**EXHIBIT 4.23**

 
| **30  April, 2003**                 |
|-------------------------------------|
|                                |   |
|                                |   |
| **Kentucky  Utilities  ** |   |
| ***(as Borrower)***                 |   |
|                                |   |
|                                |   |
| **Fidelia  Corporation**            |   |
| ***(as Lender) ***             |   |

** **

 

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**LOANAGREEMENT**

 

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**Contents**

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

 

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**THIS AGREEMENT** made on April 30, 2003

 

**Between**

 

**KENTUCKY UTILITIES**, a Kentucky corporation,as borrower (the ***Borrower***);and

 

**FIDELIA CORPORATION**, a Delawarecorporation, as lender (the ***Lender***).

 

**Whereas**

 

(A)          The Lender and theBorrower hereby enter into an agreement for the provision by the Lender to theBorrower of a loan in the amount of $100,000,000 (the Loan Amount).

 

**Now it is hereby agreed** as follows:

 

**1.****             Definitions**

 

1.1           In this Agreement

 

***Business Day*** means a day on whichbanks in New York are generally open

 

***Default Interest Rate*** means: the rate,as determined by the Lender, applying to the principal element of an overdueamount under Clause 6.3, calculated as the sum of the interest rate in effectimmediately before the due date of such amount, plus 1%;

 

***Effective Date***shall have the meaninggiven to it in Clause 2.1;

 

***Final Repayment Date***means April 30,2013;

 

***Interest Payment Date*** means April 30and October 30 of 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;

 

***Loan Amount*** means $100,000,000;

 

***Maturity Date*** means the FinalRepayment Date;

 

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***Request*** means a request for the LoanAmount from the Borrower to the Lender under the terms of clause 3.1;

 

***Termination Event***means an eventspecified as such in Clause 7;

 

***Value Date*** means the date upon whichcleared funds are made available to the Borrower by the Lender pursuant to aRequest made in accordance with Clause 3.1. Such date shall be a BusinessDay as defined herein.

 

**2.****             Term Loan**

 

2.1           This Agreement shall come into effect on April 30, 2003 (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 $100,000,000.

 

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

 

**3.****             Availability of 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 4.55%.

 

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 InterestPayment Date.

 

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**5.****             Repayment and 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 interest payableprovided in this loan agreement and (ii) the interest payable at the prevailinginterest rate at the time of prepayment, for the period from the date ofprepayment through the Maturity Date, which difference, if negative, shall be deemed to be zero. The presentvalue will be determined using the prevailing interest rate at the time of theprepayment 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 of Defaulthereunder:

 

7.2.1        Default is made by the Borrower in the payment of any sumdue under this Agreement and such default continues for a period of 10 BusinessDays;

 

7.2.2        Bankruptcy proceedings are initiated against the Borrower;

 

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

 

7.2.4        Securities and Exchange Commission or Public Utility HoldingCompany Act (PUHCA) requirements prohibit the transactions hereunder.

 

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) or (7.2.4)of this Section, Lender shall at its discretion grant Borrower a reasonablegrace period unless such grace period shall be detrimental to the Lender. Ifthe Termination Event is uncured at the expiration of such period, the LoanAmount outstanding 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 by facsimiletransmission or letter.

 

9.2           Communications to the Borrower shall be addressed to:Kentucky Utilities, 220 W. Main St., Louisville, KY 40202, Attn: Treasurer fax#(502)627-4742 except for confirmations which should be sent to the attention ofMimi Kelly.

 

9.3           Communications to the Lender shall be addressed to: FideliaCorporation, 300 Delaware Avenue, Suite 545, Wilmington, Delaware 19801, fax#(302) 427-5913, 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 this Agreement toany affiliate of the Lender.

 

**11.****          Severability**

 

11.1         If any of the provisionsof this Agreement becomes invalid, illegal or unenforceable in any respectunder any law, the validity, legality and enforceability of the remainingprovisions shall not in any way be affected or impaired.

 

**12.****          Counterparts**

 

12.1         This Agreement may beexecuted in any number of counterparts that shall together constitute oneAgreement. Any party may enter into an Agreement by signing any suchcounterpart.

 

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**13.****          Law**

 

13.1         This Agreement shall begoverned by and construed for all purposes in accordance with the laws ofDelaware.

 

**IN WITNESS**whereofthe parties have executed this Agreement the day and year first above written.

 

 
| **SIGNED**by         |   |   | )     |
|----------------------|--------|--------|-------|
| for and on behalf of | )      |
| Kentucky Utilities   | )      |
| in the presence of:  | )      |
|                 |   |
|                 |   |
| **SIGNED**by         |   |   | )     |
| Udo Koch, President  | )      |
| Fidelia Corporation  | )      |
|                 |   |
|                 |   |
| **SIGNED by**        |   |   | **)** |

 

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# **EXHIBIT “A”**

 

# **PROMISSORYNOTE**

 
| U.S. $100,000,000.00 |   | Louisville,  Kentucky, April 30, 2003 |
|----------------------|--------|---------------------------------------|

 

Kentucky Utilities, forvalue received, hereby promises to pay to the order of FIDELIA Corporation(“FIDELIA”), in lawful money of the United States of America (in freelytransferable U.S. dollars and in same day funds), in accordance with the methodof payment specified in that certain Kentucky Utilities Loan Agreement dated asof April 30, 2003, between FIDELIA and Kentucky Utilities (“the Agreement”),the principal sum of $100,000,000.00, which amount shall be payable at suchtimes as provided in the Agreement.

 

Kentucky Utilitiespromises also to pay interest on the unpaid principal amount hereof in likemoney and in like manner at the rates which shall be determined in accordancewith the provisions of the Agreement, said interest to be payable at the timeprovided for in the Agreement.  ThisNote is referred to in the Agreement and is entitled to the benefits thereofand the security contemplated thereby. This Note evidences a loan made by FIDELIA, during such time as suchloan is being maintained.  This Note issubject to prepayment as specified in the Agreement.  In case Kentucky Utilities defaults on the loan, the principaland accrued interest on this Note may be declared to be due and payable in themanner and with the effect provided in the Agreement.

 

Kentucky Utilities herebywaives presentment, demand, protest or notice of any kind in connection withthis Note.

 

This Note shall begoverned and construed and interpreted in accordance with the laws of the Stateof Delaware.

 
|   | Kentucky Utilities |
|--------|--------------------|
|   |               |   |
|   |               |   |
|   | By:                |   |   |
|   |               | Daniel K. Arbough |
|   |               | Director of Corporate  Finance & Treasurer |
|   |               |   |
|   |               |   |
|   | By:                |   |   |
|        |                    |  |  |  |

 

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