FIVE-YEAR LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT

Commitment Appendix

Schedule 5.12   -   Restricted Subsidiaries, Etc.

Schedule 5.18   -   Guarantees of Foreign Subsidiary Debt

Schedule 6.07   -   Existing Liens

Schedule 6.10   -   Restrictive Agreements

Schedule 6.12   -   Existing Debt

Exhibit A   -   Form of Notice of Conversion/Continuation

Exhibit B   -   Form of Note

Exhibit C   -   Form of Assignment and Assumption Agreement

Exhibit D   -   Forms of Opinion of Counsel for the Borrower

FIVE-YEAR LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT (this “ Agreement ”) dated as of December 15, 2005 among PPL ENERGY SUPPLY, LLC, a Delaware limited liability company (the “ Borrower ”), the LENDERS party hereto from time to time, and WACHOVIA FIXED INCOME STRUCTURED TRADING SOLUTIONS, LLC, a Delaware limited liability company, as Administrative Agent and Issuing Lender.

The Borrower has requested and the Lenders (as hereinafter defined) have agreed to enter into this Agreement on the terms and conditions set forth as follows:

Section 1.01    Definitions . All capitalized terms used in this Agreement or in any Appendix, Schedule or Exhibit hereto which are not otherwise defined herein or therein shall have the respective meanings set forth below.

“ Adjusted London Interbank Offered Rate ” means, for any Interest Period, a rate per annum equal to the quotient obtained (rounded upward, if necessary, to the nearest 1/100th of 1%) by dividing (i) the London Interbank Offered Rate for such Interest Period by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.

“ Administrative Agent ” means Wachovia Fixed Income Structured Trading Solutions, LLC, in its capacity as administrative agent for the Lenders hereunder and under the other Loan Documents, and its successor or successors in such capacity.

“ Administrative Questionnaire ” means, with respect to each Lender, an administrative questionnaire in the form provided by the Administrative Agent and submitted to the Administrative Agent (with a copy to the Borrower) duly completed by such Lender.

“ Affiliates ” means, with respect to any Person, any other Person who is directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through the ownership of stock or its equivalent, by contract or otherwise.

“ Agent ” means the Administrative Agent.

“ Agreement ” means this Five-Year Letter of Credit and Reimbursement Agreement, as amended, restated, supplemented or modified from time to time.

“ Applicable Lending Office ” means, with respect to any Lender, (i) in the case of its Base Rate Loans, its Base Rate Lending Office and (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.

“ Asset Sale ” shall mean any sale of any assets, including by way of the sale by the Borrower or any of its Subsidiaries of equity interests in such Subsidiaries.

“ Assignee ” has the meaning set forth in Section 9.06(c).

“ Assignment and Assumption Agreement ” means an Assignment and Assumption Agreement, substantially in the form of attached Exhibit C, under which an interest of a Lender hereunder is transferred to an Eligible Assignee pursuant to Section 9.06(c).

“ Bankruptcy Code ” means the Bankruptcy Reform Act of 1978, as amended, or any successor statute.

“ Base Rate ” means for any day a rate per annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal Funds Rate for such day.

“ Base Rate Borrowing ” means a Borrowing comprised of Base Rate Loans.

“ Base Rate Lending Office ” means, as to each Lender, its office located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Base Rate Lending Office) or such other office as such Lender may hereafter designate as its Base Rate Lending Office by notice to the Borrower and the Administrative Agent.

“ Base Rate Loan ” means a Loan in respect of which interest is computed on the basis of the Base Rate.

“ Borrower ” has the meaning set forth in the Recitals.

“ Borrower’s Rating ” means the senior unsecured long-term debt rating of the Borrower from Moody’s or S&P.

“ Borrowing ” means a group of Loans of a single Type made by the Lenders on a single date and, in the case of a Euro-Dollar Borrowing, having a single Interest Period.

“ Business Day ” means any day except a Saturday, Sunday or other day on which commercial banks in Charlotte, North Carolina or New York, New York are authorized by law to close; provided , that, when used in Article III with respect to any action taken by or with respect to any Issuing Lender, the term “Business Day” shall not include any day on which commercial banks are authorized by law to close in the jurisdiction where the office at which such Issuing Lender books the Letter of Credit is located; and provided , further , that when used with respect to any borrowing of, payment or prepayment of principal of or interest on, or the Interest Period for, a Euro-Dollar Loan, or a notice by the Borrower with respect to any such borrowing payment, prepayment or Interest Period, the term “Business Day” shall also mean that such day is a day on which commercial banks are open for international business (including dealings in Dollar deposits) in London.

“ Capital Lease ” means any lease of property which, in accordance with GAAP, should be capitalized on the lessee’s balance sheet.

“ Capital Lease Obligations ” means, with respect to any Person, all obligations of such Person as lessee under Capital Leases, in each case taken at the amount thereof accounted for as liabilities in accordance with GAAP.

“ Change of Control ” means (i) the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended) of 25% or more of the outstanding shares of voting stock of PPL Corporation or its successors or (ii) the failure at any time of PPL Corporation or its successors to own 80% or more of the outstanding shares of the Voting Stock in the Borrower.

“ Closing Date ” means the date, not later than December 15, 2005, on which the Administrative Agent determines that the conditions specified in or pursuant to Section 4.01 have been satisfied.

“ Commitment ” means, with respect to any Lender, the commitment of such Lender to make Loans under this Agreement as set forth in the Commitment Appendix and to purchase participations in the Letter of Credit pursuant to Article III hereof, as such Commitment may be reduced from time to time pursuant to Sections 2.07, 2.08 or 9.06(c) or increased from time to time pursuant to Section 9.06(c).

“ Commitment Appendix ” means the Appendix attached under this Agreement identified as such.

“ Commitment Letter ” means that certain commitment letter, dated November 29, 2005, as amended and restated on December 14, 2005, regarding, among other things, the agreement as to certain fees payable by the Borrower to Wachovia Bank, National Association and Wachovia Fixed Income Structured Trading Solutions, LLC, as further amended, supplemented or otherwise modified from time to time in accordance with its terms.

“ Consolidated Capitalization ” shall mean the sum of, without duplication, (A) the Consolidated Debt of the Borrower, (B) the consolidated members’ equity (determined in accordance with GAAP) of the common, preference and preferred equityholders of the Borrower and minority interests recorded on the Borrower’s consolidated financial statements (excluding therefrom the effect of all unrealized gains and losses reported under Financial Accounting Standards Board Statement No. 133 in connection with forward contracts, futures contracts or other derivatives or commodity hedging agreements for the future delivery of electricity or capacity), (C) up to an aggregate amount of $200,000,000 of Hybrid Preferred Securities and (D) up to an aggregate amount of $200,000,000 of Equity-Linked Securities, except that for purposes of calculating Consolidated Capitalization of the Borrower, Consolidated Debt of the Borrower shall exclude Non-Recourse Debt and Consolidated Capitalization of the Borrower shall exclude that portion of member equity attributable to assets securing Non-Recourse Debt.

“ Consolidated Debt ” means the consolidated Debt of the Borrower and its Consolidated Subsidiaries (determined in accordance with GAAP), except that for purposes of this definition (a) Consolidated Debt of the Borrower shall exclude Non-Recourse Debt and (b) Consolidated Debt of the Borrower shall exclude (i) up to an aggregate amount of $200,000,000 of Hybrid Preferred Securities and (ii) up to an aggregate amount of $200,000,000 of Equity-Linked Securities.

“ Consolidated Subsidiary ” means with respect to any Person at any date any Subsidiary of such Person or other entity the accounts of which would be consolidated with those of such Person in its consolidated financial statements if such statements were prepared as of such date in accordance with GAAP.

“ Continuing Lender ” means with respect to any event described in Section 2.07(b), a Lender which is not a Retiring Lender, and “Continuing Lenders” means any two or more of such Continuing Lenders.

“ Corporation ” means a corporation, association, company, joint stock company, limited liability company, partnership or business trust.

“ Debt ” of any Person means, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (iii) all Guarantees by such Person of Debt of others, (iv) all Capital Lease Obligations and Synthetic Leases of such Person, (v) all obligations of such Person in respect of Interest Rate Protection Agreements, foreign currency exchange agreements or other interest or exchange rate hedging arrangements (the amount of any such obligation to be the net amount that would be payable upon the acceleration, termination or liquidation thereof), but only to the extent that such net obligations exceed $75,000,000 in the aggregate and (vi) all obligations of such Person as an account party in respect of letters of credit and bankers’ acceptances; provided , however , that “Debt” of such Person does not include (a) obligations of such Person under any installment sale, conditional sale or title retention agreement or any other agreement relating to obligations for the deferred purchase price of property or services (b) obligations under agreements relating to the purchase and sale of any commodity, including any power sale or purchase agreements, any commodity hedge or derivative (regardless of whether any such transaction is a “financial” or physical transaction), (c) any trade obligations or other obligations of such Person incurred in the ordinary course of business or (d) obligations of such Person under any lease agreement (including any lease intended as security) that is not a Capital Lease or a Synthetic Lease.

“ Default ” means 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.

“ Defaulting Lender ” means at any time any Lender with respect to which a Lender Default is in effect at such time.

“ Dollars ” and the sign “$” means lawful money of the United States of America.

“ Effective Date ” means the date this Agreement becomes effective in accordance with Section 9.08.

“ Eligible Assignee ” means (i) a Lender; (ii) a commercial bank organized under the laws of the United States and having a combined capital and surplus of at least $100,000,000; (iii) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development, or a political subdivision of any such country, and having a combined capital and surplus of at least $100,000,000; provided , that such bank is acting through a branch or agency located and licensed in the United States; (iv) an Affiliate of a Lender that is an “accredited investor” (as defined in Regulation D under the Securities Act of 1933, as amended); or (v) any contractual counterparty, which is an “accredited investor” (as defined in Regulation D under the Securities Act of 1933, as amended), under any credit derivative transaction entered into with a Lender in which the Borrower is the “referenced entity”; provided , that upon and following the occurrence of an Event of Default, an Eligible Assignee shall mean any Person.

“ Environmental Laws ” means any and all federal, state and local statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses or other written governmental restrictions relating to the environment or to emissions, discharges or releases of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or Hazardous Substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, petroleum or petroleum products, chemicals or industrial, toxic or Hazardous Substances or wastes.

“ Environmental Liabilities ” means all liabilities (including anticipated compliance costs) in connection with or relating to the business, assets, presently or previously owned, leased or operated property, activities (including, without limitation, off-site disposal) or operations of the Borrower or any of its Subsidiaries, whether vested or unvested, contingent or fixed, actual or potential, which arise under or relate to matters covered by Environmental Laws.

“ Equity-Linked Securities ” means any securities of the Borrower or any of its Subsidiaries which are convertible into, or exchangeable for, equity securities of the Borrower, such Subsidiary or PPL Corporation, including any securities issued by any of such Persons which are pledged to secure any obligation of any holder to purchase equity securities of the Borrower, any of its Subsidiaries or PPL Corporation.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute.

“ ERISA Group ” means the Borrower and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower, are treated as a single employer under Section 414(b) or (c) of the Internal Revenue Code.

“ Euro-Dollar Lending Office ” means, as to each Lender, its office, branch or Affiliate located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Euro-Dollar Lending Office) or such other office, branch or Affiliate of such Lender as it may hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower and the Administrative Agent.

“ Euro-Dollar Borrowing ” means a Borrowing comprised of Euro-Dollar Loans.

“ Euro-Dollar Loan ” means a Loan in respect of which interest is computed on the basis of the Adjusted London Interbank Offered Rate pursuant to the applicable Notice of Conversion/Continuation.

“ Euro-Dollar Reserve Percentage ” of any Lender for the Interest Period of any LIBOR Rate Loan means the reserve percentage applicable to such Lender during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) then applicable to such Lender with respect to liabilities or assets consisting of or including “Eurocurrency Liabilities” (as defined in Regulation D). The Adjusted London Interbank Offered Rate shall be adjusted automatically on and as of the effective date of any change in the Euro-Dollar Reserve Percentage.

“ Event of Default ” has the meaning set forth in Section 7.01.

“ Existing Debt ” means the Debt outstanding on the Closing Date and listed on Schedule 6.12 hereto.

“ Existing Synthetic Lease Financing ” means each of the following lease financings existing as of the date hereof, regardless of whether such financing constitutes a “Synthetic Lease” within the meaning of this Agreement: (i) the Lower Mount Bethel project and (ii) the lease financing involving PPL Large Scale Distributed Generation II, LLC.

“ Federal Funds Rate ” means for any day the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided , that (i) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average of quotations for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by the Administrative Agent.

“ Foreign Subsidiary ” means a Subsidiary which is not formed under the laws of the United States or any territory thereof.

“ GAAP ” means United States generally accepted accounting principles applied on a consistent basis.

“ Governmental Authority ” means any federal, state or local government, authority, agency, central bank, quasi-governmental authority, court or other body or entity, and any arbitrator with authority to bind a party at law.

“ Group of Loans ” means at any time a group of Loans consisting of (i) all Loans which are Base Rate Loans at such time or (ii) all Loans which are Euro-Dollar Loans of the same Type having the same Interest Period at such time; provided , that, if a Loan of any particular Lender is converted to or made as a Base Rate Loan pursuant to Sections 2.14 or 2.17, such Loan shall be included in the same Group or Groups of Loans from time to time as it would have been in if it had not been so converted or made.

“ Guarantee ” of or by any person means any obligation, contingent or otherwise, of such person guaranteeing or having the economic effect of guaranteeing any Debt of any other person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or to purchase (or to advance or supply funds for the purchase of) any security for payment of such Debt, (ii) to purchase or lease property, securities or services for the purpose of assuring the owner of such Debt of the payment of such Debt or (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Debt; provided , however , that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

“ Hazardous Substances ” means any toxic, caustic or otherwise hazardous substance, including petroleum, its derivatives, by-products and other hydrocarbons, or any substance having any constituent elements displaying any of the foregoing characteristics.

“ Hybrid Preferred Securities ” means any trust preferred securities, or deferrable interest subordinated debt with a maturity of at least 20 years issued by the Borrower, or any business trusts, limited liability companies, limited partnerships (or similar entities) (i) all of the common equity, general partner or similar interests of which are owned (either directly or indirectly through one or more wholly owned Subsidiaries) at all times by the Borrower or any of its Subsidiaries, (ii) that have been formed for the purpose of issuing hybrid preferred securities and (iii) substantially all the assets of which consist of (A) subordinated debt of the Borrower or a Subsidiary of the Borrower, as the case may be, and (B) payments made from time to time on the subordinated debt.

“ Indemnitee ” has the meaning set forth in Section 9.03(b).

“ Interest Period ” means with respect to each Euro-Dollar Loan, a period commencing on the date specified in the applicable Notice of Conversion/Continuation and ending one, two, three or six months thereafter, as the Borrower may elect in the applicable notice; provided , that:

(i)    any Interest Period which would otherwise end on a day which is not a Business Day shall, subject to clauses (iii) and (iv) below, be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(ii)    any Interest Period which begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (iii) below, end on the last Business Day of a calendar month;

(iii)    if any Interest Period includes a date on which a payment of principal of the Loans is required (based on circumstances existing at the first day of such Interest Period) to be made under Section 2.08 but does not end on such date, then (x) the principal amount (if any) of each Euro-Dollar Loan required to be repaid on such date shall have an Interest Period ending on such date and (y) the remainder (if any) of each such Euro-Dollar Loan shall have an Interest Period determined as set forth above; and

(iv)    no Interest Period in respect of a Loan shall end after the Termination Date.

“ Interest Rate Protection Agreements ” means any agreement providing for an interest rate swap, cap or collar, or any other financial agreement designed to protect against fluctuations in interest rates.

“ Internal Revenue Code ” means the Internal Revenue Code of 1986, as amended, or any successor statute.

“ Issuing Lender ” means Wachovia Fixed Income Structured Trading Solutions, LLC, in its capacity as the issuer of the Letter of Credit under Section 2.01, and its successor or successors in such capacity.

“ Lender ” means each bank or other lending institution listed in the Commitment Appendix as having a Commitment, each Eligible Assignee that becomes a Lender pursuant to Section 9.06(c) and their respective successors and shall include, as the context may require and each Issuing Lender in such capacity.

“ Lender Default ” means (i) the failure (which has not been cured) of any Lender to make available any Loan or any reimbursement for a drawing under the Letter of Credit which in either case it is obligated to make available under the terms and conditions of this Agreement or (ii) a Lender having notified the Administrative Agent and the Borrower that such Lender does not intend to comply with its obligations under Article II following the appointment of a receiver or conservator with respect to such Lender at the direction or request of any regulatory agency or authority.

“ Letter of Credit ” means the letter of credit issued under this Agreement by Wachovia Fixed Income Structured Trading Solutions, LLC, as Issuing Lender, on the Closing Date, as amended, restated, supplemented or modified from time to time.

“ Letter of Credit Commitment ” means the aggregate Commitment.

“ Letter of Credit Liabilities ” means, for any Lender at any time, the product derived by multiplying (i) the sum, without duplication, of (A) the aggregate amount that is (or may thereafter become) available for drawing under the Letter of Credit plus (B) the aggregate unpaid amount of all Reimbursement Obligations outstanding at such time by (ii) the quotient derived by dividing such Lender’s Commitment by the aggregate of the Commitments of all Lenders.

“ Lien ” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance intended to confer or having the effect of conferring upon a creditor a preferential interest.

“ Loan ” means a Base Rate Loan or a Euro-Dollar Loan, and “Loans” means any combination of the foregoing; provided , that, if any such loan or loans (or portions thereof) are combined or subdivided pursuant to a Notice of Conversion/Continuation, the term “Loan” shall refer to the combined principal amount resulting from such combination or to each of the separate principal amounts resulting from such subdivision, as the case may be.

“ Loan Availability Period ” means the period from and including the Closing Date to and including the Business Day immediately preceding the Termination Date.

“ Loan Documents ” means this Agreement and the Notes.

“ London Interbank Offered Rate ” means, for any Euro-Dollar Loan for any Interest Period, the interest rate for deposits in Dollars for a period of time comparable to such Interest Period which appears on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days before the first day of such Interest Period; provided , however , if more than one rate is specified on Telerate page 3750, the applicable rate shall be the arithmetic means of all such rates. If for any reason such rate is not available, the term “London Interbank Offered Rate” means for any Interest Period, the rate per annum appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days before the first day of such Interest Period for a period of time comparable to such Interest Period; provided , however , that if more than one such rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%). If for any reason the London interbank offered rate is not available on either Telerate page 3750 or Reuters Screen LIBO Page, the term “London Interbank Offered Rate” means for any Interest Period, the rate per annum at which deposits in Dollars are offered to Wachovia Bank, National Association in the London interbank market at approximately 11:00 A.M. (London time) two Business Days before the first day of such Interest Period in an amount approximately equal to the principal amount of the Euro-Dollar Loan of Wachovia Bank, National Association to which such Interest Period is to apply and for a period of time comparable to such Interest Period.

“ Master Letter of Credit Fee Rate ” shall have the meaning set forth in the Commitment Letter.

“ Material Adverse Effect ” means (i) any material adverse effect upon the business, assets, financial condition or operations of the Borrower or the Borrower and its Subsidiaries, taken as a whole; (ii) a material adverse effect on the ability of the Borrower to perform its obligations under this Agreement, the Notes or the other Loan Documents or (iii) a material adverse effect on the validity or enforceability of this Agreement, the Notes or any of the other Loan Documents.

“ Material Debt ” means Debt (other than the Notes) of the Borrower and/or one or more of its Restricted Subsidiaries in a principal or face amount exceeding $40,000,000.

“ Material Plan ” means at any time a Plan or Plans having aggregate Unfunded Liabilities in excess of $25,000,000.

“ Moody’s ” means Moody’s Investors Service, Inc., a Delaware corporation, and its successors or, absent any such successor, such nationally recognized statistical rating organization as the Borrower and the Administrative Agent may select.

“ Multiemployer Plan ” means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions.

“ New Lender ” means with respect to any event described in Section 2.07(b), an Eligible Assignee which becomes a Lender hereunder as a result of such event, and “New Lenders” means any two or more of such New Lenders.

“ Non-Defaulting Lender ” means each Lender other than a Defaulting Lender, and “Non-Defaulting Lenders” means any two or more of such Lenders.

“ Non-Recourse Debt ” shall mean Debt that is nonrecourse to the Borrower or any Restricted Subsidiary.

“ Non-U.S. Lender ” has the meaning set forth in Section 2.16(e).

“ Note ” means a promissory note, substantially in the form of Exhibit B hereto, issued at the request of a Lender evidencing the obligation of the Borrower to repay outstanding Loans.

“ Notice of Conversion/Continuation ” has the meaning set forth in Section 2.05(d)(ii).

“ Obligations ” means:

(i)    all principal of and interest (including, without limitation, any interest which accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of the Borrower, whether or not allowed or allowable as a claim in any such proceeding) on any Loan, fees payable or Reimbursement Obligation under, or any Note issued pursuant to, this Agreement or any other Loan Document;

(ii)    all other amounts now or hereafter payable by the Borrower and all other obligations or liabilities now existing or hereafter arising or incurred (including, without limitation, any amounts which accrue after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of the Borrower, whether or not allowed or allowable as a claim in any such proceeding) on the part of the Borrower pursuant this Agreement or any other Loan Document;

(iii)    all expenses of the Administrative Agent as to which the Administrative Agent has a right to reimbursement under Section 9.03(a) hereof or under any other similar provision of any other Loan Document; and

(iv)    all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 9.03 hereof or under any other similar provision of any other Loan Document;

together in each case with all renewals, modifications, consolidations or extensions thereof.

“ Other Taxes ” has the meaning set forth in Section 2.16(b).

“ Outstandings ” means at any time, with respect to any Lender, the sum of (i) the aggregate principal amount of such Lender’s outstanding Loans plus (ii) the aggregate amount of such Lender’s outstanding Letter of Credit Liabilities.

“ Parent ” means PPL Corporation, a Pennsylvania corporation, and its successors.

“ Participant ” has the meaning set forth in Section 9.06(b).

“ PBGC ” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“ Permitted Business ” with respect to any Person means a business that is the same or similar to the business of the Borrower or any Subsidiary as of the date hereof, or any business reasonably related thereto.

“ Person ” means an individual, a corporation, a partnership, an association, a limited liability company, a trust or an unincorporated association or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“ Plan ” means at any time an employee pension benefit plan (including a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (i) is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or (ii) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group.

“ Primary Facility ” shall mean the letter of credit and loan facility governed by the Five-Year Letter of Credit and Revolving Credit Agreement, dated the date hereof, among the Borrower, Wachovia Bank, National Association, as issuing lender, lender and administrative agent, and the lenders from time to time party thereto, as amended, restated supplemented or modified from time to time.

“ Primary Letter of Credit ” shall mean any letters of credit issued pursuant to the Primary Facility, as amended, restated supplemented or modified from time to time.

“ Prime Rate ” means the rate of interest publicly announced by Wachovia Bank, National Association in Charlotte, North Carolina from time to time as its Prime Rate.

“ Quarterly Date ” means the fifteenth (15 ^th ) day of each March, June, September and December, or, if such day is not a Business Day, the immediately succeeding Business Day.

“ Register ” has the meaning set forth in Section 9.06(e).

“ Regulation D ” means Regulation D of the Board of Governors of the Federal Reserve System, as amended, or any successor regulation.

“ Reimbursement Obligations ” means at any time all obligations of the Borrower to reimburse the Issuing Lender pursuant to Section 2.02(a) for amounts paid by the Issuing Lender in respect of drawings under the Letter of Credit, including any portion of any such obligation to which a Lender has become subrogated pursuant to Section 2.02(c) (it being understood that Unpaid Reimbursement Obligations that are converted to Loans shall no longer be considered Reimbursement Obligations).

“ Replacement Date ” has the meaning set forth in Section 2.07(b).

“ Replacement Lender ” has the meaning set forth in Section 2.07(b).

“ Required Lenders ” means at any time the Administrative Agent and the Non-Defaulting Lenders having at least 51% of the aggregate amount of the Commitments of all Non-Defaulting Lenders or, if the Commitments shall have been terminated, the Administrative Agent and Non-Defaulting Lenders having at least 51% of the aggregate amount of the Outstandings of the Non-Defaulting Lenders at such time.

“ Restricted Subsidiary ” means each Subsidiary listed on Schedule 5.12 and each other Subsidiary designated by the Borrower as a “Restricted Subsidiary” in writing to the Administrative Agent; provided , that, each Restricted Subsidiary shall be a direct Wholly-Owned Subsidiary of the Borrower or a direct Wholly-Owned Subsidiary of a Restricted Subsidiary.

“ Retiring Lender ” means a Lender that ceases to be a Lender hereunder pursuant to the operation of Section 2.07(b).

“ SEC ” means the Securities and Exchange Commission.

“ S&P ” means Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc., a New York corporation, and its successors or, absent any such successor, such nationally recognized statistical rating organization as the Borrower and the Administrative Agent may select.

“ Special Purpose Subsidiary ” means any Wholly-Owned Subsidiary (regardless of the form of organization) of the Borrower formed solely for the purpose of, and which engages in no other activities except those necessary for, effecting financings related to Synthetic Leases.

“ Subsidiary ” means, any Corporation a majority of the outstanding Voting Stock of which is owned, directly or indirectly, by the Borrower or one or more other Subsidiaries of the Borrower.

“ Synthetic Lease ” means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an operating lease in accordance with GAAP.

“ Taxes ” has the meaning set forth in Section 2.16(a).

“ Termination Date ” means March 10, 2011 (or, if such day is not a Business Day, the next preceding Business Day), or such earlier date upon which the Commitments shall have been terminated in their entirety in accordance with this Agreement.

“ Type ” when used in respect of any Loan or Borrowing, shall refer to the rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined.

“ Unfunded Liabilities ” means, with respect to any Plan at any time, the amount (if any) by which (i) the value of all benefit liabilities under such Plan, determined on a plan termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the ERISA Group to the PBGC or any other Person under Title IV of ERISA.

“ United States ” means the United States of America, including the States and the District of Columbia, but excluding its territories and possessions.

“ Unpaid Reimbursement Obligation ” shall have the meaning set forth in Section 2.02(b).

“ Voting Stock ” means stock (or other interests) of a Corporation having ordinary voting power for the election of directors, managers or trustees thereof, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.

“ Wholly-Owned Subsidiary ” means, with respect to any Person at any date, any Subsidiary of such Person all of the Voting Stock of which (except directors’ qualifying shares) are at the time directly or indirectly owned by such Person.

Section 2.01    Commitments .

(a)    Letter of Credit . The Issuing Lender agrees, on the terms and conditions set forth in this Agreement, to issue the Letter of Credit on the Closing Date for the account of the Borrower and in support of such obligations of the Borrower that are acceptable to the Issuing Lender; provided , that, immediately after the Letter of Credit is issued, (A) the aggregate amount of the Letter of Credit Liabilities shall not exceed the Letter of Credit Commitment and (B) the Outstandings shall not exceed the aggregate amount of the Commitments. The Letter of Credit shall have a term that extends no more than one Business Day beyond the Termination Date.

(b)    Loans .   Each Lender severally agrees, on the terms and conditions set forth in this Agreement, to make Loans as required by Section 2.02(b) during the Loan Availability Period in amounts such that its Outstandings shall not exceed its Commitment; provided , that, immediately after giving effect to each such Loan, the aggregate Outstandings of all Lenders shall not exceed the aggregate amount of the Commitments of all Lenders. No Loans made hereunder shall be made directly to the Borrower, and instead, the proceeds of all such Loans shall be paid to the Administrative Agent to reimburse unpaid Reimbursement Obligations of the Issuing Lender in accordance with Section 2.02(b).

Section 2.02    Reimbursement Obligations .

(a)    Letter of Credit Drawings . The Borrower shall be irrevocably and unconditionally obligated forthwith to reimburse the Issuing Lender for any amounts paid by such Issuing Lender upon any drawing under the Letter of Credit, together with any and all reasonable charges and expenses which the Issuing Lender may pay or incur relative to such drawing and interest on the amount drawn at the rate applicable to Base Rate Loans for each day from and including the date such amount is drawn to but excluding the date such reimbursement payment is due and payable. Such reimbursement payment shall be due and payable (i) at or before 1:00 P.M. (Charlotte, North Carolina time) on the date the Issuing Lender notifies the Borrower of such drawing, if such notice is given at or before 10:00 A.M. (Charlotte, North Carolina time) on such date or (ii) at or before 10:00 A.M. (Charlotte, North Carolina time) on the next succeeding Business Day; provided , that no payment otherwise required by this sentence to be made by the Borrower at or before 1:00 P.M. (Charlotte, North Carolina time) on any day shall be overdue hereunder if arrangements for such payment satisfactory to the Issuing Lender, in its reasonable discretion, shall have been made by the Borrower at or before 1:00 P.M. (Charlotte, North Carolina time) on such day and such payment is actually made at or before 3:00 P.M. (Charlotte, North Carolina time) on such day. In addition, the Borrower agrees to pay to the Issuing Lender interest, payable on demand, on any and all amounts not paid by the Borrower to the Issuing Lender when due under this Section 2.02(a), for each day from and including the date when such amount becomes due to but excluding the date such amount is paid in full, whether before or after judgment, at a rate per annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for such day. Each payment to be made by the Borrower pursuant to this Section 2.02(a) shall be made to the Issuing Lender in Federal or other funds immediately available to it at its address referred to Section 9.01.

(b)    Obligations of Lenders to Reimburse Issuing Lender for Unpaid Drawings . If the Issuing Lender makes any payment under the Letter of Credit and the Borrower shall not have reimbursed such amount in full to such Issuing Lender pursuant to Section 2.02(a), all such amounts remaining unpaid by the Borrower after the date and time required by Section 2.02(a) (an “ Unpaid Reimbursement Obligation ”) shall convert automatically to a Base Rate Loan on such date. The Administrative Agent shall, on behalf of the Borrower (which hereby irrevocably directs the Administrative Agent so to act on its behalf), give notice no later than 1:00 P.M. (Charlotte, North Carolina time) on such date requesting each Lender to make, and each Lender hereby agrees to make, a Base Rate Loan, in an amount equal to such Lender’s share (determined by the proportions each Lender’s Commitment bears to the aggregate Commitments) of the Unpaid Reimbursement Obligation to which such notice relates. Each Lender shall make such Loan available to the Administrative Agent at its address referred to in Section 9.01 in immediately available funds, not later than 3:00 P.M. (Charlotte, North Carolina time), on the date specified in such notice. The Administrative Agent shall pay the proceeds of such Loans to the Issuing Lender, which shall immediately apply such proceeds to repay the applicable Unpaid Reimbursement Obligation.

(c)    Lender Obligations . To the extent any Loan is not made by a Lender as required by Section 2.02(b) above, such Lender will pay to the Administrative Agent, for the account of the Issuing Lender, immediately upon the Issuing Lender’s demand at any time during the period commencing after such Unpaid Reimbursement Obligation arises until reimbursement therefor in full by the Borrower, an amount equal to such Lender’s share (determined by the proportions each Lender’s Commitment bears to the aggregate Commitments) of such Unpaid Reimbursement Obligation, together with interest on such amount for each day from the date of the Issuing Lender’s demand for such payment (or, if such demand is made after 1:00 P.M. (Charlotte, North Carolina time) on such date, from the next succeeding Business Day) to the date of payment by such Lender of such amount at a rate per annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for such day.

Section 2.03    Funding of Loans .

(a)    Funding By the Administrative Agent in Anticipation of Amounts Due from the Lenders . Unless the Administrative Agent shall have received notice from a Lender prior to the time of any Borrowing (except in the case of a Base Rate Borrowing, in which case prior to the time of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available to the Administrative Agent on the date of such Borrowing in accordance with Section 2.02(b), and the Administrative Agent may, in reliance upon such assumption, make available for the purposes of Section 2.02(b) on such date a corresponding amount. If and to the extent that such Lender shall not have so made such share available to the Administrative Agent, such Lender and the Borrower severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount, together with interest thereon for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent at (i) a rate per annum equal to the higher of the Federal Funds Rate and the interest rate applicable thereto pursuant to Section 2.05, in the case of the Borrower, and (ii) the Federal Funds Rate, in the case of such Lender. If such Lender shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Lender’s Loan included in such Borrowing for purposes of this Agreement.

(b)    Obligations of Lenders Several . The failure of any Lender to make a Loan required to be made by it as part of any Borrowing hereunder shall not relieve any other Lender of its obligation, if any, hereunder to make any Loan on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Loan to be made by such other Lender on such date of Borrowing.

Section 2.04    Noteless Agreement; Evidence of Indebtedness .

(a)    Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(b)    The Administrative Agent shall also maintain accounts in which it will record (a) the amount of each Loan made hereunder, the Type thereof and the Interest Period with respect thereto, (b) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (c) the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Lender’s share thereof.

(c)    The entries maintained in the accounts maintained pursuant to paragraphs (a) and (b) above shall be prima facie evidence of the existence and amounts of the Obligations therein recorded; provided , however ,   that the failure of the Administrative Agent or any Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Obligations in accordance with their terms.

(d)    Any Lender may request that its Loans be evidenced by a Note. In such event, the Borrower shall prepare, execute and deliver to such Lender a Note payable to the order of such Lender. Thereafter, the Loans evidenced by such Note and interest thereon shall at all times (including after any assignment pursuant to Section 9.06(c)) be represented by one or more Notes payable to the order of the payee named therein or any assignee pursuant to Section 9.06(c), except to the extent that any such Lender or assignee subsequently returns any such Note for cancellation and requests that such Loans once again be evidenced as described in paragraphs (a) and (b) above.

Section 2.05    Interest Rates .

(a)    Interest Rate Options . Each Loan shall initially be incurred as a Base Rate Loan and, at the option of the Borrower and except as otherwise provided herein, be maintained as, or converted into, one or more Base Rate Loans or Euro-Dollar Loans.

(b)    Base Rate Loans . Each Loan which is made as, or converted into, a Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made as, or converted into, a Base Rate Loan until it becomes due or is converted into a Loan of any other Type, at a rate per annum equal to the Base Rate for such day. Such interest shall be payable quarterly in arrears on each Quarterly Date and, with respect to the principal amount of any Base Rate Loan converted to a Euro-Dollar Loan, on the date such Base Rate Loan is so converted. Any overdue principal of or interest on any Base Rate Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 2% plus the rate otherwise applicable to Base Rate Loans for such day.

(c)    Euro-Dollar Loans . Each Euro-Dollar Loan shall bear interest on the outstanding principal amount thereof, for each day during the Interest Period applicable thereto, at a rate per annum equal to the sum of the Adjusted London Interbank Offered Rate for such Interest Period plus 25 basis points plus the Master Letter of Credit Fee Rate; provided , that if any Euro-Dollar Loan or any portion thereof shall, as a result of clause (iii) of the definition of Interest Period, have an Interest Period of less than one month, such portion shall bear interest during such Interest Period at the rate applicable to Base Rate Loans during such period. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof. Any overdue principal of or interest on any Euro-Dollar Loan shall bear interest, payable on demand, for each day until paid at a rate per annum equal to the sum of 2% plus the sum of (A) the Adjusted London Interbank Offered Rate applicable to such Loan at the date such payment was due plus (B) 25 basis points plus (C) the Master Letter of Credit Fee Rate (or, if the circumstance described in Section 2.13 shall exist, at a rate per annum equal to the sum of 2% plus the rate applicable to Base Rate Loans for such day).

(d)    Method of Electing Interest Rates .

(i)    Each Loan shall bear interest initially at the Base Rate. Thereafter, with respect to each Group of Loans, the Borrower shall have the option (A) to convert all or any part of (y) so long as no Default or Event of Default is in existence on the date of conversion, outstanding Base Rate Loans to Euro-Dollar Loans and (z) outstanding Euro-Dollar Loans to Base Rate Loans; provided , that in each case that the amount so converted shall be equal to $10,000,000 or any larger multiple of $1,000,000, or (B) upon the expiration of any Interest Period applicable to outstanding Euro-Dollar Loans, so long as no Default or Event of Default is in existence on the date of continuation, to continue all or any portion of such Loans equal to $10,000,000 and any larger multiple of $1,000,000 in excess of that amount as Euro-Dollar Loans. The Interest Period of any Base Rate Loan converted to a Euro-Dollar Loan pursuant to clause (A) above shall commence on the date of such conversion. The succeeding Interest Period of any Euro-Dollar Loan continued pursuant to clause (B) above shall commence on the last day of the Interest Period of the Loan so continued. Euro-Dollar Loans may only be converted on the last day of the then current Interest Period applicable thereto or on the date required pursuant to Section 2.17.

(ii)    The Borrower shall deliver a written notice of each such conversion or continuation (a “ Notice of Conversion/Continuation ”) to the Administrative Agent no later than (A) 12:00 Noon (Charlotte, North Carolina time) at least three Business Days before the date of the proposed conversion to, or continuation of, a Euro-Dollar Loan and (B) 11:30 A.M. (Charlotte, North Carolina time) on the day of a conversion to a Base Rate Loan. A written Notice of Conversion/Continuation shall be substantially in the form of Exhibit A attached hereto and shall specify: (A) the Group of Loans (or portion thereof) to which such notice applies, (B) the proposed conversion/continuation date (which shall be a Business Day), (C) the aggregate amount of the Loans being converted/continued, (D) an election between the Base Rate and the Adjusted London Interbank Offered Rate and (E) in the case of a conversion to, or a continuation of, Euro-Dollar Loans, the requested Interest Period. Upon receipt of a Notice of Conversion/Continuation, the Administrative Agent shall give each Lender prompt notice of the contents thereof and such Lender’s pro rata share of all conversions and continuations requested therein. If no timely Notice of Conversion/Continuation is delivered by the Borrower as to any Euro-Dollar Loan, and such Loan is not repaid by the Borrower at the end of the applicable Interest Period, such Loan shall be converted automatically to a Base Rate Loan on the last day of the then applicable Interest Period.

(e)    Determination and Notice of Interest Rates . The Administrative Agent shall determine each interest rate applicable to the Loans hereunder. The Administrative Agent shall give prompt notice to the Borrower and the participating Lenders of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error.

Section 2.06    Fees .

(a)    Fees . The Borrower shall pay to the Administrative Agent the fees set forth in the Commitment Letter.

(b)    Payments . The fees referenced in this Section 2.06 shall be payable quarterly in arrears on each Quarterly Date and on the last day of the Termination Date. Fees paid hereunder shall not be refundable under any circumstances.

(c)    Commitment Letter .Any reference herein or in any other document to fees and/or other amounts or obligations payable under this Agreement shall include all fees and other amounts payable pursuant to the Commitment Letter and any reference to this Agreement shall be deemed to include reference to the Commitment Letter.

Section 2.07    Adjustments of Commitments .

(a)    Optional Termination or Reductions of Commitments (Pro-Rata) . The Borrower may, upon at least three Business Days’ prior written notice to the Administrative Agent, (i) terminate the Commitments, if there are no Outstandings at such time or (ii) ratably reduce from time to time by a minimum amount of $10,000,000 or any integral multiple of $5,000,000, the aggregate amount of the Commitments in excess of the aggregate Outstandings. Any reduction of the commitments under the Primary Facility shall automatically result in an irrevocable reduction of the Commitments hereunder in the same ratable amount. If, under any provision of this Agreement, the Commitments are reduced or terminated (in whole or in part), all accrued fees and, to the extent required by the Commitment Letter, the “Master Termination Fee” (as set forth in the Commitment Letter) shall be payable on the effective date of such termination or of each such reduction or at the time otherwise required by the Commitment Letter.

(b)    Optional Termination of Commitments (Non-Pro-Rata) . If (i) any Lender has demanded compensation or indemnification pursuant to Sections 2.13, 2.14, 2.15 or 2.16, (ii) the obligation of any Lender to make Euro-Dollar Loans has been suspended pursuant to Section 2.14 or (iii) any Lender is a Defaulting Lender (each such Lender described in clauses (i), (ii) or (iii) being a “ Retiring Lender ”), the Borrower shall have the right, if no Default or Event of Default then exists, to replace such Lender with one or more Eligible Assignees (which may be one or more of the Continuing Lenders) (each a “ Replacement Lender ” and, collectively, the “Replacement Lenders”) reasonably acceptable to the Administrative Agent. The replacement of a Retiring Lender pursuant to this Section 2.07(b) shall be effective on the tenth Business Day (the “ Replacement Date ”) following the date of notice of such replacement to the Retiring Lender and each Continuing Lender through the Administrative Agent, subject to the satisfaction of the following conditions:

(i)    the Replacement Lender shall have satisfied the conditions to assignment and assumption set forth in Section 9.06(c) (with all fees payable pursuant to Section 9.06(c) to be paid by the Borrower) and, in connection therewith, the Replacement Lender(s) shall pay:

(A)    to the Retiring Lender an amount equal in the aggregate to the sum of (x) the principal of, and all accrued but unpaid interest on, all outstanding Loans of the Retiring Lender, (y) all unpaid drawings that have been funded by (and not reimbursed to) the Retiring Lender under Section 3.10, together with all accrued but unpaid interest with respect thereto and (z) all accrued but unpaid fees owing to the Retiring Lender pursuant to Section 2.07; and

(B)    to the Issuing Lender an amount equal to the aggregate amount owing by the Retiring Lender to the Issuing Lender as reimbursement pursuant to Section 2.02(b), to the extent such amount was not theretofore funded by such Retiring Lender; and

(ii)    the Borrower shall have paid to the Administrative Agent for the account of the Retiring Lender an amount equal to all obligations owing to the Retiring Lender by the Borrower pursuant to this Agreement and the other Loan Documents (other than those obligations of the Borrower referred to in clause (i)(A) above).

On the Replacement Date, each Replacement Lender that is a New Lender shall become a Lender hereunder, and the Retiring Lender shall cease to constitute a Lender hereunder; provided , that the provisions of this Agreement (including, without limitation, the provisions of Sections 2.11, 2.15, 2.16 and 9.03) shall continue to govern the rights and obligations of a Retiring Lender with respect to any Loans made, the Letter of Credit, or any other actions taken by such Retiring Lender while it was a Lender.

Section 2.08    Maturity of Loans; Mandatory Prepayments .

(a)    Scheduled Repayments and Prepayments of Loans; Overline Repayments .

(i)    All Loans shall mature on the Termination Date, and such Loans or any Letter of Credit Liabilities then outstanding (together with accrued interest thereon and fees in respect thereof) shall be due and payable or, in the case of the Letter of Credit, cash collateralized pursuant to Section 2.08(a)(ii), on such date.

(ii)    If on any date the aggregate Outstandings exceed the aggregate amount of the Commitments, the Borrower shall prepay, and there shall become due and payable (together with accrued interest thereon), on such date an aggregate principal amount of Loans equal to such excess. If (x) no Loans are outstanding or (y) the Termination Date shall have occurred and, in either case, any Letter of Credit Liabilities remain outstanding, the Borrower shall cash collateralize any Letter of Credit Liabilities by depositing in a cash collateral account established and maintained (including the investments made pursuant thereto) by the Administrative Agent pursuant to a cash collateral agreement in form and substance satisfactory to the Administrative Agent such amounts as are necessary so that, after giving effect to any repayment of Loans and the cash collateralization of Letter of Credit Liabilities pursuant to this subsection, the aggregate Outstandings do not exceed the aggregate amount of the Commitments. In determining Outstandings for purposes of this clause (ii), Letter of Credit Liabilities shall be reduced to the extent that they are cash collateralized as contemplated by this Section 2.08(a)(ii).

(b)    Applications of Prepayments and Reductions .

(i)    Each prepayment of Loans pursuant to this Section 2.08 shall be ratably to the respective Loans of all of the Lenders.

(ii)    Each payment of principal of the Loans shall be made together with interest accrued on the amount repaid to the date of payment.

(iii)    Each payment of the Loans shall be applied to such Group or Groups of Loans as the Borrower may designate (or, failing such designation, as determined by the Administrative Agent).

Section 2.09    Optional Prepayments and Repayments .

(a)    Prepayments of Loans . Subject to Section 2.11, the Borrower may (i) upon at least one Business Day’s notice to the Administrative Agent, prepay any Base Rate Borrowing or (ii) upon at least three Business Days’ notice to the Administrative Agent, prepay any Euro-Dollar Borrowing, in each case in whole at any time, or from time to time in part in amounts aggregating $10,000,000 or any larger multiple of $1,000,000, by paying the principal amount to be prepaid together with accrued interest thereon to the date of prepayment. Each such optional prepayment shall be applied to prepay ratably the Loans of the several Lenders included in such Borrowing.

(b)    Notice to Lenders . Upon receipt of a notice of prepayment pursuant to Section 2.09(a), the Administrative Agent shall promptly notify each Lender of the contents thereof and of such Lender’s ratable share (if any) of such prepayment, and such notice shall not thereafter be revocable by the Borrower.

Section 2.10    General Provisions as to Payments .

(a)    Payments by the Borrower . The Borrower shall make each payment of principal of and interest on the Loans and Letter of Credit Liabilities and fees hereunder (other than fees payable directly to the Issuing Lender) not later than 12:00 Noon (Charlotte, North Carolina time) on the date when due, without set-off, counterclaim or other deduction, in Federal or other funds immediately available in Charlotte, North Carolina, to the Administrative Agent at its address referred to in Section 9.01. The Administrative Agent will promptly distribute to each Lender its ratable share of each such payment received by the Administrative Agent for the account of the Lenders. Whenever any payment of principal of or interest on the Base Rate Loans or Letter of Credit Liabilities or of fees shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day. Whenever any payment of principal of or interest on the Euro-Dollar Loans shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case the date for payment thereof shall be the next preceding Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time.

(b)    Distributions by the Administrative Agent . Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date, and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent that the Borrower shall not have so made such payment, each Lender shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent, at the Federal Funds Rate.

Section 2.11    Funding Losses . If the Borrower makes any payment of principal with respect to any Euro-Dollar Loan pursuant to the terms and provisions of this Agreement (any conversion of a Euro-Dollar Loan to a Base Rate Loan pursuant to Section 2.17 being treated as a payment of such Euro-Dollar Loan on the date of conversion for purposes of this Section 2.11) on any day other than the last day of the Interest Period applicable thereto, or the last day of an applicable period fixed pursuant to Section 2.05(c), or if the Borrower fails to borrow, convert or prepay any Euro-Dollar Loan after notice has been given in accordance with the provisions of this Agreement, the Borrower shall reimburse each Lender within 15 days after demand for any resulting loss or expense incurred by it (and by an existing Participant in the related Loan), including, without limitation, any loss incurred in obtaining, liquidating or employing deposits from third parties, but excluding loss of margin for the period after any such payment or failure to borrow or prepay; provided , that such Lender shall have delivered to the Borrower a certificate as to the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error.

Section 2.12    Computation of Interest and Fees . Interest on Loans based on the Prime Rate hereunder shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days elapsed. All other interest and fees shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day).

Section 2.13    Basis for Determining Interest Rate Inadequate, Unfair or Unavailable . If on or prior to the first day of any Interest Period for any Euro-Dollar Loan: (a) Lenders having 50% or more of the aggregate amount of the Commitments advise the Administrative Agent that the Adjusted London Interbank Offered Rate as determined by the Administrative Agent, will not adequately and fairly reflect the cost to such Lenders of funding their Euro-Dollar Loans for such Interest Period; or (b) the Administrative Agent shall determine that no reasonable means exists for determining the Adjusted London Interbank Offered Rate, the Administrative Agent shall forthwith give notice thereof to the Borrower and the Lenders, whereupon until the Administrative Agent notifies the Borrower that the circumstances giving rise to such suspension no longer exist, (i) the obligations of the Lenders to make Euro-Dollar Loans or to convert outstanding Loans into Euro-Dollar Loans shall be suspended; and (ii) each outstanding Euro-Dollar Loan shall be converted into a Base Rate Loan on the last day of the current Interest Period applicable thereto. Unless the Borrower notifies the Administrative Agent at least two Domestic Business Days before the date of (or, if at the time the Borrower receives such notice the day is the date of, or the date immediately preceding, the date of such Euro-Dollar Borrowing, by 10:00 A.M. on the date of) any Euro-Dollar Borrowing for which a Notice of Conversion/Continuation has previously been given that it elects not to borrow on such date, such Borrowing shall instead be made as a Base Rate Borrowing.

Section 2.14    Illegality . If, on or after the date of this Agreement, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its Euro-Dollar Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for any Lender (or its Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and such Lender shall so notify the Administrative Agent, the Administrative Agent shall forthwith give notice thereof to the other Lenders and the Borrower, whereupon until such Lender notifies the Borrower and the Administrative Agent that the circumstances giving rise to such suspension no longer exist, the obligation of such Lender to make Euro-Dollar Loans, or to convert outstanding Loans into Euro-Dollar Loans, shall be suspended. Before giving any notice to the Administrative Agent pursuant to this Section, such Lender shall designate a different Euro-Dollar Lending Office if such designation will avoid the need for giving such notice and will not, in the judgment of such Lender, be otherwise disadvantageous to such Lender. If such notice is given, each Euro-Dollar Loan of such Lender then outstanding shall be converted to a Base Rate Loan either (i) on the last day of the then current Interest Period applicable to such Euro-Dollar Loan if such Lender may lawfully continue to maintain and fund such Loan to such day or (ii) immediately if such Lender shall determine that it may not lawfully continue to maintain and fund such Loan to such day.

Section 2.15    Increased Cost and Reduced Return .

(a)    Increased Costs . If after the date hereof, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall impose, modify or deem applicable any reserve (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System), special deposit, insurance assessment or similar requirement against the L