit fails to notify the Purchase Contract Agent of his intention to make a Cash Settlement in accordance with paragraph 5.03(f)(i) above, or does notify the Purchase Contract Agent as provided in paragraph 5.03(f)(i) above of his intention to pay the Purchase Price in cash, but fails to make such payment as required by paragraph 5.03(f)(ii) above, then upon the maturity of the Pledged Treasury Securities held by the Securities Intermediary on the Business Day immediately preceding the Purchase Contract Settlement Date, the principal amount of the Treasury Securities received by the Securities Intermediary shall be invested promptly in Permitted Investments. On the Purchase Contract Settlement Date, an amount equal to the Purchase Price shall be remitted to the Company as payment thereof without receiving any instructions from the Holder. In the event the sum of the proceeds from the related Pledged Treasury Securities and the investment earnings earned from such investments is in excess of the aggregate Purchase Price of the Purchase Contracts being settled thereby, the Collateral Agent shall cause the Securities Intermediary to distribute such excess to the Purchase Contract Agent for the benefit of the Holder of the related Treasury PEPS Unit or PEPS Unit when received. (iv) If a Tax Event Redemption or a Successful Initial Remarketing has occurred, a Holder of a PEPS Unit may not make a Cash Settlement. (v) A holder of a Preferred Security or Subordinated Note that is no longer part of a PEPS Unit may elect to have such Preferred Security or Subordinated Note, as the case may be, remarketed pursuant to Section 5.7(c) of the Pledge Agreement. (g) Upon Cash Settlement of any Purchase Contract: (i) the Collateral Agent will in accordance with the terms of the Pledge Agreement cause the Pledged Preferred Securities, Pledged Subordinated Notes, the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio or the Pledged Treasury Securities, as the case may be, underlying the relevant Security to be released from the Pledge, free and clear of any security interest of the Company, and transferred to the Purchase Contract Agent for delivery to the Holder thereof or its designee as soon as practicable; and (ii) subject to the receipt thereof, the Purchase Contract Agent shall, by book-entry transfer or other appropriate procedures, in accordance with written instructions provided by the Holder thereof, transfer such Preferred Securities, Subordinated Notes, or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio or such Treasury Securities, as the case may be (or, if no such instructions are given to the Purchase Contract Agent by the Holder, the Purchase Contract Agent shall hold such Preferred Securities, Subordinated Notes, or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio or such Treasury Securities, as the case may be, and any 55 60 interest payment thereon, in the name of the Purchase Contract Agent or its nominee in trust for the benefit of such Holder until the expiration of the time period specified in the abandoned property laws of the relevant state). (h) The obligations of the Holders to pay the Purchase Price are non-recourse obligations and, except to the extent satisfied by Early Settlement or Cash Settlement, are payable solely out of the proceeds of any Collateral pledged to secure the obligations of the Holders and in no event will Holders be liable for any deficiency between the proceeds of the disposition of Collateral and the Purchase Price. SECTION 5.03.A. Failed Final Remarketing. If a Failed Final Remarketing occurs Holders of Preferred Securities or Subordinated Notes, as the case may be, that are not part of a PEPS Unit will retain possession of their Preferred Securities, and the Reset Rate will be reset on the Purchase Contract Settlement Date as described in the definition of Reset Rate in Section 1.01 and in Section 4.01 of this Agreement. SECTION 5.04. Issuance of Shares of Common Stock. Unless a Termination Event or an Early Settlement shall have occurred, subject to Section 5.05(b), on the Purchase Contract Settlement Date upon receipt of the aggregate Purchase Price payable on all Outstanding Securities, the Company shall issue and deposit with the Purchase Contract Agent, for the benefit of the Holders of the Outstanding Securities, one or more certificates representing the shares of Common Stock registered in the name of the Purchase Contract Agent (or its nominee) as custodian for the Holders (such certificates for shares of Common Stock, together with any dividends or distributions for which a record date and payment date for such dividend or distribution has occurred after the Purchase Contract Settlement Date, being hereinafter referred to as the "PURCHASE CONTRACT SETTLEMENT FUND") to which the Holders are entitled hereunder. Subject to the foregoing, upon surrender of a Certificate to the Purchase Contract Agent on or after the Purchase Contract Settlement Date, together with settlement instructions thereon duly completed and executed, the Holder of such Certificate shall be entitled to receive in exchange therefor a certificate representing that number of whole shares of Common Stock which such Holder is entitled to receive pursuant to the provisions of this Article Five (after taking into account all Securities then held by such Holder), together with cash in lieu of fractional shares as provided in Section 5.09 and any dividends or distributions with respect to such shares constituting part of the Purchase Contract Settlement Fund, but without any interest thereon, and the Certificate so surrendered shall be cancelled. Such shares shall be registered in the name of the Holder or the Holder's designee as specified in the settlement instructions provided by the Holder to the Purchase Contract Agent. If any shares of Common Stock issued in respect of a Purchase Contract are to be registered to a Person other than the Person in whose name the Certificate evidencing such Purchase Contract is registered, no such 56 61 registration shall be made unless the Person requesting such registration has paid any transfer and other taxes required by reason of such registration in a name other than that of the registered Holder of the Certificate evidencing such Purchase Contract or has established to the satisfaction of the Company that such tax either has been paid or is not payable. SECTION 5.05. Adjustment of Settlement Rate. (a) Adjustments for Dividends, Distributions, Stock Splits, Etc. (1) In case the Company shall pay or make a dividend or other distribution on Common Stock in Common Stock, the Settlement Rate in effect at the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution shall be increased by dividing such Settlement Rate by a fraction of which: (i) the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination; and (ii) the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (1), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include any shares issuable in respect of any scrip certificates issued in lieu of fractions of shares of Common Stock. The Company shall not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company. (2) In case the Company shall issue rights, warrants or options to all holders of its Common Stock (not being available on an equivalent basis to Holders of the Securities upon settlement of the Purchase Contracts underlying such Securities) entitling them, for a period expiring within 45 days after the record date for the determination of shareholders entitled to receive such rights, warrants or options, to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price per share of Common Stock on the date fixed for the determination of shareholders entitled to receive such rights, warrants or options the Settlement Rate in effect at the opening of business on the day following the date fixed for such determination shall be increased by dividing such Settlement Rate by a fraction of which: (i) the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price; and 57 62 (ii) the denominator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (2), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include any shares issuable in respect of any scrip certificates issued in lieu of fractions of shares of Common Stock. The Company agrees that it shall not issue any such rights, warrants or options in respect of shares of Common Stock held in the treasury of the Company. (3) In case outstanding shares of Common Stock shall be subdivided or split into a greater number of shares of Common Stock, the Settlement Rate in effect at the opening of business on the day following the day upon which such subdivision or split becomes effective shall be proportionately increased, and, conversely, in case outstanding shares of Common Stock shall each be combined into a smaller number of shares of Common Stock, the Settlement Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision, split or combination becomes effective. (4) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock evidences of its indebtedness or assets (including securities, but excluding any rights, warrants or options referred to in paragraph (2) of this Section 5.05(a), any dividend or distribution paid exclusively in cash and any dividend or distribution referred to in paragraph (1) of this Section 5.05(a)), the Settlement Rate shall be adjusted so that the same shall equal the rate determined by dividing the Settlement Rate in effect immediately prior to the close of business on the date fixed for the determination of shareholders entitled to receive such distribution by a fraction of which: (i) the numerator shall be the Current Market Price per share of Common Stock on the date fixed for such determination less the then fair market value (as reasonably determined by the Board of Directors, whose determination shall be conclusive and the basis for which shall be described in a Board Resolution) of the portion of the assets or evidences of indebtedness so distributed applicable to one share of Common Stock; and (ii) the denominator shall be such Current Market Price per share of Common Stock, such adjustment to become effective immediately prior to the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such distribution. In any case in which this paragraph (4) is applicable, paragraph (2) of this Section 5.05(a) shall not be applicable. In the event that such dividend or distribution is 58 63 not so paid or made, the Settlement Rate shall again be adjusted to be the Settlement Rate which would then be in effect if such dividend or distribution had not been declared. (5) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Stock cash (excluding: (i) any quarterly cash dividend on Common Stock to the extent that the aggregate cash dividend per share of Common Stock in any fiscal quarter does not exceed $.265 per share (the "DIVIDEND THRESHOLD"), and (ii) any dividend or distribution in connection with the liquidation, dissolution or termination of the Company, whether voluntary or involuntary), then, in such case, the Settlement Rate shall be increased so that the same shall equal the rate determined by dividing the Settlement Rate in effect immediately prior to the close of business on such record date by a fraction of which: (iii) the numerator shall be the Current Market Price of Common Stock on the record date less the amount of cash so distributed (and not excluded as provided above) applicable to one share of Common Stock; and (iv) the denominator shall be the Current Market Price of Common Stock, such increase to be effective immediately prior to the opening of business on the day following the record date; provided, however, that in the event the portion of cash so distributed applicable to one share of Common Stock is equal to or greater than the Current Market Price per share of Common Stock on the record date, in lieu of the foregoing adjustment, adequate provision shall be made so that each holder of a Security shall have the right to receive upon settlement of the Securities the amount of cash such Holder would have received had such Holder settled each Security on the record date. In the event that such dividend or distribution is not so paid or made, the Settlement Rate shall again be adjusted to be the Settlement Rate which would then be in effect if such dividend or distribution had not been declared. If any adjustment is required to be made as set forth in this Section 5.05(a)(5) as a result of a distribution that is a quarterly dividend, such adjustment shall be based upon the amount by which such distribution exceeds the amount of the Dividend Threshold. If an adjustment is required to be made as set forth in this Section 5.05(a)(5) above as a result of a distribution that is not a quarterly dividend, such adjustment shall be based upon the full amount of the distribution. (6) In case a tender or exchange offer made by the Company or any subsidiary of the Company for all or any portion of Common Stock shall expire and such tender or exchange offer (as amended upon the expiration thereof) shall require the payment to shareholders (based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of Purchased Shares as herein defined) of an aggregate 59 64 consideration having a fair market value (as reasonably determined by the Board of Directors, whose determination shall be conclusive and the basis for which shall be described in a Board Resolution) that combined together with the aggregate of the cash plus the fair market value (as reasonably determined by the Board of Directors, whose determination shall be conclusive and the basis for which shall be described in a Board Resolution), as of the expiration of such tender or exchange offer, of consideration payable in respect of any other tender or exchange offer, by the Company or any subsidiary of the Company for all or any portion of Common Stock expiring within the 12 months preceding the expiration of such tender or exchange offer and in respect of which no adjustment pursuant to this paragraph (6) has been made, and (II) the aggregate amount of any distributions to all holders of Common Stock made exclusively in cash within the 12 months preceding the expiration of such tender or exchange offer and in respect of which no adjustment pursuant to paragraph (6) has been made, exceeds 15% of the product of the Current Market Price per share of Common Stock as of the last time (the "EXPIRATION TIME") tenders could have been made pursuant to such tender or exchange offer (as it may be amended) times the number of shares of Common Stock outstanding (including any tendered shares) on the Expiration Time, then, and in each such case, immediately prior to the opening of business on the day after the date of the Expiration Time, the Settlement Rate shall be adjusted so that the same shall equal the rate determined by dividing the Settlement Rate immediately prior to the close of business on the date of the Expiration Time by a fraction: (i) the numerator of which shall be equal to (A) the product of (I) the Current Market Price per share of Common Stock on the date of the Expiration Time and (II) the number of shares of Common Stock outstanding (including any tendered shares) on the Expiration Time less (B) the amount of cash plus the fair market value (determined as aforesaid) of the aggregate consideration payable to shareholders based on the transactions described in clauses (I) and (II) above (assuming in the case of clause (I) the acceptance, up to any maximum specified in the terms of the tender or exchange offer, of Purchased Shares); and (ii) the denominator of which shall be equal to the product of (A) the Current Market Price per share of Common Stock as of the Expiration Time and (B) the number of shares of Common Stock outstanding (including any tendered shares) as of the Expiration Time less the number of all shares validly tendered and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "PURCHASED SHARES"). (7) The reclassification of Common Stock into securities including securities other than Common Stock (other than any reclassification upon a Reorganization Event to which Section 5.05(b) applies) shall be deemed to involve: (i) a distribution of such securities other than Common Stock to all holders of Common Stock (and the effective date of such reclassification shall be deemed to be "the date fixed for the determination of shareholders entitled to 60 65 receive such distribution" and the "date fixed for such determination" within the meaning of paragraph (4) of this Section); and (ii) a subdivision, split or combination, as the case may be, of the number of shares of Common Stock outstanding immediately prior to such reclassification into the number of shares of Common Stock outstanding immediately thereafter (and the effective date of such reclassification shall be deemed to be "the day upon which such subdivision or split becomes effective" or "the day upon which such combination becomes effective", as the case may be, and "the day upon which such subdivision, split or combination becomes effective" within the meaning of paragraph (3) of this Section). (8) The "CURRENT MARKET PRICE" per share of Common Stock on any date of determination means the average of the daily Closing Prices for the five consecutive Trading Days selected by the Company commencing not more than 30 Trading Days before, and ending not later than, the earlier of such date of determination and the day before the "ex date" with respect to the issuance or distribution requiring such computation. For purposes of this paragraph, the term "ex date," when used with respect to any issuance or distribution, shall mean the first date on which Common Stock trades on such exchange or in such market without the right to receive such issuance or distribution. (9) All adjustments to the Settlement Rate shall be calculated to the nearest 1/10,000th of a share of Common Stock (or if there is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment in the Settlement Rate shall be required unless such adjustment would require an increase or decrease of at least one percent thereof; provided, however, that any adjustments which by reason of this subparagraph are not required to be made shall be carried forward and taken into account in any subsequent adjustment. If an adjustment is made to the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.05(a), an adjustment shall also be made to the Applicable Market Value solely to determine which of clauses (i), (ii) or (iii) of the definition of Settlement Rate in Section 5.01 will apply on the Purchase Contract Settlement Date. Such adjustment shall be made by multiplying the Applicable Market Value by a fraction of which the numerator shall be the Settlement Rate immediately after such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.05(a) and the denominator shall be the Settlement Rate immediately prior to such adjustment; provided, however, that if such adjustment to the Settlement Rate is required to be made pursuant to the occurrence of any of the events contemplated by paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.05(a) during the period taken into consideration for determining the Applicable Market Value, appropriate and customary adjustments shall be made to the Settlement Rate. (10) The Company may, but shall not be required to, make such increases in the Settlement Rate, in addition to those required by this Section, as it considers to be advisable in order to avoid or diminish any income tax to any holders of shares of 61 66 Common Stock resulting from any dividend or distribution of stock or issuance of rights or warrants to purchase or subscribe for stock or from any event treated as such for income tax purposes or for any other reason. (b) Adjustment for Consolidation, Merger or Other Reorganization Event. (1) In the event of: (i) any consolidation or merger of the Company with or into another Person (other than a merger or consolidation in which the Company is the continuing corporation and in which the shares of Common Stock outstanding immediately prior to the merger or consolidation are not exchanged for cash, securities or other property of the Company or another Person); (ii) any sale, transfer, lease or conveyance to another Person of the property of the Company as an entirety or substantially as an entirety; (iii) any statutory share exchange of the Company with another Person (other than in connection with a merger or acquisition); (iv) any liquidation, dissolution or termination of the Company other than as a result of or after the occurrence of a Termination Event (any such event, a "REORGANIZATION EVENT"), the Settlement Rate will be adjusted to provide that each Holder of Securities will receive on the Purchase Contract Settlement Date with respect to each Purchase Contract forming a part thereof, the kind and amount of securities, cash and other property receivable upon such Reorganization Event (without any interest thereon, and without any right to dividends or distribution thereon which have a record date that is prior to the Purchase Contract Settlement Date) by a Holder of the number of shares of Common Stock issuable on account of each Purchase Contract if the Purchase Contract Settlement Date had occurred immediately prior to such Reorganization Event, assuming such Holder of Common Stock is not a Person with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or transfer was made, as the case may be (any such Person, a "CONSTITUENT PERSON"), or an Affiliate of a Constituent Person to the extent such Reorganization Event provides for different treatment of Common Stock held by Affiliates of the Company and non-affiliates and such Holder failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such Reorganization Event (provided that if the kind or amount of securities, cash and other property receivable upon such Reorganization Event is not the same for each share of Common Stock held immediately prior to such Reorganization Event by other than a Constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised ("NON-ELECTING SHARE"), then for the purpose of this Section the kind and amount of securities, cash and other property receivable upon such Reorganization Event by each 62 67 non-electing share shall be deemed to be the kind and amount so receivable per share by a plurality of the non-electing shares). In the event of such a Reorganization Event, the Person formed by such consolidation, merger or exchange or the Person which acquires the assets of the Company or, in the event of a liquidation, dissolution or termination of the Company, the Company or a liquidating trust created in connection therewith, shall execute and deliver to the Purchase Contract Agent an agreement supplemental hereto providing that each Holder of an Outstanding Security shall have the rights provided by this Section 5.05(b). Such supplemental agreement shall provide for adjustments which, for events subsequent to the effective date of such supplemental agreement, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section. The above provisions of this Section shall similarly apply to successive Reorganization Events. (2) In the event of a consolidation or merger of the Company with or into another Person, any merger of another Person into the Company (other than a merger that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock) in which 30% or more of the total consideration paid to the Company's shareholders consists of cash or cash equivalents, then a Holder of a Security may settle his Purchase Contract for cash as described in Section 5.03(a)(i) or 5.03(f)(i) hereof, as applicable, during the one week period beginning on the twenty-third Trading Day following the closing date of such merger (the "EARLY SETTLEMENT WEEK"), at the applicable Settlement Rate. For the purposes of this Section, the twenty-third Trading Day after the closing of the merger or consolidation shall be deemed to be the Purchase Contract Settlement Date for the purpose of determining the Applicable Market Value and the deadline for submitting the notice to settle early and the related cash payment shall be 5:00 p.m. (New York City time) of the last Business Day of the Early Settlement Week. (c) All calculations and determinations pursuant to this Section 5.05 shall be made by the Company or its agent and the Purchase Contract Agent shall have no responsibility with respect thereto. SECTION 5.06. Notice of Adjustments and Certain Other Events. (a) Whenever the Settlement Rate is adjusted as herein provided, the Company shall: (i) forthwith compute the adjusted Settlement Rate in accordance with Section 5.05 and prepare and transmit to the Purchase Contract Agent an Officers' Certificate setting forth the Settlement Rate, the method of calculation thereof in reasonable detail, and the facts requiring such adjustment and upon which such adjustment is based; and (ii) within 10 Business Days following the occurrence of an event that requires an adjustment to the Settlement Rate pursuant to Section 5.05 (or if the 63 68 Company is not aware of such occurrence, as soon as practicable after becoming so aware), provide a written notice to the Holders of the Securities of the occurrence of such event and a statement in reasonable detail setting forth the method by which the adjustment to the Settlement Rate was determined and setting forth the adjusted Settlement Rate. (b) The Purchase Contract Agent shall not at any time be under any duty or responsibility to any Holder of Securities to determine whether any facts exist which may require any adjustment of the Settlement Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed in making the same. The Purchase Contract Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at the time be issued or delivered with respect to any Purchase Contract; and the Purchase Contract Agent makes no representation with respect thereto. The Purchase Contract Agent shall not be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock pursuant to a Purchase Contract or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article. SECTION 5.07. Termination Event; Notice. The Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Company to pay Contract Adjustment Payments, if any, if the Company shall have such obligation, and the rights and obligations of Holders to purchase Common Stock, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Purchase Contract Agent or the Company, if, prior to or on the Purchase Contract Settlement Date, a Termination Event shall have occurred. Upon and after the occurrence of a Termination Event, the Securities shall thereafter represent the right to receive the Preferred Securities, the Subordinated Notes, the Treasury Securities or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case may be, forming part of such Securities, in accordance with the provisions of Section 5.02 and 5.03 of the Pledge Agreement. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Purchase Contract Agent, the Collateral Agent and the Holders, at their addresses as they appear in the Security Register. SECTION 5.08. Early Settlement. (a) Subject to and upon compliance with the provisions of this Section 5.08, at the option of the Holder thereof, Purchase Contracts underlying Securities may be settled early ("EARLY SETTLEMENT") in the case of PEPS Units (unless a Tax Event Redemption or a Successful Initial Remarketing has occurred) on or prior to 5:00 p.m. (New York City time) on the fifth Business Day immediately preceding the Purchase Contract Settlement 64 69 Date, and in the case of Treasury PEPS Units on or prior to the second Business Day immediately preceding the Purchase Contract Settlement Date, in each case, as provided herein; provided however, that if a Tax Event Redemption or a Successful Initial Remarketing has occurred and the Treasury Portfolio has become a component of the PEPS Units, Purchase Contracts underlying such PEPS Units may not be settled early. Holders of Treasury PEPS Units may only settle the related Purchase Contracts in integral multiples of 40 Purchase Contracts. In order to exercise the right to effect Early Settlement with respect to any Purchase Contracts, the Holder of the Certificate evidencing Securities shall deliver to the Purchase Contract Agent at the Corporate Trust Office an Election to Settle Early form (on the reverse side of the Certificate) and any other documents requested by the Purchase Contract Agent and accompanied by payment (payable to the Company in immediately available funds) in an amount (the "EARLY SETTLEMENT AMOUNT") equal to (i) the product of (a) the Stated Amount times (b) the number of Purchase Contracts with respect to which the Holder has elected to effect Early Settlement, plus (ii) if such delivery is made with respect to any Purchase Contracts during the period from the close of business on any Record Date next preceding any Payment Date to the opening of business on such Payment Date, an amount equal to the Contract Adjustment Payments, if any, payable on such Payment Date with respect to such Purchase Contracts. Except as provided in the immediately preceding sentence, and subject to the second to last paragraph of Section 5.2, no payment or adjustment shall be made upon Early Settlement of any Purchase Contract on account of any Contract Adjustment Payments accrued on such Purchase Contract or on account of dividends on the Common Stock issued upon such Early Settlement. If the foregoing requirements are first satisfied with respect to Purchase Contracts underlying any Securities prior to or at 5:00 p.m. (New York City time) on a Business Day, such day shall be the "EARLY SETTLEMENT DATE" with respect to such Securities and if such requirements are first satisfied after 5:00 p.m. (New York City time) on a Business Day or on a day that is not a Business Day, the "EARLY SETTLEMENT DATE" with respect to such Securities shall be the next succeeding Business Day. (b) Upon Early Settlement of Purchase Contracts by a Holder of the related Securities, the Company shall issue, and the Holder shall be entitled to receive 0.3845 shares of Common Stock on account of each Purchase Contract as to which Early Settlement is effected (the "EARLY SETTLEMENT RATE"); provided, however, that upon the Early Settlement of the Purchase Contracts, the Holder of such related Securities will forfeit the right to receive any future Contract Adjustment Payments, if any, except to the extent that the Early Settlement Date is after the close of business on a Record Date and prior to the opening of business on the corresponding Payment Date. The Early Settlement Rate shall be adjusted in the same manner and at the same time as the Settlement Rate is adjusted. (i) No later than the third Business Day after the applicable Early Settlement Date, the Company shall cause: 65 70 (ii) Upon receipt of the shares of Common Stock from the Company's Transfer Agent, the shares of Common Stock issuable upon Early Settlement of Purchase Contracts to be issued and delivered, together with payment in lieu of any fraction of a share, as provided in Section 5.09; and (iii) the related Preferred Securities or Subordinated Notes, in the case of PEPS Units, or the related Treasury Securities of the Treasury Portfolio, in the case of Treasury PEPS Units, to be released from the Pledge by the Collateral Agent and transferred, in each case, to the Purchase Contract Agent for delivery to the Holder thereof or its designee. (c) Upon Early Settlement of any Purchase Contracts, and subject to receipt of shares of Common Stock from the Company and the Preferred Securities or Subordinated Notes of the Treasury Portfolio, or Treasury Securities, as the case may be, from the Securities Intermediary, as applicable, the Purchase Contract Agent shall, in accordance with the instructions provided by the Holder thereof on the Election to Settle Early form (on the reverse of the Certificate evidencing the related Securities): (i) transfer to the Holder the Preferred Securities or Subordinated Notes, or Treasury Securities, as the case may be, forming a part of such Securities; and (ii) deliver to the Holder a certificate or certificates for the full number of shares of Common Stock issuable upon such Early Settlement, together with payment in lieu of any fraction of a share, as provided in Section 5.09. (d) In the event that Early Settlement is effected with respect to Purchase Contracts underlying less than all the Securities evidenced by a Certificate, upon such Early Settlement the Company shall execute and the Purchase Contract Agent shall authenticate, countersign and deliver to the Holder thereof, at the expense of the Company, a Certificate evidencing the Securities as to which Early Settlement was not effected. (e) A Holder of a Security who effects Early Settlement may elect to have the Preferred Securities or Subordinated Notes, as the case may be, no longer a part of a PEPS Unit, or Treasury PEPS Unit, as the case may be, remarketed pursuant to Section 5.7(c) of the Pledge Agreement. SECTION 5.09. No Fractional Shares. No fractional shares or scrip representing fractional shares of Common Stock shall be issued or delivered upon settlement on the Purchase Contract Settlement Date or upon Early Settlement of any Purchase Contracts. If Certificates evidencing more than one Purchase Contract shall be surrendered for settlement at one time by the same Holder, the number of full shares of Common Stock which shall be delivered upon settlement shall be computed on the basis of the aggregate number of Purchase Contracts 66 71 evidenced by the Certificates so surrendered. Instead of any fractional share of Common Stock which would otherwise be deliverable upon settlement of any Purchase Contracts on the Purchase Contract Settlement Date or upon Early Settlement, the Company, through the Purchase Contract Agent, shall make a cash payment in respect of such fractional interest in an amount equal to the value of such fractional shares times the Applicable Market Value. The Company shall provide the Purchase Contract Agent from time to time with sufficient funds to permit the Purchase Contract Agent to make all cash payments required by this Section 5.09 in a timely manner. SECTION 5.10. Charges and Taxes. The Company will pay all stock transfer and similar taxes attributable to the initial issuance and delivery of the shares of Common Stock pursuant to the Purchase Contracts; provided, however, that the Company shall not be required to pay any such tax or taxes which may be payable in respect of any exchange of or substitution for a Certificate evidencing a Security or any issuance of a share of Common Stock in a name other than that of the registered Holder of a Certificate surrendered in respect of the Securities evidenced thereby, other than in the name of the Purchase Contract Agent, as custodian for such Holder, and the Company shall not be required to issue or deliver such share certificates or Certificates unless or until the Person or Persons requesting the transfer or issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. ARTICLE 6 REMEDIES SECTION 6.01. Unconditional Right of Holders to Receive Contract Adjustment Payments and to Purchase Shares of Common Stock. Each Holder of a Security shall have the right, which is absolute and unconditional (i) to receive payment of each installment of the Contract Adjustment Payments, if any, with respect to the Purchase Contract constituting a part of such Security on the respective Payment Date for such Security, and (ii) to purchase shares of Common Stock pursuant to such Purchase Contract and, in each such case, to institute suit for the enforcement of such payment and the right to purchase shares of Common Stock, and such rights shall not be impaired without the consent of such Holder. SECTION 6.02. Restoration of Rights and Remedies. If any Holder has instituted any proceeding to enforce any right or remedy under this Agreement and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to such Holder, then and in every such case, subject to any determination in such proceeding, the Company and such Holder shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of such Holder shall continue as though no such proceeding had been instituted. 67 72 SECTION 6.03. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Certificates in the last paragraph of Section 3.10, no right or remedy herein conferred upon or reserved to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 6.04. Delay or Omission Not Waiver. No delay or omission of any Holder to exercise any right or remedy upon a default shall impair any such right or remedy or constitute a waiver of any such right. Every right and remedy given by this Article or by law to the Holders may be exercised from time to time, and as often as may be deemed expedient, by such Holders. SECTION 6.05. Undertaking for Costs. All parties to this Agreement agree, and each Holder of a Security, by its acceptance of such Security shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Agreement, or in any suit against the Purchase Contract Agent for any action taken, suffered or omitted by it as Purchase Contract Agent, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and costs against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section shall not apply to any suit instituted by the Purchase Contract Agent, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% of the Outstanding Securities, or to any suit instituted by any Holder for the enforcement of distributions on any Preferred Securities or interest on any Subordinated Notes or Contract Adjustment Payments, if any, on any Purchase Contract on or after the respective Payment Date therefor in respect of any Security held by such Holder, or for enforcement of the right to purchase shares of Common Stock under the Purchase Contracts constituting part of any Security held by such Holder. SECTION 6.06. Waiver of Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Agreement; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the 68 73 execution of any power herein granted to the Purchase Contract Agent or the Holders, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE 7 THE PURCHASE CONTRACT AGENT SECTION 7.01. Certain Duties and Responsibilities. (a) The Purchase Contract Agent: (i) undertakes to perform, with respect to the Securities, such duties and only such duties as are specifically set forth in this Agreement and the Pledge Agreement, and no implied covenants or obligations shall be read into this Agreement or the Pledge Agreement against the Purchase Contract Agent; and (ii) in the absence of bad faith or gross negligence on its part, may, with respect to the Securities, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Purchase Contract Agent and conforming to the requirements of this Agreement or the Pledge Agreement, as applicable, but in the case of any certificates or opinions which by any provision hereof are specifically required to be furnished to the Purchase Contract Agent, the Purchase Contract Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Agreement or the Pledge Agreement, as applicable (but need not confirm or investigate the accuracy of the mathematical calculations or other facts stated therein). (b) No provision of this Agreement or the Pledge Agreement shall be construed to relieve the Purchase Contract Agent from liability for its own grossly negligent action, its own grossly negligent failure to act, or its own willful misconduct, except that: (i) this Subsection shall not be construed to limit the effect of Subsection (a) of this Section; (ii) the Purchase Contract Agent shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Purchase Contract Agent was grossly negligent in ascertaining the pertinent facts; and (iii) no provision of this Agreement or the Pledge Agreement shall require the Purchase Contract Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if indemnity satisfactory to the Purchase Contract Agent is not provided to it. 69 74 (iv) the Purchase Contract Agent shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in liquidation amount or principal amount, as the case may be, of the Outstanding Securities. (c) Whether or not therein expressly so provided, every provision of this Agreement and the Pledge Agreement relating to the conduct or affecting the liability of or affording protection to the Purchase Contract Agent shall be subject to the provisions of this Section. (d) The Purchase Contract Agent is authorized to execute and deliver the Pledge Agreement in its capacity as Purchase Contract Agent. SECTION 7.02. Notice of Default. Within 30 days after the occurrence of any default by the Company hereunder of which a Responsible Officer of the Purchase Contract Agent has actual knowledge, the Purchase Contract Agent shall transmit by mail to the Company and the Holders of Securities, as their names and addresses appear in the Security Register, notice of such default hereunder, unless such default shall have been cured or waived. SECTION 7.03. Certain Rights of Purchase Contract Agent. Subject to the provisions of Section 7.01: (i) the Purchase Contract Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, Subordinated Note, 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; (ii) any request or direction of the Company mentioned herein shall be sufficiently evidenced by an Officers' Certificate, Issuer Order or Issuer Request, and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution; (iii) whenever in the administration of this Agreement or the Pledge Agreement the Purchase Contract Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Purchase Contract Agent (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officers' Certificate of the Company; (iv) the Purchase Contract Agent may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full 70 75 and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (v) the Purchase Contract Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Purchase Contract Agent, in its discretion, and at the expense of the Company, may make reasonable further inquiry or investigation into such facts or matters related to the execution, delivery and performance of the Purchase Contracts as it may see fit, and, if the Purchase Contract Agent shall determine to make such further inquiry or investigation, it shall be given a reasonable opportunity to examine the relevant books, records and premises of the Company, personally or by agent or attorney and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation; (vi) the Purchase Contract Agent may execute any of the powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or an Affiliate and the Purchase Contract Agent shall not be responsible for any misconduct or negligence on the part of any agent or attorney or an Affiliate appointed with due care by it hereunder; (vii) the Purchase Contract Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Holders pursuant to this Agreement, unless such Holders shall have offered to the Purchase Contract Agent security or indemnity satisfactory to the Purchase Contract Agent against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (viii) the Purchase Contract Agent shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement; (ix) the Purchase Contract Agent shall not be deemed to have notice of any default or event of default unless a Responsible Officer of the Purchase Contract Agent has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Purchase Contract Agent at the Corporate Trust Office of the Purchase Contract Agent, and such notice references the Securities and this Agreement; (x) the Purchase Contract Agent may request that the Company deliver an Officers' Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Agreement, which Officers' Certificate may be signed by any person authorized 71 76 to sign an Officers' Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded; and (xi) the rights, privileges, protections, immunities and benefits given to the Purchase Contract Agent, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Purchase Contract Agent in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder. SECTION 7.04. Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Certificates shall be taken as the statements of the Company, and the Purchase Contract Agent assumes no responsibility for their accuracy. The Purchase Contract Agent makes no representations as to the validity or sufficiency of either this Agreement or of the Securities, or of the Pledge Agreement or the Pledge. The Purchase Contract Agent shall not be accountable for the use or application by the Company of the proceeds in respect of the Purchase Contracts. SECTION 7.05. May Hold Securities. Any Security Registrar or any other agent of the Company, or the Purchase Contract Agent and its Affiliates, in their individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Company, the Collateral Agent or any other Person with the same rights it would have if it were not Security Registrar or such other agent, or the Purchase Contract Agent. The Company may become the owner or pledgee of Securities. SECTION 7.06. Money Held in Custody. Money held by the Purchase Contract Agent in custody hereunder need not be segregated from the other funds except to the extent required by law or provided herein. The Purchase Contract Agent shall be under no obligation to invest or pay interest on any money received by it hereunder except as otherwise provided hereunder agreed in writing with the Company. SECTION 7.07. Compensation and Reimbursement. The Company agrees: (i) to pay to the Purchase Contract Agent compensation for all services rendered by it hereunder and under the Pledge Agreement as the Company and the Purchase Contract Agent shall from time to time agree in writing; (ii) except as otherwise expressly provided for herein, to reimburse the Purchase Contract Agent upon its request for all reasonable expenses, 72 77 disbursements and advances incurred or made by the Purchase Contract Agent in accordance with any provision of this Agreement or the Pledge Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its gross negligence or willful misconduct; and (iii) to indemnify the Purchase Contract Agent and any predecessor Purchase Contract Agent for, and to hold it harmless against, any loss, liability or expense incurred without gross negligence or willful misconduct on its part, arising out of or in connection with the acceptance or administration of its duties hereunder, including the costs and expenses of defending itself against any claim (whether asserted by the Company, a Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder. SECTION 7.08. Corporate Purchase Contract Agent Required; Eligibility. There shall at all times be a Purchase Contract Agent hereunder which shall be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having (or being a member of a bank holding company having) a combined capital and surplus of at least $50,000,000, subject to supervision or examination by Federal or State authority and having a corporate trust office in the Borough of Manhattan, New York City, if there be such a corporation in the Borough of Manhattan, New York City, qualified and eligible under this Article and willing to act on reasonable terms. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Purchase Contract Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. SECTION 7.09. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Purchase Contract Agent and no appointment of a successor Purchase Contract Agent pursuant to this Article shall become effective until the acceptance of appointment by the successor Purchase Contract Agent in accordance with the applicable requirements of Section 7.10. (b) The Purchase Contract Agent may resign at any time by giving written notice thereof to the Company 60 days prior to the effective date of such resignation. If the instrument of acceptance by a successor Purchase Contract Agent required by Section 7.10 shall not have been delivered to the Purchase Contract Agent within 30 days after the giving of such notice of resignation, the resigning Purchase Contract Agent may 73 78 petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Purchase Contract Agent. (c) The Purchase Contract Agent may be removed at any time by Act of the Holders of a majority in number of the Outstanding Securities delivered to the Purchase Contract Agent and the Company. (d) If at any time: (i) the Purchase Contract Agent fails to comply with Section 310(b) of the TIA, as if the Purchase Contract Agent were an indenture trustee under an indenture qualified under the TIA, after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months; (ii) the Purchase Contract Agent shall cease to be eligible under Section 7.08 and shall fail to resign after written request therefor by the Company or by any such Holder; or (iii) the Purchase Contract Agent shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Purchase Contract Agent or of its property shall be appointed or any public officer shall take charge or control of the Purchase Contract Agent or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company by a Board Resolution may remove the Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Purchase Contract Agent and the appointment of a successor Purchase Contract Agent. (e) If the Purchase Contract Agent shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Purchase Contract Agent for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Purchase Contract Agent and shall comply with the applicable requirements of Section 7.10. If no successor Purchase Contract Agent shall have been so appointed by the Company and accepted appointment in the manner required by Section 7.10, any Holder who has been a bona fide Holder of a Security for at least six months, on behalf of itself and all others similarly situated, or the Purchase Contract Agent may petition at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Purchase Contract Agent. (f) The Company shall give, or shall cause such successor Purchase Contract Agent to give, notice of each resignation and each removal of the Purchase Contract Agent and each appointment of a successor Purchase Contract Agent by mailing written notice of such event by first-class mail, postage prepaid, to all Holders as their names and 74 79 addresses appear in the applicable Register. Each notice shall include the name of the successor Purchase Contract Agent and the address of its Corporate Trust Office. SECTION 7.10. Acceptance of Appointment by Successor. (a) In case of the appointment hereunder of a successor Purchase Contract Agent, every such successor Purchase Contract Agent so appointed shall execute, acknowledge and deliver to the Company and to the retiring Purchase Contract Agent an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Purchase Contract Agent shall become effective and such successor Purchase Contract Agent, without any further act, deed or conveyance, shall become vested with all the rights, powers, agencies and duties of the retiring Purchase Contract Agent; but, on the request of the Company or the successor Purchase Contract Agent, such retiring Purchase Contract Agent shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Purchase Contract Agent all the rights, powers and trusts of the retiring Purchase Contract Agent and shall duly assign, transfer and deliver to such successor Purchase Contract Agent all property and money held by such retiring Purchase Contract Agent hereunder. (b) Upon request of any such successor Purchase Contract Agent, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Purchase Contract Agent all such rights, powers and agencies referred to in paragraph 7.10(a) of this Section. (c) No successor Purchase Contract Agent shall accept its appointment unless at the time of such acceptance such successor Purchase Contract Agent shall be qualified and eligible under this Article. SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Purchase Contract 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 the Purchase Contract Agent shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Purchase Contract Agent, shall be the successor of the Purchase Contract Agent hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, with the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Certificates shall have been authenticated and executed on behalf of the Holders, but not delivered, by the Purchase Contract Agent then in office, any successor by merger, conversion or consolidation to such Purchase Contract Agent may adopt such authentication and execution and deliver the Certificates so authenticated and executed with the same effect as if such successor Purchase Contract Agent had itself authenticated and executed such Securities. 75 80 SECTION 7.12. Preservation of Information; Communications to Holders. (a) The Purchase Contract Agent shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders received by the Purchase Contract Agent in its capacity as Security Registrar. (b) If three or more Holders (herein referred to as "APPLICANTS") apply in writing to the Purchase Contract Agent, and furnish to the Purchase Contract Agent reasonable proof that each such applicant has owned a Security for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders with respect to their rights under this Agreement or under the Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Purchase Contract Agent shall mail to all the Holders copies of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Purchase Contract Agent of the materials to be mailed and of payment, or provision for the payment, of the reasonable expenses of such mailing. SECTION 7.13. No Obligations of Purchase Contract Agent. Except to the extent otherwise expressly provided in this Agreement, the Purchase Contract Agent assumes no obligations and shall not be subject to any liability under this Agreement, the Pledge Agreement or any Purchase Contract in respect of the obligations of the Holder of any Security thereunder. The Company agrees, and each Holder of a Certificate, by his acceptance thereof, shall be deemed to have agreed, that the Purchase Contract Agent's execution of the Certificates on behalf of the Holders shall be solely as agent and attorney-in-fact for the Holders, and that the Purchase Contract Agent shall have no obligation to perform such Purchase Contracts on behalf of the Holders, except to the extent expressly provided in Article Five hereof. Anything contained in this Agreement to the contrary notwithstanding, in no event shall the Purchase Contract Agent or its officers, employees or agents be liable under this Agreement to any third party for indirect, special, punitive, or consequential loss or damage of any kind whatsoever, including lost profits, whether or not the likelihood of such loss or damage was known to the Purchase Contract Agent, incurred without any act or deed that is found to be attributable to gross negligence or willful misconduct on the part of the Purchase Contract Agent. SECTION 7.14. Tax Compliance. (a) The Company and the Purchase Contract Agent will comply with all applicable certification, information reporting and withholding (including "backup" withholding) requirements imposed by applicable tax laws, regulations or administrative practice with respect to (1) any payments made with respect to the Securities or (2) the issuance, delivery, holding, transfer, redemption or exercise of rights under the Securities. Such compliance shall include, without limitation, the preparation and timely filing of 76 81 required returns and the timely payment of all amounts required to be withheld to the appropriate taxing authority or its designated agent. (b) The Purchase Contract Agent shall comply in accordance with the terms hereof with any written direction received from the Company with respect to the execution or certification of any required documentation and the application of such requirements to particular payments or Holders or in other particular circumstances, and may for purposes of this Agreement conclusively rely on any such direction in accordance with the provisions of Section 7.01(a)(2) hereof. (c) The Purchase Contract Agent shall maintain all appropriate records documenting compliance with such requirements, and shall make such records available, on written request, to the Company or its authorized representative within a reasonable period of time after receipt of such request. ARTICLE 8 SUPPLEMENTAL AGREEMENTS SECTION 8.01. Supplemental Agreements Without Consent of Holders. Without the consent of any Holders, the Company and the Purchase Contract Agent, at any time and from time to time, may enter into one or more agreements supplemental hereto, in form satisfactory to the Company and the Purchase Contract Agent, to: (i) evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Certificates; (ii) evidence and provide for the acceptance of appointment hereunder by a successor Purchase Contract Agent; (iii) add to the covenants of the Company for the benefit of the Holders, or surrender any right or power herein conferred upon the Company; (iv) make provision with respect to the rights of Holders pursuant to the requirements of Section 5.05(b); or (v) except as provided for in Section 5.05, cure any ambiguity, correct or supplement any provisions herein which may be inconsistent with any other provisions herein, or make any other provisions with respect to such matters or questions arising under this Agreement, provided such action shall not adversely affect the interests of the Holders. 77 82 SECTION 8.02. Supplemental Agreements with Consent of Holders. With the consent of the Holders of not less than a majority of the outstanding Securities voting together as one class, by Act of said Holders delivered to the Company and the Purchase Contract Agent, the Company, when authorized by a Board Resolution, and the Purchase Contract Agent may enter into an agreement or agreements supplemental hereto for the purpose of modifying in any manner the terms of the Purchase Contracts, or the provisions of this Agreement or the rights of the Holders in respect of the Securities; provided, however, that, except as contemplated herein, no such supplemental agreement shall, without the unanimous consent of the Holders of each outstanding Purchase Contract affected thereby: (i) change any Payment Date; (ii) change the amount or the type of Collateral required to be Pledged to secure a Holder's obligations under the Purchase Contract, impair the right of the Holder of any Purchase Contract to receive distributions on the related Collateral (except for the rights of Holders of PEPS Units to substitute Treasury Securities for the Pledged Preferred Securities or Pledged Subordinated Notes or the Applicable Ownership Interest of the Treasury Portfolio or the rights of Holders or Treasury PEPS Units to substitute Preferred Securities, Subordinated Notes or the Applicable Ownership Interest of the Treasury Portfolio for the Pledged Treasury Securities) or otherwise adversely affect the Holder's rights in or to such Collateral or adversely alter the rights in or to such Collateral; (iii) reduce any Contract Adjustment Payments, if any, or change any place where, or the coin or currency in which, any Contract Adjustment Payment is payable; (iv) impair the right to institute suit for the enforcement of any Purchase Contract or any Contract Adjustment Payment, if any; (v) reduce the number of shares of Common Stock to be purchased pursuant to any Purchase Contract, increase the price to purchase shares of Common Stock upon settlement of any Purchase Contract or change the Purchase Contract Settlement Date or otherwise adversely affect the Holder's rights under a Purchase Contract; or (vi) reduce the percentage of the outstanding Purchase Contracts the consent of whose Holders is required for any such supplemental agreement; provided that if any amendment or proposal referred to above would adversely affect only the PEPS Units or only the Treasury PEPS Units, then only the affected class of Holders as of the record date for the Holders entitled to vote thereon will be entitled to vote on such amendment or proposal, and such amendment or proposal shall not be effective except with the consent of Holders of not less than a majority of such class; and 78 83 provided, further, that the unanimous consent of the Holders of each outstanding Purchase Contract of such class affected thereby shall be required to approve any amendment or proposal specified in clauses (1) through (6) above. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental agreement, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 8.03. Execution of Supplemental Agreements. In executing, or accepting the additional agencies created by, any supplemental agreement permitted by this Article or the modifications thereby of the agencies created by this Agreement, the Purchase Contract Agent shall be provided, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that the execution of such supplemental agreement is authorized or permitted by this Agreement and that all conditions precedent to the execution and delivery of such supplemental agreement have been satisfied. The Purchase Contract Agent may, but shall not be obligated to, enter into any such supplemental agreement which affects the Purchase Contract Agent's own rights, duties or immunities under this Agreement or otherwise. SECTION 8.04. Effect of Supplemental Agreements. Upon the execution of any supplemental agreement under this Article, this Agreement shall be modified in accordance therewith, and such supplemental agreement shall form a part of this Agreement for all purposes; and every Holder of Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered hereunder, shall be bound thereby. SECTION 8.05. Reference to Supplemental Agreements. Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any supplemental agreement pursuant to this Article may, and shall if required by the Purchase Contract Agent, bear a notation in form approved by the Purchase Contract Agent as to any matter provided for in such supplemental agreement. If the Company shall so determine, new Certificates so modified as to conform, in the opinion of the Purchase Contract Agent and the Company, to any such supplemental agreement may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Purchase Contract Agent in exchange for outstanding Certificates. 79 84 ARTICLE 9 MERGER, CONSOLIDATION, SHARE EXCHANGE, SALE OR CONVEYANCE SECTION 9.01. Covenant Not to Merge, Consolidate, Enter into a Share Exchange, Sell or Convey Property Except Under Certain Conditions. The Company covenants that it will not merge, consolidate or enter into a share exchange with any other Person or sell, assign, transfer, lease or convey all or substantially all of its properties and assets to any Person or group of affiliated Persons in one transaction or a series of related transactions, unless: (i) either the Company shall be the continuing corporation, or the successor (if other than the Company) shall be a corporation organized and existing under the laws of the United States of America or a State thereof or the District of Columbia and such corporation shall expressly assume all the obligations of the Company under the Purchase Contracts, this Agreement, the Remarketing Agreement and the Pledge Agreement by one or more supplemental agreements in form reasonably satisfactory to the Purchase Contract Agent and the Collateral Agent, executed and delivered to the Purchase Contract Agent and the Collateral Agent by such corporation; and (ii) the Company or such successor corporation, as the case may be, shall not, immediately after such merger, consolidation or share exchange, or such sale, assignment, transfer, lease or conveyance, be in default in the performance of any covenant or condition hereunder, under any of the Securities or under the Pledge Agreement. SECTION 9.02. Rights and Duties of Successor Corporation. In case of any such merger, consolidation, share exchange, sale, assignment, transfer, lease or conveyance and upon any such assumption by a successor corporation in accordance with Section 9.01, such successor corporation shall succeed to and be substituted for the Company with the same effect as if it had been named herein as the Company. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of PPL Corporation, any or all of the Certificates evidencing Securities issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Purchase Contract Agent; and, upon the order of such successor corporation, instead of the Company, and subject to all the terms, conditions and limitations in this Agreement prescribed, the Purchase Contract Agent shall authenticate and execute on behalf of the Holders and deliver any Certificates which previously shall have been signed and delivered by the officers of the Company to the Purchase Contract Agent for authentication and execution, and any Certificate evidencing Securities which such successor corporation thereafter shall cause to be signed and delivered to the Purchase Contract Agent for that purpose. All the Certificates issued shall in all respects have the same legal rank and benefit under this Agreement as the Certificates theretofore or thereafter issued in accordance with the terms of this 80 85 Agreement as though all of such Certificates had been issued at the date of the execution hereof. In case of any such merger, consolidation, share exchange, sale, assignment, transfer, lease or conveyance such change in phraseology and form (but not in substance) may be made in the Certificates evidencing Securities thereafter to be issued as may be appropriate. SECTION 9.03. Officers' Certificate and Opinion of Counsel Given to Purchase Contract Agent. The Purchase Contract Agent, subject to Sections 7.01 and 7.03, shall receive an Officers' Certificate and an Opinion of Counsel as conclusive evidence that any such merger, consolidation, share exchange, sale, assignment, transfer, lease or conveyance, and any such assumption, complies with the provisions of this Article and that all conditions precedent to the consummation of any such merger, consolidation, share exchange, sale, assignment, transfer, lease or conveyance have been met. ARTICLE 10 COVENANTS SECTION 10.01. Performance under Purchase Contracts. The Company covenants and agrees for the benefit of the Holders from time to time of the Securities that it will duly and punctually perform its obligations under the Purchase Contracts in accordance with the terms of the Purchase Contracts and this Agreement. SECTION 10.02. Maintenance of Office or Agency. The Company will maintain in the Borough of Manhattan, New York City an office or agency (a "New York Office") where Certificates may be presented or surrendered for acquisition of shares of Common Stock upon settlement of the Purchase Contracts on the Purchase Contract Settlement Date or Early Settlement and for transfer of Collateral upon occurrence of a Termination Event, where Certificates may be surrendered for registration of transfer or exchange, for a Collateral Substitution or reestablishment of PEPS Units and where notices and demands to or upon the Company in respect of the Securities and this Agreement may be served. The Company will give prompt written notice to the Purchase Contract Agent of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Purchase Contract Agent with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Company hereby appoints the 81 86 Purchase Contract Agent as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies where Certificates may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, New York City for such purposes. The Company will give prompt written notice to the Purchase Contract Agent of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates as the place of payment for the Securities the Corporate Trust Office and appoints the Purchase Contract Agent at its Corporate Trust Office as paying agent in such city. SECTION 10.03. Company to Reserve Common Stock. The Company shall at all times prior to the Purchase Contract Settlement Date reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock the full number of shares of Common Stock issuable against tender of payment in respect of all Purchase Contracts constituting a part of the Securities evidenced by Outstanding Certificates. SECTION 10.04. Covenants as to Common Stock. The Company covenants that all shares of Common Stock which may be issued against tender of payment in respect of any Purchase Contract constituting a part of the Outstanding Securities will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable. The Company shall comply, in all material respects, with all applicable securities laws regulating the offer, issuance and delivery of shares of Common Stock upon settlement of Purchase Contracts and will endeavor to list such shares on each national securities exchange or automated quotation system on which the Common Stock is then listed. SECTION 10.05. Statements of Officers of the Company as to Default. The Company will deliver to the Purchase Contract Agent, within 140 days after the end of each fiscal year of the Company (which as of the date hereof is December 31) ending after the date hereof, an Officers' Certificate (one of the signers of which shall be the principal executive officer, principal financial officer or principal accounting officer of the Company), stating whether or not to the knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions hereof, and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. 82 87 SECTION 10.06. ERISA. Each Holder from time to time of the Securities that is a Plan hereby represents that its acquisition of the PEPS Units and the holding of the same satisfies the applicable fiduciary requirements of ERISA and that it is entitled to exemption relief from the prohibited transaction provisions of ERISA and the Code in accordance with one or more prohibited transaction exemptions or otherwise will not result in a nonexempt prohibited transaction. 83 88 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. PPL CORPORATION By: /s/ James E. Abel ------------------------- Name: James E. Abel Title: Vice President-Finance and Treasurer THE CHASE MANHATTAN BANK, as Purchase Contract Agent By: /s/ Annette M. Marsula -------------------------- Name: Annette M. Marsula Title: Vice President 84 89 EXHIBIT A FACE OF PEPS UNITS CERTIFICATE "THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN." No. _________ Cusip No. 69352F204 Number of PEPS Units ___________ PPL CORPORATION PPL CAPITAL FUNDING TRUST I PEPS UNITS This PEPS Units Certificate certifies that Cede & Co. is the registered Holder of the number of PEPS Units set forth above. Each PEPS Unit consists of (i) either (a) the beneficial ownership by the Holder of one Preferred Security (the "PREFERRED SECURITY") of PPL Capital Funding Trust I, a Delaware statutory business trust (the "TRUST"), having a stated liquidation amount of $25, subject to the Pledge of such Preferred Security by such Holder pursuant to the Pledge Agreement, or (b) upon the occurrence of a Tax Event Redemption or Successful Initial Remarketing prior to the Purchase Contract Settlement Date, the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio by such Holder pursuant to the Pledge A-1 90 Agreement, and (ii) the rights and obligations of the Holder under one Purchase Contract with PPL Corporation, a Delaware corporation (the "COMPANY"). All capitalized terms used herein which are defined in the Purchase Contract Agreement (as defined on the reverse hereof) have the meaning set forth therein. Pursuant to the Pledge Agreement, the Preferred Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be, constituting part of each PEPS Unit evidenced hereby has been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Purchase Contract comprising part of such PEPS Unit. The Pledge Agreement provides that all payments of the liquidation amount with respect to any of the Pledged Preferred Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be, or cash distributions on any Pledged Preferred Securities (as defined in the Pledge Agreement) or the appropriate Applicable Ownership Interest (as specified in clause (B) of the definition of such term) of the Treasury Portfolio, as the case may be, constituting part of the PEPS Units received by the Securities Intermediary shall be paid by wire transfer in same day funds (i) in the case of (A) cash distributions with respect to Pledged Preferred Securities or the appropriate Applicable Ownership Interest (as specified in clause (B) of the definition of such term) of the Treasury Portfolio, as the case may be, and (B) any payments of the liquidation amount with respect to any Preferred Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be, that have been released from the Pledge pursuant to the Pledge Agreement, to the Purchase Contract Agent to the account designated by the Purchase Contract Agent, no later than 2:00 p.m., New York City time, on the Business Day such payment is received by the Securities Intermediary (provided that in the event such payment is received by the Securities Intermediary on a day that is not a Business Day or after 12:30 p.m., New York City time, on a Business Day, then such payment shall be made no later than 10:30 a.m., New York City time, on the next succeeding Business Day) and (ii) in the case of payments of the liquidation amount with respect to any of the Pledged Preferred Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, to the Company on the Purchase Contract Settlement Date (as described herein) in accordance with the terms of the Pledge Agreement, in full satisfaction of the respective obligations of the Holders of the PEPS Units of which such Pledged Preferred Securities or the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be, are a part under the Purchase Contracts forming a part of such PEPS Units. Distributions on any Preferred Security or the appropriate Applicable Ownership Interest (as specified in clause (B) of the definition of such term) of the Treasury Portfolio, as the case may be, forming part of a PEPS Unit evidenced hereby, which are payable quarterly in arrears on February 18, May 18, August 18 and November 18, of each year, commencing August 18, 2001 (a "PAYMENT A-2 91 DATE"), shall, subject to receipt thereof by the Purchase Contract Agent from the Securities Intermediary, be paid to the Person in whose name this PEPS Unit Certificate (or a Predecessor PEPS Unit Certificate) is registered at the close of business on the Record Date for such Payment Date. Each Purchase Contract evidenced hereby obligates the Holder of this PEPS Units Certificate to purchase, and the Company to sell, on May 18, 2004 (the "PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $25 (the "STATED AMOUNT"), a number of shares of Common Stock, $0.01 par value ("COMMON STOCK"), of the Company, equal to the Settlement Rate, unless on or prior to the Purchase Contract Settlement Date there shall have such occurred a Termination Event or an Early Settlement with respect to the PEPS Unit of which such Purchase Contract is a part, all as provided in the Purchase Contract Agreement and more fully described on the reverse hereof. The purchase price (the "PURCHASE PRICE") for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract Settlement Date by application of payment received in respect of the liquidation amount with respect to any Pledged Preferred Securities pursuant to the Remarketing or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be, pledged to secure the obligations under such Purchase Contract of the Holder of the PEPS Unit of which such Purchase Contract is a part. Distributions on the Preferred Securities and the Applicable Ownership Interest (as specified in clause (B) of the definition of such term) will be payable at the office of the Purchase Contract Agent in New York City or, at the option of the Company, by check mailed to the address of the Person entitled thereto as such address appears on the PEPS Units Register. The Company shall pay on each Payment Date in respect of each Purchase Contract forming part of a PEPS Unit evidenced hereby an amount (the "Contract Adjustment Payments") equal to 0.46% per annum of the Stated Amount, or $0.1150 per annum, computed on the basis of a 360-day year of twelve 30 day months. Such Contract Adjustment Payments, if any, shall be payable to the Person in whose name this PEPS Units Certificate (or a Predecessor PEPS Units Certificate) is registered at the close of business on the Record Date for such Payment Date. Contract Adjustment Payments, if any, will be payable at the Corporate Trust Office of the Purchase Contract Agent and at the New York Office or, at the option of the Company, by check mailed to the address of the Person entitled thereto as such address appears on the Securities Register. Reference is hereby made to the further provisions 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 92 Unless the certificate of authentication hereon has been executed by the Purchase Contract Agent by manual signature, this PEPS Units Certificate shall not be entitled to any benefit under the Pledge Agreement or the Purchase Contract Agreement or be valid or obligatory for any purpose. A-4 93 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. PPL CORPORATION By: ------------------------- Name: Title: HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase Contracts) By: THE CHASE MANHATTAN BANK, not individually but solely as Attorney-in-Fact of such Holder By: ------------------------- Name: Title: DATED: A-5 94 CERTIFICATE OF AUTHENTICATION OF PURCHASE CONTRACT AGENT This is one of the PEPS Units Certificates referred to in the within mentioned Purchase Contract Agreement. By: THE CHASE MANHATTAN BANK, as Purchase Contract Agent By: ------------------------- Authorized Officer A-6 95 (FORM OF REVERSE OF PEPS UNITS CERTIFICATE) Each Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement, dated as of May 9, 2001 (as may be supplemented from time to time, the "PURCHASE CONTRACT AGREEMENT"), between the Company and The Chase Manhattan Bank, as Purchase Contract Agent (including its successors hereunder, the "PURCHASE CONTRACT AGENT"), to which Purchase Contract Agreement and supplemental agreements thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Purchase Contract Agent, the Company, and the Holders and of the terms upon which the PEPS Units Certificates are, and are to be, executed and delivered. Unless a Cash Settlement or an Early Settlement has occurred, each Purchase Contract evidenced hereby obligates the Holder of this PEPS Units Certificate to purchase, and the Company to sell, on the Purchase Contract Settlement Date at a price equal to the Stated Amount (the "PURCHASE PRICE"), a number of shares of Common Stock equal to the Settlement Rate, unless, prior to or on the Purchase Contract Settlement Date, there shall have occurred a Termination Event with respect to the Security of which such Purchase Contract is a part or an Early Settlement shall have occurred. The "SETTLEMENT RATE" is equal to: (1) if the Applicable Market Value (as defined below) is greater than or equal to $65.03 (the "THRESHOLD APPRECIATION PRICE"), 0.3845 shares of Common Stock per Purchase Contract; (2) if the Applicable Market Value is less than the Threshold Appreciation Price but greater than $53.30 (the "REFERENCE PRICE"), the number of shares of Common Stock per Purchase Contract having a value, based on the Applicable Market Value, equal to $25; and (3) if the Applicable Market Value is less than or equal to the Reference Price, 0.4690 shares of Common Stock per Purchase Contract, in each case subject to adjustment as provided in the Purchase Contract Agreement (and in each case rounded upward or downward to the nearest 1/10,000th of a share). No fractional shares of Common Stock will be issued upon settlement of Purchase Contracts, as provided in Section 5.09 of the Purchase Contract Agreement. Each Purchase Contract evidenced hereby, which is settled either through Early Settlement or Cash Settlement, shall obligate the Holder of the related PEPS Unit to purchase at the Purchase Price, and the Company to sell, a number of shares of Common Stock equal to the Early Settlement Rate or the Settlement Rate, as applicable. A-7 96 The "APPLICABLE MARKET VALUE" means the average of the Closing Price per share of Common Stock on each of the 20 consecutive Trading Days ending on the third Trading Day immediately preceding the Purchase Contract Settlement Date. The "CLOSING PRICE" per share of Common Stock on any date of determination means: (1) the closing sale price (or, if no closing price is reported, the last reported sale price) per share on the New York Stock Exchange, Inc. (the "NYSE") on such date; (2) if Common Stock is not listed for trading on the NYSE on any such date, the closing sale price per share as reported in the composite transactions for the principal United States securities exchange on which Common Stock is so listed; (3) if Common Stock is not so listed on a United States national or regional securities exchange, the closing sale price per share as reported by The NASDAQ Stock Market, Inc.; (4) if Common Stock is not so reported, the last quoted bid price for Common Stock in the over-the-counter market as reported by the National Quotation Bureau or similar organization; or (5) if such bid price is not available, the average of the mid-point of the last bid and ask prices of Common Stock on such date from at least three nationally recognized independent investment banking firms retained for this purpose by the Company. A "TRADING DAY" means a day on which Common Stock (1) is not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (2) has traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of Common Stock. In accordance with the terms of the Purchase Contract Agreement, the Holder of this PEPS Units Certificate may pay the Purchase Price for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby by effecting a Cash Settlement or an Early Settlement or from the proceeds of the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio or a Remarketing of the related Pledged Preferred Securities. Unless a Tax Event Redemption or a Successful Initial Remarketing has occurred, a Holder of PEPS Units who does not elect to make an effective cash settlement, on or prior to 5:00 p.m. (New York City time) on the fifth Business Day immediately preceding the Purchase Contract Settlement Date, or elects to make such Cash Settlement, but fails to pay such cash on the fourth Business Day immediately preceding the Purchase Contract Settlement A-8 97 Date, or does not elect to make an effective Early Settlement, shall pay the Purchase Price for the shares of Common Stock to be delivered under the related Purchase Contract from the proceeds of the sale of the related Pledged Preferred Securities held by the Collateral Agent. Unless a Tax Event Redemption or a Successful Initial Remarketing has occurred, such sale will be made by the Remarketing Agent pursuant to the terms of the Remarketing Agreement and any supplemental remarketing agreement executed in connection therewith between the parties thereto, on the third Business Day prior to the Purchase Contract Settlement Date. The Company shall not be obligated to issue any shares of Common Stock in respect of a Purchase Contract or deliver any certificates therefor to the Holder unless it shall have received payment of the aggregate purchase price for the shares of Common Stock to be purchased thereunder in the manner herein set forth. Each Purchase Contract evidenced hereby and all obligations and rights of the Company and the Holder thereunder shall terminate if a Termination Event shall occur. Upon the occurrence of a Termination Event, the Company shall give written notice to the Purchase Contract Agent and to the Holders, at their addresses as they appear in the Security Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Pledged Preferred Security or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio forming a part of each PEPS Unit from the Pledge. A PEPS Unit shall thereafter represent the right to receive the Preferred Security or the appropriate Applicable Ownership Interest of the Treasury Portfolio forming a part of such PEPS Unit in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. Under the terms of the Pledge Agreement, the Purchase Contract Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Pledged Preferred Securities. Upon receipt of notice of any meeting at which holders of Preferred Securities are entitled to vote or upon the solicitation of consents, waivers or proxies of holders of Preferred Securities, the Purchase Contract Agent shall, as soon as practicable thereafter, mail to the PEPS Units Holders a notice: (1) containing such information as is contained in the notice or solicitation; (2) stating that each PEPS Unit Holder on the record date set by the Purchase Contract Agent therefor (which, to the extent possible, shall be the same date as the record date for determining the holders of Preferred Securities entitled to vote) shall be entitled to instruct the Purchase Contract Agent as to the exercise of the voting rights pertaining to the Preferred Securities constituting a part of such Holder's PEPS Unit; and (3) stating the manner in which such instructions may be given. A-9 98 Upon the written request of the PEPS Unit Holders on such record date, the Purchase Contract Agent shall endeavor insofar as practicable to vote or cause to be voted, in accordance with the instructions set forth in such requests, the maximum number of Preferred Securities as to which any particular voting instructions are received. In the absence of specific instructions from the Holder of a PEPS Unit, the Purchase Contract Agent shall abstain from voting the Preferred Security evidenced by such PEPS Unit. Upon the dissolution and liquidation of the Trust, a principal amount of the Subordinated Notes constituting the assets of the Trust and underlying the Preferred Securities equal to the aggregate liquidation amount of the Pledged Preferred Securities shall be delivered to the Securities Intermediary in exchange for the Pledged Preferred Securities. Thereafter, the Subordinated Notes shall be held by the Securities Intermediary to secure the obligations of each Holder of PEPS Units to purchase shares of Common Stock under the Purchase Contracts constituting a part of such PEPS Units. Following the dissolution and liquidation of the Trust, the Holders and the Collateral Agent shall have such security interests, rights and obligations with respect to the Subordinated Notes as the Holders and the Collateral Agent had in respect of the Pledged Preferred Securities, any reference herein to the Preferred Securities shall be deemed to be a reference to the Subordinated Notes and any reference herein to the liquidation amount of the Preferred Securities shall be deemed to be a reference to the principal amount of the Subordinated Notes. Upon the occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement Date, the Redemption Price payable on the Tax Event Redemption Date with respect to the Applicable Amount of Subordinated Notes shall be delivered to the Securities Intermediary in exchange for the Pledged Preferred Securities. Thereafter, pursuant to the terms of the Pledge Agreement, the Securities Intermediary will apply an amount equal to the Redemption Amount of such Redemption Price to purchase on behalf of the Holders of PEPS Units, the Treasury Portfolio and promptly (a) transfer the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio to the Collateral Account to secure the obligations of each Holder of PEPS Units to purchase shares of Common Stock under the Purchase Contracts constituting a part of such PEPS Units, (b) transfer the Applicable Ownership Interest (as specified in clause (B) of the definition of such term) of the Treasury Portfolio to the Purchase Contract Agent for the benefit of the Holders of such PEPS Units and (C) remit the remaining portion of such Redemption Price to the Purchase Contract Agent for payment to the Holders of such PEPS Units. Upon the occurrence of a Successful Initial Remarketing, pursuant to the terms of the Remarketing Agreement, the Remarketing Agent will apply an amount equal to the Treasury Portfolio Purchase Price to purchase on behalf of the Holders of PEPS Units, the Treasury Portfolio, and, after deducting the Remarketing Fee to the extent permitted under the terms of the Remarketing Agreement, promptly remit the remaining portion of A-10 99 such Proceeds of the Successful Initial Remarketing to the Agent for Payment to the Holders of such PEPS units. Following the occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement Date or following a Successful Initial Remarketing, the Holders of PEPS Units and the Collateral Agent shall have such security interest rights and obligations with respect to the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio as the Holder of PEPS Units and the Collateral Agent had in respect of the Preferred Securities or Subordinated Notes, as the case may be, subject to the Pledge thereof as provided in the Pledge Agreement and any reference herein to the Preferred Securities shall be deemed to be a reference to such Treasury Portfolio. The PEPS Certificates are issuable only in registered form and only in denominations of a single PEPS Unit and any integral multiple thereof. The transfer of any PEPS Units Certificate will be registered and PEPS Units Certificates may be exchanged as provided in the Purchase Contract Agreement. The Security Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Purchase Contract Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. A Holder who elects to substitute a Treasury Security for Preferred Securities, thereby creating Treasury PEPS Units, shall be responsible for any fees or expenses payable in connection therewith. Except as provided in the Purchase Contract Agreement, for so long as the Purchase Contract underlying a PEPS Unit remains in effect, such PEPS Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such PEPS Unit in respect of the Preferred Securities or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case may be, and Purchase Contract constituting such PEPS Unit may be transferred and exchanged only as a PEPS Unit. The Holder of PEPS Units may substitute for the Pledged Preferred Securities, securing such Holder's obligations under the related Purchase Contracts, Treasury Securities in an aggregate principal amount equal to the aggregate liquidation amount of the Pledged Preferred Securities, in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. From and after such Collateral Substitution, each Security for which such Pledged Treasury Securities secures the Holder's obligation under the Purchase Contract shall be referred to as a "TREASURY PEPS UNIT". A Holder may make such Collateral Substitution only in integral multiples of 40 PEPS Units for 40 Treasury PEPS Units. Such Collateral Substitution may cause the equivalent aggregate Stated Amount of this Certificate to be increased or decreased; provided, however, the equivalent aggregate Stated Amount outstanding under this PEPS Units Certificate shall not exceed $500,000,000. All such adjustments to the equivalent aggregate Stated Amount of this PEPS Units Certificate shall be duly recorded by placing an appropriate notation on the Schedule attached hereto. A-11 100 A Holder of Treasury PEPS Units may recreate PEPS Units by delivering to the Securities Intermediary Preferred Securities, equal to the aggregate principal amount of the Pledged Treasury Securities in exchange for the release of such Pledged Treasury Securities in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. A Holder may recreate PEPS Units in integral multiples of 40 Treasury PEPS Units for 40 PEPS Units; provided, however, that if a Tax Event Redemption or a successful Initial Remarketing has occurred and the Treasury Portfolio has become a component of the PEPS Units, a Holder may not make such substitution. The Company shall pay, on each Payment Date, the Contract Adjustment Payments, if any, payable in respect of each Purchase Contract to the Person in whose name the PEPS Units Certificate evidencing such Purchase Contract is registered at the close of business on the Record Date for such Payment Date. Contract Adjustment Payments, if any, will be payable at the Corporate Trust Office of the Purchase Contract Agent and the New York Office or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such address as it appears on the Securities Register or by wire transfer to the account designated by such Person in writing. The Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Company to pay Contract Adjustment Payments, if any, and the rights and obligations of Holders to purchase Common Stock, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Purchase Contract Agent or the Company, if, on or prior to the Purchase Contract Settlement Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Purchase Contract Agent, the Collateral Agent and the Holders, at their addresses as they appear in the Security Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Preferred Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be, from the Pledge in accordance with the provisions of the Pledge Agreement. Subject to and upon compliance with the provisions of the Purchase Contract Agreement, at the option of the Holder thereof, Purchase Contracts underlying Securities may be settled early ("EARLY SETTLEMENT") as provided in the Purchase Contract Agreement; provided, however, that if a Tax Event Redemption or a Successful Initial Remarketing has occurred and the Treasury Portfolio has become a component of the PEPS Units, Holders may not make an Early Settlement of their PEPS Units. In order to exercise the right to effect Early Settlement with respect to any Purchase Contracts evidenced by this PEPS Units Certificate, the Holder of this PEPS Units Certificate shall deliver to the Purchase Contract Agent at the Corporate Trust Office an Election to Settle Early form set forth below and any other documents requested by the Purchase Contract Agent duly completed and accompanied by payment in the form of immediately available funds payable to the order of the Company in an amount (the "EARLY SETTLEMENT A-12 101 AMOUNT") equal to (i) the product of (A) $25 times (B) the number of Purchase Contracts with respect to which the Holder has elected to effect Early Settlement, plus (ii) if such delivery is made with respect to any Purchase Contracts during the period from the close of business on any Record Date next preceding any Payment Date to the opening of business on such Payment Date, an amount equal to the Contract Adjustment Payments, if any, payable on such Payment Date with respect to such Purchase Contracts. Upon Early Settlement of Purchase Contracts by a Holder of the related Securities, the Pledged Preferred Securities underlying such Securities shall be released from the Pledge as provided in the Pledge Agreement and the Holder shall be entitled to receive a number of shares of Common Stock on account of each Purchase Contract forming part of a PEPS Unit as to which Early Settlement is effected equal to 0.3845 shares of Common Stock per Purchase Contract (the "EARLY SETTLEMENT RATE"); provided, however, that upon the Early Settlement of the Purchase Contracts, the Holder of such related Securities will forfeit the right to receive any future Contract Adjustment Payments, except to the extent that the Early Settlement Date is after the close of business on a Record Date and prior to the opening of business on the corresponding Payment Date. The Early Settlement Rate shall be adjusted in the same manner and at the same time as the Settlement Rate is adjusted as provided in the Purchase Contract Agreement. Upon registration of transfer of this PEPS Units Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Purchase Contract Agent pursuant to the Purchase Contract Agreement), under the terms of the Purchase Contract Agreement and the Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Purchase Contracts evidenced by this PEPS Units Certificate. The Company covenants and agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. The Holder of this PEPS Units Certificate, by its acceptance hereof, authorizes the Purchase Contract Agent to enter into and perform the related Purchase Contracts forming part of the PEPS Units evidenced hereby on its behalf as its attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform his obligations under such Purchase Contracts, consents to the provisions of the Purchase Contract Agreement, authorizes the Purchase Contract Agent to enter into and perform the Purchase Contract Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of the Preferred Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be, underlying this PEPS Units Certificate pursuant to the Pledge Agreement. The Holder further covenants and agrees that, to the extent and in the manner provided in the Purchase Contract Agreement and the Pledge Agreement, but subject to the terms thereof, payments in respect to the aggregate liquidation amount of the Pledged Preferred A-13 102 Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be, on the Purchase Contract Settlement Date shall be paid by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such payments. Subject to certain exceptions, the provisions of the Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the Purchase Contracts. The Purchase Contracts shall be governed by, and construed in accordance with, the laws of the State of New York. The Company, the Purchase Contract Agent and its Affiliates and any agent of the Company or the Purchase Contract Agent may treat the Person in whose name this PEPS Units Certificate is registered as the owner of the PEPS Units evidenced hereby for the purpose of receiving payments of distributions payable quarterly on the Preferred Securities or interest on the maturing quarterly interest strips of the Treasury Portfolio, as applicable, receiving payments of Contract Adjustment Payments, if any, performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Purchase Contract Agent nor any such agent shall be affected by notice to the contrary. The Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of shares of Common Stock. A copy of the Purchase Contract Agreement is available for inspection at the Corporate Trust Office of the Purchase Contract Agent. A-14 103 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM: as tenants in common UNIF GIFT MIN ACT: Custodian ------------------- ------------------- (cust) (minor) Under Uniform Gifts to Minors Act of -------------------- --------------------------------------------------------- TENANT: as tenants by the entireties JT TEN: as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ----------------- FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto - ------------------------------------------------------------------------------- (Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee) - ------------------------------------------------------------------------------- (Please Print or Type Name and Address Including Postal Zip Code of Assignee) the within PEPS Units Certificates and all rights thereunder, hereby irrevocably constituting and appointing attorney __________________, to transfer said PEPS Units Certificates on the books of PPL Corporation and PPL Capital Funding Trust I with full power of substitution in the premises. Dated: Signature --------------------- --------------------------- NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within PEPS Units Certificates in every particular, without alteration or enlargement or any change whatsoever. Signature Guarantee: ------------------------------- A-15 104 SETTLEMENT INSTRUCTIONS The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon settlement on or after the Purchase Contract Settlement Date of the Purchase Contracts underlying the number of PEPS Units evidenced by this PEPS Units Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: --------------------- ------------------------------- Signature Signature Guarantee:______________ (if assigned to another person) If shares are to be registered in the name of and delivered to a Person other than the REGISTERED HOLDER Holder, please (i) print such Person's name and address and (ii) provide a guarantee of Please print name and address of Registered your signature: Holder: - ------------------------------ ------------------------------ Name Name - ------------------------------ ------------------------------ Address Address - ------------------------------ ------------------------------ - ------------------------------ ------------------------------ - ------------------------------ ------------------------------ Social Security or other Taxpayer Identification Number, if any ------------------------------
A-16 105 ELECTION TO SETTLE EARLY The undersigned Holder of this PEPS Units Certificate hereby irrevocably exercises the option to effect Early Settlement in accordance with the terms of the Purchase Contract Agreement with respect to the Purchase Contracts underlying the number of PEPS Units evidenced by this PEPS Units Certificate specified below. The option to effect Early Settlement may be exercised only with respect to Purchase Contracts underlying PEPS Units with an aggregate Stated Amount equal to $1,000 or an integral multiple thereof; provided, however, that if a Tax Event Redemption or a Successful Initial Remarketing has occurred and the Treasury Portfolio has become a component of the PEPS Units, Holders may not early settle PEPS Units. The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon such Early Settlement be registered in the name of, and delivered, together with a check in payment for any fractional share and any PEPS Units Certificate representing any PEPS Units evidenced hereby as to which Early Settlement of the related Purchase Contracts is not effected, to the undersigned at the address indicated below unless a different name and address have been indicated below. Pledged Preferred Securities or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case may be, deliverable upon such Early Settlement will be transferred in accordance with the transfer instructions set forth below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: --------------------- -------------------------------- Signature Signature Guarantee: ----------------------------------- A-17 106 Number of Securities evidenced hereby as to which Early Settlement of the related Purchase Contracts is being elected: If shares of Common Stock or PEPS REGISTERED HOLDER Units Certificates are to be registered in the name of and delivered to and Pledged Preferred Securities, or the Applicable Ownership Interest of the Treasury Portfolio, as the case may be, are to be transferred to a Person other than the Holder, please print such Person's name and address: Please print name and address of Registered Holder: ------------------------------ - ------------------------------ Name Name ------------------------------ - ------------------------------ Address Address ------------------------------ - ------------------------------ ------------------------------ - ------------------------------ ------------------------------ - ------------------------------ Social Security or other Taxpayer Identification Number, if any ------------------------------
A-18 107 Transfer Instructions for Pledged Preferred Securities or the Applicable Ownership Interest of the Treasury Portfolio, as the case may be, transferable upon Early Settlement or a Termination Event: - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- A-19 108 [TO BE ATTACHED TO GLOBAL CERTIFICATES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE The following increases or decreases in this Global Certificate have been made:
============================================================================================== Number of PEPS Amount of Amount of Units evidenced Signature of increase in decrease in by this Global authorized Number of PEPS Number of PEPS Certificate officer of Units evidenced Units evidenced following such Trustee or by the Global by the Global decrease or Securities Date Certificate Certificate increase Custodian - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------------------
A-20 109 EXHIBIT B FACE OF TREASURY PEPS CERTIFICATE "THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN." No. Cusip No. 69352F303 Number of PEPS Units PPL CORPORATION PPL Capital Funding TRUST I TREASURY PEPS UNITS This Treasury PEPS Units Certificate certifies that Cede & Co. is the registered Holder of the number of Treasury PEPS Units set forth above. Each Treasury PEPS Unit consists of (i) a 1/40 undivided beneficial ownership interest of a Treasury Security having a principal amount at maturity equal to $1,000, subject to the Pledge of such Treasury Security by such Holder pursuant to the Pledge Agreement, and (ii) the rights and obligations of the Holder under one Purchase Contract with PPL Corporation, a Delaware corporation (the "COMPANY"). All capitalized terms used herein which are 110 defined in the Purchase Contract Agreement (as defined on the reverse hereof) have the meaning set forth therein. Pursuant to the Pledge Agreement, the Treasury Securities constituting part of each Treasury PEPS Unit evidenced hereby have been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Purchase Contract comprising part of such Treasury PEPS Unit. Each Purchase Contract evidenced hereby obligates the Holder of this Treasury PEPS Units Certificate to purchase, and the Company, to sell, on May 18, 2004, at a price equal to $25 (the "STATED AMOUNT"), a number of shares of Common Stock, $0.01 par value ("COMMON STOCK"), of the Company, equal to the Settlement Rate, unless prior to or on the Purchase Contract Settlement Date there shall have occurred a Termination Event or an Early Settlement with respect to the Treasury PEPS Unit of which such Purchase Contract is a part, all as provided in the Purchase Contract Agreement and more fully described on the reverse hereof. The purchase price (the "PURCHASE PRICE") for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract Settlement Date by application of the proceeds from the Treasury Securities at maturity pledged to secure the obligations of the Holder under such Purchase Contract of the Treasury PEPS Unit of which such Purchase Contract is a part. The Company shall pay on each Payment Date in respect of each Purchase Contract forming part of a Treasury PEPS Unit evidenced hereby an amount (the "Contract Adjustment Payments") equal to 0.46% per annum of the Stated Amount, computed on the basis of a 360-day year of twelve 30 day months. Such Contract Adjustment Payments, if any, shall be payable to the Person in whose name this Treasury PEPS Units Certificate (or a Predecessor Treasury PEPS Units Certificate) is registered at the close of business on the Record Date for such Payment Date. Contract Adjustment Payments, if any, will be payable at the Corporate Trust Office of the Purchase Contract Agent and at the New York Office or, at the option of the Company, by check mailed to the address of the Person entitled thereto as such address appears on the Securities Register or by wire transfer to the account designated by such Person by prior written notice. Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Purchase Contract Agent by manual signature, this Treasury PEPS Units Certificate shall not be entitled to any benefit under the Pledge Agreement or the Purchase Contract Agreement or be valid or obligatory for any purpose. B-2 111 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. PPL CORPORATION By: ------------------------- Name: Title: HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase Contracts) By: THE CHASE MANHATTAN BANK, not individually but solely as Attorney-in-Fact of such Holder By: ------------------------- Name: Title: DATED: B-3 112 CERTIFICATE OF AUTHENTICATION OF PURCHASE CONTRACT AGENT This is one of the Treasury PEPS Units referred to in the within-mentioned Purchase Contract Agreement. By: THE CHASE MANHATTAN BANK, as Purchase Contract Agent By: --------------------------- Authorized Officer B-4 113 (REVERSE OF TREASURY PEPS UNITS CERTIFICATE) Each Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement, dated as of May 9, 2001 (as may be supplemented from time to time, the "PURCHASE CONTRACT AGREEMENT") between the Company and The Chase Manhattan Bank, as Purchase Contract Agent (including its successors thereunder, herein called the "PURCHASE CONTRACT AGENT"), to which the Purchase Contract Agreement and supplemental agreements thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Purchase Contract Agent, the Company and the Holders and of the terms upon which the Treasury PEPS Units Certificates are, and are to be, executed and delivered. Unless a Cash Settlement or an Early Settlement has occurred, each Purchase Contract evidenced hereby obligates the Holder of this Treasury PEPS Units Certificate to purchase, and the Company to sell, on the Purchase Contract Settlement Date at a price equal to the Stated Amount (the "PURCHASE PRICE") a number of shares of Common Stock equal to the Settlement Rate, unless prior to the Purchase Contract Settlement Date, there shall have occurred a Termination Event with respect to the Security of which such Purchase Contract is a part or an Early Settlement shall have occurred. The "SETTLEMENT RATE" is equal to: (1) if the Applicable Market Value (as defined below) is greater than or equal to $65.03 (the "THRESHOLD APPRECIATION PRICE"), 0.3845 shares of Common Stock per Purchase Contract; (2) if the Applicable Market Value is less than the Threshold Appreciation Price but greater than $53.30 (the "REFERENCE PRICE"), the number of shares of Common Stock per Purchase Contract having a value, based on the Applicable Market Value, equal to $25; and (3) if the Applicable Market Value is less than or equal to the Reference Price, then 0.4690 shares of Common Stock per Purchase Contract, in each case subject to adjustment as provided in the Purchase Contract Agreement (and in each case rounded upward or downward to the nearest 1/10,000th of a share). No fractional shares of Common Stock will be issued upon settlement of Purchase Contracts, as provided in Section 5.09 of the Purchase Contract Agreement. Each Purchase Contract evidenced hereby, which is settled either through Early Settlement or Cash Settlement, shall obligate the Holder of the related Treasury PEPS Unit to purchase at the Purchase Price for cash, and the Company to sell, a number of shares of Common Stock equal to the Early Settlement Rate or the Settlement Rate, as applicable. B-5 114 The "APPLICABLE MARKET VALUE" means the average of the Closing Prices per share of Common Stock on each of the 20 consecutive Trading Days ending on the third Trading Day immediately preceding the Purchase Contract Settlement Date. The "CLOSING PRICE" per share of Common Stock on any date of determination means the: (1) closing sale price (or, if no closing price is reported, the last reported sale price) per share on the New York Stock Exchange, Inc. (the "NYSE") on such date; (2) if the Common Stock is not listed for trading on the NYSE on any such date, the closing sale price per share as reported in the composite transactions for the principal United States securities exchange on which the Common Stock is so listed; (3) if the Common Stock is not so listed on a United States national or regional securities exchange, the closing sale price per share as reported by The NASDAQ Stock Market, Inc.; (4) if the Common Stock is not so reported, the last quoted bid price for the Common Stock in the over-the-counter market as reported by the National Quotation Bureau or similar organization; or (5) if such bid price is not available, the average of the mid-point of the last bid and ask prices of the Common Stock on such date from at least three nationally recognized independent investment banking firms retained for this purpose by the Company. A "TRADING DAY" means a day on which the Common Stock (1) is not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (2) has traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Stock. In accordance with the terms of the Purchase Contract Agreement, the Holder of this Treasury PEPS Unit shall pay the Purchase Price for the shares of the Common Stock purchased pursuant to each Purchase Contract evidenced hereby either by effecting a Cash Settlement or an Early Settlement of each such Purchase Contract or by applying a principal amount of the Pledged Treasury Securities underlying such Holder's Treasury PEPS Unit equal to the Stated Amount of such Purchase Contract to the purchase of the Common Stock. A Holder of Treasury PEPS Unit who does not effect, prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding the Purchase Contract Settlement Date, an Early Settlement, shall pay the Purchase Price for the shares of Common Stock to be issued under the related Purchase Contract from the proceeds of the Pledged Treasury Securities. B-6 115 The Company shall not be obligated to issue any shares of Common Stock in respect of a Purchase Contract or deliver any certificates therefor to the Holder unless it shall have received payment of the aggregate purchase price for the shares of Common Stock to be purchased thereunder in the manner herein set forth. Each Purchase Contract evidenced hereby and all obligations and rights of the Company and the Holder thereunder shall terminate if a Termination Event shall occur. Upon the occurrence of a Termination Event, the Company shall give written notice to the Purchase Contract Agent and to the Holders, at their addresses as they appear in the Treasury PEPS Units Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Pledged Treasury Securities (as defined in the Pledge Agreement) forming a part of each Treasury PEPS Unit. A Treasury PEPS Unit shall thereafter represent the right to receive the interest in the Treasury Security forming a part of such Treasury PEPS Unit, in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. The Treasury PEPS Units Certificates are issuable only in registered form and only in denominations of a single Treasury PEPS Unit and any integral multiple thereof. The transfer of any Treasury PEPS Certificate will be registered and Treasury PEPS Certificates may be exchanged as provided in the Purchase Contract Agreement. The Treasury PEPS Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Purchase Contract Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. A Holder who elects to substitute Preferred Securities or Subordinated Notes, as the case may be, for Treasury Securities, thereby recreating PEPS Units, shall be responsible for any fees or expenses associated therewith. Except as provided in the Purchase Contract Agreement, for so long as the Purchase Contract underlying a Treasury PEPS Unit remains in effect, such Treasury PEPS Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Treasury PEPS Unit in respect of the Treasury Security and the Purchase Contract constituting such Treasury PEPS Unit may be transferred and exchanged only as a Treasury PEPS Unit. A Holder of Treasury PEPS Units may recreate PEPS Units by delivering to the Collateral Agent, Preferred Securities or Subordinated Notes with a liquidation amount, in the case of such Preferred Securities or with a principal amount in the case of such Subordinated Notes, equal to the aggregate principal amount at maturity of the Pledged Treasury Securities in exchange for the release of such Pledged Treasury Securities in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. From and after such substitution, the Holder's Security shall be referred to as a "PEPS UNIT". Any such creation of PEPS Units may be effected in multiples of 40 Treasury PEPS Units for 40 PEPS Units; provided, however, that if a Tax Event Redemption or a Successful Initial Remarketing has occurred and the Treasury Portfolio B-7 116 has become a component of the PEPS Units, a Holder may not make such substitution. Such substitution may cause the equivalent aggregate Stated Amount of this Certificate to be increased or decreased; provided, however, the equivalent aggregate Stated Amount outstanding under this Treasury Units Certificate shall not exceed $500,000,000. All such adjustments to the equivalent aggregate Stated Amount of this PEPS Units Certificate shall be duly recorded by placing an appropriate notation on the Schedule attached hereto. A Holder of PEPS Units may recreate Treasury PEPS Units by delivering to the Collateral Agent Treasury Securities in an aggregate principal amount equal to the aggregate liquidation amount of the Pledged Preferred Securities or the aggregate principal amount at maturity of the Pledged Subordinated Notes, as the case may be, in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. Any such recreation of Treasury PEPS Units may be effected only in multiples of 40 PEPS Units for 40 Treasury PEPS Units; provided, however, if a Tax Event Redemption or a Successful Initial Remarketing has occurred and the Treasury Portfolio has become a component of the PEPS Unit, a Holder may not make such Collateral Substitution. The Company shall pay, on each Payment Date, the Contract Adjustment Payments, if any, payable in respect of each Purchase Contract to the Person in whose name the Treasury PEPS Units Certificate evidencing such Purchase Contract is registered at the close of business on the Record Date for such Payment Date. Contract Adjustment Payments, if any, will be payable at the Corporate Trust Office of the Purchase Contract Agent and the New York Office or at the option of the Company, by check mailed to the address of the Person entitled thereto at such address as it appears on the Securities Register. The Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Company to pay Contract Adjustment Payments, if any, and the rights and obligations of Holders to purchase Common Stock, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Purchase Contract Agent or the Company, if, on or prior to the Purchase Contract Settlement Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Purchase Contract Agent, the Collateral Agent and the Holders, at their addresses as they appear in the Security Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Treasury Securities from the Pledge in accordance with the provisions of the Pledge Agreement. A Treasury PEPS Unit shall thereafter represent the right to receive the interest in the Treasury Security forming a part of such Treasury PEPS Unit, in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. B-8 117 Subject to and upon compliance with the provisions of the Purchase Contract Agreement, at the option of the Holder thereof, Purchase Contracts underlying Securities may be settled early ("EARLY SETTLEMENT") as provided in the Purchase Contract Agreement. In order to exercise the right to effect Early Settlement with respect to any Purchase Contracts evidenced by this Treasury PEPS Unit, the Holder of this Treasury PEPS Units Certificate shall deliver to the Purchase Contract Agent at the Corporate Trust Office an Election to Settle Early form set forth below and any other documents requested by the Purchase Contract Agent duly completed and accompanied by payment in the form of immediately available funds payable to the order of the Company in an amount (the "EARLY SETTLEMENT AMOUNT") equal to (i) the product of (A) $25 times (B) the number of Purchase Contracts with respect to which the Holder has elected to effect Early Settlement, plus (ii) if such delivery is made with respect to any Purchase Contracts during the period from the close of business on any Record Date next preceding any Payment Date to the opening of business on such Payment Date, an amount equal to the Contract Adjustment Payments, if any, payable on such Payment Date with respect to such Purchase Contracts. Upon Early Settlement of Purchase Contracts by a Holder of the related Securities, the Pledged Treasury Securities underlying such Securities shall be released from the Pledge as provided in the Pledge Agreement and the Holder shall be entitled to receive a number of shares of Common Stock on account of each Purchase Contract forming part of a Treasury PEPS Unit as to which Early Settlement is effected equal to 0.3845 shares of Common Stock per Purchase Contract (the "EARLY SETTLEMENT RATE") ; provided, however, that upon the Early Settlement of the Purchase Contracts, the Holder of such related Securities will forfeit the right to receive any future Contract Adjustment Payments, except to the extent that the Early Settlement Date is after the close of business on a Record Date and prior to the opening of business on the corresponding Payment Date. The Early Settlement Rate shall be adjusted in the same manner and at the same time as the Settlement Rate is adjusted as provided in the Purchase Contract Agreement. Upon registration of transfer of this Treasury PEPS Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Purchase Contract Agent pursuant to the Purchase Contract Agreement), under the terms of the Purchase Contract Agreement and the Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Purchase Contracts evidenced by this Treasury PEPS Units Certificate. The Company covenants and agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. The Holder of this Treasury PEPS Units Certificate, by its acceptance hereof, authorizes the Purchase Contract Agent to enter into and perform the related Purchase Contracts forming part of the Treasury PEPS Units evidenced hereby on its behalf as its attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the B-9 118 terms and provisions thereof, covenants and agrees to perform its obligations under such Purchase Contracts, consents to the provisions of the Purchase Contract Agreement, authorizes the Purchase Contract Agent to enter into and perform the Purchase Contract Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of the Treasury Securities underlying this Treasury PEPS Units Certificate pursuant to the Pledge Agreement. The Holder further covenants and agrees, that, to the extent and in the manner provided in the Purchase Contract Agreement and the Pledge Agreement, but subject to the terms thereof, payments in respect to the aggregate principal amount of the Pledged Treasury Securities on the Purchase Contract Settlement Date shall be paid by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such payments. Subject to certain exceptions, the provisions of the Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the Purchase Contracts. The Purchase Contracts shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York. The Company, the Purchase Contract Agent and its Affiliates and any agent of the Company or the Purchase Contract Agent may treat the Person in whose name this Treasury PEPS Units Certificate is registered as the owner of the Treasury PEPS Units evidenced hereby for the purpose of receiving payments of interest on the Treasury Securities, receiving payments of Contract Adjustment Payments, if any, performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Purchase Contract Agent nor any such agent shall be affected by notice to the contrary. The Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of shares of Common Stock. A copy of the Purchase Contract Agreement is available for inspection at the Corporate Trust Office of the Purchase Contract Agent. B-10 119 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM: as tenants in common UNIF GIFT MIN ACT: Custodian ------------------- ---------------------- (cust) (minor) Under Uniform Gifts to Minors Act of -------------- ---------------------------------------------------- TENANT: as tenants by the entireties JT TEN: as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. ----------------- FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto - ------------------------------------------------------------------------------- (Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee) - ------------------------------------------------------------------------------- (Please Print or Type Name and Address Including Postal Zip Code of Assignee) the within PEPS Units Certificates and all rights thereunder, hereby irrevocably constituting and appointing attorney __________________, to transfer said PEPS Units Certificates on the books of PPL Corporation and PPL Capital Funding Trust I with full power of substitution in the premises. Dated: Signature --------------------- --------------------------- NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within PEPS Units Certificates in every particular, without alteration or enlargement or any change whatsoever. Signature Guarantee: ------------------------------- B-11 120 SETTLEMENT INSTRUCTIONS The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon settlement on or after the Purchase Contract Settlement Date of the Purchase Contracts underlying the number of PEPS Units evidenced by this PEPS Units Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: --------------------- ------------------------------- Signature Signature Guarantee:______________ (if assigned to another person) If shares are to be registered in the name of and delivered to a Person other than the REGISTERED HOLDER Holder, please (i) print such Person's name and address and (ii) provide a guarantee of Please print name and address of Registered your signature: Holder: - ------------------------------ ------------------------------ Name Name - ------------------------------ ------------------------------ Address Address - ------------------------------ ------------------------------ - ------------------------------ ------------------------------ - ------------------------------ ------------------------------ Social Security or other Taxpayer Identification Number, if any ------------------------------
B-12 121 ELECTION TO SETTLE EARLY The undersigned Holder of this Treasury PEPS Units Certificate irrevocably exercises the option to effect Early Settlement in accordance with the terms of the Purchase Contract Agreement with respect to the Purchase Contracts underlying the number of Treasury PEPS Units evidenced by this Treasury PEPS Units Certificate specified below. The option to effect Early Settlement may be exercised only with respect to Purchase Contracts underlying Treasury PEPS with an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon such Early Settlement be registered in the name of, and delivered, together with a check in payment for any fractional share and any Treasury PEPS Units Certificate representing any Treasury PEPS Units evidenced hereby as to which Early Settlement of the related Purchase Contracts is not effected, to the undersigned at the address indicated below unless a different name and address have been indicated below. Pledged Treasury Securities deliverable upon such Early Settlement will be transferred in accordance with the transfer instructions set forth below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: ----------------------- -------------------------------- Signature Signature Guarantee: ------------------------ B-13 122 Number of Securities evidenced hereby as to which Early Settlement of the related Purchase Contracts is being elected: If shares of Common Stock of Treasury PEPS REGISTERED HOLDER Units Certificates are to be registered in the name of and delivered to and Pledged Treasury Securities are to be transferred to a Person other than the Holder, please print such Person's name and address: Please print name and address of Registered Holder: - ------------------------------ ------------------------------ Name Name - ------------------------------ ------------------------------ Address Address - ------------------------------ ------------------------------ - ------------------------------ ------------------------------ - ------------------------------ ------------------------------ Social Security or other Taxpayer Identification Number, if any ------------------------------
B-14 123 Transfer Instructions for Pledged Preferred Securities or the Applicable Ownership Interest of the Treasury Portfolio, as the case may be, transferable upon Early Settlement or a Termination Event: - ------------------------------------------------------------------------ - ------------------------------------------------------------------------ - ------------------------------------------------------------------------ C-15 124 [TO BE ATTACHED TO GLOBAL CERTIFICATES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE The following increases or decreases in this Global Certificate have been made:
================================================================================================= Amount of Amount of increase decrease in Number of Treasury Signature of in Number of Number of PEPS Units evidenced authorized Treasury PEPS Treasury PEPS by this Global officer of Units evidenced by Units evidenced Certificate Trustee or the Global by the Global following such Securities Date Certificate Certificate decrease or increase Custodian - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------
C-16 125 EXHIBIT C INSTRUCTION TO PURCHASE CONTRACT AGENT The Chase Manhattan Bank 450 West 33rd Street New York, New York 10001 Attention: Institutional Trust Services Re: [_______ PEPS Units] [_______ Treasury PEPS Units] of PPL Corporation, a Pennsylvania corporation (the "COMPANY"), and PPL Capital Funding Trust I. The undersigned Holder hereby notifies you that it has delivered to The Bank of New York, as Securities Intermediary, for credit to the Collateral Account, $______ aggregate [principal] [liquidation] amount of [Preferred Securities] [Subordinated Notes] [Treasury Securities] or security entitlements with respect thereto in exchange for the [Pledged Preferred Securities] [Pledged Subordinated Notes] [Pledged Treasury Securities] held in the Collateral Account, in accordance with the Pledge Agreement, dated as of May 9, 2001 (the "PLEDGE AGREEMENT"; unless otherwise defined herein, terms defined in the Pledge Agreement are used herein as defined therein), between you, the Company, the Collateral Agent and the Securities Intermediary. The undersigned Holder has paid all applicable fees relating to such exchange. The undersigned Holder hereby instructs you to instruct the Collateral Agent to release to you on behalf of the undersigned Holder the [Pledged Preferred Securities] [Pledged Subordinated Notes] [Pledged Treasury Securities] related to such [PEPS Units] [Treasury PEPS Units]. Dated: ----------------------- -------------------------------- Signature Signature Guarantee: ------------------------ - -------------------------------- TRADES Account No. of Holder ---------------------------- - ------------------------------ DTC Account No. of Holder C-1 126 Please print name and address of Registered Holder: - --------------------------- --------------------------------- Name Social Security or other Taxpayer Identification Number, if any Address - --------------------------- - --------------------------- - --------------------------- C-2 127 EXHIBIT D NOTICE FROM PURCHASE CONTRACT AGENT TO HOLDERS (Transfer of Collateral upon Occurrence of a Termination Event) [HOLDER] - ---------------------------- - ---------------------------- Attention: Telecopy: ------------------- Re: [__________ PEPS Units] [______ Treasury PEPS Units] of PPL Corporation, a Pennsylvania corporation (the "COMPANY") and PPL Capital Funding Trust I Please refer to the Purchase Contract Agreement, dated as of May 9, 2001 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein, terms defined in the Purchase Contract Agreement are used herein as defined therein), between the Company and the undersigned, as Purchase Contract Agent and as attorney-in-fact for the holders of PEPS Units and Treasury PEPS Units from time to time. We hereby notify you that a Termination Event has occurred and that [the Subordinated Notes][the Treasury Securities] [Applicable Ownership Interest in the Treasury Portfolio] underlying your ownership interest in _____ [PEPS Units] [Treasury PEPS Units] have been released and are being held by us for your account pending receipt of transfer instructions with respect to such [Subordinated Notes][Treasury Securities] [Applicable Ownership Interest in the Treasury Portfolio] (the "RELEASED SECURITIES"). Pursuant to Section 3.15 of the Purchase Contract Agreement, we hereby request written transfer instructions with respect to the Released Securities. Upon receipt of your instructions and upon transfer to us of your [PEPS Units][Treasury PEPS Units] effected through book-entry or by delivery to us of your [PEPS Units Certificate][Treasury PEPS Units Certificate], we shall transfer the Released Securities by book-entry transfer or other appropriate procedures, in accordance with your instructions. In the event you fail to effect such transfer or delivery, the Released Securities and any distributions thereon, shall be held in our name, or a nominee in trust for your benefit, until such time as such [PEPS Units][Treasury PEPS Units] are transferred or your [PEPS Units Certificate] [Treasury PEPS Units Certificate] is surrendered or satisfactory evidence is provided that such [PEPS Units Certificate][Treasury PEPS Units Certificate] has been destroyed, lost or stolen, D-1 128 together with any indemnification that we or the Company may require. Date: By: THE CHASE MANHATTAN BANK, as Purchase Contract Agent ------------------------------ Name: Title: Authorized Signatory D-2 129 EXHIBIT E NOTICE TO SETTLE BY CASH The Chase Manhattan Bank 450 West 33rd Street New York, New York 10001 Attention: Institutional Trust Services Re: [_______ PEPS Units] [_______ Treasury PEPS Units] of PPL Corporation, a Pennsylvania corporation (the "COMPANY") and PPL Capital Funding Trust I The undersigned Holder hereby irrevocably notifies you in accordance with Section of the Purchase Contract Agreement, dated as of May __, 2001 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein, terms defined in the Purchase Contract Agreement are used herein as defined therein), between the Company and you, as Purchase Contract Agent and as Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder has elected to pay to the Securities Intermediary for deposit in the Collateral Account, prior to or on 11:00 a.m. (New York City time) on the fourth Business Day immediately preceding the Purchase Contract Settlement Date (in lawful money of the United States wire transfer, in immediately available funds), $______ as the Purchase Price for the shares of Common Stock issuable to such Holder by the Company under the related Purchase Contracts on the Purchase Contract Settlement Date. The undersigned Holder hereby instructs you to notify promptly the Collateral Agent of the undersigned Holders' election to make such cash settlement with respect to the Purchase Contracts related to such Holder's [PEPS Units] [Treasury PEPS Units]. Dated: ----------------------- -------------------------------- Signature Signature Guarantee: ----------------------------- Please print name and address of Registered Holder: E-1 130 EXHIBIT F NOTICE FROM PURCHASE CONTRACT AGENT TO REMARKETING AGENT, COLLATERAL AGENT AND INDENTURE TRUSTEE AND THE COMPANY (Settlement of Purchase Contract through Remarketing) Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 Attention: Telecopy: The Bank of New York 101 Barclay Street New York, New York 10004 Attention: Telecopy: PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18101-1179 Attention: Treasurer Telecopy: (610) 774-5106 The Chase Manhattan Bank 450 West 33rd Street New York, New York 10001 Attention: Institutional Trust Services Telecopy: (212) 946-8177 Re: __________ PEPS Units of PPL Corporation, a Pennsylvania corporation (the "COMPANY") and PPL Capital Funding Trust I, a Delaware statutory business trust Please refer to the Purchase Contract Agreement, dated as of May 9, 2001 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein, terms defined in the Purchase Contract Agreement are used herein as defined therein), between the Company and the undersigned, as Purchase Contract Agent and as attorney-in-fact for the Holders of PEPS Units from time to time. In accordance with Section 5.03(b) of the Purchase Contract Agreement and, based on instructions received from Holders of PEPS Units as of 11:00 a.m. (New York City time), on the fifth Business Day preceding the Purchase Contract Settlement Date, F-1 131 we hereby notify you that ______ [Preferred Securities] [Subordinated Notes] are to be tendered for purchase in the Remarketing. Date: By: THE CHASE MANHATTAN BANK, as Purchase Contract Agent ------------------------------ Name: Title: Authorized Officer F-2 EX-4.6 5 y49005ex4-6.txt FORM OF PLEDGE AGREEMENT 1 EXECUTION COPY EXHIBIT 4.6 PPL CORPORATION and THE BANK OF NEW YORK, as Collateral Agent, Securities Intermediary and Custodial Agent and THE CHASE MANHATTAN BANK, as Purchase Contract Agent PLEDGE AGREEMENT Dated as of May 9, 2001 2
TABLE OF CONTENTS ----------------- Section 1. Definitions...............................................................2 Section 2. Pledge....................................................................6 Section 2.1 Pledge...........................................................6 Section 2.2 Control; Financing Statement.....................................6 Section 2.3 Termination......................................................6 Section 3. Distributions on Pledged Collateral.......................................7 Section 3.1 Income Distributions.............................................7 Section 3.2 Principal Payments Following Termination Event...................7 Section 3.3 Principal Payments Prior To or On Purchase Contract Settlement Date.............................................................7 Section 3.4 Payments to Purchase Contract Agent..............................8 Section 3.5 Assets Not Properly Released.....................................8 Section 4. Control...................................................................8 Section 4.1 Establishment of Collateral Account..............................8 Section 4.2 Treatment as Financial Assets....................................9 Section 4.3 Sole Control by Collateral Agent.................................9 Section 4.4 Securities Intermediary's Location...............................9 Section 4.5 No Other Claims..................................................9 Section 4.6 Investment and Release..........................................10 Section 4.7 Statements and Confirmations....................................10 Section 4.8 Tax Allocations.................................................10 Section 4.9 No Other Agreements.............................................10 Section 4.10 Powers Coupled With An Interest.................................10 Section 4.11 Wire Transfer Instructions......................................11 Section 5. Initial Deposit; Establishment of Treasury PEPS Units and Re-establishment of PEPS Units............................................................11 Section 5.1 Initial Deposit of Trust Preferred Securities...................11 Section 5.2 Establishment of Treasury PEPS Units............................11 Section 5.3 Reestablishment of PEPS Units...................................13 Section 5.4 Termination Event...............................................14 Section 5.5 Cash Settlement.................................................16 Section 5.6 Early Settlement................................................17 Section 5.7 Application of Proceeds in Settlement of Purchase Contracts.....18 Section 5.8 Tax Event Redemption............................................20
i 3 Section 6. Voting Rights - Pledged Preferred Securities and Pledged Subordinated Notes....................................................................21 Section 7. Rights and Remedies......................................................22 Section 7.1 Rights and Remedies of the Collateral Agent.....................22 Section 7.2 Substitution of Subordinated Notes..............................23 Section 7.3 Tax Event Redemption............................................23 Section 7.4 Initial and Additional Remarketing; Treasury Portfolio Cash Payment to Remarketing Agent or Its Designated Entity...........24 Section 7.5 Substitutions...................................................25 Section 8. Representations and Warranties; Covenants................................25 Section 8.1 Representations and Warranties..................................25 Section 8.2 Covenants.......................................................26 Section 9. The Collateral Agent, the Securities Intermediary and the Custodial Agent....................................................................27 Section 9.1 Appointment, Powers and Immunities..............................27 Section 9.2 Instructions of the Company.....................................28 Section 9.3 Reliance by Collateral Agent, Securities Intermediary and Custodial Agent...........................................................28 Section 9.4 Rights in Other Capacities......................................29 Section 9.5 Non-Reliance on Collateral Agent, Securities Intermediary and Custodial Agent.................................................29 Section 9.6 Compensation and Indemnity......................................29 Section 9.7 Failure to Act..................................................30 Section 9.8 Resignation of Collateral Agent, Securities Intermediary and Custodial Agent.................................................31 Section 9.9 Right to Appoint Agent or Advisor...............................32 Section 9.10 Survival........................................................32 Section 9.11 Exculpation.....................................................32 Section 10. Amendment................................................................33 Section 10.1 Amendment Without Consent of Holders............................33 Section 10.2 Amendment With Consent of Holders...............................33 Section 10.3 Execution of Amendments.........................................34 Section 10.4 Effect of Amendments............................................34 Section 10.5 Reference to Amendments.........................................34 Section 11. Miscellaneous............................................................35 Section 11.1 No Waiver.......................................................35 Section 11.2 Governing Law...................................................35 Section 11.3 Notices.........................................................35 Section 11.4 Successors and Assigns..........................................36 Section 11.5 Counterparts....................................................36 Section 11.6 Severability....................................................36
ii 4 Section 11.7 Expenses, Etc...................................................36 Section 11.8 Security Interest Absolute......................................37 Section 11.9 Notice of Tax Event, Tax Event Redemption and Termination Event.37 Section 11.10Book-entry Interests............................................38
iii 5 EXHIBIT A INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT (Establishment of Treasury PEPS Units)...............A-1 EXHIBIT B INSTRUCTION FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY (Establishment of Treasury PEPS Units)...................B-1 EXHIBIT C INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT (Reestablishment of PEPS Units ).....................C-1 EXHIBIT D INSTRUCTION FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY (Reestablishment of PEPS Units)..........................D-1 EXHIBIT E NOTICE OF CASH SETTLEMENT FROM SECURITIES INTERMEDIARY TO PURCHASE CONTRACT AGENT (Cash Settlement Amounts)...................................................E-1 EXHIBIT F INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING...........................................................F-1 EXHIBIT G INSTRUCTION TO CUSTODIAL AGENT REGARDING WITHDRAWAL FROM REMARKETING...........................................G-1 EXHIBIT H NOTICE TO MAKE TREASURY PORTFOLIO CASH PAYMENT........................H-1 EXHIBIT I INSTRUCTION TO PURCHASE CONTRACT AGENT................................I-1 EXHIBIT J INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT......................................................H-1
iv 6 PLEDGE AGREEMENT PLEDGE AGREEMENT, dated as of May 9, 2001, among PPL Corporation, a Pennsylvania corporation (the "COMPANY"), The Bank of New York, a New York banking corporation, as collateral agent (in such capacity, together with its successors in such capacity, the "COLLATERAL AGENT"), as securities intermediary with respect to the Collateral Account (as defined below) (in such capacity, together with its successors in such capacity, the "SECURITIES INTERMEDIARY"), and as custodial agent for the Company (in such capacity, together with its successors in such capacity, the "CUSTODIAL AGENT") and The Chase Manhattan Bank, as purchase contract agent and as attorney-in-fact of the Holders from time to time of the Securities under the Purchase Contract Agreement (in such capacity, together with its successors in such capacity, the "PURCHASE CONTRACT AGENT"). RECITALS The Company and the Purchase Contract Agent are parties to the Purchase Contract Agreement dated as of the date hereof (as modified and supplemented and in effect from time to time, the "PURCHASE CONTRACT AGREEMENT"), pursuant to which there may be issued up to $575,000,000 Premium Equity Participating Security Units--PEPS(SM) Units (including any Treasury PEPS Units (as referred to below), the "SECURITIES") (including $75,000,000 Securities relating to the over-allotment option granted to the underwriters pursuant to the Underwriting Agreement). Each Security, at issuance, consists of a unit comprised of (a) a stock purchase contract (the "PURCHASE CONTRACT") under which the Holder will purchase from the Company on May 18, 2004 (the "PURCHASE CONTRACT SETTLEMENT DATE"), for an amount equal to $25 (the "STATED AMOUNT"), a number of shares of PPL Corporation common stock, par value $0.01 per share ("COMMON STOCK"), equal to the Settlement Rate, and (b) a Trust Preferred Security (a "PREFERRED SECURITY") issued by PPL Capital Funding Trust I (the "TRUST"), having a stated liquidation amount equal to the Stated Amount and maturing on May 18, 2006, representing an undivided beneficial ownership interest in the assets of the Trust and guaranteed by the Company. Pursuant to the terms of the Purchase Contract Agreement and the Purchase Contracts, the Holders of the Securities have irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such Holders to, among other things, execute and deliver this Agreement on behalf of such Holders and grant the pledge provided herein of the Collateral Account to secure the Obligations (as defined below). Accordingly, the Company, the Collateral Agent, the Securities Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own behalf and as attorney-in-fact of the Holders from time to time of the Securities, agree as follows: 7 SECTION 1. DEFINITIONS. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Section 1 have the meanings assigned to them in this Section 1 and include the plural as well as the singular; (b) the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of similar import refer to this Agreement as a whole and not to any particular Section, Exhibit or other subdivision; (c) the following terms which are defined in the UCC shall have the meanings set forth therein: "CERTIFICATED SECURITY," "CONTROL," "FINANCIAL ASSET," "ENTITLEMENT ORDER," "SECURITIES ACCOUNT" and "SECURITY ENTITLEMENT"; (d) the following terms have the meanings assigned to them in the Purchase Contract Agreement: "ACT," "APPLICABLE OWNERSHIP INTEREST," "BANKRUPTCY CODE," "BENEFICIAL OWNER," "BUSINESS DAY," "CASH SETTLEMENT," "CERTIFICATE," "CODE," "DEPOSITARY," "EARLY SETTLEMENT," "EARLY SETTLEMENT AMOUNT," "EARLY SETTLEMENT DATE," "FAILED INITIAL REMARKETING," "FAILED FINAL REMARKETING," "FINAL REMARKETING DATE," "HOLDER," "INDENTURE TRUSTEE" "INITIAL REMARKETING DATE," "OFFICERS' CERTIFICATE," "OPINION OF COUNSEL," "OUTSTANDING SECURITIES," "PEPS UNIT," "PERSON," "PURCHASE CONTRACT," "PURCHASE CONTRACT SETTLEMENT DATE," "PURCHASE PRICE," "QUOTATION AGENT," "REDEMPTION AMOUNT," "REMARKETING AGENT," "REMARKETING AGREEMENT," "REMARKETING FEE," "SETTLEMENT RATE," "SUBORDINATED NOTES," "SUCCESSFUL INITIAL REMARKETING," "SUPPLEMENTAL REMARKETING AGREEMENT," "TAX EVENT REDEMPTION AMOUNT," "TERMINATION EVENT," "TREASURY PEPS UNIT," "TREASURY PORTFOLIO," "TREASURY PORTFOLIO PURCHASE PRICE," and "UNDERWRITING AGREEMENT"; (e) the following terms have the meanings assigned to them in the Amended and Restated Trust Agreement of PPL Capital Funding Trust I, of even date herewith: "PROPERTY TRUSTEE," "REDEMPTION PRICE," "TAX EVENT," "TAX EVENT REDEMPTION," and "TAX EVENT REDEMPTION DATE"; and (f) the following terms have the meanings given to them in this Section 1(f): "AGREEMENT" means this Pledge Agreement, as the same may be amended, modified or supplemented from time to time by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof. "CASH" means any coin or currency of the United States as at the time shall be legal tender for payment of public and private debts. "COLLATERAL ACCOUNT" means the collective reference to: 2 8 (1) the securities account of The Bank of New York, as Collateral Agent, maintained by the Securities Intermediary and designated "The Bank of New York, as Collateral Agent of PPL Corporation, as pledgee of The Chase Manhattan Bank, as the Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders"; (2) all investment property and other financial assets from time to time credited to the Collateral Account, including, without limitation, (A) the Preferred Securities and security entitlements relating thereto which are a component of the PEPS Units from time to time, (B) the Applicable Ownership Interests (as specified in Clause (A) of the definition of such term) of the Holders with respect to the Treasury Portfolio which are a component of the PEPS Units from time to time and any interest accruing thereon; (C) the Subordinated Notes and security entitlements relating thereto which are a component of the PEPS Units from time to time, (D) any Treasury Securities and security entitlements relating thereto delivered from time to time upon establishment of Treasury PEPS Units in accordance with Section 5.2 hereof and (E) payments made by Holders pursuant to Section 5.5 hereof; (3) all Proceeds of any of the foregoing (whether such Proceeds arise before or after the commencement of any proceeding under any applicable bankruptcy, insolvency or other similar law, by or against the pledgor or with respect to the pledgor); and (4) all powers and rights now owned or hereafter acquired under or with respect to the Collateral Account ((2), (3) and (4), being collectively referred to as the "COLLATERAL"). "COMPANY" means the Person named as the "COMPANY" in the first paragraph of this instrument until a successor shall have become such, and thereafter "COMPANY" shall mean such successor. "OBLIGATIONS" means, with respect to each Holder, the collective reference to all obligations and liabilities of such Holder under such Holder's Purchase Contract, the Purchase Contract Agreement, and this Agreement or any other document made, delivered or given in connection herewith or therewith, in each case whether on account of principal, interest (including, without limitation, interest accruing before and after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Holder, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Company or the Collateral Agent or the Securities Intermediary or the Custodial Agent that are required to be paid by the Holder pursuant to the terms of any of the foregoing agreements). 3 9 "PERMITTED INVESTMENTS" means any one or more of the following which shall mature not later than the next succeeding Business Day: (1) any evidence of indebtedness with an original maturity of 365 days or less issued, or directly and fully guaranteed or insured, by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support of the timely payment thereof or such indebtedness constitutes a general obligation of it); (2) deposits, certificates of deposit or acceptances with an original maturity of 365 days or less of any institution which is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $200.0 million at the time of deposit (and which may include the Collateral Agent); (3) investments with an original maturity of 365 days or less of any Person that is fully and unconditionally guaranteed by a bank referred to in clause (2); (4) repurchase agreements and reverse repurchase agreements relating to marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed as to timely payment by the full faith and credit of the United States Government; (5) investments in commercial paper, other than commercial paper issued by the Company or its affiliates, of any corporation incorporated under the laws of the United States or any State thereof, which commercial paper has a rating at the time of purchase at least equal to "A-1" by Standard & Poor's Ratings Services ("S&P") or at least equal to "P-1" by Moody's Investors Service, Inc. ("MOODY'S"); and (6) investments in money market funds (including, but not limited to, money market funds managed by the Collateral Agent or an affiliate of the Collateral Agent) registered under the Investment Company Act of 1940, as amended, rated in the highest applicable rating category by S&P or Moody's. "PLEDGE" means the lien and security interest created by this Agreement. "PLEDGED PREFERRED SECURITIES" means the Preferred Securities and security entitlements with respect thereto from time to time credited to the Collateral Account and not then released from the Pledge. "PLEDGED SUBORDINATED NOTES" means Subordinated Notes and security entitlements with respect thereto from time to time credited to the Collateral Account and not then released from the Pledge. 4 10 "PLEDGED TREASURY SECURITIES" means Treasury Securities and security entitlements with respect thereto from time to time credited to the Collateral Account and not then released from the Pledge. "PROCEEDS" has the meaning ascribed thereto in the UCC and includes, without limitation, all interest, dividends, cash, instruments, securities, financial assets (as defined in Section 8-102(a)(9) of the UCC) and other property received, receivable or otherwise distributed upon the sale, exchange, collection or disposition of any financial assets from time to time held in the Collateral Account. "PURCHASE CONTRACT AGENT" has the meaning specified in the paragraph preceding the recitals of this Agreement. "SEPARATE SECURITIES" means any Preferred Securities that are not Pledged Preferred Securities or any Subordinated Notes that are not Pledged Subordinated Notes, as the case may be. "TRADES" means the Treasury/Reserve Automated Debt Entry System maintained by the Federal Reserve Bank of New York pursuant to the TRADES Regulations. "TRADES REGULATIONS" means the regulations of the United States Department of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time. Unless otherwise defined herein, all terms defined in the TRADES Regulations are used herein as therein defined. "TRANSFER" means in the case of certificated securities in registered form, delivery as provided in Section 8-301(a) of the UCC, indorsed to the transferee or in blank by an effective endorsement; in the case of Treasury Securities, registration of the transferee as the owner of such Treasury Securities on TRADES; and in the case of security entitlements, including, without limitation, security entitlements with respect to Treasury Securities, a securities intermediary indicating by book entry that such security entitlement has been credited to the transferee's securities account. "TREASURY PORTFOLIO CASH PAYMENT" shall have the meaning set forth in Section 7.4. "TREASURY SECURITIES" means zero-coupon U.S. treasury securities (Cusip No. 912820BJ5) that mature on May 17, 2004. "UCC" means the Uniform Commercial Code as in effect in the State of New York from time to time. 5 11 "VALUE" means, with respect to any item of Collateral on any date, as to (1) Cash, the face amount thereof and (2) Treasury Securities or Pledged Treasury Securities, the aggregate principal amount thereof due at maturity and (3) the Preferred Securities or Pledged Preferred Securities, the stated liquidation amount thereof and (4) Subordinated Notes or Pledged Subordinated Notes, the aggregate principal amount thereof due at maturity. SECTION 2. PLEDGE. SECTION 2.1 PLEDGE. Each Holder, acting through the Purchase Contract Agent as such Holder's attorney-in-fact, hereby pledges and grants to the Collateral Agent, as agent of and for the benefit of the Company, a continuing first priority security interest in and to, and a lien upon and right of set-off against, all of such Holder's right, title and interest in and to the Collateral Account to secure the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Obligations. The Collateral Agent shall have all of the rights, remedies and recourses with respect to the Collateral afforded a secured party by the UCC, in addition to, and not in limitation of, the other rights, remedies and recourses afforded to the Collateral Agent by this Agreement. SECTION 2.2 CONTROL; FINANCING STATEMENT. (a) The Collateral Agent shall have control of the Collateral Account pursuant to the provisions of Section 4 of this Agreement. (b) As soon as practicable after the date of initial issuance of the Securities, the Company shall deliver to the Collateral Agent a financing statement under the UCC which was prepared for filing by the Company in the Office of the Secretary of State of the State of New York and any other jurisdictions which the Company deems necessary, signed by the Purchase Contract Agent, as attorney-in-fact for the Holders, as Debtors, and describing the Collateral, together with evidence of the filing thereof and of the filing information of the filing officer of each office in which so filed. SECTION 2.3 TERMINATION. As to each Holder, this Agreement and the Pledge created hereby shall terminate upon the satisfaction of such Holder's Obligations. Upon such termination, the Securities Intermediary shall Transfer such Holder's portion of the Collateral to the Purchase Contract Agent for distribution to such Holder in accordance with his interest, free and clear of any lien, pledge or security interest created hereby. 6 12 SECTION 3. DISTRIBUTIONS ON PLEDGED COLLATERAL. SECTION 3.1 INCOME DISTRIBUTIONS. All income distributions received by the Securities Intermediary on account of the Preferred Securities, the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, the Subordinated Notes or Permitted Investments from time to time held in the Collateral Account shall be distributed to the Purchase Contract Agent (The Chase Manhattan Bank, ABA No. 021000021, DDA No. 507947533, FFC A/C No. 160268.1, Re: PPL Corporation PEPS Units) for the benefit of the applicable Holders as provided in the Purchase Contracts or Purchase Contract Agreement. SECTION 3.2 PRINCIPAL PAYMENTS FOLLOWING TERMINATION EVENT. All payments received by the Securities Intermediary following a Termination Event of (1) the liquidation amount of Pledged Preferred Securities or securities entitlements thereto, or (2) the Applicable Ownership Interests (as specified in Clause (A) of the definition thereof) of the Treasury Portfolio, (3) the aggregate principal amount of the Pledged Subordinated Notes or securities entitlements thereto, or (4) the principal amount of the Pledged Treasury Securities or security entitlements with respect thereto, shall be distributed to the Purchase Contract Agent for the benefit of the applicable Holders for distribution to such Holders in accordance with their respective interests. SECTION 3.3 PRINCIPAL PAYMENTS PRIOR TO OR ON PURCHASE CONTRACT SETTLEMENT DATE. (a) Subject to the provisions of Section 7.2, and except as provided in clause 3.3(b) below, if no Termination Event shall have occurred, all payments received by the Securities Intermediary of (1) the liquidation amount with respect to the Pledged Preferred Securities or security entitlements with respect thereto, (2) the Applicable Ownership Interests (as specified in Clause (A) of the definition thereof) of the Treasury Portfolio, (3) the aggregate principal amount with respect to the Pledged Subordinated Notes or security entitlements with respect thereto or (4) the principal amount of Pledged Treasury Securities or security entitlements with respect thereto, shall be held and invested in Permitted Investments until the Purchase Contract Settlement Date and on the Purchase Contract Settlement Date distributed to the Company as provided in Section 5.7 hereof. Any balance remaining in the Collateral Account shall be distributed to the Purchase Contract Agent for the benefit of the applicable Holders for distribution to such Holders in accordance with their respective interests. Upon the request of the Securities Intermediary, the Company shall instruct the Securities Intermediary as to the type of Permitted Investments in which any payments made under this Section shall be invested, provided, however, that if the Company fails to deliver such instructions by 10:30 a.m. (New York City time), the Securities Intermediary shall invest such payments in the Permitted Investments described in clause 6 of the definition of Permitted Investments. 7 13 (b) All payments received by the Securities Intermediary of (1) the liquidation amount of Preferred Securities or security entitlements with respect thereto, (2) the Applicable Ownership interests (as specified in Clause (A) of the definition thereof) of the Treasury Portfolio, (3) the aggregate principal amount with respect to the Subordinated Notes or security entitlements with respect thereto or (4) the principal amount of Treasury Securities or security entitlements with respect thereto, that, in each case, have been released from the Pledge shall be distributed to the Purchase Contract Agent for the benefit of the applicable Holders for distribution to such Holders in accordance with their respective interests. SECTION 3.4 PAYMENTS TO PURCHASE CONTRACT AGENT. The Securities Intermediary shall use all commercially reasonable efforts to deliver payments to the Purchase Contract Agent hereunder to the account designated by the Purchase Contract Agent for such purpose not later than the close of business on the Business Day such payment is received by the Securities Intermediary; provided, however, that if such payment is received on a day that is not a Business Day or after 11:00 A.M. (New York City time) on a Business Day, then the Securities Intermediary shall use all commercially reasonable efforts to deliver such payment no later than 10:30 a.m. (New York City time) on the next succeeding Business Day. SECTION 3.5 ASSETS NOT PROPERLY RELEASED. If the Purchase Contract Agent or any Holder shall receive any principal payments on account of financial assets credited to the Collateral Account and not released therefrom in accordance with this Agreement, the Purchase Contract Agent or such Holder shall hold the same as trustee of an express trust for the benefit of the Company and, upon receipt of an Officers' Certificate of the Company so directing, promptly deliver the same to the Securities Intermediary for credit to the Collateral Account or to the Company for application to the Obligations of the Holders, and the Purchase Contract Agent and Holders shall acquire no right, title or interest in any such payments of principal amounts so received. SECTION 4. CONTROL. SECTION 4.1 ESTABLISHMENT OF COLLATERAL ACCOUNT. The Securities Intermediary hereby confirms that: (1) the Securities Intermediary has established the Collateral Account; (2) the Collateral Account is a securities account; (3) subject to the terms of this Agreement, the Securities Intermediary shall treat the Purchase Contract Agent as entitled to exercise the rights that comprise any financial asset credited to the Collateral Account; 8 14 (4) all property delivered to the Securities Intermediary pursuant to this Agreement or the Purchase Contract Agreement will be credited promptly to the Collateral Account; (5) all securities or other property underlying any financial assets credited to the Collateral Account shall be registered in the name of the Securities Intermediary, indorsed to the Securities Intermediary or in blank, or credited to another securities account maintained in the name of the Securities Intermediary, and in no case will any financial asset credited to the Collateral Account be registered in the name of the Purchase Contract Agent or any Holder, payable to the order of the Purchase Contract Agent or any Holder or specially indorsed to the Purchase Contract Agent or any Holder. SECTION 4.2 TREATMENT AS FINANCIAL ASSETS. Each item of property (whether investment property, financial asset, security, instrument or cash) credited to the Collateral Account shall be treated as a financial asset. SECTION 4.3 SOLE CONTROL BY COLLATERAL AGENT. Except as provided in Section 6, at all times prior to the termination of the Pledge, the Collateral Agent shall have sole control of the Collateral Account, and the Securities Intermediary shall take instructions and directions with respect to the Collateral Account solely from the Collateral Agent. If at any time the Securities Intermediary shall receive an entitlement order issued by the Collateral Agent and relating to the Collateral Account, the Securities Intermediary shall comply with such entitlement order without further consent by the Purchase Contract Agent or any Holder or any other Person. Until termination of the Pledge, the Securities Intermediary will not comply with any entitlement orders issued by the Purchase Contract Agent or any Holder. SECTION 4.4 SECURITIES INTERMEDIARY'S LOCATION. The Collateral Account, and the rights and obligations of the Securities Intermediary, the Collateral Agent, the Purchase Contract Agent and the Holders with respect thereto, shall be governed by the laws of the State of New York. Regardless of any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the Securities Intermediary's location. SECTION 4.5 NO OTHER CLAIMS. Except for the claims and interest of the Collateral Agent and of the Purchase Contract Agent and the Holders in the Collateral Account, the Securities Intermediary (without making any investigation) does not know of any claim to, or interest in, the Collateral Account or in any financial asset credited thereto. If any Person asserts any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Collateral Account or in any 9 15 financial asset carried therein, the Securities Intermediary will promptly notify the Collateral Agent and the Purchase Contract Agent. SECTION 4.6 INVESTMENT AND RELEASE. All proceeds of financial assets from time to time deposited in the Collateral Account shall be invested and reinvested as provided in this Agreement. At all times prior to termination of the Pledge, no property shall be released from the Collateral Account except in accordance with this Agreement or upon written instructions of the Collateral Agent. SECTION 4.7 STATEMENTS AND CONFIRMATIONS. The Securities Intermediary will send copies of all statements, confirmations and other correspondence concerning the Collateral Account and any financial assets credited thereto to each of the Purchase Contract Agent and the Collateral Agent, simultaneously, at their addresses for notices under this Agreement. SECTION 4.8 TAX ALLOCATIONS. The Company shall report all items of income, gain, expense and loss recognized in the Collateral Account, to the extent such reporting is required by law, to the Internal Revenue Service and all state and local taxing authorities under the names and taxpayer identification numbers of the Holders. None of the Securities Intermediary, the Collateral Agent or the Custodial Agent shall have any tax reporting duties hereunder. SECTION 4.9 NO OTHER AGREEMENTS. The Securities Intermediary has not entered into, and prior to the termination of the Pledge will not enter into, any agreement with any other Person relating to the Collateral Account or any financial assets credited thereto, including, without limitation, any agreement to comply with entitlement orders of any Person other than the Collateral Agent. SECTION 4.10 POWERS COUPLED WITH AN INTEREST. The rights and powers granted in this Section 4 to the Collateral Agent have been granted in order to perfect its security interests in the Collateral Account, are powers coupled with an interest and will be affected neither by the bankruptcy of the Purchase Contract Agent or any Holder nor by the lapse of time. The obligations of the Securities Intermediary under this Section 4 shall continue in effect until the termination of the Pledge. 10 16 SECTION 4.11 WIRE TRANSFER INSTRUCTIONS. Any moneys transferred hereunder for deposit into the Collateral Account shall be delivered by wire transfer in immediately available funds addressed as follows: The Bank of New York, ABA No. 021000018; Corporate Trust Agency GLA 111565; Ref.: BNY as Collateral Agent for PPL Pledge; Account No.: 015715. SECTION 5. INITIAL DEPOSIT; ESTABLISHMENT OF TREASURY PEPS UNITS AND RE-ESTABLISHMENT OF PEPS UNITS. SECTION 5.1 INITIAL DEPOSIT OF TRUST PREFERRED SECURITIES. Prior to or concurrently with the execution and delivery of this Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the PEPS Units, shall Transfer to the Securities Intermediary, for credit to the Collateral Account, the Preferred Securities or security entitlements relating thereto, and the Securities Intermediary shall indicate by book-entry that a securities entitlement to such Preferred Securities has been credited to the Collateral Account. SECTION 5.2 ESTABLISHMENT OF TREASURY PEPS UNITS. (a) So long as the Trust shall not have been dissolved and liquidated, at any time on or prior to the fifth Business Day immediately preceding the Purchase Contract Settlement Date, a Holder of PEPS Units shall have the right to substitute Treasury Securities or security entitlements with respect thereto for the Pledged Preferred Securities securing such Holder's obligations under the Purchase Contract comprising a part of such Holder's PEPS Units in integral multiples of 40 PEPS Units by: (1) Transferring to the Securities Intermediary for credit to the Collateral Account Treasury Securities or security entitlements with respect thereto having a Value equal to the aggregate liquidation amount of the Pledged Preferred Securities to be released accompanied by a notice, substantially in the form of Exhibit C to the Purchase Contract Agreement, and all applicable fees, whereupon the Purchase Contract Agent shall deliver to the Collateral Agent a notice, substantially in the form of Exhibit A hereto, (A) stating that such Holder has Transferred Treasury Securities or security entitlements with respect thereto to the Securities Intermediary for credit to the Collateral Account, (B) stating the Value of the Treasury Securities or security entitlements with respect thereto Transferred by or on behalf of such Holder and (C) requesting that the Collateral Agent release from the Pledge the Pledged Preferred Securities that are a component of such PEPS Units; and (2) delivering the related PEPS Units to the Purchase Contract Agent. Upon receipt of such notice and confirmation that Treasury Securities or security entitlements with respect thereto have been credited to the Collateral Account as 11 17 described in such notice, the Collateral Agent shall instruct the Securities Intermediary by a notice, substantially in the form of Exhibit B hereto, to release such Pledged Preferred Securities from the Pledge by Transfer to the Purchase Contract Agent for distribution to such Holder, free and clear of any lien, pledge or security interest created hereby. (b) If no Tax Event Redemption shall have occurred, but the Trust shall have been dissolved and liquidated, and the Subordinated Notes have become a component of the PEPS Units, at any time on or prior to the fifth Business Day immediately preceding the Purchase Contract Settlement Date, a Holder of PEPS Units shall have the right to substitute Treasury Securities or security entitlements with respect thereto for the Pledged Subordinated Notes comprising a part of such Holder's PEPS Units in integral multiples of 40 PEPS Units by: (1) Transferring to the Securities Intermediary for credit to the Collateral Account Treasury Securities or security entitlements with respect thereto having a Value equal to the aggregate principal amount at maturity of Pledged Subordinated Notes to be released accompanied by a notice, substantially in the form of Exhibit C to the Purchase Contract Agreement, and all applicable fees, whereupon the Purchase Contract Agent shall deliver to the Collateral Agent a notice, substantially in the form of Exhibit A hereto, (A) stating that such Holder has Transferred Treasury Securities or security entitlements with respect thereto to the Securities Intermediary for credit to the Collateral Account, (B) stating the Value of the Treasury Securities or securities entitlements with respect thereto Transferred by or on behalf of such Holder and (C) requesting that the Collateral Agent release from the Pledge the Pledged Subordinated Notes that are a component of such PEPS Units; and (2) delivering the related PEPS Units to the Purchase Contract Agent. Upon receipt of such notice and confirmation that Treasury Securities or security entitlements with respect thereto have been credited to the Collateral Account as described in such notice, the Collateral Agent shall instruct the Securities Intermediary by a notice, substantially in the form of Exhibit B hereto, to release such Pledged Subordinated Notes from the Pledge by Transfer to the Purchase Contract Agent for distribution to such Holder free and clear of any lien, pledge or security interest created hereby. (c) Upon credit to the Collateral Account of Treasury Securities or security entitlements with respect thereto delivered by a Holder of PEPS Units and receipt of the related instruction from the Collateral Agent, the Securities Intermediary shall release the Pledged Preferred Securities or the Pledged Subordinated Notes, as the case may be, and shall promptly transfer the same to the Purchase Contract Agent for distribution to such Holder, free and clear of any lien, pledge or security interest created hereby. (d) All Treasury Securities delivered under this Agreement for credit to the Collateral Account shall be delivered addressed as follows: Treasuries, The Bank of New 12 18 York; ABA No.: 021000018; BK of NYC/Cust. Account No.: 015715; Contact: Paul J. Schmalzel, (212) 815-2565. SECTION 5.3 REESTABLISHMENT OF PEPS UNITS. (a) So long as the Trust shall not have been dissolved and liquidated and so long as the Treasury Portfolio has not replaced the Treasury Securities as a component of the Treasury PEPS Units as a result of a Successful Initial Remarketing or a Tax Event Redemption, at any time on or prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date, a Holder of Treasury PEPS Units shall have the right to reestablish PEPS Units by substitution of Preferred Securities or security entitlements with respect thereto, for Pledged Treasury Securities or security entitlements with respect thereto in integral multiples of 40 Treasury PEPS Units by: (1) Transferring to the Securities Intermediary for credit to the Collateral Account Preferred Securities or security entitlements with respect thereto having a liquidation amount equal to the Value of the Pledged Treasury Securities to be released, accompanied by a notice, substantially in the form of Exhibit C to the Purchase Contract Agreement, and all applicable fees whereupon the Purchase Contract Agent shall deliver to the Collateral Agent a notice, substantially in the form of Exhibit C hereto, stating that such Holder has Transferred Trust Preferred Securities or security entitlements with respect thereto, to the Securities Intermediary for credit to the Collateral Account and requesting that the Collateral Agent release from the Pledge the Pledged Treasury Securities related to such Treasury PEPS Units; and (2) Delivering the related Treasury PEPS Units to the Purchase Contract Agent. Upon receipt of such notice and confirmation that Preferred Securities or security entitlements thereto have been credited to the Collateral Account as described in such notice, the Collateral Agent shall instruct the Securities Intermediary by a notice in the form provided in Exhibit D hereto to release such Pledged Treasury Securities from the Pledge by Transfer to the Purchase Contract Agent for distribution to such Holder, free and clear of any lien, pledge or security interest created hereby. (b) If no Tax Event Redemption shall have occurred, but the Trust shall have been dissolved and liquidated, and the Subordinated Notes have become a component of the PEPS Units, at any time on or prior to the seventh Business Day immediately preceding the Purchase Contract Settlement Date, a Holder of Treasury PEPS Units shall have the right to reestablish PEPS Units by substitution of Subordinated Notes or security entitlements with respect thereto for Pledged Treasury Securities in integral multiples of 40 Treasury PEPS Units by: (1) Transferring to the Securities Intermediary for credit to the Collateral Account Subordinated Notes or security entitlements with respect thereto having a 13 19 principal amount equal to the Value of the Pledged Treasury Securities to be released, accompanied by a notice, substantially in the form of Exhibit C to the Purchase Contract Agreement, and all applicable fees whereupon the Purchase Contract Agent shall deliver to the Collateral Agent a notice, substantially in the form of Exhibit C hereto, stating that such Holder has Transferred the Subordinated Notes or security entitlements with respect thereto, to the Securities Intermediary for credit to the Collateral Account and requesting that the Collateral Agent release from the Pledge the Pledged Treasury Securities related to such Treasury PEPS Units; and (2) delivering the related Treasury PEPS Units to the Purchase Contract Agent. Upon receipt of such notice and confirmation that Subordinated Notes or security entitlements with respect thereto have been credited to the Collateral Account as described in such notice, the Collateral Agent shall instruct the Securities Intermediary by a notice in the form provided in Exhibit D hereto to release such Pledged Treasury Securities from Pledge by Transfer to the Purchase Contract Agent for distribution to such Holder, free and clear of any lien, pledge or security interest created hereby. (c) Upon credit to the Collateral Account of Preferred Securities or security entitlements with respect thereto or Subordinated Notes or security entitlements with respect thereto, as the case may be, delivered by a Holder of Treasury PEPS Units and receipt of the related instruction from the Collateral Agent, the Securities Intermediary shall release the Pledged Treasury Securities and shall promptly transfer the same to the Purchase Contract Agent for distribution to such Holder, free and clear of any lien, pledge or security interest created hereby. SECTION 5.4 TERMINATION EVENT. (a) Upon receipt by the Collateral Agent of written notice from the Company or the Purchase Contract Agent that a Termination Event has occurred, the Collateral Agent shall release all Collateral from the Pledge and shall promptly Transfer: (1) any Pledged Preferred Securities or security entitlements with respect thereto or the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio (if a Tax Event Redemption or a Successful Initial Remarketing has occurred and the Treasury Portfolio has become a component of the PEPS Units) or the Pledged Subordinated Notes or security entitlements with respect thereto (if the Trust has been dissolved and liquidated, and the Subordinated Notes or security entitlements with respect thereto have become a component of the PEPS Units); (2) any Pledged Treasury Securities, and 14 20 (3) payments by Holders (or the Permitted Investments of such payments) pursuant to Section 5.5 hereof, to the Purchase Contract Agent for the benefit of the Holders for distribution to such Holders in accordance with their respective interests, free and clear of any lien, pledge or security interest or other interest created hereby; provided, however, if any Holder shall be entitled to receive less than $1,000 with respect to his interest in the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, the Purchase Contract Agent shall have the right to dispose of such interest for cash and deliver to such Holder cash in lieu of delivering the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio. (b) If such Termination Event shall result from the Company's becoming a debtor under the Bankruptcy Code, and if the Collateral Agent shall for any reason fail promptly to effectuate the release and Transfer of all Pledged Preferred Securities, the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, the Pledged Subordinated Notes, the Pledged Treasury Securities or payments by Holders (or the Permitted Investments of such payments) pursuant to Section 5.5 hereof, as the case may be, as provided by this Section 5.4, the Purchase Contract Agent shall: (1) use its commercially reasonable efforts to obtain an opinion of a nationally recognized law firm reasonably acceptable to the Collateral Agent to the effect that, as a result of the Company's being the debtor in such a bankruptcy case, the Collateral Agent will not be prohibited from releasing or Transferring the Collateral as provided in this Section 5.4, and shall deliver such opinion to the Collateral Agent within ten days after the occurrence of such Termination Event, and if (A) the Purchase Contract Agent shall be unable to obtain such opinion within ten days after the occurrence of such Termination Event or (B) the Collateral Agent shall continue, after delivery of such opinion, to refuse to effectuate the release and Transfer of all Preferred Securities, Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, all the Pledged Subordinated Notes, the Pledged Treasury Securities, the payments by Holders or the Permitted Investments of such payments pursuant to Section 5.5 hereof or the Proceeds of any of the foregoing, as the case may be, as provided in this Section 5.4, then the Purchase Contract Agent shall within fifteen days after the occurrence of such Termination Event commence an action or proceeding in the court having jurisdiction of the Company's case under the Bankruptcy Code seeking an order requiring the Collateral Agent to effectuate the release and transfer of all Pledged Preferred Securities, Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, all the Pledged Subordinated Notes, the Pledged Treasury Securities, or the payments by Holders or the 15 21 Permitted Investments of such payments pursuant to Section 5.5 hereof, or as the case may be, as provided by this Section 5.4; or (2) commence an action or proceeding like that described in clause 5.4(b)(1) hereof within ten days after the occurrence of such Termination Event. SECTION 5.5 CASH SETTLEMENT. (a) Upon receipt by the Collateral Agent of (1) (i) in the case of PEPS Units, a notice from the Purchase Contract Agent promptly after the receipt by the Purchase Contract Agent of a notice from a Holder of PEPS Units prior to or at 11:00 a.m. (New York City time) on the fifth Business Day immediately preceding the Purchase Contract Settlement Date that such Holder has elected, in accordance with the procedures specified in Section 5.03(a)(i) of the Purchase Contract Agreement to effect a Cash Settlement, or (ii) in the case of Treasury PEPS Units, receipt of such notice on the second Business Day immediately preceding the Purchase Contract Settlement Date that such Holder has elected, in accordance with the procedures specified in Section 5.03(f)(i) of the Purchase Contract Agreement to effect a Cash Settlement, and (2) payment by such Holder by deposit in the Collateral Account prior to or at 11:00 a.m. (New York City time) (i) in the case of PEPS Units, on the fourth Business Day immediately preceding the Purchase Contract Settlement Date, or (ii) in the case of Treasury PEPS Units, on the Business Day immediately preceding the Purchase Contract Settlement Date, of the Purchase Price in lawful money of the United States by wire transfer of immediately available funds payable to or upon the order of the Securities Intermediary, then the Collateral Agent shall: (1) instruct the Securities Intermediary promptly to invest any such Cash in Permitted Investments; (2) release from the Pledge the PEPS Unit holder's or the Treasury PEPS Unit holder's related Pledged Preferred Securities, the Pledged Subordinated Notes or Pledged Treasury Securities, as applicable, as to which such Holder has elected to effect a Cash Settlement pursuant to this Section 5.5(a); and (3) instruct the Securities Intermediary to Transfer all such Pledged Preferred Securities, Pledged Subordinated Notes or the Pledged Treasury Securities, as the case may be, to the Purchase Contract Agent for the benefit of such Holder, in each case free and clear of the Pledge created hereby, for distribution to such Holder. The Company shall instruct the Securities Intermediary as to the type of Permitted Investments in which any such Cash shall be invested; provided, however, that if the Company fails to deliver such instructions by 10:30 a.m. (New York City time), the Securities Intermediary shall invest such Cash in the Permitted Investments described in clause 6 of the definition of Permitted Investments. 16 22 Upon receipt of the proceeds upon the maturity of the Permitted Investments on the Purchase Contract Settlement Date, the Collateral Agent shall (A) instruct the Securities Intermediary to pay the portion of such proceeds, in an aggregate amount equal to the Purchase Price, to the Company on the Purchase Contract Settlement Date, and (B) instruct the Securities Intermediary to release any amounts in excess of the Purchase Price earned from such Permitted Investments to the Purchase Contract Agent for distribution to such Holder. (b) If a Holder of PEPS Units (if neither a Tax Event Redemption nor a Successful Initial Remarketing shall have occurred) notifies the Purchase Contract Agent as provided in paragraph 5.03(a)(i) of the Purchase Contract Agreement of its intention to pay the Purchase Price in cash, but fails to make such payment as required by paragraph 5.03(a)(ii) of the Purchase Contract Agreement, such Holder shall be deemed to have consented to the disposition of such Holder's Pledged Preferred Securities or Pledged Subordinated Notes in accordance with the remarketing procedures as described in paragraph 5.03(a)(iii) of the Purchase Contract Agreement. (c) If a Holder of a Treasury PEPS Unit notifies the Purchase Contract Agent as provided in paragraph 5.03(f)(i) of the Purchase Contract Agreement of its intention to pay the Purchase Price in cash, but fails to make such payment as required by paragraph 5.03(f)(ii) of the Purchase Contract Agreement, such Holder shall be deemed to have elected to pay the Purchase Price in accordance with paragraph 5.03(f)(iii) of the Purchase Contract Agreement. (d) In the event of a Failed Final Remarketing as described in Section 5.02 of the Purchase Contract Agreement, the Collateral Agent, for the benefit of the Company, will also exercise its rights as a secured party with respect to such Pledged Preferred Securities at the direction of the Company to retain or dispose of the Collateral in accordance with applicable law. (e) As soon as practicable after 11:00 a.m. (New York City time) (i) in the case of PEPS Units, on the fourth Business Day immediately preceding the Purchase Contract Settlement Date, and (ii) in the case of Treasury PEPS Units, on the Business Day immediately preceding the Purchase Contract Settlement Date, the Securities Intermediary shall deliver to the Purchase Contract Agent a notice, substantially in the form of Exhibit E hereto, stating the amount of cash that it has received with respect to the Cash Settlement of PEPS Units or the amount of cash that it has received with respect to the Cash Settlement of Treasury PEPS Units, as the case may be. SECTION 5.6 EARLY SETTLEMENT. Upon receipt by the Collateral Agent of a notice from the Purchase Contract Agent that a Holder of Securities has elected to effect Early Settlement of its obligations under the Purchase Contracts forming a part of such Securities in accordance with the terms of the Purchase Contracts and Section 5.08 of the Purchase Contract Agreement (which notice shall set forth the number of such Purchase Contracts as to which such 17 23 Holder has elected to effect Early Settlement), and that the Purchase Contract Agent has received from such Holder, and paid to the Company as confirmed in writing by the Company, the related Early Settlement Amounts pursuant to the terms of the Purchase Contracts and the Purchase Contract Agreement and that all conditions to such Early Settlement have been satisfied, then the Collateral Agent shall release from the Pledge, (1) Pledged Preferred Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definitions at such term) of the Treasury Portfolio or Pledged Subordinated Notes in the case of a Holder of PEPS Units or (2) Pledged Treasury Securities, in the case of a Holder of Treasury PEPS Units, with a Value equal to the product of (x) the Stated Amount times (y) the number of Purchase Contracts as to which such Holder has elected to effect Early Settlement, and shall instruct the Securities Intermediary to Transfer all such Pledged Preferred Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definitions at such term) of the Treasury Portfolio or Pledged Subordinated Notes or Pledged Treasury Securities, as the case may be, to the Purchase Contract Agent for the benefit of such Holder, in each case free and clear of the Pledge created hereby, for distribution to such Holder. A Treasury PEPS Unit holder may settle early only in integral multiples of 40 Purchase Contracts. SECTION 5.7 APPLICATION OF PROCEEDS IN SETTLEMENT OF PURCHASE CONTRACTS. (a) If a Holder of PEPS Units (if neither a Tax Event Redemption nor a Successful Initial Remarketing has occurred) has not elected to make an effective Cash Settlement by notifying the Purchase Contract Agent in the manner provided for in Section 5.03(a)(i) in the Purchase Contract Agreement, such Holder shall be deemed to have elected to pay for the shares of Common Stock to be issued under such Purchase Contracts from the proceeds of the remarketing of the related Pledged Preferred Securities or Pledged Subordinated Notes. Upon notice of such event from the Purchase Contract Agent, the Collateral Agent shall, by 11:00 a.m., New York City time, on the fourth Business Day immediately preceding the Purchase Contract Settlement Date, without any instruction from such Holder of PEPS Units, instruct the Securities Intermediary to Transfer the related Pledged Preferred Securities or Pledged Subordinated Notes to the Remarketing Agent for remarketing. Upon receiving such Pledged Preferred Securities or the Pledged Subordinated Notes, the Remarketing Agent, pursuant to the terms of the Remarketing Agreement and the Supplemental Remarketing Agreement, will use reasonable efforts to remarket the Pledged Preferred Securities or Pledged Subordinated Notes on the Final Remarketing Date at a price of approximately 100.25% (but not less than 100%) of the aggregate Value of such Pledged Preferred Securities or Pledged Subordinated Notes. After deducting as the Remarketing Fee an amount not exceeding 25 basis points (.25%) of the aggregate Value of the remarketed Pledged Preferred Securities or Pledged Subordinated Notes from any amount of such proceeds in excess of the aggregate Value of the remarketed Pledged Preferred Securities or Pledged Subordinated Notes, the Remarketing Agent will remit the entire amount of the proceeds of such remarketing to the Collateral Agent. On the Purchase Contract Settlement Date, the Purchase Contract Agent shall give written direction to the 18 24 Collateral Agent specifying the instruction the Collateral Agent shall give to the Securities Intermediary in order to apply a portion of the Proceeds from such remarketing equal to the aggregate liquidation amount of the Preferred Securities or aggregate principal amount of such Pledged Subordinated Note to satisfy in full such Holder's obligations to pay the Purchase Price to purchase the shares of Common Stock under the related Purchase Contracts and the balance of the Proceeds from the remarketing, if any, that shall be transferred to the Purchase Contract Agent for the benefit of such Holder for distribution to such Holder. If the Remarketing Agent advises the Collateral Agent in writing that it cannot remarket the related Pledged Preferred Securities or Pledged Subordinated Notes of such Holders of PEPS Units at a price not less than 100% of the aggregate Value of such Pledged Preferred Securities or Pledged Subordinated Notes or if the remarketing shall not have occurred because a condition precedent to the remarketing shall not have been fulfilled, thus resulting in a Failed Final Remarketing, the Collateral Agent, for the benefit of the Company shall, at the written direction of the Company, retain or dispose of the Pledged Preferred Securities or Pledged Subordinated Notes in accordance with applicable law and satisfy in full, from such retention or disposition, such Holder's obligations to pay the Purchase Price for the shares of Common Stock. (b) If a Holder of a Treasury PEPS Unit has not elected to make an effective Cash Settlement by notifying the Purchase Contract Agent in the manner provided for in Section 5.03(f)(i) of the Purchase Contract Agreement, or in all cases where the Treasury Portfolio has become a component of PEPS Units or Treasury PEPS Units such Holder shall be deemed to have elected to pay for the shares of Common Stock to be issued under such Purchase Contracts from the Proceeds of the related Pledged Treasury Securities or the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be. Promptly, after 11:00 a.m. (New York City time) on the Business Day immediately prior to the Purchase Contract Settlement Date, the Securities Intermediary shall invest the Cash Proceeds of the maturing Pledged Treasury Securities or the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be, in Permitted Investments in clause 6 of the definition of Permitted Investments, unless prior to 10:30 a.m. (New York City time), the Company shall otherwise instruct the Securities Intermediary as to the type of Permitted Investments in which any such Cash Proceeds shall be invested. Without receiving any instruction from any such Holder, the Collateral Agent shall apply the Proceeds of the related Pledged Treasury Securities or such Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as the case may be, to the settlement of such Purchase Contracts on the Purchase Contract Settlement Date. In the event the sum of the Proceeds from the related Pledged Treasury Securities or such Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio as the case may be, and the investment earnings from the investment in Permitted Investments exceeds the aggregate Purchase Price of the Purchase Contracts being settled thereby, the Collateral Agent shall instruct the Securities 19 25 Intermediary to distribute such excess, when received, to the Purchase Contract Agent for the benefit of such Holder for distribution to such Holder. (c) Pursuant to the Remarketing Agreement and subject to the terms of the Supplemental Remarketing Agreement, on or prior to the fifth Business Day immediately preceding February 18, 2004 or the Final Remarketing Date, as applicable, or in the event of any Additional Remarketing, on or prior to the second Business Day following the notification by the Remarketing Agent of its intention to conduct an Additional Remarketing, but no earlier than the Payment Date immediately preceding any such date, Holders of Separate Securities may elect to have their Separate Securities remarketed by delivering their Separate Securities, together with a notice of such election, substantially in the form of Exhibit F hereto, to the Custodial Agent. The Custodial Agent shall hold such Separate Securities in an account separate from the Collateral Account. A Holder of Separate Securities electing to have its Separate Securities remarketed will also have the right to withdraw such election by written notice to the Custodial Agent, substantially in the form of Exhibit G hereto, on or prior to the second Business Day immediately preceding the first Initial Remarketing taking place on the third Business Day prior to February 18, 2004 or the Final Remarketing Date, as applicable, upon receipt of which notice the Custodial Agent shall return such Separate Securities to such Holder. On the Business Day immediately preceding any Initial Remarketing Date or the Final Remarketing Date, as applicable, the Custodial Agent shall notify the Remarketing Agent and the Company of the aggregate liquidation amount, or the aggregate principal amount, as the case may be, of the Separate Securities to be remarketed and will deliver to the Remarketing Agent for remarketing all Separate Securities delivered to the Custodial Agent pursuant to this Section 5.7(c) and not withdrawn pursuant to the terms hereof prior to such date. After deducting the Remarketing Fee to the extent permitted under the terms of the Remarketing Agreement, the Remarketing Agent will remit to the Custodial Agent the remaining portion of the proceeds for the benefit of such Holders. In the event of any Failed Initial Remarketing or a Failed Final Remarketing, as applicable, the Remarketing Agent will promptly return such Separate Securities to the Custodial Agent for redelivery to such Holders. (d) The Purchase Contract Agent, on behalf of itself and the Holders, acknowledges and irrevocably agrees that any remarketing of the Preferred Securities or Subordinated Notes on any Initial Remarketing Date or the Final Remarketing Date shall not constitute a foreclosure of the Pledge of or other exercise of default remedies with respect to the Preferred Securities or Subordinated Notes within the meaning of the Code, but rather shall constitute a voluntary sale of the Preferred Securities or Subordinated Notes by and on behalf of the Holders and the Purchase Contract Agent. SECTION 5.8 TAX EVENT REDEMPTION. If the Securities Intermediary receives notice that a Tax Event Redemption has occurred prior to the Purchase Contract Settlement Date, the Securities Intermediary in accordance with Section 7.3 hereof shall apply the Redemption Amount to purchase the 20 26 Treasury Portfolio and the Securities Intermediary shall credit the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio to the Collateral Account and shall transfer the Applicable Ownership Interest (as specified in clause (B) of the definition of such term) of the Treasury Portfolio to the Purchase Contract Agent for distribution to the Holders of the PEPS Units. Upon credit to the Collateral Account of the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio having a Value equal to the liquidation amount of the Pledged Preferred Securities or the aggregate principal amount of the Pledged Subordinated Notes, the Securities Intermediary shall release the Pledged Preferred Securities or the Pledged Subordinated Notes, as applicable, from the Collateral Account and shall promptly transfer the Pledged Preferred Securities to the Trust or the Pledged Subordinated Notes to the Company, as applicable. SECTION 6. VOTING RIGHTS - PLEDGED PREFERRED SECURITIES AND PLEDGED SUBORDINATED NOTES. The Purchase Contract Agent may exercise, or refrain from exercising, any and all voting and other consensual rights pertaining to the Pledged Preferred Securities or the Pledged Subordinated Notes or any part thereof for any purpose not inconsistent with the terms of this Agreement and in accordance with the terms of the Contract Agreement; provided, that the Purchase Contract Agent shall not exercise or shall not refrain from exercising such right, as the case may be, if, in the judgment of the Company, such action would impair or otherwise have a material adverse effect on the value of all or any of the Pledged Preferred Securities or the Pledged Subordinated Notes; and provided, further, that the Purchase Contract Agent, upon receipt of notice of any such voting rights by the Company, shall give the Company and the Collateral Agent at least five Business Days' prior written notice of the manner in which it intends to exercise, or its reasons for refraining from exercising, any such right. Upon receipt of any notices and other communications in respect of any Pledged Preferred Securities or the Pledged Subordinated Notes, including notice of any meeting at which holders of the Pledged Preferred Securities or the Pledged Subordinated Notes are entitled to vote or solicitation of consents, waivers or proxies of holders of the Preferred Securities or Subordinated Notes, the Collateral Agent shall use reasonable efforts to send promptly to the Purchase Contract Agent such notice or communication, and as soon as reasonably practicable after receipt of a written request therefor from the Purchase Contract Agent, execute and deliver to the Purchase Contract Agent such proxies and other instruments in respect of such Pledged Preferred Securities or the Pledged Subordinated Notes (in form and substance satisfactory to the Collateral Agent) as are prepared by the Purchase Contract Agent with respect to the Pledged Preferred Securities or the Pledged Subordinated Notes. 21 27 SECTION 7. RIGHTS AND REMEDIES. SECTION 7.1 RIGHTS AND REMEDIES OF THE COLLATERAL AGENT. (a) In addition to the rights and remedies specified in Section 5.7 hereof or otherwise available at law or in equity, after an event of default (as specified in Section 7.1(b) below) hereunder, the Collateral Agent shall have all of the rights and remedies with respect to the Collateral of a secured party under the UCC (whether or not the UCC is in effect in the jurisdiction where the rights and remedies are asserted) and the TRADES Regulations and such additional rights and remedies to which a secured party is entitled under the laws in effect in any jurisdiction where any rights and remedies hereunder may be asserted. Without limiting the generality of the foregoing, such remedies may include, to the extent permitted by applicable law, (1) retention of the Pledged Preferred Securities, Pledged Subordinated Notes, Pledged Treasury Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in full satisfaction of the Holders' obligations under the Purchase Contracts and the Purchase Contract Agreement or (2) sale of the Pledged Preferred Securities, Pledged Subordinated Notes, Pledged Treasury Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) in one or more public or private sales. (b) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, in the event the Collateral Agent is unable to make payments to the Company on account of the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, or on account of principal payments of any Pledged Treasury Securities as provided in Section 3 hereof, in satisfaction of the Obligations of the Holder of the PEPS Units (if a Tax Event Redemption has occurred) of which such appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio or the Holder of the Treasury PEPS Units of which such Pledged Treasury Securities, as applicable, is a part under the related Purchase Contracts, the inability to make such payments shall constitute an event of default hereunder and the Collateral Agent shall have and may exercise, with reference to such Pledged Treasury Securities or the appropriate Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury Portfolio, as applicable, any and all of the rights and remedies available to a secured party under the UCC and the TRADES Regulations after default by a debtor, and as otherwise granted herein or under any other law. (c) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably authorized to receive and collect all payments of (i) the liquidation amount of the Pledged Preferred Securities, (ii) the principal amount of the Pledged Subordinated Notes, (iii) the principal amount of the Pledged Treasury Securities and (iv) the principal amount of the Applicable Ownership Interest (as specified in clause (A) of the definition of such term) of the Treasury 22 28 Portfolio, subject, in each case, to the provisions of Section 3 hereof, and as otherwise granted herein. (d) The Purchase Contract Agent and each Holder of Securities agrees that, from time to time, upon the written request of the Company or the Purchase Contract Agent, such Holder shall execute and deliver such further documents and do such other acts and things as the Company may reasonably request in order to maintain the Pledge, and the perfection and priority thereof, and to confirm the rights of the Company and the Collateral Agent hereunder. The Purchase Contract Agent shall have no liability to any Holder for executing any documents or taking any such acts requested by the Company hereunder, except for liability for its own gross negligent acts, its own gross negligent failure to act or its own willful misconduct. SECTION 7.2 SUBSTITUTION OF SUBORDINATED NOTES. If the Trust shall have been dissolved and liquidated prior to the Purchase Contract Settlement Date, the Securities Intermediary shall transfer to the Collateral Agent Subordinated Notes having a Value equal to the liquidation amount of the Pledged Preferred Securities for credit to the Collateral Account. Upon credit to the Collateral Account of such Subordinated Notes, the Collateral Agent shall release the Pledged Preferred Securities from the Collateral Account and shall promptly transfer the same to the Trust. SECTION 7.3 TAX EVENT REDEMPTION. Upon the occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement Date, the Redemption Price payable on the Tax Event Redemption Date with respect to the Tax Event Redemption Amount shall be credited to the Collateral Account by the Property Trustee or, in case there has been a dissolution of the Trust and the distribution of the related Subordinated Notes, by the Indenture Trustee, on or prior to 12:30 p.m., New York City time on such Tax Event Redemption date, by wire transfer of immediately available funds. The Collateral Agent is hereby authorized to present the Pledged Preferred Securities or the Pledged Subordinated Notes for payment as may be required by their respective terms. Upon receipt of such funds, the Pledged Preferred Securities or Pledged Subordinated Notes, as the case may be, shall be released from the Collateral Account. In the event such funds are credited to the Collateral Account, the Collateral Agent, at the written direction of the Company, shall instruct the Securities Intermediary to (a) apply an amount equal to the Redemption Amount of such Redemption Price to purchase the Treasury Portfolio from the Quotation Agent for credit to the Collateral Account and (b) promptly remit the remaining portion of such Redemption Price, if any, to the Purchase Contract Agent for payment to the Holders of PEPS Units. 23 29 SECTION 7.4 INITIAL AND ADDITIONAL REMARKETING; TREASURY PORTFOLIO CASH PAYMENT TO REMARKETING AGENT OR ITS DESIGNATED ENTITY. (a) Unless a Tax Event Redemption shall have occurred, the Collateral Agent shall, by 11:00 a.m., New York City time, on the fifth Business Day immediately preceding February 18, 2004 or, in the case of any Additional Remarketing subsequent to that date (written notice of which the Collateral Agent shall have received from the Remarketing Agent), by 11:00 a.m., New York City time on the second Business Day immediately preceding the date of such Additional Remarketing, without any instruction from any Holder of PEPS Units, present the related Pledged Preferred Securities or Pledged Subordinated Notes, as the case may be, to the Remarketing Agent for remarketing other than those Pledged Preferred Securities or Pledged Subordinated Notes in respect of which a Holder shall have delivered a notice in the form set forth as Exhibit H hereto together with cash in an amount equal to 100% of the Treasury Portfolio Purchase Price plus such fees and expenses that the Remarketing Agent or its designated entity shall charge from time to time to purchase such Treasury Portfolio (the "Treasury Portfolio Cash Payment") to the Remarketing Agent or its designated entity by 11:00 a.m., New York City time, on the fifth Business Day immediately preceding the first Initial Remarketing Date, or by 11:00 a.m., New York City time on the Second Business Day preceding the date of the Additional Remarketing. Upon receiving such Pledged Preferred Securities or Pledged Subordinated Notes, as the case may be, the Remarketing Agent, pursuant to the terms of the Remarketing Agreement and the Supplemental Remarketing Agreement, will use its reasonable efforts to remarket such Pledged Preferred Securities or Pledged Subordinated Notes, as the case may be, on the Initial Remarketing Date at a price of approximately 100.25% (but not less than 100%) of the Treasury Portfolio Purchase Price. After deducting as the Remarketing Fee an amount not exceeding 25 basis points (.25%) of the Treasury Portfolio Purchase Price from any amount of such Proceeds in excess of the Treasury Portfolio Purchase Price, the Remarketing Agent will remit the entire amount of the Proceeds of such remarketing to the Collateral Agent on or prior to 12:00 p.m., New York City time, on such remarketing date, by wire transfer in immediately available funds, per the instructions and to the account specified in Section 4.11 hereof, in exchange for the Pledged Preferred Securities or Pledged Subordinated Notes, as the case may be. In the event a Holder elects to make the Treasury Portfolio Cash Payment, such payment shall be made on or prior to 11:00 a.m., New York City time, on the fifth Business Day immediately preceding the first Initial Remarketing Date, or by 11:00 a.m., New York City time on the Second Business Day preceding the date of the Additional Remarketing, by wire transfer in immediately available funds at such place and at such account as may be designated therefor by the Remarketing Agent. In the event the Collateral Agent receives from the Remarketing Agent such proceeds from an Initial Remarketing, the Collateral Agent will, at the written direction of the Company, apply an amount equal to the Treasury Portfolio Purchase Price to purchase from the Quotation Agent the Treasury Portfolio and promptly remit any remaining portion of such proceeds to the Purchase Contract Agent for payment to the Holders of PEPS Units. The Collateral Agent shall Transfer the Treasury Portfolio to the Collateral Account to secure the obligation of all Holders of PEPS Units to purchase 24 30 Common Stock of the Company under the Purchase Contracts constituting a part of such PEPS Units, in substitution for the Pledged Preferred Securities or Pledged Subordinated Notes, as the case may be. Thereafter the Collateral Agent shall have such security interests, rights and obligations with respect to the Treasury Portfolio as it had in respect of the Pledged Preferred Securities or Pledged Subordinated Notes, as the case may be, as provided herein, and any reference herein to the Pledged Preferred Securities or Pledged Subordinated Notes, as the case may be, shall be deemed to be reference to such Treasury Portfolio, and any reference herein to distributions on the Pledged Preferred Securities or interest on the Pledged Subordinated Notes, as the case may be, shall be deemed to be a reference to distributions on such Treasury Portfolio. (b) In connection with the Treasury Portfolio Cash Payment paid to the Remarketing Agent for a Collateral substitution of the Pledged Preferred Securities or Pledged Subordinated Notes, as the case may be, pursuant to Section 7.4(a) hereof, subject to receipt by the Collateral Agent of the Applicable Ownership Interest of the Treasury Portfolio required by Section 5.02 of the Purchase Contract Agreement, the Collateral Agent shall release, upon written instruction from the Purchase Contract Agent substantially in the form of Exhibit J hereto, the Pledged Preferred Securities or the Pledged Subordinated Notes, as the case may be, underlying the number of PEPS Units indicated in such instruction from the Pledge and transfer, without recourse, such released Pledged Securities, free and clear of any lien, pledge or security interest created hereby, to the Purchase Contract Agent for delivery by the Purchase Contract Agent pursuant to the provisions of the Purchase Contract Agreement. The Applicable Ownership Interest of the Treasury Portfolio received by the Collateral Agent in connection with the Collateral substitution shall be subject to the Pledge. SECTION 7.5 SUBSTITUTIONS. Whenever a Holder has the right to substitute Treasury Securities, Trust Preferred Securities, Subordinated Notes or security entitlements for any of them or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case may be, for financial assets held in the Collateral Account, such substitution shall not constitute a novation of the security interest created hereby. SECTION 8. REPRESENTATIONS AND WARRANTIES; COVENANTS. SECTION 8.1 REPRESENTATIONS AND WARRANTIES. Each Holder from time to time, acting through the Purchase Contract Agent as attorney-in-fact (it being understood that the Purchase Contract Agent shall not be liable for any representation or warranty made by or on behalf of a Holder), hereby represents and warrants to the Collateral Agent and the Company (with respect to such Holder's interest in the Collateral), which representations and warranties shall be deemed repeated on each day a Holder Transfers Collateral that: 25 31 (1) such Holder has the power to grant a security interest in and lien on the Collateral; (2) such Holder is the sole beneficial owner of the Collateral and, in the case of Collateral delivered in physical form, is the sole Holder of such Collateral and is the sole beneficial owner of, or has the right to Transfer, the Collateral it Transfers to the Securities Intermediary for credit to the Collateral Account, free and clear of any security interest, lien, encumbrance, call, liability to pay money or other restriction other than the security interest and lien granted under Section 2 hereof; (3) upon the Transfer of the Collateral to the Securities Intermediary for credit to the Collateral Account, the Collateral Agent, for the benefit of the Company, will have a valid and perfected first priority security interest therein (assuming that any central clearing operation or any securities intermediary or other entity not within the control of the Holder involved in the Transfer of the Collateral, including the Company, or Collateral Agent and the Securities Intermediary on the Company's behalf, gives the notices and takes the action required of it hereunder and under applicable law for perfection of that interest and assuming the establishment and exercise of control pursuant to Section 4 hereof); and (4) the execution and performance by the Holder of its obligations under this Agreement will not result in the creation of any security interest, lien or other encumbrance on the Collateral other than the security interest and lien granted under Section 2 hereof or violate any provision of any existing law or regulation applicable to it or of any mortgage, charge, pledge, indenture, contract or undertaking to which it is a party or which is binding on it or any of its assets. SECTION 8.2 COVENANTS. The Holders from time to time, acting through the Purchase Contract Agent as their attorney-in-fact (it being understood that the Purchase Contract Agent shall not be liable for any covenant made by or on behalf of a Holder), hereby covenant to the Collateral Agent that for so long as the Collateral remains subject to the Pledge: (1) neither the Purchase Contract Agent nor such Holders will create or purport to create or allow to subsist any mortgage, charge, lien, pledge or any other security interest whatsoever over the Collateral or any part of it other than pursuant to this Agreement; and (2) neither the Purchase Contract Agent nor such Holders will sell or otherwise dispose (or attempt to dispose) of the Collateral or any part of it except for the beneficial interest therein, subject to the Pledge hereunder, transferred in connection with the Transfer of the Securities. 26 32 SECTION 9. THE COLLATERAL AGENT, THE SECURITIES INTERMEDIARY AND THE CUSTODIAL AGENT. It is hereby agreed as follows: SECTION 9.1 APPOINTMENT, POWERS AND IMMUNITIES. The Collateral Agent, the Securities Intermediary and the Custodial Agent shall act as agents for the Company hereunder with such powers as are specifically vested in the Collateral Agent, the Securities Intermediary and the Custodial Agent by the terms of this Agreement, together with such other powers as are reasonably incidental thereto, and shall have no duties, fiduciary or otherwise, to any other Person. Each of the Collateral Agent, the Securities Intermediary and the Custodial Agent and the Securities Intermediary shall: (1) have no duties or responsibilities except those expressly set forth in this Agreement and no implied covenants or obligations shall be inferred from this Agreement against any of them, nor shall any of them be bound by the provisions of any agreement by any party hereto beyond the specific terms hereof; (2) not be responsible for any recitals contained in this Agreement, or in any certificate or other document referred to or provided for in, or received by it under, this Agreement, the Securities or the Purchase Contract Agreement, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement (other than as against the Collateral Agent), the Securities or the Purchase Contract Agreement or any other document referred to or provided for herein or therein, or for any failure by the Company or any other Person (except the Collateral Agent, the Securities Intermediary or the Custodial Agent, as the case may be) to perform any of its obligations hereunder or thereunder, or for the attachment, perfection, priority or, except as expressly required hereby, maintenance of any lien or security interest created or intended to be created hereunder; (3) not be required to initiate or conduct any litigation or collection proceedings hereunder (except in the case of the Collateral Agent pursuant to directions furnished under Section 9.2 hereof, subject to Section 9.6 hereof); (4) not be responsible for any action taken, suffered or omitted to be taken by it hereunder or under any other document or instrument referred to or provided for herein or in connection herewith or therewith, except for its own gross negligence or willful misconduct; and (5) not be required to advise any party as to selling or retaining, or taking or refraining from taking any action with respect to, any securities or other property deposited hereunder. 27 33 Subject to the foregoing, during the term of this Agreement, the Collateral Agent and the Securities Intermediary shall take all reasonable action in connection with the safekeeping and preservation of the Collateral hereunder. No provision of this Agreement shall require the Collateral Agent, the Securities Intermediary or the Custodial Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. In no event shall the Collateral Agent, the Securities Intermediary or the Custodial Agent be liable for any amount in excess of the Value of the Collateral. Notwithstanding the foregoing, each of the Collateral Agent, the Securities Intermediary, the Custodial Agent and the Purchase Contract Agent in its individual capacity hereby waives any right of setoff, bankers' lien, liens or perfection rights as securities intermediary or any counterclaim with respect to any of the Collateral. SECTION 9.2 INSTRUCTIONS OF THE COMPANY. The Company shall have the right, by one or more written instruments executed and delivered to the Collateral Agent, the Securities Intermediary or the Custodial Agent, as the case may be, to direct the time, method and place of conducting any proceeding for the realization of any right or remedy available to the Collateral Agent, or of exercising any power conferred on the Collateral Agent, the Securities Intermediary or the Custodial Agent, as the case may be, or to direct the taking or refraining from taking of any action authorized by this Agreement; provided, however, that (i) such direction shall not conflict with the provisions of any law or of this Agreement and (ii) the Collateral Agent, the Securities Intermediary and the Custodial Agent shall be adequately indemnified as provided herein and shall not be subject to personal liability. Nothing contained in this Section 9.2 shall impair the right of the Collateral Agent in its discretion to take any action or omit to take any action which it deems proper and which is not inconsistent with such direction. SECTION 9.3 RELIANCE BY COLLATERAL AGENT, SECURITIES INTERMEDIARY AND CUSTODIAL AGENT. Each of the Collateral Agent, the Securities Intermediary and the Custodial Agent shall be entitled to rely upon any certification, order, judgment, opinion, notice or other written communication (including, without limitation, any thereof by telecopy) believed by it to be genuine and to have been signed or sent by or on behalf of the proper Person or Persons (without being required to determine the correctness of any fact stated therein) and consult with and rely upon advice, opinions and statements of legal counsel and other experts selected by the Collateral Agent, the Securities Intermediary, or the Custodial Agent, as the case may be. Each of the Collateral Agent and the Securities Intermediary may consult with counsel and the 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. As to any matters not expressly provided for by this Agreement, the Collateral Agent, the Securities 28 34 Intermediary and the Custodial Agent shall in all cases be entitled to receive and shall be fully protected in acting, or in refraining from acting, hereunder in accordance with instructions given by the Company in accordance with this Agreement. SECTION 9.4 RIGHTS IN OTHER CAPACITIES. The Collateral Agent, the Securities Intermediary and the Custodial Agent and their affiliates may (without having to account therefor to the Company) accept deposits from, lend money to, make their investments in and generally engage in any kind of banking, trust or other business with the Purchase Contract Agent, any other Person interested herein and any Holder of Securities (and any of their respective subsidiaries or affiliates) as if it were not acting as the Collateral Agent, the Securities Intermediary or the Custodial Agent, as the case may be, and the Collateral Agent, the Securities Intermediary and the Custodial Agent and their affiliates may accept fees and other consideration from the Purchase Contract Agent and any Holder of Securities without having to account for the same to the Company; provided that each of the Securities Intermediary, the Collateral Agent and the Custodial Agent covenants and agrees with the Company that it shall not accept, receive or permit there to be created in favor of itself and shall take no affirmative action to permit there to be created in favor of any other Person, any security interest, lien or other encumbrance of any kind in or upon the Collateral other than the lien created by the Pledge. SECTION 9.5 NON-RELIANCE ON COLLATERAL AGENT, SECURITIES INTERMEDIARY AND CUSTODIAL AGENT. Neither the Securities Intermediary, the Collateral Agent nor the Custodial Agent shall be required to keep itself informed as to the performance or observance by the Purchase Contract Agent or any Holder of Securities of this Agreement, the Purchase Contract Agreement, the Securities or any other document referred to or provided for herein or therein or in connection herewith or therewith or to inspect the properties or books of the Purchase Contract Agent or any Holder of Securities. None of the Collateral Agent, the Securities Intermediary or the Custodial Agent shall have any duty or responsibility to provide the Company with any credit or other information concerning the affairs, financial condition or business of the Purchase Contract Agent or any Holder of Securities (or any of their respective affiliates) that may come into the possession of the Collateral Agent, the Securities Intermediary or and the Custodial Agent or any of their respective affiliates. SECTION 9.6 COMPENSATION AND INDEMNITY. The Company agrees to: (1) pay the Collateral Agent, the Securities Intermediary and the Custodial Agent from time to time such compensation as shall be agreed in writing between the Company and the Collateral Agent, the Securities Intermediary or the Custodial Agent, as the case may be, for all services rendered by them hereunder; 29 35 (2) indemnify and hold harmless the Collateral Agent, the Securities Intermediary and the Custodial Agent and each of their respective directors, officers, agents and employees (collectively, the "INDEMNITEES"), harmless from and against any and all claims, liabilities, losses, damages, fines, penalties and expenses (including reasonable fees and expenses of counsel) (collectively, "LOSSES" and individually, a "LOSS") that may be imposed on, incurred by, or asserted against, the Indemnitees or any of them for following any instructions or other directions upon which either the Collateral Agent, the Securities Intermediary or the Custodial Agent is entitled to rely pursuant to the terms of this Agreement; and (3) in addition to and not in limitation of paragraph (2) immediately above, indemnify and hold the Indemnitees and each of them harmless from and against any and all Losses that may be imposed on, incurred by or asserted against, the Indemnitees or any of them in connection with or arising out of the Collateral Agent's, the Securities Intermediary's or the Custodial Agent's acceptance or performance of its powers and duties under this Agreement, provided the Collateral Agent, the Securities Intermediary or the Custodial Agent have not acted with gross negligence or engaged in willful misconduct with respect to the specific Loss against which indemnification is sought. Without prejudice to its rights hereunder, when any of the Collateral Agent or Securities Intermediary incurs expenses or renders services after a Termination Event occurs, the expenses and compensation for the services are intended to constitute expenses of administration under the Bankruptcy Code or any applicable state bankruptcy, insolvency or other similar law. SECTION 9.7 FAILURE TO ACT. In the event of any ambiguity in the provisions of this Agreement or any dispute between or conflicting claims by or among the parties hereto or any other Person with respect to any funds or property deposited hereunder, then at its sole option, each of the Collateral Agent, the Securities Intermediary and the Custodial Agent shall be entitled, after prompt notice to the Company and the Purchase Contract Agent, to refuse to comply with any and all claims, demands or instructions with respect to such property or funds so long as such dispute or conflict shall continue, and the Collateral Agent, the Securities Intermediary and the Custodial Agent shall not be or become liable in any way to any of the parties hereto for its failure or refusal to comply with such conflicting claims, demands or instructions. The Collateral Agent, the Securities Intermediary and the Custodial Agent shall be entitled to refuse to act until either: (1) such conflicting or adverse claims or demands shall have been finally determined by a court of competent jurisdiction or settled by agreement between the conflicting parties as evidenced in a writing satisfactory to the Collateral Agent, the Securities Intermediary or the Custodial Agent, as the case may be; or 30 36 (2) the Collateral Agent, the Securities Intermediary or the Custodial Agent, as the case may be, shall have received security or an indemnity satisfactory to it sufficient to save it harmless from and against any and all loss, liability or reasonable out-of-pocket expense which it may incur by reason of its acting. The Collateral Agent, the Securities Intermediary and the Custodial Agent may in addition elect to commence an interpleader action or seek other judicial relief or orders as the Collateral Agent, the Securities Intermediary or the Custodial Agent may deem necessary. Notwithstanding anything contained herein to the contrary, neither the Collateral Agent, the Securities Intermediary nor the Custodial Agent shall be required to take any action that is in its opinion contrary to law or to the terms of this Agreement, or which would in its opinion subject it or any of its officers, employees or directors to liability. SECTION 9.8 RESIGNATION OF COLLATERAL AGENT, SECURITIES INTERMEDIARY AND CUSTODIAL AGENT. (a) Subject to the appointment and acceptance of a successor Collateral Agent, Securities Intermediary or Custodial Agent as provided below: (1) the Collateral Agent, the Securities Intermediary and the Custodial Agent may resign at any time by giving notice thereof to the Company and the Purchase Contract Agent as attorney-in-fact for the Holders of Securities; (2) the Collateral Agent, the Securities Intermediary and the Custodial Agent may be removed at any time by the Company; and (3) if the Collateral Agent, Securities Intermediary or the Custodial Agent fails to perform any of its material obligations hereunder in any material respect for a period of not less than 20 days after receiving written notice of such failure by the Purchase Contract Agent and such failure shall be continuing, the Collateral Agent, the Securities Intermediary or the Custodial Agent may be removed by the Purchase Contract Agent. The Purchase Contract Agent shall promptly notify the Company of any removal of the Collateral Agent, Securities Intermediary or Custodial Agent pursuant to clause (3) of the immediately preceding sentence. Upon any such resignation or removal, the Company shall have the right to appoint a successor Collateral Agent, Securities Intermediary or the Custodial Agent, as the case may be. If no successor Collateral Agent, Securities Intermediary or Custodial Agent, as the case may be, shall have been so appointed and shall have accepted such appointment within 30 days after the retiring Collateral Agent's, Securities Intermediary's or Custodial Agent's giving of notice of resignation or the Company or the Purchase Contract Agent giving notice of such removal, then the retiring Collateral Agent, Securities Intermediary or Custodial Agent, as the case may be, may petition any court of competent jurisdiction for the appointment of a successor Collateral 31 37 Agent, Securities Intermediary or the Custodial Agent, as the case may be. Each of the Collateral Agent, the Securities Intermediary and Custodial Agent shall be a bank or a national banking association which has an office (or an agency office) in New York City with a combined capital and surplus of at least $50,000,000 and shall not be the Purchase Contract Agent or any of its affiliates. Upon the acceptance of any appointment as Collateral Agent, Securities Intermediary or Custodial Agent, as the case may be, hereunder by a successor Collateral Agent, Securities Intermediary or Custodial Agent, as the case may be, such successor shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent, Securities Intermediary, or Custodial Agent, as the case may be, and the retiring Collateral Agent, Securities Intermediary or Custodial Agent, as the case may be, shall take all appropriate action to transfer any money and property held by it hereunder (including the Collateral) to such successor. The retiring Collateral Agent, Securities Intermediary or Custodial Agent shall, upon such succession, be discharged from its duties and obligations as Collateral Agent, Securities Intermediary or Custodial Agent hereunder. After any retiring Collateral Agent's, Securities Intermediary's or Custodial Agent's resignation hereunder as Collateral Agent, Securities Intermediary or Custodial Agent, the provisions of Sections 9 and 11.7 hereof shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Collateral Agent, the Securities Intermediary or the Custodial Agent. SECTION 9.9 RIGHT TO APPOINT AGENT OR ADVISOR. The Collateral Agent shall have the right to appoint agents or advisors in connection with any of its duties hereunder, and the Collateral Agent shall not be liable for any action taken or omitted by, or in reliance upon the advice of, such agents or advisors selected in good faith. The appointment of agents pursuant to this Section 9.9 shall be subject to prior consent of the Company, which consent shall not be unreasonably withheld. SECTION 9.10 SURVIVAL. The provisions of Sections 9 and 11.7 hereof shall survive termination of this Agreement and the resignation or removal of the Collateral Agent, the Securities Intermediary or the Custodial Agent. SECTION 9.11 EXCULPATION. Anything contained in this Agreement to the contrary notwithstanding, in no event shall the Collateral Agent, the Securities Intermediary or the Custodial Agent or their officers, directors, employees or agents be liable under this Agreement for indirect, special, punitive, or consequential loss or damage of any kind whatsoever, including, but not limited to, lost profits, whether or not the likelihood of such loss or damage was known to the Collateral Agent, the Securities Intermediary or the Custodial Agent, or any of them. 32 38 SECTION 10. AMENDMENT. SECTION 10.1 AMENDMENT WITHOUT CONSENT OF HOLDERS. Without the consent of any Holders, the Company, the Collateral Agent, the Securities Intermediary, the Custodial Agent and the Purchase Contract Agent, at any time and from time to time, may amend this Agreement, in form satisfactory to the Company, the Collateral Agent, the Securities Intermediary, the Custodial Agent and the Purchase Contract Agent, to: (1) evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company; (2) evidence and provide for the acceptance of appointment hereunder by a successor Collateral Agent, Securities Intermediary, Custodial Agent or Purchase Contract Agent; (3) add to the covenants of the Company for the benefit of the Holders, or surrender any right or power herein conferred upon the Company, provided such covenants or such surrender do not adversely affect the validity, perfection or priority of the Pledge created hereunder; or (4) cure any ambiguity (or formal defect), correct or supplement any provisions herein which may be inconsistent with any other such provisions herein, or make any other provisions with respect to such matters or questions arising under this Agreement, provided such action shall not adversely affect the interests of the Holders. SECTION 10.2 AMENDMENT WITH CONSENT OF HOLDERS. With the consent of the Holders of not less than a majority of the Purchase Contracts at the time outstanding, by Act of such Holders delivered to the Company, the Purchase Contract Agent, the Securities Intermediary, the Collateral Agent and the Custodial Agent, as the case may be, the Company, the Purchase Contract Agent, the Securities Intermediary, the Collateral Agent and the Custodial Agent may amend this Agreement for the purpose of modifying in any manner the provisions of this Agreement or the rights of the Holders in respect of the Securities; provided, however, that no such supplemental agreement shall, without the unanimous consent of the Holders of each Outstanding Security adversely affected thereby: (1) Change the amount or type of Collateral underlying a Security (except for the rights of holders of PEPS Units to substitute the Treasury Securities for the Pledged Preferred Securities or the Pledged Subordinated Notes, as the case may be, or the rights of Holders of Treasury PEPS Units to substitute Preferred Securities or Subordinated Notes, as applicable, for the Pledged Treasury Securities), impair the right of the Holder of any Security to receive distributions 33 39 on the underlying Collateral or otherwise adversely affect the Holder's rights in or to such Collateral; or (2) otherwise effect any action that would require the consent of the Holder of each Outstanding Security affected thereby pursuant to the Purchase Contract Agreement if such action were effected by an agreement supplemental thereto; or (3) reduce the percentage of Purchase Contracts the consent of whose Holders is required for any such amendment; provided that if any amendment or proposal referred to above would adversely affect only the PEPS Units or only the Treasury PEPS Units, then only the affected class of Holders as of the record date for the Holders entitled to vote thereon will be entitled to vote on such amendment or proposal, and such amendment or proposal shall not be effective except with the consent of Holders of not less than a majority of such class; provided, further, that the unanimous consent of the Holders of each outstanding Purchase Contract of such class affected thereby shall be required to approve any amendment or proposal specified in clauses (1) through (3) above. It shall not be necessary for any Act of Holders under Section 10 hereof to approve the particular form of any proposed amendment, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 10.3 EXECUTION OF AMENDMENTS. In executing any amendment permitted by Section 10 hereof, the Collateral Agent, the Securities Intermediary, the Custodial Agent and the Purchase Contract Agent shall be entitled to receive and (subject to Section 7.1 of the Purchase Contract Agreement with respect to the Purchase Contract Agent) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent, if any, to the execution and delivery of such amendment have been satisfied. SECTION 10.4 EFFECT OF AMENDMENTS. Upon the execution of any amendment under Section 10 hereof, this Agreement shall be modified in accordance therewith, and such amendment shall form a part of this Agreement for all purposes; and every Holder of Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered under the Purchase Contract Agreement shall be bound thereby. SECTION 10.5 REFERENCE TO AMENDMENTS. Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any amendment pursuant to Section 10 hereof may, and shall if required 34 40 by the Collateral Agent or the Purchase Contract Agent, bear a notation in form approved by the Purchase Contract Agent and the Collateral Agent as to any matter provided for in such amendment. If the Company shall so determine, new Security Certificates so modified as to conform, in the opinion of the Collateral Agent, the Purchase Contract Agent and the Company, to any such amendment may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Purchase Contract Agent in accordance with the Purchase Contract Agreement in exchange for Outstanding Security Certificates. SECTION 11. MISCELLANEOUS. SECTION 11.1 NO WAIVER. No failure on the part of the Collateral Agent, the Securities Intermediary, the Custodial Agent or any of their respective agents to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Collateral Agent, the Securities Intermediary, the Custodial Agent or any of their respective agents of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law. SECTION 11.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The Company, the Collateral Agent, the Securities Intermediary, the Custodial Agent and the Holders from time to time of the Securities, acting through the Purchase Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York state court sitting in New York City for the purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Company, the Collateral Agent, the Securities Intermediary, the Custodial Agent and the Holders from time to time of the Securities, acting through the Purchase Contract Agent as their attorney-in-fact, irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. SECTION 11.3 NOTICES. All notices, requests, consents and other communications provided for herein (including, without limitation, any modifications of, or waivers or consents under, this Agreement) shall be given or made in writing (including, without limitation, by telecopy) delivered to the intended recipient at the "ADDRESS FOR NOTICES" specified below its name on the signature pages hereof or, as to any party, at such other address as shall be 35 41 designated by such party in a notice to the other parties. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by telecopier or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. SECTION 11.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the Company, the Collateral Agent, the Securities Intermediary, the Custodial Agent and the Purchase Contract Agent, and the Holders from time to time of the Securities, by their acceptance of the same, shall be deemed to have agreed to be bound by the provisions hereof and to have ratified the agreements of, and the grant of the Pledge hereunder by, the Purchase Contract Agent. SECTION 11.5 COUNTERPARTS. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. SECTION 11.6 SEVERABILITY. If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. SECTION 11.7 EXPENSES, ETC. The Company agrees to reimburse the Collateral Agent, the Securities Intermediary and the Custodial Agent for: (1) all reasonable costs and expenses of the Collateral Agent, the Securities Intermediary and the Custodial Agent (including, without limitation, the reasonable fees and expenses of counsel to the Collateral Agent, the Securities Intermediary and the Custodial Agent), in connection with the negotiation, preparation, execution and delivery or performance of any services under or in connection with this Agreement, including any modification, supplement or waiver of any of the terms of this Agreement; (2) in addition to and not in limitation of paragraph (1) immediately above, all reasonable costs and expenses of the Collateral Agent, the Securities Intermediary and the Custodial Agent (including, without limitation, reasonable fees and expenses of counsel) in connection with (i) any enforcement or 36 42 proceedings resulting or incurred in connection with causing any Holder of Securities to satisfy its obligations under the Purchase Contracts forming a part of the Securities and (ii) the enforcement of this Section 11.7; (3) all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any other document referred to herein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated hereby (it being understood, however, that none of the Collateral Agent, Securities Intermediary or Custodial Agent shall have any duty or obligation in respect of any such filing, registration, recording or perfection unless and until specifically requested in writing by the Company to take any action in respect thereto); (4) all fees and expenses of any agent, expert or advisor appointed by the Collateral Agent and, in the case of any agent, consented to by the Company under Section 9.9 of this Agreement; and (5) any other out-of-pocket costs and expenses reasonably incurred by the Collateral Agent, the Securities Intermediary and the Custodial Agent in connection with the performance of their duties hereunder. SECTION 11.8 SECURITY INTEREST ABSOLUTE. All rights of the Collateral Agent and security interests hereunder, and all obligations of the Holders from time to time hereunder, shall be absolute and unconditional irrespective of: (1) any lack of validity or enforceability of any provision of the Purchase Contracts or the Securities or any other agreement or instrument relating thereto; (2) any change in the time, manner or place of payment of, or any other term of, or any increase in the amount of, all or any of the obligations of Holders of the Securities under the related Purchase Contracts, or any other amendment or waiver of any term of, or any consent to any departure from any requirement of, the Purchase Contract Agreement or any Purchase Contract or any other agreement or instrument relating thereto; or (3) any other circumstance which might otherwise constitute a defense available to, or discharge of, a borrower, a guarantor or a pledger. SECTION 11.9 NOTICE OF TAX EVENT, TAX EVENT REDEMPTION AND TERMINATION EVENT. Upon the occurrence of a Tax Event, a Tax Event Redemption or a Termination Event, the Company shall deliver written notice to the Collateral Agent and the Securities 37 43 Intermediary and unless and until any such notice is so delivered, the Collateral Agent and the Securities Intermediary may conclusively presume that no such events exist. Upon the written request of the Collateral Agent or the Securities Intermediary, the Company shall inform such party whether or not a Tax Event, a Tax Event Redemption or a Termination Event has occurred. SECTION 11.10 BOOK-ENTRY INTERESTS Unless and until definitive, fully registered Certificates have been issued to Beneficial Owners pursuant to Section 3.09 of the Purchase Contract Agreement, the Collateral Agent, Securities Intermediary and Custodial Agent shall be entitled to deal with the Depositary for all purposes of this Agreement (including the receipt or transfer of any funds hereunder) as the Holder of the Securities, shall have no obligation to the Beneficial Owners and the rights of the Beneficial Owners shall be exercised only through the Depositary and shall be limited to those established by law and agreement between such Beneficial Owners and the Depositary or the Depositary Participants. The provisions of Sections 3.06 and 3.07 of the Purchase Contract Agreement are hereby made applicable to the Collateral Agent, Securities Intermediary and Custodial Agent, mutatis mutandis, as if they were the Purchase Contract Agent as referred to therein. 38 44 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. PPL CORPORATION THE CHASE MANHATTAN BANK as Purchase Contract Agent and as attorney-in-fact of the Holders from time to time of the Securities By: /s/ James E. Abel By: /s/ Annette M. Marsula - ----------------------------------------------- ------------------------------------------- Name: James E. Abel Name: Annette M. Marsula Title: Vice-President - Finance and Title: Vice President Treasurer Address for Notices: Address for Notices: PPL Corporation The Chase Manhattan Bank Two North Ninth Street 450 West 33rd Street Allentown, Pennsylvania 18101-1179 New York, NY 10001 Attention: Treasurer Attention: Institutional Trust Services Telecopy: (610) 774-5106 Administration Telecopy: (212) 946-8177 THE BANK OF NEW YORK, THE BANK OF NEW YORK, As Collateral Agent as Securities Intermediary By: /s/ Paul J. Schmalzel By: /s/ Paul J. Schmalzel - ----------------------------------------------- ------------------------------------------- Name: Paul J. Schmalzel Name: Paul J. Schmalzel Title: Vice President Title: Vice President Addresses for Notices: Addresses for Notices: The Bank of New York The Bank of New York 101 Barclay Street, Floor 21 West 101 Barclay Street, Floor 21 West New York, New York 10286 New York, New York 10286 Attention: Corporate Trust Administration- Attention: Corporate Trust Administration- Corporate Finance Unit Corporate Finance Unit Telecopy: (212) 815-5915 Telecopy: (212) 815-5915
39 45 THE BANK OF NEW YORK, As Custodial Agent By: /s/ Paul J. Schmalzel - ----------------------------------------------- Name: Paul J. Schmalzel Title: Vice President Addresses for Notices: The Bank of New York 101 Barclay Street, Floor 21 West New York, New York 10286 Attention: Corporate Trust Administration- Corporate Finance Unit Telecopy: (212) 815-5915 40 46 EXHIBIT A INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT (Establishment of Treasury PEPS Units) The Bank of New York 101 Barclay Street Floor 21 West New York, New York 10286 Attention: Corporate Trust Administration-Corporate Finance Unit Telecopy: (212) 815-5915 Re: PEPS Units of PPL Corporation (the "COMPANY") and PPL Capital Funding Trust I The securities account of The Bank of New York, as Collateral Agent, maintained by the Securities Intermediary and designated The Bank of New York, as Collateral Agent of PPL Corporation, as pledgee of The Chase Manhattan Bank, as the Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders" (the "COLLATERAL ACCOUNT") Please refer to the Pledge Agreement, dated as of May 9, 2001 (the "PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, , as Securities Intermediary, and as Custodial Agent, and the undersigned, as Purchase Contract Agent and as attorney-in-fact for the holders of PEPS Units from time to time. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. We hereby notify you in accordance with Section 5.2 of the Pledge Agreement that the holder of securities named below (the "HOLDER") has elected to substitute $__________ Value of Treasury Securities or security entitlements with respect thereto in exchange for [an equal Value of [Pledged Preferred Securities] [Pledged Subordinated Notes] relating to _________ PEPS Units] and has delivered to the undersigned a notice stating that the Holder has Transferred such Treasury Securities or security entitlements with respect thereto to the Securities Intermediary for credit to the Collateral Account. We hereby request that you instruct the Securities Intermediary, upon confirmation that such Treasury Securities or security entitlements with respect thereto have been credited to the Collateral Account, to release to the undersigned [an equal Value of [Pledged Preferred Securities] [Pledged Subordinated Notes]] in accordance with Section 5.2 of the Pledge Agreement. We also hereby confirm that no Tax Event Redemption has occurred. A-1 47 THE CHASE MANHATTAN BANK, as Purchase Contract Agent and as Date: attorney-in-fact of the Holders from ------------- time to time of the Securities By: ----------------------------------- Name: Title: A-2 48 Please print name and address of Holder electing to substitute Treasury Securities or security entitlements thereto for the [Pledged Preferred Securities] [Pledged Subordinated Notes]: - ------------------------------ --------------------------------------- Name Social Security or other Taxpayer Identification Number, if any - ------------------------------ Address - ------------------------------ - ------------------------------ --------------------------------------- - ------------------------------ Trades Account No. of or through which Holder transferred Treasury Securities A-3 49 EXHIBIT B INSTRUCTION FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY (Establishment of Treasury PEPS Units) The Bank of New York, as Securities Intermediary 101 Barclay Street Floor 21 West New York, New York 10286 Attention: Corporate Trust Administration-Corporate Finance Unit Telecopy: (212) 815-5915 Re: PEPS Units of PPL Corporation (the "COMPANY") and PPL Capital Funding Trust I The securities account of The Bank of New York, as Collateral Agent, maintained by the Securities Intermediary and designated The Bank of New York, as Collateral Agent of PPL Corporation, as pledgee of The Chase Manhattan Bank, as the Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders" (the "COLLATERAL ACCOUNT") Please refer to the Pledge Agreement, dated as of May 9, 2001 (the "PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, as Securities Intermediary and as Custodial Agent, The Chase Manhattan Bank, as Purchase Contract Agent and as attorney-in-fact for the holders of PEPS Units from time to time, and the undersigned, as Collateral Agent. Capitalized terms used herein but not defined shall have the meanings set forth in the Pledge Agreement. When you have confirmed that $__________ Value of Treasury Securities or security entitlements thereto has been credited to the Collateral Account by or for the benefit of _________, as Holder of PEPS Units (the "HOLDER"), you are hereby instructed to release from the Collateral Account [an equal Value of [Preferred Securities or security entitlements thereto] [Subordinated Notes or security entitlements thereto]] relating to _____ PEPS Units of the Holder] by Transfer to the Purchase Contract Agent. The Bank of New York, Dated: as Collateral Agent ------------ By: ----------------------------------- Name: Title: B-1 50 Please print name and address of Holder: - ------------------------------ --------------------------------------- Name Social Security or other Taxpayer Identification Number, if any - ------------------------------ Address - ------------------------------ - ------------------------------ --------------------------------------- - ------------------------------ Trades Account No. of or through which Holder transferred Treasury Securities B-2 51 EXHIBIT C INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT (Reestablishment of PEPS Units ) The Bank of New York 101 Barclay Street Floor 21 West New York, New York 10286 Attention: Corporate Trust Administration-Corporate Finance Unit Telecopy: (212) 815-5915 Re: PEPS Units of PPL Corporation (the "COMPANY") and PPL Capital Funding Trust I Please refer to the Pledge Agreement dated as of May 9, 2001 (the "PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, as Securities Intermediary and as Custodial Agent, and the undersigned, as Purchase Contract Agent and as attorney-in-fact for the holders of PEPS Units from time to time. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. We hereby notify you in accordance with Section 5.3(a) of the Pledge Agreement that the holder of securities listed below (the "HOLDER") has elected to substitute [$_____________ Value of [Preferred Securities or security entitlements thereto] [Subordinated Notes or security entitlements thereto]] in exchange for $__________ Value of Pledged Treasury Securities and has delivered to the undersigned a notice stating that the holder has Transferred such [Preferred Securities or security entitlements thereto] [Subordinated Notes or security entitlements thereto] to the Securities Intermediary, for credit to the Collateral Account. We hereby request that you instruct the Securities Intermediary, upon confirmation that such [Preferred Securities or security entitlements thereto] [Subordinated Notes or security entitlements thereto] have been credited to the Collateral Account, to release to the undersigned $__________ Value of Treasury Securities or security entitlements thereto related to _____ PEPS Units of such Holder in accordance with Section 5.3(a) of the Pledge Agreement. We also hereby confirm that no Tax Event Redemption nor a successful Initial Remarketing has occurred. THE CHASE MANHATTAN BANK, Date: as Purchase Contract Agent ------------- By: ---------------------------------- Name: Title: C-1 52 Please print name and address of Holder electing to substitute [Preferred Securities or security entitlements thereto] [Subordinated Notes or security entitlements thereto] for Pledged Treasury Securities: - ------------------------------ --------------------------------------- Name Social Security or other Taxpayer Identification Number, if any - ------------------------------ Address - ------------------------------ - ------------------------------ --------------------------------------- - ------------------------------ DTC Account No. through which Holder transferred Preferred Securities or Subordinated Notes or security entitlements thereto C-2 53 EXHIBIT D INSTRUCTION FROM COLLATERAL AGENT TO SECURITIES INTERMEDIARY (Reestablishment of PEPS Units) The Bank of New York, as Securities Intermediary 101 Barclay Street Floor 21 West New York, New York 10286 Attention: Corporate Trust Administration-Corporate Finance Unit Telecopy: (212) 815-5915 Re: _______ PEPS Units of PPL Corporation (the "COMPANY") and PPL Capital Funding Trust I The securities account of The Bank of New York, as Collateral Agent, maintained by the Securities Intermediary and designated The Bank of New York, as Collateral Agent of PPL Corporation, as pledgee of The Chase Manhattan Bank, as the Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders" (the "COLLATERAL ACCOUNT") Please refer to the Pledge Agreement dated as of May 9, 2001 (the "PLEDGE AGREEMENT"), among the Company, you, as Collateral Agent, as Securities Intermediary and as Custodial Agent, The Chase Manhattan Bank, as Purchase Contract Agent and as attorney-in-fact for the holders of PEPS Units from time to time, and the undersigned, as Collateral Agent. Capitalized terms used herein but no defined shall have the meaning set forth in the Pledge Agreement. When you have confirmed that $ __________ Value of [Preferred Securities or security entitlements thereto] [Subordinated Notes or security entitlements thereto] has been credited to the Collateral Account by or for the benefit of ________________, as Holder of PEPS Units (the "HOLDER"), you are hereby instructed to release from the Collateral Account $ ________________ Value of Treasury Securities or security entitlements thereto by Transfer to the Purchase Contract Agent. The Bank of New York, Dated: As Collateral Agent ------------ By: -------------------------------- Name: Title: D-1 54 Please print name and address of Holder electing to substitute [Preferred Securities or security entitlements thereto] [Subordinated Notes or security entitlements thereto] for Pledged Treasury Securities: - ------------------------------ --------------------------------------- - ------------------------------ --------------------------------------- Name Social Security or other Taxpayer Identification Number, if any - ------------------------------ Address - ------------------------------ - ------------------------------ --------------------------------------- - ------------------------------ DTC Account No. through which Holder transferred Preferred Securities or Subordinated Notes or security entitlements thereto D-2 55 EXHIBIT E NOTICE OF CASH SETTLEMENT FROM SECURITIES INTERMEDIARY TO PURCHASE CONTRACT AGENT (Cash Settlement Amounts) The Chase Manhattan Bank 450 West 33rd Street New York, NY 10001 Attention: Corporate Trustee Administration Telecopy: ------------------- Re: PEPS Units of PPL Corporation (the "COMPANY") and PPL Capital Funding Trust I Please refer to the Pledge Agreement dated as of May 9, 2001 (the "PLEDGE AGREEMENT"), by and among you, the Company, The Bank of New York, as Collateral Agent, as Custodial Agent and the undersigned, as Securities Intermediary. Unless otherwise defined herein, terms defined in the Pledge Agreement are used herein as defined therein. In accordance with Section 5.5(d) of the Pledge Agreement, we hereby notify you that as of 11:00 a.m. (New York City time) [(i) on the fourth Business Day immediately preceding May 18, 2004], [on the Business Day immediately preceding May 18, 2004], we have received [(i) $ _______________ in immediately available funds paid in an aggregate amount equal to the Purchase Price to the Company on the Purchase Contract Settlement Date with respect to ________________ PEPS Units] [(ii) $ ___________ in immediately available funds paid in an aggregate amount equal to the Purchase Price to the Company on the Purchase Contract Settlement Date with respect to ______ Treasury PEPS Units]. The Bank of New York, Date: as Securities Intermediary ------------- By: -------------------------------- Name: Title: E-1 56 EXHIBIT F TO CUSTODIAL AGENT REGARDING REMARKETING The Bank of New York 101 Barclay Street Floor 21 West New York, New York 10286 Attention: Corporate Trust Administration-Corporate Finance Unit Telecopy: (212) 815-5915 Re: [Preferred Securities] [Subordinated Notes] of [PPL Capital Funding Trust I] [PPL Capital Funding, Inc.] The undersigned hereby notifies you in accordance with Section 5.7(c) of the Pledge Agreement, dated as of May 9, 2001 (the "PLEDGE AGREEMENT"), among PPL Corporation, yourselves, as Collateral Agent and Securities Intermediary and Custodial Agent, and The Chase Manhattan Bank, as Purchase Contract Agent and as attorney-in-fact for the Holders of PEPS Units and of Treasury PEPS Units from time to time, that the undersigned elects to deliver $____ [aggregate liquidation preference] [principal amount] of [Preferred Securities] [Subordinated Notes] for delivery to the Remarketing Agent on the Business Day immediately preceding the [Initial Remarketing Date] [Final Remarketing Date] for remarketing pursuant to Section 5.7(c) of the Pledge Agreement. The undersigned will, upon request of the Remarketing Agent, execute and deliver any additional documents deemed by the Remarketing Agent or by the Company to be necessary or desirable to complete the sale, assignment and transfer of the [Preferred Securities] [Subordinated Notes] tendered hereby. The undersigned hereby instructs you, upon receipt of the Proceeds of such remarketing from the Remarketing Agent to deliver such Proceeds to the undersigned in accordance with the instructions indicated herein under "A. Payment Instructions". The undersigned hereby instructs you, in the event of a Failed [Initial] [Final] Remarketing, upon receipt of the [Preferred Securities] [Subordinated Notes] tendered herewith from the Remarketing Agent, to deliver the [Preferred Securities] [Subordinated Notes] to the person(s) and the address(es) indicated herein under "B. Delivery Instructions." With this notice, the undersigned hereby (i) represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the [Preferred Securities] [Subordinated Notes] tendered hereby and that the undersigned is the record owner of any [Preferred Securities] [Subordinated Notes] tendered herewith in physical form or a participant in The Depositary Trust Company ("DTC") and the beneficial owner of any [Preferred Securities] [Subordinated Notes] tendered herewith by book-entry transfer to your account at DTC and (ii) agrees to be bound by the terms and conditions of Section 5.7(c) of the Pledge Agreement. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. F-1 57 EXHIBIT F Date: ------------- By: -------------------------------- Name: Title: Signature Guarantee: Please print name and address: - ----------------------------------- -------------------------------- Name Social Security or other Taxpayer Identification Number, if any Address - ----------------------------------- - ----------------------------------- - -----------------------------------
- ---------------------------------------------- ----------------------------------------- A. PAYMENT INSTRUCTIONS B. DELIVERY INSTRUCTIONS - ---------------------------------------------- ----------------------------------------- Proceeds of the remarketing should be paid In the event of a failed by check in the name of the person(s) set remarketing, Preferred forth below and mailed to the address set Securities or Subordinated forth below Notes which are in physical form should be delivered to the person(s) set forth below and mailed to the address set forth below. Name(s) ----------------------------- Name(s) (Please Print) ----------------------------- Address (Please Print) ----------------------------- Address (Please Print) ----------------------------- (Please Print) ----------------------------- ----------------------------- ----------------------------- (Zip Code) ----------------------------- (Zip Code) ----------------------------- (Tax Identification or Social Security Number) ----------------------------- (Tax Identification or Social Security If a DTC Participant, add wire transfer Number) instructions and DTC Account No. In the event of a failed remarketing, Preferred Securities or Subordinated ----------------------------- Notes which are in book-entry form Wire transfer instructions should be credited to the account at The Depositary Trust Company set forth below. ----------------------------- DTC Account Number ----------------------------- DTC Account Number - ---------------------------------------------- -----------------------------------------
F-2 58 EXHIBIT F - ---------------------------------------------- ----------------------------------------- Name of Account Party: - ---------------------------------------------- -----------------------------------------
F-3 59 EXHIBIT G INSTRUCTION TO CUSTODIAL AGENT REGARDING WITHDRAWAL FROM REMARKETING The Bank of New York 101 Barclay Street Floor 21 West New York, New York 10286 Attention: Corporate Trust Administration-Corporate Finance Unit Telecopy: (212) 815-5915 Re: [Preferred Securities] [Subordinated Notes] of [PPL Capital Funding Trust I] [PPL Capital Funding, Inc.] The undersigned hereby notifies you in accordance with Section 5.7(c) of the Pledge Agreement, dated as of May 9, 2001 (the "PLEDGE AGREEMENT"), among PPL Corporation, yourselves, as Collateral Agent, Securities Intermediary and Custodial Agent, and The Chase Manhattan Bank, as Purchase Contract Agent and as attorney-in-fact for the Holders of PEPS Units and Treasury PEPS Units from time to time, that the undersigned elects to withdraw the $____ [aggregate liquidation preference] [principal amount] of [Preferred Securities] [Subordinated Notes] delivered to the Custodial Agent on ______________, __________ for remarketing pursuant to Section 5.7(c) of the Pledge Agreement. The undersigned hereby instructs you to return such [Preferred Securities] [Subordinated Notes] to the undersigned in accordance with the undersigned's instructions. With this notice, the undersigned hereby agrees to be bound by the terms and conditions of Section 5.7(c) of the Pledge Agreement. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Date: ------------- By: ------------------------------- Name: Title: Signature Guarantee: G-1 60 Please print name and address: - ------------------------------ --------------------------------------- Name Social Security or other Taxpayer Identification Number, if any Address - ------------------------------ - ------------------------------ - ------------------------------ --------------------------------------- - ------------------------------ DTC Account No. to which such Preferred Securities or Subordinated Notes or security entitlements thereto are to be credited at the Depository Trust Company G-2 61 Exhibit H NOTICE TO MAKE TREASURY PORTFOLIO CASH PAYMENT Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 Telecopy: (212) 761-0538 Re: ________ PEPS Units of PPL Corporation, a Pennsylvania corporation (the "COMPANY") and PPL Capital Funding Trust I The undersigned Holder hereby irrevocably notifies you in accordance with Section 5.02 of the Purchase Contract Agreement, dated as of May 9, 2001 (the "PURCHASE CONTRACT AGREEMENT") and Section 7.4 of the Pledge Agreement, dated as of May 9, 2001 (the "PLEDGE AGREEMENT"); that such Holder has elected to pay to the Remarketing Agent for purchase of the Treasury Portfolio, prior to or at 11:00 a.m. (New York City time) on the fifth Business Day immediately preceding the first Initial Remarketing Date or the third Business Day immediately preceding February 18, 2004, or, in the case of an Additional Remarketing, on the second Business Day immediately preceding such Initial Remarketing Date (in lawful money of the United States by wire transfer, in immediately available funds), $______ as the Treasury Portfolio Purchase Price for the Treasury Portfolio to be purchased and substituted for the Holder's Preferred Trust Securities on the applicable Reset Effective Date. Date: ---------------------------- ----------------------------------- Signature Signature Guarantee: --------------- H-1 62 Please print name and address of Registered Holder: - ------------------------------ --------------------------------------- Name Social Security or other Taxpayer Identification Number, if any - ------------------------------ Address - ------------------------------ - ------------------------------ --------------------------------------- - ------------------------------ DTC Account No. of Holder H-2 63 EXHIBIT I INSTRUCTION TO PURCHASE CONTRACT AGENT AND SECURITIES INTERMEDIARY The Chase Manhattan Bank 450 West 33rd Street New York, NY 10001 Attention: Corporate Trustee Administration Re: PEPS Units of PPL Corporation (the "Company") and PPL Capital Funding Trust I The undersigned Holder hereby notifies you that it has delivered to the Remarketing Agent, for credit to the Collateral Account, cash in the amount of $______ for the purchase of the Applicable Ownership Interest in the Treasury Portfolio in exchange for $__________ Preferred Securities or Subordinated Notes, as the case may be, held in the Collateral Account in respect of the number of PEPS Units specified below, in accordance with the Pledge Agreement, dated as of May 9, 2001 (the "Pledge Agreement"; unless otherwise defined herein, terms defined in the Pledge Agreement are used herein as defined therein). The undersigned Holder has paid all applicable fees relating to such exchange. The undersigned Holder hereby instructs you to instruct the Collateral Agent to release to you on behalf of the undersigned Holder the Notes related to such PEPS Units. Date: ---------------------------- ----------------------------------- Signature Signature Guarantee: --------------- Please print name and address of Registered Holder: - ------------------------------ --------------------------------------- Name Social Security or other Taxpayer Identification Number, if any Address - ------------------------------ Number of PEPS Units ------------------ - ------------------------------ - ------------------------------ I-1 64 EXHIBIT J INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT The Bank of New York 101 Barclay Street - 2115 New York, NY 10286 Re: PEPS Units of PPL Corporation (the "Company") and PPL Capital Funding Trust I Please refer to the Pledge Agreement dated as of May 9, 2001 (the "Pledge Agreement"), among the Company, you, as Collateral Agent, Securities Intermediary and Custodial Agent, and the undersigned, as Purchase Contract Agent and as attorney-in-fact for the holders of PEPS Units from time to time. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. We hereby instruct you in accordance with Section 74 of the Pledge Agreement that we have received notice from the Holder named below that the Holder has elected to substitute $________ per Preferred Security or Subordinated Note, as the case may be, as permitted under Section 5.02 of the Purchase Contract Agreement through optional cash payment to the Remarketing Agent of the Treasury Portfolio Purchase Price. The Applicable Ownership Interest of the Treasury Portfolio will, upon receipt thereof from the Remarketing Agent, be substituted for $___________ in principal amount of the Pledged Preferred Security or the Pledged Subordinated Note, as the case may be. We have received a notice stating that the Holder has transferred such cash to the Remarketing Agent for the purchase of the Applicable Ownership Interest of the Treasury Portfolio. We hereby request that you as the Collateral Agent cause the Securities Intermediary, upon confirmation that such Applicable Ownership Interest of the Treasury Portfolio has been credited to the Collateral Account, to release to us for delivery to such Holder _________ principal amount of Preferred Security or Subordinated Note, as the case may be, in accordance with Section 7.4 of the Pledge Agreement. THE CHASE MANHATTAN BANK, as Purchase Contract Agent Date: By: ------------- ------------------------------ Name: Title: J-1 EX-4.7 6 y49005ex4-7.txt FORM OF REMARKETING AGREEMENT 1 [EXECUTION COPY] EXHIBIT 4.7 REMARKETING AGREEMENT May 9, 2001 MORGAN STANLEY & CO. INCORPORATED 1585 Broadway New York, New York 10036 Ladies and Gentlemen: Morgan Stanley & Co. Incorporated is undertaking to remarket the 7.29% Trust Preferred Securities due May 18, 2006 (the "Trust Preferred Securities"), issued by PPL Capital Funding Trust I, a Delaware statutory business trust (the "Trust"), pursuant to an Amended and Restated Trust Agreement (the "Trust Agreement"), dated as of May 9, 2001 by and among PPL Corporation, a Pennsylvania corporation (the "Company"), as Depositor and Trust Securities Guarantor, John R. Biggar and James E. Abel, as the Administrative Trustees, The Chase Manhattan Bank, as Property Trustee, Chase Manhattan Bank USA, National Association, as Delaware Trustee, and the holders, from time to time, of the securities representing undivided beneficial ownership interests in the assets of the Trust to be issued pursuant to the Trust Agreement, and the 7.29% Subordinated Notes due 2006 (the "Subordinated Notes") issued by PPL Capital Funding, Inc., a Delaware corporation ("PPL Capital Funding") in the event of a substitution of Subordinated Notes for the Trust Preferred Securities. The Remarketing (as defined below) of the Trust Preferred Securities is provided for in the Trust Agreement, the Pledge Agreement and the Purchase Contract Agreement (as defined below). If a liquidation and dissolution of the Trust shall have occurred prior to the Purchase Contract Settlement Date and the Subordinated Notes have been distributed to the holders of the Trust Preferred Securities all references herein to "Trust Preferred Securities" shall instead be references to "Subordinated Notes" and references to "Remarketed Trust Preferred Securities" shall instead be references to "Remarketed Subordinated Notes", unless the context otherwise requires. Section 1. Definitions. (a) Capitalized terms used and not defined in this Agreement shall have the meanings set forth in the Purchase Contract Agreement, dated as of May 9, 2001 (the "Purchase Contract Agreement"), between the Company and The Chase Manhattan Bank, as Purchase Contract Agent and Trustee (the "Purchase Contract Agent") or, if not therein defined, in the Pledge Agreement, dated as of May 9, 2001, between The Bank of New York, as Collateral Agent, Securities Intermediary and Custodial Agent, and the Purchase Contract Agent (the "Pledge Agreement") or, if not therein defined, in the Underwriting Agreement, dated as of May 2 3, 2001, between the Company, PPL Capital Funding, the Trust and the several Underwriters listed in Schedule I thereto (the "Underwriters"). (b) As used in this Agreement, the following terms have the following meanings: "Additional Remarketing" means any Remarketing after the failure of the first Initial Remarketing, on the third Business Day preceding February 18, 2004, in which the Remarketing Agent will use its reasonable efforts in its discretion to remarket all of the Trust Preferred Securities from time to time thereafter prior to the tenth Business Day preceding the Purchase Contract Settlement Date. "Guarantee Agreement" means the guarantee agreement dated May 9, 2001 between the Company and The Chase Manhattan Bank as the initial Guarantee Trustee. "Issuers" means the Company, PPL Capital Funding and the Trust, collectively. "Morgan Stanley" means Morgan Stanley & Co. Incorporated. "Remarketed Trust Preferred Securities" means the Trust Preferred Securities subject to the Remarketing, as identified to the Remarketing Agent by the Purchase Contract Agent after 11:00 a.m., New York City time, on the third Business Day immediately preceding the Reset Effective Date. "Remarketing" means the remarketing of the Remarketed Trust Preferred Securities pursuant to the Remarketing Procedures. "Remarketing Agent" shall have the meaning set forth in Section 2(a) hereof. "Remarketing Date" means any Initial Remarketing Date, Additional Remarketing Date and/or Final Remarketing Date, as applicable. "Remarketing Procedures" means the procedures in connection with the Remarketing of the Trust Preferred Securities described in the Purchase Contract Agreement, the Pledge Agreement and the Trust Agreement, as the case may be; and "Transaction Documents" means the Purchase Contract Agreement, the Pledge Agreement and the Trust Agreement, collectively. Section 2. Appointment and Obligations of the Remarketing Agent. (a) The Company hereby appoints Morgan Stanley as exclusive remarketing agent (the "Remarketing Agent"), and Morgan Stanley hereby accepts appointment: (i) as Remarketing Agent, (ii) as the Reset Agent to determine in consultation with the Company, in the manner provided for herein and in the Trust Agreement with respect to the Trust Preferred Securities: 2 3 (1) the Reset Rate that, in the opinion of the Reset Agent, will, when applied to the Trust Preferred Securities, enable the Applicable Amount of the Trust Preferred Securities to have an approximate aggregate market value of 100.25% of the Treasury Portfolio Purchase Price as of the Initial Remarketing Date, and (2) in the event that no Successful Initial Remarketing has taken place before the Failed Remarketing Date, the Reset Rate that, in the opinion of the Reset Agent, will, when applied to the Trust Preferred Securities, enable a Trust Preferred Security to have an approximate market value of 100.25% of its liquidation amount as of the third Business Day preceding the Purchase Contract Settlement Date, or (3) in the event of a Failed Final Remarketing, the Reset Rate that will be equal to the Two Year Benchmark Treasury in effect on the Purchase Contract Settlement Date plus the Applicable Spread; provided, in each case, that the Company, by notice to the Reset Agent prior to the tenth Business Day preceding February 18, 2004, in the case of an Initial Remarketing, or the tenth Business Day preceding the Purchase Contract Settlement Date, in the case of the Final Remarketing, or prior to the seventh Business Day preceding the Reset Effective Date applicable to any Additional Remarketing, shall, if applicable, limit the Reset Rate so that it does not exceed the maximum rate permitted by applicable law, and provided further, in each case, that the Reset Rate shall not be below the initial Coupon Rate, and (iii) as the exclusive Remarketing Agent (subject to the right of Morgan Stanley to appoint additional remarketing agents hereunder as described below) to: (1) remarket the Trust Preferred Securities of the Holders electing to have their Trust Preferred Securities remarketed and of the Holders of PEPS Units on the first Initial Remarketing Date, who have not delivered the Treasury Portfolio Cash Payment to the Remarketing Agent or its designated entity to purchase the Treasury Portfolio on their behalf on or prior to the fifth Business Day immediately preceding February 18, 2004, for settlement on February 18, 2004, (2) use its reasonable efforts in its discretion to conduct any Additional Remarketing after February 18, 2004 and on or before the tenth Business Day preceding May 18, 2004 to remarket the Trust Preferred Securities of the Holders electing to have their Trust Preferred Securities remarketed and of the Holders of PEPS Units who have not delivered the Treasury Portfolio Cash Payment to the Remarketing Agent or its designated entity to purchase the Treasury Portfolio on their behalf on or prior to the second Business Day immediately preceding the date of any Additional Remarketing, and (3) in the case that no Successful Initial Remarketing has taken place before the Failed Remarketing Date, remarket the Trust Preferred Securities of the Holders electing to have their Trust Preferred Securities remarketed or of the 3 4 Holders of PEPS Units who have not settled early the related Purchase Contracts and have failed to notify the Purchase Contract Agent, on or prior to the fifth Business Day immediately preceding the Purchase Contract Settlement Date, of their intention to settle the related Purchase Contracts through Cash Settlement, or have so notified the Purchase Contract Agent, but failed to deliver sufficient cash to the Purchase Contract Agent on or prior to the fourth Business Day preceding May 18, 2004. In connection with the remarketing contemplated hereby, the Remarketing Agent may enter into a Supplemental Remarketing Agreement (the "Supplemental Remarketing Agreement") with the Company and the Purchase Contract Agent, which shall either be (i) substantially in the form attached hereto as Exhibit A (with such changes as the Company and the Remarketing Agent may agree upon, it being understood that changes may be necessary in the provisions of the Supplemental Remarketing Agreement due to changes in law or facts and circumstances or in the event that Morgan Stanley is not the sole remarketing agent, and with such further changes therein as the Remarketing Agent may reasonably request), or (ii) in such other form as the Remarketing Agent may reasonably request, subject to the approval of the Company (such approval not to be unreasonably withheld). Anything herein to the contrary notwithstanding, to the extent that the parties hereto are unable to agree on the form or substance of the Supplemental Remarketing Agreement, Morgan Stanley shall not act as Remarketing Agent or Reset Agent hereunder. The Company agrees that Morgan Stanley shall have the right, on 15 Business Days' notice to the Company to appoint one or more additional remarketing agents so long as any such additional remarketing agents shall be reasonably acceptable to the Company. Upon any such appointment, the parties shall enter into an appropriate amendment to this Agreement to reflect the addition of any such remarketing agent. (b) Pursuant to the Supplemental Remarketing Agreement, the Remarketing Agent, either as sole remarketing agent or as representative of a group of remarketing agents appointed as aforesaid, will agree, subject to the terms and conditions set forth herein and therein, to use its reasonable efforts to (i) remarket, on the Initial Remarketing Date, the Trust Preferred Securities that the Purchase Contract Agent and the Custodial Agent shall have notified the Remarketing Agent have been tendered for, or otherwise are to be included in, the Initial Remarketing, at a price per Trust Preferred Security such that the aggregate price for the Applicable Amount of the Trust Preferred Securities is approximately 100.25% of the Treasury Portfolio Purchase Price and (ii) in the event of a Failed Initial Remarketing, remarket, on the third Business Day immediately preceding the Purchase Contract Settlement Date, the Trust Preferred Securities that the Purchase Contract Agent and the Custodial Agent shall have notified the Remarketing Agent have been tendered for, or otherwise are to be included in, the Final Remarketing, at a price of approximately 100.25% of the aggregate liquidation amount of such Trust Preferred Securities. Notwithstanding the preceding sentence, the Remarketing Agent shall not remarket any Trust Preferred Securities for a price less than the price (the "Minimum Initial Remarketing Price") necessary for the Applicable Amount of the Trust Preferred 4 5 Securities to have an aggregate price equal to 100% of the Treasury Portfolio Purchase Price, in the case of the Initial Remarketing, or the aggregate liquidation amount of such Trust Preferred Securities, in the case of the Final Remarketing. After deducting the fee specified in Section 3 below, the proceeds of such Initial Remarketing or Final Remarketing, as the case may be, shall be paid to the Collateral Agent in accordance with Section 5.7 or 7.4 of the Pledge Agreement and Section 5.02 or 5.03 of the Purchase Contract Agreement (each of which Sections are incorporated herein by reference). (c) The Remarketing Agent will notify the Company, the Securities Intermediary, the Collateral Agent and the Purchase Contract Agent of any Additional Remarketing that it plans to conduct as soon as practical, but not later than three Business Days in advance of the Additional Remarketing. (d) If the Remarketing on the third Business Day preceding February 18, 2004 fails, and if the Remarketing Agent in its discretion proceeds with any Additional Remarketing as described under Section 2(c) above, then in case of any such Additional Remarketing, the Remarketing Agent shall notify all Holders of Trust Preferred Securities that are not part of PEPS Units of the date of such Additional Remarketing as soon as practical, but no later than three Business Days immediately preceding the Remarketing Date. Holders of separate Securities who wish to participate in any Additional Remarketing have to deliver their Trust Preferred Securities together with the notice of this election to the Custodial Agent no later than two Business Days following the notification by the Remarketing Agent. (e) It is understood and agreed that neither the Remarketing Agent nor the Reset Agent shall have any obligation whatsoever to purchase any Trust Preferred Securities, whether in the Initial Remarketing, Final Remarketing or otherwise, and shall in no way be obligated to provide funds to make payment upon tender of Trust Preferred Securities for remarketing or to otherwise expend or risk their own funds or incur or be exposed to financial liability in the performance of their respective duties under this Agreement or the Supplemental Remarketing Agreement, and, without limitation of the foregoing, the Remarketing Agent shall not be deemed an underwriter of the remarketed Trust Preferred Securities. The Company, the Trust, and PPL Capital Funding shall not be obligated in any case to provide funds to make payment upon tender of Trust Preferred Securities for remarketing. Section 3. Fees. In the event of a Successful Initial Remarketing, the Remarketing Agent shall retain as a Remarketing Fee an amount not exceeding 25 basis points (0.25%) of the Minimum Initial Remarketing Price from any amount received in connection with such Initial Remarketing in excess of the Minimum Initial Remarketing Price. In the event of a Successful Final Remarketing, the Remarketing Agent shall retain as the Remarketing Fee an amount not exceeding 25 basis points (0.25%) of the liquidation amount of the remarketed Trust Preferred Securities from any amount received in connection with such Final Remarketing in excess of the aggregate liquidation amount of such remarketed Trust Preferred Securities. In addition, the Reset Agent shall, in either case, receive from the Company a reasonable and customary fee (the "Reset Agent Fee"); provided, however, that if the Remarketing Agent shall also act as the Reset Agent, then the Reset Agent shall not be entitled to receive any such Reset Agent Fee. Payment 5 6 of such Reset Agent Fee shall be made by the Company on the Initial Remarketing Date, in the case of a Successful Initial Remarketing, or on the third Business Day immediately preceding the Purchase Contract Settlement Date, in the case of a Successful Final Remarketing, in immediately available funds or, upon the instructions of the Reset Agent, by certified or official bank check or checks or by wire transfer. Section 4. Representations and Warranties of the Company, PPL Capital Funding and the Trust. The Company, PPL Capital Funding and the Trust jointly and severally represent and warrant (i) on and as of the date hereof, (ii) on and as of the date the Prospectus or other Remarketing Materials (each as defined in Section 3(a) below) are first distributed in connection with the Remarketing (the "Commencement Date"), (iii) on and as of the Remarketing Date, and (iv) on and as of the Purchase Contract Settlement Date that: (a) The Issuers meet the requirements for use of Form S-3 under the Securities Act; the Registration Statement has become effective; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose have been instituted or threatened by the Commission. (b) Each part of the Registration Statement, when such part became or becomes effective, and the Prospectus and any amendment or supplement thereto, on the date of filing thereof with the Commission and at the Closing Date and the Option Closing Date (each as hereinafter defined), if any, conformed or will conform in all material respects with the requirements of the Securities Act; each part of the Registration Statement, when such part became or becomes effective, did not or will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendment or supplement thereto, on the date of filing thereof with the Commission and on the Closing Date and the Option Closing Date, if any, did not or will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that the representations and warranties set forth in this paragraph do not apply to statements in or omissions from any such document in reliance upon, and in conformity with, written information furnished to the Company by the Representatives, specifically for use in the Registration Statement, the Prospectus or any amendment or supplement thereto. (c) The documents incorporated by reference in the Registration Statement or the Prospectus, or any amendment or supplement thereto, when they became effective under the Securities Act or were filed with the Commission under the Exchange Act, as the case may be, conformed in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable. 6 7 (d) The consolidated financial statements of the Company and its subsidiaries, together with the related notes and schedules, set forth or incorporated by reference in the Registration Statement and Prospectus comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Exchange Act; such audited financial statements have been prepared in all material respects in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except as disclosed therein; and no material modifications are required to be made to the unaudited interim financial statements for them to be in conformity with generally accepted accounting principles. (e) Each of PPL Capital Funding and the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation with corporate power and authority to enter into and perform its obligations under this Agreement, the PEPS Agreements, the Indenture, the Subordinated Notes, the Notes Guarantee and the Trust Agreements to the extent a party thereto. (f) This Agreement has been duly and validly authorized, executed and delivered by each of the Issuers. (g) The authorized capital stock of the Company conforms as to legal matters to the description thereof contained in the Prospectus. (h) The shares of Common Stock outstanding prior to the issuance of the Securities have been duly authorized and are validly issued, fully paid and non-assessable, and are not subject to any preemptive or similar rights. (i) The shares of Common Stock to be issued and sold by the Company pursuant to the settlement of the Purchase Contracts have been duly and validly authorized and reserved for issuance; such shares of Common Stock, when issued and delivered in accordance with the provisions of the PEPS Agreements, will be validly issued, fully paid and non-assessable; and the issuance of such shares of Common Stock will not be subject to any preemptive or similar rights. (j) The shares of Common Stock outstanding prior to the issuance of the Securities are, and upon issuance the shares of Common Stock to be issued and sold by the Company pursuant to the settlement of the Purchase Contracts will be, listed on the New York Stock and Philadelphia Stock Exchanges. (k) The Securities and the PEPS Agreements have been duly authorized and, at the Closing Date or, in the case of Option Securities and Purchase Contracts constituting part of the Option Securities, the Option Closing Date (as defined herein), will have been duly executed and delivered by the Company, and, as of the Closing Date or the Option Closing Date, as the case may be, assuming due authorization, execution and delivery by parties thereto other than the Company, the PEPS Agreements will constitute valid and binding agreements of the Company, enforceable in accordance with their terms, except to the extent limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or moratorium laws or by other laws now or hereafter in effect relating to or affecting the enforcement of creditors' rights and by general equitable principles (regardless of whether considered in a proceeding in equity or at law), an 7 8 implied covenant of good faith and fair dealing and consideration of public policy, and Federal or state securities law limitations on indemnification and contribution (the "ENFORCEABILITY EXCEPTIONS"); provided, however, that upon the occurrence of a Termination Event (as defined in the Purchase Contract Agreement), Section 365(e)(1) of the United States Bankruptcy Code (11 U.S.C. Sections 101-1330, as amended) and Section 541 of the Bankruptcy Code should not substantively limit the provisions of Section 3.15 and 5.06 of the Purchase Contract Agreement and Section 5.4 of the Pledge Agreement that require termination of the Purchase Contracts and release of the Collateral Agent's security interest in the Trust Preferred Securities or the Treasury Securities (as defined in the Purchase Contract Agreement); the Securities and the PEPS Agreements conform in all material respects to the descriptions thereof contained in the Prospectus; (l) The Remarketing Agreement (the "REMARKETING AGREEMENT") has been duly authorized by each of the Issuers and when executed and delivered by each of the Issuers will constitute a valid and binding agreement of each of the Issuers, enforceable in accordance with its terms, except to the extent limited by the Enforceability Exceptions; and the Remarketing Agreement conforms in all material respects to the description thereof in the Prospectus; (m) The Subordinated Notes and the Notes Guarantee have been duly authorized, and, when issued and delivered pursuant to the Indenture, will have been duly executed, authenticated, issued and delivered and will constitute valid and binding obligations of PPL Capital Funding and the Company, as applicable, entitled to the benefits provided by the Indenture; the Indenture has been duly authorized, executed and delivered by PPL Capital Funding and the Company and constitutes a valid and binding agreement, enforceable in accordance with its terms, except to the extent limited by the Enforceability Exceptions; and the Indenture conforms in all material respects to the description thereof in the Prospectus; (n) Each of the Preferred Securities Guarantees and the Guarantee Agreement has been duly authorized and when validly executed and delivered by the Company will constitute a valid and binding obligation of the Company, enforceable in accordance with its terms, except to the extent limited by the Enforceability Exceptions; and the Preferred Securities Guarantees conforms in all material respects to the description thereof in the Prospectus; (o) Each of the Indenture, the Amended Declaration and the Guarantee Agreement has been duly qualified under the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"); (p) The Trust has been duly created and is validly existing as a statutory business trust in good standing under the Business Trust Act of the State of Delaware (the "DELAWARE TRUST ACT") and is a "grantor trust" for federal income tax purposes, with the trust power and authority to own property and conduct its business as described in the Prospectus, and has conducted and will conduct no business other than the transactions contemplated by this Agreement and its Amended Declaration as described in the Prospectus; the Trust is not a party to or bound by any agreement or instrument and after the Trust executes the Amended Declaration, the Trust will not be a party to or bound by any agreement or instrument other than this Agreement, the Remarketing Agreement, the Amended Declaration and the other agreements entered into in connection with the transactions contemplated hereby; the Trust has 8 9 no liabilities or obligations other than those arising out of the transactions contemplated by this Agreement, the Remarketing Agreement and the Amended Declaration; and the Trust is not a party to or subject to any action, suit or proceeding of any nature; (q) The Amended Declaration has been duly authorized by the Company, as Sponsor, and, when duly executed and delivered by the Company, as Sponsor, and the Administrative Trustees (assuming due authorization, execution and delivery by the Property Trustee and the Delaware Trustee), will constitute a valid and binding agreement of the Sponsor and Trustees, enforceable in accordance with its terms, except to the extent limited by the Enforceability Exceptions; and the Amended Declaration conforms in all material respects to the description thereof contained in the Prospectus; (r) The Trust Preferred Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Amended Declaration and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be validly issued and (subject to the terms of the Amended Declaration) fully paid and non-assessable undivided beneficial ownership interests in the assets of the Trust, and the issuance of such Trust Preferred Securities will not be subject to any preemptive or similar rights; holders of the Trust Preferred Securities will be entitled to the same limitation of personal liability as that extended to stockholders of corporations for profit organized under the General Corporation Law of the State of Delaware; and the Common Securities have been duly authenticated under the Amended Declaration and, when issued and delivered to the Company against payment therefor as described in the Prospectus, will be validly issued undivided beneficial ownership interests in the assets of the Trust, and the issuance of such Common Securities will not be subject to any preemptive rights; (s) None of the Issuers is, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Prospectus, none will be, required to register as an "investment company" as such term is defined in the Investment Company Act of 1940, as amended; (t) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein or contemplated thereby, there has been no event or occurrence that would result in a material adverse change, or any development involving a material adverse change, in the financial position or results of operations of the Company and its subsidiaries considered as one enterprise. (u) The issue and sale of the Securities and the compliance by each Issuer with all of the provisions of this Agreement, the PEPS Agreement, the Indenture, the Subordinated Notes, the Notes Guarantee and the Trust Agreements to the extent a party thereto and the consummation of the transactions contemplated herein and therein will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, any constituent document of any Issuer or any material agreement or instrument to which the Company or any of its subsidiaries is a party or by which it is bound except for such breaches or defaults that would not in the aggregate have a material adverse effect on the Issuers' ability to perform their respective obligations under this Agreement, the PEPS Agreement, the Indenture, the Subordinated Notes, the Notes Guarantee and the Trust Agreements to the extent a party thereto. 9 10 (v) The certificate delivered pursuant to paragraph (e) of Section 6 hereof and all other documents delivered by the Company or its representatives in connection with the issuance and sale of the Remarketed Trust Preferred Securities were on the dates on which they were delivered, or will be on the dates on which they are to be delivered, in all material respects true and complete. Section 5. Covenants of the Company, PPL Capital Funding and the Trust. Each of the Company, PPL Capital Funding and the Trust covenants and agrees as follows: (a) (1) To prepare any registration statement or the Prospectus, if required in connection with the Remarketing, in a form approved by the Remarketing Agent and to file any such prospectus pursuant to the Securities Act of 1933 as amended (the "Act") within the period required by the Act and the rules and regulations thereunder; (2) to advise the Remarketing Agent, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the Remarketing Agent with copies thereof; (3) to file promptly all reports and any definitive proxy or information statements required to be filed with the Securities and Exchange Commission (the "Commission") pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is required in connection with the offering or sale of the Remarketed Trust Preferred Securities; (4) to advise the Remarketing Agent, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of the Prospectus, of the suspension of the qualification of any of the Remarketed Trust Preferred Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information, and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Prospectus or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal; (b) To furnish promptly to the Remarketing Agent and to counsel to the Remarketing Agent a conformed copy of the Registration Statement as originally filed with the Commission, and each amendment thereto filed with the Commission, including all consents and exhibits filed therewith; (c) To furnish to the Remarketing Agent in New York City such copies of the following documents as the Remarketing Agent shall reasonably request: (1) conformed 10 11 copies of the Registration Statement as originally filed with the Commission and each amendment thereto (in each case excluding exhibits); (2) the Prospectus and any amended or supplemented Prospectus; (3) any document incorporated by reference in the Prospectus (excluding exhibits thereto); and (4) any Remarketing Materials; and, if the delivery of a prospectus is required at any time in connection with the Remarketing and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, to notify the Remarketing Agent and, upon its request, to file such document and to prepare and furnish without charge to the Remarketing Agent and to any dealer in securities as many copies as the Remarketing Agent may from time to time reasonably request of an amended or supplemented Prospectus which will correct such statement or omission or effect such compliance; (d) To file promptly with the Commission any amendment to the Registration Statement or the Prospectus or any supplement to the Prospectus that may, in the reasonable judgment of the Company or the Remarketing Agent, be required by the Securities Act or requested by the Commission; (e) Prior to filing with the Commission (1) any amendment to the Registration Statement or supplement to the Prospectus or (2) any Prospectus pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to the Remarketing Agent and counsel to the Remarketing Agent; and not to file any such amendment or supplement which shall be reasonably disapproved by the Remarketing Agent promptly after reasonable notice; (f) As soon as practicable, but in any event not later than eighteen months, after the Effective Date of the Registration Statement, to make "generally available to its security holders" an "earnings statement" of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act and the Rules and Regulations (including, at the option of the Company, Rule 158). The terms "generally available to its security holders" and "earnings statement" shall have the meanings set forth in Rule 158 of the Rules and Regulations; (g) To take such action as the Remarketing Agent may reasonably request in order to qualify the Remarketed Trust Preferred Securities for offer and sale under the securities or "blue sky" laws of such jurisdictions as the Remarketing Agent may reasonably request; provided that in no event shall the Company be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction.; and (h) To pay: (1) the costs incident to the preparation and printing of the Registration Statement, Prospectus and any Remarketing Materials and any amendments 11 12 or supplements thereto; (2) the costs of distributing the Registration Statement, Prospectus and any Remarketing Materials and any amendments or supplements thereto; (3) the fees and expenses of qualifying the Remarketed Trust Preferred Securities under the securities laws of the several jurisdictions as provided in Section 5(g) and of preparing, printing and distributing a Blue Sky Memorandum (including related fees and expenses of counsel to the Remarketing Agent); (4) all other costs and expenses incident to the performance of the obligations of the Company, hereunder; and (5) the reasonable fees and expenses of counsel to the Remarketing Agent in connection with its duties hereunder; Section 6. Conditions to the Remarketing Agent's Obligations. The obligations of the Remarketing Agent hereunder are subject to the following conditions: (a) The Subordinated Notes tendered for, or otherwise to be included in the Initial Remarketing or Final Remarketing, as the case may be, have not been called for redemption. (b) The Remarketing Agent is able to find a purchaser or purchasers for tendered Trust Preferred Securities (1) in the case of the Initial Remarketing, at a price not less than Minimum Initial Remarketing Price, and (2) in the case of the Final Remarketing, at a price not less than 100% of the liquidation amount thereof. (c) The Purchase Contract Agent, the Collateral Agent, the Custodial Agent and the Company shall have performed their respective obligations in connection with the Initial Remarketing and, in the event of a Failed Initial Remarketing, in connection with the Final Remarketing, in each case pursuant to the Purchase Contract Agreement, the Pledge Agreement, this Agreement and the Supplemental Remarketing Agreement, including, without limitation, giving the Remarketing Agent notice of the Treasury Portfolio Purchase Price no later than 10:00 a.m., New York City time, on the third Business Day prior to February 18, 2004, or the date of any Additional Remarketing, in the case of the Initial Remarketing, and giving the Remarketing Agent notice of the aggregate liquidation amount, as the case may be, of Trust Preferred Securities to be remarketed, no later than 11:00 a.m., New York City time, on the third Business Day prior to the Purchase Contract Settlement Date, in the case of the Final Remarketing, and, in each case, concurrently delivering the Trust Preferred Securities to be remarketed to the Remarketing Agent. (d) The Prospectus shall have been timely filed with the Commission; no stop order suspending the effectiveness of the Registration Statement or any part thereof or suspending the qualification of the Indenture shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and any request of the Commission for inclusion of additional information in the Registration Statement or the Prospectus or otherwise shall have been complied with. 12 13 (e) The Remarketing Agent shall not have discovered and disclosed to the Company prior to or on the Remarketing Date that the Prospectus, the Registration Statement, or the Remarketing Materials or any amendment or supplement thereto contains any untrue statement of a fact which, in the opinion of counsel for the Remarketing Agent, is material or omits to state any fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading. (f) Since the respective dates as of which information is given in the Remarketing Materials (1) trading generally shall not have been suspended or materially limited on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange or the National Association of Securities Dealers, Inc., (2) trading of any securities of the Company shall not have been suspended on any exchange or in any over-the-counter market, (3) a general moratorium on commercial banking activities in New York shall not have been declared by either federal or New York State authorities, (4) there shall not have occurred any change or any development involving or prospective change not contemplated by the Registration Statement or Prospectus in or affecting particularly the business or properties of the Company and its subsidiaries considered as one enterprise that, in your judgment, is material and adverse or (5) any material disruption of the U.S. Treasury securities market, U.S. corporate bond market or U.S. federal wire system; and in the case of any of the events specified in clauses (1), (2), (3) (4), and (5), such event, singly or together with any other such event, makes it, in the judgment of the Remarketing Agent, impracticable to proceed with the Remarketing on the terms and in the manner contemplated in the Prospectus and in the Remarketing Materials. (g) The representations and warranties of the Company, the Trust and PPL Capital Funding contained herein shall be true and correct in all material respects on and as of the Remarketing Date, and each of the Company, the Trust and PPL Capital Funding shall have performed in all material respects all covenants and agreements herein contained to be performed on its part at or prior to the Remarketing Date. (h) The Company shall have furnished to the Remarketing Agent a certificate, dated the Remarketing Date, of the President or a Vice President and a financial or accounting officer of the Company, satisfactory to the Remarketing Agent, stating that to the best of their knowledge after reasonable investigation: (1) no order suspending the effectiveness of the Registration Statement or prohibiting the sale of the Remarketed Trust Preferred Securities is in effect, and no proceedings for such purpose are pending before or, to the knowledge of such officers, threatened by the Commission; (2) the representations and warranties of the Company, PPL Capital Funding and the Trust in Section 3 are true and correct on and as of the Remarketing Date and each of the Company, PPL Capital Funding and the Trust has performed in all material respects all covenants and agreements contained herein to be performed on its part at or prior to the Remarketing Date; (3) the Registration Statement, as of its Effective Date, and the Remarketing Materials, as of their respective dates, did not contain any untrue statement of a material fact and did not omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and the Prospectus did not 13 14 contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (i) On the Remarketing Date, the Remarketing Agent shall have received a letter addressed to the Remarketing Agent and dated such date, in form and substance satisfactory to the Remarketing Agent, of PricewaterhouseCoopers LLP, or such other firm of nationally recognized independent public accountants satisfactory to the Remarketing Agent, containing statements and information of the type ordinarily included in accountants' "comfort letters" with respect to certain financial information contained in the Prospectus and in the Remarketing Materials. (j) Simpson Thacher & Bartlett, outside counsel to the Company, Michael McGrail, Senior Counsel to the Company, and Richards, Layton & Finger, P.A., Delaware counsel to the Company, PPL Capital Funding and the Trust, shall have furnished to the Remarketing Agent their opinion letters addressed to the Remarketing Agent and dated the Remarketing Date, in form and substance reasonably satisfactory to the Remarketing Agent addressing such matters as are set forth in such counsels' opinions furnished pursuant to Sections 5(d), 5(e) and 5(f), respectively, of the Underwriting Agreement dated May 4, 2001 among the Company, the Trust, PPL Capital Funding and the underwriters named therein relating to $575,000,000 7.75% Premium Equity Participating Securities Units -- PEPS(SM) Units, adapted as necessary to relate to the securities being remarketed hereunder and to the Remarketing Materials; and (k) Sullivan & Cromwell, counsel for the Remarketing Agent, shall have furnished to the Remarketing Agent its opinion, addressed to the Remarketing Agent and dated the Remarketing Date, in form and substance satisfactory to the Remarketing Agent. Section 7. Indemnification and Contribution. (a) The Issuers agree that they will jointly and severally indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act, against any and all loss, expense, claim, damage or liability to which, jointly or severally, such Underwriter or such controlling person may become subject, under the Securities Act or otherwise, insofar as such loss, expense, claim, damage or liability (or actions in respect thereof) arises out of or is based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, any related preliminary prospectus, or any amendment or supplement to any thereof, or arises out of or is based upon the omission or alleged omission to state therein any material fact required to be stated therein or necessary to make the statements therein not misleading; and, except as hereinafter in this Section provided, PPL Capital Funding and the Company agree to reimburse each Underwriter and each person who controls any Underwriter as aforesaid for any reasonable legal or other expenses as incurred by such Underwriter or such controlling person in connection with investigating or defending any such loss, expense, claim, damage or liability; provided, however, that the Issuers shall not be liable in any such case to the extent that any such loss, expense, claim, damage or liability arises out of or 14 15 is based on an untrue statement or alleged untrue statement or omission or alleged omission made in any such document in reliance upon, and in conformity with, written information furnished to the Company by the Representatives expressly for use in any such document or arises out of, or is based on, statements in or omissions from that part of the Registration Statement which shall constitute the T-1; provided, further however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Underwriter from whom the person asserting any such losses, expenses, claims, damages or liabilities purchased Securities, or any person controlling such Underwriter, if a copy of the Prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Underwriter to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the Securities to such person, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or liabilities, unless such failure is the result of noncompliance by the Company with Section 7(a) hereof. (b) Each Underwriter severally agrees that it will indemnify and hold harmless the Issuers, their officers, trustees and directors, and each of them, and each person, if any, who controls any Issuer within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act, against any loss, expense, claim, damage or liability to which it or they may become subject, under the Securities Act or otherwise, insofar as such loss, expense, claim, damage or liability (or actions in respect thereof) arises out of or is based on any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, any related preliminary prospectus, or any amendment or supplement to any thereof, or arises out of or is based upon the omission or alleged omission to state therein any material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, and only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any such documents in reliance upon, and in conformity with, written information furnished to the Company by the Representatives, expressly for use in any such document and, except as hereinafter in this Section provided, each Underwriter agrees to reimburse the Issuers, their officers, trustees and directors, and each of them, and each person, if any, who controls any Issuer within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act, for any reasonable legal or other expenses incurred by it or them in connection with investigating or defending any such loss, expense, claim, damage or liability. (c) Upon receipt of notice of the commencement of any action against an indemnified party, the indemnified party shall, with reasonable promptness, if a claim in respect thereof is to be made against an indemnifying party under its agreement contained in this Section 7, notify such indemnifying party in writing of the commencement thereof; but the omission so to notify an indemnifying party shall not relieve it from any liability which it may have to the indemnified party otherwise than under its agreement contained in this Section 7. In the case of any such notice to an indemnifying party, it shall be entitled to participate at its own expense in the defense, or if it so elects, to assume the defense, of any such action, but, if it elects to assume the defense, such defense shall be conducted by counsel chosen by it and satisfactory to the indemnified party and to any other indemnifying party, defendant in the suit, and the indemnifying party shall pay the fees and disbursements of such counsel related to such 15 16 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 Morgan Stanley & Co. Incorporated, in the case of parties indemnified pursuant to Section 7(a), and by the Company, in the case of parties indemnified pursuant to Section 7(b). No indemnifying party shall be liable in the event of any settlement of any such action effected without its consent except as provided in Section 7(e) hereof. Each indemnified party agrees promptly to notify each indemnifying party of the commencement of any litigation or proceedings against it in connection with the issue and sale of the Securities. (d) If any Underwriter or person entitled to indemnification by the terms of subsection (a) of this Section 7 shall have given notice to any Issuer of a claim in respect thereof pursuant to Section 7(c) hereunder, and if such claim for indemnification is thereafter held by a court to be unavailable for any reason other than by reason of the terms of this Section 7 or if such claim is unavailable under controlling precedent, such Underwriter or person shall be entitled to contribution from the Issuers to liabilities and expenses, except to the extent that contribution is not permitted under Section 11(f) of the Securities Act. In determining the amount of contribution to which such Underwriter or person is entitled, there shall be considered the relative benefits received by such Underwriter or person and the Issuers from the offering of the Securities that were the subject of the claim for indemnification (taking into account the portion of the proceeds of the offering realized by each), such Underwriter's or person's and the Issuers' knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and any other equitable considerations appropriate under the circumstances. The Issuers and the Underwriters agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Underwriters were treated as one entity for such purpose). (e) No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 7 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party and all liability arising out of such litigation, investigation, proceeding or claim, and (ii) does not include a statement as to or an admission of fault, culpability or the failure to act by or on behalf of any indemnified party. 16 17 (f) The indemnity and contribution provided for in this Section 7 and the representations and warranties of the Issuers and the several Underwriters set forth in this Agreement shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter, the Issuers, their directors, trustees or officers or any person controlling any of them, (ii) acceptance of any Securities and payment therefor under this Agreement, and (iii) any termination of this Agreement. Section 8. Resignation and Removal of the Remarketing Agent. The Remarketing Agent may resign and be discharged from its duties and obligations hereunder, and the Company or the Trust may remove the Remarketing Agent, by giving 60 days' prior written notice, in the case of a resignation, to the Company, the Depositary, the Property Trustee, the Trust and the Indenture Trustee and, in the case of a removal, the removed Remarketing Agent, the Depositary, the Property Trustee, the Trust and the Indenture Trustee; provided, however, that: (a) the Company may not remove the Remarketing Agent unless (1) the Remarketing Agent becomes involved as a debtor in a bankruptcy, insolvency or similar proceeding, (2) the Remarketing Agent shall not be among the 15 underwriters with the largest volume underwritten in dollars, on a lead or co-managed basis, of U.S. domestic debt securities during the twelve-month period ended as of the last calendar quarter preceding the Remarketing Date, (3) the Remarketing Agent shall be subject to one or more legal restrictions preventing the performance of its obligations hereunder, or (4) the Remarketing Agent shall determine that (i) the Company has not met its obligation under Section 6(d) or (ii) using its reasonable efforts, the Remarketing Agent would be unable to consummate the Remarketing on the terms and in the manner contemplated in the Prospectus and the Remarketing Materials; (b) the Remarketing Agent may not resign without reasonable cause; and (c) no such resignation nor any such removal shall become effective until the Company shall have appointed at least one nationally recognized broker-dealer as successor Remarketing Agent and such successor Remarketing Agent shall have entered into a remarketing agreement with the Company, the Trust, and PPL Capital Funding, in which it shall have agreed to conduct the Remarketing in accordance with the Remarketing Procedures in all material respects. In any such case, the Company will use its reasonable efforts to appoint a successor Remarketing Agent and enter into such a remarketing agreement with such person as soon as reasonably practicable. The provisions of Sections 7 and 8 shall survive the resignation or removal of any Remarketing Agent pursuant to this Agreement. Section 9. Dealing in the Remarketed Trust Preferred Securities. The Remarketing Agent, when acting as a Remarketing Agent or in its individual or any other capacity, may, to the extent permitted by law, buy, sell, hold and deal in any of the Remarketed Trust Preferred Securities. The Remarketing Agent may exercise any vote or join in 17 18 any action which any beneficial owner of Remarketed Trust Preferred Securities may be entitled to exercise or take pursuant to the Trust Agreement with like effect as if it did not act in any capacity hereunder. The Remarketing Agent, in its individual capacity, either as principal or agent, may also engage in or have an interest in any financial or other transaction with the Company as freely as if it did not act in any capacity hereunder. Section 10. Remarketing Agent's Performance; Duty of Care. The duties and obligations of the Remarketing Agent shall be determined solely by the express provisions of this Agreement, the Trust Agreement, the Pledge Agreement and the Purchase Contract Agreement. No implied covenants or obligations of or against the Remarketing Agent shall be read into this Agreement, the Trust Agreement, the Pledge Agreement or the Purchase Contract Agreement. In the absence of bad faith on the part of the Remarketing Agent, the Remarketing Agent may conclusively rely upon any document furnished to it, as to the truth of the statements expressed in any of such documents. The Remarketing Agent shall be protected in acting upon any document or communication reasonably believed by it to have been signed, presented or made by the proper party or parties except as otherwise set forth herein. The Remarketing Agent, acting under this Agreement, shall incur no liability to the Company, the Trust or to any holder of Remarketed Trust Preferred Securities in its individual capacity or as Remarketing Agent for any action or failure to act, on its part in connection with a Remarketing or otherwise, except if such liability is judicially determined to have resulted from its failure to comply with the material terms of this Agreement or the gross negligence or willful misconduct on its part. Section 11. Termination. This Agreement shall terminate as to the Remarketing Agent on the effective date of the resignation or removal of the Remarketing Agent pursuant to Section 8. In addition, this Agreement may be terminated (a) by the Company, or the Trust or PPL Capital Funding, as the case may be, by notifying the Remarketing Agent at any time before the time when the Remarketed Trust Preferred Securities are first generally offered by the Remarketing Agent to dealers by letter or telegram, or (b) by the Remarketing Agent by notifying the Company, PPL Capital Funding and the Trust at or prior to 10:00 a.m. (New York City time) five business days prior to the Remarketing Date by letter or telegram if any of the conditions described in Section 6 are not satisfied. If this Agreement is terminated pursuant to any of the provisions hereof, except as otherwise provided herein, the Company shall not be under any liability to the Remarketing Agent and the Remarketing Agent shall not be under any liability to the Company, except that (a) if this Agreement is terminated by the Remarketing Agent because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, the Company will reimburse the Remarking Agent for all of its out-of-pocket expenses (including the fees and disbursements of its counsel) reasonably incurred by it, and (b) if the Remarketing Agent failed or refused to purchase the Remarketed Trust Preferred Securities hereunder, without some reason sufficient hereunder to justify the cancellation or termination of if obligations hereunder, the Remarketing Agent shall not be relieved of liability to the Company for damages occasioned by its default. 18 19 Section 12. Notices. All statements, requests, notices and agreements hereunder shall be in writing, and: (a) if to the Remarketing Agent, shall be delivered or sent by mail, telex or facsimile transmission to Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention: David Sun (Fax: 212-761-0358); (b) if to the Company, shall be delivered or sent by mail, telex or facsimile transmission to Two North Ninth Street, Allentown, Pennsylvania 18101-1179, Attention: Treasurer (Fax: 610-774-5106); (c) if to the Trust, shall be delivered or sent by mail, telex or facsimile transmission to Two North Ninth Street, Allentown, Pennsylvania 18101-1179, Attention: Treasurer (Fax: 610-774-5106); and (d) if to PPL Capital Funding, shall be delivered or sent by mail, telex or facsimile transmission to Two North Ninth Street, Allentown, Pennsylvania 18101-1179, Attention: Treasurer (Fax: 610-774-5106). Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof. Section 13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the Remarketing Agent, the Company, the Trust, PPL Capital Funding and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except that (a) the representations, warranties, indemnities and agreements of the Company, PPL Capital Funding and the Trust contained in this Agreement shall also be deemed to be for the benefit of the Remarketing Agent and the person or persons, if any, who control the Remarketing Agent within the meaning of Section 15 of the Securities Act and (b) the indemnity agreement of the Remarketing Agent contained in Section 7(b) of this Agreement shall be deemed to be for the benefit of the Company's, the Trust's and PPL Capital Funding's directors, officers and Trustees who sign the Registration Statement and any person controlling the Company, the Trust or PPL Capital Funding within the meaning of Section 15 of the Securities Act. Nothing contained in this Agreement is intended or shall be construed to give any person, other than the persons referred to herein, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. Section 14. Survival. The respective indemnities, representations, warranties and agreements of the Company, PPL Capital Funding and the Trust and the Remarketing Agent contained in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall survive the Remarketing and shall remain in full force and effect, regardless of any investigation made by or on behalf of any of them or any person controlling any of them. 19 20 Section 15. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of New York. Section 16. Counterparts. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original but all such counterparts shall together constitute one and the same instrument. Section 17. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. If the foregoing correctly sets forth the agreement between the Company, the Trust, PPL Capital Funding and the Remarketing Agent, please indicate your acceptance in the space provided for that purpose below. [SIGNATURES ON THE FOLLOWING PAGE] 20 21 Very truly yours, PPL CORPORATION By: /s/ James E. Abel --------------------------------- Name: James E. Abel Title: Vice-President - Finance and Treasurer PPL CAPITAL FUNDING TRUST I By: PPL Corporation, as Sponsor By: /s/ James E. Abel -------------------------- Name: James E. Abel Title: Vice-President - Finance and Treasurer PPL CAPITAL FUNDING, INC. By: /s/ James E. Abel --------------------------------- Name: James E. Abel Title: Treasurer Accepted: MORGAN STANLEY & CO. INCORPORATED By: /s/ David P. Sun --------------------------------- Name: David P. Sun Title: Principal 21 22 Exhibit A to Remarketing Agreement Form of Supplemental Remarketing Agreement Supplemental Remarketing Agreement dated __________, ____ among PPL Corporation, a Pennsylvania corporation (the "Company"), PPL Capital Funding Trust I, a Delaware business trust (the "Trust"), PPL Capital Funding, Inc. ("PPL Capital Funding"), Morgan Stanley & Co. Incorporated (the "Remarketing Agent"), and The Chase Manhattan Bank, as Purchase Contract Agent and attorney-in-fact for the Holders of the PEPS Units (as such terms are defined in the Purchase Contract Agreement referred to in Schedule I hereto). NOW, THEREFORE, for and in consideration of the covenants herein made, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Definitions. Capitalized terms used and not defined in this Agreement shall have the meanings assigned to them in the Remarketing Agreement dated as of May 9, 2001 (the "Remarketing Agreement") among the Company, the Trust, PPL Capital Funding, the Purchase Contract Agent and Morgan Stanley & Co. Incorporated or, if not defined in the Remarketing Agreement, the meanings assigned to them in the Purchase Contract Agreement (as defined in Schedule I hereto). 2. Registration Statement and Prospectus. The Company, PPL Capital Funding and the Trust have filed with the Commission, and there has become effective, a registration statement on Form S-3, including a prospectus, relating to the Securities (as such term is defined on Schedule I hereto). Such Registration Statement, as amended, and including the information deemed to be a part thereof pursuant to Rule 430A under the Act, and the documents incorporated or deemed to be incorporated by reference therein, are hereinafter called, collectively, the "Registration Statement"; [the related preliminary prospectus dated __________, including the documents incorporated or deemed to be incorporated by reference therein, [and preliminary prospectus supplement dated __________] are hereinafter called, [collectively] the "preliminary prospectus";] and the related prospectus dated __________, including the documents incorporated or deemed to be incorporated by reference therein, [and prospectus supplement dated __________] are hereinafter called, [collectively,] the "Prospectus." The Company, PPL Capital Funding and the Trust have provided copies of the Registration Statement [,the preliminary prospectus] and the Prospectus to the Remarketing Agent, and hereby consents to the use of the [preliminary prospectus] and the Prospectus in connection with the remarketing of the Securities. [IN THE EVENT THAT A REGISTRATION STATEMENT IS NOT REQUIRED, INSERT THE FOLLOWING: The Company, PPL Capital Funding and the Trust have provided to the Remarketing Agent, for use in connection with remarketing of the Securities (as such term is defined on Schedule I hereto), a [preliminary remarketing memorandum and] remarketing memorandum and [describe other materials, if any]. Such remarketing memorandum (including the documents incorporated or deemed to be incorporated by reference therein, [and] [describe other materials] are hereinafter called, collectively, the "Prospectus," [and such preliminary marketing memorandum (including the documents incorporated or deemed to be incorporated by reference therein) is hereinafter called a "preliminary prospectus")]. The Company, PPL Capital Funding and the Trust hereby consent to the use of the Prospectus [and the preliminary prospectus] in connection with the remarketing of the Securities.] All references in this Agreement to amendments or supplements to the Registration Statement [the preliminary prospectus] or the Prospectus shall be deemed to A-1 23 mean and include the filing of any document under the Exchange Act, which is incorporated or deemed to be incorporated by reference in the Registration Statement [,the preliminary prospectus] or the Prospectus, as the case may be. 3. Provisions Incorporated by Reference. (a) Subject to Section 3(b) hereof, the provisions of the Underwriting Agreement (other than [Section 1, Section 3, Section 4, Section 5, Section 8 and Section 9] thereof) are incorporated herein by reference, mutatis mutandis, and the Company, PPL Capital Funding and the Trust hereby make the representations and warranties, and agrees to comply with the covenants and obligations, set forth in the provisions of the Underwriting Agreement incorporated by reference herein, as modified by the provisions of Section 3(b) hereof. (b) With respect to the provisions of the Underwriting Agreement incorporated herein, for the purposes hereof, (i) all references therein to the "Underwriter" or "Underwriters" shall be deemed to refer to the Remarketing Agent and all references to the "Representative" or the "Representatives" shall be deemed to refer to Morgan Stanley & Co. Incorporated ("Morgan Stanley"); (ii) all references therein to the "Units" or "Firm Units" shall be deemed to refer to the Securities as defined herein; (iii) all references therein to the "Time of Delivery" shall be deemed to refer to the Remarketing Closing Date specified in Schedule I hereto; (iv) all references therein to the "Registration Statement", [the "Preliminary Prospectus"] or the "final prospectus" shall be deemed to refer to the Registration Statement[, the preliminary prospectus] and the Prospectus, respectively, as defined herein; (v) all references therein to this "Agreement," the "Underwriting Agreement," "hereof "herein" and all references of similar import, shall be deemed to mean and refer to this Supplemental Remarketing Agreement; (vi) all references therein to "the date hereof," "the date of this Agreement" and all similar references shall be deemed to refer to the date of this Supplemental Remarketing Agreement; (vii) all references therein to any "settlement date" shall be disregarded; and (viii) [other changes].] 4. Remarketing. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth or incorporated by reference herein and in the Remarketing Agreement, the Remarketing Agent agrees to use its reasonable efforts to remarket, in the manner set forth in Section 2(b) of the Remarketing Agreement, the aggregate liquidation amount or the aggregate principal amount, as the case may be, of Securities set forth in Schedule I hereto at a purchase price not less than 100% of the [Minimum Initial Remarketing Price] [aggregate liquidation amount or the aggregate principal amount of the Securities]. In connection therewith, the registered holder or holders thereof agree, in the manner specified in Section 5 hereof, to pay to the Remarketing Agent a Remarketing Fee equal to an amount not exceeding 25 basis points (0.25%) of [the Minimum Initial Remarketing Price] [such aggregate principal amount,] payable by deduction from any amount received in connection from such [Initial] [Final] Remarketing in excess of the [Minimum Initial Remarketing Price] [aggregate liquidation amount or the aggregate principal amount of the Securities]. Pursuant to the Trust Agreement, the right of each holder of Securities to have Securities tendered for purchase shall be limited to the extent set forth in the last sentence of Section 2(b) of the Remarketing Agreement (which is incorporated by reference herein). As more fully provided in Section 2(c) of the Remarketing Agreement (which is incorporated by reference herein), the Remarketing Agent is not obligated to purchase any Securities in the remarketing or otherwise, and neither the Company nor the A-2 24 Remarketing Agent shall be obligated in any case to provide funds to make payment upon tender of Securities for remarketing. 5. Delivery and Payment. Delivery of payment for the remarketed Securities by the purchasers thereof identified by the Remarketing Agent and payment of the Remarketing Fee shall be made on the Remarketing Closing Date at the location and time specified in Schedule I hereto (or such later date not later than five Business Days after such date as the Remarketing Agent shall designate), which date and time may be postponed by agreement between the Remarketing Agent and the Company, PPL Capital Funding and the Trust. Delivery of the remarketed Securities and payment of the Remarketing Fee shall be made to the Remarketing Agent against payment by the respective purchasers of the remarketed Securities of the consideration therefor as specified herein, which consideration shall be paid to the Collateral Agent for the account of the persons entitled thereto by certified or official bank check or checks drawn on or by a New York Clearing House bank and payable in immediately available funds or in immediately available funds by wire transfer to an account or accounts designated by the Collateral Agent. If the Securities are not represented by a Global Security held by or on behalf of The Depository Trust Company, certificates for the Securities shall be registered in such names and denominations as the Remarketing Agent may request not less than one full Business Day in advance of the Remarketing Closing Date, and the Company, the Collateral Agent and the registered holder or holders thereof agree to have such certificates available for inspection, packaging and checking by the Remarketing Agent in New York, New York not later than 1:00 p.m. on the Business Day prior to the Remarketing Closing Date. 6. Notices. Unless otherwise specified, any notices, requests, consents or other communications given or made hereunder or pursuant hereto shall be made in writing or transmitted by any standard form of telecommunication, including telephone or telecopy, and confirmed in writing. All written notices and confirmations of notices by telecommunication shall be deemed to have been validly given or made when delivered or mailed, by registered or certified mail, return receipt requested and postage prepaid. All such notices, requests, consents or other communications shall be addressed as follows: if to the Company, to Two North Ninth Street, Allentown, Pennsylvania 18101-1179, Attention: Treasurer, with a copy to Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, NY 10017, Attention: Vincent Pagano Jr.; if to the Remarketing Agent, to Morgan Stanley & Co. Incorporated, at 1585 Broadway, New York, NY 10036, Attention: David Sun, with a copy to Sullivan & Cromwell, 125 Broad Street, New York, NY 10004-2498, Attention: Robert W. Downes; and if to the Purchase Contract Agent, to The Chase Manhattan Bank, 450 West 33rd Street, New York, NY 10001, Attention: Institutional Trust Services, or to such other address as any of the above shall specify to the other in writing. 7. Conditions to Obligations of Remarketing Agent. Anything herein to the contrary notwithstanding, the parties hereto agree that the obligations of the Remarketing Agent under this Agreement are subject to the satisfaction, on the Remarketing Closing Date, of the conditions incorporated by reference herein from Section 5 of the Underwriting Agreement as modified by Section 6 hereof (including, without limitation, the delivery of opinions of counsel, officers' certificates and accountants' comfort letters as reasonably requested by the A-3 25 Remarketing Agent and in form and substance reasonably satisfactory to the Remarketing Agent, the accuracy as of the Remarketing Closing Date of the representations and warranties of the Company, PPL Capital Funding and the Trust included and incorporated by reference herein and the performance by the Company, PPL Capital Funding and the Trust of their obligations under the Remarketing Agreement and this Agreement as and when required hereby and thereby). In addition, anything herein to the contrary notwithstanding, this Agreement may be terminated by the Remarketing Agent, by notice to the Company, PPL Capital Funding and the Trust at any time prior to the time of settlement on the Remarketing Closing Date, if any of the events or conditions set forth in Section 8 of the Underwriting Agreement, as modified by Section 11 hereof, shall have occurred or shall exist. 8. Indemnity and Contribution. Anything herein to the contrary notwithstanding, the Remarketing Agent shall be entitled to indemnity and contribution on the terms and conditions set forth in the Remarketing Agreement. A-4 26 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company, the Trust, PPL Capital Funding and the Remarketing Agent. Very truly yours, PPL CORPORATION By: ----------------------------------- Name: Title: PPL CAPITAL FUNDING TRUST I By: PPL Corporation, as Sponsor By: -------------------------------- Name: Title: PPL CAPITAL FUNDING, INC. By: -------------------------------- Name: Title: CONFIRMED AND ACCEPTED: MORGAN STANLEY & CO. INCORPORATED By: -------------------------------- Authorized Signatory [Add other Remarketing Agents, if any] By: -------------------------------- Name: Title: A-5 27 SCHEDULE I Securities subject to the remarketing: [7.29% Preferred Trust Securities due 2006 of PPL Capital Funding Trust I] [7.29% Subordinated Notes due 2006 of PPL Capital Funding, Inc.] (the "Securities"). Purchase Contract Agreement, dated as of May 9, 2001 (the "Purchase Contract Agreement") by and between PPL Corporation, a Pennsylvania corporation, and The Chase Manhattan Bank, a New York banking corporation. Pledge Agreement dated as of May 9, 2001 (the "Pledge Agreement") by and between PPL Corporation, a Pennsylvania corporation , The Bank of New York and The Chase Manhattan Bank. [Minimum Initial Remarketing Price] [Aggregate Liquidation Amount of Securities] [Aggregate Principal Amount of Securities]:[$ __________] Underwriting Agreement, dated May 3, 2001 (the "Underwriting Agreement") among PPL Corporation, PPL Capital Funding Trust I, PPL Capital Funding, Inc., Morgan Stanley & Co. Incorporated , Credit Suisse First Boston Corporation, First Union Securities, Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and UBS Warburg LLC. Remarketing Closing Date, Time and Location: A-6 EX-4.8 7 y49005ex4-8.txt FORM OF AMENDED AND RESTATED TRUST AGREEMENT 1 [EXECUTION COPY] EXHIBIT 4.8 =============================================================================== AMENDED AND RESTATED TRUST AGREEMENT among PPL CORPORATION, as Depositor, Trust Securities Guarantor and Common Securities Holder, PPL CAPITAL FUNDING, INC., as Subordinated Notes Issuer THE CHASE MANHATTAN BANK, as Property Trustee, CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION as Delaware Trustee, THE ADMINISTRATIVE TRUSTEES NAMED HEREIN and THE SEVERAL HOLDERS OF THE TRUST SECURITIES Dated as of May 9, 2001 PPL CAPITAL FUNDING TRUST I =============================================================================== 2 PPL CAPITAL FUNDING TRUST I Certain Sections of this Trust Agreement relating to Sections 310 through 318 of the Trust Indenture Act of 1939:
Trust Indenture Trust Agreement Act Section Section - --------------- --------- Section 310(a)(1) .............................................................................................. 8.07 (a)(2) .............................................................................................. 8.07 (a)(3) .............................................................................................. 8.09 (a)(4) .............................................................................................. Not Applicable (b) .............................................................................................. 8.08 Section 311(a) .............................................................................................. 8.13 (b) .............................................................................................. 8.13 Section 312(a) .............................................................................................. 5.07 (b) .............................................................................................. 5.07 (c) .............................................................................................. 5.07 Section 313(a) .............................................................................................. 8.14(a) (b) .............................................................................................. 8.14(a) (c) .............................................................................................. 8.14(a) (d) .............................................................................................. 8.14(b) Section 314(a) .............................................................................................. 8.15 (b) .............................................................................................. Not Applicable (c)(1) .............................................................................................. 8.16 (c)(2) .............................................................................................. 8.16 (c)(3) .............................................................................................. Not Applicable (d) .............................................................................................. Not Applicable (e) .............................................................................................. 1.01 Section 315(a) .............................................................................................. 8.01, 8.03 (b) .............................................................................................. 8.02 (c) .............................................................................................. 8.01(a) (d) .............................................................................................. 8.01, 8.03 (e) .............................................................................................. Not Applicable Section 316(a) .............................................................................................. 6.01 (a)(1)(A) .............................................................................................. 6.01 (a)(1)(B) .............................................................................................. Not Applicable (a)(2) .............................................................................................. Not Applicable (b) .............................................................................................. Not Applicable (c) .............................................................................................. 6.07 Section 317(a)(1) .............................................................................................. Not Applicable (a)(2) .............................................................................................. Not Applicable (b) .............................................................................................. 5.09 Section 318(a) .............................................................................................. 10.10
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Trust Agreement. 3 \ TABLE OF CONTENTS ARTICLE I Defined Terms Section 1.04. Definitions.....................................................................................................2 ARTICLE II Continuation of the Trust Section 2.01. Name...........................................................................................................11 Section 2.02. Office of the Delaware Trustee; Principal Place of Business....................................................11 Section 2.03. Initial Contribution of Trust Property; Organizational Expenses................................................11 Section 2.04. A. Issuance of the Preferred Trust Securities.................................................................12 Section 2.04. B. Issuance of the CommonTrust Securities. Section 2.05. Subscription and Purchase of Subordinated Notes; Issuance of the Common Trust Securities.......................12 Section 2.06. Declaration of Trust; Appointment of Additional Administrative Trustees........................................12 Section 2.07. Authorization to Enter into Certain Transactions...............................................................13 Section 2.08. Assets of Trust................................................................................................16 Section 2.09. Title to Trust Property........................................................................................16 ARTICLE III Payment Account Section 3.01. Payment Account................................................................................................16 ARTICLE IV Distributions; Redemption Section 4.01. Distributions..................................................................................................17 Section 4.02. A. Redemption.................................................................................................18 Section 4.02. B. Redemption Procedures......................................................................................18 Section 4.03. Subordination of Common Trust Securities.......................................................................20 Section 4.04. Payment Procedures.............................................................................................20 Section 4.05. Tax Returns and Reports........................................................................................21 Section 4.06. Payments under Indenture.......................................................................................21 Section 4.07. Initial Remarketing Procedures.................................................................................21 Section 4.08. Final Remarketing Procedures...................................................................................24 ARTICLE V Trust Securities Certificates Section 5.01. Initial Ownership..............................................................................................26 Section 5.02. The Trust Securities Certificates..............................................................................26 Section 5.03. Execution and Delivery of Trust Securities Certificates........................................................27 Section 5.04. Registration of Transfer and Exchange of Trust Securities Certificates.........................................27 Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates.............................................28 Section 5.06. Persons Deemed Securityholders.................................................................................29 Section 5.07. Access to List of Securityholders' Names and Addresses.........................................................29 Section 5.08. Maintenance of Office or Agency................................................................................29 Section 5.09. Appointment of Paying Agent....................................................................................29 Section 5.10. Ownership of Common Trust Securities by Depositor..............................................................30
-i- 4 Section 5.11. Definitive Preferred Trust Securities Certificates.............................................................30 Section 5.12. Book-Entry System..............................................................................................30 Section 5.13. Rights of Securityholders......................................................................................31 Section 5.14. Cancellation by Transfer Agent and Registrar...................................................................31 ARTICLE VI Acts of Securityholders; Meetings; Voting Section 6.01. Limitations on Voting Rights...................................................................................32 Section 6.02. Notice of Meetings.............................................................................................33 Section 6.03. Meetings of Holders of Preferred Trust Securities..............................................................33 Section 6.04. Voting Rights..................................................................................................34 Section 6.05. Proxies, etc...................................................................................................34 Section 6.06. Securityholder Action by Written Consent.......................................................................34 Section 6.07. Record Date for Voting and Other Purposes......................................................................34 Section 6.08. Acts of Securityholders........................................................................................34 Section 6.09. Inspection of Records..........................................................................................35 ARTICLE VII Representations and Warranties of the Property Trustee and the Delaware Trustee Section 7.01. Property Trustee...............................................................................................36 Section 7.02. Delaware Trustee...............................................................................................37 ARTICLE VIII The Trustees Section 8.01. Certain Duties and Responsibilities............................................................................37 Section 8.02. Notice of Defaults.............................................................................................38 Section 8.03. Certain Rights of Property Trustee.............................................................................39 Section 8.04. Not Responsible for Recitals or Issuance of Securities.........................................................41 Section 8.05. May Hold Securities............................................................................................41 Section 8.06. Compensation; Fees; Indemnity..................................................................................42 Section 8.07. Certain Trustees Required; Eligibility.........................................................................42 Section 8.08. Conflicting Interests..........................................................................................43 Section 8.09. Co-Trustees and Separate Trustee...............................................................................43 Section 8.10. Resignation and Removal; Appointment of Successor..............................................................44 Section 8.11. Acceptance of Appointment by Successor.........................................................................46 Section 8.12. Merger, Conversion, Consolidation or Succession to Business....................................................46 Section 8.13. Preferential Collection of Claims Against Depositor or Trust...................................................47 Section 8.14. Reports by Property Trustee....................................................................................47 Section 8.15. Reports to the Property Trustee................................................................................47 Section 8.16. Evidence of Compliance With Conditions Precedent...............................................................47 Section 8.17. Number of Trustees.............................................................................................48 Section 8.18. Delegation of Power............................................................................................48 Section 8.19. Fiduciary Duty.................................................................................................48 Section 8.20. Delaware Trustee...............................................................................................49 ARTICLE IX Dissolution and Liquidation Section 9.01. Dissolution Upon Expiration Date...............................................................................49
-ii- 5 Section 9.02. Early Dissolution..............................................................................................49 Section 9.03. Termination....................................................................................................50 Section 9.04. Liquidation....................................................................................................50 Section 9.05. Mergers, Consolidations, Amalgamations or Replacements of the Trust............................................52 ARTICLE X Miscellaneous Provisions Section 10.01. Payment of Expenses of the Trust...............................................................................53 Section 10.02. Limitation of Rights of Securityholders........................................................................53 Section 10.03. Amendment......................................................................................................53 Section 10.04. Separability...................................................................................................54 Section 10.05. Governing Law..................................................................................................54 Section 10.06. Successors.....................................................................................................55 Section 10.07. Intention of Parties...........................................................................................55 Section 10.08. Headings.......................................................................................................55 Section 10.09. Notice and Demand..............................................................................................55 Section 10.10. Agreement Not to Petition......................................................................................55 Section 10.11. Conflict with Trust Indenture Act..............................................................................56 Section 10.12. Counterparts...................................................................................................56
-iii- 6 S&C Draft of May 4, 2001 AMENDED AND RESTATED TRUST AGREEMENT, dated as of May 9, 2001, among (i) PPL Corporation, a Pennsylvania corporation as depositor (the "Depositor"), trust securities guarantor (the "Trust Securities Guarantor") and as common securities holder (the "Common Securities Holder"), (ii) PPL Capital Funding, Inc., a Delaware corporation, as subordinated notes issuer, (the "Subordinated Notes Issuer"), (iii) The Chase Manhattan Bank, a New York banking corporation, as trustee (the "Property Trustee" and, in its separate capacity and not in its capacity as Property Trustee, the "Bank"), (iii) Chase Manhattan Bank USA, National Association, a national banking association, as Delaware trustee (the "Delaware Trustee"), (iv) John R. Biggar and James E. Abel, each an individual, and each of whose address is c/o PPL Electric Utilities Corporation, Two North Ninth Street, Allentown, Pennsylvania 18101-1179 (each, an "Administrative Trustee" and collectively, the "Administrative Trustees") (the Property Trustee, the Delaware Trustee and the Administrative Trustees are referred to herein each as a "Trustee" and collectively as the "Trustees"), and (v) the several Holders, as hereinafter defined. R E C I T A L S: The Depositor, the Property Trustee, the Delaware Trustee and James E. Abel, as Administrative Trustee, have heretofore duly created and continued a business trust under the Delaware Business Trust Act by the entering into that certain Trust Agreement, dated as of September 21, 1999 (the "Original Trust Agreement"), as amended by the Removal and Appointment of Trustee and Amendment of Trust Agreement of the Trust, dated as of August 15, 2000, and by the execution and filing with the Secretary of State of the State of Delaware of the Certificate of Trust, dated September 21, 1999, as amended by the Certificate of Amendment to Certificate of Trust, dated May 22, 2000, as amended by the Amended and Restated Certificate of Trust of PPL Capital Funding Trust I, dated as of August 15, 2000, copies of which are attached as Exhibit A (as it may be amended from time to time, the "Certificate of Trust"). The Trust, the Depositor and the Subordinated Notes Issuer have entered into an Underwriting Agreement dated May 3, 2001 with Morgan Stanley & Co. Incorporated, Credit Suisse First Boston Corporation, First Union Securities, Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Warburg LLC. The parties hereto desire to amend and restate the Original Trust Agreement in its entirety as set forth herein to provide for, among other things, (i) the issuance of the Common Trust Securities and Preferred Trust Securities, as hereinafter defined, by the Trust to the Subordinated Notes Issuer in exchange for the Subordinated Notes, as hereinafter defined, (ii) the sale of the Preferred Trust Securities to the public by the PPL Capital Funding and (iii) the acquisition by the Trust of all of the right, title and interest in the Subordinated Notes, as hereinafter defined. NOW THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each party, for the benefit of the other party and for the benefit of the Securityholders, hereby amends and restates the Original Trust Agreement in its entirety and agrees as follows: 7 ARTICLE I DEFINED TERMS SECTION 1.04. DEFINITIONS. For all purposes of this Trust Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (b) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (c) unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Trust Agreement; and (d) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section or other subdivision; and (e) the following terms have the meanings given to them in the Purchase Contract Agreement: (i) Applicable Amount, (ii) Applicable Ownership Interest, (iii) Cash Settlement, (iv) Code, (v) Collateral Agent, (vi) Company, (vii) Depositary Participant, (viii) Failed Final Remarketing, (ix) Failed Initial Remarketing, (x) Final Remarketing, (xi) Final Remarketing Date, (xii) Initial Remarketing, (xiii) Initial Remarketing Date, (xiv) PEPS Unit, (xv) Pledge Agreement, (xvi) Purchase Contract Agent, (xvii) Purchase Contract Settlement Date, (xviii) Quotation Agent, (xix) Remarketing Agent, (xx) Redemption Amount, (xxi) Remarketing Agreement, (xxii) Reset Agent, (xxiii) Reset Announcement Date, (xxiv) Reset Rate, (xxv) Security, (xxvi) Subordinated Notes, (xxvii) Successful Initial Remarketing, (xxviii) Successful Final Remarketing, (xxix) Tax Event Redemption Amount, (xxx) Treasury Portfolio, (xxxi) Treasury Portfolio Purchase Price and (xxxii) Underwriting Agreement. "Act" has the meaning specified in Section 6.08. "Administrative Trustee" means each of the individuals identified as an "Administrative Trustee" in the preamble to this Trust Agreement solely in their capacities as Administrative Trustees of the Trust and not in their individual capacities, or such trustee's successor in interest in such capacity, or any successor trustee appointed as herein provided. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or -2- 8 indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Authorized Officer" means the Chairman of the Board, the President and Vice President, the Treasurer, any Assistant Treasurer or any other officer or agent of the Depositor duly authorized by the Board of Directors to act in respect of matters relating to this Trust Agreement. "Bank" has the meaning specified in the preamble to this Trust Agreement. "Bankruptcy Event" means, with respect to any Person: (i) the entry of a decree or order by a court having jurisdiction in the premises judging such Person a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjudication or composition of or in respect of such Person under Federal bankruptcy law or any other applicable Federal or state law, or appointing a receiver, liquidator, assignee, trustee, sequestrator or other similar official of such Person or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or (ii) the institution by such Person of proceedings to be adjudicated a bankrupt or insolvent, or of the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under Federal bankruptcy law or any other applicable Federal or state law, or the consent by it to the filing of such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator or similar official of such Person or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due. "Bankruptcy Laws" has the meaning specified in Section 10.09. "Business Day" means a day other than (x) a Saturday or a Sunday, (y) a day on which banks in New York, New York are authorized or obligated by law or executive order to remain closed or (z) a day on which the Property Trustee's Corporate Trust Office or the Subordinated Notes Trustee's principal corporate trust office is closed for business. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor legislation. A reference to a specific section of the Code refers not only to such specific section but also to any corresponding provision of any federal tax statute enacted after the date of this Trust Agreement, as such specific section or corresponding provision is in effect on the date of application of the provisions of this Trust Agreement containing such reference. -3- 9 "Certificate of Trust" has the meaning specified the recitals hereof. "Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act. "Closing Date" means the date of execution and delivery of this Trust Agreement. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Common Trust Securities Certificate" means a certificate evidencing ownership of Common Trust Securities, substantially in the form attached as Exhibit B. "Common Trust Security" means a security representing an undivided beneficial interest in the assets of the Trust having a Liquidation Amount of $25 and having the rights provided therefor in this Trust Agreement, including the right to receive Distributions, Subordinated Notes and a Liquidation Distribution as provided herein. "Corporate Trust Office" means the principal corporate trust office of the Property Trustee located in New York, New York which at the date of execution of this Trust Agreement is located at 450 West 33rd Street, 15th Floor, New York, New York 10001. "Covered Person" means: (a) any officer, director, shareholder, partner, member, representative, employee or agent of the Trust or the Trust's Affiliates; and (b) any Holder of Trust Securities. "Custodial Agent" has the meaning specified in the Pledge Agreement. "Definitive Preferred Trust Securities Certificates" means Preferred Trust Securities Certificates issued in certificated, fully registered form as provided in Section 5.11. "Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time. "Delaware Trustee" means the banking association identified as the "Delaware Trustee" in the preamble to this Trust Agreement solely in its capacity as Delaware Trustee of the Trust and not in its individual capacity, or its successor in interest in such capacity, or any successor trustee appointed in such capacity as herein provided. "Depositary" shall mean, with respect to Trust Securities issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as depositary for such Securities, and initially shall be The Depository Trust Company. "Depositary Participant" shall mean a member of, or participant in, the Depositary. -4- 10 "Depositor" has the meaning specified in the preamble to this Trust Agreement and includes PPL Corporation, in its capacity as Holder of the Common Trust Securities, and its successors. "Distribution Date" has the meaning specified in Section 4.01(a). "Distributions" means amounts payable in respect of the Trust Securities as provided in Section 4.01. "Early Termination Event" has the meaning specified in Section 9.02. "Event of Default" means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (i) the occurrence of a Subordinated Note Event of Default; or (ii) default by the Trust in the payment of any Distribution when it becomes due and payable, and continuation of such default for a period of 30 days; or (iii) default by the Trust in the payment of any Redemption Price, plus accumulated and unpaid Distributions, of any Trust Security when it becomes due and payable; or (iv) default in the performance, or breach, in any material respect, of any covenant or warranty of the Trustees in this Trust Agreement (other than a covenant or warranty a default in whose performance or breach is specifically dealt with in clause (ii) or (iii), above) and continuation of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Trust, the defaulting trustee and the Depositor by the Holders of at least 25% in Liquidation Amount of the Outstanding Preferred Trust Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (v) the occurrence of a Bankruptcy Event with respect to the Trust. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Expiration Date" shall have the meaning specified in Section 9.01. "Global Security" shall mean a global Preferred Security Certificate registered in the name of a Depositary or its nominee. "Holder" shall mean any holder of Preferred Trust Securities or Common Securities, as registered on the books and records of the Trust, such holder being a beneficial owner within the meaning of the Business Trust Act, provided that in determining whether the -5- 11 Holders of the requisite liquidation amount of the Preferred Securities have voted on any matter provided for in this Agreement, then for the purpose of such determination only (and not for any other purpose hereunder), if the Preferred Trust Securities remain in the form of one or more Global Securities and if the Depositary that is the holder of such Global Securities has sent an omnibus proxy to the Depositary Participants to whose accounts the Preferred Trust Securities are credited on the record date, the term of "Holders" shall mean the Depositary Participants acting at the direction of the Beneficial Owners. "Indemnified Person" means any Trustee, any Affiliate of any Trustee, or any officer, director, shareholder, member, partners, employee, representative or agent of any Trustee, or any employee or agent of the Trust or its Affiliates. "Interest Payment Date" shall have the meaning set forth in Section 4.01(b). "Investment Company Act" means the Investment Company Act of 1940, as amended. "Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of trust, adverse ownership interest, hypothecation, assignment, security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever. "Like Amount" means (i) Trust Securities having a Liquidation Amount equal to the principal amount of Subordinated Notes to be contemporaneously redeemed in accordance with the Subordinated Indenture and the proceeds of which will be used to pay the Redemption Price of such Trust Securities plus accumulated and unpaid Distributions to the date of such payment and (ii) Subordinated Notes having a principal amount equal to the Liquidation Amount of the Trust Securities of the Holders to which such Subordinated Notes are distributed. "Liquidation Amount" means the stated amount of $25 per Trust Security. "Liquidation Date" means the date on which Subordinated Notes are to be distributed to Holders of Trust Securities in connection with a dissolution and liquidation of the Trust pursuant to Section 9.04. "Liquidation Distribution" has the meaning specified in Section 9.04(e). "Offer" has the meaning specified in Section 2.07(c). "Officer's Certificate" means a certificate signed by an Authorized Officer of the Depositor and delivered to the appropriate Trustee. Any officer signing an Officer's Certificate given pursuant to Section 8.16 shall be the principal executive, financial or accounting officer of the Depositor. Any Officer's Certificate delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement shall include: (a) a statement that the officer signing the Officer's Certificate has read the covenant or condition and the definitions relating thereto; -6- 12 (b) a brief statement of the nature and scope of the examination or investigation undertaken by such officer in rendering the Officer's Certificate; (c) a statement that such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of such officer, such condition or covenant has been complied with. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Trust, the Property Trustee, the Delaware Trustee or the Depositor, and who shall be reasonably acceptable to the Property Trustee. Any Opinion of Counsel delivered with respect to compliance with a condition or covenant provided for in this Trust Agreement shall include statements comparable to the statements referred to in the definition of "Officer's Certificate" herein. "Original Trust Agreement" has the meaning specified in the recitals to this Trust Agreement. "Outstanding," when used with respect to Preferred Trust Securities, means, as of the date of determination, all Preferred Trust Securities theretofore delivered under this Trust Agreement, except: (i) Preferred Trust Securities theretofore canceled by the Transfer Agent and Registrar or delivered to the Transfer Agent and Registrar for cancellation; (ii) Preferred Trust Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Property Trustee or any Paying Agent for the Holders of such Preferred Trust Securities; provided that, if such Preferred Trust Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Trust Agreement; and (iii) Preferred Trust Securities which have been paid or in exchange for or in lieu of which other Preferred Trust Securities have been delivered pursuant to this Trust Agreement, including pursuant to Sections 5.04, 5.05 or 5.11; provided, however, that in determining whether the Holders of the requisite Liquidation Amount of the Outstanding Preferred Trust Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Preferred Trust Securities owned by the Depositor, the Trust Securities Guarantor, any Administrative Trustee or any Affiliate of the Depositor, the Trust Securities Guarantor or any Administrative Trustee shall be disregarded and deemed not to be Outstanding, except that (a) in determining whether any Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Preferred Trust Securities which such Trustee knows to be so owned shall be so -7- 13 disregarded and (b) the foregoing shall not apply at any time when all of the Outstanding Preferred Trust Securities are owned by the Depositor, the Trust Securities Guarantor, one or more of the Administrative Trustees and/or any such Affiliate. Preferred Trust Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Administrative Trustees the pledgee's right so to act with respect to such Preferred Trust Securities and that the pledgee is not the Depositor or the Trust Securities Guarantor, or any Affiliate of the Depositor or the Trust Securities Guarantor. "Owner" means each Person who is the beneficial owner of a Trust Securities Certificate as reflected in the records of the Depository or, if a Depository participant is not the beneficial owner, then as reflected in the records of a Person maintaining an account with such Depository (directly or indirectly), in accordance with the rules of such Depository. "Paying Agent" means any paying agent or co-paying agent appointed pursuant to Section 5.09 and shall initially be the Property Trustee. "Payment Account" means a segregated non-interest-bearing corporate trust account maintained by the Property Trustee with the Bank, or such other banking institution as the Depositor shall select for the benefit of the Securityholders in which all amounts paid in respect of the Subordinated Notes will be held and from which the Paying Agent, pursuant to Section 5.09, shall make payments to the Securityholders in accordance with Sections 4.01 and 4.02. "PEPS Units" shall mean a security consisting of a unit comprised of (A) a purchase contract under which the holder of the unit will purchase from the Depositor, for $25 in cash, a certain number of shares of common stock, par value $.01 per share, of the Depositor and (B) beneficial ownership of a Preferred Trust Security or Subordinated Note, or in certain circumstances following the occurrence of a Tax Event, the appropriate Applicable Ownership Interest of the Treasury Portfolio. "Person" means any individual, corporation, partnership, joint venture, trust, limited liability company or corporation, unincorporated organization or government or any agency or political subdivision thereof. "Preferred Trust Securities Certificate" means a certificate evidencing ownership of Preferred Trust Securities, substantially in the form attached as Exhibit C. "Preferred Trust Security" means a security representing an undivided beneficial interest in the assets of the Trust having a Liquidation Amount of $25 and having rights provided therefor in this Trust Agreement, including the right to receive Distributions, Subordinated Notes and a Liquidation Distribution as provided herein and, in certain circumstances, a preference over the Common Trust Securities. "Pro Rata" shall mean pro rata to each Holder according to the aggregate Liquidation Amount of the Trust Securities held by such Holder in relation to the aggregate Liquidation Amount of all Trust Securities outstanding. -8- 14 "Property Trustee" means the commercial bank or trust company identified as the "Property Trustee" in the preamble to this Trust Agreement solely in its capacity as Property Trustee of the Trust and not in its individual capacity, or its successor in interest in such capacity, or any successor trustee appointed in such capacity as herein provided. "Purchase Contract Agreement" shall mean the Purchase Contract Agreement dated as of May 9, 2001 between the Depositor and The Chase Manhattan Bank, as Purchase Contract Agent. "Redemption Date" means, with respect to any Trust Security to be redeemed, the date fixed for such redemption by or pursuant to this Trust Agreement; provided that each Subordinated Note Redemption Date shall be a Redemption Date for a Like Amount of Trust Securities. "Redemption Price" means, with respect to any date fixed for redemption of any Trust Security, the redemption price paid by the Subordinated Note Issuer to repay or redeem the Subordinated Notes held by the Trust, which shall include accumulated and unpaid distributions on such Trust Securities through the date of their redemption or such lesser amount as will be received by the Trust in respect of Subordinated Notes so repaid or redeemed. "Relevant Trustee" shall have the meaning specified in Section 8.10. "Remarketing Settlement Date" shall mean the date, if any, on which the settlement of the Remarketed Securities has occurred through the normal settlement procedures in effect at such time of the Depository or any successor Depository. "Responsible Officer," when used with respect to the Property Trustee, means an officer of the Property Trustee assigned by the Property Trustee to administer this Trust Agreement. "Securities Register" shall mean the Securities Register as described in Section 5.04. "Securityholder" or "Holder" means a Person in whose name a Trust Security or Trust Securities is registered in the Securities Register; such Person being a beneficial owner within the meaning of the Business Trust Act. "Subordinated Indenture" means the Indenture, dated as of May 9, 2001 among the Subordinated Notes Issuer, the Depositor, as guarantor, and the Subordinated Notes Trustee, as trustee, as amended or supplemented from time to time. "Subordinated Note Event of Default" means an "Event of Default" as defined in the Subordinated Indenture. "Subordinated Note Redemption Date" means "Redemption Date" as defined in the Subordinated Indenture with respect to the Subordinated Notes. -9- 15 "Subordinated Notes Issuer" means PPL Capital Funding, Inc., a Delaware corporation, in its capacity as issuer of the Subordinated Notes, and its successors. "Subordinated Notes Trustee" means The Chase Manhattan Bank, a New York banking corporation, as trustee under the Subordinated Indenture, and its permitted successors and assigns as such trustee. "Supermajority" shall have the meaning set forth in Section 6.01(b). "Tax Event" means the receipt by the Subordinated Notes Issuer and the Trust of an Opinion of Counsel, rendered by a law firm having a recognized national tax practice, to the effect that, as a result of any amendment to, change in or announced proposed change in the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein, or as a result of any official administrative decision, pronouncement, judicial decision or action interpreting or applying such laws or regulations, which amendment or change is effective, or which proposed change, pronouncement, action, or decision is announced on or after the date of issuance of the Preferred Trust Securities, there is more than an insubstantial increase in the risk that (i) the Trust is, or within 90 days of the date of such opinion, will be, subject to United States Federal income tax with respect to income received or accrued on the Subordinated Notes, (ii) interest payable by the Depositor on the Subordinated Notes is not, or within 90 days of the date of such opinion, will not be, fully deductible by the Depositor for United States Federal income tax purposes, or (iii) the Trust is, or within 90 days of the date of such opinion will be subject to more than a de minimis amount of other taxes, duties or other governmental charges. "Tax Event Redemption" shall mean that a Tax Event has occurred and is continuing and the Subordinated Notes have been called for redemption pursuant to the Subordinated Indenture. "Tax Event Redemption Date" shall mean the date of the Tax Event Redemption, if any, specified by the Subordinated Notes Issuer. "Transfer Agent and Registrar" shall mean the transfer agent and registrar for the Preferred Trust Securities appointed by the Trust and shall be initially the Property Trustee. "Trust" means PPL Capital Funding Trust I, a Delaware business trust created by the Original Trust Agreement and the Certificate of Trust and continued hereby. "Trust Agreement" means this Amended and Restated Trust Agreement, as the same may be modified, amended or supplemented in accordance with the applicable provisions hereof, including (i) all exhibits hereto and (ii) for all purposes of this Amended and Restated Trust Agreement and any such modification, amendment or supplement, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this Amended and Restated Trust Agreement and any such modification, amendment or supplement, respectively. "Trust Enforcement Event" in respect of the Trust Securities shall mean that an Indenture Event of Default has occurred and is continuing in respect of the Subordinated Notes. -10- 16 "Trust Indenture Act" means the Trust Indenture Act of 1939 as amended and in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Trust Property" means (i) the Subordinated Notes, (ii) any cash on deposit in, or owing to, the Payment Account and (iii) all proceeds and rights in respect of the foregoing for the time being held by the Property Trustee pursuant to the terms of this Trust Agreement. "Trust Securities Certificate" means any one of the Common Trust Securities Certificates or the Preferred Trust Securities Certificates. "Trust Securities Guarantee" means the Trust Securities Guarantee Agreement executed and delivered by the Depositor, as guarantor, and The Chase Manhattan Bank, a New York banking corporation, as trustee, contemporaneously with the execution and delivery of this Trust Agreement, for the benefit of the Holders of the Preferred Trust Securities, as amended from time to time. "Trust Securities Guarantor" means PPL Corporation, a Pennsylvania corporation, and its successors, as guarantor under the Trust Securities Guarantee. "Trust Security" means any one of the Common Trust Securities or the Preferred Trust Securities. The Common Trust Securities and the Preferred Trust Securities represent the sole beneficial interests in the Trust, and the Trust shall not issue any interests other than the Trust Securities. "Trustees" mean, collectively, the Property Trustee, the Delaware Trustee and the Administrative Trustees. ARTICLE II CONTINUATION OF THE TRUST SECTION 2.01. NAME. The Trust continued hereby shall be known as "PPL Capital Funding Trust I", as such name may be modified from time to time by the Administrative Trustees following written notice to the Holders of Trust Securities and the other Trustees, in which name the Trustees may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued. SECTION 2.02. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS. The office of the Delaware Trustee in the State of Delaware is 1201 Market Street, Wilmington, Delaware 19801, Attn: Trust Department, or at such other address in Delaware as the Delaware Trustee may designate by written notice to the Securityholders, the Depositor and the Trust Securities Guarantor. The principal place of business of the Trust is c/o PPL Corporation, Two North Ninth Street, Allentown, Pennsylvania 18101-1179. SECTION 2.03. INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL EXPENSES. The Property Trustee acknowledges receipt in trust from the Depositor in connection -11- 17 with the Original Trust Agreement of the sum of $10, which constituted the initial Trust Property. The Depositor shall pay organizational expenses of the Trust as they arise or shall, upon request of any Trustee, promptly reimburse such Trustee for any such expenses paid by such Trustee. The Depositor shall make no claim upon the Trust Property for the payment of such expenses. SECTION 2.04.A. ISSUANCE OF THE PREFERRED TRUST SECURITIES. On May 3, 2001, an authorized representative of the Depositor, the Trust and the Subordinated Notes Issuer, each executed and delivered the Underwriting Agreement. Contemporaneously with the execution and delivery of this Trust Agreement, one of the Administrative Trustees, on behalf of the Trust in accordance with Section 5.02, executed and delivered a Preferred Trust Securities Certificate, registered in the name of the Purchase Contract Agent, having an aggregate Liquidation Amount of $500,000,000. SECTION 2.04.B. ISSUANCE OF THE COMMON TRUST SECURITIES. Contemporaneously with the execution and delivery of this Trust Agreement, one of the Administrative Trustees, on behalf of the Trust in accordance with Section 5.02, executed and delivered a Common Trust Securities Certificate, registered in the name of the Subordinated Notes Issuer, having an aggregate Liquidation Amount of $15,463,918. SECTION 2.05. SUBSCRIPTION AND EXCHANGE OF SUBORDINATED NOTES FOR TRUST SECURITIES. Contemporaneously with the execution and delivery of this Trust Agreement, the Administrative Trustees, on behalf of the Trust, subscribed to and purchased from the Subordinated Notes Issuer Subordinated Notes, registered in the name of The Chase Manhattan Bank, as Property Trustee of PPL Capital Funding Trust I and having an aggregate principal amount equal to $515,463,918 and, in exchange for such Subordinated Notes, one of the Administrative Trustees, on behalf of the Trust, executed and delivered to the Subordinated Notes Issuer the Trust Securities Certificates executed and delivered pursuant to Section 2.04.A and 2.04.B. The Subordinated Notes Issuer then delivered to the Purchase Contract Agent the Preferred Trust Securities Certificate issued pursuant to Section 2.04.A in connection with the Depositor's issuance of $500,000,000 of PEPS Units to the public. SECTION 2.06. DECLARATION OF TRUST; APPOINTMENT OF ADDITIONAL ADMINISTRATIVE TRUSTEES. The exclusive purposes and functions of the Trust are (i) to issue Trust Securities in exchange for the Subordinated Notes, and (ii) to engage in those activities necessary or incidental thereto. The Depositor hereby appoints the Trustees as trustees of the Trust, to have all the rights, powers and duties to the extent set forth herein, and the Trustees hereby accept such appointment. The Property Trustee hereby declares that it will hold the Trust Property in trust upon and subject to the conditions set forth herein for the benefit of the Securityholders. The Trustees shall have all rights, powers and duties set forth herein and in accordance with applicable law with respect to accomplishing the purposes of the Trust. Anything in this Trust Agreement to the contrary notwithstanding, the Delaware Trustee shall not be entitled to exercise any powers, nor shall the Delaware Trustee have any of the duties and responsibilities of the Property Trustee or the Administrative Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of the Trust for the sole and limited purpose of fulfilling the requirements of Section 3807 of the Delaware Business Trust Act. -12- 18 SECTION 2.07. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS. The Trustees shall conduct the affairs of the Trust in accordance with the terms of this Trust Agreement. Subject to the limitations set forth in paragraph (b) of this Section and Article VIII and in accordance with the following provisions (A) and (B), the Trustees shall have the authority to enter into all transactions and agreements determined by the Trustees to be appropriate in exercising the authority, express or implied, otherwise granted to the Trustees under this Trust Agreement, and to perform all acts in furtherance thereof, including without limitation, the following: (A) As among the Trustees, the Administrative Trustees, acting singularly or together, shall have the power, duty and authority to act on behalf of the Trust with respect to the following matters: (i) the issuance of the Trust Securities in exchange for the Subordinated Notes; (ii) without the consent of any Person, to cause the Trust to enter into and to execute, deliver and perform on behalf of the Trust, such agreements as may be necessary or desirable in connection with the consummation of the Underwriting Agreement and the Remarketing Agreement; (iii) to qualify the Trust to do business in any jurisdiction as may be necessary or desirable; (iv) the registration of the Preferred Trust Securities under the Securities Act of 1933, as amended, and under state securities or blue sky laws, and the qualification of this Trust Agreement as a trust indenture under the Trust Indenture Act; (v) the listing, if any, of the Preferred Trust Securities upon such national securities exchange or exchanges or automated quotation system or systems as shall be determined by the Depositor and the registration of the Preferred Trust Securities under the Exchange Act, and the preparation and filing of all periodic and other reports and other documents pursuant to the foregoing; (vi) the appointment or removal of a Paying Agent and Transfer Agent and Registrar in accordance with this Trust Agreement; (vii) the establishment of a record date for any of the purposes contemplated by Section 6.07 hereof; (viii) to duly prepare and file all applicable tax returns and tax information reports that are required to be filed with respect to the Trust on behalf of the trust; -13- 19 (ix) to take all action that may be necessary or appropriate for the preservation and the continuation of the Trust's valid existence, rights, franchises and privileges as a statutory business trust under the laws of the State of Delaware and of each other jurisdiction in which such existence is necessary to protect the limited liability of the Holders of the Preferred Trust Securities or to enable the Trust to effect the purposes for which the Trust was created; (x) to execute and deliver all documents or instruments, perform all duties and powers, and do all things for and on behalf of the Trust in all matters necessary or incidental to the foregoing; (xi) to the extent provided in this Trust Agreement, the winding up of the affairs of and liquidation of the Trust and the preparation, execution and filing of the certificate of cancellation with the Secretary of State of Delaware; and (xii) the taking of any action incidental to the foregoing as the Administrative Trustees may from time to time determine is necessary or advisable to protect and conserve the Trust Property for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder). (B) As among the Trustees, the Property Trustee shall have the power, duty and authority to act on behalf of the Trust with respect to the following ministerial matters: (i) the establishment of the Payment Account in the name of and under the exclusive control of the Property Trustee on behalf of the Securityholders; (ii) the receipt of the Subordinated Notes; (iii) the collection and deposit, upon receipt, in the Payment Account of interest, principal and any other payments made in respect of the Subordinated Notes; (iv) the distribution of amounts owed to the Securityholders from the Payment Account in respect of the Trust Securities in accordance with the terms of this Trust Agreement (funds in the Payment Account to be held uninvested until disbursed in accordance with this Trust Agreement); (v) the sending of notices of default and other information regarding the Trust Securities and the Subordinated Notes to the Securityholders in accordance with the terms of this Trust Agreement; (vi) the distribution of the Trust Property in accordance with the terms of this Trust Agreement upon written direction by the Depositor to dissolve the Trust; -14- 20 (vii) to the extent provided in this Trust Agreement, the winding up of the affairs of and liquidation of the Trust and the execution of the certificate of cancellation to be prepared and filed by the Administrative Trustees with the Secretary of State of the State of Delaware; and (viii) the taking of any ministerial action incidental to the foregoing as the Property Trustee may from time to time determine is necessary or advisable to protect and conserve the Trust Property for the benefit of the Securityholders (without consideration of the effect of any such action on any particular Securityholder). Subject to this Section 2.07(a)(B), the Property Trustee shall have none of the duties, powers or authority of the Administrative Trustees set forth in Sections 2.07(a)(A) and 2.07(c) or the Depositor set forth in Section 2.07(c). The Property Trustee shall have the power and authority to exercise all of the rights, powers and privileges of a holder of Subordinated Notes under the Subordinated Indenture, subject to the terms of this Trust Agreement, and, if an Event of Default occurs and is continuing, the Property Trustee shall, subject to Article VIII hereof and its responsibilities pursuant to the Trust Indenture Act, for the benefit of Holders of the Trust Securities, proceed to protect and enforce its rights as holder of the Subordinated Notes subject to the rights of the Holders to institute proceedings directly pursuant to the terms of this Trust Agreement. (b) So long as this Trust Agreement remains in effect, the Trust (or the Trustees acting on behalf of the Trust) shall not undertake any business, activities or transaction except as expressly provided herein or contemplated hereby. In particular, the Trustees, acting on behalf of the Trust, shall not (i) acquire any investments or engage in any activities not authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange, pledge, set-off or otherwise dispose of any of the Trust Property or interests therein, including to Securityholders, except as expressly provided herein, (iii) take any action that would reasonably be expected to cause the Trust to fail or cease to qualify as a "grantor trust" for United States Federal income tax purposes, (iv) incur any indebtedness for borrowed money or (v) take or consent to any action that would result in the placement of a Lien on any of the Trust Property. The Trustees shall defend all claims and demands of all Persons at any time claiming any Lien on any of the Trust Property adverse to the interest of the Trust or the Securityholders in their capacity as Securityholders. (c) In connection with the issue and sale of the Preferred Trust Securities, each of the Depositor and the Administrative Trustees, acting singularly or together shall have the right and responsibility to assist the Trust with respect to, or effect on behalf of the Trust, the following (and any actions taken by the Depositor in furtherance of the following prior to the date of this Trust Agreement are hereby ratified and confirmed in all respects): (i) to prepare for filing by the Trust with the Commission and to execute and file a registration statement on Form S-3 in relation to the Preferred Trust Securities, including any amendments thereto and to take any action necessary or desirable to exchange the Preferred Trust Securities for the Subordinated Notes; (ii) to determine the States in which to take appropriate action to qualify or register for sale all or part of the Preferred Trust Securities and to do any and all such acts, other than actions which must be taken by or on behalf of the Trust, and advise the Trustees of actions they must take on behalf of the Trust, -15- 21 and prepare for execution and filing any documents to be executed and filed by the Trust or on behalf of the Trust, as the Depositor deems necessary or advisable in order to comply with the applicable laws of any such States in connection with the sale of Preferred Trust Securities; (iii) to select the investment banker or bankers to act as underwriters with respect to the offer and sale by the Trust of Preferred Trust Securities ("Offer") and negotiate the terms of an Underwriting Agreement and pricing agreement providing for the Offer; (iv) to execute and deliver on behalf of the Trust the Underwriting Agreement and such other agreements as may be necessary or desirable in connection with the consummation thereof; (v) to take any other actions necessary or desirable to carry out any of the foregoing activities. (d) Notwithstanding anything herein to the contrary, the Administrative Trustees are hereby authorized and directed to conduct the affairs of the Trust and to operate the Trust so that the Trust will not be deemed to be an "investment company" required to be registered under the Investment Company Act or classified other than as a "grantor trust" for United States Federal income tax purposes and so that the Subordinated Notes will be treated as indebtedness of the Subordinated Notes Issuer for United States Federal income tax purposes. In this connection, the Depositor and the Administrative Trustees are authorized to take any action, not inconsistent with applicable law, the Certificate of Trust or this Trust Agreement, that each of the Depositor and the Administrative Trustees determines in its discretion to be necessary or desirable for such purposes, as long as such action does not materially adversely affect the interests of the Holders of the Preferred Trust Securities. SECTION 2.08. ASSETS OF TRUST. The assets of the Trust shall consist of the Trust Property. SECTION 2.09. TITLE TO TRUST PROPERTY. Legal title to all Trust Property shall be vested at all times in the Property Trustee (in its capacity as such) and shall be held and administered by the Property Trustee for the benefit of the Securityholders in accordance with this Trust Agreement. ARTICLE III PAYMENT ACCOUNT SECTION 3.01. PAYMENT ACCOUNT. (a) On or prior to the Closing Date, the Property Trustee shall establish the Payment Account. The Property Trustee and any Paying Agent appointed by the Administrative Trustees shall have exclusive control and sole right of withdrawal with respect to the Payment Account for the purpose of making deposits in and -16- 22 withdrawals from the Payment Account in accordance with this Trust Agreement. All monies and other property deposited or held from time to time in the Payment Account shall be held by the Property Trustee in the Payment Account for the exclusive benefit of the Holders of Trust Securities and for distribution as herein provided, including (and subject to) any priority of payments provided for herein. The Property Trustee shall have no liability in any respect whatsoever in regards to any moneys or other property deposited in the Payment Account at an institution other than the Property Trustee. (b) The Property Trustee shall deposit in the Payment Account, promptly upon receipt, all payments of principal or interest on, and any other payments or proceeds with respect to, the Subordinated Notes. Amounts held in the Payment Account shall not be invested by the Property Trustee pending distribution thereof. ARTICLE IV DISTRIBUTIONS; REDEMPTION SECTION 4.01. DISTRIBUTIONS. (a) As owners of undivided beneficial interests in the Subordinated Notes, Holders of Trust Securities shall be entitled to receive cumulative cash Distributions on the Trust Securities. Interest on the Subordinated Notes shall accrue, and, as a result, Distributions shall accumulate, from the Closing Date and shall be payable quarterly in arrears on February 18, May 18, August 18, and November 18 of each year, commencing on August 18, 2001. If any date on which Distributions are otherwise payable on the Trust Securities is not a Business Day, then the payment of such Distribution shall be made on the next succeeding day which is a Business Day except that if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day (and without any interest or other payment in respect of any such delay) in each case, with the same force and effect as if made on such date (each date on which Distributions are payable in accordance with this Section 4.01(a), a "Distribution Date"). (b) Pursuant to the Subordinated Indenture, interest on the Subordinated Notes, and, as a result, Distributions payable on the Trust Securities, shall be fixed initially at a rate of 7.29% per annum of the principal amount of the Subordinated Notes until the day immediately preceding the applicable Reset Effective Date, and at the Reset Rate thereafter; in each case payable quarterly in arrears on February 18, May 18, August 18, and November 18 of each year (each, an "Interest Payment Date"). The amount of Distributions payable for any quarterly period shall be computed on the same basis as interest is calculated on the Subordinated Notes. (c) Distributions on the Trust Securities shall be made and shall be deemed payable on each Distribution Date only to the extent that the Trust has funds available in the Payment Account for the payment of such Distributions. (d) Distributions on the Trust Securities with respect to a Distribution Date shall be payable to the Holders thereof as they appear on the Securities Register for the Trust Securities on the relevant record date, which shall be one Business Day prior to the relevant -17- 23 Distribution Date if Trust Securities are in book-entry only form, and 15 days prior to the relevant Distribution Date if Trust Securities are not in book-entry only form. SECTION 4.02. A. REDEMPTION. Upon the repayment or redemption, in whole or in part, of the Subordinated Notes held by the Trust, whether at the stated maturity of the Subordinated Notes or upon earlier redemption as provided in the Subordinated Indenture, the proceeds from such repayment or redemption shall be simultaneously applied Pro Rata to redeem Trust Securities having an aggregate Liquidation Amount equal to the aggregate principal amount of the Subordinated Notes so repaid or redeemed at the Redemption Price. Holders of the Securities shall be given not less than 30 nor more than 60 days notice of such redemption in accordance with Section 4.02. B. (a) If the Subordinated Notes Issuer redeems the Subordinated Notes upon the occurrence and continuance of a Tax Event, the proceeds from such redemption shall be applied by the Property Trustee to redeem the Trust Securities in whole (but not in part) at a redemption price per Trust Security equal to the Redemption Price plus any accumulated and unpaid Distributions thereon to the Tax Event Redemption Date. If, following the occurrence of a Tax Event, the Subordinated Notes Issuer exercises its option to redeem the Subordinated Notes, the Subordinated Notes Issuer shall appoint the Quotation Agent; if a Tax Event Redemption occurs prior to the Purchase Contract Settlement Date, the redemption price payable in liquidation of the Trust Securities will be distributed to the Securities Intermediary under the Pledge Agreement, which in turn will apply that amount to purchase the Treasury Portfolio and remit the remaining portion, if any, of such price to the Purchase Contract Agent under the Purchase Contract Agreement, for payment to the holders of the Securities. If a Tax Event Redemption occurs after the Purchase Contract Settlement Date, the Treasury Portfolio shall not be purchased and the Property Trustee shall distribute Pro Rata to the Holders of the Trust Securities on the Tax Event Redemption Date the Redemption Price payable in liquidation of such Holders' interests in the assets of the Trust. SECTION 4.02. B. REDEMPTION PROCEDURES. (a) On each Subordinated Note Redemption Date and at the maturity date ("Maturity Date") for the Subordinated Notes (as defined in the Subordinated Indenture), the Property Trustee will be required to redeem a Like Amount of Trust Securities at the Redemption Price. (b) Notice of redemption shall be given by the Property Trustee by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date to each Holder of Trust Securities to be redeemed, at such Holder's address appearing in the Security Register. All notices of redemption or liquidation shall state: (i) the Redemption Date; (ii) the Redemption Price and the amount of accumulated and unpaid Distributions to be paid on the Redemption Date; (iii) the CUSIP number; -18- 24 (iv) if less than all the Outstanding Trust Securities are to be redeemed, the identification and the total Liquidation Amount of the particular Trust Securities to be redeemed; (v) that on the Redemption Date the Redemption Price will become due and payable upon each such Trust Security to be redeemed and that Distributions thereon will cease to accumulate on and after said date; and (vi) if the Preferred Trust Securities are no longer held in book-entry only form, the place and address where the Holders shall surrender their Preferred Trust Securities Certificates. (c) The Trust Securities redeemed on each Redemption Date shall be redeemed at the Redemption Price with the proceeds from the contemporaneous redemption of Subordinated Notes. Redemptions of the Trust Securities shall be made and the Redemption Price shall be deemed payable on each Redemption Date only to the extent that the Trust has funds immediately available in the Payment Account for such payment. (d) If the Property Trustee gives a notice of redemption in respect of any Preferred Trust Securities, then, by 12:00 noon, New York time, on the Redemption Date, subject to Section 4.02(c), the Property Trustee shall irrevocably deposit with the Paying Agent funds sufficient to pay the applicable Redemption Price and will give the Paying Agent irrevocable instructions and authority to pay the Redemption Price to the Holders thereof upon surrender of their Preferred Trust Securities Certificates and Common Trust Securities Certificates. Notwithstanding the foregoing, Distributions on the Trust Securities with respect to Distribution Dates occurring on or prior to the Redemption Date for any Trust Securities called for redemption shall be payable to the Holders of such Trust Securities as they appear on the Securities Register for the Trust Securities on the relevant record dates for the related Distribution Dates. If notice of redemption shall have been given and funds deposited as required, then on the Redemption Date, all rights of Securityholders holding Trust Securities so called for redemption will cease, except the right of such Securityholders to receive the Redemption Price, but without interest thereon, and such Trust Securities will cease to be Outstanding. In the event that any Redemption Date is not a Business Day, then payment of the Redemption Price payable on such date shall be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case, with the same force and effect as if made on such date. In the event that payment of the Redemption Price in respect of any Trust Securities called for redemption is improperly withheld or refused and not paid either by the Trust or by the Trust Securities Guarantor pursuant to the Trust Securities Guarantee, Distributions on such Trust Securities will continue to accumulate, at the then applicable rate, from the Redemption Date originally established by the Trust for such Trust Securities to the date such Redemption Price is actually paid, in which case the actual payment date will be deemed the date fixed for redemption for purposes of calculating the Redemption Price. (e) Payment of the Redemption Price on the Trust Securities shall be made to the Holders thereof as they appear on the Securities Register for the Trust Securities on the -19- 25 relevant record date, which shall be one Business Date prior to the relevant Redemption Date; provided, however, that in the event that the Preferred Trust Securities do not remain in book-entry-only form, the relevant record date shall be the date fifteen days prior to the relevant Redemption Date. (f) Subject to Section 4.03(a), if less than all the Outstanding Trust Securities are to be redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust Securities to be redeemed shall be allocated to the Common Trust Securities and to the Preferred Trust Securities Pro Rata. The Property Trustee shall promptly notify the Transfer Agent and Registrar in writing of the Preferred Trust Securities selected for redemption and, in the case of any Preferred Trust Securities selected for partial redemption, the Liquidation Amount thereof to be redeemed. For all purposes of this Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of Preferred Trust Securities shall relate, in the case of any Preferred Trust Securities redeemed or to be redeemed only in part, to the portion of the Liquidation Amount of Preferred Trust Securities which has been or is to be redeemed. SECTION 4.03. SUBORDINATION OF COMMON TRUST SECURITIES. (a) Payment of Distributions on, and the Redemption Price of, the Trust Securities, as applicable, shall be made Pro Rata based on the Liquidation Amount of the Trust Securities; provided, however, that if on any Distribution Date or Redemption Date an Event of Default resulting from a Subordinated Note Event of Default shall have occurred and be continuing, no payment of any Distribution on, or Redemption Price of, any Common Trust Security, and no other payment on account of the redemption, liquidation or other acquisition of Common Trust Securities, shall be made unless payment in full in cash of all accumulated and unpaid Distributions on all Outstanding Preferred Trust Securities for all distribution periods terminating on or prior thereto, or in the case of payment of the Redemption Price the full amount of such Redemption Price on all Outstanding Preferred Trust Securities, shall have been made or provided for, and all funds immediately available to the Property Trustee shall first be applied to the payment in full in cash of all Distributions on, or Redemption Price of, Preferred Trust Securities then due and payable. (b) In the case of the occurrence of any Event of Default resulting from a Subordinated Note Event of Default, the Holder of Common Trust Securities will be deemed to have waived any right to act with respect to any such Event of Default under this Trust Agreement until the effect of all such Events of Default with respect to the Preferred Trust Securities have been cured, waived or otherwise eliminated. Until all such Events of Default under this Trust Agreement with respect to the Preferred Trust Securities have been so cured, waived or otherwise eliminated, the Property Trustee shall, to the fullest extent permitted by law, act solely on behalf of the Holders of the Preferred Trust Securities and not the Holder of the Common Trust Securities, and only the Holders of the Preferred Trust Securities will have the right to direct the Property Trustee to act on their behalf. SECTION 4.04. PAYMENT PROCEDURES. Payments in respect of the Preferred Trust Securities shall be made by check mailed to the address of the Person entitled thereto as such address shall appear on the Securities Register or, if the Preferred Trust Securities are held by a Depository, such Distributions shall be made to the Depository in immediately available funds, which shall credit the relevant Persons' accounts at such Depository on the applicable Distribution Dates. Payments in respect of the Common Trust Securities shall be made in such -20- 26 manner as shall be mutually agreed between the Property Trustee and the Holder of the Common Trust Securities. SECTION 4.05. TAX RETURNS AND REPORTS. The Administrative Trustees shall prepare (or cause to be prepared), at the Depositor's expense and direction, and file all United States Federal, state and local tax and information returns and reports required to be filed by or in respect of the Trust. In this regard, the Administrative Trustees shall (a) prepare and file (or cause to be prepared or filed) the Internal Revenue Service Form 1041 (or any successor form) required to be filed in respect of the Trust in each taxable year of the Trust and (b) prepare and furnish (or cause to be prepared and furnished), to the extent required by law, to each Securityholder the related Internal Revenue Service Form 1099 (or any successor form) and the information required to be provided on such form. The Administrative Trustees shall provide the Depositor and the Property Trustee with a copy of all such returns, reports and schedules promptly after such filing or furnishing. The Trustees shall comply with United States Federal withholding and backup withholding tax laws and information reporting requirements with respect to any payments to Securityholders under the Trust Securities. SECTION 4.06. PAYMENTS UNDER INDENTURE. Any amount payable hereunder to any Holder of Preferred Trust Securities shall be reduced by the amount of any corresponding payment such Holder has directly received pursuant to Section 808 of the Subordinated Indenture. SECTION 4.07. INITIAL REMARKETING PROCEDURES. (a) The Depositor shall request, (i) in the case of the first Initial Remarketing on the third Business Day immediately preceding February 18, 2004 and the Final Remarketing, not later than 7 nor more than 15 days prior to the Reset Announcement Date, and (ii) in the case of any Additional Remarketing, as soon as practical after the Depositary has been notified of such Additional Remarketing by the Depositor, that the Depositary notify the Holders of the Preferred Trust Securities of the Reset Announcement Date. The Depositor shall request (i) in the case of the first Initial Remarketing on the third Business Day immediately preceding February 18, 2004 and the Final Remarketing, request, not later than 15 nor more than 30 calendar days prior to any such Remarketing Date, and (ii) in the case of any Additional Remarketing as soon as practical after the Depositary has been notified of such Additional Remarketing by the Depositor, that the Depositary notify the Holders of the Preferred Trust Securities of such Remarketing. (b) Under Section 5.02 of the Purchase Contract Agreement, Preferred Trust Securities that constitute components of PEPS Units will be remarketed as provided therein and in this Section 4.07. Instead of participating in the first Initial Remarketing, Holders of Preferred Trust Securities can deliver sufficient cash to the Securities Intermediary to pay the Treasury Portfolio Purchase Price to purchase the Treasury Portfolio on their behalf prior to or on the fifth Business Day preceding February 18, 2004. Instead of participating in an Additional Remarketing, Holders of Preferred Trust Securities can deliver sufficient cash to the Securities Intermediary to pay the Treasury Portfolio Purchase Price to purchase the Treasury Portfolio on their behalf on the second Business Day prior to any Additional Remarketing. Not later than 5:00 P.M., New York City time, on the second Business Day immediately preceding any such Initial Remarketing Date, but no earlier than the Interest Payment Date immediately preceding -21- 27 such Remarketing Date, each Holder of Preferred Trust Securities not constituting components of PEPS Units may elect to have the Preferred Trust Securities held by such Holder remarketed. Holders of Preferred Trust Securities that are not components of PEPS Units shall give notice of their election to have such Preferred Trust Securities remarketed to the Custodial Agent pursuant to the Pledge Agreement. Any such notice shall be irrevocable after 5:00 p.m., New York City time, on the second Business Day immediately preceding any Initial Remarketing Date and may not be conditioned upon the level at which the Reset Rate is established. Pursuant to Section 5.02 of the Purchase Contract Agreement, the Purchase Contract Agent shall notify, by 11:00 a.m., New York City time, on the Business Day immediately preceding any Initial Remarketing Date, the Remarketing Agent, the Trust and the Depositor of the aggregate Liquidation Amount of Preferred Trust Securities (that are components of PEPS Units) to be remarketed. Pursuant to Section 5.7(c) of the Pledge Agreement, the Custodial Agent shall notify the Remarketing Agent and the Depositor of the aggregate Liquidation Amount of Preferred Trust Securities (that are not components of PEPS Units) to be remarketed. The Preferred Trust Securities constituting components of the PEPS Units shall be deemed tendered, notwithstanding any failure by the holder of such PEPS Units to deliver or properly deliver such Preferred Trust Securities to the Remarketing Agent for purchase. (c) The right of each Holder to have Preferred Trust Securities tendered for purchase shall be limited to the extent that: (i) the Remarketing Agent conducts an Initial Remarketing pursuant to the terms of the Remarketing Agreement and Purchase Contract Agreement, (ii) Preferred Trust Securities tendered have not been called for redemption, (iii) the Remarketing Agent is able to find a purchaser or purchasers for tendered Preferred Trust Securities at a price per Preferred Trust Security such that the aggregate price for the Applicable Amount of Preferred Trust Securities is not less than 100% of the Treasury Portfolio Purchase Price and (iv) such purchaser or purchasers deliver the purchase price therefor to the Remarketing Agent as and when required. The Holders of Preferred Trust Securities that are remarketed in a Successful Initial Remarketing shall be deemed to have agreed that the remarketing fee specified in Section 5.02 of the Purchase Contract Agreement shall be deducted from the proceeds of the remarketing. (d) On the Initial Remarketing Date, pursuant to the terms of the Remarketing Agreement, the Remarketing Agent shall use reasonable efforts to remarket, at a price per Preferred Trust Security such that the aggregate price for the Applicable Amount of Preferred Trust Securities is equal to approximately 100.25% of the Treasury Portfolio Purchase Price. (e) If there are no PEPS Units outstanding and none of the Holders elect to have Preferred Trust Securities held by them remarketed, the Reset Rate shall be the rate determined by the Remarketing Agent subject to the terms of the Remarketing Agreement, as the rate that would have been established had a remarketing been held on the Initial Remarketing Date. (f) If the Remarketing Agent has determined that it will be able to remarket all Preferred Trust Securities tendered or deemed tendered prior to 4:00 p.m., New York City time, on the Initial Remarketing Date, the Remarketing Agent, subject to the terms of the Remarketing Agreement, shall determine the Reset Rate. -22- 28 (g) If, by 4:00 p.m., New York City time, on the Initial Remarketing Date, a Failed Initial Remarketing has occurred, pursuant to the terms of the Remarketing Agreement, the Remarketing Agent shall so advise by telephone the Depositary, the Property Trustee, the Trust, the Subordinated Notes Issuer, the Collateral Agent, the Purchase Contract Agent and the Depositor. (h) By approximately 4:30 p.m., New York City time, on the Initial Remarketing Date, provided that there has not been a Failed Initial Remarketing, the Remarketing Agent shall, pursuant to the terms of the Remarketing Agreement advise, by telephone (i) the Depositary, the Property Trustee, the Trust, the Subordinated Notes Issuer, the Collateral Agent, the Purchase Contract Agent and the Depositor of the Reset Rate determined in the Initial Remarketing and the aggregate Liquidation Amount of Preferred Trust Securities sold in the Initial Remarketing, (ii) each purchaser (or the Depositary Participant thereof) of the Reset Rate and the aggregate Liquidation Amount of Preferred Trust Securities such purchaser is to purchase and (iii) each purchaser to give instructions to its Depositary Participant to pay the purchase price on the Reset Effective Date in same day funds against delivery of the Preferred Trust Securities purchased through the facilities of the Depositary. (i) In accordance with the Depositary's normal procedures, on the Reset Effective Date, the transactions described above with respect to each Preferred Trust Security tendered for purchase and sold in the Initial Remarketing shall be executed through the Depositary, and the accounts of the respective Depositary Participants shall be debited and credited and such Preferred Trust Securities delivered by book-entry as necessary to effect purchases and sales of such Preferred Trust Securities. The Depositary shall make payment in accordance with its normal procedures. (j) If any Holder selling Preferred Trust Securities in the Initial Remarketing fails to deliver such Preferred Trust Securities, the Depositary Participant of such selling Holder and of any other Person that was to have purchased Preferred Trust Securities in the Initial Remarketing may deliver to any such other Person an aggregate Liquidation Amount of Preferred Trust Securities that is less than the aggregate Liquidation Amount of Preferred Trust Securities that otherwise was to be purchased by such Person. In such event, the aggregate Liquidation Amount of Preferred Trust Securities to be so delivered shall be determined by such Depositary Participant, and delivery of such lesser number of Preferred Trust Securities shall constitute good delivery. (k) The Remarketing Agent is not obligated to purchase any Preferred Trust Securities in the Initial Remarketing or otherwise. None of the Trust, any Trustee, the Depositor, the Subordinated Notes Issuer or the Remarketing Agent shall be obligated in any case to provide funds to make payment upon tender of the Preferred Trust Securities for remarketing. (l) The tender and settlement procedures set forth in this Section 4.07, including provisions for payment by purchasers of Preferred Trust Securities in the Initial Remarketing, shall be subject to modification, notwithstanding any provision to the contrary set forth herein, to the extent required by the Depository or if the book-entry system is no longer available for the Preferred Trust Securities at the time of the Initial Remarketing or if any Preferred Trust Securities are then held in certificated form, to facilitate the tendering and -23- 29 remarketing of Preferred Trust Securities in certificated form. In addition, the Remarketing Agent may, notwithstanding any provision to the contrary set forth herein, modify the settlement procedures set forth herein in order to facilitate the settlement process. (m) Anything herein to the contrary notwithstanding, the Reset Rate shall in no event be below the initial distribution rate payable for the Preferred Trust Securities and in no event exceed the maximum rate, if any, permitted by applicable law and, as provided in the Remarketing Agreement, neither the Remarketing Agent nor the Reset Agent shall have no obligation to determine whether there is any limitation under applicable law on the Reset Rate or, if there is any such limitation, the maximum permissible Reset Rate on the Preferred Trust Securities and it shall rely solely upon written notice from the Depositor (which the Depositor agrees to provide prior to the Reset Announcement Date) as to whether or not there is any such limitation and, if so, the maximum permissible Reset Rate. SECTION 4.08. FINAL REMARKETING PROCEDURES. (a) If no Successful Initial Remarketing has occurred, then, not later than 5:00 p.m., New York City time, on the second Business Day immediately preceding the Final Remarketing Date, but no earlier than the Interest Payment Date immediately preceding May 18, 2004, each Holder of Preferred Trust Securities may elect to have the Preferred Trust Securities held by such Holder remarketed. Under Section 5.03 of the Purchase Contract Agreement, Holders of PEPS Units that do not give notice of their intention to make Cash Settlement of their related Purchase Contracts shall be deemed to have consented to the disposition of the Preferred Trust Securities constituting a component of such PEPS Units. Holders of Preferred Trust Securities that are not components of PEPS Units shall give notice of their election to have such Preferred Trust Securities remarketed to the Property Trustee pursuant to the Pledge Agreement. Any such notice shall be irrevocable after 5:00 p.m., New York City time, on the second Business Day immediately preceding the Final Remarketing Date and may not be conditioned upon the level at which the Reset Rate is established. Pursuant to Section 5.03 of the Purchase Contract Agreement, the Purchase Contract Agent shall notify, by 11:00 a.m., New York City time, on the Business Day immediately preceding the Final Remarketing Date, the Remarketing Agent, the Subordinated Notes Issuer and the Depositor of the aggregate Liquidation Amount of Preferred Trust Securities (that are components of PEPS Units) to be remarketed. Pursuant to Section 5.7(c) of the Pledge Agreement, the Property Trustee shall notify the Remarketing Agent of the aggregate Liquidation Amount of Preferred Trust Securities (that are not components of PEPS Units) to be remarketed. (b) If any Holder of PEPS Units does not give notice of its intention to make a Cash Settlement or gives a notice of election to tender Preferred Trust Securities as described in Section 4.08(b), the Preferred Trust Securities of such Holder shall be deemed tendered, notwithstanding any failure by such Holder to deliver or properly deliver such Preferred Trust Securities to the Remarketing Agent for purchase. (c) The right of each Holder to have Preferred Trust Securities tendered for purchase shall be limited to the extent that: (i) the Remarketing Agent conducts a Final Remarketing pursuant to the terms of the Remarketing Agreement and Purchase Contract Agreement, (ii) Preferred Trust Securities tendered have not been called for redemption, (iii) the Remarketing Agent is able to find a purchaser or purchasers for tendered Preferred Trust Securities at a price of not less than 100% of the principal amount thereof and (iv) such -24- 30 purchaser or purchasers deliver the purchase amount therefor to the Remarketing Agent as and when required. The Holders of Preferred Trust Securities that are remarketed in a Successful Final Remarketing agree that the remarketing fee Specified in 5.02 of the Purchase Contract Agreement shall be deducted from the proceeds of the remarketing. (d) If no Successful Initial Remarketing has occurred, on the Final Remarketing Date, the Remarketing Agent shall use reasonable efforts to remarket, at a price equal to approximately 100.25% of the aggregate Liquidation Amount thereof, Preferred Trust Securities tendered or deemed tendered for purchase. (e) If none of the Holders elect or are deemed to have elected to have Preferred Trust Securities held by them remarketed, the Reset Rate shall be the rate determined by the Remarketing Agent, subject to the terms of the Remarketing Agreement, as the rate that would have been established had a remarketing been held on the Final Remarketing Date. (f) On the Final Remarketing Date, the Remarketing Agent shall, pursuant to the terms or the Remarketing Agreement, determine the Reset Rate. (g) If by 4:00 p.m., New York City time, on the Final Remarketing Date, a Failed Final Remarketing has occurred, the Remarketing Agent shall, pursuant to the terms of the Remarketing Agreement, so advise by telephone the Depositary, the Property Trustee, the Trust, the Subordinated Notes Issuer, the Collateral Agent, the Purchase Contract Agent and the Depositor and the Reset Rate shall be determined pursuant to Section 5.03A at the Purchase Contract Agreement. (h) By approximately 4:30 p.m., New York City time, on the Final Remarketing Date, the Remarketing Agent shall, pursuant to the terms of the Remarketing Agreement, advise by telephone (i) the Depositary, the Property Trustee, the Trust, the Subordinated Notes Issuer, the Collateral Agent, the Purchase Contract Agent and the Depositor of the Reset Rate determined in the Final Remarketing and, provided that there has not been a Failed Final Remarketing, the aggregate Liquidation Amount of Preferred Trust Securities sold in the Final Remarketing, (ii) each purchaser (or the Depositary Participant thereof) of the Reset Rate and, provided that there has not been a Failed Final Remarketing, the aggregate Liquidation Amount of Preferred Trust Securities such purchaser is to purchase and (iii) provided that there has not been a Failed Final Remarketing, each purchaser to give instructions to its Depositary Participant to pay the purchase price on the Purchase Contract Settlement Date in same day funds against delivery of the Preferred Trust Securities purchased through the facilities of the Depositary. (i) In accordance with the Depositary's normal procedures, on the Remarketing Settlement Date, the transactions described above with respect to each Preferred Trust Security tendered for purchase and sold in the Final Remarketing shall be executed through the Depositary, and the accounts of the respective Depositary Participants shall be debited and credited and such Preferred Trust Securities delivered by book-entry as necessary to effect purchases and sales of such Preferred Trust Securities. The Depositary shall make payment in accordance with its normal procedures. -25- 31 (j) If any Holder selling Preferred Trust Securities in the Final Remarketing fails to deliver such Preferred Trust Securities, the Depository Participant of such selling Holder and of any other Person that was to have purchased Preferred Trust Securities in the Final Remarketing may deliver to any such other Person an aggregate Liquidation Amount of Preferred Trust Securities that is less than the aggregate Liquidation Amount of Preferred Trust Securities that otherwise was to be purchased by such Person. In such event, the aggregate Liquidation Amount of Preferred Trust Securities to be so delivered shall be determined by such Depository Participant, and delivery of such lesser aggregate Liquidation Amount of Preferred Trust Securities shall constitute good delivery. (k) The Remarketing Agent is not obligated to purchase any Preferred Trust Securities in the Final Remarketing or otherwise. None of the Trust, any Trustee, the Depositor, the Subordinated Notes Issuer or the Remarketing Agent shall be obligated in any case to provide funds to make payment upon tender Preferred Trust Securities for remarketing. (l) The tender and settlement procedures set forth in this Section 4.08, including provisions for payment by purchasers of Preferred Trust Securities in the Final Remarketing, shall be subject to modification, notwithstanding any provision to the contrary set forth herein, to the extent required by the Depository or if the book-entry system is no longer available for the Preferred Trust Securities at the time of the Final Remarketing or if any Preferred Trust Securities are then held in certificated form, to facilitate the tendering and remarketing of Preferred Trust Securities in certificated form. In addition, the Remarketing Agent may, notwithstanding any provision to the contrary set forth herein, modify the settlement procedures set forth herein in order to facilitate the settlement process. (m) Anything herein to the contrary notwithstanding, the Reset Rate shall in no event be below the initial distribution rate payable for the Preferred Trust Securities and in no event exceed the maximum rate, if any, permitted by applicable law and, as provided in the Remarketing Agreement, the Remarketing Agent shall have no obligation to determine whether there is any limitation under applicable law on the Reset Rate or, if there is any such limitation, the maximum permissible Reset Rate on the Preferred Trust Securities and it shall rely solely upon written notice from the Depositor (which the Depositor agrees to provide prior to the Reset Announcement Date) as to whether or not there is any such limitation and, if so, the maximum permissible Reset Rate. ARTICLE V TRUST SECURITIES CERTIFICATES SECTION 5.01. INITIAL OWNERSHIP. Upon the creation of the Trust by the contribution by the Depositor pursuant to Section 2.03 and until the issuance of the Trust Securities, and at any time during which no Trust Securities are outstanding, the Depositor shall be the sole beneficial owner of the Trust. SECTION 5.02. THE TRUST SECURITIES CERTIFICATES. The Trust Securities Certificates shall be issued in denominations of $25 Liquidation Amount and integral multiples thereof. The Trust Securities Certificates shall be executed on behalf of the Trust by manual or -26- 32 facsimile signature of at least one Administrative Trustee and, the Preferred Trust Securities shall be countersigned by the Transfer Agent and Registrar or its agent. Trust Securities Certificates bearing the manual or facsimile signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on behalf of the Trust and, in the case of Preferred Trust Securities, countersigned by the Transfer Agent and Registrar or its agent, shall be validly issued and entitled to the benefits of this Trust Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the delivery of such Trust Securities Certificates or did not hold such offices at the date of delivery of such Trust Securities Certificates. A transferee of a Trust Securities Certificate shall become a Securityholder, and shall be entitled to the rights and subject to the obligations of a Securityholder hereunder, upon due registration of such Trust Securities Certificate in such transferee's name pursuant to Section 5.04 or 5.12. Every Person, by virtue of having become a Securityholder, shall be deemed to have expressly assented and agreed to the terms of, and shall be bound by, this Trust Agreement, the Trust Securities Guarantee and the Subordinated Indenture. SECTION 5.03. EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES. On the Closing Date, the Administrative Trustees, or any one of them, shall cause Trust Securities Certificates, in an aggregate Liquidation Amount as provided in Sections 2.04 and 2.05, to be executed on behalf of the Trust, and in the case of Preferred Trust Securities, countersigned by the Transfer Agent and Registrar, or its agent, and delivered to or upon the written order of the Depositor signed by its chairman of the board, any of its vice presidents or its treasurer, without further corporate action by the Depositor, in authorized denominations. SECTION 5.04. REGISTRATION OF TRANSFER AND EXCHANGE OF TRUST SECURITIES CERTIFICATES. The Transfer Agent and Registrar shall keep or cause to be kept, at the office or agency maintained pursuant to Section 5.08, a Securities Register in which, subject to such reasonable regulations as it may prescribe, the Transfer Agent and Registrar shall provide for the registration of Preferred Trust Securities Certificates and registration of transfers and exchanges of Preferred Trust Securities Certificates as herein provided. The Property Trustee shall be the initial Transfer Agent and Registrar. Upon surrender for registration of transfer of any Preferred Trust Securities Certificate at the office or agency maintained pursuant to Section 5.08, the Administrative Trustees, or any one of them, shall execute on behalf of the Trust by manual or facsimile signature and cause the Transfer Agent and Registrar or its agent to countersign and deliver, in the name of the designated transferee or transferees, one or more new Preferred Trust Securities Certificates in authorized denominations of a like aggregate Liquidation Amount. At the option of a Holder, Preferred Trust Securities Certificates may be exchanged for other Preferred Trust Securities Certificates in authorized denominations of the same class and of a like aggregate Liquidation Amount upon surrender of the Preferred Trust Securities Certificates to be exchanged at the office or agency maintained pursuant to Section 5.08. Every Preferred Trust Securities Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Administrative Trustees and the Transfer Agent and Registrar duly executed by the Holder or such Holder's attorney duly authorized in writing. Each Preferred -27- 33 Trust Securities Certificate surrendered for registration of transfer or exchange shall be canceled and subsequently disposed of by the Transfer Agent and Registrar in accordance with its customary procedures. The Trust shall not be required to (i) issue, register the transfer of, or exchange any Preferred Trust Securities during a period beginning at the opening of business 15 calendar days before the day of mailing of a notice of redemption of any Preferred Trust Securities called for redemption and ending at the close of business on the day of such mailing or (ii) register the transfer of or exchange any Preferred Trust Securities so selected for redemption, in whole or in part, except the unredeemed portion of any such Preferred Trust Securities being redeemed in part. No service charge shall be made for any registration of transfer or exchange of Preferred Trust Securities Certificates, but the Transfer Agent and Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Preferred Trust Securities Certificates. SECTION 5.05. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES CERTIFICATES. If (a) any mutilated Trust Securities Certificate shall be surrendered to the Transfer Agent and Registrar, or if the Transfer Agent and Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Trust Securities Certificate and (b) there shall be delivered to the Transfer Agent and Registrar and the Administrative Trustees such security or indemnity as may be required by them to save each of them and the Depositor harmless, then in the absence of notice that such Trust Securities Certificate shall have been acquired by a protected purchaser, the Administrative Trustees, or any one of them, on behalf of the Trust shall execute by manual or facsimile signature and in the case of Preferred Trust Securities shall also cause the Transfer Agent and Registrar or its agent to countersign; and the Administrative Trustees, or any one of them, and in the case of Preferred Trust Securities the Transfer Agent and Registrar or its agent, shall make available for delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust Securities Certificate of like class, tenor and denomination. In connection with the issuance of any new Trust Securities Certificate under this Section, the Administrative Trustees or the Transfer Agent and Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Trust Securities Certificate issued pursuant to this Section shall constitute conclusive evidence of an undivided beneficial interest in the Trust Property, as if originally issued, whether or not the lost, stolen or destroyed Trust Securities Certificate shall be found at any time. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement of mutilated, destroyed, lost or stolen Trust Securities Certificates. SECTION 5.06. PERSONS DEEMED SECURITYHOLDERS. Prior to due presentation of a Trust Securities Certificate for registration of transfer, the Trustees and the Transfer Agent and Registrar, and any agent of the Trustees and the Transfer Agent and Registrar, shall be entitled to treat the Person in whose name any Trust Securities Certificate shall be registered in the Securities Register as the owner of such Trust Securities Certificate for the purpose of receiving Distributions and for all other purposes whatsoever, and neither the Trustees nor the Transfer Agent and Registrar shall be bound by any notice to the contrary. -28- 34 SECTION 5.07. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES. The Administrative Trustees shall furnish or cause to be furnished (x) to the Depositor or the Property Trustee, within 15 days after receipt by any Administrative Trustee of a request therefor from the Depositor or the Property Trustee, as the case may be, in writing and (y) to the Property Trustee, quarterly not more than 5 days after each February 1, May 1, August 1 and November 1 of each year beginning August 1 (unless the Property Trustee is the Transfer Agent and Registrar), a list, in such form as the Depositor or the Property Trustee may reasonably require, of the names and addresses of the Securityholders as of a recent date. Each Holder, by receiving and holding a Trust Securities Certificate, shall be deemed to have agreed not to hold either the Depositor or any Trustees accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived. SECTION 5.08. MAINTENANCE OF OFFICE OR AGENCY. The Depositor shall or shall cause the Transfer Agent and Registrar to maintain in The City of New York, an office or offices or agency or agencies where Preferred Trust Securities Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Depositor, the Trust or the Transfer Agent and Registrar in respect of the Trust Securities and the Trust Agreement may be served. The Depositor initially designates The Chase Manhattan Bank, Capital Markets Fiduciary Services, 450 West 33rd Street, 15th Floor, New York, New York 10001 as its principal office for such purposes. The Depositor shall, or shall cause the Transfer Agent and Registrar to, give prompt written notice to the Trust Securities Guarantor, the Property Trustee, the Administrative Trustees and to the Securityholders of any change in the location of the Securities Register or any such office or agency. If at any time the Depositor shall fail to maintain such office or agency or shall fail to furnish the Property Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Property Trustee, and the Depositor hereby appoints the Property Trustee its agent and the agent of the Trust to receive all such presentations, surrenders, notices and demands. SECTION 5.09. APPOINTMENT OF PAYING AGENT. The Paying Agent shall make Distributions to Securityholders from the Payment Account and shall report the amounts of such Distributions to the Administrative Trustees and the Property Trustee. Any Paying Agent shall have the revocable power to withdraw funds from the Payment Account for the purpose of making the Distributions referred to above. The Property Trustee shall be entitled to rely upon a certificate of the Paying Agent stating in effect the amount of such funds so to be withdrawn and that same are to be applied by the Paying Agent in accordance with this Section 5.09. The Administrative Trustees or any one of them may revoke such power and remove the Paying Agent if the Administrative Trustee or any one of them determines in its sole discretion that the Paying Agent shall have failed to perform its obligations under this Trust Agreement in any material respect. The Paying Agent shall initially be the Property Trustee, and it may choose any co-paying agent that is acceptable to the Administrative Trustees, the Subordinated Notes Issuer, and the Depositor. The Paying Agent shall be permitted to resign upon 30 days' written notice to the Administrative Trustees, the Property Trustee, the Subordinated Notes Issuer and the Depositor. In the event of the removal or resignation of the Property Trustee as Paying Agent, the Administrative Trustees shall appoint a successor that is reasonably acceptable to the Property Trustee, the Subordinated Notes Issuer and the Depositor to act as Paying Agent (which shall be a bank, trust company or an Affiliate of the Depositor). The Administrative Trustees -29- 35 shall cause such successor Paying Agent or any additional Paying Agent appointed by the Administrative Trustees to execute and deliver to the Trustees an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Trustees that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Securityholders in trust for the benefit of the Securityholders entitled thereto until such sums shall be paid to such Securityholders. The Paying Agent shall return all unclaimed funds to the Property Trustee and upon resignation or removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06 shall apply to the Paying Agent appointed hereunder, and the Paying Agent shall be bound by the requirements with respect to paying agents of securities issued pursuant to the Trust Indenture Act. Any reference in this Trust Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise. SECTION 5.10. OWNERSHIP OF COMMON TRUST SECURITIES BY DEPOSITOR. On the Closing Date, the Depositor shall acquire, and thereafter retain, beneficial and record ownership of the Common Trust Securities. Except in connection with a transaction involving the Depositor that would be permitted under Article Eleven of the Subordinated Indenture, any attempted transfer of the Common Trust Securities shall, to the fullest extent permitted by law, be void. The Administrative Trustees shall cause each Common Trust Securities Certificate issued to the Subordinated Notes Issuer to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE TRUST AGREEMENT." Common Trust Securities Certificates representing the Common Trust Securities shall be issued to the Depositor in the form of a typewritten or definitive Common Trust Securities Certificate. SECTION 5.11. DEFINITIVE PREFERRED TRUST SECURITIES CERTIFICATES. Definitive Preferred Trust Securities Certificates shall be typewritten, printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Administrative Trustees, as evidenced by the execution thereof by the Administrative Trustees, or any one of them. The Administrative Trustees, or any one of them, shall execute on behalf of the Trust by manual or facsimile signature, and countersigned by the Transfer Agent and Registrar or its agent, the Definitive Preferred Trust Securities Certificates initially in accordance with the instructions of the Depositor complying with Section 5.03. Neither the Transfer Agent and Registrar nor any of the Administrative Trustees shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. SECTION 5.12. BOOK-ENTRY SYSTEM. Some or all of the Preferred Trust Securities may be registered in the name of the Depositary or a nominee therefor, and held in the custody of the Depository or a custodian thereof. In such event, a single certificate will be issued and delivered to the Depository for such Preferred Trust Securities, in which case the Owners of such Preferred Trust Securities will not receive physical delivery of certificates for Preferred Trust Securities. Unless Definitive Preferred Trust Securities Certificate are delivered to the Owners of Preferred Trust Securities as provided herein, all transfers of beneficial ownership interests in such Preferred Trust Securities will be made by book-entry only, and no investor or other party purchasing, selling or otherwise transferring beneficial ownership of the Preferred Trust Securities will receive, hold or deliver any certificate for Preferred Trust Securities. The Depositor, the Trustees and the Paying Agent will recognize the Depository or its nominee as the -30- 36 Holder of Preferred Trust Securities for all purposes, including payment, notices and voting and shall have no payment, notice or communication obligations to the Owners. The Administrative Trustees, at the direction and expense of the Depositor, may from time to time appoint a Depository or a successor thereto and enter into a letter of representations or other agreement with such Depository to establish procedures with respect to the Preferred Trust Securities. Any Depository shall be a Clearing Agency. The Depositor and the Trustees covenant and agree to meet the requirements of a Depository for the Preferred Trust Securities with respect to required notices and other provisions of the letter of representations or agreement executed with respect to such Preferred Trust Securities. Whenever the beneficial ownership of any Preferred Trust Securities is determined through the books of a Depository, the requirements in this Trust Agreement of holding, delivering or transferring such Preferred Trust Securities shall be deemed modified with respect to such Preferred Trust Securities to meet the requirements of the Depository with respect to actions of the Trustees, the Depositor and the Paying Agent. Any provisions hereof permitting or requiring delivery of such Preferred Trust Securities shall, while such Preferred Trust Securities are in a book-entry system, be satisfied by the notation on the books of the Depository in accordance with applicable state law. Definitive Preferred Trust Securities Certificates will be issued and delivered to the Owners of such Preferred Trust Securities in accordance with registration instructions of the Depository if (a) the Depository is no longer willing or able to properly discharge its responsibilities with respect to the Preferred Trust Securities, and the Depositor does not appoint a successor Depository within 90 days after such discontinuance, or (b) the Depositor at its option advises the Trustees in writing that it elects to terminate the book-entry system through the Depository. SECTION 5.13. RIGHTS OF SECURITYHOLDERS. The legal title to the Trust Property is vested exclusively in the Property Trustee (in its capacity as such) in accordance with Section 2.09, and the Securityholders shall not have any right or title therein other than an undivided beneficial interest in the assets of the Trust conferred by their Trust Securities and they shall have no right to call for any partition or division of property, profits or rights of the Trust except as described below. The Trust Securities shall be personal property giving only the rights specifically set forth therein and in this Trust Agreement. The Preferred Trust Securities shall have no preemptive or similar rights and when issued and delivered to Securityholders against payment of the purchase price therefor will be fully paid and nonassessable undivided beneficial interests in the assets of the Trust. SECTION 5.14. CANCELLATION BY TRANSFER AGENT AND REGISTRAR. All Trust Securities Certificates surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Transfer Agent and Registrar, be delivered to the Transfer Agent and Registrar and, if not theretofore canceled, shall be promptly canceled by the Transfer Agent and Registrar. No Trust Securities Certificates shall be issued in lieu of or in exchange for any Trust Securities Certificates canceled as provided in this Section, except as -31- 37 expressly permitted by this Trust Agreement. All canceled Trust Securities Certificates held by the Transfer Agent and Registrar shall be disposed of in accordance with its customary procedures. ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING SECTION 6.01. LIMITATIONS ON VOTING RIGHTS. (a) Except as provided in this Section 6.01, Section 8.10 and Section 10.03 and as otherwise required by law, no Holder of Preferred Trust Securities shall have any right to vote or in any manner otherwise control the administration, operation and management of the Trust or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Trust Securities Certificates, be construed so as to constitute the Securityholders from time to time as partners or members of an association. If the Property Trustee fails to enforce its rights under the Subordinated Notes or this Trust Agreement, a Holder of Preferred Trust Securities may, to the fullest extent permitted by law, institute a legal proceeding directly against the Depositor or the Subordinated Notes Issuer to enforce the Property Trustee's rights under the Subordinated Notes or this Trust Agreement without first instituting any legal proceeding against the Property Trustee or any other Person. Notwithstanding the foregoing, a Holder of Preferred Trust Securities may directly institute a proceeding for enforcement of payment to such Holder of principal of or interest on the Subordinated Notes having a principal amount equal to the aggregate Liquidation Preference amount of the Preferred Trust Securities of such Holder on or after the due dates specified in the Subordinated Notes. (b) So long as any Subordinated Notes are held by the Property Trustee, the Property Trustee shall not (i) direct the time, method and place of conducting any proceeding for any remedy available to the Subordinated Notes Trustee, or executing any trust or power conferred on the Subordinated Notes Trustee with respect to such Subordinated Notes, (ii) waive any past default which is waivable under Section 813 of the Subordinated Indenture, (iii) exercise any right to rescind or annul a declaration that the principal of all the Subordinated Notes shall be due and payable or (iv) consent to any amendment, modification or termination of the Subordinated Indenture or the Subordinated Notes, where such consent shall be required, without, in each case, obtaining the prior approval of the Holders of at least a majority of the aggregate Liquidation Amount of the Outstanding Preferred Trust Securities; provided, however, that where a consent under the Subordinated Indenture would require the consent of Holders of greater than a majority in principal amount (a "Supermajority") of Subordinated Notes affected thereby, no such consent shall be given by the Property Trustee without the prior written consent of the same Supermajority of Holders of Preferred Trust Securities; and further provided, that if any past default is not waivable under the Subordinated Indenture, it shall not be waivable under this Trust Agreement. The Property Trustee shall not revoke any action previously authorized or approved by a vote of the Preferred Trust Securities, except pursuant to a subsequent vote of the Preferred Trust Securities. The Property Trustee shall notify all Holders of the Preferred Trust Securities of any notice of default received from the Subordinated Notes Trustee with respect to the Subordinated Notes. In addition to obtaining the foregoing approvals of the Holders of the Preferred Trust Securities, prior to taking any of the foregoing actions, the Property Trustee shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced in such matters -32- 38 to the effect that such action will not cause the Trust to be classified as an association or publicly traded partnership taxable as a corporation for United States Federal income tax purposes. (c) If any proposed amendment to the Trust Agreement provides for, or the Trustees otherwise propose to effect, (i) any action that would materially adversely affect the powers, preferences or special rights of the Preferred Trust Securities, whether by way of amendment to the Trust Agreement or otherwise, or (ii) the dissolution, winding-up or termination of the Trust, other than pursuant to the terms of this Trust Agreement, then the Holders of Outstanding Preferred Trust Securities as a class will be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of the Holders of at least majority in aggregate Liquidation Amount of the Outstanding Preferred Trust Securities. (d) The Holders of a majority in Outstanding Liquidation Amount of the Preferred Trust Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Property Trustee in respect of this Trust Agreement or the Subordinated Notes or exercising any trust or power conferred upon the Property Trustee under this Trust Agreement; provided, however, that, subject to Section 8.01, the Property Trustee shall have the right to decline to follow any such direction if the Property Trustee being advised by counsel determines that the action so directed may not lawfully be taken, or if the Property Trustee in good faith shall, by a Responsible Officer or Officers of the Property Trustee, determine that the proceedings so directed would be illegal or involve it in personal liability or be unduly prejudicial to the rights of Holders not party to such direction, and provided further that nothing in this Trust Agreement shall impair the right of the Property Trustee to take any action deemed proper by the Property Trustee and which is not inconsistent with such direction. SECTION 6.02. NOTICE OF MEETINGS. Notice of all meetings of the Holders of Preferred Trust Securities, stating the time, place and purpose of the meeting, shall be given by the Administrative Trustees pursuant to Section 10.08 to each Holder of a Preferred Trust Security, at such Holder's registered address, at least 15 days and not more than 90 days before the meeting. At any such meeting, any business properly before the meeting may be so considered whether or not stated in the notice of the meeting. Any adjourned meeting may be held as adjourned without further notice. SECTION 6.03. MEETINGS OF HOLDERS OF PREFERRED TRUST SECURITIES. No annual meeting of Securityholders is required to be held. The Administrative Trustees, however, shall call a meeting of Securityholders to vote on any matter upon the written request of the Holders of 25% of the then Outstanding Preferred Trust Securities (based upon their aggregate Liquidation Amount) and the Administrative Trustees or the Property Trustee may, at any time in their discretion, call a meeting of Holders of Preferred Trust Securities to vote on any matters as to which the Holders of Preferred Trust Securities are entitled to vote. Holders of at least a majority of the then Outstanding Preferred Trust Securities (based upon their aggregate Liquidation Amount), present in person or by proxy, shall constitute a quorum at any meeting of Securityholders. -33- 39 If a quorum is present at a meeting, an affirmative vote by the Holders of Preferred Trust Securities present, in person or by proxy, holding at least a majority of the then Outstanding Preferred Trust Securities (based upon their aggregate Liquidation Amount) present, either in person or by proxy, at such meeting shall constitute the action of the Securityholders, unless this Trust Agreement requires a greater number of affirmative votes. SECTION 6.04. VOTING RIGHTS. Securityholders shall be entitled to one vote for each $25 of Liquidation Amount represented by their Outstanding Trust Securities in respect of any matter as to which such Securityholders are entitled to vote. SECTION 6.05. PROXIES, ETC. At any meeting of Securityholders, any Securityholder entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Administrative Trustees, or with such other officer or agent of the Trust as the Administrative Trustees may direct, for verification prior to the time at which such vote shall be taken. Only Securityholders of record shall be entitled to vote. When Trust Securities are held jointly by several Persons, any one of them may vote at any meeting in person or by proxy in respect of such Trust Securities, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Trust Securities. A proxy purporting to be executed by or on behalf of a Securityholder shall be deemed valid unless challenged at or prior to its exercise, or, if earlier, until eleven months after it is sent and the burden of proving invalidity shall rest on the challenger. No proxy shall be valid more than three years after its date of execution. SECTION 6.06. SECURITYHOLDER ACTION BY WRITTEN CONSENT. Any action which may be taken by Securityholders at a meeting may be taken without a meeting and without prior notice if Securityholders holding a majority of all Outstanding Trust Securities entitled to vote in respect of such action (or such larger proportion thereof as shall be required by any express provision of this Trust Agreement) shall consent to the action in writing (based upon their aggregate Liquidation Amount). SECTION 6.07. RECORD DATE FOR VOTING AND OTHER PURPOSES. For the purposes of determining the Securityholders who are entitled to notice of and to vote at any meeting or to vote by written consent without prior notice, or to participate in any Distribution on the Trust Securities in respect of which a record date is not otherwise provided for in this Trust Agreement, or for the purpose of any other action, the Administrative Trustees may from time to time fix a date, not more than 90 days prior to the date of any meeting of Securityholders or the payment of Distribution or other action including action to be taken by written consent, as the case may be, as a record date for the determination of the identity of the Securityholders of record for such purposes. SECTION 6.08. ACTS OF SECURITYHOLDERS. Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Trust Agreement to be given, made or taken by Securityholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Securityholders in person or by an agent duly appointed in writing; and, except as otherwise expressly provided herein, such action shall become effective when such instrument or instruments are delivered to the Administrative -34- 40 Trustees. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Securityholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Trust Agreement and (subject to Section 8.01) conclusive in favor of the Trustees, if made in the manner provided in this Section. The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgements of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which any Trustee deems sufficient. The ownership of Preferred Trust Securities shall be proved by the Securities Register. Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Securityholder of any Trust Security shall bind every future Securityholder of the same Trust Security and the Securityholder of every Trust Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustees or the Trust in reliance thereon, whether or not notation of such action is made upon such Trust Security. Without limiting the foregoing, a Securityholder entitled hereunder to take any action hereunder with regard to any particular Trust Security may do so with regard to all or any part of the Liquidation Amount of such Trust Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such Liquidation Amount. If any dispute shall arise between or among the Securityholders and the Administrative Trustees with respect to the authenticity, validity or binding nature of any request, demand, authorization, direction, consent, waiver or other Act of such Securityholder or Trustee under this Article VI, then the determination of such matter by the Property Trustee shall be conclusive with respect to such matter. SECTION 6.09. INSPECTION OF RECORDS. Subject to Section 5.07 concerning access to the list of Securityholders, upon reasonable notice to the Administrative Trustees and the Property Trustee, the other records of the Trust shall be open to inspection by Securityholders during normal business hours for any purpose reasonably related to such Securityholder's interest as a Securityholder. -35- 41 ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE AND THE DELAWARE TRUSTEE SECTION 7.01. PROPERTY TRUSTEE. The Property Trustee and any successor Property Trustee hereby represents and warrants for the benefit of the Depositor and the Securityholders that: (a) the Property Trustee is (i) a bank as defined in Section 581 of the Code or (ii) a U.S. government-owned agency or U.S. government sponsored enterprise or (iii) a banking corporation, validly existing and in good standing under the laws of the State of New York; (b) the Property Trustee has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement; (c) this Trust Agreement has been duly authorized, executed and delivered by the Property Trustee and constitutes the valid and legally binding agreement of the Property Trustee enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (d) the execution, delivery and performance by the Property Trustee of this Trust Agreement will not violate, conflict with or constitute a breach of the Property Trustee's charter or by-laws; and (e) the execution, delivery and performance by the Property Trustee of this Trust Agreement does not require the consent or approval of, the giving of notice to, or the registration with any Federal or state banking authority having jurisdiction over its trust powers. SECTION 7.02. DELAWARE TRUSTEE. The Delaware Trustee and any successor Delaware Trustee represents and warrants for the benefit of the Depositor and the Securityholders that: (a) the Delaware Trustee is a national banking association duly organized, validly existing and in good standing under the laws of the United States of America; (b) the Delaware Trustee has full corporate power, authority and legal right to execute, deliver and perform its obligations under this Trust Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Trust Agreement; (c) this Trust Agreement has been duly authorized, executed and delivered by the Delaware Trustee and constitutes the valid and legally binding agreement of the Delaware Trustee enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, -36- 42 fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; (d) the Delaware Trustee is a natural person who is a resident of the State of Delaware or, if not a natural person, an entity which has its principal place of business in the State of Delaware and, in either case, a Person that satisfies for the Trust the requirements of Section 3807 of the Delaware Business Trust Act; (e) the execution, delivery and performance by the Delaware Trustee of this Trust Agreement will not (i) violate the Delaware Trustee's charter or by-laws or (ii) violate any law, governmental rule or regulation of the State of Delaware governing the trust powers of the Delaware Trustee or any order, judgment or decree applicable to the Delaware Trustee; and (f) the execution, delivery and performance by the Delaware Trustee of this Trust Agreement does not require the consent or approval of, the giving of notice to, or the registration with any Federal or state banking authority having jurisdiction over its trust powers. ARTICLE VIII THE TRUSTEES SECTION 8.01. CERTAIN DUTIES AND RESPONSIBILITIES. (a) The rights, immunities, duties and responsibilities of the Trustees shall be restricted to those set forth in the express provisions of this Trust Agreement and, in the case of the Property Trustee, as provided in the Trust Indenture Act, and no implied covenants or obligations shall be read into this Trust Agreement against any of the Trustees. For purposes of Sections 315(a) and 315(c) of the Trust Indenture act, the term "default" is hereby defined as an Event of Default which has occurred and is continuing. Notwithstanding the foregoing, no provision of this Trust Agreement shall require any of the Trustees to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Trust Agreement relating to the conduct or affecting the liability of or affording protection to the Trustees shall be subject to the provisions of this Section. To the extent that, at law or in equity, a Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust or to the Securityholders, such Trustee shall not be liable to the Trust or to any Securityholder for such Trustee's good faith reliance on the provisions of this Trust Agreement. The provisions of this Trust Agreement, to the extent that they restrict the duties and liabilities of any Trustee otherwise existing at law or in equity, are agreed by the Depositor and the Securityholders to replace such other duties and liabilities of such Trustee. (b) All payments made by the Property Trustee or a Paying Agent in respect of the Trust Securities shall be made only from the income and proceeds from the Trust Property and only to the extent that there shall be sufficient income or proceeds from the Trust Property to enable the Property Trustee or Paying Agent to make payments in accordance with the terms hereof. Each Securityholder, by its acceptance of a Trust Security, agrees that it will look solely -37- 43 to the income and proceeds from the Trust Property to the extent available for distribution to it as herein provided and that the Trustees are not personally liable to it for any amount distributable in respect of any Trust Security or for any other liability in respect of any Trust Security. This Section 8.01(b) does not limit the liability of the Trustees expressly set forth elsewhere in this Trust Agreement or, in the case of the Property Trustee, in the Trust Indenture Act. (c) All duties and responsibilities of the Property Trustee contained in this Trust Agreement are subject to the following: (i) the Property Trustee's sole duty with respect to the custody, safe keeping and physical preservation of the Trust Property shall be to deal with such property in a similar manner as the Property Trustee deals with similar property for its own account, subject to the protections, exculpations and limitations on liability afforded to the Property Trustee under this Trust Agreement, the Trust Indenture Act, the Delaware Business Trust Act and, to the extent applicable, Rule 3a-7 under the Investment Company Act or any successor rule thereunder; (ii) the Property Trustee shall have no duty or liability for or with respect to the value, genuineness, existence or sufficiency of the Trust Property or the payment of any taxes or assessments levied thereon or in connection therewith; (iii) the Property Trustee shall not be liable for any interest on any money received by it except as it may otherwise agree in writing with the Depositor. Money held by the Property Trustee need not be segregated from other funds held by it except in relation to the Payment Account established by the Property Trustee pursuant to this Trust Agreement and except to the extent otherwise required by law; and (iv) the Property Trustee shall not be responsible for monitoring the compliance by the Administrative Trustees or the Depositor with their respective duties under this Trust Agreement, nor shall the Property Trustee be liable for the default or misconduct of the Administrative Trustees or the Depositor. (d) The Trustees shall not be responsible for monitoring the compliance by the other Trustees or the Depositor with their respective duties under this Trust Agreement, nor shall any Trustee be liable for the default or misconduct of any other Trustee or the Depositor. SECTION 8.02. NOTICE OF DEFAULTS. (a) Within ninety (90) days after the occurrence of any default known to the Property Trustee, the Property Trustee shall transmit, in the manner and to the extent provided in Section 10.08, notice of such default to the Securityholders, the Depositor, the Trust Securities Guarantor and the Administrative Trustees, unless such default shall have been cured or waived before the giving of such notice, provided that, except in the case of a payment default, the Property Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors or Responsible Officers of the Property Trustee in good faith determines that the withholding of such notice is in the interests of the Holders. For the purpose -38- 44 of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default. SECTION 8.03. CERTAIN RIGHTS OF PROPERTY TRUSTEE. Subject to the provisions of Section 8.01 and except as provided by law: (i) the Property Trustee may rely and shall be protected in acting or refraining from acting in good faith upon any resolution, Opinion of Counsel, certificate, written representation of a Holder or transferee, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, appraisal, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties; (ii) if (A) in performing its duties under this Trust Agreement the Property Trustee is required to decide between alternative courses of action or (B) in construing any of the provisions in this Trust Agreement the Property Trustee finds the same ambiguous or inconsistent with any other provisions contained herein or (C) the Property Trustee is unsure of the application of any provision of this Trust Agreement, then, except as to any matter as to which the Preferred Trust Securityholders are entitled to vote under the terms of this Trust Agreement, the Property Trustee shall deliver a notice to the Depositor requesting written instructions of the Depositor as to the course of action to be taken. The Property Trustee shall take such action, or refrain from taking such action, as the Property Trustee shall be instructed in writing to take, or to refrain from taking, by the Depositor; provided, however, that if the Property Trustee does not receive such instructions of the Depositor within ten Business Days after it has delivered such notice, or such reasonably shorter period of time set forth in such notice (which to the extent practicable shall not be less than two Business Days), it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Trust Agreement as it shall deem advisable and in the best interests of the Securityholders, in which event the Property Trustee shall have no liability except for its own bad faith, negligence or willful misconduct; (iii) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Property Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, request and rely upon an Officer's Certificate which, upon receipt of such request, shall be promptly delivered by the Depositor or the Administrative Trustees; (iv) the Property Trustee may consult with counsel of its selection (which counsel may be counsel to the Property Trustee, Depositor or the Trust Securities Guarantor or any of their Affiliates, and may include any of their employees) and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action -39- 45 taken, suffered or omitted by it hereunder in good faith and in reliance thereon and in accordance with such advice; (v) the Property Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any Securityholder pursuant to this Trust Agreement, unless such Securityholder shall have offered to the Property Trustee reasonable security or indemnity against the costs, expenses (including reasonable attorneys' fees and expenses) and liabilities which might be incurred by it in complying with such request or direction; provided that, nothing contained in this Section 8.03(v) shall be taken to relieve the Property Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Trust Agreement; (vi) the Property Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, approval, bond, debenture, note or other evidence of indebtedness or other paper or document, but the Property Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Property Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Depositor personally or by agent or attorney; (vii) the Property Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through its agents or attorneys, and the Property Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (viii)the Property Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Trust Agreement; (ix) the Property Trustee shall not be charged with knowledge of any default or Event of Default with respect to the Trust Securities unless either (A) a Responsible Officer of the Property Trustee shall have actual knowledge of the default or Event of Default or (B) written notice of such default or Event of Default shall have been given to the Property Trustee by the Depositor, the Administrative Trustees or by any Holder of the Trust Securities; (x) no provision of this Trust Agreement shall be deemed to impose any duty or obligation on the Property Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Property Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any -40- 46 such act or acts or to exercise any such right, power, duty or obligation; and no permissive or discretionary power or authority available to the Property Trustee shall be construed to be a duty; (xi) no provision of this Trust Agreement shall require the Property Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Property Trustee shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Trust Agreement or adequate indemnity against such risk or liability is not reasonably assured to it; (xii) the Property Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any tax or securities form) (or any rerecording, refiling or reregistration thereof); (xiii) the Property Trustee shall have the right at any time to seek instructions concerning the administration of this Trust Agreement from any court of competent jurisdiction; (xiv) whenever in the administration of this Trust Agreement the Property Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Property Trustee (A) may request instructions from the Holders of the Trust Securities, which instructions may only be given by the Holders of the same Liquidation Amount of the Trust Securities as would be entitled to direct the Property Trustee under the terms of this Trust Agreement in respect of such remedies, rights or actions, (B) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (C) shall be protected in acting in accordance with such instructions; and (xv) unless otherwise expressly provided herein, any direction or act of the Depositor contemplated by this Trust Agreement shall be sufficiently evidenced by an Officers' Certificate. SECTION 8.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The recitals contained herein and in the Trust Securities Certificates shall be taken as the statements of the Trust, and the Trustees do not assume any responsibility for their correctness. The Trustees make no representations as to the title to, or value or condition of, the property of the Trust or any part thereof, nor as to the validity or sufficiency of this Trust Agreement, the Subordinated Notes or the Trust Securities. The Trustees shall not be accountable for the use or application by the Trust of the proceeds of the Trust Securities. SECTION 8.05. MAY HOLD SECURITIES. Any Trustee or any agent of any Trustee or the Trust, in its individual or any other capacity, or the Subordinated Notes Issuer, may become the owner or pledgee of Trust Securities and, subject to Sections 8.08 and 8.13, and except as -41- 47 provided in the definition of the term "Outstanding" in Article I, may otherwise deal with the Trust with the same rights it would have if it were not a Trustee or such agent. SECTION 8.06. COMPENSATION; FEES; INDEMNITY. The Depositor agrees: (i) to pay to the Trustees from time to time such reasonable compensation as shall be agreed in writing with the Depositor for all services rendered by the Trustees hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (ii) except as otherwise expressly provided herein, to reimburse the Trustees upon request for all reasonable expenses, disbursements and advances reasonably incurred or made by the Trustees in accordance with any provision of this Trust Agreement (including the reasonable compensation and the expenses and disbursements of their agents and counsel), except any such expense, disbursement or advance as may be attributable to their negligence (gross negligence, in the case of any Administrative Trustee), bad faith or willful misconduct; and (iii) to the fullest extent permitted by applicable law, to indemnify each Trustee for, and to hold each Trustee harmless against, any and all loss, damage, claims, liability or expense incurred without negligence (gross negligence, in the case of any Administrative Trustee or the Delaware Trustee), bad faith or willful misconduct on its part, arising out of or in connection with the acceptance or administration of the trust or trusts under this Trust Agreement, including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. No Trustee may claim any Lien or charge on any Trust Property as a result of any amount due pursuant to this Section 8.06. In addition to the rights provided to each Trustee pursuant to the provisions of the immediately preceding paragraph of this Section 8.06 and without prejudice to any rights available to the Trustees under applicable law, when a Trustee incurs expenses or renders services in connection with an Event of Default resulting from a Bankruptcy Event with respect to the Trust, the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable Federal or State bankruptcy, insolvency or other similar law. The provisions of this Section 8.06 shall survive the resignation or removal of any Trustee and the termination of this Trust Agreement. SECTION 8.07. CERTAIN TRUSTEES REQUIRED; ELIGIBILITY. (a) There shall at all times be a Property Trustee hereunder with respect to the Trust Securities. The Property Trustee shall be a Person that has a combined capital and surplus of at least $50,000,000. If any such -42- 48 Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Property Trustee with respect to the Trust Securities shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article VIII. (b) There shall at all times be one or more Administrative Trustees hereunder with respect to the Trust Securities. Each Administrative Trustee shall be either a natural person who is at least 21 years of age or a legal entity that shall act through one or more persons authorized to bind such entity. (c) There shall at all times be a Delaware Trustee with respect to the Trust Securities. The Delaware Trustee shall either be (i) a natural person who is at least 21 years of age and a resident of the State of Delaware or (ii) a legal entity with its principal place of business in the State of Delaware that otherwise meets the requirements of applicable Delaware law and that shall act through one or more persons authorized to bind such entity. (d) At all times, each Trustee under this Trust Agreement, and each person to whom a Trustee delegates authority under this Trust Agreement, must be a United States Person as defined in Section 7701(a)(30) of the Code. SECTION 8.08. CONFLICTING INTERESTS. If the Property Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Property Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Trust Agreement. The Subordinated Indenture and the securities of any series issued thereunder and the Trust Securities Guarantee Agreement shall be deemed to be specifically described in this Trust Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. SECTION 8.09. CO-TRUSTEES AND SEPARATE TRUSTEE. At any time or times, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the Trust Property may at the time be located, the Depositor and the Administrative Trustees, by agreed action of the majority of such Trustees (except as provided in the following sentence), shall have power to appoint, and upon the written request of the Administrative Trustees, the Depositor shall for such purpose join with the Administrative Trustees in the execution, delivery, and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Property Trustee either to act as co-trustee, jointly with the Property Trustee, of all or any part of such Trust Property, or to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section. If the Depositor does not join in such appointment within 15 days after the receipt by it of a request so to do, or in case a Subordinated Note Event of Default has occurred and is continuing, the Property Trustee alone shall have power to make such appointment. -43- 49 Should any written instrument from the Depositor be required by any co-trustee or separate trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right, or power, any and all such instruments shall, on request, be executed, acknowledged, and delivered by the Depositor. Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms, namely: (1) The Trust Securities shall be executed and delivered and all rights, powers, duties, and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Trustees designated for such purpose hereunder, shall be exercised, solely by such Trustees. (2) The rights, powers, duties, and obligations hereby conferred or imposed upon the Property Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Property Trustee or by the Property Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Property Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties, and obligations shall be exercised and performed by such co-trustee or separate trustee. (3) The Property Trustee at any time, by an instrument in writing executed by it, with the written concurrence of the Depositor, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section 8.09, and, in case a Subordinated Note Event of Default has occurred and is continuing, the Property Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Depositor. Upon the written request of the Property Trustee, the Depositor shall join with the Property Trustee in the execution, delivery, and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section. (4) No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of any Trustee, or any other such trustee hereunder. (5) The Property Trustee shall not be liable by reason of any act of a co-trustee or separate trustee hereunder. (6) Any Act of Holders delivered to the Property Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee. SECTION 8.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. No resignation or removal of any Trustee (as the case may be, the "Relevant Trustee") and no appointment of a successor Relevant Trustee pursuant to this Article shall become effective until -44- 50 the acceptance of appointment by the successor Relevant Trustee in accordance with the applicable requirements of Section 8.11. The Relevant Trustee may resign at any time by giving written notice thereof to the Securityholders, the Depositor and the other Trustees, except that notice is only required to be delivered to the Securityholders in the event that the Property Trustee or the Delaware Trustee is the resigning Relevant Trustee. If the instrument of acceptance by a successor Relevant Trustee required by Section 8.11 shall not have been delivered to the resigning Relevant Trustee within 30 days after the giving of such notice of resignation, the resigning Relevant Trustee may petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee. Unless a Subordinated Note Event of Default shall have occurred and be continuing, the Relevant Trustee may be removed at any time by Act of the Common Trust Securityholder. If a Subordinated Note Event of Default shall have occurred and be continuing, the Property Trustee or the Delaware Trustee, or both of them, may be removed at such time by Act of the Holders of a majority of the aggregate Liquidation Amount of the Outstanding Preferred Trust Securities, delivered to the Relevant Trustee (in its individual capacity and on behalf of the Trust). An Administrative Trustee may be appointed, replaced or removed solely by the Common Trust Securityholder at any time. If the Relevant Trustee shall resign, be removed or become incapable of continuing to act as Relevant Trustee at a time when no Subordinated Note Event of Default shall have occurred and be continuing, the Common Trust Securityholder, by Act of the Common Trust Securityholder delivered to the retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and the retiring Relevant Trustee shall comply with the applicable requirements of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign, be removed or become incapable of continuing to act as the Property Trustee or the Delaware Trustee, as the case may be, at a time when a Subordinated Note Event of Default shall have occurred and be continuing, the Preferred Trust Securityholders, by Act of the Preferred Trust Securityholders of a majority in aggregate Liquidation Amount of the Outstanding Preferred Trust Securities delivered to such retiring Trustee, shall promptly appoint a successor Relevant Trustee or Trustees, and such successor shall comply with the applicable requirements of Section 8.11. If an Administrative Trustee shall resign, be removed or become incapable of acting as Administrative Trustee, at a time when a Subordinated Note Event of Default shall have occurred and be continuing, the Common Securityholder by Act of the Common Securityholder delivered to the Administrative Trustees shall promptly appoint a successor Administrative Trustee or Trustees and such successor Administrative Trustee or Trustees shall comply with the applicable requirements of Section 8.11. If no successor Relevant Trustee shall have been so appointed by the Common Trust Securityholders or the Preferred Trust Securityholders and accepted appointment in the manner required by Section 8.11, any Securityholder who has been a Securityholder of Trust Securities for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Relevant Trustee. The Property Trustee shall give notice of each resignation and each removal of a Property Trustee or Delaware Trustee and each appointment of a successor to such Trustee to all Securityholders in the manner provided in Section 10.08 and shall give notice to the Depositor. -45- 51 Such notice shall include the name of the successor Relevant Trustee and the address of its Corporate Trust Office if it is the Property Trustee. Notwithstanding the foregoing or any other provision of this Trust Agreement, in the event any Administrative Trustee or a Delaware Trustee who is a natural person dies or becomes in the opinion of the Depositor, incompetent or incapacitated, the vacancy created by such death, incompetence or incapacity may be filled by (i) the unanimous act of remaining Administrative Trustees if there are at least two of them or (ii) otherwise by the Depositor (with the successor in each case being an individual who satisfies the eligibility requirements for Administrative Trustees or Delaware Trustee, as the case may be, set forth in Section 8.07). Additionally, notwithstanding the foregoing or any other provision of this Trust Agreement, in the event the Depositor reasonably believes that any Administrative Trustee who is a natural person has become incompetent or incapacitated, the Depositor, by notice to the remaining Trustees, may terminate the status of such Person as an Administrative Trustee (in which case the vacancy so created will be filled in accordance with the preceding sentence). No Trustee shall be liable for the acts or omissions to act of any successor Trustee. SECTION 8.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. In case of the appointment hereunder of a successor Relevant Trustee, the retiring Relevant Trustee (if requested by the Depositor) and each successor Trustee shall execute and deliver an amendment hereto wherein each successor Relevant Trustee shall accept such appointment and which shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Relevant Trustee all the rights, powers, trusts and duties of the retiring Relevant Trustee and upon the execution and delivery of such amendment the resignation or removal of the retiring Relevant Trustee shall become effective to the extent provided therein and each such successor Relevant Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Relevant Trustee; but, on request of the Trust or any successor Relevant Trustee such retiring Relevant Trustee shall, upon payment of all sums owed to it, duly assign, transfer and deliver to such successor Trustee all Trust Property, all proceeds thereof and money held by such retiring Relevant Trustee hereunder with respect to the Trust Securities and the Trust. Upon request of any such successor Relevant Trustee, the retiring Relevant Trustee shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Relevant Trustee all such rights, powers and trusts referred to in the preceding paragraph. No successor Relevant Trustee shall accept its appointment unless at the time of such acceptance such successor Relevant Trustee shall be qualified and eligible under this Article VIII. SECTION 8.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any Person into which the Property Trustee or the Delaware Trustee or any Administrative Trustee that is not a natural person may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which -46- 52 such Relevant Trustee shall be a party, or any Person succeeding to all or substantially all the corporate trust business of such Relevant Trustee, shall be the successor of such Relevant Trustee hereunder, provided such Person shall be otherwise qualified and eligible under this Article VIII, without the execution or filing of any paper, the giving of any notice or any further act on the part of any of the parties hereto. SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST. If and when the Property Trustee shall be or become a creditor of the Depositor or the Trust (or any other obligor upon the Subordinated Notes or the Trust Securities), the Property Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Depositor or Trust (or any such other obligor). SECTION 8.14. REPORTS BY PROPERTY TRUSTEE. (a) The Property Trustee shall transmit to Securityholders such reports concerning the Property Trustee and its actions under this Trust Agreement as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. Such of those reports as are required to be transmitted by the Property Trustee pursuant to Section 313(a) of the Trust Indenture Act shall be dated as of the next preceding May 15, and shall be transmitted no later than July 15 of each year, commencing May 15, 2002. (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Property Trustee with each national exchange, the Nasdaq National Market or such other interdealer quotation system or self-regulatory organization upon which the Trust Securities are listed or traded, if any, with the Commission and with the Depositor. The Depositor will notify the Property Trustee of any such listing or trading. SECTION 8.15. REPORTS TO THE PROPERTY TRUSTEE. The Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such documents, reports and information, if any, and the compliance certificate required by Section 314(a)(4) of the Trust Indenture Act, in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act, provided that such compliance certificate shall be delivered annually on or before June 15 in each year, beginning June 15, 2001. Delivery of such reports, information and documents by the Depositor to the Property Trustee is for informational purposes only and the Property Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Depositor's compliance with any of its covenants hereunder (as to which the Property Trustee is entitled to rely exclusively on Officer's Certificates). SECTION 8.16. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. Each of the Depositor and the Administrative Trustees on behalf of the Trust shall provide to the Property Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Trust Agreement (including any covenants compliance with which constitutes a condition precedent) that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) of the Trust Indenture Act may be given in the form of an Officer's Certificate. -47- 53 SECTION 8.17. NUMBER OF TRUSTEES. (a) The number of Trustees shall be four, provided that the Depositor, by written instrument, may increase or decrease the number of Administrative Trustees. (b) If a Trustee ceases to hold office for any reason and the number of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall occur. The vacancy shall be filled with a Trustee appointed in accordance with Section 8.10. (c) The death, resignation, retirement, removal, bankruptcy, incompetence or incapacity to perform the duties of a Trustee shall not operate to annul, dissolve or terminate the Trust. Whenever a vacancy in the number of Administrative Trustees shall occur, until such vacancy is filled by the appointment of an Administrative Trustee in accordance with Section 8.10, the Administrative Trustees in office, regardless of their number (and notwithstanding any other provision of this Agreement), shall have all the powers granted to the Administrative Trustees and shall discharge all the duties imposed upon the Administrative Trustees by this Trust Agreement. SECTION 8.18. DELEGATION OF POWER. (a) Any Administrative Trustee may, by power of attorney consistent with applicable law, delegate to any other natural person over the age of 21 his or her power for the purpose of executing any documents contemplated in Sections 2.07(a) and 2.07(c), including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing; and (b) the Administrative Trustees shall have power to delegate from time to time to such of their number the doing of such things and the execution of such instruments either in the name of the Trust or the names of the Administrative Trustees or otherwise as the Administrative Trustees may deem expedient, to the extent such delegation is not prohibited by applicable law or contrary to the provisions of the Trust, as set forth herein. SECTION 8.19. FIDUCIARY DUTY. (a) Unless otherwise expressly provided herein and subject to the provisions of the Trust Indenture Act: (i) whenever a conflict of interest exists or arises between an Indemnified Person and any Covered Person; or (ii) whenever this Trust Agreement or any other agreement contemplated herein or therein provides that an Indemnified Person shall act in a manner that is, or provides terms that are, fair and reasonable to the Trust or any Holder of Trust Securities, the Indemnified Person shall resolve such conflict of interest, take such action or provide such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable generally accepted accounting practices or principles. In the absence of bad faith -48- 54 by the Indemnified Person, the resolution, action or term so made, taken or provided by the Indemnified Person shall not constitute a breach of this Trust Agreement or any other agreement contemplated herein or of any duty or obligation of the Indemnified Person at law or in equity or otherwise; and (b) Unless otherwise expressly provided herein and subject to the provisions of the Trust Indenture Act, whenever in this Trust Agreement an Indemnified Person is permitted or required to make a decision (i) in its "discretion" or under a grant of similar authority, the Indemnified Person shall be entitled to consider such interests and factors as it reasonably desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Trust or any other Person; or (ii) in its "good faith" or under another express standard, the Indemnified Person shall act under such express standard and shall not be subject to any other or different standard imposed by this Trust Agreement or by applicable law. SECTION 8.20. DELAWARE TRUSTEE. It is expressly understood and agreed by the parties hereto that in fulfilling its obligations as Delaware Trustee hereunder on behalf of the Trust (i) any agreements or instruments executed and delivered by Chase Manhattan Bank USA, National Association are executed and delivered not in its individual capacity but solely as Delaware Trustee under this Trust Agreement in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as representations, warrants, covenants, undertakings and agreements by Chase Manhattan Bank USA, National Association in its individual capacity but is made and intended for the purpose of binding only the Trust, and (iii) under no circumstances shall Chase Manhattan Bank USA, National Association in its individual capacity be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaking by the Trust under this Trust Agreement, except if such breach or failure is due to any gross negligence or willful misconduct of the Delaware Trustee. ARTICLE IX DISSOLUTION AND LIQUIDATION SECTION 9.01. DISSOLUTION UPON EXPIRATION DATE. Unless earlier dissolved, the Trust shall automatically dissolve on December 31, 2010 (the "Expiration Date") and the Trustees shall take such action as is required by Section 9.04. SECTION 9.02. EARLY DISSOLUTION. Upon the first to occur of any of the following events (such first occurrence, an "Early Termination Event"): -49- 55 (i) the occurrence of a Bankruptcy Event in respect of, or the dissolution or liquidation of, the Depositor; (ii) the redemption of all of the Preferred Trust Securities; (iii) an order for judicial dissolution of the Trust having been entered by a court of competent jurisdiction; (iv) the election by the Depositor to dissolve the Trust and, after satisfaction of liabilities to creditors of the Trust, distribute the Subordinated Notes to the Holders of Preferred Trust Securities in liquidation of the Trust; the Trust shall dissolve and the Trustees shall take such action as is required by Section 9.04. SECTION 9.03. TERMINATION. The respective obligations and responsibilities of the Trust and the Trustees created hereby shall terminate upon the latest to occur of the following: (i) the distribution by the Property Trustee to Securityholders upon the liquidation of the Trust pursuant to Section 9.04, or upon the redemption of all of the Trust Securities pursuant to Section 4.02 or 9.04(d), of all amounts required to be distributed hereunder upon the final payment of the Trust Securities; (ii) the payment of any expenses owed by the Trust; (iii) the discharge of all administrative duties of the Administrative Trustees, including the performance of any tax reporting obligations with respect to the Trust or the Securityholders and (iv) the filing of a certificate of cancellation with the Delaware Secretary of State. SECTION 9.04. LIQUIDATION. (a) Upon the Expiration Date or if an Early Termination Event specified in clause (i), (iii) or (iv) of Section 9.02 occurs, after satisfaction of creditors of the Trust, if any, as provided by applicable law, the Trust shall be liquidated by the Administrative Trustees as expeditiously as such Trustees determine to be appropriate by distributing to each Securityholder a Like Amount of Subordinated Notes, subject to Section 9.04(e). Notice of liquidation shall be given by the Administrative Trustees by first-class mail, postage prepaid, mailed not later than 30 nor more than 60 days prior to the Liquidation Date to each Holder of Trust Securities at such Holder's address appearing in the Securities Register. All notices of liquidation shall: (i) state the Liquidation Date; (ii) state that from and after the Liquidation Date, the Trust Securities will no longer be deemed to be Outstanding and any Trust Securities Certificates not surrendered for exchange will be deemed to represent a Like Amount of Subordinated Notes; and (iii) provide such information with respect to the mechanics by which Holders may exchange Trust Securities Certificates for Subordinated Notes, or, if Section 9.04(e) applies, receive a Liquidation Distribution, as the Administrative Trustees or the Property Trustee shall deem appropriate. (b) Except where Sections 9.02(ii), 9.04(d) or 9.04(e) apply, in order to effect the liquidation of the Trust hereunder, and any resulting distribution of the Subordinated Notes to -50- 56 Securityholders, the Administrative Trustees shall establish a record date for such distribution (which shall be not more than 45 days prior to the Liquidation Date) and, either itself acting as exchange agent or through the appointment of a separate exchange agent, shall establish such procedures as it shall deem appropriate to effect the distribution of Subordinated Notes in exchange for the Outstanding Trust Securities Certificates. (c) Except where Sections 9.02(ii), 9.04(d) or 9.04(e) apply, after any Liquidation Date, (i) the Trust Securities will no longer be deemed to be Outstanding, (ii) certificates representing a Like Amount of Subordinated Notes will, after satisfaction of liabilities to creditors of the Trust, if any, as provided by applicable law, be issued to Holders of Trust Securities Certificates, upon surrender of such Trust Securities Certificates to the Administrative Trustees or their agent for exchange, (iii) any Trust Securities Certificates not so surrendered for exchange will be deemed to represent a Like Amount of Subordinated Notes, accruing interest at the rate provided for in the Subordinated Notes from the last Distribution Date on which a Distribution was made on such Trust Securities Certificates until such Trust Securities Certificates are so surrendered (and until such Trust Securities Certificates are so surrendered, no payments or interest or principal will be made to Holders of Trust Securities Certificates with respect to such Subordinated Notes) and (iv) all rights of Securityholders holding Trust Securities will cease, except the right of such Securityholders to receive, after satisfaction of liabilities to creditors of the Trust, if any, as provided by applicable law, Subordinated Notes upon surrender of Trust Securities Certificates. (d) If at any time, a Tax Event shall occur and be continuing, and either (i) in the Opinion of Counsel to the Depositor experienced in such matters, there would in all cases, after effecting the dissolution of the Trust, after satisfaction of liabilities to creditors of the Trust, if any, as provided by applicable law, and the distribution of the Subordinated Notes to the Holders of the Preferred Trust Securities in exchange therefor, be more than an insubstantial risk that an Adverse Tax Consequence would continue to exist or (ii) the Subordinated Notes are not held by the Trust, then the Depositor shall have the right to redeem the Subordinated Notes, in whole but not in part, at any time within 90 days following the occurrence of the Tax Event. Whether or not a Tax Event has occurred, the Depositor has the right, at any time, to dissolve the Trust and, after satisfaction of liabilities to creditors of the Trust, if any, as provided by applicable law, shall cause the Subordinated Notes to be distributed to the Holders of the Preferred Trust Securities and Common Trust Securities on a Pro Rata basis. (e) In the event that, notwithstanding the other provisions of this Section 9.04, whether because of an order for dissolution entered by a court of competent jurisdiction or otherwise, distribution of the Subordinated Notes in the manner provided herein is determined by the Property Trustee not to be practical, the Trust Property shall be liquidated, and the Trust shall be wound-up, by the Property Trustee in such manner as the Property Trustee determines. In such event, Securityholders will be entitled to receive out of the assets of the Trust available for distribution to Securityholders, after satisfaction of liabilities to creditors of the Trust, if any, as provided by applicable law, an amount equal to the Liquidation Amount per Trust Security plus accumulated and unpaid Distributions thereon to the date of payment (such amount being the "Liquidation Distribution"). If, upon any such winding up, the Liquidation Distribution can be paid only in part because the Trust has insufficient assets available to pay in full the aggregate Liquidation Distribution, then, subject to the next succeeding sentence, the amounts payable by -51- 57 the Trust on the Trust Securities shall be paid on a Pro Rata basis (based upon Liquidation Amounts). The Holder of Common Trust Securities will be entitled to receive Liquidation Distributions upon any such winding-up Pro Rata (determined as aforesaid) with Holders of Preferred Trust Securities, except that, if a Subordinated Note Event of Default (or event that with the lapse of time or giving of notice would become an Event of Default) has occurred and is continuing, the Preferred Trust Securities shall have a priority over the Common Trust Securities. SECTION 9.05. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST. The Trust may not merge, consolidate, amalgamate with or into, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to any other Person, except pursuant to this Article IX. At the request of the Depositor, with the consent of the Administrative Trustees and without the consent of the Holders of the Preferred Trust Securities, the Property Trustee or the Delaware Trustee, the Trust may merge, consolidate, amalgamate, with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to a trust organized as such under the laws of any State; provided, that (i) such successor entity either (a) expressly assumes all of the obligations of the Trust with respect to the Preferred Trust Securities or (b) substitutes for the Preferred Trust Securities other securities having substantially the same terms as the Preferred Trust Securities (the "Successor Securities") so long as the Successor Securities rank the same as the Preferred Trust Securities rank in priority with respect to distributions and payments upon liquidation, redemption and otherwise, (ii) a trustee of such successor entity possessing substantially the same powers and duties as the Property Trustee is appointed to hold the Subordinated Notes, (iii) the Successor Securities are listed or traded, or any Successor Securities will be listed upon notification of issuance, on any national securities exchange or other organization on which the Preferred Trust Securities are then listed or traded, if any, (iv) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the Preferred Trust Securities (including any Successor Securities) to be downgraded by any nationally recognized statistical rating organization, (v) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of the Preferred Trust Securities (including any Successor Securities) in any material respect, (vi) such successor entity has a purpose substantially identical to that of the Trust, (vii) prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Depositor has received an Opinion of Counsel to the effect that (a) such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of the Preferred Trust Securities (including any Successor Securities) in any material respect, and (b) following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither the Trust nor such successor entity will be required to register as an investment company under the Investment Company Act and (viii) the Depositor or its permitted transferee owns all of the common securities of such successor entity and guarantees the obligations of such successor entity under the Successor Securities at least to the extent provided by the guarantee. Notwithstanding the foregoing, the Trust shall not, except with the consent of Holders of all the Preferred Trust Securities, consolidate, amalgamate or merge with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any other Person or permit any other Person to consolidate, amalgamate or merge with or into, or replace it if such consolidation, -52- 58 amalgamation, merger, replacement, conveyance, transfer or lease would cause the Trust or the successor entity to be classified as other than a grantor trust for United States federal income tax purposes. ARTICLE X MISCELLANEOUS PROVISIONS SECTION 10.01. PAYMENT OF EXPENSES OF THE TRUST. Pursuant to Article Three of the Supplemental Indenture No. 1 to the Indenture, the Subordinated Notes Issuer has agreed to pay to the Trust, and reimburse the Trust for, the full amount of any costs, expenses or liabilities of the Trust (other than obligations of the Trust to pay the Holders of any Preferred Trust Securities or Common Trust Securities), including, without limitation, any taxes, duties or other governmental charges of whatever nature (other than withholding taxes) imposed on the Trust by the United States or any other taxing authority. Such payment obligation includes any such costs, expenses or liabilities of the Trust that are required by applicable law to be satisfied in connection with a termination of the Trust. SECTION 10.02. LIMITATION OF RIGHTS OF SECURITYHOLDERS. The death, incapacity, bankruptcy, dissolution or termination of any Person having an interest, beneficial or otherwise, in a Trust Security shall not operate to terminate this Trust Agreement, nor dissolve, terminate or annul the Trust, nor entitle the legal representatives or heirs of such Person or any Securityholder for such Person, to claim an accounting, take any action or bring any proceeding in any court for a partition or winding up of the arrangements contemplated hereby, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. SECTION 10.03. AMENDMENT. (a) In addition to amendments contemplated by Section 8.11, this Trust Agreement may be amended from time to time by a majority of the Administrative Trustees, the Property Trustee and the Depositor, without the consent of any Securityholders, (i) to cure any ambiguity, correct or supplement any provision herein or therein which may be inconsistent with any other provision herein or therein, or to make any other provisions with respect to matters or questions arising under this Trust Agreement, (ii) to change the name of the Trust or (iii) to modify, eliminate or add to any provisions of this Trust Agreement to such extent as shall be necessary to ensure that the Trust will not be classified for United States Federal income tax purposes other than as a "grantor trust" at any time that any Trust Securities are outstanding or to ensure the Trust's exemption from the status of an "investment company" under the Investment Company Act; provided, however, that such action shall not adversely affect in any material respect the interests of any Securityholder and, in the case of clause (i), any such amendments of this Trust Agreement shall become effective when notice thereof is given to the Securityholders. (b) Except as provided in Sections 6.01(c) and 10.03(c), any provision of this Trust Agreement may be amended by the Administrative Trustees, the Property Trustee and the Depositor with (i) the consent of Holders of Trust Securities representing not less than a majority (based upon Liquidation Amounts) of the Outstanding Trust Securities and (ii) receipt by the Trustees of an Opinion of Counsel to the effect that such amendment or the exercise of any power granted to the Trustees in accordance with such amendment will not affect the Trust's -53- 59 status as a grantor trust for Federal income tax purposes or the Trust's exemption from status as an "investment company" under the Investment Company Act. (c) In addition to and notwithstanding any other provision in this Trust Agreement, without the consent of each affected Securityholder, this Trust Agreement may not be amended to (i) adversely change the amount or timing of any Distribution on the Trust Securities or otherwise adversely affect the amount of any Distribution required to be made in respect of the Trust Securities as of a specified date or (ii) restrict the right of a Securityholder to institute suit for the enforcement of any such payment on or after such date. (d) Notwithstanding any other provisions of this Trust Agreement, no amendment to this Trust Agreement may be made if, as a result of such amendment, the Trust would not be classified as a "grantor trust" for United States Federal income tax purposes or would to fail or cease to qualify for the exemption from status of an "investment company" under the Investment Company Act afforded by Rule 3a-5 thereunder. (e) Notwithstanding anything in this Trust Agreement to the contrary, the Depositor and the Trustees may, but shall not be obligated to, enter into any amendment which imposes any additional obligation on the Depositor or any Trustee or, in the case of the Trustees, which affects any of their respective rights, duties or immunities hereunder. (f) In the event that any amendment to this Trust Agreement is made, the Administrative Trustees shall promptly provide to the Depositor a copy of such amendment. (g) The Delaware Trustee may join in the execution of any amendment to the Trust Agreement and the Property Trustee and the Delaware Trustee are entitled to rely upon an Opinion of Counsel as conclusive evidence that any amendment to this Trust Agreement entered into pursuant to this Section 10.03 is authorized or permitted by, and conforms to, the terms of this Section 10.03, has been duly authorized by and lawfully executed and delivered on behalf of the other requisite parties, and that it is proper for the Property Trustee under the provisions of this Section 10.03 to accept the additional trusts created thereby and, if so requested, for the Delaware Trustee to join in the execution thereof. SECTION 10.04. SEPARABILITY. In case any provision in this Trust Agreement or in the Trust Securities Certificates shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 10.05. GOVERNING LAW. THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST, THE DEPOSITOR, THE SUBORDINATED NOTES ISSUER, THE TRUST SECURITIES GUARANTOR AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES). -54- 60 SECTION 10.06. SUCCESSORS. This Trust Agreement shall be binding upon and shall inure to the benefit of any successor to the Depositor, the Trust Securities Guarantor, the Trust or the Relevant Trustees or any of them, including any successor by operation of law. SECTION 10.07. INTENTION OF PARTIES. It is the intention of the parties hereto that the Trust be classified for United States federal income tax purposes as a grantor trust. The provisions of this Trust Agreement shall be interpreted in a manner consistent with such classification. SECTION 10.08. HEADINGS. The Article and Section headings are for convenience only and shall not affect the construction of this Trust Agreement. SECTION 10.09. NOTICE AND DEMAND. Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon any Securityholder or the Depositor may be given or served in writing by deposit thereof, postage prepaid, in the United States mail, hand delivery or facsimile transmission, in each case, addressed, (i) in the case of a Preferred Trust Securityholder, to such Preferred Trust Securityholder as such Securityholder's name and address may appear on the Securities Register, and (ii) in the case of the Depositor, the Common Securityholder or the Trust Securities Guarantor, to PPL Corporation, Two North Ninth Street, Allentown, Pennsylvania 18101, Attention: Treasurer, facsimile no. 610-774-5106 (until another address is given to the Property Trustee). Such notice, demand or other communication to or upon a Securityholder shall be deemed to have been sufficiently given or made, for all purposes, upon hand delivery, mailing or facsimile transmission. Any notice, demand or other communication which by any provision of this Trust Agreement is required or permitted to be given or served to or upon the Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees shall be given in writing addressed (until another address is given to the other parties hereto) as follows: (i) with respect to the Property Trustee, to The Chase Manhattan Bank, 450 West 33rd Street, 15th Floor, New York, New York 10001, Attention: Institutional Trust Services, (ii) with respect to the Delaware Trustee, to Chase Manhattan Bank USA, National Association, 1201 Market Street, 9th Floor, Wilmington, Delaware 19801, Attention: Corporate Trust Department, with a copy to the Property Trustee at the address set forth in (i) above and (iii) with respect to the Trust or the Administrative Trustees, at the address above for notice to the Depositor, marked "Attention: Administrative Trustees for PPL Capital Funding Trust I". Such notice, demand or other communication to or upon the Trust, the Delaware Trustee or the Property Trustee shall be deemed to have been sufficiently given or made only upon actual receipt of the writing by the Trust, the Delaware Trustee or the Property Trustee. SECTION 10.10. AGREEMENT NOT TO PETITION. Each of the Trustees and the Depositor agrees for the benefit of the Securityholders that, until at least one year and one day after the Trust has been terminated in accordance with Article IX, it shall not file, or join in the filing of, a petition against the Trust under any bankruptcy, reorganization, arrangement, insolvency, liquidation or other similar law (including, without limitation, the United States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of -55- 61 any proceeding against the Trust under any Bankruptcy Law. In the event the Depositor takes action in violation of this Section 10.09, the Property Trustee agrees, for the benefit of Securityholders, that it shall file an answer with the bankruptcy court or otherwise properly contest the filing of such petition by the Depositor against the Trust or the commencement of such action and raise the defense that the Depositor has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as counsel for the Property Trustee or the Trust may assert. The provisions of this Section 10.09 shall survive the termination of this Trust Agreement. SECTION 10.11. CONFLICT WITH TRUST INDENTURE ACT. (a) This Trust Agreement is subject to the provisions of the Trust Indenture Act that are required or deemed to be part of this Trust Agreement and shall, to the extent applicable, be governed by such provisions. (b) The Property Trustee shall be the only Trustee which is a trustee for the purposes of the Trust Indenture Act. (c) If any provision hereof limits, qualifies or conflicts with another provision hereof which is required or deemed to be included in this Trust Agreement by any of the provisions of the Trust Indenture Act, such required or deemed provision shall control. (d) The application of the Trust Indenture Act to this Trust Agreement shall not affect the nature of the Trust Securities as equity securities representing interests in the Trust. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON BEHALF OF A SECURITYHOLDER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS AND PROVISIONS SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS. SECTION 10.12. COUNTERPARTS. This Trust Agreement may contain more than one counterpart of the signature page and this Trust Agreement may be executed by the affixing of the signature of each of the Trustees to one of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single signature page. -56- 62 IN WITNESS WHEREOF, the parties have caused this Amended and Restated Trust Agreement to be duly executed, all as of the day and year first above written. PPL CORPORATION, as Depositor and Trust Securities Guarantor By: /s/ James E. Abel ------------------------------------- Name: James E. Abel Title: Vice President-Finance and Treasurer PPL CAPITAL FUNDING, INC., as Subordinated Notes Issuer and Common Securities Holder By: /s/ James E. Abel ------------------------------------- Name: James E. Abel Title: Treasurer THE CHASE MANHATTAN BANK, as Property Trustee By: /s/ Annette M. Marsula ------------------------------------- Name: Annette M. Marsula Title: Vice President CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, as Delaware Trustee By: /s/ Denis Kelly ------------------------------------- Name: Denis Kelly Title: Assistant Vice President /s/ James E Abel ------------------------------------- as Administrative Trustee /s/ John R. Biggar ------------------------------------- as Administrative Trustee -57- 63 EXHIBIT A CERTIFICATE OF TRUST OF PP&L CAPITAL FUNDING TRUST I THIS CERTIFICATE OF TRUST of PP&L Capital Funding Trust I (the "Trust"), dated as of September 21, 1999, is being duly executed and filed by the undersigned, as trustees, to form a business trust under the Delaware Business Trust Act (12 Del.C. Section 3801 et seq.). 1. Name. The name of the business trust formed hereby is PPL Capital Funding Trust I. 2. Delaware Trustee. The name and business address of the trustee of the Trust with a principal place of business in the State of Delaware are Chase Manhattan Bank Delaware, 1201 Market Street, 9th Floor, Wilmington, Delaware 19801. 3. Effective Date. This Certificate of Trust shall be effective upon its filing with the Secretary of State of the State of Delaware. IN WITNESS WHEREOF, the undersigned, being the only trustees of the Trust, have executed this Certificate of Trust as of the date first above written. THE CHASE MANHATTAN BANK, not in its individual capacity but solely as trustee By: /s/ Francine Springer -------------------------------- Name: Francine Springer Title: Assistant Vice President CHASE MANHATTAN BANK DELAWARE not in its individual capacity but solely as trustee By: /s/ Denis Kelly -------------------------------- Name: Denis Kelly Title: Assistant Vice President /s/ James E. Abel ------------------------------------- JAMES E. ABEL, not in his individual capacity but solely as trustee A-1 64 CERTIFICATE OF AMENDMENT TO CERTIFICATE OF TRUST (PURSUANT TO SECTION 3810 OF THE DELAWARE BUSINESS TRUST ACT) To the Secretary of State State of Delaware It is hereby certified that: 1. The name of the business trust (hereinafter referred to as the "trust") is PPL Capital Funding Trust I. 2. Article 1 of the Certificate of Trust of the trust is hereby amended to read as follows: "Name. The name of the business trust formed hereby is PPL Capital Funding Trust I." 3. The undersigned person is a trustee of the trust. 4. This Certificate of Amendment to Certificate of Trust shall be effective upon its filing with the Secretary of State of the State of Delaware. Signed on May 22, 2000 /s/ James E. Abel ------------------------------------- JAMES E. ABEL, not in his individual capacity but solely as trustee A-2 65 AMENDED AND RESTATED CERTIFICATE OF TRUST OF PPL CAPITAL FUNDING TRUST I This Amended and Restated Certificate of Trust of PPL Capital Funding Trust I (originally known as "PPL Capital Funding Trust I") (the "Trust"), dated as of August 15, 2000, is being duly executed and filed under the Delaware Business Trust Act (12 Del. C. Section 3801, et seq.) (the "Act") by the undersigned, as trustees of the Trust, to amend and restate the Certificate of Trust of the Trust, which was filed with the Secretary of State of the State of Delaware (the "Secretary of State") on September 21, 1999, as amended by the Certificate of Amendment to the Certificate of Trust, which was filed with the Secretary of State on May 23, 2000 (the "Certificate of Trust"). The Certificate of Trust is hereby amended and restated in its entirety, pursuant to Section 3810(c)(1) of the Act, to read as follows: 1. Name. The name of the business trust formed hereby is PPL Capital Funding Trust I. 2. Delaware Trustee. The name and business address of the trustee of the Trust with its principal place of business in the State of Delaware are Chase Manhattan Bank USA, National Association, 1201 Market Street, Wilmington, Delaware, 19801, Attention: Corporate Trust Administration. 3. Effective Date. This Certificate of Trust shall be effective upon the date and time of filing. 4. Counterparts. This Certificate of Trust may be executed in one or more counterparts. [SIGNATURE PAGE FOLLOWS] A-3 66 IN WITNESS WHEREOF, the undersigned have executed this Certificate of Trust in accordance with Section 3811(a)(2) of the Act. CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity, but solely as trustee By: /s/ Denis Kelly -------------------------------- Name: Denis Kelly Title: Assistant Vice President THE CHASE MANHATTAN BANK, not in its individual capacity, but solely as trustee By: /s/ Robert S. Peschler ------------------------------------- Name: Robert S. Peschler Title: Assistant Vice President JAMES E. ABEL, not in his individual capacity, but solely as trustee /s/ James E. Abel ------------------------------------- A-4 67 EXHIBIT B THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN THE TRUST AGREEMENT Certificate Number Number of Common Trust Securities C - Certificate Evidencing Common Trust Securities of PPL Capital Funding Trust I Common Trust Securities (liquidation amount $25 per Common Trust Security) PPL Capital Funding Trust I, a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that PPL Capital Funding, Inc. (the "Holder") is the registered owner of _____ common securities of the Trust representing undivided beneficial interests in the assets of the Trust and designated the PPL Capital Funding Trust I Common Trust Securities (liquidation amount $25 per Common Trust Security) (the "Common Trust Securities"). Except as permitted by Section 5.10 of the Trust Agreement (as defined below), the Common Trust Securities are not transferable and any attempted transfer hereof shall be void. The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Common Trust Securities are set forth in, and this certificate and the Common Trust Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust dated as of May 9, 2001, as the same may be amended from time to time (the "Trust Agreement"), including the designation of the terms of the Common Trust Securities as set forth therein. Capitalized terms used herein but not defined shall have the meaning given them in the Trust Agreement. The holder of this certificate is entitled to the benefits of the Trust Securities Guarantee Agreement of PPL Corporation and The Chase Manhattan Bank, as guarantee trustee, dated as of May 9, 2001, as the same may be amended from time to time, (the "Guarantee") to the extent provided therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee to the Holder without charge upon written request to the Trust at its principal place of business or registered office. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the Subordinated Notes as indebtedness and the Common Trust Securities as evidence of undivided beneficial interests in the assets of the Trust. B-1 68 IN WITNESS WHEREOF, an Administrative Trustee of the Trust has executed this certificate for and on behalf of the Trust this ___ day of May, 2001. PPL Capital Funding Trust I By: -------------------------------------- not in his individual capacity, but solely as Administrative Trustee B-2 69 EXHIBIT C [Legend] Certificate Number Number of Preferred Trust Securities P- CUSIP NO. Certificate Evidencing Preferred Trust Securities of PPL Capital Funding Trust I [Title of Securities] (liquidation amount $25 per Preferred Trust Security) PPL Capital Funding Trust I, a statutory business trust created under the laws of the State of Delaware (the "Trust"), hereby certifies that ____________ (the "Holder") is the registered owner of _____ preferred securities of the Trust representing an undivided beneficial interest in the assets of the Trust and designated the PPL Capital Funding Trust I [Title of Securities] (liquidation amount $25 per Preferred Trust Security) (the "Preferred Trust Securities"). The Preferred Trust Securities are transferable on the books and records of the Trust, in person or by a duly authorized attorney, upon surrender of this certificate duly endorsed and in proper form for transfer as provided in Section 5.04 or 5.12 of the Trust Agreement (as defined below). The designations, rights, privileges, restrictions, preferences and other terms and provisions of the Preferred Trust Securities are set forth in, and this certificate and the Preferred Trust Securities represented hereby are issued and shall in all respects be subject to the terms and provisions of, the Amended and Restated Trust Agreement of the Trust dated as of May 9, 2001, as the same may be amended from time to time (the "Trust Agreement"), including the designation of the terms of the Preferred Trust Securities as set forth therein. Capitalized terms used herein but not defined shall have the meaning given them in the Trust Agreement. The holder of this certificate is entitled to the benefits of the Trust Securities Guarantee Agreement of PPL Corporation and The Chase Manhattan Bank, as guarantee trustee, dated as of May 9, 2001, as the same may be amended from time to time, (the "Guarantee") to the extent provided therein. The Trust will furnish a copy of the Trust Agreement and the Guarantee to the Holder without charge upon written request to the Trust at its principal place of business or registered office. Upon receipt of this certificate, the Holder is bound by the Trust Agreement and is entitled to the benefits thereunder. By acceptance, the Holder agrees to treat, for United States federal income tax purposes, the Subordinated Notes as indebtedness and the Preferred Trust Securities as evidence of undivided beneficial interests in the assets of the Trust. C-1 70 IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed this certificate for and on behalf of the Trust. Dated: PPL CAPITAL FUNDING TRUST I By: --------------------------------------- not in his individual capacity, but solely as Administrative Trustee Countersigned and Registered: THE CHASE MANHATTAN BANK, Transfer Agent and Registrar By: -------------------------------------- (Authorized Signature) C-2 71 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred Trust Security to: - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ (Insert assignee's social security or tax identification number) - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ (Insert address and zip code of assignee) - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ of the Preferred Trust Securities represented by this Certificate and irrevocably appoints - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------ attorney to transfer such Preferred Trust Securities Certificate on the books of the Trust. The attorney may substitute another to act for him or her.
Date: ____________________________ Signature: ________________________ (Sign exactly as your name appears on the other side of this Preferred Trust Securities Certificate) Signature: ________________________ (Sign exactly as your name appears on the other side of this Preferred Trust Securities Certificate) C-3 EX-4.10 8 y49005ex4-10.txt FORM OF TRUST SECURITIES GUARANTEE AGREEMENT 1 [EXECUTION COPY] EXHIBIT 4.10 TRUST SECURITIES GUARANTEE AGREEMENT Among PPL Corporation (as Guarantor) and The Chase Manhattan Bank (as Guarantee Trustee) Relating to PPL Capital Funding Trust I dated as of May 9, 2001 ------------ 2 TABLE OF CONTENTS
Page ---- ARTICLE I DEFINITIONS.....................................................................1 SECTION 1.01 Definitions...............................................................1 ARTICLE II TRUST INDENTURE ACT............................................................4 SECTION 2.01 Trust Indenture Act; Application..........................................4 SECTION 2.02 Lists of Holders of Trust Securities......................................4 SECTION 2.03 Reports by the Guarantee Trustee..........................................4 SECTION 2.04 Periodic Reports to Guarantee Trustee.....................................4 SECTION 2.05 Evidence of Compliance with Conditions Precedent..........................4 SECTION 2.06 Events of Default; Waiver.................................................5 SECTION 2.07 Event of Default; Notice..................................................5 SECTION 2.08 Conflicting Interests under Agreement and Subordinated Indenture..........5 ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE................................5 SECTION 3.01 Powers and Duties of the Guarantee Trustee................................5 SECTION 3.02 Certain Rights of Guarantee Trustee.......................................7 SECTION 3.03 Not Responsible for Recitals or Issuance of Guarantee.....................9 ARTICLE IV GUARANTEE TRUSTEE..............................................................9 SECTION 4.01 Guarantee Trustee; Eligibility............................................9 SECTION 4.02 Compensation, Reimbursement and Indemnity.................................9 SECTION 4.03 Appointment, Removal and Resignation of Guarantee Trustee................10 ARTICLE V GUARANTEE......................................................................10 SECTION 5.01 Guarantee................................................................10 SECTION 5.02 Waiver of Notice and Demand..............................................11 SECTION 5.03 Obligations Not Affected.................................................11 SECTION 5.04 Rights of Holders........................................................12 SECTION 5.05 Guarantee of Payment.....................................................12 SECTION 5.06 Subrogation..............................................................12 SECTION 5.07 Independent Obligations..................................................12 ARTICLE VI limitation of transactions; SUBORDINATION.....................................13 SECTION 6.01 Limitation of Transactions...............................................13 SECTION 6.02 Subordination............................................................13 ARTICLE VII TERMINATION..................................................................14
(i) 3 SECTION 7.01 Termination..............................................................14 ARTICLE VIII MISCELLANEOUS...............................................................14 SECTION 8.01 Successors and Assigns...................................................14 SECTION 8.02 Amendments...............................................................14 SECTION 8.03 Notices..................................................................14 SECTION 8.04 Benefit..................................................................15 SECTION 8.05 Interpretation...........................................................15 SECTION 8.06 Governing Law............................................................16 SECTION 8.07 Counterparts.............................................................16
(ii) 4 CROSS-REFERENCE TABLE* ---------------------
Section of Section of Trust Indenture Act Guarantee of 1939, as amended Agreement - ------------------- --------- 310(a)..........................................................................4.01(a) 310(b)..........................................................................4.01(c), 2.08 310(c)..........................................................................Inapplicable 311(a)..........................................................................2.02(b) 311(b)..........................................................................2.02(b) 311(c)..........................................................................Inapplicable 312(a)..........................................................................2.02(a) 312(b)..........................................................................2.02(b) 313.............................................................................2.03 314(a)..........................................................................2.04 314(b)..........................................................................Inapplicable 314(c)..........................................................................2.05 314(d)..........................................................................Inapplicable 314(e)..........................................................................1.01, 2.05, 3.02 314(f)..........................................................................2.01 315(a)..........................................................................3.01, 3.02 315(b)..........................................................................2.07 315(c)..........................................................................3.01 315(d)..........................................................................3.01(c) 316(a)..........................................................................5.04, 2.06 316(b)..........................................................................5.03 316(c)..........................................................................8.02 317(a)..........................................................................Inapplicable 317(b)..........................................................................Inapplicable 318(a)..........................................................................2.01(b) 318(b)..........................................................................2.01 318(c)..........................................................................2.01(a)
- ------------- * This Cross-Reference Table does not constitute part of the Guarantee Agreement and shall not affect the interpretation of any of its terms or provisions. (iii) 5 TRUST SECURITIES GUARANTEE AGREEMENT This TRUST SECURITIES GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of May 9, 2001, is executed and delivered by PPL Corporation, a Pennsylvania corporation (the "Guarantor"), and The Chase Manhattan Bank, as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined herein) from time to time of the Trust Securities (as defined herein) of PPL Capital Funding Trust I, a Delaware statutory business trust (the "Issuer"). WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust Agreement"), dated as of May 9, 2001 among the Trustees named therein, PPL Corporation, as Depositor and Guarantor and the several Holders (as defined therein), the Issuer may issue up to $575,000,000 aggregate Liquidation Amount of its 7.29% Preferred Trust Securities (the "Preferred Trust Securities"), of which $500,000,000 aggregate Liquidation Amount is being issued as of the date hereof, and up to $17,783,506 aggregate Liquidation Amount of its Common Trust Securities, of which $15,463,918 aggregate Liquidation Amount is being issued as of the date hereof (the "Common Trust Securities", and together with the Preferred Trust Securities, the "Trust Securities") representing undivided beneficial interests in the assets of the Issuer and having the terms set forth in the Trust Agreement. Up to the remaining $75,000,000 aggregate Liquidation Amount of Preferred Trust Securities and up to $2,319,588 aggregate Liquidation Amount of its Common Trust Securities may be issued by the Trust by and to the extent the over-allotment option granted by the Trust and the Guarantor pursuant to the Underwriting Agreement is exercised by the Underwriters named in the Underwriting Agreement; WHEREAS, the Trust Securities are to be issued by the Issuer to PPL Corporation in exchange for the $515,463,918principal amount of Subordinated Notes (as defined in the Trust Agreement) of PPL Capital Funding, Inc. (the "Subordinated Notes Issuer"), which Subordinated Notes will be deposited with The Chase Manhattan Bank, as Property Trustee under the Trust Agreement, as trust assets, and then PPL Corporation will sell the Preferred Trust Securities to the public; and WHEREAS, as an incentive for Holders to purchase Preferred Trust Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth herein, to pay to the Holders the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the purchase of Subordinated Notes, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the benefit of the Holders from time to time. ARTICLE I DEFINITIONS SECTION 1.01 DEFINITIONS. As used in this Guarantee Agreement, the terms set forth below shall, unless the context otherwise requires, have the following meanings. 6 Capitalized or otherwise defined terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Trust Agreement as in effect on the date hereof. "Event of Default" means a default by the Guarantor on any of its payment or other obligations under this Guarantee Agreement; provided, however, that, except with respect to a default in payment of any Guarantee Payments, the Guarantor shall have received notice of default from the Guarantee Trustee or any Holder (with a copy to the Guarantee Trustee) and shall not have cured such default within 90 days after receipt of such notice. "Guarantee Payments" means the following payments or distributions, without duplication, with respect to the Trust Securities, to the extent not paid or made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions that are required to be paid on such Trust Securities but only if and to the extent that the Property Trustee has available in the Payment Account funds sufficient to make such payment at such time, (ii) the redemption price (the "Redemption Price"), and all accumulated and unpaid Distributions to the date of redemption, with respect to the Trust Securities called for redemption by the Issuer but only if and to the extent that the Property Trustee has available in the Payment Account funds sufficient to make such payment, (iii) upon a voluntary or involuntary dissolution, winding-up or termination of the Issuer (other than in connection with the distribution of Subordinated Notes to the Holders in exchange for Trust Securities as provided in the Trust Agreement or upon a redemption of all of the Trust Securities upon maturity or redemption of the Subordinated Notes as provided in the Trust Agreement), the lesser of (a) the aggregate of the Liquidation Amount of all Trust Securities and all accumulated and unpaid Distributions on the Trust Securities to the date of payment but only if and to the extent that the Property Trustee has available in the Payment Account funds sufficient to make such payment at such time, and (b) the amount of assets of the Issuer remaining legally available for distribution to Holders in liquidation of the Issuer after satisfaction of liabilities to creditors of the Issuer as required by applicable law (in either case, the "Liquidation Distribution"). "Guarantee Trustee" means The Chase Manhattan Bank, until a Successor Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee Agreement and thereafter means each such Successor Guarantee Trustee. "Holder" means a Person in whose name a Trust Security or Trust Securities is registered in the Securities Register; provided, however, that in determining whether the holders of the requisite percentage of Trust Securities have given any request, notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of the Guarantor. "Majority in Liquidation Amount" means a vote by Holders voting together as a single class, or as the context may require, a vote by Holders of outstanding Trust Securities or the Holders of outstanding Common Trust Securities, voting separately as a class, of more than 50% of the aggregate Liquidation Amount of all then outstanding Trust Securities of the relevant class. "Officer's Certificate" means a certificate signed by the Chairman or a Vice Chairman of the Board of Directors, the President, any Vice President, the Treasurer, or any Assistant Treasurer of the Guarantor, and delivered to the Guarantee Trustee. Any Officer's -2- 7 Certificate or Opinion of Counsel delivered with respect to compliance with a condition or covenant provided for in this Guarantee Agreement shall include: (a) a statement that the officer or counsel signing the Officer's Certificate or the Opinion of Counsel has read the covenant or condition and the definitions relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officer's Certificate or the Opinion of Counsel; (c) a statement that each such officer or counsel has made such examination or investigation as, in such officer's or counsel's opinion, is necessary to enable such officer or counsel to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such officer or counsel, such condition or covenant has been complied with. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Guarantee Trustee or the Guarantor or an Affiliate of the Guarantor, or an employee or any thereof, who shall be acceptable to the Guarantee Trustee. "Preferred Trust Security" shall have the meaning set forth in the Recitals to this Agreement. "Responsible Officer" means, with respect to the Guarantee Trustee, any officer in the Corporate Trust Department of the Guarantee Trustee with direct responsibility for the administration of this Guarantee Agreement and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject. "Subordinated Indenture" means the Indenture dated as of May 9, 2001, among the Guarantor, the Subordinated Notes Issuer and The Chase Manhattan Bank, as trustee, pursuant to which the Subordinated Notes are issued, together with any indenture supplemental thereto. "Successor Guarantee Trustee" means a successor Guarantee Trustee possessing the qualifications to act as Guarantee Trustee under Section 4.01. "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended. -3- 8 ARTICLE II TRUST INDENTURE ACT SECTION 2.01 TRUST INDENTURE ACT; APPLICATION. (a) This Guarantee Agreement is subject to the provisions of the Trust Indenture Act that are required or deemed to be part of this Guarantee Agreement and shall, to the extent applicable, be governed by such provisions; and (b) if and to the extent that any provision of this Guarantee Agreement limits, qualifies or conflicts with the duties imposed by Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. SECTION 2.02 LISTS OF HOLDERS OF TRUST SECURITIES. (a) The Guarantor and Subordinated Notes Issuer shall furnish or cause to be furnished to the Guarantee Trustee (a) semiannually, not later than June 30 and December 31 in each year, and (b) at such other times as the Guarantee Trustee may request in writing, a list of the names and addresses of the Holders ("List of Holders") and the Guarantee Trustee shall preserve such information and similar information received by it in any other capacity and afford to the Holders access to information so preserved by it, all to such extent, if any, and in such manner as shall be required by the Trust Indenture Act, provided that, the Guarantor shall not be obligated to provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Guarantee Trustee by the Guarantor. The Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders. (b) The Guarantee Trustee shall comply with its obligations under Section 311(a) of the Trust Indenture Act, subject to the provisions of Section 311(b) of the Trust Indenture Act, and Section 312(b) of the Trust Indenture Act. SECTION 2.03 REPORTS BY THE GUARANTEE TRUSTEE. No later than July 15 after each May 15 of each year, commencing May 15, 2002 the Guarantee Trustee shall provide to the Holders such reports, if any, as are required by Section 313(a) of the Trust Indenture Act in the form and in the manner provided by Section 313(a) of the Trust Indenture Act. Any such report shall be dated as of the next preceding May 15th. The Guarantee Trustee shall also comply with the other requirements of Section 313 of the Trust Indenture Act. SECTION 2.04 PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor shall provide to the Guarantee Trustee, the Securities and Exchange Commission and the Holders such documents, reports and information, if any, as required by Section 314 of the Trust Indenture Act and the compliance certificate required by Section 314(a)(4) of the Trust Indenture Act in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act, provided that such compliance certificate shall be delivered annually on or before 90 days of the end of each fiscal year of the Issuer, beginning in 2002. SECTION 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The Guarantor shall provide to the Guarantee Trustee such evidence of compliance with any conditions precedent provided for in this Guarantee Agreement as and to the extent required by -4- 9 Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c) of the Trust Indenture Act may be given in the form of an Officer's Certificate. SECTION 2.06 EVENTS OF DEFAULT; WAIVER. (a) The Holders of a Majority in Liquidation Amount may, by vote, on behalf of the Holders, waive any past Event of Default and its consequences. Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Guarantee Agreement, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. (b) The right of any Holder to receive payment of the Guarantee Payments in accordance with this Guarantee Agreement, or to institute suit for the enforcement of any such payment, shall not be impaired without the consent of each such Holder. SECTION 2.07 EVENT OF DEFAULT; NOTICE. (a) The Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first class postage prepaid, to the Holders, a notice of such Event of Default known to the Guarantee Trustee, unless such default shall have been cured or waived before the giving of such notice, provided that, except in the case of a default in the payment of a Guarantee Payment, the Guarantee Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors or Responsible Officers of the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders. (b) The Guarantee Trustee shall not be deemed to have knowledge of any Event of Default unless the Guarantee Trustee shall have received written notice, or a Responsible Officer of the Guarantee Trustee shall have received written notice, in each case from the Guarantor or a Holder, of such Event of Default. SECTION 2.08 CONFLICTING INTERESTS UNDER AGREEMENT AND SUBORDINATED INDENTURE. The Trust Agreement, the Subordinated Indenture and the securities of any series issued thereunder shall be deemed to be specifically described in this Guarantee Agreement for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE SECTION 3.01 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE. (a) This Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of the Holders, and the Guarantee Trustee shall not transfer this Guarantee Agreement or any rights hereunder to any Person except a Holder exercising his or her rights pursuant to Section 5.04 or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall automatically vest in any Successor Guarantee Trustee, and such vesting and cessation of title -5- 10 shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee. (b) The Guarantee Trustee, prior to the occurrence of any Event of Default and after the curing or waiving of all Events of Default that may have occurred, shall undertake to perform such duties and only such duties as are specifically set forth in this Guarantee Agreement, and no implied covenants or obligations shall be read into this Guarantee Agreement against the Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.06), the Guarantee Trustee shall exercise such of the rights and powers vested in it by this Guarantee Agreement, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (c) No provision of this Guarantee Agreement shall be construed to relieve the Guarantee Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Guarantee Trustee shall be determined solely by the express provisions of this Guarantee Agreement, and the Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee Agreement; and (B) in the absence of bad faith on the part of the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Guarantee Trustee and conforming to the requirements of this Guarantee Agreement; but in the case of any such certificates or opinions that by any provision hereof or of the Trust Indenture Act are specifically required to be furnished to the Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Guarantee Agreement; (ii) the Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Guarantee Trustee, unless it shall be proved that the Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) the Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a Majority in Liquidation Amount to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or -6- 11 exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement; and (iv) no provision of this Guarantee Agreement shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if the Guarantee Trustee shall have reasonable grounds for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Guarantee Agreement or adequate indemnity, reasonably satisfactory to the Guarantee Trustee, against such risk or liability is not reasonably assured to it. (d) This Guarantee Agreement and all moneys received by the Guarantee Trustee in respect of the Guarantee Payment will not be subject to any right, charge, security interest, lien or claim of any kind in favor of or for the benefit of, the Guarantee Trustee or its agents or their creditors. SECTION 3.02 CERTAIN RIGHTS OF GUARANTEE TRUSTEE. (a) Subject to the provisions of Section 3.01: (i) the Guarantee Trustee may rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been signed, sent or presented by the proper party or parties; (ii) any direction or act of the Guarantor contemplated by this Guarantee Agreement shall be sufficiently evidenced by an Officer's Certificate, or as otherwise expressly provided herein; (iii) whenever, in the administration of this Guarantee Agreement, the guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting to take any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and rely upon an Officer's Certificate which, upon receipt of such request from the Guarantee Trustee, shall be promptly delivered by the Guarantor; (iv) the Guarantee Trustee may consult with counsel of its choice, and the written advice or Opinion of Counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion; such counsel may be counsel to the Guarantee Trustee, the Guarantor or any of its Affiliates and may include any of its employees; the Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee Agreement from any court of competent jurisdiction; -7- 12 (v) the Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Guarantee Agreement at the request or direction of any Holder, unless such Holder shall have provided to the Guarantee Trustee such adequate security and indemnity as would satisfy a reasonable person in the position of the Guarantee Trustee, against the costs, expenses (including attorneys' fees and expenses) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Guarantee Trustee; provided that, nothing contained in this Section 3.02(a)(v) shall be taken to relieve the Guarantee Trustee, upon the occurrence and continuance of an Event of Default, of its obligation under the last sentence of Section 3.01(b) to exercise the rights and powers vested in it by this Guarantee Agreement; (vi) the Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Guarantee Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit; (vii) the Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by it hereunder; (viii) whenever in the administration of this Guarantee Agreement the Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Guarantee Trustee (1) may request instructions from the Holders of a Majority in Liquidation Amount, (2) may refrain from enforcing such remedy or right or taking such other action until such instructions are received, and (3) shall be protected in relying on or acting in accordance with such instructions; (ix) the Guarantee Trustee shall have no duty to see to any recording, filing or registration of any instrument (including any financing or continuation statement or any tax or securities form) (or any rerecording, refiling or re-registration thereof); and (x) the Guarantee Trustee shall not be liable for any action taken, suffered or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Guarantee Agreement. (b) No provision of this Guarantee Agreement shall be deemed to impose any duty or obligation on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be -8- 13 illegal, or in which the Guarantee Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Guarantee Trustee shall be construed to be a duty to act in accordance with such power or authority. SECTION 3.03 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE. The recitals contained in this Guarantee Agreement shall be taken as the statements of the Guarantor, and the Guarantee Trustee does not assume any responsibility for their correctness. The Guarantee Trustee makes no representation as to the validity or sufficiency of this Guarantee Agreement. ARTICLE IV GUARANTEE TRUSTEE SECTION 4.01 GUARANTEE TRUSTEE; ELIGIBILITY. (a) There shall at all times be a Guarantee Trustee which shall: (i) not be an Affiliate of the Guarantor; and (ii) be a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or Person permitted by the Securities and Exchange Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by Federal, State, Territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then, for the purposes of this Section 4.01(a)(ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b) If at any time the Guarantee Trustee shall cease to be eligible to so act under Section 4.01(a), the Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 4.03(c). (c) If the Guarantee Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. SECTION 4.02 COMPENSATION, REIMBURSEMENT AND INDEMNITY. The Guarantor agrees to pay to the Guarantee Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), to reimburse the Guarantee Trustee upon request for all reasonable expenses, disbursements and advances (including the reasonable fees and expenses of its attorneys and agents) incurred or made by the Guarantee -9- 14 Trustee in accordance with any provision of this Guarantee Agreement and to indemnify each of the Guarantee Trustee and any predecessor Guarantee Trustee for, and to hold it harmless against, any and all loss, damage, claim, liability or expense, including taxes (other than taxes based upon the income of the Guarantee Trustee) incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance of the trusts created by, or the administration of, this Guarantee Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligations of the Guarantor under this Section shall survive the resignation or removal of the Guarantee Trustee and the termination of this Guarantee Agreement and the resignation or removal of the Guarantee Trustee. SECTION 4.03 APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE TRUSTEE. (a) Subject to Section 4.03(b), the Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor. (b) The Guarantee Trustee shall not be removed until a Successor Guarantee Trustee has been appointed by the Guarantor and has accepted such appointment by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor. (c) The Guarantee Trustee appointed to office shall hold office until a Successor Guarantee Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee. (d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.02 within 30 days after delivery to the Guarantor of an instrument of resignation or removal, the Guarantee Trustee resigning or being removed may petition any court of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee. (e) No Guarantee Trustee shall be liable for the acts or omissions to act of any Successor Guarantee Trustee. ARTICLE V GUARANTEE SECTION 5.01 GUARANTEE. The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by or on behalf of the Issuer), as and when due, regardless of any defense, right of set-off or counterclaim which the Issuer may have or assert. The Guarantor's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the -10- 15 Guarantor to the Holders, or to the Guarantee Trustee for remittance to the Holders, or by causing the Issuer to pay such amounts to the Holders. SECTION 5.02 WAIVER OF NOTICE AND DEMAND. The Guarantor hereby waives notice of acceptance of this Guarantee Agreement and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Guarantee Trustee, Issuer or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands. SECTION 5.03 OBLIGATIONS NOT AFFECTED. The obligation of the Guarantor to make the Guarantee Payments under this Guarantee Agreement shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Trust Securities to be performed or observed by the Issuer; (b) the extension of time for the payment by the Issuer of all or any portion of the Distributions, Redemption Price, Liquidation Distribution or any other sums payable under the terms of the Trust Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Trust Securities (other than an extension of time for payment of Distributions, Redemption Price, Liquidation Distribution or other sum payable that results from the extension of any interest payment period on the Subordinated Notes permitted by the Subordinated Indenture); (c) any failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the terms of the Trust Securities, or any action on the part of the Issuer granting indulgence or extension of any kind; (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the assets of the Issuer; (e) any invalidity of, or defect or deficiency in, the Trust Securities; (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 5.03 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. -11- 16 There shall be no obligation of the Holders to give notice to, or obtain consent of, the Guarantor with respect to the happening of any of the foregoing. SECTION 5.04 RIGHTS OF HOLDERS. The Guarantor expressly acknowledges that: (i) this Guarantee Agreement will be deposited with the Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in Liquidation Amount have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee Agreement, provided, however, that, subject to Section 3.01, the Guarantee Trustee shall have the right to decline to follow any such direction if the Guarantee Trustee being advised by counsel determines that the action so directed may not lawfully be taken, or if the Guarantee Trustee in good faith shall, by a Responsible Officer or Officers of the Guarantee Trustee, determine that the proceedings so directed would be illegal or involve it in personal liability or be unduly prejudicial to the rights of Holders not party to such direction, and provided further that nothing in this Trust Agreement shall impair the right of the Guarantee Trustee to take any action deemed proper by the Guarantee Trustee which is not inconsistent with such direction; and (iv) any Holder may enforce this Guarantee Agreement, or institute a legal proceeding directly against the Guarantor to enforce the Guarantee Trustee's rights under this Guarantee Agreement without first instituting a legal proceeding against the Issuer, the Guarantee Trustee, or any other Person. SECTION 5.05 GUARANTEE OF PAYMENT. This Guarantee Agreement creates a guarantee of payment and not of collection. This Guarantee Agreement will not be discharged except by payment of the Guarantee Payments in full (without duplication) or upon the distribution of Subordinated Notes as provided in the Trust Agreement. SECTION 5.06 SUBROGATION. The Guarantor shall be subrogated to all, if any, rights of the Holders against the Issuer in respect of any amounts paid to the Holders by the Guarantor under this Guarantee Agreement; provided, however, that the Guarantor shall not (except to the extent required by mandatory provisions of law) be entitled to enforce or exercise any rights which it may acquire by way of subrogation or any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee Agreement, if, at the time of any such payment, any amounts of Guarantee Payments are due and unpaid under this Guarantee Agreement. If any amount shall be paid to the Guarantor in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders. SECTION 5.07 INDEPENDENT OBLIGATIONS. The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Trust Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 5.03. -12- 17 ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION SECTION 6.01 LIMITATION OF TRANSACTIONS. (a) As long as any Trust Securities issued by the Trust remain outstanding and, either the Guarantor is in default on its Guarantee Payments or other payment obligations under this Guarantee Agreement, or any Event of Default under the Trust Agreement has occurred and is continuing, then the Guarantor shall not: (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock; or (ii) make any payment of principal, interest or premium, if any, on or repay, repurchase or redeem any debt securities that rank equally with or junior in interest to the Subordinated Notes of the Subordinated Notes Issuer or make any guarantee payments with respect to any guarantee by it of the debt of any subsidiary of the Guarantor if such guarantee ranks equally with or junior in interest to the Subordinated Notes Issuer's Subordinated Notes. (b) Clauses (i) and (ii) are subject to the following exceptions for or as a result of: (i) the declaration of dividends in connection with the implementation of a stockholders' rights plan or the redemption or repurchase of any such rights pursuant thereto; (ii) a reclassification of the Guarantor's capital stock or exchange or conversion of one class or a series of the Guarantor's capital stock for or into another class or series of the Guarantor's capital stock; (iii) the purchase of fractional interests in shares of the Guarantor's capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged; (iv) the declaration of dividends or distributions in the Guarantor's capital stock; and (v) payments under this Guarantee Agreement related to the Trust Securities. SECTION 6.02 SUBORDINATION. This Guarantee Agreement will constitute an unsecured obligation of the Guarantor and will rank (i) subordinate and junior in right of payment to all other liabilities of the Guarantor, including the guarantee of the Subordinated Notes, except those made pari passu or subordinate by their terms, (ii) pari passu with the most senior preferred or preference stock now or hereafter issued by the Guarantor and with any guarantee now or hereafter entered into by the Guarantor in respect of any preferred or preference stock of any Affiliate of the Guarantor, and (iii) senior to all common stock of the Guarantor. When a Trust Enforcement Event (as defined in the Trust Agreement) occurs and is continuing, the rights of holders of the Common Trust Securities to receive Guarantee Payments -13- 18 will be subordinated to the rights to payment of holders of Trust Securities to receive Guarantee Payments. Each Person, by virtue of having become a Holder of a Security, shall be deemed to have expressly assented and agreed to the terms of, and shall be bound by, this Guarantee Agreement, the Trust Agreement and the Subordinated Indenture. ARTICLE VII TERMINATION SECTION 7.01 TERMINATION. This Guarantee Agreement shall terminate and be of no further force and effect upon: (i) full payment of the Redemption Price of all Trust Securities, and all accumulated and unpaid Distributions to the date of redemption, (ii) the distribution of Subordinated Notes to Holders in exchange for all of the Trust Securities, or (iii) full payment of the amounts payable in accordance with the Trust Agreement upon liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee Agreement will continue to be effective or will be reinstated, as the case may be, if at any time any Holder must restore payment of any sums paid with respect to Trust Securities or under this Guarantee Agreement. ARTICLE VIII MISCELLANEOUS SECTION 8.01 SUCCESSORS AND ASSIGNS. All guarantees and agreements contained in this Guarantee Agreement shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Trust Securities then outstanding. Except in connection with a consolidation, merger or sale involving the Guarantor that is permitted under Article Eleven of the Subordinated Indenture and pursuant to which the assignee agrees in writing to perform the Guarantor's obligations hereunder, the Guarantor shall not assign its obligations hereunder. SECTION 8.02 AMENDMENTS. This Guarantee Agreement may be amended only by an instrument in writing entered into by the Guarantor and the Guarantee Trustee. Except with respect to any changes which do not materially adversely affect the rights of Holders (in which case no consent of Holders will be required), this Guarantee Agreement may only be amended with the prior approval of the Holders of not less than a majority in aggregate Liquidation Amount of all the outstanding Trust Securities. Any such consent shall be deemed to be on behalf of the holders of all the Trust Securities. The provisions of Article VI of the Trust Agreement concerning meetings or consents of Holders shall apply to the giving of such approval. SECTION 8.03 NOTICES. Any notice, request or other communication required or permitted to be given hereunder shall be in writing, duly signed by the party giving such notice, and delivered, telecopied or mailed by first class mail as follows: (a) if given to the Guarantor, to the address set forth below or such other address or facsimile number or to the attention of such other Person as the Guarantor may give notice of to the Guarantee Trustee and the Holders of the Trust Securities: -14- 19 PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18101-1179 Facsimile No: 610-774-5106 Attention: Treasurer (b) if given to the Issuer, in care of the Administrative Trustees, at the Issuer's (and the Administrative Trustees') address set forth below or such other address or facsimile number or to the attention of such other Person as the Administrative Trustees on behalf of the Issuer may give notice of to the Guarantee Trustee and the Holders: PPL Capital Funding Trust I c/o PPL Corporation Two North Ninth Street Allentown, Pennsylvania 18101-1179 Facsimile No: 610-774-5100 Attention: Administrative Trustees (c) if given to the Guarantee Trustee, to the address set forth below or such other address or facsimile number or to the attention of such other Person as the Guarantee Trustee may give notice of to the Guarantor and the Holders of the Trust Securities: The Chase Manhattan Bank 450 West 33rd Street, 15th Floor New York, New York 10001 Facsimile No: 212-946-8177 Attention: Institutional Trust Services (d) if given to any Holder, at the address set forth on the books and records of the Issuer. All notices hereunder shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid, except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. SECTION 8.04 BENEFIT. This Guarantee Agreement is solely for the benefit of the Holders and, subject to Section 3.01(a), is not separately transferable from the Trust Securities. SECTION 8.05 INTERPRETATION. In this Guarantee Agreement, unless the context otherwise requires: (a) a term defined anywhere in this Guarantee Agreement has the same meaning throughout; -15- 20 (b) all references to "the Guarantee Agreement" or "this Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented or amended from time to time; (c) all references in this Guarantee Agreement to Articles and Sections are to Articles and Sections of this Guarantee Agreement unless otherwise specified; (d) a term defined in the Trust Indenture Act has the same meaning when used in this Guarantee Agreement unless otherwise defined in this Guarantee Agreement or unless the context otherwise requires; (e) a reference to the singular includes the plural and vice versa; and (f) the masculine, feminine or neuter genders used herein shall include the masculine, feminine and neuter genders. SECTION 8.06 GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SECTION 8.07 COUNTERPARTS. This Guarantee Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. -16- 21 THIS GUARANTEE AGREEMENT is executed as of the day and year first above written. PPL CORPORATION, As Guarantor By: /s/ James E. Abel --------------------------------------------- Name: James E. Abel Title: Vice President-Finance and Treasurer THE CHASE MANHATTAN BANK, as Guarantee Trustee By: /s/ Annette M. Marsula --------------------------------------------- Name: Annette M. Marsula Title: Vice President -17 EX-8.1 9 y49005ex8-1.txt TAX OPINION OF SIMPSON THACHER & BARTLETT 1 Exhibit 8.1 MAY 9, 2001 RE: Issuance and Sale of Premium Equity Participating Security Units PPL CORPORATION TWO NORTH NINTH STREET ALLENTOWN, PA 18101-1179 PPL CAPITAL FUNDING, INC. TWO NORTH NINTH STREET ALLENTOWN, PA 18101-1179 PPL CAPITAL FUNDING TRUST I TWO NORTH NINTH STREET ALLENTOWN, PA 18101-1179 Ladies and Gentlemen: We have acted as tax counsel ("Tax Counsel") to PPL Corporation, a Pennsylvania corporation (the "Company"), PPL Capital Funding, Inc., a Delaware Corporation ("PPL Capital Funding") and PPL Capital Funding Trust I, a statutory business trust created under the laws of the State of Delaware (the "Trust"), in connection with the preparation and filing by the Company and the Trust with the Securities and Exchange Commission (the "Commission") of the Prospectus Supplement dated May 3, 2001 to the Prospectus dated February 9, 2001 (together, the "Prospectus"), which formed a part of the Registration Statement on Form S-3 (as amended, the "Registration Statement") under the Securities Act of 1933, as amended, with respect to the issuance of 20,000,000 (plus an 2 PPL CORPORATION PPL CAPITAL FUNDING, INC. PPL CAPITAL FUNDING TRUST I -2- MAY 9, 2001 additional 3,000,000 if the over-allotment option is exercised in full by the underwriters) 7 3/4% Premium Equity Participating Securities Units (the "PEPS Units"), each of which will initially consist of (i) a purchase contract under which the holder agrees to purchase, for $25, shares of common stock of the Company on May 18, 2004 (a "Purchase Contract") and (ii) a trust preferred security of the Trust, with a stated liquidation amount of $25 (a "Trust Preferred Security") . The Trust Preferred Securities represent undivided beneficial interests in the assets of the Trust. The Trust's assets will consist of up to $515,463,918 (plus an additional $77,319,588 if the over-allotment option is exercised in full by the underwriters) aggregate principal amount of Subordinated Notes due May 18, 2006 (the "Subordinated Notes") to be issued by PPL Capital Funding. All capitalized terms used in this opinion letter and not otherwise defined herein shall have the meaning ascribed to such terms in the Registration Statement. In delivering this opinion letter, we have reviewed and relied upon: (i) the Registration Statement; (ii) a form of the Subordinated Indenture; (iii) a form of the Supplemental Indenture; (iv) a form of the Subordinated Note; (v) a form of the Trust Agreement; (vi) a form of the Guarantee; (vii) forms of the Trust Securities; (viii) a form of the Purchase Contract Agreement; (ix) a form of the Remarketing Agreement; (x) a form of the Pledge Agreement; (xi) a form of the Underwriting Agreement; (xii) a form of the Global PEPS Units Certificates; and (xiii) a form of the Global Treasury Units Certificates. We also have examined and relied upon originals, or duplicates or certified or conformed 3 PPL CORPORATION PPL CAPITAL FUNDING, INC. PPL CAPITAL FUNDING TRUST I -3- MAY 9, 2001 copies, of such records of the Company, PPL Capital Funding and the Trust and such other documents, certificates, representations and records as we have deemed necessary or appropriate as a basis for the opinions set forth herein. In our examination of such material, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to original documents of all copies of documents submitted to us. In addition, we also have assumed that factual representations made to us are true, correct and complete and that the transactions related to the issuance of the PEPS Units, the Trust Securities, and the Subordinated Notes will be consummated in accordance with the terms of the documents and forms of documents described herein. If any of the above described assumptions are untrue for any reason or if the issuance of the PEPS Units, the Trust Securities and the Subordinated Notes is consummated in a manner that is inconsistent with the manner in which it is described in the Prospectus, our opinions as expressed below may be adversely affected and may not be relied upon. On the basis of the foregoing and assuming that the Trust was formed and will be maintained in compliance with the terms of the Trust Agreement, we are of the opinion that under current United States federal income tax law: (1) The Trust will be classified as a grantor trust for United States federal income tax purposes and not as an association taxable as a corporation. (2) The Subordinated Notes will be classified as indebtedness for United States federal income tax purposes. 4 PPL CORPORATION PPL CAPITAL FUNDING, INC. PPL CAPITAL FUNDING TRUST I -4- MAY 9, 2001 We express no opinion with respect to the transactions referred to herein or in the Prospectus other than as expressly set forth herein. Moreover, we note that there is no authority directly on point dealing with securities such as the PEPS Units, Trust Securities or transactions of the type described herein and that our opinion is not binding on the Internal Revenue Service or the courts, either of which could take a contrary position. Nevertheless, we believe that the opinions expressed in the Prospectus, if challenged, would be sustained by a court with jurisdiction in a properly presented case. Our opinions are based upon the Internal Revenue Code of 1986, as amended, the Treasury regulations promulgated thereunder and other relevant authorities and law, all as in effect on the date hereof. Consequently, future changes in the law may cause the tax treatment of the transactions referred to herein to be materially different from that described above. We disclaim any undertaking to advise you of any subsequent changes of the matters stated, represented or assumed herein or any subsequent changes in applicable law, regulations or interpretations thereof. 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 federal law of the United States. We consent to the filing of this opinion as an exhibit to the Form 8-K to be filed with the Securities and Exchange Commission and to the use of our name in the Registration Statement under the caption "United States Federal Income Tax Consequences" and "Validity of the Securities". 5 PPL CORPORATION PPL CAPITAL FUNDING, INC. PPL CAPITAL FUNDING TRUST I -5- MAY 9, 2001 Very truly yours, /s/ Simpson Thacher & Bartlett SIMPSON THACHER & BARTLETT -----END PRIVACY-ENHANCED MESSAGE-----