Exhibit 4.28


 


 


December 19, 2005


 


 


Kentucky Utilities Company

(as Borrower)


 


 


Fidelia Corporation

(as Lender)


 


 






 


LOAN AGREEMENT


 






 

















 


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

  



 

















 


THIS
AGREEMENT made on December 19, 2005


 


Between


 


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


 


FIDELIA
CORPORATION, a Delaware corporation, as lender (the Lender).


 


Whereas


 


(A)          The
Lender and the Borrower hereby enter into an agreement for the provision by the
Lender to the Borrower of a loan in the amount of $75,000,000 (the Loan
Amount).


 


Now it is
hereby agreed as follows:


 


1.             Definitions


 


1.1           In this
Agreement


 


Business
Day means a day on which banks in New York are generally
open


 


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


 


Effective
Date shall have the meaning given to it in Clause 2.1;


 


Final
Repayment Date means December 21, 2015;


 


Interest
Payment Date means June 19th and December 19th
of each year during the term of this agreement, provided, that:


 


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


 


Loan
Amount means $75,000,000;


 


Maturity
Date means the Final Repayment Date;


 


1

















 


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


 


Termination
Event means an event specified as such in Clause 7;


 


Value
Date means the date upon which cleared funds are made
available to the Borrower by the Lender pursuant to a Request made in accordance
with Clause 3.1. Such date shall be a Business Day as defined herein.


 


2.             Term
Loan


 


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 and
conditions of this Agreement a term loan in an amount of $75,000,000.


 


2.3           The new indebtedness shall be evidenced by a note in
substantially 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 the
Value Date, the Maturity Date and the bank account to which payment is to be
made. The Request shall be submitted to the Lender by the Borrower and
delivered 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 year
consisting of twelve 30 day months upon the Loan Amount.


 


4.3           Interest shall be payable in arrears on each Interest Payment
Date.


 


2

















 


5.             Repayment
and Prepayment


 


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


 


5.2           On any Interest Payment Date, and with at least three
business day’s prior written notice, the Borrower shall be entitled to prepay
any amount of the loan outstanding, provided such payment is not less than
$1,000,000 and, provided further, the Borrower shall pay a prepayment charge
equal to the present value of the difference between (i) the interest
payable provided in this loan agreement and (ii) the interest payable at
the prevailing interest rate at the time of prepayment, for the period from the
date of prepayment through the Maturity Date, which difference, if negative,
shall be deemed to be zero. The present value will be determined using the
prevailing 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 any
time from the Borrower to the Lender under this Agreement shall, in the absence
of manifest error, be conclusive.


 


6.             Payments


 


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


 


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


 


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


 


3

















 


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 aware
of it.


 


7.2           The following shall constitute an Event of
Default hereunder:


 


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


 


7.2.2        Bankruptcy proceedings are initiated against the
Borrower;


 


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


 


If
a Termination Event occurs under Clause (7.2.2) of this section, the Loan
Amount outstanding together with interest will become due and payable
immediately.


 


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


 


8.             Operational Breakdown


 


8.1           The
Borrower is not liable for any damages incurred by the Lender and the Lender is
not liable for any damages incurred by the Borrower caused by Acts of God or
other circumstances incurred by one party for which the other party cannot be
held responsible (i.e. power outages, strikes, lock-outs, domestic and foreign
acts of government and the like).


 


4

















 


9.             Notices


 


9.1           Each communication to be made in respect of this Agreement
shall be made in writing but, unless otherwise stated, may be made by
facsimile transmission or letter.


 


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


 


9.3           Communications to the Lender shall be addressed to: Fidelia
Corporation, 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 otherwise
transfer all or any part of its rights and obligations under this
Agreement to any affiliate of the Lender.


 


11.          Severability


 


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


 


12.          Counterparts


 


12.1         This
Agreement may be executed in any number of counterparts that shall
together constitute one Agreement. Any party may enter into an Agreement
by signing any such counterpart.


 


5

















 


13.          Law


 


13.1         This
Agreement shall be governed by and construed for all purposes in accordance
with the laws of Delaware.


 


IN
WITNESS whereof the parties have executed this Agreement the
day 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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