**Exhibit 4.28**

 

 

**December 19, 2005**

 

 

**Kentucky Utilities Company*(as Borrower)***

 

 

**Fidelia Corporation*(as Lender)***

 

 

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**LOAN AGREEMENT**

 

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**Contents**

 
| **Clause** | **Page**                  |
|------------|---------------------------|
| ** ** | ** **                | ** ** |
| 1.         | DEFINITIONS               | 1 |
|       |                      |   |
| 2.         | TERM LOAN                 | 2 |
|       |                      |   |
| 3.         | AVAILABILITY OF  REQUESTS | 2 |
|       |                      |   |
| 4.         | INTEREST                  | 2 |
|       |                      |   |
| 5.         | REPAYMENT AND  PREPAYMENT | 3 |
|       |                      |   |
| 6.         | PAYMENTS                  | 3 |
|       |                      |   |
| 7.         | TERMINATION  EVENTS       | 4 |
|       |                      |   |
| 8.         | OPERATIONAL  BREAKDOWN    | 4 |
|       |                      |   |
| 9.         | NOTICES                   | 5 |
|       |                      |   |
| 10.        | ASSIGNMENT                | 5 |
|       |                      |   |
| 11.        | SEVERABILITY              | 5 |
|       |                      |   |
| 12.        | COUNTERPARTS              | 5 |
|       |                      |   |
| 13.        | LAW                       | 6 |

 

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**THISAGREEMENT** made on December 19, 2005

 

**Between**

 

**KENTUCKYUTILITIES COMPANY**, a Kentucky corporation, as borrower (the ***Borrower***); and

 

**FIDELIACORPORATION**, a Delaware corporation, as lender (the ***Lender***).

 

**Whereas**

 

(A)          TheLender and the Borrower hereby enter into an agreement for the provision by theLender to the Borrower of a loan in the amount of $75,000,000 (the LoanAmount).

 

**Now it ishereby agreed** as follows:

 

**1.****             Definitions**

 

1.1           In thisAgreement

 

***BusinessDay*** means a day on which banks in New York are generallyopen

 

***DefaultInterest Rate*** means: the rate, as determined by theLender, applying to the principal element of an overdue amount under Clause6.3, calculated as the sum of the interest rate in effect immediately beforethe due date of such amount, plus 1%;

 

***EffectiveDate***shall have the meaning given to it in Clause 2.1;

 

***FinalRepayment Date***means December 21, 2015;

 

***InterestPayment Date*** means June 19th and December 19thof each year during the term of this agreement, provided, that:

 

any Interest Payment Datewhich is not a Business Day shall be extended to the next succeeding BusinessDay;

 

***LoanAmount*** means $75,000,000;

 

***MaturityDate*** means the Final Repayment Date;

 

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***Request***means a request for the Loan Amount from the Borrower to the Lender under theterms of clause 3.1;

 

***TerminationEvent***means an event specified as such in Clause 7;

 

***ValueDate*** means the date upon which cleared funds are madeavailable to the Borrower by the Lender pursuant to a Request made in accordancewith Clause 3.1. Such date shall be a Business Day as defined herein.

 

**2.****             TermLoan**

 

2.1           This Agreement shall come into effect on December 19,2005 (the “Effective Date”).

 

2.2           The Lender grants to the Borrower upon the terms andconditions of this Agreement a term loan in an amount of $75,000,000.

 

2.3           The new indebtedness shall be evidenced by a note insubstantially the form of Exhibit “A” attached hereto.

 

**3.****             Availabilityof Requests**

 

3.1           On the Effective Date, the Borrower will submit a request(the “Request”) to the Lender for the Loan Amount, such Request specifying theValue Date, the Maturity Date and the bank account to which payment is to bemade. The Request shall be submitted to the Lender by the Borrower anddelivered in accordance with Clause 9.3.

 

**4.****             Interest**

 

4.1           The rate of interest on the Loan Amount is 5.36%.

 

4.2           Interest shall accrue on the basis of a 360-day yearconsisting of twelve 30 day months upon the Loan Amount.

 

4.3           Interest shall be payable in arrears on each Interest PaymentDate.

 

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**5.****             Repaymentand Prepayment**

 

5.1           The Borrower shall repay the Loan Amount together with allinterest accrued thereon and all other amounts due from the Borrower hereunderon the Final Repayment Date, whereupon this Agreement shall be terminated.

 

5.2           On any Interest Payment Date, and with at least threebusiness day’s prior written notice, the Borrower shall be entitled to prepayany amount of the loan outstanding, provided such payment is not less than$1,000,000 and, provided further, the Borrower shall pay a prepayment chargeequal to the present value of the difference between (i) the interestpayable provided in this loan agreement and (ii) the interest payable atthe prevailing interest rate at the time of prepayment, for the period from thedate of prepayment through the Maturity Date, which difference, if negative,shall be deemed to be zero. The present value will be determined using theprevailing interest rate at the time of the prepayment as the discount rate.

 

5.3           A certificate from the Lender as to the amount due at anytime from the Borrower to the Lender under this Agreement shall, in the absenceof manifest error, be conclusive.

 

**6.****             Payments**

 

6.1           All payments of principal to be made to the Lender by theBorrower shall be made on the Final Repayment Date, or on an Interest PaymentDate under Clause (5.2) to such account as the Lender shall have specified.

 

6.2           Interest shall be payable in arrears on each InterestPayment Date.

 

6.3           If and to the extent that full payment of any amount duehereunder is not made by the Borrower on the due date then, interest shall becharged at the Default Interest Rate on such overdue amount from the date ofsuch default to the date payment is received by the Lender.

 

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**7.**             **Termination Events**

 

7.1           The Borrower shall notify the Lender of any Event of Default(and the steps, if any, being taken to remedy it) promptly upon becoming awareof it.

 

7.2           The following shall constitute an Event ofDefault hereunder:

 

7.2.1        Default is made by the Borrower in the paymentof any sum due under this Agreement and such default continues for a period of10 Business Days;

 

7.2.2        Bankruptcy proceedings are initiated against theBorrower;

 

7.2.3        The Borrower leaves the E.ON Group (i.e. thecompanies consolidated in EON AG’s balance sheet);

 

Ifa Termination Event occurs under Clause (7.2.2) of this section, the LoanAmount outstanding together with interest will become due and payableimmediately.

 

Ifa Termination Event occurs according to Clauses (7.2.1) or (7.2.3) of thisSection, Lender shall at its discretion grant Borrower a reasonable graceperiod unless such grace period shall be detrimental to the Lender. If theTermination Event is uncured at the expiration of such period, the Loan Amountoutstanding together with interest will become due and payable immediately.

 

**8.****            ****Operational Breakdown**

 

8.1           TheBorrower is not liable for any damages incurred by the Lender and the Lender isnot liable for any damages incurred by the Borrower caused by Acts of God orother circumstances incurred by one party for which the other party cannot beheld responsible (i.e. power outages, strikes, lock-outs, domestic and foreignacts of government and the like).

 

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**9.****            ****Notices**

 

9.1           Each communication to be made in respect of this Agreementshall be made in writing but, unless otherwise stated, may be made byfacsimile transmission or letter.

 

9.2           Communications to the Borrower shall be addressed to: KentuckyUtilities Company, 220 W. Main St., Louisville, KY 40202, Attn: Treasurer fax#(502) 627-4742 except for confirmations which should be sent to the attentionof Joe Barnes.

 

9.3           Communications to the Lender shall be addressed to: FideliaCorporation, 919 N. Market Street, Suite 504, Wilmington, Delaware 19801,fax# (302) 778-5514, Attn: President.

 

**10.****         ****Assignment**

 

10.1         The Lender may at any time assign, novate or otherwisetransfer all or any part of its rights and obligations under thisAgreement to any affiliate of the Lender.

 

**11.****          Severability**

 

11.1         If any ofthe provisions of this Agreement becomes invalid, illegal or unenforceable inany respect under any law, the validity, legality and enforceability of theremaining provisions shall not in any way be affected or impaired.

 

**12.****          Counterparts**

 

12.1         ThisAgreement may be executed in any number of counterparts that shalltogether constitute one Agreement. Any party may enter into an Agreementby signing any such counterpart.

 

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**13.****          Law**

 

13.1         ThisAgreement shall be governed by and construed for all purposes in accordancewith the laws of Delaware.

 

**INWITNESS**whereof the parties have executed this Agreement theday and year first above written.

 
| **SIGNED**by | /s/ Daniel K. Arbough        |   | ) |
|--------------|------------------------------|--------|---|
|         | Daniel K. Arbough, Treasurer | )      |
|         | for and on behalf of         | )      |
|         | Kentucky Utilities Company   | )      |
|         |                         |
|         |                         |
| **SIGNED**by | /s/ Udo Koch                 |   | ) |
|         | Udo Koch, President          | )      |
|         | Fidelia Corporation          | )      |
|              |                              |        |   |  |  |

 

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