Exhibit 10(b)

EXECUTION VERSION

UNCOMMITTED LINE OF CREDIT LETTER AGREEMENT

dated as of

July 1, 2012

PPL ENERGY SUPPLY, LLC
Two North Ninth Street (GENTW14)
Allentown, PA 18101-1179

Ladies and Gentlemen:

We take pleasure in advising you that we are prepared to extend to you, on an
uncommitted basis, the credit facilities described below, subject to and on the
terms and conditions set forth in this Uncommitted Line of Credit Letter
Agreement (this "Agreement"):

Definitions:
Capitalized terms shall have the meaning specified herein including Exhibit A
hereto.
   
Borrower:
PPL Energy Supply, LLC, a Delaware limited liability company (the “Borrower”).
   
Bank:
Banco Bilbao Vizcaya Argentaria, S.A. (the “Bank”).  For purposes of this
Agreement, the Bank is acting through its New York branch (the “Branch”).
Type and Amount
 
of Facility:
Uncommitted revolving letter of credit facility in an aggregate principal amount
not to exceed $100,000,000 (the "Facility Amount") at any one time
outstanding.  Under the line of credit, the Borrower may obtain letters of
credit (each a "Letter of Credit"). No Letter of Credit shall be issued if,
after giving effect thereto (i) the aggregate unpaid principal amount of all
unreimbursed drawings under Letters of Credit plus (ii) the aggregate amount
then available for drawing under all Letters of Credit would exceed the Facility
Amount.
   
Availability
 
Period:
On or prior to the date that is 30 days prior to the Final Maturity Date or, if
such date is not a Business Day, the next following Business Day (the "Expiry
Date").
   
Procedure for Letters
 
of Credit:
Without limiting the uncommitted nature of the facilities described herein,
Letters of Credit may be issued on any Business Day upon the giving of three (3)
Business Days prior written notice to the Bank stating the date, amount,
expiration date and beneficiary of such Letter of Credit, together with all
other particulars necessary to complete such Letter of Credit and the drawing
certificate to be attached thereto.  The amount of each Letter of Credit shall
not be less than the Minimum Amount. The Bank may issue the Letters of Credit or
arrange for the issuance thereof by another banking institution.  Each Letter of
Credit must be in form and substance satisfactory to the Bank (in its sole
discretion) and, unless otherwise agreed to by the Bank, expire no later than
the Expiry Date or, if earlier, on the first anniversary of the issuance of such
Letter of Credit. In addition to the foregoing, the Borrower shall have executed
and delivered to the Bank a reimbursement agreement substantially in the form of
Exhibit B (the “Reimbursement Agreement”) and such applications (each, an
“Application” and, together with the Reimbursement Agreement, the “Letter of
Credit Documents”) as the Bank shall require in connection with each such Letter
of Credit.
   
Purpose:
General corporate purposes.
   
Final Maturity Date:
The third anniversary of the date hereof or, if such date is not a Business Day,
the next following Business Day (or such later date as the Bank may agree in
writing in its sole discretion) (the “Final Maturity Date”).
   
Reimbursement
Reimbursement of drawings under Letters of Credit shall be made in accordance
with the Reimbursement Agreement.
   
Interest:
Interest on unreimbursed drawings under any Letter of Credit shall accrue and be
payable in accordance with the Reimbursement Agreement.
   
Fees:
As agreed by the parties in connection with each Letter of Credit.
   
Computation
 
Basis:
Interest, fees and other charges accruing on a per annum basis shall be computed
on the number of days actually elapsed on the basis of a 360-day year.
   
Representations and Warranties:
The Borrower hereby makes to the Bank the representations and warranties made by
it as “Borrower” in Article V of the $3,000,000,000 Revolving Credit Agreement
dated as of October 19, 2010 by and among PPL Energy Supply, LLC, as Borrower,
the Lenders party thereto and Wells Fargo Bank, National Association, as
Administrative Agent (as amended, restated, supplemented or otherwise modified
to the date hereof, the “Syndicated Credit Agreement”).  Such representations
and warranties are incorporated hereto by reference mutatis mutandis as if fully
set forth herein.  Such representations and warranties shall be deemed made as
of each date an Application is submitted and as of each date a Letter of Credit
is issued, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they were true and correct
as of such earlier date and except for the representations in Section 5.04(c),
Section 5.06, Section 5.15 and Section 5.16 of the Syndicated Credit Agreement
(as incorporated herein), which shall be deemed only to relate to the matters
referred to therein on and as of the date hereof.
   
Conditions to Effectiveness:
This Agreement shall be effective as of the date hereof, subject to the
satisfaction of the following conditions precedent:
     
(i)
Each of this Agreement and the Reimbursement Agreement shall have been duly
authorized, executed and delivered by the parties thereto;
 
(ii)
There shall exist no Default or Event of Default;
 
(iii)
All representations and warranties con­tained herein shall be true and correct
in all respects, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they were true and correct
as of such earlier date and except for the representations in Section 5.04(c),
Section 5.06, Section 5.15 and Section 5.16 of the Syndicated Credit Agreement
(as incorporated herein), which shall be deemed only to relate to the matters
referred to therein on and as of the date hereof; and
 
(iv)
The Bank shall have received a certificate from the Borrower dated the date
hereof, signed by a duly authorized officer of the Borrower, substantially in
the form of Exhibit C, with appro­priate insertions, together with copies of the
charter documents of the Borrower and the necessary resolutions of the Borrower
and other documents referred to in such certificate.
     
Conditions to each Issuance of
 
Letters of Credit
The facilities described herein are uncommitted and only available to the
Borrower under such conditions and on such terms as may be satisfactory to the
Bank.  In any event, the Bank will not issue Letters of Credit until the
following conditions have been met:
       
(i)
After giving effect to the Letter of Credit being requested, (i) the aggregate
unpaid principal amount of all unreimbursed drawings under Letters of Credit
plus (ii) the aggregate amount then available for drawing under all Letters of
Credit shall not exceed the Facility Amount;
 
(ii)
Immediately before and after giving effect to such Letter of Credit, there shall
exist no Default or Event of Default;
 
(iii)
All representations and warranties con­tained herein shall be true and correct,
except to the extent that such representations and warranties specifically refer
to an earlier date, in which case they were true and correct as of such earlier
date and except for the representations in Section 5.04(c), Section 5.06,
Section 5.15 and Section 5.16 of the Syndicated Credit Agreement (as
incorporated herein), which shall be deemed only to relate to the matters
referred to therein on and as of the date hereof;
 
(iv)
The Bank shall have received and accepted a duly completed Application in
respect of such Letter of Credit, signed by an authorized officer of the
Borrower (which authority shall have been previously certified to the Bank in
writing); and
 
(v)
Such Letter of Credit shall be satisfactory in form and substance to such Bank.
     
The Bank will not issue any Letter of Credit if: any order, judgment or decree
of any governmental authority shall by its terms purport to enjoin or restrain
the Bank from issuing such Letter of Credit, or any requirement of law
applicable to the Bank or any request or directive (whether or not having the
force of law) from any governmental authority with jurisdiction over the Bank
shall prohibit, or request that the Bank refrain from, the issuance of letters
of credit generally or such Letter of Credit in particular or shall impose upon
the Bank with respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the Bank is not otherwise compensated hereunder)
not in effect on the date hereof, or shall impose upon the Bank any unreimbursed
loss, cost or expense which was not applicable on the date hereof and which the
Bank in good faith deems material to it.
   
Covenants:
Until all commitments to issue Letters of Credit (if any) have been terminated
and all of the Obligations have been satisfied in full, the Borrower shall
perform the covenants that apply to it as “Borrower” under Article VI of the
Syndicated Credit Agreement.  Such covenants are incorporated herein by
reference mutatis mutandis as if fully set forth herein, provided that (i)
Section 6.07(aa) shall permit the granting of Liens (as defined in the
Syndicated Credit Agreement) to the Administrative Agent in accordance with the
terms of the Syndicated Credit Agreement, (ii) the first sentence of Section
6.06 of the Syndicated Credit Agreement shall be excluded for purposes hereof,
(iii) the Borrower shall be deemed to have complied with the obligations set
forth in Section 6.01 of the Syndicated Credit Agreement as long as it delivers
the requisite information in accordance with the terms of such Section 6.01,
(iv) references to Sections of the Syndicated Credit Agreement that are
incorporated by reference in this Agreement shall be deemed references to such
Sections as so incorporated herein, and (v) for purposes of this Agreement, a
new Section 6.07(bb) shall be added at the end of Section 6.07 of the Syndicated
Credit Agreement, which shall read as follows:
       
“(bb) Liens on cash securing the Obligations hereunder granted to the Bank
pursuant to the provisions set forth next to the caption “Cash Collateral.””
   
Events of Default:
Each of the events set forth in Section 7.01(a) through 7.01(l) (inclusive) of
the Syndicated Credit Agreement shall constitute an “Event of Default” under
this Agreement and the other Letter of Credit Documents, subject to the next
following sentence.  Such sections are incorporated herein by reference mutatis
mutandis as if fully set forth herein, provided that (i) references to the
“Loans” shall be disregarded for purposes hereof, (ii) references to the
“Required Lenders” shall be a reference to the Bank, and (iii) references to
“Reimbursement Obligations” shall refer to the Obligations.
   
Remedies:
If an Event of Default shall have occurred and be continuing, then, and in every
such event, while such event is continuing, the Bank may (A) by notice to the
Borrower terminate any commitment to issue Letters of Credit, and such
commitments shall thereupon terminate, and (B) by notice to the Borrower declare
all of the Obligations (whether absolute or contingent and whether or not due at
such time) to be, and such Obligations shall thereupon become, immediately due
and payable without presentment, demand, protest or other notice of any kind
(except as set forth in clause (A) above), all of which are hereby waived by the
Borrower and require the Borrower to, and the Borrower shall, cash collateralize
all such Obligations in accordance with the provisions set forth next to the
caption “Cash Collateral” below; provided, that, in the case of any Default or
any Event of Default specified in clauses 7.01(h) or 7.01(i) of the Syndicated
Credit Agreement (as incorporated herein) with respect to the Borrower, without
any notice to the Borrower or any other act by the Bank, any then outstanding
commitments to issue Letters of Credit shall thereupon terminate and all of the
Obligations (whether absolute or contingent and whether or not due at such time)
shall become immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower, and
the Borrower shall cash collateralize all such Obligations in accordance with
the provisions set forth next to the caption “Cash Collateral” below.
 
No failure by the Bank to exercise, no course of dealing with respect to, and no
delay in exercising any right, power or privilege hereunder or under any Letter
of Credit Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
provided herein and in the Letter of Credit Documents shall be cumulative and
not exclusive of any rights or remedies provided by law.
   
Cash Collateral:
Upon the occurrence of any of the following: (i) the stated amount of issued and
outstanding Letters of Credit exceeds the Facility Amount, (ii) an Event of
Default, or (iii) the Expiry Date, the Borrower shall cash collateralize all of
the Letters of Credit by depositing into a cash collateral account established
and maintained (including the investments made pursuant thereto) by the Bank
pursuant to a cash collateral agreement in form and substance satisfactory to
the Bank an amount in cash equal to the stated amount of the then outstanding
Letters of Credit.
   
Other Incorporated Provisions:
The following additional provisions from the Syndicated Credit Agreement are
hereby incorporated by reference mutatis mutandis as if fully set forth herein:
         
·
·
·
Section 2.16,
Section 2.17,
Section 9.01, provided that all notices to the Bank shall be sent to:
             
Banco Bilbao Vizcaya Argentaria, S.A., New York Branch
1345 Avenue of the Americas
New York, NY 10105
Attention: Nietzsche Rodricks
Tel: (212) 728-2380
Fax: (212) 333-2904
E-mail: nietzsche.rodricks@bbvany.com
           
·
Section 9.03, but excluding clause (i) of subsection 9.03(a) and the proviso to
such subsection,    
·
Section 9.09,    
·
Section 9.12, and    
·
Section 9.14.
   
Interpretation:
In case of conflict between any provision of the Reimbursement Agreement and the
provisions of this Agreement (including, for the avoidance of doubt, those
provisions included herein by reference to the Syndicated Credit Agreement), the
provisions of this Agreement shall prevail. Letters of Credit issued under this
Agreement are expressly intended not to be issued under the Syndicated Credit
Agreement (and not to constitute “Letters of Credit” thereunder).  This
Agreement and any Letters of Credits issued under this Agreement and the Letter
of Credit Documents shall not constitute “Loan Documents” for any purpose under
the Syndicated Credit Agreement.
     
Unless otherwise stated in this Agreement, whenever a provision of the
Syndicated Credit Agreement is incorporated by reference:
 
(i)
references to “this Agreement,” or to any “Notes” or “Loan Documents” shall be
deemed a reference to this Agreement and the Letter of Credit Documents,
 
(ii)
such provision shall be deemed to include, mutatis mutandis, all related
definitions and interpretive provisions,
 
(iii)
references to “Default” and “Event of Default” shall be deemed a reference to a
Default or an Event of Default under this Agreement,
 
(iv)
references to the “Administrative Agent,” any “Lender,” and any “Issuing Lender”
shall be a reference to the Bank,
 
(v)
any requirement that a notice or communication be given or other action be taken
among the Administrative Agent, the Lenders, any Issuing Lender, a certain
majority of Lenders, the Required Lenders or any party other than the Borrower,
no such notice, communication or action shall be required for purposes hereof,
 
(vi)
references therein to “Letters of Credit” shall be deemed references to the
Letters of Credit under this Agreement,
 
(vii)
references to the “Escrow Closing Date” and the “Effective Date” shall be deemed
references to the date hereof;
 
(viii)
the Bank’s “Applicable Lending Office” for purposes hereof, shall be the Branch,
and
 
(ix)
references to sections or clauses of the Syndicated Credit Agreement that are
incorporated by reference in this Agreement shall be deemed references to such
sections or clauses as so incorporated herein.
GOVERNING LAW;
   
JURISDICTION; WAIVER OF
   
IMMUNITY:
THIS AGREEMENT AND THE LETTER OF CREDIT DOCUMENTS SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.  THE
BORROWER HEREBY SUBMITS 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 PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE LETTER OF CREDIT DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.  THE BORROWER IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH
COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
   
JURY WAIVER:
BORROWER AND BANK WAIVE TRIAL BY JURY IN CONNECTION WITH ANY ACTION OR
PROCEEDING OF ANY NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION, ANY
COUNTERCLAIM, OFFSET OR DEFENSE) ARISING UNDER, OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR THE LETTER OF CREDIT DOCUMENTS.
   
Survival; Amendments; etc.
All indemnities set forth herein shall survive the execution and delivery of
this Agreement, the issuance of the Letters of Credit, and the expiration or
termination of this Agreement.  Neither this Agreement nor any Letter of Credit
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the parties thereto.  This Agreement may be exe­cuted in any number of
counterparts and by the different par­ties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.  This Agreement and the
Letter of Credit Documents represent the final and complete agreement of the
parties hereto, and all prior negotiations, representa­tions, understandings,
writings and statements of any nature are hereby superseded in their entirety by
the terms of this Agreement and the Letter of Credit Documents.
   
Patriot Act Notice:
The Bank hereby notifies the Borrower that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)), as amended and supplemented from time to time (the “Patriot Act”), the
Bank may be required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower
and other information that will allow the Bank to identify the Borrower in
accordance with the Patriot Act.  The Borrower shall provide, to the extent
commercially reasonable, such information and take such actions as are
reasonably requested by the Bank in order to assist the Bank in maintaining
compliance with the Patriot Act.
   
UNCOMMITTED FACILIY:
THIS AGREEMENT DOES NOT AND IS NOT INTENDED TO CONSTI­TUTE OR INCLUDE A LEGALLY
BINDING COMMITMENT BY THE BANK TO EXTEND CREDIT TO THE BORROWER.  THE LINE OF
CREDIT PROVIDED BY THIS AGREEMENT AND THE EXTENSIONS OF CREDIT CONTEMPLATED
HEREBY ARE UNCON­DI­TIONALLY CANCELLABLE BY THE BANK AT ANY TIME, WITHOUT CAUSE
AND WITHOUT ANY PRIOR NOTICE OF ANY KIND TO THE BORROWER.  WITHOUT LI­MITING THE
GENERALITY OF THE FOREGOING AND NOTWITHSTANDING ANY OTHER PROVISION OF THIS
AGREEMENT OR ANY OTHER LETTER OF CREDIT DOCUMENT, EACH EXTENSION OF CREDIT
HEREUNDER IS SUBJECT TO THE PRIOR APPROVAL OF THE BANK'S CREDIT COMMITTEE OR THE
OFFICER OR OFFICERS OF THE BANK TO WHOM AUTHORITY FOR SUCH APPROVAL HAS BEEN
GRANTED; SUCH APPROVAL MAY BE GRANTED OR WITHHELD IN THE SOLE DISCRETION OF THE
APPROPRI­ATE PARTY, REGARDLESS OF ANY PRIOR DEALINGS OR COURSE OF CONDUCT.
     
     [SIGNATURE PAGES FOLLOW]

 
 

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Sincerely,

BANCO BILBAO VIZCAYA ARGENTARIA, S.A., the Bank

By: __________________________
Name: ________________________
Title: _________________________

By: __________________________
Name: ________________________
Title: _________________________

[PPL UNCOMMITTED LINE OF CREDIT AGREEMENT]

 
 

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Accepted and Agreed as of the date first written above:

PPL ENERGY SUPPLY, LLC, the Borrower

By: __________________________
Name: ________________________
Title: _________________________

[PPL UNCOMMITTED LINE OF CREDIT AGREEMENT]
 
 
 

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EXHIBIT A

 
(Additional Definitions)

The following additional terms as used in this Agreement shall have the
following meanings:

(a)           Business Day shall mean a day on which the main office of the Bank
in New York, New York is open for business.

(b)           Default shall mean any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.

(c)           Obligations shall means the obligations and liabilities of the
Borrower to the Bank under this Agreement and the Letter of Credit Documents and
all of the Bank’s claims against the Borrower, whether arising or incurred under
this Agreement or the Letter of Credit Documents or relating to any Letter of
Credit or otherwise, whether now existing or hereafter incurred, and whether now
or hereafter owing to or acquired in any manner by the Bank.

A-1