Exhibit
4.1


April 13,
2007


Louisville
Gas and Electric 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 April 13, 2007


Between


LOUISVILLE GAS AND ELECTRIC
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 $68,000,000 (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 April 13, 2031;


Interest
Payment Date means April 13 and October 13 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 $68,000,000;


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 April 13, 2007 (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 $68,000,000.


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 5.93%.


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);


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


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) or (7.2.4) 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: Louisville Gas and Electric 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 Mimi Kelly.


9.3                                 Communications
to the Lender shall be addressed to: Fidelia Corporation, 2751 Centerville
Road, Suite 231, fax # (302) 006-9080, 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

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  Louisville Gas & Electric Co.

  	
  )

  
	
  in the presence of:

  	
  )

  
	
   

  	
   

  
	
  SIGNED
  by

  	
  /s/ Udo Koch

  	
  )

  
	
  Udo Koch, President

  	
  )

  
	
  Fidelia Corporation

  	
  )

  
	
   

  	
   

  
	
  SIGNED
  by ________________

  	
  )

  
				



 



 6














PROMISSORY
NOTE


	
  U.S. $68,000,000

  	
  Louisville, Kentucky,
  April 13, 2007

  



 


Louisville Gas
& Electric Company, for value received, hereby promises to pay to the order
of FIDELIA Corporation (“FIDELIA”), in lawful money of the United States of
America (in freely transferable U.S. dollars and in same day funds), in
accordance with the method of payment specified in that certain Louisville Gas
& Electric Company loan Agreement dated as of April 13, 2007, between
FIDELIA and Louisville Gas & Electric Company (“the Agreement”), the
principal sum of $68,000,000, which amount shall be payable at such times as
provided in the Agreement.


Louisville
Gas & Electric Company promises also to pay interest on the unpaid
principal amount hereof in like money and in like manner at the rates which
shall be determined in accordance with the provisions of the Agreement, said
interest to be payable at the time provided for in the Agreement. This Note is
referred to in the Agreement and is entitled to the benefits thereof and the
security contemplated thereby. This Note evidences a loan made by FIDELIA,
during such time as such loan is being maintained. This Note is subject to
prepayment as specified in the Agreement. In case Louisville Gas & Electric
Company defaults on the loan, the principal and accrued interest on this Note
may be declared to be due and payable in the manner and with the effect
provided in the Agreement.


Louisville
Gas & Electric Company hereby waives presentment, demand, protest or notice
of any kind in connection with this Note.


This
Note shall be governed and construed and interpreted in accordance with the
laws of the State of Delaware.


	
  

  	
  Louisville Gas & Electric Company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel K. Arbough

  
	
   

  	
   

  	
  Daniel K. Arbough

  
	
   

  	
   

  	
  Director of Corporate Finance & Treasurer