Document:

EXHIBIT
10.43

 

PARTICIPATION
AGREEMENT

 

 

BY AND BETWEEN

 

 

LOUISVILLE GAS
AND ELECTRIC COMPANY

220 West Main Street

Post Office Box 32010 (40232)

Louisville, Kentucky 40202

 

 

AND

 

 

INDIANA
MUNICIPAL POWER AGENCY

11610 North College Avenue

Carmel, Indiana 46032

 

 

February 1,
1993

 

 

	
   

  	
   

  	
   

  
	
  TABLE OF CONTENTS

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1. DEFINITIONS

  	
   

  
	
  1.1.

  	
  Agreed Rate.

  	
   

  
	
  1.2.

  	
  Agreement.

  	
   

  
	
  1.3.

  	
  Available.

  	
   

  
	
  1.4.

  	
  Capacity Factor.

  	
   

  
	
  1.5.

  	
  Closing.

  	
   

  
	
  1.6.

  	
  Commercial Operation Date.

  	
   

  
	
  1.7.

  	
  Construction Work.

  	
   

  
	
  1.8.

  	
  Coordination Committee.

  	
   

  
	
  1.9.

  	
  Delivery Points.

  	
   

  
	
  1.10.

  	
  Effective Date.

  	
   

  
	
  1.11.

  	
  Electric Capability.

  	
   

  
	
  1.12.

  	
  Electric Energy.

  	
   

  
	
  1.13.

  	
  Electric Capability And Energy.

  	
   

  
	
  1.14.

  	
  Electric Capability And Energy Entitlement.

  	
   

  
	
  1.15.

  	
  Execution Date.

  	
   

  
	
  1.16.

  	
  Fixed Operation and Maintenance Expenses.

  	
   

  
	
  1.17.

  	
  Force Majeure.

  	
   

  
	
  1.18.

  	
  Fuel/Reactant Operation Expenses.

  	
   

  
	
  1.19.

  	
  Good Utility Practice.

  	
   

  
	
  1.20.

  	
  Incremental Capital Assets.

  	
   

  
	
  1.21.

  	
  Insurance.

  	
   

  
	
  1.22.

  	
  Interconnection Agreement.

  	
   

  
	
  1.23.

  	
  Internal Load.

  	
   

  
	
  1.24.

  	
  Joint Transmission System.

  	
   

  
	
  1.25.

  	
  Louisville’s Cost Of Capital.

  	
   

  
	
  1.26.

  	
  Net Electric Generating Capability And
  Associated Electric Energy.

  	
   

  
	
  1.27.

  	
  Net Seasonal Capability.

  	
   

  
	
  1.28.

  	
  Operating Work.

  	
   

  
	
  1.29.

  	
  Owners.

  	
   

  
	
  1.30.

  	
  Representative.

  	
   

  
	
  1.31.

  	
  Trimble County General Plant Facilities.

  	
   

  
	
  1.32.

  	
  Trimble County Plant.

  	
   

  
	
  1.33.

  	
  Trimble County Site.

  	
   

  
	
  1.34.

  	
  Trimble County Unit 1.

  	
   

  
	
  1.35.

  	
  Uniform System Of Accounts.

  	
   

  
	
  ARTICLE 2. OWNERSHIP INTEREST AND SALE

  	
   

  
	
  2.1.

  	
  Ownership Interests.

  	
   

  
	
  2.2.

  	
  Sale Of Property Included In Trimble County
  Unit 1.

  	
   

  
	
  2.3.

  	
  Release From Lien Of Louisville’s
  Indenture.

  	
   

  
	
  2.4.

  	
  Closing.

  	
   

  
	
  2.5.

  	
  Additional Generating Units.

  	
   

  
	
  2.6.

  	
  Modification Of Existing Property.

  	
   

  
	
  ARTICLE 3. PURCHASE, PAYMENT, AND CLOSING

  	
   

  

 

i

 

	
  3.1.

  	
  Purchase Price.

  	
   

  
	
  3.2.

  	
  Closing.

  	
   

  
	
  3.2.1.

  	
  Date And Place.

  	
   

  
	
  3.2.2.

  	
  Delivery Of Documents, Certificates, And
  Funds.

  	
   

  
	
  3.3.

  	
  Special Conditions.

  	
   

  
	
  3.4.

  	
  Continued Marketing By Louisville.

  	
   

  
	
  3.5.

  	
  Termination If Closing Does-Not Occur.

  	
   

  
	
  ARTICLE 4. REPRESENTATIONS, WARRANTIES, AND
  MUTUAL COVENANTS

  	
   

  
	
  4.1.

  	
  IMPA Representations.

  	
   

  
	
  4.1.1.

  	
  IMPA Organization

  	
   

  
	
  4.1.2.

  	
  Authority Relative To This Agreement.

  	
   

  
	
  4.1.3.

  	
  Approvals And Consents.

  	
   

  
	
  4.1.4.

  	
  Legal Proceedings.

  	
   

  
	
  4.2.

  	
  Louisville Representations.

  	
   

  
	
  4.2.1.

  	
  Louisville Organization.

  	
   

  
	
  4.2.2.

  	
  Authority Relative To This Agreement.

  	
   

  
	
  4.2.3.

  	
  Approvals And Consents.

  	
   

  
	
  4.2.4.

  	
  Legal Title.

  	
   

  
	
  4.2.5.

  	
  Condition Of Plant And Equipment.

  	
   

  
	
  4.2.6.

  	
  Legal Proceedings.

  	
   

  
	
  ARTICLE 5. OPERATING ARRANGEMENTS

  	
   

  
	
  5.1.

  	
  Authority For Operation And Management.

  	
   

  
	
  5.2.

  	
  Scheduling And Dispatching Of Electric
  Generation

  	
   

  
	
  5.3.

  	
  Economic Replacement Of Trimble County Unit
  1 Energy.

  	
   

  
	
  5.4.

  	
  Electric Capability And Energy
  Entitlements.

  	
   

  
	
  5.5.

  	
  Operations Management.

  	
   

  
	
  5.5.1.

  	
  Administration Of Operating Work And
  Incremental Capital Assets.

  	
   

  
	
  5.5.2.

  	
  Purchasing Necessary Goods And Services.

  	
   

  
	
  5.5.3.

  	
  Procurement Of Fuel.

  	
   

  
	
  5.5.4.

  	
  Expenditure Of Funds.

  	
   

  
	
  5.5.5.

  	
  Insurance.

  	
   

  
	
  5.5.6.

  	
  Enforcement Of Claims Against Third
  Parties.

  	
   

  
	
  5.5.7.

  	
  Processing Claims By Third Parties.

  	
   

  
	
  5.5.8.

  	
  Delivery Of Operating data.

  	
   

  
	
  5.6.

  	
  Environmental Laws and Regulations.

  	
   

  
	
  5.7.

  	
  Indemnification Of Environmental Fines And
  Penalties.

  	
   

  
	
  ARTICLE 6. INCREMENTAL CAPITAL ASSETS

  	
   

  
	
  6.1.

  	
  Determination Of Need.

  	
   

  
	
  6.2.

  	
  Estimate Of Costs.

  	
   

  
	
  6.3.

  	
  Responsibility For Costs.

  	
   

  
	
  ARTICLE 7. COMPENSATION

  	
   

  
	
  7.1.

  	
  Monthly Charges.

  	
   

  
	
  7.1.1.

  	
  Fuel/Reactant Operation Expense.

  	
   

  
	
  7.2.

  	
  Fixed Operation And Maintenance Expenses.

  	
   

  
	
  7.2.1.

  	
  Non-Fuel Operating Component.

  	
   

  
	
  7.2.2.

  	
  Working Capital Component.

  	
   

  

 

ii

 

	
  7.2.3.

  	
  Transmission Charge.

  	
   

  
	
  ARTICLE 8. BILLING, PAYMENTS, AND RECORDS

  	
   

  
	
  8.1.

  	
  Billings By Louisville.

  	
   

  
	
  8.2.

  	
  Payments By IMPA Or Louisville.

  	
   

  
	
  8.3.

  	
  Records.

  	
   

  
	
  ARTICLE 9. TRANSMISSION SERVICE

  	
   

  
	
  ARTICLE 10. BACKUP POWER AND ENERGY

  	
   

  
	
  10.1.

  	
  From Louisville.

  	
   

  
	
  10.2.

  	
  From Third Parties.

  	
   

  
	
  10.3.

  	
  Effective Date Of Backup Power Provision.

  	
   

  
	
  ARTICLE 11. GENERAL CONDITIONS

  	
   

  
	
  11.1.

  	
  Cooperation.

  	
   

  
	
  11.2.

  	
  Approvals.

  	
   

  
	
  11.3.

  	
  Access.

  	
   

  
	
  11.4.

  	
  Conditions Precedent To Louisville’s
  Obligations Hereunder.

  	
   

  
	
  11.4.1.

  	
  Accuracy Of IMPA’s Representations And
  Warranties.

  	
   

  
	
  11.4.2.

  	
  Capability Of Performance By IMPA.

  	
   

  
	
  11.4.3.

  	
  Opinion Of Counsel For IMPA.

  	
   

  
	
  11.4.4.

  	
  Payment Of Funds By IMPA.

  	
   

  
	
  11.5.

  	
  Conditions Precedent To IMPA’s Obligations
  Hereunder.

  	
   

  
	
  11.5.1.

  	
  Accuracy Of Louisville’s Representations
  And Warranties.

  	
   

  
	
  11.5.2.

  	
  Opinion of Counsel for Louisville.

  	
   

  
	
  11.5.3.

  	
  Opinion Of Counsel For Louisville.

  	
   

  
	
  11.6.

  	
  Conditions Precedent To The Respective
  Obligations Of The Parties.

  	
   

  
	
  11.7.

  	
  Release From Louisville’s Indenture(s).

  	
   

  
	
  11.8.

  	
  Amendments.

  	
   

  
	
  11.9.

  	
  Limited Warranty.

  	
   

  
	
  11.10.

  	
  No Agency Or Third Party Beneficiary

  	
   

  
	
  ARTICLE 12. TAXES

  	
   

  
	
  12.1.

  	
  Management Of Tax Matters.

  	
   

  
	
  12.1.1.

  	
  Louisville’s Responsibility

  	
   

  
	
  12.1.2.

  	
  IMPA’s Responsibility.

  	
   

  
	
  12.1.3.

  	
  Cooperation.

  	
   

  
	
  12.2.

  	
  Sharing Of Taxes And Related Payments

  	
   

  
	
  12.3.

  	
  Payment Of Title Taxes And Fees

  	
   

  
	
  12.4.

  	
  Exclusion Of Income Taxes

  	
   

  
	
  12.5.

  	
  Non-creation Of Taxable Entity

  	
   

  
	
  ARTICLE 13. INSURANCE

  	
   

  
	
  13.1.

  	
  Procurement Of Insurance.

  	
   

  
	
  13.1.1.

  	
  Sharing Of Insurance Costs.

  	
   

  
	
  13.1.2.

  	
  IMPA Named As Insured.

  	
   

  
	
  13.1.3.

  	
  Procurement Of Additional Insurance For
  IMPA.

  	
   

  
	
  13.1.4.

  	
  Sharing Of Refunds From Insurance Premiums.

  	
   

  
	
  13.1.5.

  	
  Sharing Of Insurance Proceeds

  	
   

  
	
  13.2.

  	
  Destruction.

  	
   

  
	
  13.2.1.

  	
  Damage Or Destruction Fully Covered By
  Insurance

  	
   

  

 

iii

 

	
  13.2.2.

  	
  Damage Or Destruction Not Fully Covered By
  Insurance.

  	
   

  
	
  ARTICLE 14. PARTITION OF OR TRANSFER OF
  INTEREST IN TRIMBLE COUNTY UNIT 1

  	
   

  
	
  14.1.

  	
  Special Nature Of Trimble County Unit 1 .
  Waiver Of Right Of Partition.

  	
   

  
	
  14.2.

  	
  Transfer Of Ownership Interests To Third
  Parties.

  	
   

  
	
  14.2.1.

  	
  Conditions Of Transfer

  	
   

  
	
  14.2.2.

  	
  Further Conditions Of Transfer

  	
   

  
	
  14.2.3.

  	
  Non-applicability Of Certain Provisions

  	
   

  
	
  14.3.

  	
  Transfer Of Associated Rights And Interests

  	
   

  
	
  ARTICLE 15. RIGHT OF FIRST REFUSAL

  	
   

  
	
  ARTICLE 16. ASSIGNMENT

  	
   

  
	
  16.1.

  	
  Limitation Of Assignability.

  	
   

  
	
  16.2.

  	
  Successors And Assigns.

  	
   

  
	
  ARTICLE 17. LIABILITY AND DEFAULT

  	
   

  
	
  17.1.

  	
  Liability To Third Parties.

  	
   

  
	
  17.2.

  	
  Liability Between The Parties.

  	
   

  
	
  17.3.

  	
  Indemnification.

  	
   

  
	
  17.4.

  	
  Nature And Survival Of Representations And
  Warranties.

  	
   

  
	
  17.5.

  	
  Default.

  	
   

  
	
  17.5.1.

  	
  Events of Default.

  	
   

  
	
  17.5.2.

  	
  Curing Default In Regard To Paying Money.

  	
   

  
	
  17.5.3.

  	
  Curing Default For Other Than Failure To
  Pay Money

  	
   

  
	
  17.5.4.

  	
  Non-Applicability Of Cure Provisions

  	
   

  
	
  17.5.5.

  	
  Appointment Of A Receiver.

  	
   

  
	
  17.5.6.

  	
  Additional Obligations.

  	
   

  
	
  17.5.7.

  	
  Waivers

  	
   

  
	
  17.5.8.

  	
  Legal And Other costs.

  	
   

  
	
  17.6.

  	
  Force Majeure

  	
   

  
	
  ARTICLE 18. ADMINISTRATION

  	
   

  
	
  18.1.

  	
  Coordination Committee.

  	
   

  
	
  18.2.

  	
  Membership.

  	
   

  
	
  18.3.

  	
  Meetings.

  	
   

  
	
  18.4.

  	
  Functions

  	
   

  
	
  18.5.

  	
  Records

  	
   

  
	
  18.6.

  	
  Expenses.

  	
   

  
	
  18.7.

  	
  Conduct

  	
   

  
	
  ARTICLE 19. DISAGREEMENT

  	
   

  
	
  19.1.

  	
  Consultation.

  	
   

  
	
  19.2.

  	
  Disagreement.

  	
   

  
	
  19.2.1.

  	
  Arbitration.

  	
   

  
	
  ARTICLE 20. REMEDIES

  	
   

  
	
  20.1.

  	
  All Remedies . Setoff.

  	
   

  
	
  20.2.

  	
  Injunctive Relief.

  	
   

  
	
  20.3.

  	
  No Remedy Exclusive.

  	
   

  
	
  20.4.

  	
  Failure To Participate In Incremental
  Capital Assets.

  	
   

  
	
  ARTICLE 21. MISCELLANEOUS

  	
   

  

 

iv

 

	
  21.1.

  	
  Governing Law.

  	
   

  
	
  21.2.

  	
  Notice To Parties.

  	
   

  
	
  21.3.

  	
  Article Headings Not To Affect Meaning.

  	
   

  
	
  21.4.

  	
  Counterparts.

  	
   

  
	
  21.5.

  	
  Time.

  	
   

  
	
  21.6.

  	
  Severability.

  	
   

  
	
  21.7.

  	
  Integration.

  	
   

  
	
  21.8.

  	
  Computation Of Time.

  	
   

  
	
  21.9.

  	
  Waiver.

  	
   

  
	
  21.10.

  	
  Equal Opportunity Clause.

  	
   

  
	
  21.11.

  	
  Non-Segregated Facilities.

  	
   

  
	
  21.12.

  	
  Condemnation.

  	
   

  
	
  ARTICLE 22. TERM AND TERMINATION

  	
   

  
	
  22.1.

  	
  Termination.

  	
   

  
	
  22.2.

  	
  Retirement Of Property.

  	
   

  
	
  22.3.

  	
  Retirement Costs.

  	
   

  
	
   

  	
   

  	
   

  

 

v

 

AGREEMENT

 

This
Agreement, dated February 1, 1993, between Louisville Gas and Electric Company
(“Louisville” or a “Party”), a Kentucky corporation, and Indiana Municipal
Power Agency (“IMPA” or a “Party”), a body corporate and politic and a
political subdivision of the State of Indiana, collectively (the “Parties”).

 

WHEREAS, IMPA
is an agency composed of numerous municipally-owned electric systems, and is
empowered, among other things, to plan, finance, develop, own and operated
projects to supply electric power and energy on a collective basis for the
present and future needs of its members; and

 

WHEREAS,
Louisville is a regulated public utility and owns and operates facilities for
the generation, transmission, and distribution of electric power and energy in
the Commonwealth of Kentucky, and

 

WHEREAS, IMPA
owns and operates facilities for the generation and transmission of electric
power and energy to provide electric power and energy to its members in the
State of Indiana, and

 

WHEREAS, Louisville
is the owner of the Trimble County Plant, consisting of Trimble County
Unit 1, the Trimble County General Plant Facilities, and the Trimble
County Site, of which Illinois Municipal Electric Agency (“IMEA”) owns an
undivided 12.12 percent interest in Trimble County Unit 1; and

 

WHEREAS,
Louisville and IMPA are entering into this Agreement to establish (a) the
respective ownership interests of the Parties in Trimble County Unit 1, and (b)
the respective obligations and rights of the Parties with respect to the
operation and maintenance of Trimble County Unit 1.

 

NOW,
THEREFORE, in consideration of the premises and of the mutual covenants herein
set forth, and subject to the terms and conditions herein set forth, the
Parties agree as follows:

 

1

 

ARTICLE 1.

DEFINITIONS

 

1.1.          Agreed
Rate.

 

Two (2)
percent per annum above the published prime commercial lending rate established
from time to time by Chase Manhattan Bank, N.A., New York, New York.

 

1.2.          Agreement.

 

This
Participation Agreement between Louisville and IMPA dated as of February 1,
1993.

 

1.3.          Available.

 

The state in
which a unit is capable of providing service regardless of the capacity level
that can be provided.

 

1.4.          Capacity Factor.

 

The ratio of
the actual net electric energy generated by Trimble County Unit 1 in a period
of time to the maximum net electric energy that could be generated by the same
unit in the same period of time if such unit operated uninterrupted at its Net
Seasonal Capability rating.

 

1.5.          Closing.

 

The delivery
of documents and certificates and the payment of money as provided in Article
3.

 

1.6.          Commercial Operation Date.

 

December 23,
1990, the date on which Trimble County Unit 1 was determined by Louisville to
be reliable as a source of electric capacity and energy.

 

1.7.          Construction Work.

 

All
engineering, design, contract preparation, purchasing (of equipment, materials,
and supplies), construction, supervision, expediting, inspection, accounting,
testing and start-up for the Trimble County Plant and preparation of operating
and equipment manuals, quality assurance manuals, emergency action plans, all
reports required by regulatory authorities and the conduct of hearings and all
other activities incidental to obtaining requisite permits, licenses, and
certificates for the construction and operation of the Trimble County Plant
prior to the Commercial Operation Date of Trimble County Unit 1 in accordance
with Electric Plant Instruction No. 3, Components of Construction Cost, Uniform
System of Accounts. Construction Work, as used in

 

2

 

Article 15
hereof, shall refer to the categories of costs and expenses set forth above,
which relate to the unit to be constructed referenced in Article 15.

 

1.8.          Coordination Committee.

 

The committee
established pursuant to Article 18 hereof.

 

1.9.          Delivery Points.

 

The
interconnection points of Louisville’s system with the Joint Transmission
System and with any other utility or utilities with which IMPA has contracted
for transmission service to transmit power from Louisville to IMPA.

 

1.10.        Effective
Date.

 

The date on
which Closing occurs pursuant to Article 3 of this Agreement.

 

1.11.        Electric Capability.

 

Megawatts (MW)
of electric demand.

 

1.12.        Electric
Energy.

 

Megawatt-hours
(MWH) of electric energy.

 

1.13.        Electric Capability And Energy.

 

Electric
Capability and associated Electric Energy.

 

1.14.        Electric Capability And Energy
Entitlement.

 

The percentage
of the Net Electric Generating Capability and Associated Electric Energy of
Trimble County Unit 1 to which Louisville or IMPA, as the case may be, is
entitled under Article 5.4 of this Agreement.

 

1.15.        Execution
Date.

 

The date upon
which the Parties entered into this Agreement, which appears at the beginning
of this Agreement.

 

1.16.        Fixed Operation and Maintenance
Expenses.

 

The Fixed
Operation and Maintenance Expenses are calculated as the sum of the following
expenses as they relate to the operation ~ and maintenance of Trimble County
Unit 1, Trimble County General Plant Facilities (as such pertain to Trimble
County Unit 1), and the Trimble County Site (as such pertain to Trimble County
Unit 1), as recorded in Louisville’s accounting records under the Uniform
System of Accounts:

 

3

 

(a)           Operation supervision
and engineering (Account 500).

 

(b)           Steam expenses (Account
502 except for scrubber reactant).

 

(c)           Electric expenses
(Account 505).

 

(d)           Miscellaneous steam
power expenses (Account 506).

 

(e)           Rents (Account 507).

 

(f)            Maintenance
supervision and engineering (Account 510).

 

(g)           Maintenance of
structures (Account 511).

 

(h)           Maintenance of boiler
plant (Account 512).

 

(i)            Maintenance of
electric plant (Account 513).

 

(j)            Maintenance of
miscellaneous steam plant (Account 514).

 

1.17.        Force
Majeure.

 

Any cause
beyond the reasonable control of a Party, and which by reasonable efforts the
Party is unable to overcome, including without limitation, the following: acts
of God; strikes, lockouts, or other industrial disturbances; acts of public
enemies; acts, orders, or absence of necessary orders and permits of any kind,
from the government of the United States, or from the government of one of its
sovereign states, or any of their departments, agencies, or officials, or from
any civil or military authority insurrections; riots; delay in transportation;
unforeseen soil conditions; equipment, material, supplies, labor, or machinery
shortages; epidemics; landslides; lightning; earthquakes; fire; hurricanes;
tornadoes; storms; floods; washouts; drought; arrest; war; civil disturbances;
explosions; breakage or accident to machinery, equipment, transmission lines,
pipes, or canals; partial or entire failure of utility service; breach of
contract by any supplier, contractor, subcontractor, laborer, or materialman;
sabotage; injunction; blight; famine; blockage; quarantine; or any other
similar or dissimilar cause or event not reasonably within the control of the
Party. Force Majeure does not include financial inability to pay, and shall
not, in any event, excuse payment for obligations already incurred hereunder at
the time such claim is made.

 

1.18.        Fuel/Reactant Operation Expenses.

 

The
fuel/reactant operation expenses are calculated as the sum of the following
expenses as recorded in Louisville’s accounting records under the Uniform
System of Accounts:

 

(a)           Fuel (Account 501).

 

(b)           Scrubber reactant
expenses in Steam Expenses (Account 502).

 

4

 

1.19.        Good Utility Practice.

 

At a
particular time, any of the practices, methods, and acts, which, in the
exercise of reasonable judgment in the light of the facts known at the time the
decision was made, would have been expected to accomplish the desired result or
further the possibility of achieving such result, at a reasonable cost
consistent with reliability and safety and all applicable laws and governmental
rules, regulations, and orders pertaining to Trimble County Plant. Such
practices, methods, and acts shall include, but shall not be limited to, any of
the practices, methods, and acts engaged in or approved by other members of the
electric utility industry at, prior to, or subsequent to the time the decision
was made. Good Utility Practice is not intended to be limited to the optimum
practice, method, or act to the exclusion of all others, but rather to be a
number of possible practices, methods, or acts.

 

1.20.        Incremental Capital Assets.

 

All assets of
the Trimble County Plant pertaining to the use of Trimble County Unit 1 which
are not included in Accounts 101, 106, or 107 of the Uniform System of Accounts
on the Commercial Operation Date, or such later date as is necessary to
complete the original construction of Trimble County Unit 1 and the Trimble
County General Plant Facilities and the Trimble County Site as they pertain to
Trimble County Unit 1.

 

1.21.        Insurance.

 

Policies of
insurance of any type procured and maintained, including any self-insurance
maintained by Louisville or jointly by the Parties, relating to Trimble County
Unit I on and after its Commercial Operation Date, in accordance with Article
13 hereof.

 

1.22.        Interconnection Agreement.

 

The agreement
between Louisville and IMPA as such agreement may be amended from time to time,
providing for purchases and sales of electric capacity and energy between the
Parties, and specifying the rates to be charged for such transactions as filed
with the Federal Energy Regulatory Commission (“FERC”).

 

1.23.        Internal
Load.

 

Aggregate
electric demand of all retail consumers served, including those served under
non-firm (interruptible) rate schedules, and associated transmission and
distribution losses.

 

1.24.        Joint Transmission System.

 

The Joint
Transmission System shall be the transmission facilities owned and jointly
operated by PSI Energy (“PSI”), IMPA, and Wabash Valley Power Association

 

5

 

(“WVPA”)
functionally serving as transmission facilities, all having an operating
voltage of 69,000 volts or higher.

 

1.25.        Louisville’s Cost Of Capital.

 

An amount
determined by the weighted average cost of capital based on Louisville’s
capital structure at the end of the prior month, including short-term debt,
long-term debt, preferred stock, and common equity. The cost rates for
short-term debt, long-term debt, and preferred stock shall be determined based
on the average embedded cost at the end of the prior month. The cost of common
equity shall be based upon the rate of return on common equity allowed by the
Kentucky Public Service Commission, or its successor, by its Order in
Louisville’s last general rate case.

 

1.26.        Net Electric Generating Capability And
Associated Electric Energy.

 

The maximum
continuous ability of Trimble County Unit 1 to produce power which can be
available at any particular time, less any power required for operation of the
unit, taking into account all relevant conditions and factors affecting or
limiting the capability of the unit to produce power at such time, including,
without limitation, availability and quality of fuel, any mechanical or other
defects, breakdowns, malfunctions, or environmental and permit limitations then
existing.

 

1.27.        Net Seasonal Capability.

 

The steady
hourly output, less auxiliary usage, which generating equipment is expected to
produce under ideal conditions, and adjusted due to seasonal variations in
ambient temperature, condensing water availability and/or temperature,
reservoir levels, scheduled reservoir discharge, river flow head, etc. Such
output shall be declared on a monthly basis and determined according to testing
criteria defined in the East Central Area Reliability Coordination Agreement’s
Document No. 4 entitled, “Criteria and Method For the Uniform Rating of
Generating Equipment.”

 

1.28.        Operating
Work.

 

All
engineering, contract preparation, purchasing, repair, supervision,
recruitment, training, expediting, inspection, accounting, testing, protection,
operating, management, maintenance, and all other work and activities
associated with operating Trimble County Unit 1 which are not included in
Construction Work, but excluding all work on any Incremental Capital Assets.

 

1.29.        Owners.

 

The Parties
and Illinois Municipal Electric Agency (“IMEA”).

 

6

 

1.30.        Representative.

 

A Party’s
member of the Coordination Committee as set forth in Article 18 of this
Agreement.

 

1.31.        Trimble County General Plant Facilities.

 

Facilities on
the Trimble County Site, excluding those in which an interest is conveyed as
identified in Appendix B, which are necessary for use by IMPA with respect to
its proportional ownership of Trimble County Unit 1, for which IMPA shall have
a non-exclusive license, substantially in the form shown in Appendix C, to use
consistent with its ownership interests. Ownership in such facilities is not
conveyed to IMPA hereunder. Such facilities are identified in Appendix C
hereto, and in the absence of other units at the Trimble County Site, all such
facilities shall be considered to pertain to the use of Trimble County Unit 1.

 

1.32.        Trimble County Plant.

 

The generating
plant at a site along the Ohio River at river mile 571.4 at Wises Landing in
Trimble County, Kentucky, which plant currently consists of a single coal-fired
steam electric generating unit of 495,000 kilowatts, and includes Trimble
County Unit 1, the Trimble County General Plant Facilities, and the Trimble
County Site.

 

1.33.        Trimble County Site.

 

Certain land,
consisting of approximately 2,200 acres, and certain rights in land owned by
Louisville, including the land on which Trimble County Unit 1 is constructed
and including that portion of the land underlying Trimble County Unit 1 which
is conveyed to IMPA under Article 2.2 hereof. In the absence of other units at
the Trimble County Site, all such land shall be considered to pertain to the
use of Trimble County Unit 1.

 

1.34.        Trimble County Unit 1.

 

The 495,000
kilowatt unit, located at the Trimble County Site, consisting of the property
set forth in Appendix B hereto.

 

1.35.        Uniform System Of Accounts.

 

The FERC’s
“Uniform System of Accounts Prescribed for Public Utilities and Licensees
(Class A and Class B)”, in effect as of the date of this Agreement, as such
Uniform System of Accounts may be modified from time to time. References in
this Agreement to any specific account number shall mean the account number in
effect as of the Execution Date of this Agreement or any successor account.

 

7

 

ARTICLE 2.

OWNERSHIP
INTEREST AND SALE

 

2.1.          Ownership Interests.

 

Trimble County
Unit 1 shall be owned by the Parties and IMEA as tenants in common. The
undivided ownership interest of each Party and IMEA in Trimble County Unit 1
shall be free and clear of the lien of any indenture of mortgage, deed of
trust, bond resolution, or other instrument (hereinafter called “indenture”)
establishing a lien upon some or all of the property of the other Party or
IMEA. The undivided ownership interests of Louisville, IMPA, and IMEA in
Trimble County Unit 1 shall be 75.00, 12.88, and 12.12 percent, respectively.
Trimble County Unit 1 is more specifically described in Appendix B attached
hereto which may be revised from time to time in accordance with this
Agreement. Louisville shall retain full ownership of the Trimble County General
Plant Facilities as described in Appendix C attached hereto, subject to the
non- exclusive licenses granted to IMPA hereunder and to IMEA. Louisville shall
retain full ownership of the Trimble County Site except for that portion of the
Trimble County Site conveyed to IMPA pursuant to Article 2.2, and except for
that portion of the Trimble County Site previously conveyed to IMEA, and
subject to the reciprocal easements over the Trimble County Site conveyed to
and by Louisville, IMPA, and IMEA.

 

It is
recognized by the Parties, however, that various items of property included in
Trimble County Unit 1 may be leased from others in lieu of purchasing such
items of property. Nothing in this Agreement shall preclude the Parties from
leasing such items of property. Such leased property shall be held by the
Owners in an undivided ownership as tenants in common.

 

2.2.          Sale Of Property Included In Trimble
County Unit 1.

 

At the
Closing, from its ownership share of Trimble County Unit i~ Louisville shall
sell and convey to IMPA, and IMPA shall purchase from Louisville, a 12.88
percent undivided ownership interest as a tenant in common in Trimble County
Unit 1 as set forth in Appendix B. Upon such conveyance, the undivided
ownership shares of Trimble County Unit 1 shall be as follow: Louisville.  75 percent, IMPA- 12.88 percent, IMEA- 12.12
percent. Such conveyance shall be by Bill of Sale substantially in the form
shown in Appendix A attached hereto and made a part hereof

 

From its
ownership share of the Trimble County Site, Louisville shall further convey to
IMPA by general warranty deed, substantially in the form shown in Appendix E,
an undivided ownership interest in 12.88 percent of that portion of the real
estate constituting the Trimble County Site underlying Trimble County Unit 1 to
be held is tenants in common. Upon such conveyance, the undivided ownership
shares of that portion of the real estate constituting the Trimble County Site
underlying Trimble County Unit 1 shall be as follow: Louisville
75 percent, IMPA 12.88 percent, IMEA . 12.12 percent.

 

8

 

Louisville
shall further grant to IMPA a nonexclusive license, substantially in the form
shown in Appendix C, to use the Trimble County General Plant Facilities and a
non-exclusive easement, substantially in the form shown in Appendix F, over
that portion of the Trimble County Site owned by Louisville, as the Trimble
County- General Plant Facilities and the Trimble County Site pertain to IMPA’s
use of Trimble County Unit 1. IMPA shall rant to Louisville and any other
Owners of Trimble County Unit 1 an easement, substantially in the form shown in
Appendix G, over IMPA’s interest in the Trimble County Site.

 

Further, after
the Closing, the Parties shall execute such other instruments, if any, as may
be necessary or appropriate to confirm the respective rights and interests of
the Parties hereunder and to maintain their respective ownership interests.

 

2.3.          Release From Lien Of Louisville’s
Indenture.

 

At the
Closing, Louisville shall furnish to IMPA a properly executed release of that
portion of the property being conveyed to IMPA at the Closing from the lien of
any and all indentures, applicable to Louisville’s property conveyed to IMPA
hereunder.

 

2.4.          Closing.

 

The Closing
shall be held in accordance with the provisions of Article 3.

 

2.5.          Additional Generating Units.

 

Subject to
Article 15 hereof, Louisville shall have the sole and exclusive right to own,
install, enlarge, modify, and operate any generating unit or units other than
Trimble County Unit 1, as well as any other facility, including necessary
appurtenances thereto, on the Trimble County Site, provided that such other
units or facilities shall not be so installed, enlarged, modified, and operated,
as the case may be, as to unreasonably impair (economically or operationally)
the operation of Trimble County Unit 1.

 

2.6.          Modification Of Existing Property.

 

Subject to the
approval of the Coordination Committee, and in accordance with the terms of
this Agreement, Louisville shall have the right to use, enlarge, modify, or
relocate any facilities installed as a part of Trimble County Unit 1 or Trimble
County General Plant Facilities in connection with the installation,
enlargement, modification, or operation, as the case may be, of such other unit
or units or facilities provided that:

 

(a)           such use, enlargement,
modification, or relocation of Trimble County Unit 1 facilities or Trimble
County General Plant Facilities shall not unreasonably impair (economically or
operationally) the operation of Trimble County Unit 1; and

 

(b)           the cost of such use,
enlargement, modification, or relocation of Trimble County Unit 1 facilities or
Trimble County General Plant Facilities, in connection with such other unit or
units or facilities, shall be borne by Louisville (except that if such use,

 

9

 

enlargement,
modification, or relocation of Trimble County Unit 1 facilities or Trimble
County General Plant Facilities is in connection with the installation,
enlargement, modification, or operation of any additional unit or units or
facilities which are owned or to be owned by the Owners in common, then the
cost of such use, enlargement, modification, or relocation of said Trimble
County Unit 1 facilities or Trimble County General Plant Facilities shall be
shared by the Owners in proportion to their respective ownership interests in
such additional unit or units or facilities); and

 

(c)           such action shall not
enlarge or diminish the respective ownership interests of the Owners in any
part of Trimble County Unit 1; and

 

(d)           such action shall not
enlarge or diminish the Owner’s respective obligations to share in the costs of
any part of Trimble County Unit 1; and

 

(e)           further, where
modification of existing property and rights requires revisions to existing
documents setting forth the respective rights and interests of the Owners, or
where new conveyances are required to properly effectuate the modifications to
property and rights made hereunder, the Parties agree to cooperate to promptly
execute and deliver such documents.

 

ARTICLE 3.

PURCHASE, PAYMENT, AND CLOSING

 

3.1.          Purchase Price.

 

The purchase
price for IMPA’s 12.88 percent undivided ownership interest in Trimble County Unit
1 shall be $91,075,617 (the amount established pursuant to the Option Agreement
of December 30, 1991, between the Parties) (the “Purchase Price”), paid at
Closing in immediately available funds.

 

3.2.          Closing.

 

3.2.1.                       Date And Place.

 

Provided that
the conditions in Article 3.3 hereof have been fulfilled, Closing shall occur
at such location as may be selected by the Parties, on such date as set forth
in the Option Agreement, or on such other date as mutually agreed upon by the
Parties.

 

3.2.2.                       Delivery Of Documents, Certificates, And
Funds.

 

At the
Closing, Louisville shall deliver to IMPA the Bill of Sale, deed, easement,
license, the release of any and all indentures of the ownership interest in
Trimble County Unit 1 to be conveyed to IMPA hereunder at the Closing from the
lien of such indenture(s), and all certificates and evidences of
authorizations, approvals, and documents as provided for herein. IMPA shall
deliver to Louisville the Purchase Price at the Closing, in immediately
available funds and all certificates, easements, and evidences of
authorizations, approvals, and documents as provided for herein.

 

10

 

3.3.          Special Conditions.

 

IMPA’s
obligation to complete the transaction as contemplated in this Article shall be
subject to the fulfillment, prior to Closing, of each of the following special
conditions:

 

(a)           IMPA shall have
exercised the Option set forth in the Option Agreement of December 30, 1991,
between the Parties.

 

(b)           IMPA shall have obtained
entitlement or contractual authority and any required regulatory approval for
the use of such transmission system or systems as are necessary to transmit
power and energy from the Delivery Points to IMPA.

 

(c)           IMPA shall have issued
and sold tax-exempt bonds sufficient in amount to pay for any and all sums due
to be paid by IMPA to Louisville at Closing.

 

(d)           The Parties shall have
executed the Interconnection Agreement.

 

IMPA shall
endeavor in good faith to fulfill each of these special conditions as soon as
reasonably practicable. In the event IMPA determines that it cannot fulfill the
sale of tax-exempt bonds, it shall notify Louisville. IMPA shall regularly
report on its progress to Louisville.

 

Should IMPA
fail or be unable to close by Closing due to its inability to meet these
special conditions, the Agreement shall terminate without penalty to either
Party.

 

3.4.          Continued Marketing By Louisville.

 

IMPA
understands and acknowledges that Louisville may incur certain costs should
Closing not occur. IMPA shall undertake to keep Louisville promptly and
adequately informed of its efforts and progress toward satisfying the
conditions set forth in Article 3.3 above, as well as any event, situation, or
occurrence which could adversely affect IMPA’s ability or decision to close as
scheduled. In this regard, IMPA shall regularly, no less frequently than
monthly, report on its efforts and progress, and shall declare its intention to
close as scheduled.

 

Except as
otherwise specifically provided in this Agreement, IMPA also understands and
acknowledges that Louisville, in its sole discretion, reserves the right to
sell prior to and subsequent to the Closing, all or any portion of Trimble
County Unit 1 or the output thereof, including the Trimble County General Plant
Facilities and the Trimble County Site, other than the portion to be conveyed
to IMPA hereunder.

 

3.5.          Termination If Closing Does-Not Occur.

 

Should Closing
not occur at the time set for Closing under Article 3.2.1 due to any default or
failure to satisfy any condition or contingency by IMPA, this Agreement shall
immediately terminate with Louisville having no further obligation or liability

 

11

 

hereunder. In
such event, the Unit Power Purchase Agreement of December 30, 1991, between
Louisville and IMPA, shall remain in full force and effect.

 

ARTICLE 4.

REPRESENTATIONS, WARRANTIES,
AND MUTUAL COVENANTS

 

4.1.          IMPA Representations.

 

IMPA hereby
represents and warrants to Louisville as of the Closing as follows:

 

4.1.1.                       IMPA Organization.

 

IMPA is a body
corporate and politic and a political subdivision of the State of Indiana, duly
organized, validly existing and in good standing under the laws of the State of
Indiana, has the full power, legal capacity, and authority to enter into this
Agreement and related agreements, and to carry out the transactions
contemplated by this Agreement, and to carry on its business as it is now being
conducted and as it is contemplated to be conducted after the Closing. IMPA has
delivered to Louisville on or before the Closing a true and complete copy of
its Statement of Organization and By-Laws as amended to date.

 

4.1.2.                       Authority Relative To This Agreement.

 

The execution,
delivery, and performance by IMPA of this Agreement have been duly authorized
by all necessary corporate action on the part of IMPA, and the execution,
delivery, and performance by IMPA of the Interconnection Agreement will have
been duly authorized by all necessary corporate action on the part of IMPA prior
to Closing. The execution, delivery, and performance by IMPA of this Agreement
and the Interconnection Agreement do not contravene any law, or any
governmental rule, regulation, or order, applicable to IMPA or its properties,
or the Statement of Organization or By-Laws of IMPA and do not and will not
contravene the provisions of, or constitute a default under, any indenture,
mortgage, contract, or other instrument to which IMPA is a party or by which
IMPA is bound, and this Agreement constitutes a legal, valid, and binding
obligation of IMPA, enforceable in accordance with its terms, except as limited
by applicable bankruptcy, insolvency, reorganization, or similar laws at the
time in effect.

 

4.1.3.                       Approvals And Consents.

 

Any consent or
approval of, giving of notice to, registration with, or taking of any other
action by any state, federal, or other governmental commission, court, agency,
or regulatory authority including, without limitation, the Indiana Utility
Regulatory Commission, the Federal Energy Regulatory Commission, and the
Securities and Exchange Commission, in connection with the execution, delivery,
and performance of this Agreement and the Interconnection Agreement required to
be obtained by IMPA on or before the Closing will have been obtained by the
Closing.

 

12

 

4.1.4.                       Legal Proceedings.

 

There is no
materially adverse legal action, suit, arbitration, governmental investigation,
or other legal or administrative proceeding, or any order, decree, or judgment
in progress, pending or in effect, or to the knowledge of IMPA threatened
against or relating to IMPA in connection with or relating to the transactions
contemplated by this Agreement, and IMPA does not know or have any reason to be
aware of any basis for the same.

 

4.2.          Louisville Representations.

 

Louisville
hereby represents and warrants to IMPA as of the Closing as follows:

 

4.2.1.                       Louisville Organization.

 

Louisville is
a corporation duly organized and validly existing under the laws of the
Commonwealth of Kentucky, and has corporate power to carry on its business as
it is now being conducted and as it is contemplated to be conducted after the
Closing. Louisville has delivered to IMPA on or before the Closing a true and
complete copy of its Articles of Incorporation and By-Laws as amended to date.

 

4.2.2.                       Authority Relative To This Agreement.

 

The execution,
delivery, and performance by Louisville of this Agreement and the
Interconnection Agreement have been duly authorized, or by Closing, will be
ratified by all necessary corporate action on the part of Louisville, do not
contravene any law, or any governmental rule, regulation, or order, applicable
to Louisville or its properties, or the Articles of Incorporation or By-Laws of
Louisville and do not and will not contravene the provisions of, or constitute
a default under, any indenture, mortgage, contract, or other instrument to
which Louisville is a party or by which Louisville is bound, and this Agreement
constitutes a legal, valid, and binding obligation of Louisville, enforceable
in accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, or similar laws at the time in effect.

 

4.2.3.                       Approvals And Consents.

 

Any consent or
approval of, giving of notice to, registration with, or taking of any other
action by any state, federal, or other governmental commission, court, agency,
or regulatory authority including, without limitation, the Kentucky Public
Service Commission, the Federal Energy Regulatory Commission, and the
Securities and Exchange Commission, in connection with the execution, delivery,
and performance of this Agreement and the Interconnection Agreement required to
be obtained by Louisville on or before the Closing will have been obtained by
the Closing.

 

13

 

4.2.4.                       Legal Title.

 

Louisville has
good and marketable title to the assets conveyed to IMPA free and clear of all
liens, except easements, restrictions, . and stipulations of record, and the
lien of current real property taxes not delinquent, subject to the rights of
IMEA which owns a 12.12 percent undivided interest as tenants in common to the
assets conveyed. Before Closing, Louisville shall provide to IMPA a list of all
easements, restrictions, and stipulations of record. Within thirty days
thereafter, IMPA shall consent to such easements, restrictions, and
stipulations of record, which consent shall not unreasonably be withheld, if it
reasonably determines that the easements, restrictions, and stipulations of
record will not adversely affect the marketability of said title. Should IMPA
reasonably refuse to consent to any such easement, restriction, or stipulation
of record, Louisville, at its option and at its expense, may (I) remove such
easement, restriction, or stipulation of record from the property, or (ii)
remove the limiting language “except easements, restrictions, or stipulations
of record’ from the representation of good and marketable title in this
Article, and convey good and marketable title subject only to current taxes not
delinquent, or (iii) purchase standard form title insurance with respect to the
real estate to be conveyed herein in favor of IMPA, which title insurance, if
obtainable, will insure over any easement, restriction, or stipulation of
record adversely affecting marketability of said title, reasonably objected to
by IMPA. If title insurance is obtained under this provision in favor of IMPA,
Louisville shall be responsible for the cost of such title insurance covering
the real estate conveyed to IMPA, up to a maximum of $5,000.00, with IMPA being
responsible for the cost of such insurance above $5,000.00.

 

4.2.5.                       Condition Of Plant And Equipment.

 

As of the
Closing Date, the portions of the Trimble County Plant pertaining to the
original construction of Trimble County Unit 1 are capable of full operation,
according to their design and specifications, except as set forth in a
certificate in the form attached as Appendix D hereto.

 

4.2.6.                       Legal Proceedings.

 

There is no
materially adverse legal action, suit, arbitration, governmental investigation,
or other legal or administrative proceeding, or any order, decree, or judgment
in progress, pending or in effect, or to the knowledge of Louisville threatened
against or relating to Louisville in connection with or relating to the
transactions contemplated by this Agreement, and Louisville does not know or
have any reason to be aware of any basis for the same.

 

14

 

ARTICLE 5.

OPERATING ARRANGEMENTS

 

5.1.          Authority For Operation And Management.

 

Subject to any
directions from the Coordination Committee, Louisville shall have sole
authority to manage, control, maintain, and operate (including dispatch)
Trimble County Unit 1 for the benefit of each Party’s respective interest and
Louisville shall take all steps which it deems necessary or appropriate for
that purpose. Louisville shall discharge such authority in accordance with Good
Utility Practice and the other provisions of this Agreement.

 

5.2.          Scheduling And Dispatching Of Electric
Generation

 

When Trimble
County Unit 1 is~ Available, IMPA shall have the right to schedule, subject to
the scheduling provisions herein, all, or any part that is five (5) megawatts
or greater, of its Electric Capability and Energy Entitlement in Trimble County
Unit 1 (or as such Electric Capability and Energy Entitlement may be modified
herein); provided, that during periods when Trimble County Unit 1 is being
operated at minimum generation, IMPA, unless otherwise agreed to by Louisville,
shall not schedule less than what its Electric Capability and Energy
Entitlement in Trimble County Unit 1 would have been had the Net Electric
Generating Capability and Associated Electric Energy of Trimble County Unit 1
been restricted to such minimum generation. Louisville shall promptly notify
IMPA of any significant change in the Net Electric Generating Capability of
Trimble County Unit 1. As used in this paragraph, the term “minimum generation’
means the Net Electric Generating Capability level below which Trimble County
Unit 1 cannot operate in a stable manner and must be shut down.

 

Louisville and
IMPA shall each be entitled to dispose of their respective Electric Capability
and Energy Entitlement through scheduled transactions with other electric
utilities in a manner consistent with Good Utility Practice.

 

IMPA shall
schedule Electric Energy to be delivered pursuant to this Agreement prior to
12:00 noon E.S.T. of the day prior to delivery; provided that, for Saturdays,
Sundays, Mondays, and holidays recognized by Louisville, IMPA shall schedule
the Electric Energy prior to 12:00 noon E.S.T. on the last normal work day
prior to the weekend or holiday. : Schedules shall be subject to change after
12:00 noon E.S.T. of the applicable day on which the schedule is submitted only
upon the mutual consent of the Parties, but Louisville shall make every
reasonable effort to accommodate changes in the schedules. All schedules shall
be in increments of whole megawatts; provided, that where IMPA’s full
entitlement is requested and available, IMPA shall be entitled to its full
Electric Capability and Energy Entitlement. Prior to each calendar year,
Louisville shall notify IMPA of the holidays to be recognized by Louisville for
that year. In the event Louisville fails to provide such notice, the said
holidays shall be the same as for the prior year.

 

15

 

Louisville
will provide to IMPA, by 9:00 A.M. each day, the Net Electric Generating
Capability expected for the next day; provided that, for Saturdays, Sundays,
Mondays, and holidays recognized by Louisville, Louisville will provide this
information on the last normal work day prior to the weekend or holiday. At all
times, Louisville will immediately inform IMPS of any increase or decrease in
unit Net Electric Generating Capability that will or may occur, or any
suspected conditions that could cause such change.

 

At any time
IMPA is not requesting, for any reason, including a claim by 1MPA of Force
Majeure, the maximum amount of Net Electric Generating Capability available to
it from Trimble County Unit 1, Louisville shall have the right to utilize, for
its own use, ail or any part of the Electric Energy associated with such unused
Net Electric Generating Capability. When so utilized, the energy consumed by
Louisville shall be referred to as “Banked Energy.’ At a future date, IMPA
shall be entitled to request, in accordance with the scheduling provisions of
Article 5.2, Electric Energy associated with the Net Electric Generating
Capability from Louisville’s portion of Trimble County Unit 1 in an amount
equal to all or any portion of the then-current balance of Banked Energy due to
IMPA. Louisville shall be obligated to supply the requested amount of IMPA’s
Banked Energy unless, pursuant to guidelines established by the Coordination
Committee, conditions are unsuitable to do so. Pursuant to procedures and
guidelines established by the Coordination Committee, the balance of Banked
Energy owed to IMPA shall be periodically returned to zero. When Banked Energy
is used by Louisville or returned to IMPA, the Fuel/Reactant Operation Expenses
for the Electric Energy associated therewith shall be assumed by the Party
using such Electric Energy. Louisville shall maintain records adequate to
determine the transactions related to, and balances of, Banked Energy.

 

Louisville
shall submit to IMPA, as far in advance as practicable, schedules showing the
expected time and duration for maintenance and repair outages of Trimble County
Unit 1. Louisville will adjust such schedules to accommodate IMPA’s operating
needs, where, in Louisville’s sole judgment, it is practicable to do so,
consistent with Good Utility Practice. Should IMPA desire a schedule for
maintenance and repair outages which Louisville believes is impracticable, IMPA
shall be entitled to raise the scheduling issue with the Coordination
Committee.

 

5.3.          Economic Replacement Of Trimble County
Unit 1 Energy.

 

In the event,
and only in the event, Louisville voluntarily ceases to operate Trimble County
Unit 1 or reduces the output therefrom solely because of the availability of
Electric Energy to Louisville from other sources, the cost of which is
projected to be lower than what the cost of Fuel/Reactant Operation Expenses of
Electric Energy generated by Trimble County Unit 1 would be during the period
of such cessation in operation, Louisville shall make available to IMPA
replacement Electric Energy from such other sources during the period of such
cessation in operation. The amount of such replacement Electric Energy to be
made available to IMPA during such period shall be the amount of Electric
Energy requested by IMPA during such period, but not in excess

 

16

 

of the amount
to which IMPA would have been entitled during such period had the operation of
Trimble County Unit 1 not ceased or the output not been reduced. The per
kilowatt-hour cost of such replacement Electric Energy shall be the per
kilowatt-hour cost incurred by Louisville for such replacement Electric Energy
obtained from such other sources during such period.

 

5.4.          Electric Capability And Energy
Entitlements.

 

Louisville and
IMPA shall be entitled to the Net Electric Generating Capability and Associated
Electric Energy of Trimble County Unit 1 in proportion to their respective
ownership interests in Trimble County Unit 1; however, the Net Electric
Generating Capability of Trimble County Unit 1 shall not exceed the applicable
Net Seasonal Capability of Trimble County Unit 1, except under criteria as may
be established by the Coordination Committee. 
These entitlements shall begin at the time of Closing and continue until
Trimble County Unit 1 ceases to be used for the generation of Electric Energy. 

 

5.5.          Operations Management.

 

5.5.1.                       Administration Of Operating Work And
Incremental Capital Assets.

 

Louisville
shall perform all work, or execute, and enforce (including any renegotiation
and settlement) all contracts, contractual obligations and arrangements for
Operating Work and Incremental Capital Assets, including, without limitation,
any and all warranties on equipment, facilities, materials, and services
furnished pursuant to any such contracts. Warranties and claims arising under
this Article shall be administered in accordance with the provisions of Article
5.5.6 of this Agreement.

 

5.5.2.                       Purchasing Necessary Goods And Services.

 

Louisville
shall purchase and procure, through and from any source it may select, the
equipment, apparatus, machinery, tools, services, materials and supplies, and
emergency spare parts necessary for the performance of Operating Work and
Incremental Capital Assets.

 

5.5.3.                       Procurement Of Fuel.

 

At all times,
Louisville shall make necessary and reasonable efforts to maintain an adequate
supply of fuel. At IMPA’s request, Louisville will receive bids or proposals
from suppliers of Indiana coal who wish to be considered for purchases of coal
supplies for Trimble County Unit 1. Louisville shall have no obligation to
consider any particular bid or proposal, which in Louisville’s sole judgment,
is not in the best interest of the Owners when considering price, reliability,
quality, and other relevant terms, conditions, and considerations. IMPA may
elect from time to time to purchase fuel directly for use in connection with
its share of Trimble County Unit I pursuant to fuel specifications and
procedures for delivery, handling, testing, and use as approved by Louisville.
In such case, IMPA shall contract and pay directly to suppliers and billing
under this Agreement

 

17

 

shall be
adjusted appropriately. IMPA shall be responsible for all its costs resulting
from these separate fuel procurement activities, and for any additional costs
imposed upon the other Owners where such additional costs result from
activities not performed by or under the direct supervision of Louisville
pursuant to this Agreement.

 

5.5.4.                       Expenditure Of Funds.

 

Louisville
shall expend funds in accordance with the terms and conditions of this
Agreement.

 

5.5.5.                       Insurance.

 

Louisville
shall arrange for the placement and maintenance of Insurance, as provided
herein in Article 13.

 

5.5.6.                       Enforcement Of Claims Against Third
Parties.

 

Louisville
shall present and prosecute known claims against third parties, including but
not limited to claims against insurers and indemnitors providing Insurance or
indemnities with respect to any loss of or damage to any property of Trimble
County Unit 1, or the Trimble County General Plant Facilities or the Trimble
County Site as they pertain to Trimble County Unit 1, or any interest of the
Owners pertaining thereto, and with respect to any liability of Louisville or
IMPA to third parties covered by Insurance or indemnity agreement. To the
extent that such loss, damage, or liability is not covered by Insurance or by
any indemnity agreement, Louisville shall present and prosecute claims therefor
against any parties who may be liable therefor. Nothing herein shall require Louisville
to initiate, present, or prosecute any claim which, in its sole judgment, is
without sufficient merit to warrant such enforcement, or otherwise is
inconsistent with the Owners’ general business interests. Nothing herein shall
require Louisville to invoke any certain type of enforcement procedure, or to
seek, or to continue to seek, enforcement of any claim, when in Louisville’s
sole judgment, the Owners’ general business interests are better served by
settling or withdrawing such claim. If any such claim by the Owners is in
excess of $250,000 in amount, Louisville shall notify IMPA of the existence and
nature of such claim and shall also notify IMPA if and when any settlement of
such claim is accomplished by Louisville.

 

In the event
that Louisville should fail or refuse to diligently prosecute any claim,
nothing herein contained shall prevent IMPA from prosecuting such claim or
demand in its own name, to the extent of, and as such claim or demand affects,
its interest.  IMPA may intervene in any
suit on a claim pursuant to this Article as an additional plaintiff or
defendant to assert or defend as to its respective ownership interest and
rights. Cost and monies net of reasonable expenses recovered are to be shared
by the Owners in proportion to their respective ownership interests in Trimble
County Unit 1.

 

18

 

5.5.7.                       Processing Claims By Third Parties.

 

Louisville
shall investigate, adjust, defend, and settle claims by third parties against
IMPA and Louisville, arising out of or attributable to Operating Work or
Incremental Capital Assets, or the past or future performance or nonperformance
of the obligations and duties of either IMPS or Louisville under or pursuant to
this Agreement, including but not limited to any claim resulting from death or
injury to persons or damage to property, when such claims are not covered by
valid and collectible Insurance carried by Louisville or IMPA and, whenever and
to the extent reasonable, present and prosecute claims against any third party,
including insurers, for any costs, losses, and damages incurred in connection’
with such claims. If tiny such claim against IMPS and Louisville is in excess
of $50,000 in amount and is not covered by valid and collectible Insurance
carried by Louisville or 1MPA, Louisville shall notify IMPA of the existence
and nature of such claim and shall also notify IMPA if and when any settlement
of such claim is accomplished by Louisville. Settlement of claims in excess of
$1,000,000 shall be reported to and approved by the Coordination Committee.

 

In the event
that Louisville should fail or refuse to diligently defend any claim, nothing
herein contained shall prevent IMPA from defending such claim or demand in its
own name, to the extent of, and as such claim or demand affects, its interest.
IMPA may intervene in any suit on a claim pursuant to this Article as an
additional party to defend as to its respective ownership interests and rights
in Trimble County Unit 1.

 

5.5.8.                       Delivery Of Operating data.

 

As promptly as
practicable after the end of each month, Louisville shall render to IMPA a
statement setting forth appropriate operating data as may be needed for reports
and records.

 

5.6.          Environmental Laws and Regulations.

 

Each Party
shall be responsible for its own share of any obligations, costs, or burdens of
any kind, resulting from any federal, state, or local environmental law,
regulation, or requirement, as amended from time to time. Similarly, each Party
shall be entitled to its share, on a pro rata ownership basis, of any rights,
credits, or entitlements associated with such law, regulation, or requirement.
Louisville’s obligation to produce generation from IMPA’s share of Thimble
County Unit 1, as well as Louisville’s obligation to produce backup power and
energy as set forth in Article 10 hereof, shall be conditioned upon IMPA’s
compliance with such laws, regulations, or requirements as set forth in this
Article, and IMPA’s possession of required environmental allowances needed for
such generation. In the event IMPA’s rights, credits, or entitlements from
Trimble County Unit 1 or other sources are not sufficient to allow the desired
level of generation from IMPA’s share of Trimble County Unit 1 or the
production of backup power and energy, Louisville shall provide such rights,
credits, or entitlements to IMPA upon IMPA’s request and after consultation
with IMPA concerning the availability and cost of such rights, credits, or
entitlements. Louisville shall have no obligation, however,

 

19

 

to provide
such rights, credits, or entitlements where such rights, credits, or
entitlements are required for use by Louisville to serve its Internal Load, or
any firm off-system sales existing prior to any request for backup power and
energy, or backup power and energy to IMEA. Louisville may satisfy this
obligation, at its option, by supplying such rights, credits, or entitlements
from its own system, or by purchasing from other sources. Such obligation shall
be limited to the rights, credits, or entitlements necessary to operate IMPA’s
portion of Trimble County Unit 1 at the lower of an 80 percent Capacity Factor
or IMPA’s actual Capacity Factor, and shall apply only to the excess
requirements above the rights, credits, or entitlements obtained by IMPA as a
result of its ownership Interest in Trimble County Unit 1 or from other
sources.

 

IMPA shall
compensate Louisville for providing such allowances for IMPA’s Trimble County
Unit 1 generation, as well as for allowances for backup power and energy sold
by Louisville to IMPA under Article 10 hereof, at a price equal to the fair
market value of such allowances, as such value may change from time to time.
Fair market value and procedures for billing and payment will be determined
according to criteria set forth by the Coordination Committee; provided that,
fair market value shall not be less than

 

Louisville’s
actual cost of providing or obtaining such allowances. In lieu of compensation
under this Article for such allowances, where agreed by the Parties, such
compensation may be accounted for by inclusion in the price for backup power
pursuant to the Interconnection Agreement between the Parties.

 

5.7.          Indemnification Of Environmental Fines
And Penalties.

 

Louisville
will indemnify IMPA against administrative fines and civil penalties arising
out of the operation of the Trimble County Plant imposed for violations of
applicable environmental laws and regulations, resulting from acts of
Louisville as plant operator. Exclusions from this special indemnification
shall include operation and maintenance costs which might be incurred as a
result of environmental laws and regulations, Incremental Capital Assets
incurred in environmental compliance, occurrences from acts of third parties or
from equipment failure or malfunction, remedial measures imposed by
administrative agencies for environmental purposes, or reimbursement of
response costs under Comprehensive Environmental Response Compensation And
Liability Act (CERCLA) and K.R.S. Chapter 224, and subsequent amendments
thereof, and any subsequently enacted legislation covering the same subject
matter as CERCLA and K.R.S. Chapter 224, or to any claims of personal injury or
property damage.

 

20

 

ARTICLE 6.

INCREMENTAL CAPITAL ASSETS

 

6.1.          Determination Of Need.

 

The
Coordination Committee shall approve Incremental Capital Assets expected to
cost over $250,000. Louisville shall have the authority to make all decisions
with respect to Incremental Capital Assets expected to cost $250,000 or less.
Emergency expenditures for Incremental Capital Assets which total in excess of
$250,000 in any calendar year shall be submitted to the Coordination Committee
for ratification.

 

6.2.          Estimate Of Costs.

 

Prior to
beginning of work on any Incremental Capital Asset which Louisville expects to
cost more than $1,000,000, such estimate shall be furnished by Louisville in
reasonable detail to IMPA for use by it in anticipating its financial requirements.
Such estimate shall be subject to revision periodically to reflect more current
information on such Incremental Capital Asset.

 

6.3.          Responsibility For Costs.

 

Subsequent to
the Closing, the costs of each Incremental Capital Asset shall be borne by
Louisville and IMPA in proportion to their respective percentage ownership
interests in Trimble County Unit 1. The amount incurred for Incremental Capital
Assets during each month shall be included in the monthly billings provided for
in Article 8.L IMPA’s share of all Incremental Capital Assets booked during
January 1993, shall not be reflected in the Purchase Price stated in Article
3.1 hereof, but shall be included instead in the first monthly billing to IMPA
following Closing.

 

21

 

ARTICLE 7.

COMPENSATION

 

7.1.          Monthly Charges.

 

The Owners
will share all costs associated with Trimble County Unit 1, and with the
Thimble County General Plant Facilities and the Trimble County Site as they
pertain to Trimble County Unit 1. These costs are set forth below in five
components for billing and accounting purposes. The Parties intend that these
components incorporate all costs which are or could be associated with Trimble
County Unit 1, and with the Trimble County General Plant Facilities and the
Trimble County Site as they pertain to Trimble County Unit 1. Should, however,
any item or category of costs not fall within the technical definitions of any
of the five components, the Parties agree to adjust the billing components so
as to include such item or category.

 

Starting at
the Closing, IMPA shall pay a monthly amount equal to the sum of the five
components delineated in Articles 7.1.1, 7.1.2, 7.1.3, 7.1.4, and 7.1.5, as
provided for in Article 8.1.

 

7.1.1.                       Fuel/Reactant Operation Expense.

 

All
Fuel/Reactant Operation Expenses of Trimble County Unit 1 will be prorated to
the Parties, according to the net Electric Energy consumed by each Party as
compared to the total net energy generated by Trimble County Unit 1.

 

For purposes
of this Article, Fuel/Reactant Operation Expenses shall be allocated to IMPA on
the basis of its loss-adjusted net Electric Energy during the applicable month.
This loss-adjusted net Electric Energy shall be calculated by multiplying
IMPA’s actual Trimble County Unit 1 net Electric Energy during the month by a
loss factor to be determined using load flow studies or other mutually
acceptable analyses which, at the request of either Party, but not more
frequently than once every two years, shall be reviewed and shall be adjusted
as appropriate.

 

7.2.          Fixed Operation And Maintenance Expenses.

 

A Fixed
Operation and Maintenance Expenses component shall be shared by the Parties in
proportion to their respective percentage ownership interest in Trimble County
Unit 1.

 

7.2.1.                       Non-Fuel Operating Component.

 

A non-fuel
operating component shall be shared by the Parties in proportion to their
respective percentage ownership interest in Trimble County Unit 1, calculated
monthly as the sum of the following four items as they relate to Trimble County
Unit 1, and the Trimble County General Plant Facilities and the Trimble County
Site as they pertain to Trimble County Unit I:

 

22

 

(a) Taxes
other than federal and state income taxes (Account 408.1), except that those
categories of taxes, or payments in lieu thereof, that are directly billed to
IMPA by the taxing authority and paid by IMPA, shall not be included in this
item.

 

(b)
Administrative and general expenses (Accounts 920-935) as recorded in
Louisville’s accounting records under the Uniform System of Accounts.

 

(c) Lease
payments which result from a third-party financed Incremental Capital Asset.

 

(d) Penalties
(Account 426.3), except for those environmental penalties against which
Louisville is indemnifying IMPA under Article 5.7 hereof.

 

7.2.2.                       Working Capital Component.

 

A working
capital component shall be shared by the Parties in proportion to their
respective percentage ownership interests in Trimble County Unit 1. This
component is comprised of the items listed below, to the extent that each of
these items relates to Trimble County Unit 1, the Trimble County General Plant
Facilities (as they pertain to Trimble County Unit 1), and the Trimble County
Site (as it pertains to Trimble County Unit 1). This component shall be
calculated by multiplying the beginning monthly balances of the items by
Louisville’s Cost of Capital as “grossed up’ for federal and state income
taxes.

 

(a)           Fuel stocks (Account
151).

 

(b)           Fuel stock expenses
undistributed (Account 152).

 

(c)           Plant materials and
operating supplies (Account 154).

 

(d)           Stores expense
undistributed (Account 163).

 

(e)           Prepayments (Account
165).

 

(f)            Miscellaneous deferred
debits (Account 186).

 

7.2.3.                       Transmission Charge.

 

A transmission
charge to cover transmission of the Electric Energy from Trimble County Unit 1
to the Delivery Points shall be assessed according to the Trimble County
schedule contained in the Interconnection Agreement. Such schedule may be
changed by Louisville from time to time based on revised cost information, but
shall continue to be calculated throughout the duration of this Agreement
according to the same cost of service methodology as was used to support the
initial schedule. Should FERC at any time decline to accept a rate based on
such methodology, a new rate shall be calculated using approved methodology as
close as possible to the initial methodology such that the original intent of
the Parties in pricing this service shall be maintained.

 

23

 

ARTICLE 8.

BILLING, PAYMENTS, AND RECORDS

 

8.1.          Billings By Louisville.

 

As promptly as
practicable, but not more than twelve working days after the end of each
calendar month during the term of this Agreement, Louisville shall prepare and
send to IMPA a statement, in such detail and with such segregations as may be
needed for operating and accounting records, to indicate monthly amounts due
under the provisions of this Agreement.

 

8.2.          Payments By IMPA Or Louisville.

 

All bills
under Article 8.1 for amounts owed by IMPA to Louisville shall be due and
payable on the tenth working day following the invoice date. Amounts owing by
either Party to the other under the Interconnection Agreement or under the
provisions of this Agreement, other than under Article 8.1, shall be settled in
accordance with the procedures set forth in such provisions as give rise to the
obligations. Interest on unpaid amounts shall accrue at the Agreed Rate from
the date due until the date upon which payment is made. Payments by IMPA to
Louisville based on over billing by

 

Louisville
shall bear interest at the Agreed Rate beginning on the thirty. first day after
receipt by Louisville and running until such amount is repaid or credited by
Louisville. Unless otherwise agreed upon, a calendar month shall be the
standard monthly period for the purpose of settlements under this Agreement.

 

Should either
Party withhold payment of any contested amount, the procedure for resolution of
disputes under Article 19 shall be invoked automatically. Non-payment of any
amount contested in good faith by either Party shall not constitute a default
under Article 17 prior to completion of the disagreement procedures under
Article 19. The unpaid Party may contend a default exist! under Article 17, if
payment continues to be withheld following completion of the disagreement
procedures under Article 19 including arbitration if both Parties have elected
to arbitrate.

 

8.3.          Records.

 

Louisville
will record its accounting information in accordance with generally accepted
accounting principles, as modified by the requirements or permitted practices
of applicable regulatory authorities. For the purpose of this Agreement, all
account references are to the Uniform System of Accounts. In the event of any
changes in FERC’s accounting procedures which might result in different charges
than those contemplated by the Agreement, the Parties will agree upon the
appropriate changes to the Agreement to achieve the original intent of the
Parties, unless otherwise mutually agreed by the Parties.

 

The Parties
shall keep and maintain such records as may be necessary or useful in carrying
out this Agreement. Each Party shall keep such records as may be needed to

 

24

 

afford a clear
history of all transactions under this Agreement and make copies of such
records available to the other Party upon request. Each Party shall have the
right during normal business hours, but no more often than once each calendar
year, at its own expense, to audit, or cause independent certified public
accountants of its choice to audit, the accounting and other records relating
to transactions under this Agreement and shall have the right to make copies of
records as necessary; provided that IMPA shall not be permitted to retain
documents which Louisville has designated as confidential or proprietary where
to do so would make such records open records under any applicable “open
records’ or “public records’ procedure or regulation. All such records shall be
considered confidential and proprietary business records of the Party that
generated the particular record in question. Neither Party shall make use of
records of the other Party without the express written consent of such Party,
except for disclosure or use which is permitted by this Agreement or where
required by lawful authority, or for purposes of litigation or alternative
dispute resolution procedures.

 

ARTICLE 9.

TRANSMISSION SERVICE

 

All Electric Energy
delivered under this Agreement shall be of the character commonly known as
three-phase sixty-hertz energy, and shall be considered as being delivered at
Louisville’s Delivery Points.

 

Obtaining
transmission service for transmitting power under this Agreement from
Louisville’s Delivery Points shall be the sole responsibility of IMPA. If an
electric system or systems, which is not part of the electric systems owned by
either of the Parties, is used to transmit the Net Electric Energy from
Louisville’s delivery Points to IMPA, the cost of such transmission service
shall be paid by IMPA. Losses which are incurred through such third party
transmission(s) shall be assumed by IMPA.

 

ARTICLE
10.

BACKUP POWER AND ENERGY

 

10.1.        From
Louisville.

 

In any hour of
any month that the Net Electric Generating Capability of Trimble County Unit 1
is less than the Net Seasonal Capability, IMPA shall have the option to request
from Louisville backup power and energy from Louisville’s other generating
resources. For IMPA to receive this backup power and energy, both of the
following conditions must be met:

 

(a)           the amount of backup
power and energy shall not exceed an amount equal to IMPA’s share (based on its
percentage ownership interest in Trimble County Unit 1) of such reduction from
Net Seasonal Capability; and

 

(b)           the amount of backup
power and energy requested, as limited by (a) above, is available from
Louisville’s other generating resources and is not required to serve
Louisville’s Internal Load, to honor any firm commitments made by Louisville
for

 

25

 

off-system
sales existing prior to any particular request for backup power and energy, or
to provide backup power and energy to IMEA.

 

Compensation
for backup power and energy will correspond to the demand and energy rate
provisions of the Backup Power service schedule contained in the
Interconnection Agreement in effect at the time backup energy is delivered.
Nothing in this Agreement shall require Louisville to construct, acquire,
expand, or maintain new or existing generating resources for the purpose of
supplying backup power to IMPA pursuant to this Agreement.

 

10.2.        From Third Parties.

 

In the event
Louisville is unable to provide backup power and energy from its own system,
Louisville will, at the request of IMPA, make its best effort to purchase
backup power and energy from another party for resale to IMPA. Louisville will
bill IMPA for such purchased backup power and energy according to the terms for
such third party transactions contained in the Backup Power service schedule
contained in the Interconnection Agreement in effect at the time backup energy
is delivered.

 

10.3.        Effective Date Of Backup Power Provision.

 

The provisions
of this Article 10 will become effective at the time of Closing.

 

ARTICLE
11.

GENERAL CONDITIONS

 

11.1.        Cooperation.

 

Louisville and
IMPA shall cooperate with each other and provide information as may be
necessary to facilitate, among other things, the filing of applications for
authorizations, permits, licenses, or financing and the execution of such other
documents as may be reasonably necessary to carry out the provisions of this
Agreement, subject to reasonable protections necessary to preserve each Party’s
confidential or proprietary information.

 

11.2.        Approvals.

 

The Parties
shall use their best efforts to obtain as quickly as possible all requisite
governmental, regulatory, and judicial approvals, where applicable, of the
consummation of the transactions contemplated herein. To the extent any
provision of this Agreement prevents IMPA from receiving a favorable tax ruling
authorizing the issuance by IMPA of tax-exempt bonds to finance the purchase
contemplated herein, the Parties agree to negotiate In good faith and cooperate
with each other so as to effectuate sale of such bonds; provided that the
foregoing shall not be construed so as to impose any economic detriment or
burden or unreasonable condition or obligation on Louisville or any other Owner
of Trimble County Unit 1.

 

26

 

11.3.        Access.

 

Official
representatives of IMPA and their designees, including IMPA’s bond trustee,
shall have the right, upon sufficient advance notice to Louisville, to enter
upon the Trimble County Site subject to all safety, insurance, and industrial
security requirements and the need for efficient operation of Trimble County
Unit 1.

 

11.4.        Conditions Precedent To Louisville’s
Obligations Hereunder.

 

All
obligations of Louisville under this Agreement are subject to the fulfillment,
prior to or at the Closing, of each of the conditions (or the waiver in writing
of such conditions by Louisville) that are delineated in Articles 11.4.1
through 11.4.4 and IMPA shall exert its best efforts to cause each such condition
to be fulfilled.

 

11.4.1.                     Accuracy Of IMPA’s Representations And
Warranties.

 

Louisville and
IMPA shall not have discovered any material error, misstatement, or omission in
the representations and warranties made by IMPA in this Agreement.

 

11.4.2.                     Capability Of Performance By IMPA.

 

IMPA’s
representations and warranties contained in this Agreement shall be deemed to
have been made again at and as of the time of the Closing and shall then be
true in all material respects; IMPA shall have performed and complied with all
agreements, covenants, and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing Louisville shall
have been furnished with certificates signed by the principal officer of IMPA,
dated the date of the Closing, certifying ii form and substance satisfactory to
Louisville to the fulfillment of the foregoing conditions and to the further
effect that there are no actions, suits, or proceedings pending or, to such
officer’s knowledge, threatened against or affecting IMPA before any court or
administrative body or agency which would materially adversely affect the
ability of IMPA to perform its obligations under this Agreement.

 

11.4.3.                     Opinion Of Counsel For IMPA.

 

Louisville
shall have been furnished with an opinion of counsel for IMPA, which counsel
shall be satisfactory to Louisville, in form and substance satisfactory to
Louisville, dated the date of the Closing, to the effect that:

 

(a)           IMPA is a body
corporate and politic and a political subdivision of the State of Indiana, duly
organized and validly existing in good standing under the laws of the State of
Indiana and has the corporate power, legal capacity, and authority to carry on
its business as presently conducted and to enter into and perform its
obligations under this Agreement; and

 

(b)           The execution,
delivery, and performance by IMPA of this Agreement have been duly authorized
by all necessary corporate action on the part of IMPA, do not

 

27

 

contravene any
law, or any governmental rule, regulation, or order, applicable to IMPA or its
properties, or the Statement of Organization, or the By-Laws of IMPA and do not
and will not contravene the provisions of, or constitute a default under, any
indenture, mortgage, contract, or other instrument to which IMPA is a party or
by which IMPA is bound; and

 

(c)           This Agreement has been
duly executed and delivered by IMPA and constitutes the legal, valid, and
binding obligation of IMPA enforceable in accordance with its respective terms,
except as limited by applicable bankruptcy, insolvency, reorganization, or
similar laws at the time in effect; and

 

(d)           There are no actions,
suits, or proceedings pending or, to such counsel’s knowledge, threatened
against or affecting IMPA before any court or administrative body or agency
which might materially adversely affect the ability of IMPA to perform its
obligations under this Agreement; and

 

(e)           Any consent or approval
of, giving of notice to, registration with, or taking of any other action by,
any state, federal, or other governmental commission, agency, regulatory
authority, or court, where applicable, including, without limitation, the
Indiana Utility Regulatory Commission, the Federal Energy Regulatory Commission,
and the Securities and Exchange Commission, in connection with the execution,
delivery, and performance of this Agreement required to be obtained by IMPA on
or before the Closing has been obtained.

 

11.4.4.                     Payment Of Funds By IMPA.

 

The portion of
the Purchase Price required to be paid by IMPA to Louisville at the Closing
shall be paid in immediately available funds.

 

11.5.        Conditions Precedent To IMPA’s
Obligations Hereunder.

 

All
obligations of IMPA under this Agreement are subject to the fulfillment, prior
to or at the Closing, of each of the conditions (or the waiver in writing of
such conditions by IMPA) that are delineated in Article 11.5.1 through 11.5.3
and Louisville shall exert its best efforts to cause each such condition to be
fulfilled.

 

11.5.1.                     Accuracy Of Louisville’s
Representations And Warranties.

 

IMPA and
Louisville shall not have discovered any material error, misstatement, or
omission in the representations and warranties made by Louisville in this
Agreement.

 

11.5.2.                     Opinion of Counsel for Louisville.

 

Louisville’s
representations and warranties contained in this Agreement shall be deemed to
have been made again at and as of the time of the Closing and shall then be
true in all material respects. Louisville shall have performed and complied
with all agreements, covenants, and conditions required by this Agreement to be
performed or

 

28

 

complied with it prior to or
at the Closing IMPA shall have been furnished with certificates signed by the
President or a Vice President of Louisville, dated the date of the Closing,
certifying in form and substance satisfactory to IMPA, to the fulfillment of
the foregoing conditions and to the further effect that there are no actions,
suits, or proceedings pending or, to such officer’s knowledge, threatened
against or affecting Louisville before any court or administrative body or
agency which would adversely affect the ability of Louisville to perform its
obligations under this Agreement.

 

11.5.3.                                                               Opinion Of Counsel For Louisville.

 

IMPA shall have been furnished with an opinion of
counsel for Louisville, which may include counsel employed directly by Louisville
as well as Louisville’s outside counsel, which counsel shall be satisfactory to
IMPA, in form and substance satisfactory to IMPA, dated the date of the
Closing, to the effect that:

 

(a)                                  Louisville is a corporation
duly organized and validly existing under the laws of the Commonwealth of
Kentucky and has the corporate power and authority to carry on its business as
presently conducted and to enter into and perform its obligations under this
Agreement; and

 

(b)                                 The execution, delivery, and
performance by Louisville of this Agreement have been duly authorized by all
necessary corporate action on the part of Louisville, does not contravene any
law, or any governmental rule, regulation, or order applicable to Louisville or
its properties, or the Articles of Incorporation or By-Laws of Louisville, and
do not and will not contravene the provisions of, or constitute a default
under, any indenture, mortgage, contract, or other instrument to which
Louisville is a party or by which Louisville is bound; and

 

(c)                                  The documents executed by
Louisville in connection with the Closing have been duly authorized, executed,
and delivered by Louisville; and

 

(d)                                 There are no actions, suits,
or proceedings pending or, to such counsel’s knowledge, threatened against or
affecting Louisville before any court or administrative body or agency which
would materially adversely affect the ability of Louisville to perform its
obligations under this Agreement; and

 

(e)                                  Any consent or approval of,
giving of notice to, registration with or taking of any other action by, any
state, federal, or other governmental commission, agency, or regulatory
authority, including, without limitation, the Kentucky Public Service
Commission, the Federal Energy Regulatory Commission, and the Securities and
Exchange Commission, in connection with the execution, delivery, and
performance of this Agreement required to be obtained by Louisville on or
before the Closing has been obtained; and

 

(f)                                    Louisville’s conveyance to
IMPA in fee simple with covenant of general warranty of a 12.88 percent
undivided ownership interest as tenants in common in the real estate set forth
in Appendix E, is free and clear from all encumbrances, except

 

29

 

easements, restrictions, and
stipulations of record, taxes assessed and payable in the year of Closing and
thereafter, and subject to the rights of IMEA which owns a 12.12 percent
undivided interest as tenants in common, but such opinion will be inapplicable
to matters not of record; and

 

(g)                                 Louisville has paid all
property taxes (other than sales or use or other transfer taxes, if applicable)
which are assessed on the interests conveyed to IMPS hereunder, except for
property taxes assessed and payable in the year of Closing.

 

11.6.                        Conditions Precedent To The Respective
Obligations Of The Parties.

 

The respective obligations of Louisville and IMPS
hereunder are, unless waived in writing by Louisville and IMPS prior to or at
the Closing, subject to the special conditions in Article 3.3 hereof and the
additional condition that all governmental, judicial, and regulatory approvals
of the execution, delivery, and performance of this Agreement required to be
obtained by Louisville and IMPS on or before the Closing shall have been obtained,
including all governmental, judicial, and regulatory approvals necessary for
the issuance of IMPA’s tax-exempt revenue bonds in an aggregate principal
amount sufficient to pay for any and all sums due to be paid by IMPS to
Louisville at Closing.

 

11.7.                        Release From Louisville’s Indenture(s).

 

Louisville shall have obtained the releases from any
and all indentures of the ownership interest in Trimble County Unit 1 to be
conveyed to IMPS hereunder at the Closing from the lien of such indenture.

 

11.8.                        Amendments.

 

This Agreement may be amended only by a written
instrument duly executed by the Parties. When so amended, the Parties shall
execute a conformed copy of the Agreement, which conformed copy shall contain
all amendments to the Agreement and shall thereafter govern the Parties.

 

11.9.                        Limited
Warranty.

 

Louisville warrants that as of the Closing Date
hereof, except as set forth in Appendix D, it knows of no defects in the
original design or construction of Trimble County Unit 1 or the Trimble County
General Plant Facilities, and that such facilities were designed for the
generation and production of electric power and energy Should this Agreement
become effective prior to full completion of such facilities, Louisville shall
complete the original construction of such facilities at its expense.

 

Louisville also warrants that for the time periods
set forth below, Trimble County Unit I and the Trimble County General Plant
Facilities shall be free of defects in materials or workmanship in the design
and construction of such facilities: (a) if the Closing Date occurs by or
before December 31, 1993, the limited warranty period shall

 

30

 

be ninety days from the
Closing Date; (b) if the Closing Date occurs by or before December 31, 1994,
but after December 31, 1993, the limited warranty period shall be sixty days
from the Closing Date; (c) if the Closing Date occurs by or before December 31,
1995, but after December 31, 1994, the limited warranty period shall be thirty
days from the Closing Date; (d) if the Closing Date occurs after December 31,
1995, there shall be no limited warranty. Defects that are discovered during
this warranty period, shall be repaired at Louisville’s expense. OTHER THAN FOR
THIS EXPRESS WARRANTY, IMPA’S OWNERSHIP INTEREST IN TRIMBLE COUNTY UNIT 1 IS TO
BE SOLD “AS IS” AND “WHERE IS”. LOUISVILLE MAKES NO OTHER REPRESENTATION OR
WARRANTY WHATSOEVER IN THIS AGREEMENT, EXPRESSED, IMPLIED, OR STATUTORY,
INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTY AS TO THE VALUE,
QUANTITY, CONDITION, SALABILITY, OBSOLESCENCE, MERCHANTABILITY, FITNESS, OR
SUITABILITY FOR USE OR WORKING ORDER OF ANY OF TRIMBLE COUNTY UNIT 1 INCLUDING
THE TRIMBLE COUNTY GENERAL PLANT FACILITIES, NOR DOES LOUISVILLE REPRESENT OR
WARRANT THAT THE USE OR OPERATION OF ANY SUCH FACILITIES WILL NOT VIOLATE
PATENT, TRADEMARK, OR SERVICE MARK RIGHTS OF ANY THIRD PARTIES. THE PROVISIONS
OF THIS ARTICLE 11.9 SHALL GOVERN OVER ANY CONFLICTING PROVISIONS OF THIS
AGREEMENT.  Notwithstanding the
foregoing, IMPA shall have the benefit, in proportion to its percentage
ownership interest in Trimble County Unit 1, of all manufacturers’ and vendors’
warranties and all patent, trademark, and service mark rights running to
Louisville in connection with Trimble County Unit 1 and the Trimble County
General Plant Facilities as they pertain to Trimble County Unit 1; provided
that Louisville shall have sole authority in decisions regarding the
enforcement (including any renegotiation and settlement) of such warranties and
patent, trademark, and service mark rights, subject to the rights of IMPA as
set forth in Article 5.5.6 hereof.

 

11.10.                  No Agency Or Third Party Beneficiary

 

Nothing herein is intended to or shall create an
agency whereby IMPA becomes an agent for Louisville in any relationship with
any third party. This Agreement is solely between Louisville and IMPA and shall
not be construed to create any third party beneficiary relationship with any
other person or entity.

 

ARTICLE 12.

TAXES

 

12.1.                        Management Of Tax Matters.

 

12.1.1.                                                               Louisville’s Responsibility

 

Louisville shall have the responsibility for filing
returns, making property tax declarations, paying, seeking official tax rulings
or determinations, and other related functions pertaining to all taxes,
payments in lieu of taxes, assessments, impositions,

 

31

 

charges, and related costs
of every kind and nature, ordinary or extraordinary, general or special,
foreseen or unforeseen, settled or pending settlement, including, but not
limited to, property, sales, use and payroll taxes, connected with or arising
out of the construction, ownership, operation, maintenance, alteration, repair,
rebuilding, use, or retirement of, and arising out of its ownership interest
in, Trimble County Unit 1, the Trimble County General Plant Facilities, or any
part thereof, which are or may be imposed on Louisville by any federal, state,
county, municipal, local, interregional, or quasi~ governmental authority.

 

12.1.2.                                                               IMPA’s Responsibility.

 

IMPA shall have the responsibility for filing
returns, making property tax declarations, paying, seeking official tax rulings
or determinations, and other related functions, for which it assumes
responsibility from and after Closing, pertaining to all taxes, payments in
lieu of taxes, assessments, impositions, charges, and related costs of every
kind and nature, ordinary or extraordinary, general or special, foreseen or
unforeseen, settled or pending settlement, arising out of its 12.88 percent
ownership interest in Trimble County Unit 1, including, but not limited to,
property, sales, use, and payroll taxes, connected with or arising out of the
construction, ownership, operation, maintenance, alteration, repair, rebuilding,
use, or retirement of Trimble County Unit 1, the Trimble County General Plant
Facilities, or any part thereof, which are or may be imposed on IMPA by any
federal, state, county, municipal, local, interregional, or quasi-governmental
authority (collectively, the “Taxes’).

 

12.1.3.                                                               Cooperation.

 

Louisville and IMPA will mutually cooperate and
reasonably assist each other in meeting their respective tax obligations under
this Agreement. IMPA shall, prior to filing any election, return, declaration,
refund claim, request for ruling or determination, any pleading in any court or
administrative proceeding, or any other document with any governmental
authority relating to the Taxes (a “Tax Filing”) give Louisville seven business
days prior written notice of such proposed filing, which notice shall include a
copy of the Tax Filing. Louisville will advise IMPA in writing within three
business days of the filing due date of any suggested changes which Louisville
deems appropriate for the Tax Filing. IMPA is under no obligation to
incorporate in the Tax Filing changes suggested by Louisville.

 

12.2.                        Sharing Of Taxes And Related Payments

 

All such taxes, payments in lieu of taxes,
assessments, impositions, charges and related costs of Trimble County Unit 1,
or the Trimble County General Plant Facilities or the Trimble County Site as
they pertain to Trimble County Unit 1, shall be shared and borne by Louisville
and IMPA in proportion to their respective percentage ownership interests in
Trimble County Unit 1; provided, however, IMPA shall be entitled to the entire
benefit to the extent of actual realization, of all exemptions from and
reductions of taxes, including but not limited to property, sales, use, and
payroll taxes, connected with

 

32

 

or arising out of the
ownership, operation, maintenance, alteration, repair, rebuilding, use, or
retirement of Trimble County Unit 1 or any part thereof, which may be realized
because of the provisions, if any, of the Constitutions (of the Commonwealth of
Kentucky, the State of Indiana, and the United States of America), statutes,
ordinances, rules, regulations, and laws applicable to IMPA and not Louisville.

 

The portion of such taxes, payments in lieu of
taxes, assessments, impositions, charges and related costs that are to be borne
by IMPA as set forth above in this Article 12.2 shall be billed to and paid by
IMPA in accordance with Articles 7 and 8, as applicable, except for those taxes
which are paid by IMPA directly to the taxing authority.

 

12.3.                        Payment Of Title Taxes And Fees

 

IMPA shall be responsible for all sales taxes,
recording fees, and other taxes related to transfer of property, if any,
incurred in connection with the conveyance(s) to IMPA by Louisville at Closing.

 

12.4.                        Exclusion Of Income Taxes

 

Notwithstanding the generality of Article 12.1
above, Louisville and IMPA agree that the foregoing provisions of this Article
12 shall not apply to any tax on or measured by income.

 

12.5.                        Non-creation Of
Taxable Entity

 

Notwithstanding any other provision of this
Agreement, Louisville and IMPA do not intend to create hereby at law any joint
venture, partnership, association taxable as a corporation, or other entity for
the conduct of any business for profit. Louisville and IMPA agree to elect
under Section 76 1(a) of the Internal Revenue Code of 1986, as amended, to
exclude the transactions created by this Agreement from the application of
Subchapter K, Chapter 1 of the Code, and both Parties agree to revise the terms
of this Agreement to the extent and in a manner necessary to permit such
election.

 

ARTICLE 13.

INSURANCE

 

13.1.                        Procurement Of Insurance.

 

Except with regard to directors and officers
liability insurance, Louisville shall maintain in force, for the benefit of
Louisville and IMPA as their interests in Trimble County Unit 1, Trimble County
General Plant Facilities, and the Trimble County Site shall appear, such
available insurance and self-insurance as the Coordination Committee shall
determine to be appropriate.

 

33

 

13.1.1.                                                               Sharing Of Insurance Costs.

 

The costs of such insurance policies referenced to
in Article 13.1 above shall be shared by the Parties in proportion to their
respective percentage ownership interests in Trimble County Unit 1. IMPA shall
also pay any additional premium that results from IMPA being named as an
additional insured party on Louisville’s existing policies. IMPA shall bear
responsibility for costs of and any losses incurred within the limits of any
deductibles on policies of insurance. If IMPA elects to participate in
self-insurance, as discussed in the following paragraph, the costs of claims
and expenses for such self. insurance shall also be shared in proportion to the
respective ownership interests in Trimble County Unit 1. IMPA’s share of such
insurance and self-insurance costs shall be paid in accordance with Articles 7
and 8, as applicable.

 

With regard to the portion of any self-insurance for
which IMPA is responsible, IMPA shall be entitled, at its option, to separately
fund and administer a reserve account to fund all claims and expenses for which
it is maintaining self-insurance. Any such separately maintained and
administered fund shall be established, maintained, and administered according
to policies and procedures approved by the Coordination Committee. Such fund
will be a financial device for funding IMPA’s self-insurance obligation and
will play no role in administering claims. Where IMPA establishes and maintains
such an account,. the Coordination Committee will determine appropriate
procedures and methodology for regularly billing for and recovering amounts due
to be paid by IMPA to Louisville for such claims and expenses. Such procedures
and methodology may include making adjustments to the billing and payment
practices set forth in Article 7 and 8, as such Articles relate to IMPA’s
self-insurance.

 

13.1.2.                                                               IMPA Named As Insured.

 

IMPA shall be named as an additional insured in such
insurance policies. Louisville shall use its reasonable best efforts to have
the insurance underwriters furnish IMPA with a Certificate of Insurance of each
such insurance policy. In addition, Louisville shall use its reasonable best
efforts to have each of such policies endorsed so as to provide that IMPA shall
be given the same advance notice of cancellation or material change as is
required to be given to Louisville. Loss or claim, if any, under such insurance
policies shall be adjusted and settled by Louisville with the insurance
underwriters in accordance with the third party claims procedure provided for
in Article 5.5.6.

 

13.1.3.                                                               Procurement Of Additional
Insurance For IMPA.

 

IMPA may obtain additional insurance beyond that
provided for in this Article 13 to insure its ownership interest in Trimble
County Unit 1 and the Trimble County Site and its rights with respect to the
Trimble County General Plant Facilities at its cost. With respect to such
additional insurance:

 

34

 

(a)                                  the proceeds from any claim
arising through such additional insurance shall be disbursed to IMPA; and

 

(b)                                 loss or claim, if any, under
such additional insurance shall be adjusted and settled by IMPA with the
insurance underwriters.

 

13.1.4.                                                               Sharing Of Refunds From
Insurance Premiums.

 

Any refunds of insurance premiums shall be allocated
among the Owners on the same basis as the premium payment allocation from which
such refund was derived.

 

13.1.5.                                                               Sharing Of Insurance
Proceeds

 

In the event of damage to property insured under this
Article, it is agreed that the proceeds from insurance obtained by Louisville
on behalf of the Owners shall be shared by the Owners on a pro rata basis based
on their relative payments of insurance premiums covering the damaged property.

 

13.2.                        Destruction.

 

13.2.1.                                                               Damage Or Destruction Fully
Covered By Insurance

 

If property insured under this Article or any
portion thereof should be damaged or destroyed to the extent that the cost of
repairs or reconstruction is estimated to be covered by the aggregate amount of
insurance coverage (including any deductible) carried by Louisville for the
benefit of Louisville and IMPA pursuant to Article 13 hereof, then Louisville
shall cause such repairs or reconstruction to be made so that such property
shall be restored to substantially the same general condition, character, or
use as existed prior to such damage or destruction; provided however, if the
estimate is wrong, and the insurance proceeds are insufficient to pay the cost
of repair or reconstruction, the Owners shall share the cost not reimbursed by
such insurance in proportion to their percentage ownership interests in Trimble
County Unit 1.

 

13.2.2.                                                               Damage Or Destruction Not
Fully Covered By Insurance.

 

If Trimble County Unit 1, the Trimble County General
Plant Facilities or any portion thereof as they pertain to Trimble County Unit
1, should be damaged or destroyed to the extent that the cost of repairs or
reconstruction is estimated to be more than the aggregate amount of insurance
coverage (including any deductible) carried by Louisville for the benefit of
Louisville and IMPA pursuant to Article 13 hereof and covering the cost of such
repairs or reconstruction, then, if Louisville elects to repair and reconstruct
such property and upon agreement of Louisville and IMPA, Louisville shall cause
such repairs or reconstruction to be made and Louisville and IMPA shall share
the costs of such repairs or reconstruction not reimbursed by such insurance,
in proportion to their percentage ownership interests in Trimble County Unit 1;
provided, however, that:

 

35

 

(a)                                  If IMPA elects not to join
Louisville in repairing and reconstructing such property, then, at Louisville’s
election, the Parties shall determine the monetary amount to be paid by
Louisville to IMPA or by IMPA to Louisville, as provided for in paragraph (b)
of this Article 13.2.2. Upon payment of such monetary amount by Louisville to
IMPA or by IMPA to Louisville, as the case may require as set forth in said paragraph
(b), IMPA shall transfer its ownership interest in Trimble County Unit 1 and
the Trimble County Site, and its license to use the Trimble County General
Plant Facilities, and its easement to the Trimble County Site, to Louisville
free and clear of all liens and encumbrances, and this Agreement shall be
deemed to have expired.

 

(b)                                 The monetary amount to be
paid to or received from IMPA pursuant to the provisions of paragraph (a) of
this Article 13.2.2, shall be determined in accordance with the following
equation:

 

P=W*X

 

Where:

 

	
  P

  	
  =

  	
   

  	
  the monetary amount to be paid to or received from IMPA. If P is
  positive, the monetary amount shall be paid to IMPA;and if P is negative, the
  monetary amount shall be received from IMPA.

  
	
   

  	
   

  	
   

  	
   

  
	
  W

  	
   

  	
   

  	
  IMPA’s percentage ownership interest in Trimble County Unit 1 before
  transfer of IMPA’s ownership interest in such property.

  
	
   

  	
   

  	
   

  	
   

  
	
  X

  	
  =

  	
   

  	
  the fair market value (as determined by an independent appraiser
  selected jointly by the Parties) of (I) Trimble County Unit 1 and (ii) the Trimble
  County Site and the Trimble County General Plant Facilities as they pertain
  to IMPA’s use of Trimble

  

 

County Unit 1, at the time IMPA elects not to join
Louisville in repairing and reconstructing Trimble County Unit 1 or the Trimble
County General Plant Facilities. Fair market value shall be determined after
taking into account all applicable costs of dismantling, demolishing, and
removal of equipment, facilities, and structures; security; maintenance;
disposing of debris; and any site work necessary to remove the effects of such
damage or destruction. Fair market value may be a negative figure where
appropriate.

 

36

 

ARTICLE 14.

PARTITION OF OR TRANSFER OF INTEREST IN TRIMBLE COUNTY UNIT 1

 

14.1.                        Special Nature Of Trimble
County Unit 1 . Waiver Of Right Of Partition.

 

The Parties recognize that Trimble County Unit 1 Is
an Integral part of the facilities required to provide adequate service in
their respective service territories and the service territories of other co
owners of Trimble County Unit 1 and that the physical partition of Trimble
County Unit 1 or any material part thereof would be Impossible and impractical
and wholly Inconsistent with the purposes for which this Agreement Is made.

 

Each of the Parties agrees that It will not take any
action, by judicial proceedings or otherwise, to partition Trimble County Unit
1, or that portion of the Trimble County Site conveyed by Louisville to IMPA
pursuant to Article 2.2 hereof, or any part thereof, in any way, whether by
partition In Mud or by sale and division of the proceeds thereof. Each of the
Parties further waives the right of partition and the benefit of all statutory
or common law that may now or hereafter authorize such partition of Trimble County
Unit 1 or any part thereof, or that portion of the Trimble County Site conveyed
by Louisville to IMPA pursuant to Article 2.2 hereof. In the event any such
right of partition shall hereafter accrue, each Party shall from time to time
upon the written request of the other Party execute and deliver such further
Instruments as may be necessary to confirm the foregoing waiver and release of
Its right to partition. The foregoing provisions of this Article 14.1 shall be
binding upon and Inure to the benefit of the Parties, their respective
successors and assigns, including mortgagees, receivers, trustees, or other
representatives and their respective successors and assigns, and shall run with
the land. Louisville agrees to Insert a similar covenant In any contract with
another party which acquires an ownership Interest in Trimble County Unit 1,
which covenant will be enforceable by IMPA.

 

14.2.                        Transfer Of Ownership
Interests To Third Parties.

 

If either Party (“Transferring Party’) shall desire
to transfer (whether by sale, conveyance, assignment, lease, or otherwise) all
or any portion of Its ownership Interest In Trimble County Unit 1 In a bona
fide arms length transaction to any unaffiliated third party or parties, the
Transferring Party shall give the other Party written notice thereof, and any
such transaction with such unaffiliated third party or parties shall not be
consummated until the other Party has determined not to exercise Its right of
first refusal, as set forth In this paragraph. Such written notice shall fully
disclose the nature and terms of the proposed transaction and the Identity of
the third party or parties Involved. Upon receipt of such written notice, the
other Party shall have the first right to acquire the Transferring Party’s
ownership Interest in Trimble County Unit 1 that the Transferring Party
proposes to transfer to the third party or parties, upon the same terms and
conditions which the Transferring Party proposes to make with the third party
or parties; provided, however, that where Louisville Is the Transferring Party,
IMPA’s right of first refusal shall be subordinate to a prior right of IMPA to
acquire Louisville’s ownership Interest. Within ~0 days following receipt of
such notice, the other Party shall give

 

37

 

written notice to the
Transferring Party stating whether or not It elects to acquire the Transferring
Party’s undivided ownership Interest In Trimble County Unit 1 which the
Transferring Party proposes to dispose of to the third party or parties;
provided however, that where Louisville Is the Transferring Party, IMPA’s
election to acquire such Interest shall be deemed to be of no effect If IMEA
elects to acquire such Interest. If the Party elects to exercise Its rights to
acquire such Interest, the Transferring Party, as soon as practicable, shall
execute such Instruments as may be necessary and appropriate to effectuate such
sale, conveyance, transfer, assignment, lease, or other disposition, as the
case may be, to the other Party, free and clear of all liens, charges, and
encumbrances for which the

 

Transferring Party, as between the Parties, is
responsible, including the indenture(s) of the Transferring Party.

 

14.2.1.                                                               Conditions Of Transfer

 

If the other Party elects not to acquire the
Transferring Party’s ownership interest in Trimble County Unit 1, as provided
in the first paragraph of Article 14 2, the Transferring Party may consummate
its proposed transaction with the third party or parties and dispose of such
ownership interest to the third party or parties, provided, that such
transaction is consummated within 240 days following receipt by the other Party
of the written notice first referred to in the first paragraph of Article 14.2;
and provided further, that the other Party has approved the prospective
purchaser as suitable and desirable as a joint owner of Trimble County Unit 1,
although such approval may not unreasonably be withheld and grounds for
withholding such approval shall be limited to such factors as will materially,
adversely affect the other Party’s interests hereunder; provided, however, that
where Louisville is the Transferring Party, IMPA’s right to approve the
prospective purchaser as suitable and desirable shall be limited to situations
in which the proposed transfer reduces Louisville’s ownership interest in
Trimble County Unit 1 to less than fifty (50) percent, or where such proposed
transfer conveys, in whole or part, Louisville’s rights and obligations for
operation of Trimble County Unit 1 under this Agreement to such third party or
parties; and provided, further, that IMPA shall require (as a condition of or
In connection with the sale, conveyance, transfer, assignment, lease, or other
disposition, and for the benefit of the other Party) the third party or parties
acquiring such ownership interest to assume and agree to be bound by the
provisions of this Agreement and any amendments thereto, and In furtherance
thereof the provisions of this Agreement shall be amended appropriately to
reflect:

 

(a)                                  the addition of such third
party or parties as a party or parties to this Agreement; and

 

(b)                                 the ownership Interest In
Trimble County Unit 1 acquired by such third party or parties and the decreased
ownership Interest in Trimble County Unit 1 of the Transferring Party; and

 

38

 

(c)                                  the rights, duties, and
obligations of the Transferring Party and such third party or parties under
this Agreement. Further, the Transferring Party hereby agrees to save the other
Party harmless from and against all loss or liability which the other Party may
Incur as a result of any failure by such third party or parties to fulfill its
or their duties and obligations under this Agreement and any amendments
thereto. In addition, the consummation of any transaction by the Transferring
Party with a third party or parties shall not release the Transferring Party
from any of its debts or liabilities to the other Party which, at the time of
the consummation of the transaction, have accrued under this Agreement, and any
amendments thereto, unless the Parties shall agree in writing to the contrary.

 

14.2.2.                                                               Further Conditions Of
Transfer

 

The right of the Transferring Party to dispose of
such ownership interest to a third party or parties, as set forth in the first
paragraph of Article 14.2, is subject to the further condition that the other
Party shall be given written notice thereof and shall have the further right of
first refusal, to the same extent and by the same procedure described in the
first paragraph of Article 14.2:

 

(a)                                  if the Transferring Party
shall undertake to consummate its proposed transaction at a time subsequent to
240 days following receipt of the written notice first referred to in the first
paragraph of Article 14.2; or

 

(b)                                 if the Transferring Party
shall undertake to dispose of such ownership interest to a third party or
parties other than those whose identity was disclosed in said notice; or

 

(c)                                  if the Transferring Party
shall undertake to dispose of such ownership interest upon different terms and
conditions than were disclosed in said notice.

 

14.2.3.                                                               Non-applicability Of Certain
Provisions

 

The provision of the foregoing Articles 14 2, 14 2
1, and 14 2 2 shall continue for the duration of this Agreement and shall be
applicable to each and every occasion and whenever either Party desires to
dispose of (whether by sale, conveyance, transfer, assignment, lease, or
otherwise) all or any portion of its ownership interest in Trimble County Unit
1 to any third party or parties, provided, that such provisions shall not be
applicable to, and each of the Parties hereby consents to, the following:

 

(a)                                  the transfer, sale, or
assignment to a financially responsible subsidiary, affiliate, or successor of
Louisville; or

 

(b)                                 the transfer, sale, or
assignment by IMPA to a financially responsible successor agency or affiliate
operating as a single entity; provided that if IMPA is dissolved or liquidated
by operation of law or otherwise, and IMPA’s interest herein is not assumed by
a financially responsible successor agency operating as a single entity,
Louisville shall have the immediate option to purchase all of IMPA’s interest
herein at

 

39

 

fair market value. For this
purpose, fair market value shall be determined by an Independent appraiser
selected jointly by the Parties; or

 

(c)                                  the transfer, assignment,
pledge, hypothecation, mortgage, or grant (by indenture of mortgage, deed of
trust, or otherwise) by either Party of Its ownership Interest In Trimble
County Unit 1, together with all or substantially all of Its other electric
utility property, for the purpose of securing bonds or other obligations for
borrowed money Issued or to be Issued by It, Including the effect of any after-acquired
property clause of any such Indenture of mortgage, deed of trust, or other
Instrument now existing or hereafter created by such Party, or the realization
on or enforcement of such security or the exercise by the trustee or the
mortgagee, or as the case may be, or the beneficiaries of such security of any
of the rights, powers, or privileges provided for with respect. thereto; or

 

(d)                                 the transferring by either
Party to a third party of Its undivided ownership Interest In Trimble County
Unit 1, together with all or substantially all of Its other electric utility
property, whether by sale or pursuant to or as a result of a merger,
consolidation, or corporate reorganization; or

 

(e)                                  the transferring by
Louisville of any interest In Trimble County Unit 1 which transfer would not
reduce Louisville’s interest in Trimble County Unit 1 to a level below
seventy-five (75) percent; or

 

(f)                                    the transferring by
Louisville of any interest in Trimble County Unit 1 to IMEA.

 

All transfers of interest set forth in this Article
14 shall be conditioned upon the transferee, by written agreement or by
operation of law, assuming the obligations of this Agreement, and any
amendments thereto, of the Party so transferring; except that transfer under
(b) and (c) above shall not be subject to this condition prior to any exercise
of ownership, control, or possession by the transferee over the interest
transferred.

 

14.3.                        Transfer Of Associated
Rights And Interests

 

No transfer (whether by sale, conveyance,
assignment, lease, or otherwise) by IMPA of any interests under this Agreement
shall be permitted, or shall become effective, unless the interest transferred
includes a corresponding and equivalent transfer of IMPA’s associated rights
and interests under this Agreement, including its rights and interests in
Trimble County Unit 1, the Trimble County General Plant Facilities, and the
Trimble County Site, and unless such transfer is made in full compliance with
this Article 14.

 

ARTICLE 15.

RIGHT OF FIRST REFUSAL

 

If, at any time within the term of this Agreement,
Louisville shall apply to the Kentucky Public Service Commission for a
certificate of public convenience and

 

40

 

necessity for the
Installation at the Trimble County Site of a coal-fired generating unit for use
by Its system as a base load plant, IMPA shall have a right of first refusal to
participate in the ownership of said unit by electing to own 12.88 percent of
such unit on the terms set forth herein. In the event such a certificate is not
legally required, Louisville shall use Its best efforts to give notice to IMPS
equivalent In time and content to that which would be given where a certificate
Is required. At least ninety days prior to applying for such certificate, Louisville
shill provide written notice to IMPA of Its Intention to make such application,
and shall provide IMPA with technical and economic Information available at
that time which pertains to the planned unit, and the estimated cost thereof.
IMPA shall have 180 days to elect to participate In such unit. IMPA’s right to
participate in such unit shall lapse and expire unless IMPA provides written
notice to Louisville of Its acceptance of such participation within 180 days
after the date of Louisville’s earlier notice to IMPA. Within 180 days of
Louisville’s receipt of IMPA’s notice of acceptance, the Parties shall
negotiate in good faith and execute a separate contract Incorporating the terms
and conditions of this Article 15, as well as other appropriate terms and
conditions, covering the Installation and operation of such new unit.

 

Should IMPA elect to participate, It shall pay its
pro rata share of all actual expenditures made for Construction Work In
connection with such unit and shall make quarterly progress payments to
Louisville as said expenditures are Incurred and billed by Louisville to IMPA.
In addition to such actual expenditures, IMPA shall pay Louisville a general
supervisory fee equal to two percent of such actual expenditures. IMPA’s participation
In the unit shall be subject to all terms and conditions set forth In this
Agreement unless waived In writing by Louisville, or otherwise mutually agreed
by the Parties. Terms relating to Louisville’s operation and management of such
unit may be set forth In an additional agreement between the Parties. Payment
of the above amounts shall entitle IMPA, In addition to Its ownership Interest
in such unit, to a license to use the Trimble County General Plant Facilities
and the Trimble County Site as they pertain to such unit. Subject to IMPA’s
right to elect to participate In 12.88 : percent of such unit, nothing herein
shall prevent Louisville from selling, offering to sell, or contracting with
any other Party, for an ownership or other Interest in or contractual
entitlement from the remainder of such unit, or In the Trimble County General
Plant Facilities or Trimble County Site as they pertain to such unit. The right
of first refusal shall apply only to the next coal-fired generating unit built
at the Trimble County Site for use as a base load plant, and shall not extend
to any subsequently built unit IMPA accepts this right of first refusal
acknowledging that IMEA has a similar right of first refusal In such unit In
the event Louisville assigns or conveys Its right to develop such unit to an
affiliate of Louisville or to a third party, such assignment or conveyance
shall be subject to IMPA’s right of first refusal on the same terms and
conditions as if Louisville were the developer.

 

If Louisville Is the developer of such unit,
contracts for general construction of such unit (not Including design,
architecture, and engineering services) will be awarded by Louisville pursuant
to a bidding process arranged and implemented by Louisville. Louisville
reserves the right to participate, for itself and for any affiliate of
Louisville, as a bidder for the contractual services to be awarded. Louisville,
In Its sole discretion, will

 

41

 

determine the winning bidder
based on a “best bid’ approach considering price, quality, experience, and all
other factors deemed relevant by Louisville.

 

ARTICLE 16.

ASSIGNMENT

 

16.1.                        Limitation Of Assignability.

 

This Agreement shall not be assignable by either
Party without the written consent of the other Party, except that no such
consent shall be required for IMPA to assign this Agreement (a) as an incident
to the disposition of all of its ownership interest in accordance with Articles
14.2, 14.2.1, and 14.2.2 hereof, or (b) to the trustee for the tax-exempt
revenue bonds issued by IMPA to pay the costs of the acquisition of IMPA’s
ownership interest in Trimble County Unit 1 hereunder; and (c) each of the
Parties hereby consents to the assignment of this Agreement as an incident to
the disposition of a Party’s ownership interest, as permitted by Article
14.2.3.

 

16.2.                        Successors And Assigns.

 

This Agreement shall inure to the benefit of and be
binding upon Louisville and IMPA and their respective successors. This
Agreement shall inure to the benefit of and be binding upon the assigns of
Louisville and IMPA when such assignment is made in accordance with the
provisions of Article 16.1.

 

ARTICLE 17.

LIABILITY AND DEFAULT

 

17.1.                        Liability To Third Parties.

 

Notwithstanding any provision to the contrary In
this Agreement, any liability or any payment, cost, expense, or obligation
arising from a claim of liability (after application thereto of any Insurance
coverage or proceeds) to a third party or parties against one or both of the
Parties and arising from the acquisition, planning, engineering, design,
licensing, procurement, construction, Installation, completion, operation, use,
management, control, maintenance, replacement, alteration, modification,
renewal, rebuilding or repair, retirement, disposal, or salvaging of Trimble
County Unit 1 or any part thereof and the Trimble County General Plant
Facilities and the Trimble County Site as they pertain to Trimble County Unit
1; or from any other action or failure to act by either Party (or Its employees,
agents, or contractors) In carrying out any of the provisions of this Agreement
in regard to Trimble County Unit 1 or any part thereof and the Trimble County
General Plant Facilities and the Trimble County Site as they pertain to Trimble
County Unit 1, shall be shared by the Parties in proportion to their respective
percentage ownership interests in Trimble County 1 in all circumstances except
where such liability or claim of liability Is the result of gross negligence or
intentional wrongdoing on the part of Louisville or IMPA. If, by reason of any
such liability or claim of liability (after application thereto of any
Insurance coverage or proceeds) to a third party or parties, either Party shall
be called upon to make any payment or to Incur any

 

42

 

cost, expense, or obligation
In excess of that for which It Is responsible under the provisions of the
preceding sentence, then the other Party shall reimburse the Party making such
excess payment or Incurring any such excess cost, expense, or obligation to the
full extent of the excess. Louisville shall be solely responsible for third
party claims arising prior to Closing and shall fully indemnify IMPA against
any such claim.

 

17.2.                        Liability Between The
Parties.

 

Except as set forth In this Article 17.2, Louisville
shall not be liable to IMPA for any loss, cost, damage, or expense Incurred by
IMPA as a result of any action or failure to act, under any circumstances, by
Louisville (or Its employees, agents, or contractors) In carrying out any of
the provisions of this Agreement, except that Louisville will be liable to IMPA
for (a) any such loss, cost, damage, or expense which is the result of gross
negligence or intentional wrongdoing on the part of Louisville, and (b) any
damage to IMPA caused by Louisville’s negligence, but only If such damage
results from Louisville’s failure to follow Good Utility Practice in operating
Trimble County Unit 1; provided, that no liability for failure to follow Good
Utility Practice shall exceed, in any one contract year, five percent of the
amount paid by IMPA pursuant to Articles 7.1.2, 7.1.3 and. 7.1.4 in that same
contract year.

 

Notwithstanding any other provision of this
Agreement, in no event, however, shall Louisville be liable to IMPA with
respect to any claim, whether based on contract, tort (including negligence),
patent, trademark or service mark, or otherwise, for any indirect, special,
incidental, or consequential damages, including, but not limited to, loss of
profits or revenues, loss of use of Trimble County Unit 1 or any part thereof
and the Trimble County General Plant Facilities and the Trimble County Site as
they pertain to Trimble County Unit 1, cost of capital, cost of purchased or
replacement power, claims of the customers of IMPA for service interruptions.

 

In no event shall Louisville be excused from
liability for its fraudulent acts.

 

17.3.                        Indemnification.

 

Subject to Article 17.2 hereof, each Party
(“breaching Party~) hereby agrees to indemnify and hold the other Party
(“non-breaching Party”) harmless from, against, and in respect of and shall on
demand reimburse the non-breaching Party for:

 

(a)                                  any and all loss, liability,
or damage resulting from any untrue representation, breach of warranty, or
non-fulfillment of any covenant or agreement by the breaching Party contained
herein or In any certificate, document, or instrument delivered to the
non-breaching Party hereunder and

 

(b)                                 any and all loss suffered by
the non-breaching Party due to the breaching Party’s failure to perform or
satisfy any obligation assumed pursuant to this Agreement; and

 

43

 

(c)                                  any and all loss resulting
from actions, suits, proceedings, claims, demands, assessments, judgments,
costs, and expenses, including, without limitation, legal fees and expenses,
incident to any of the foregoing or incurred in investigating or attempting to
avoid the same or to oppose the imposition thereof, or in enforcing this
indemnity.

 

17.4.                        Nature And Survival Of
Representations And Warranties.

 

Each representation, warranty, indemnity, covenant,
and agreement made by the Parties in this Agreement or In any document,
certificate, or other instrument delivered by or on behalf of the Parties
pursuant to this Agreement or in connection herewith, shall survive the
Closing.

 

17.5.                        Default.

 

17.5.1.                                                               Events of Default.

 

The following shall be Events of Default under this
Agreement:

 

17.5.1.1.                              Failure To Make Payment.

 

Subject to Article 8.2 hereof, failure by either
Party to make any payment to the other Party required under this Agreement
within sixty (60) days after the date on which such payment becomes due, or
failure by either Party to give any credit to the other Party required under
this Agreement for a period of sixty (60) days after the date on which such
credit becomes due, or failure by either Party to make payment for a period of
sixty (60) days after the date on which such payment becomes due to any third
party, when failure to do so could result in a lien on any of the property
included under this Agreement or otherwise adversely affects the interests of
the other Party; provided, however, that no Party shall be in default if the
amount it owes hereunder can be, and is, offset in whole within sixty (60) days
after the date on which such amount became due and payable, by the Party to
whom that sum is owed under this Agreement.

 

17.5.1.2.                              Failure To Perform.

 

Failure by either Party to perform any material
obligation, duty, or responsibility in accordance with the provisions of this
Agreement.

 

17.5.2.                                                               Curing Default In Regard To
Paying Money.

 

As to any default resulting from the failure to pay
money, the defaulting Party may remedy its default (when its default is the
failure to pay money) by paying to the non-defaulting Party on or before ninety
(90) days from the date the payment becomes due:

 

(a)                                  the sums due; and

 

44

 

(b)                                 interest on the sums due at
the Agreed Rate from the date due until paid; and

 

(c)                                  any other costs incurred by
the non-defaulting Party as a result of such default.

 

17.5.3.                                                               Curing Default For Other
Than Failure To Pay Money 

 

A Party in default for reasons other than the
failure to pay money may cure such default by performing such act as is
necessary to cure the default and by paying the non-defaulting Party on or
before ninety (90) days from the date such default occurred, any sums due under
Article 17.3 hereof.

 

17.5.4.                                                               Non-Applicability Of Cure
Provisions

 

Articles 17.5.2 and 17.5.3 hereof shall not be
applicable to any Event of Default relating to pre-Closing or Closing
activities set forth in this Agreement. Cure periods under Articles 175.2 and
17.5.3 will not operate to extend the time specified in any other Article of this
Agreement for the performance or occurrence of any act or event, unless
otherwise specified.

 

17.5.5.                                                               Appointment Of A Receiver.

 

In the event the default continues for a period of
180 days, then the Non-Defaulting Party may have a receiver appointed by a
state or federal court sitting in Louisville, Kentucky to take control of and
operate the defaulting Party’s interest in the facilities and perform in
accordance with the terms of this Agreement.

 

17.5.6.                                                               Additional Obligations.

 

With respect to any Party as to which an Event of
Default has occurred, such Party shall use its best efforts to take any and all
such further actions and shall execute and file where appropriate any and all
such further legal documents and papers as may be reasonable under the circumstances
in order to facilitate the carrying out of this Agreement or otherwise
effectuate its purpose, including but not limited to action to seek any
required governmental or regulatory approval and to obtain any other required
consent, release, amendment, or other similar document.

 

17.5.7.                                                               Waivers

 

No waiver of any default or Event of Default
hereunder shall extend to or affect any subsequent default or Event of Default
or shall impair any rights or remedies consequent thereon. No delay or omission
to exercise any remedy available upon any Event of Default shall impair any
Party’s right to exercise such remedy or shall be construed to be a waiver
thereof, but any such remedy may be exercised from time to time and as often as
may be deemed expedient. In order to entitle each Party hereto to

 

45

 

exercise any remedy
conferred upon or reserved by it in this Article 17, notice shall be provided
in accordance with Article 21.2 hereof.

 

17.5.8.                                                               Legal And Other costs.

 

In the event that any Party (the “Defaulting Party’)
defaults in its obligations under this Agreement and, as a result thereof, the
other Party (the “Non-Defaulting Party’) seeks to legally enforce its rights
hereunder against the Defaulting Party, then, in addition to all damages and
other remedies to which the Non-Defaulting Party Is entitled by reason of such
default, the Defaulting Party shall promptly pay to the Non-Defaulting Party an
amount equal to all costs and expenses (including reasonable attorneys’ fees)
paid or incurred by the Non-Defaulting Party in connection with such
enforcement.

 

17.6.                        Force Majeure

 

In no event shall either Party be liable to the
other Party for failure by such Party to perform any of its obligations under
this Agreement because of Force Majeure. Nothing contained herein shall be
construed to require a Party to settle any strike, lockout, work stoppage, or
other industrial disturbance or dispute in which it may be involved or to take
an appeal from any judicial, regulatory, or administrative action. Any Party
rendered unable to fulfill any of its obligations under this Agreement by
reason of Force Majeure shall exercise due diligence to remove such inability
with all reasonable dispatch. In the event either Party is unable, in whole or
in part, to perform any of its obligations by reason of Force Majeure, other
than obligations to make payments hereunder, the obligations of the Party
relying thereon, insofar as such obligations are affected by such Force Majeure,
shall be suspended during the continuance thereof but no longer. The obligation
of IMPA to make payments as set forth in Articles 7 and 8 shall be
unconditional and absolute, and shall not be subject to reduction, setoff, or
claim of Force Majeure. The Party invoking the Force Majeure shall specifically
state the full particulars of the Force Majeure and the time and date when the
Force Majeure occurred. Notices given by telephone under the provision of this
Article shall be confirmed in writing as soon as reasonably possible. When the
Force Majeure ceases, the Party relying thereon shall give immediate notice
thereof to the other Party. This Agreement shall not be terminated by reason of
Force Majeure but shall remain in full force and effect.

 

ARTICLE 18.

ADMINISTRATION

 

18.1.                        Coordination Committee.

 

From time to time various administrative, financial,
and technical matters may arise in connection with the terms and conditions of
this Agreement which will require the cooperation and consultation of the Parties
and interchange of information. As a means of providing for such consultation,
interchange, decision making, or ratification, a Coordination Committee is
hereby established with functions as described in Article 18.4 below. However,
such Committee shall not diminish in any manner the authority of

 

46

 

Louisville or the rights of
IMPA as set forth in the various sections of this Agreement. The Coordination
Committee shall have no authority to modify or amend the terms of this
Agreement.

 

18.2.                        Membership.

 

The Coordination Committee shall have one member
from each Party. Within 60 days after execution of this Agreement, each Party
shall designate in writing its Representative and at least one alternate on the
Coordination Committee and shall promptly give written notice thereof to the
other Parties. Thereafter, each Party shall promptly give written notice to the
other Party any change in the designation of its Representative on the
Coordination Committee. The Chairman of the Coordination Committee shall be the
Louisville Representative, who shall be responsible for calling meetings and
establishing agenda Each Party, however, shall have the right to have an item
included on the agenda. All actions taken by the Coordination Committee must be
by majority vote, with each Party entitled to vote in shares equal to its
ownership interest. The Coordination Committee may also act without a meeting
by telephone conference or notational voting by correspondence. Majority vote
shall not be required for either Party to invoke the procedure under Article
19.2 for handling disagreements.

 

18.3.                        Meetings.

 

The Coordination Committee shall meet annually on a
date and at a location to be announced by the Chairman at least thirty (30)
days in advance, or sooner with the consent of all members. Such other meetings
as are reasonably required may be called by any member with as much advance
notice as is practical. Meetings may be attended by other representatives of
the Parties.

 

18.4.                        Functions

 

The Coordination Committee shall have the following
functions:

 

(a)                                  Provide liaison between the
Parties at the management level and exchange Information with respect to
significant matters of licensing, design, construction, operation, and
maintenance of Trimble County Unit 1 and the Trimble County General Plant
Facilities and the Trimble County Site as they pertain to Trimble County Unit
1.

 

(b)                                 Appoint Ad Hoc Committees,
the members of which need not be members of the Coordination Committee, as
necessary to perform detailed work and conduct studies regarding matters
requiring investigation.

 

(c)                                  Review and discuss disputes
arising under this Agreement.

 

(d)                                 Provide liaison between the
Parties with respect to the financial and accounting aspects of Incremental
Capital Assets and operation of Trimble County Unit I and perform those
functions set forth in Article 6.1 hereof.

 

47

 

(e)                                  Provide a liaison between
the Parties with respect to the financial and accounting aspects of the
ownership of the property.

 

(f)                                    Review and approve budgets
for operation, maintenance, and Incremental Capital Assets, including
retirement of facilities, which affect Trimble County Unit 1 and the Trimble
County General Plant Facilities and the Trimble County Site as they pertain to
Trimble County Unit 1.

 

(g)                                 Perform such other duties as
set forth pursuant to the other Articles of this Agreement.

 

18.5.                        Records

 

The Coordination Committee shall keep written
records of all meetings.

 

18.6.                        Expenses.

 

Each Party shall be responsible for the personal
expenses of its Representative and its other attendees. All other expenses
incurred in connection with the performance by the Coordination Committee of
its functions shall be allocated and paid as determined by the Coordination
Committee.

 

18.7.                        Conduct

 

Members of the Coordination Committee shall use
their reasonable best efforts to perform Committee functions by taking into
account Good Utility Practice.

 

ARTICLE 19.

DISAGREEMENT

 

19.1.                        Consultation.

 

In accordance with the provisions of Article 18, the
members of the Coordination Committee will consult in connection with any major
matter arising under this Agreement.

 

19.2.                        Disagreement.

 

If any disagreement arises on major operation and
maintenance matters pertaining to Trimble County Unit 1, major capital matters
pertaining to Trimble County Unit 1, or major retirement matters, or other
matters arising under this Agreement, pertaining to Trimble County Unit 1
(“Plant Subject?), such matters shall be discussed by the Coordination
Committee and timely mutual agreement sought in regard thereto. If each of the
members of the Coordination Committee agrees to the resolution of any Plant
Subject, such agreement shall be reported in writing to and shall be binding
upon the Parties—within the authority of the Coordination Committee as stated
in Article 18. In the unlikely event that each of the members of the
Coordination Committee is unable to

 

48

 

reach agreement within a
reasonable time (giving due cognizance to the operating and maintenance
schedules of Trimble County Unit 1 and all other pertinent circumstances) with
respect to any Plant Subject under consideration, the President of Louisville
or the President of IMPA can, by written notice to the members of the
Coordination Committee, withdraw the matter from consideration by the
Coordination Committee and submit the same for resolution to the President of
Louisville and the President of IMPA. If these senior representatives of the
Parties agree to a resolution of the matter, such agreement shall be reported
in writing to and shall be binding upon the Parties; but if said senior
representatives fail to resolve the matter within seven days after its
submission to them, then the matter may proceed to arbitration as provided in
Article 19.3.

 

19.2.1.                                                               Arbitration.

 

If a disagreement should arise with respect to any
Plant Subject which is not resolved by the Coordination Committee or the senior
representatives of the Parties as provided in Article 19.2 or any other
disagreement concerning this Agreement, then such disagreement may be settled
by an Arbitration Board, (or by such other form of dispute resolution as agreed
upon by the Parties) which shall consist of three arbitrators as hereinafter
provided, in accordance with the provision of this Article 19.3. If, after the
procedure for resolving such disagreement by the Coordination Committee or the
senior representatives of the Parties as provided Ii Article 19.2 has been
exhausted, either Party desires that such disagreement shall be settled by
arbitration, it shall serve written notice upon the other Party setting forth
in detail such disagreement with respect to which arbitration is desired. Such
disagreement shall be settled by arbitration if, after receipt of such written
notice, both of the Parties shall agree in writing that such disagreement shall
be settled by arbitration.

 

Within a period of thirty (30) days from the date of
such agreement in writing to settle such disagreement by arbitration, each
Party shall select one arbitrator. Within a period of sixty (60) days from the
date of such agreement in writing to settle such disagreement by arbitration,
the two arbitrators so selected shall meet and select one additional
arbitrator. If either or both of the two arbitrators to be selected by the
Parties, as herein provided, are not so selected within the specified 30 day
period, or if the two arbitrators selected by the Parties shall fail to agree
upon the selection of the additional arbitrator within the specified 60 day
period, either Party may, upon written notice to the other Party, apply to the
American Arbitration Association for the appointment of the arbitrator or
arbitrators who have not been so selected and such Association shall thereupon
be empowered to select such arbitrator or arbitrators.

 

The arbitration proceedings shall be conducted in
Louisville, Kentucky unless otherwise mutually agreed. The Arbitration Board
shall afford adequate opportunity to both of the Parties to present information
with respect to the disagreement submitted to arbitration and may request
further information from either Party. Except as provided in the preceding
sentence, the Parties may, by mutual agreement, specify the rules which are to
govern any proceeding before the Arbitration Board and limit the matters to be
considered by the Arbitration Board, in which event the Arbitration Board shall
be

 

49

 

governed by the terms and
conditions of such agreement. In the absence of any such agreement respecting
the rules which are to govern any proceeding, the then current rules of the
American Arbitration Association for the conduct of commercial arbitration
shall govern the proceedings, except that if such rules shall conflict with the
then current provisions of the laws of Kentucky relating to arbitration, such
conflict shall be governed by the then current provisions of the laws of
Kentucky relating to arbitration.

 

Procedural matters pertaining to the conduct of the
arbitration and the award of the Arbitration Board shall be made upon a
determination of a majority of the arbitrators. The Parties shall, however, be
entitled to all discovery provided for by the Kentucky Rules of Civil
Procedure. The findings and award of the Arbitration Board, so made upon a
determination of a majority of the arbitrators, shall be final and conclusive
with respect to the disagreement submitted for arbitration and shall be binding
upon the Parties, except as otherwise provided by law. Each Party shall pay the
fee and expenses of the arbitrator selected by or for it, together with the
costs and expenses incurred by it in the preparation of its case to the
arbitrators. The fee and expenses of the third arbitrator selected in
accordance with this Article 19.3 shall be assigned in equal parts to the
Parties, and each Party shall assume and pay the portion of such fee and costs
so assigned to it Judgment upon the award may be entered in any court having
jurisdiction In the event the Parties do not agree to arbitrate, each shall
have the right to take appropriate judicial action. 19 4 Obligations To Make
Payments

 

If a disagreement should arise from any Plant
Subject which is not resolved by the Coordination Committee or the senior
representatives of the Parties as provided in Article 19.2, then, pending the
resolution of the disagreement by arbitration and/or litigation, Louisville
shall continue to operate Trimble County Unit 1 and make necessary Incremental
Capital Assets in a manner consistent with this Agreement, and IMPA shall
continue to make all payments required in accordance with the applicable
provisions of this Agreement.

 

ARTICLE 20.

REMEDIES

 

20.1.                        All Remedies . Setoff.

 

In the event either Party (the “Defaulting Party’)
fails to pay when due any amount owing by it to the other Party (the
“Non-Defaulting Party”) under this Agreement or the Interconnection Agreement
or fails to perform or observe any covenant, condition, or agreement to be
performed or observed under this Agreement or the Interconnection Agreement,
the Non. Defaulting Party shall have available to it all remedies, legal and
equitable, including, without limitation those available in order to enforce
payment of any such amount or performance or observance of any such covenant,
condition, or agreement, subject to the defaulting Party’s rights to cure
default under Article 17.5. All overdue payments shall bear interest at the
Agreed Rate. Further, the Non-Defaulting Party shall have the right to setoff
against any amount owed to it by the Defaulting Party the amount of any payment
which such Party has failed to pay when due under this

 

50

 

Agreement or the Interconnection
Agreement. In addition, the Non-Defaulting Party shall have the other rights
and remedies available to it under this Article 20.

 

20.2.                        Injunctive Relief.

 

The Parties hereto agree and acknowledge that the
failure to perform any of their obligations under this Agreement, including the
execution of legal documents which may be reasonably requested as set forth in
this Article, would cause irreparable injury to the other Party and that the
remedy at law for any violation or threatened violation thereof would be
inadequate, and agree that the other Party shall be entitled to a temporary or
permanent injunction or other equitable relief specifically to enforce such
obligation without the necessity of proving the inadequacy of its legal
remedies.

 

20.3.                        No Remedy Exclusive.

 

No remedy conferred upon or reserved to the Parties
hereto in this Agreement is intended to be exclusive of any other remedy or
remedies available hereunder or now or hereafter existing at law, in equity, or
by statute or otherwise, but each and every such remedy shall be cumulative and
shall be in addition to every other such remedy. The pursuit by any Party of
any specific remedy shall not be deemed to be an election of that remedy to the
exclusion of any other or others, whether provided hereunder or by law, equity,
or statute.

 

20.4.                        Failure To Participate In
Incremental Capital Assets.

 

If IMPA fails to make any payment of its share of
the cost of Incremental Capital Assets after the Closing, Louisville shall have
the right, at its election, to give written notice of such failure to IMPA. If
such overdue payment and all other overdue payments~ if any, of IMPA’s share of
the cost of the Incremental Capital Assets after the Closing, together with
interest on such overdue payment or payments, are not paid within ninety (90)
days after the giving of the written notice first referred to in this
paragraph, then (a) IMPA’s rights to make any further payments of its share of
the cost of the Incremental Capital Asset shall thereupon terminate, and (b)
the respective percentage ownership interests in Trimble County Unit 1 shall be
adjusted in accordance with the following formula:

 

ADD = ALGE*IPCT/(IMPA+ALGE) .

 

where:

 

	
  ADD =

  	
   

  	
  Additional percentage ownership interest accruing to Louisville as a
  result of making its additional investment to complete construction of
  Incremental Capital Assets (there shall be a corresponding reduction in the
  percentage ownership interest of IMPA in Trimble County Unit 1 and the
  Trimble County Site).

  
	
   

  	
   

  	
   

  
	
  IMPA  =

  	
   

  	
  Investment made by IMPA for its respective percentage ownership 

  

 

51

 

	
   

  	
   

  	
  interest in Trimble County Unit 1, the Trimble County Site and its
  nonexclusive license with respect to the Trimble County General Plant Facilities
  to the time of the written notice first referred to in this Article 20.4.

  
	
   

  	
   

  	
   

  
	
  ALGE  =

  	
   

  	
  Additional Investment made by Louisville to complete construction of
  Incremental Capital Assets as aforesaid.

  
	
   

  	
   

  	
   

  
	
  IPCT  =

  	
   

  	
  IMPA’s percentage ownership interest in Trimble County Unit 1 at the
  time of the written notice first referred to in this Article 20.4.

  

 

ARTICLE 21.

MISCELLANEOUS

 

21.1.                        Governing Law.

 

The validity, interpretation, and performance of
this Agreement and each of its provisions shall be governed by the laws of the
Commonwealth of Kentucky, except that the power and authority of IMPA to enter
into this Agreement shall be governed by the laws of the State of Indiana.

 

21.2.                        Notice To Parties.

 

Unless otherwise specifically provided by other provisions
of this Agreement, any notice, consent, or other communication required to be
made under this Agreement shall be addressed to or made by such officer, agent,
representative, or employee of each Party as such Party may, from time to time,
designate in writing, provided that any written notice required to be made
pursuant to Articles 14, 18, and 19.3 hereof shall be delivered in person, by
prepaid telegram, or by registered or certified mail, to the named officer of
the Party at the address listed below; provided, that either Party may, from
time to time, change such designated officer or the address thereof by giving
written notice of such change to the other Party. Any requirement for notice in
writing may be met by telex, telecopy, or other electronic means of
communicating written or printed material, if promptly confirmed in writing.

 

TO                               Louisville:

 

President

 

Louisville Gas and Electric Company

 

220 West Main Street (40202)

 

Post Office Box 32010

 

Louisville, Kentucky 40232

 

52

 

TO                               IMPA:

 

General Manager

 

Indiana Municipal Power Agency

 

11610 North College Avenue

 

Carmel, Indiana 46032

 

21.3.                        Article Headings Not To
Affect Meaning.

 

The descriptive headings of the various Articles of
this Agreement have been inserted for convenience of reference only and shall
in no way modify or restrict any of the terms or provisions hereof.

 

21.4.                        Counterparts.

 

This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

 

21.5.                        Time.

 

Louisville and IMPA agree that time is of the
essence in this Agreement.

 

21.6.                        Severability.

 

In the event that any provision of this Agreement,
or the application of any such provision to any person or circumstance, shall
be held invalid or unenforceable, the remainder of this Agreement, or the
application of such provision to persons or circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected thereby.

 

21.7.                        Integration.

 

The terms and provisions contained in this Agreement
and the Interconnection Agreement constitute the entire agreement between
Louisville and IMPA in regard to the respective matters of said Agreement, and
shall supersede all previous communications, representations, or agreements,
either oral or written, between Louisville and IMPA with respect to the
respective subject matters of said Agreements.

 

21.8.                        Computation Of Time.

 

In computing any period of time prescribed or
allowed by this Agreement, the day of the act, event, or default from which the
designated period of time begins to run shall

 

53

 

not be included. The last
day of this period so computed shall be included, unless it is a Saturday,
Sunday, or legal holiday in Kentucky, in which event the period shall run until
the end of the next day which is neither a Saturday, Sunday, nor legal holiday.

 

21.9.                        Waiver.

 

Any waiver at any time, by either Party, of its
rights with respect to the other Party, or with respect to any other matter
arising in connection with this Agreement, shall not be considered a waiver
with respect to any subsequent default or matter.

 

21.10.                  Equal Opportunity Clause.

 

During the performance of those parts of this
Agreement relating to the construction by a Party of any Incremental Capital
Assets, such Party agrees as follows:

 

(a)                                  Such Party will not
discriminate against any employee or applicant for employment because of race,
color, religion, sex, or national origin. Such Party will take affirmative
action to insure that applicants are employed, and that employees are treated,
during employment, without regard to their race, color, religion, sex, or
national origin. Such action shall include, but not be limited to, the
following: employment, upgrading, demotion, or transfer; recruitment or
recruitment advertising; layoff or termination; rates of pay or other forms of
compensation; and selection for training, including apprenticeship. Such Party
agrees to post, in conspicuous places, available to employees and applicants
for employment, notices setting forth the provisions of this non-discrimination
clause;

 

(b)                                 Such Party will, in all
solicitations or advertisements for employees place by or on behalf of such
Party, state that all qualified applicants will receive consideration for
employment without regard to race, color, religion, sex, or national origin;

 

(c)                                  Such Party will send to each
labor union or representative of workers with which it has a collective
bargaining agreement or other contract or understanding, a notice, to be
provided, advising the said labor union or workers’ representative, of such
Party’s commitments under this Article 21.10, and shall post copies of the
notice In conspicuous places, available to employees and applicants for
employment;

 

(d)                                 Such Party will comply with
all provisions of Executive Order No. 11246 of September 24, 1965, and of the
rules, regulations, and relevant orders of the Secretary of Labor

 

(e)                                  Such Party will furnish all
information and reports required by Executive Order No. 11246 of September 24,
1965, and by the rules, regulations, and orders of the Secretary of Labor, or
pursuant thereto, and will permit access to its books, records, and accounts by
the administering agency and the Secretary of Labor, for purposes of
investigation, to ascertain compliance with such rules, regulations, and
orders;

 

54

 

(f)                                    In the event of such Party’s
noncompliance with the none discrimination clauses of this Agreement, or with
any of the said rules, regulations, or orders, this Agreement may be canceled,
terminated, or suspended, in whole or in part, and such Party may be declared
ineligible for further Government contracts or federally assisted construction
contracts in accordance with procedures authorized in Executive Order No. 11246
of September 24, 1965, and such other sanctions may be imposed and remedies
invoked as provided in said Executive Order or by rule, regulation, or order of
the Secretary of Labor, or as otherwise provided by law

 

(g)                                 Such Party will includes the
words “During the performance of this contract, the contractor agrees as
follows:” followed by the provisions of sections (a) through (I) of this
Article 21.10 in every subcontract or purchase order, unless exempted by rules,
regulations, or orders or the Secretary of Labor issued pursuant to Section 204
of Executive Order No. 11246 of September 24, 1965, so that such provisions
will be binding upon each subcontractor or vendor. Such Party will take such
action with respect with any subcontract or purchase order as the administering
agency may direct as a means of enforcing such provisions, including sanctions
for noncompliance; provided, however, that in the event such Party becomes
involved in, or is threatened with, litigation by a subcontractor or vendor as
a result of such direction by the administering agency, such Party may request
the United States to enter into such litigation to protect the interests of the
United States;

 

(h)                                 For purposes of this
Agreement, the term “this Agreement,’ as used in this Article 21.10 shall mean
those parts of this Agreement relating to the construction by such Party of any
additions, betterments, or improvements to the property. Nothing in this
Article 21.10 shall be construed to prevent such Party from resisting,
challenging, contesting, or appealing any law, statute, regulation, or decision
of any federal, state, or local government or agency which such Party claims to
be in invalid, unlawful, arbitrary, or capricious.

 

21.11.                  Non-Segregated Facilities.

 

Each Party certifies further that It will not
maintain or provide for its employees any segregated facilities at any of its
establishments, and that it will not permit its employees to perform their
services at any location, under its control, where segregated facilities are
maintained. Each Party agrees that a breach of this certification is a
violation of the Equal Opportunity Clause in this Agreement. As used in this
certification, the term “segregated facilities’ means any waiting rooms, work
areas, rest rooms and washrooms, restaurants, and other eating areas, time
clocks, locker rooms and other storage or dressing areas, parking lots,
drinking fountains, recreation or entertainment areas, transportation, or
housing facilities provided for employees which are segregated by explicit
directive or are, in fact, segregated on the basis of race, color, religion, or
national origin, because of habit, local custom, or otherwise. Each Party
agrees that (except where it has obtained identical certifications from
proposed subcontractors for specific time periods) it will obtain identical
certifications from proposed subcontractors prior to the award of subcontracts
exceeding $10,000 which are not exempt from the

 

55

 

provisions of the Equal
Opportunity Clause, and that it will retain such certifications in its files.

 

Nothing in this Article 21.11 shall be construed to
prevent any Party from resisting, challenging, contesting, or appealing any
law, statue, regulations, or decision of any federal, state, or local
government or agency which the Party claims to be invalid, unlawful, arbitrary,
or capricious.

 

21.12.                  Condemnation.

 

In the event any portion of Trimble County Unit 1,
or any portion of the Trimble County Site or the Trimble County General Plant
Facilities as they pertain to the Parties’ use of Trimble County Unit 1, shall
be condemned and taken by exercise of any right of eminent domain or for public
or quasi-public use, and the Parties hereto are able to continue their use and
operation of the remaining portion thereof, this Agreement shall not terminate.
The proceeds of any payment of any award or compensation arising from such
condemnation (net of any unrecovered expenses of any nature incurred by the
Parties with respect thereto, which expenses shall be fully reimbursed to the
Party or Parties incurring such expenses) shall be apportioned between the
Owners on the basis of their respective ownership interests in Trimble County
Unit 1. In the event that all of Trimble County Unit 1, or all of the Trimble
County Site, and the Trimble County General Plant Facilities as they pertain to
the Parties’ use of Trimble County Unit 1, shall be condemned and taken by
exercise of any right of eminent domain or for public or quasi-public use, this
Agreement shall terminate as of the date of said taking and the proceeds of any
award or compensation arising from such condemnation (net of any unrecovered
expenses of any nature incurred by the Owners with respect thereto, which
expenses shall be fully reimbursed to the Owner or Owners incurring such
expenses) shall be apportioned between the Owners on the basis of their
respective ownership interests in Trimble County Unit 1.

 

ARTICLE 22.

TERM AND TERMINATION

 

22.1.                        Termination.

 

This Agreement shall terminate at such time as those
activities which are necessary to retire Trimble County Unit 1 from service
have been completed. Retirement from service shall include, without limitation:
dismantling, demolishing, and removal of equipment, facilities, and structures;
security; maintenance; disposing of debris; and any site work necessary to
lawfully and responsibly effect such retirement. Termination of this Agreement,
however, shall not terminate or affect, as between the Parties, the continued
liability, if any, of the Parties for environmental considerations or other
obligations imposed by law. •

 

56

 

22.2.                        Retirement Of Property.

 

The Coordination Committee shall have authority in
decisions regarding the retirement from service of any and all property
included in Trimble County Unit 1 and Trimble County General Plant Facilities
which, in the Coordination Committee’s judgment, is damaged, worn out,
uneconomic, unreliable, obsolescent, or otherwise unfit for use. However,
Trimble County Unit 1 shall not be retired from service as a generating unit
without the written consent of IMPA prior to the earlier of:

 

(a)                                  the expiration of 35 years
following the Commercial Operation Date of Trimble County Unit 1; or

 

(b)                                 the final maturity date of
the project revenue bonds originally issued by IMPA to finance its initial ownership
interest in Thimble County Unit 1, or the final maturity date of any bonds
issued by IMPA to refund such originally issued bonds.

 

After the expiration of the applicable period in the
preceding sentence, subject to the rights of any other Owner of Trimble County
Unit 1, the Coordination Committee shall have the right to retire Trimble
County Unit 1 from service as a generating unit at any time. Notwithstanding
the above, in the event the Coordination Committee approves a major life
extension or the installation of Incremental Capital Assets, either of which
costs in excess of twenty-five percent of the original construction cost of the
Trimble County Plant, and IMPA issues improvement or other bonds to finance
such improvements, Louisville agrees, subject to the interests of any co-owners
of Trimble County Unit 1, not to retire such unit prior to the expiration of 75
percent of the remaining useful life of such unit as determined by a qualified
engineering consultant selected by the Coordination Committee.

 

22.3.                        Retirement Costs.

 

All costs (less salvage credits, if any) associated
with retirement of Trimble County Unit 1 and the Trimble County General Plant
Facilities and the Trimble County Site as they pertain to Trimble County Unit
1, including, without limitation: dismantling, demolishing, and removal of
equipment, facilities, and structures; security; maintenance; disposing of
debris; and any site work necessary to lawfully and responsibly effect such
retirement, shall be shared by the Owners in proportion to their respective
percentage ownership interests in Trimble County Unit 1. Payments for these
costs (less salvage credits, if any) as they are expected to be incurred, shall
be made In accordance with the provisions of Article 8. If such salvage credits
exceed such costs, the difference shall be shared by the Owners in proportion
to their respective percentage ownership Interests in Trimble County Unit 1.

 

57

 

IN WITNESS WHEREOF, each of the Parties has caused
this Agreement to be duly executed.

 

	
   

  	
   

  	
  LOUISVILLE GAS AND ELECTRIC COMPANY

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  	
  Chris Hermann,

  
	
   

  	
   

  	
   

  	
  Vice President and General Manager,

  
	
   

  	
   

  	
   

  	
  Wholesale Electric Business

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INDIANA MUNICIPAL POWER AGENCY

  
	
  Attest:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Dwight D. Langer

  	
   

  	
   

  	
  Frank Rudolph,

  
	
   

  	
  Secretary

  	
   

  	
   

  	
  Chairman

  
									

 

58

 

APPENDICES

 

Appendices to the Participation Agreement

 

	
  Appendix A.

  	
  Bill of Sale

  
	
   

  	
   

  
	
  Appendix B.

  	
  Trimble County Unit No. 1 List

  
	
   

  	
   

  
	
  Appendix C.

  	
  License Agreement and Trimble County General
  Plant Facility List

  
	
   

  	
   

  
	
  Appendix D.

  	
  Known Defects at Closing

  
	
   

  	
   

  
	
  Appendix E.

  	
  General Warranty Deed

  
	
   

  	
   

  
	
  Appendix F.

  	
  Easement: Louisville to IMPA

  
	
   

  	
   

  
	
  Appendix G.

  	
  Easement: IMPA to Louisville

  

 

59

 

APPENDIX A

 

BILL
OF SALE

 

LOUISVILLE GAS AND ELECTRIC COMPANY, a Kentucky
corporation, 220 West Main Street, P.O. Box 32010, Louisville, Kentucky 40232
(“Seller”) and INDIANA MUNICIPAL POWER AGENCY, a body corporate and politic and
a political subdivision of the State of Indiana, 11610 North College Avenue,
Carmel, Indiana 46032 (“Buyer”) for value received and in accordance with the
covenants and conditions set forth in the Participation Agreement by and
between Seller and Buyer, dated February 1, 1993, and incorporated by reference
herein (“Agreement”) , and as part of the consideration for the performance of
the Agreement, Seller hereby grants, bargains, transfers, sells and delivers
unto Buyer, all of Seller’s right, title and interest in a l2.88~ undivided
interest as a tenant in common in Trimble County Unit 1, as defined in the
Agreement and as more particularly described in Appendix B to the Agreement,
and pursuant to the terms of the Agreement.

 

Seller hereby represents, warrants and covenants,
subject to any rights Illinois Municipal Electric Agency may have as an owner
of a l2.l2% undivided ownership interest as tenant in common to the property
transferred hereunder, that Seller is the owner of the property described in
this Bill of Sale, and has full right, power and authority to sell and transfer
the same.

 

IN WITNESS WHEREOF, the undersigned have executed
this Bill of Sale by their duly authorized officers this 1st day of February,
1993.

 

	
   

  	
   

  	
  SELLER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LOUISVILLE GAS AND ELECTRIC

  COMPANY

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Chris Hermann,

  
	
   

  	
   

  	
   

  	
  Vice President and General

  
	
   

  	
   

  	
   

  	
  Manager, Wholesale Electric

  
	
   

  	
   

  	
   

  	
  Business

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BUYER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INDIANA MUNICIPAL POWER

  AGENCY

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Frank R. Rudolph, Chairman

  
							

 

60

APPENDIX B

Trimble County Unit 1

 

STRUCTURES

 

	
  A.

  	
   

  	
  Unit Structure

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Base Pad Foundation

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Pad Finish Floor

  
	
   

  	
   

  	
   

  	
  c.

  	
  Elevated Floors

  
	
   

  	
   

  	
   

  	
  d.

  	
  Equipment Foundations

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Boiler and Air Preheater Room Steel

  
	
   

  	
   

  	
   

  	
  b.

  	
  Turbine Room Steel

  
	
   

  	
   

  	
   

  	
  c.

  	
  Stairways

  
	
   

  	
   

  	
   

  	
  d.

  	
  Equipment Platforms

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Partial Insulated Multi-Layer Metal Siding

  
	
   

  	
   

  	
   

  	
  b.

  	
  Partial Uninsulated Metal Siding

  
	
   

  	
   

  	
   

  	
  c.

  	
  Concrete & Built-Up Roof

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Draft Equipment

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Equipment Foundations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Boiler Feed and Service Water Equipment

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Equipment Foundations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Coal Mills

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Equipment Foundations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Electrostatic Precipitator

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  

 

61

 

	
   

  	
   

  	
   

  	
  a.

  	
  Columns & Girders

  
	
   

  	
   

  	
   

  	
  b.

  	
  Stairways

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Metal Siding

  
	
   

  	
   

  	
   

  	
  b.

  	
  ESP End Walls

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Sulphur Dioxide Removal System

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab

  
	
   

  	
   

  	
   

  	
  c.

  	
  Equipment Foundations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Columns & Girders

  
	
   

  	
   

  	
   

  	
  b.

  	
  Stairways

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Insulated Metal Siding

  
	
   

  	
   

  	
   

  	
  b.

  	
  Concrete & Built-Up Roof

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  Bottom Ash Handling

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  a.

  	
  Equipment Foundations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  Turbine Generator

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Equipment Foundations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
   

  	
  Boiler

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Support Steel

  

 

62

 

EQUIPMENT AND SYSTEM COMPONENTS

 

	
  A.

  	
   

  	
  Unit Structure

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Masonry Blockwork

  
	
   

  	
   

  	
  2.

  	
  HVAC

  
	
   

  	
   

  	
  3.

  	
  Roof Drains

  
	
   

  	
   

  	
  4.

  	
  Passenger Elevator

  
	
   

  	
   

  	
  S.

  	
  Conduit & Cable Tray

  
	
   

  	
   

  	
  6.

  	
  Lighting

  
	
   

  	
   

  	
  7.

  	
  6900 Volt Equipment

  
	
   

  	
   

  	
  8

  	
  480 Volt Equipment

  
	
   

  	
   

  	
  9.

  	
  208/110 Volt Equipment

  
	
   

  	
   

  	
  10.

  	
  Control & Logic Room

  
	
   

  	
   

  	
  11.

  	
  Batteries & Chargers

  
	
   

  	
   

  	
  12.

  	
  Uninterruptible Power Supply

  
	
   

  	
   

  	
  13.

  	
  Station Fuel Oil Piping

  
	
   

  	
   

  	
  14.

  	
  Ignition Oil Piping

  
	
   

  	
   

  	
  15.

  	
  Main Steam Piping

  
	
   

  	
   

  	
  16.

  	
  Hot & Cold Reheat Piping

  
	
   

  	
   

  	
  17.

  	
  Condensate Piping

  
	
   

  	
   

  	
  18.

  	
  Gland Seal Piping

  
	
   

  	
   

  	
  19.

  	
  Attemperator Piping

  
	
   

  	
   

  	
  20.

  	
  Boiler Feed Suction Piping

  
	
   

  	
   

  	
  21.

  	
  Extraction Steam Piping

  
	
   

  	
   

  	
  22.

  	
  Auxiliary Cooling Piping

  
	
   

  	
   

  	
  23.

  	
  Closed Cooling Piping

  
	
   

  	
   

  	
  24.

  	
  Compressor and Instrument Air Piping

  
	
   

  	
   

  	
  25.

  	
  House Air Piping

  
	
   

  	
   

  	
  26.

  	
  Condensate Makeup Piping

  
	
   

  	
   

  	
  27.

  	
  Fire Protection

  
	
   

  	
   

  	
  28.

  	
  Turbine Room Gantry and House Cranes

  
	
   

  	
   

  	
  29.

  	
  Coal Silos

  
	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Draft Equipment

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Inducted Draft Fans

  
	
   

  	
   

  	
  2.

  	
  Forced Draft Fans

  
	
   

  	
   

  	
  3

  	
  Primary Air Fans

  
	
   

  	
   

  	
  4

  	
  Air & Gas Ducts

  
	
   

  	
   

  	
  5

  	
  Air Heater

  
	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Boiler Feed and Service Water Equipment

  

 

63

 

	
   

  	
   

  	
  1

  	
  Motor Driven Feed Pumps

  
	
   

  	
   

  	
  2

  	
  Turbine Driven Feed Pumps

  
	
   

  	
   

  	
  3.

  	
  Feedwater Heaters

  
	
   

  	
   

  	
  4.

  	
  Cooling Pumps

  
	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Coal Mills

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Coal Mills

  
	
   

  	
   

  	
  2.

  	
  Feeders

  
	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Electrostatic Precipitator

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Precipitator

  
	
   

  	
   

  	
   

  	
  a.

  	
  Elements

  
	
   

  	
   

  	
   

  	
  b.

  	
  Hoppers

  
	
   

  	
   

  	
   

  	
  c.

  	
  Vibrations

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  HVAC

  
	
   

  	
   

  	
  3.

  	
  Fire Protection Equipment

  
	
   

  	
   

  	
  4.

  	
  Insulation

  
	
   

  	
   

  	
  5.

  	
  480 Volt Equipment

  
	
   

  	
   

  	
  6.

  	
  208/110 Volt Equipment

  
	
   

  	
   

  	
  7.

  	
  Conduit & Cable Tray

  
	
   

  	
   

  	
  8.

  	
  Lighting

  
	
   

  	
   

  	
  9.

  	
  Communications

  
	
   

  	
   

  	
  10.

  	
  Control Building

  
	
   

  	
   

  	
  11.

  	
  Piping Systems

  
	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Sulphur Dioxide Removal System

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Inlet & Outlet Ducts

  
	
   

  	
   

  	
  2.

  	
  Absorber

  
	
   

  	
   

  	
  3.

  	
  Demister Wash Equipment

  
	
   

  	
   

  	
  4.

  	
  Seal Water Tank

  
	
   

  	
   

  	
  5.

  	
  Control Building

  
	
   

  	
   

  	
  6.

  	
  Electrical Building

  
	
   

  	
   

  	
  7.

  	
  Horizontal Pumps

  
	
   

  	
   

  	
  8.

  	
  Seal Air Fans

  
	
   

  	
   

  	
  9.

  	
  Air Compressors

  
	
   

  	
   

  	
  10.

  	
  Heat Exchangers

  
	
   

  	
   

  	
  11.

  	
  Cranes & Hoists

  
	
   

  	
   

  	
  12.

  	
  Piping Systems

  
	
   

  	
   

  	
  13.

  	
  6900 Volt Equipment

  
	
   

  	
   

  	
  14.

  	
  480 Volt Equipment

  
	
   

  	
   

  	
  15.

  	
  208/110 Volt Equipment

  
	
   

  	
   

  	
  16.

  	
  Lighting

  
	
   

  	
   

  	
  17.

  	
  Communications

  

 

64

 

	
   

  	
   

  	
  18.

  	
  Multiplex System

  
	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  Bottom Ash Handling

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Hoppers

  
	
   

  	
   

  	
  2.

  	
  Ash Sluicing Equipment

  
	
   

  	
   

  	
  3.

  	
  Piping System

  
	
   

  	
   

  	
  4.

  	
  Bottom Ash Equipment

  
	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  Turbine Generator

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Turbine Generator

  
	
   

  	
   

  	
  2.

  	
  Piping Systems

  
	
   

  	
   

  	
  3.

  	
  Seal Oil Unit

  
	
   

  	
   

  	
  4.

  	
  Hydrogen Coolers

  
	
   

  	
   

  	
  S.

  	
  Turbine Oil System

  
	
   

  	
   

  	
  6.

  	
  Electro Hydraulic Control

  
	
   

  	
   

  	
  7.

  	
  Multiplex System

  
	
   

  	
   

  	
  8.

  	
  Isolated Phase Bus

  
	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
   

  	
  Boiler

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Boiler *

  
	
   

  	
   

  	
  2.

  	
  Economizer

  
	
   

  	
   

  	
  3.

  	
  Superheat/Reheat Panels

  
	
   

  	
   

  	
  4.

  	
  Water Walls

  
	
   

  	
   

  	
  5.

  	
  Heater Drains & Vents

  
	
   

  	
   

  	
  6.

  	
  Sootblowers

  
	
   

  	
   

  	
  7.

  	
  Burners

  

 

65

 

APPENDIX C

 

LICENSE AGREEMENT

 

THIS AGREEMENT made and entered into as of
this 1st day of February, 1993, by and between LOUISVILLE GAS AND ELECTRIC
COMPANY, a Kentucky corporation, having its principal office at 220 West Main
Street, P.O. Box 32010, Louisville, Kentucky 40202, (“Louisville or Licensor”)
and Indiana Municipal Power Agency, a body corporate and politic and a
political subdivision of the State of Indiana, having its principal offices at
11610 North College Avenue, Cannel, Indiana 46032 (“IMPA or Licensee~)

 

WITNESSETH:

 

WHEREAS Louisville is the owner of the
Trimble County Plant which includes Trimble County Unit 1, the Trimble County
General Plant Facilities and the Trimble County Site; and

 

WHEREAS Illinois Municipal Electric Agency
(“IMEA”) owns an undivided 12.12 percent interest in Trimble County Unit 1; and

 

WHEREAS pursuant to the Participation
Agreement dated February 1, 1993, by and between Louisville and IMPA (the
“Participation Agreement”), the terms of which are incorporated by reference
herein, Louisville has sold to IMPA, and IMPA has purchased from Luisville a 12.88%
undivided ownership interest in Trimble County Unit 1 as tenants in common; and

 

WHEREAS IMPA desires to obtain a nonexclusive
license to use the Trimble County General Plant Facilities on the Trimble
County Site in a manner consistent with IMPA’s ownership interest and so long
as it may hold its interest in Trimble County Unit 1.

 

NOW THEREFORE, in consideration of the mutual
covenants and promises herein contained, the parties agree as follows:

 

1.                                      DEFINITIONS:

 

The terms Trimble County Unit 1, Trimble
County General Plant Facilities, Trimble County Site and Trimble County Plant
as used herein shall be defined as set forth in the Participation Agreement.

 

2.                                      GRANT:

 

Upon the terms, payments and conditions set
forth in the Participation Agreement, incorporated herein by reference,
Louisville hereby grants to IMPA a nonexclusive license to use the Trimble
County General Plant Facilities to the extent necessary for efficient and full
use by IMPA of its proportional ownership interest in Trimble County Unit 1.
Louisville shall retain full ownership of the Trimble County General Plant
Facilities.

 

66

 

3.                                      USE

 

a)                                     IMPA covenants
that its use of the Trimble County General Plant Facilities pursuant to the
license granted herein will be consistent with the Participation Agreement and
otherwise in full compliance with all applicable laws, ordinances, statutes,
codes, easements and restrictions.

 

b)                                    IMPA acknowledges
that this nonexclusive license shall in no way restrict or prohibit Louisville
from constructing additional units or facilities or expanding present units or
facilities in a manner consistent with the Participation Agreement.

 

4.                                      DURATION AND
TERMINATION

 

Unless otherwise terminated by mutual
agreement of the parties, this Agreement and the license granted herein shall
continue in full force and effect until the expiration or termination of the
Participation Agreement.

 

5.                                      NOTICES

 

All notices, requests and demands and other
communications given or made in connection with this Agreement, shall be given
or made pursuant to and, in accordance with, the Participation Agreement.

 

6.                                      CONSTRUCTION
AND ASSIGNMENT

 

a)                                     This Agreement
shall be binding on and inure to the benefit of the Licensor, its legal
representatives, successors, heirs and assigns.

 

b)                                    This Agreement
shall be binding on and inure to the benefit of the Licensee, but shall not be
transferable or assignable by the Licensee except as permitted by and
consistent with the Participation Agreement.

 

c)                                     This Agreement
shall be deemed to be a contract made under the laws of the Commonwealth of
Kentucky, and shall be construed and interpreted according to the laws of said
state.

 

7.                                      MODIFICATION:

 

This Agreement and the Participation
Agreement embody all the understandings and obligations between the parties
with respect to the subject matter hereof. No amendment or modification of this
Agreement shall be valid or binding upon the parties unless made in writing and
signed on behalf of each of the parties by their respective proper officers,
duly authorized.

 

IN WITNESS WHEREOF, the parties caused this
Agreement to be executed as of the date first written above.

 

67

 

	
   

  	
  LOUISVILLE GAS AND ELECTRIC COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Chris

  
	
   

  	
   

  	
  Vice President and General Manager,

  
	
   

  	
   

  	
  Wholesale Electric Business

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDIANA MUNICIPAL POWER AGENCY

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Frank R. Rudolph,

  
	
   

  	
   

  	
  Chairman

  
						

 

68

 

List of Trimble County General
Plant Facilities

 

STRUCTURES

 

	
  A.

  	
   

  	
  Service Building

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab

  
	
   

  	
   

  	
   

  	
  c.

  	
  Elevated Floors

  
	
   

  	
   

  	
   

  	
  d.

  	
  Unloading Ramps

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Columns & Girders

  
	
   

  	
   

  	
  3.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Insulated Metal Siding

  
	
   

  	
   

  	
   

  	
  b.

  	
  Glass Curtain Wall

  
	
   

  	
   

  	
   

  	
  c.

  	
  Concrete & Built-Up Roof

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  As Fired Sample House

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab

  
	
   

  	
   

  	
   

  	
  c.

  	
  Elevated Floors

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Columns & Girders

  
	
   

  	
   

  	
   

  	
  b.

  	
  Stairways

  
	
   

  	
   

  	
   

  	
  c.

  	
  Grating

  
	
   

  	
   

  	
  3.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Insulated Metal Siding

  
	
   

  	
   

  	
   

  	
  b.

  	
  Concrete & Built-Up Roofing

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Screenwell

  
	
   

  	
   

  	
  1.

  	
  Piles

  
	
   

  	
   

  	
   

  	
  a.

  	
  Sheet Piles

  
	
   

  	
   

  	
   

  	
  b.

  	
  H-Piles

  
	
   

  	
   

  	
  2.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Walls

  
	
   

  	
   

  	
   

  	
  b.

  	
  Elevated Floors

  
	
   

  	
   

  	
  3.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Columns & Girders

  
	
   

  	
   

  	
   

  	
  b.

  	
  Miscellaneous Platforms

  
	
   

  	
   

  	
  4.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Insulate Metal Siding

  
	
   

  	
   

  	
   

  	
  b.

  	
  Concrete & Built-Up Roof

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Stack

  
	
   

  	
   

  	
  1.

  	
  Concrete

  

 

69

 

	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab

  
	
   

  	
   

  	
   

  	
  c.

  	
  Concrete Shell & Liner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Coal Handling

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Barge Unloader

  
	
   

  	
   

  	
  1.

  	
  Piles

  	
   

  
	
   

  	
   

  	
   

  	
  a.

  	
  Sheet Piles

  
	
   

  	
   

  	
   

  	
  b.

  	
  H-Piles

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Columns & Girders

  
	
   

  	
   

  	
   

  	
  b.

  	
  Stairways

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Transfer House

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  a.

  	
  Columns & Girders

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Uninsulated Metal Siding

  
	
   

  	
   

  	
   

  	
  b.

  	
  Concrete & Built-Up

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  As Delivered Sample House

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab

  
	
   

  	
   

  	
   

  	
  c.

  	
  Elevated Floors

  
	
   

  	
   

  	
   

  	
  d.

  	
  Equipment Foundations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Columns & Girders

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Uninsulated Metal Siding

  
	
   

  	
   

  	
   

  	
  b.

  	
  Concrete & Built-Up Roofing

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Coal Dock Electrical Service Building

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  

 

70

 

	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Pre-Engineered Building

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Radial Stacker

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Base Slab Rail

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Reclaim Hopper & Tunnel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab

  
	
   

  	
   

  	
   

  	
  c.

  	
  Wails

  
	
   

  	
   

  	
   

  	
  d.

  	
  Elevated Slab

  
	
   

  	
   

  	
   

  	
  e.

  	
  Access Stairway

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Crusher House

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab

  
	
   

  	
   

  	
   

  	
  c.

  	
  Elevated Floors

  
	
   

  	
   

  	
   

  	
  d.

  	
  Equipment Foundations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Columns & Girders K Stairways

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Uninsulated Metal Siding Crusher House
  Electrical Building

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Pre-Engineered Building

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Coal Maintenance Building

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  

 

71

 

	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Pre-Engineered Building

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Conveyors A, B, C, D, E, & S

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Piles

  	
   

  
	
   

  	
   

  	
   

  	
  a.

  	
  Bearing Piles

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Steel Trusses

  
	
   

  	
   

  	
   

  	
  b.

  	
  Conveyor Bents

  
	
   

  	
   

  	
   

  	
  C.

  	
  Stairways

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Conveyor Uninsulated Metal Siding

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Conveyors Fl, F2, Gi, and G2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Steel Trusses

  
	
   

  	
   

  	
   

  	
  b.

  	
  Conveyor Bents

  
	
   

  	
   

  	
   

  	
  c.

  	
  Stairways

  
	
   

  	
   

  	
   

  	
  d.

  	
  Gallery Steel Enclosure

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Gallery Uninsulated Metal Siding

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Reactant Handling Barge Unloader

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1. Piles

  
	
   

  	
   

  	
   

  	
  a.

  	
  Sheet Piles

  
	
   

  	
   

  	
   

  	
  b.

  	
  H-Piles

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Columns & Girders

  
	
   

  	
   

  	
   

  	
  b.

  	
  Stairways

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Enclosures

  

 

72

 

	
   

  	
   

  	
   

  	
  a.

  	
  Uninsulated Metal Siding

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Transfer House

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1. Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab

  
	
   

  	
   

  	
   

  	
  c.

  	
  Elevated Floors

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Columns & Girders

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Insulated Metal Siding

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Live Action Pile Enclosure

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab - Rail

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  A-Frame Structural Steel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Uninsulated Metal Siding

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dead Storage Pile

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slabs

  
	
   

  	
   

  	
   

  	
  c.

  	
  Walls

  
	
   

  	
   

  	
   

  	
  d.

  	
  Elevated Slab

  
	
   

  	
   

  	
   

  	
  e.

  	
  Access Stairway

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Conveyors A, B, and C

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Steel Trusses

  
	
   

  	
   

  	
   

  	
  b.

  	
  Conveyor Bents

  
	
   

  	
   

  	
   

  	
  c.

  	
  Stairways

  

 

73

 

	
  Reactant Prep. Building

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slab

  
	
   

  	
   

  	
   

  	
  c.

  	
  Elevated Floors

  
	
   

  	
   

  	
   

  	
  d.

  	
  Equipment Foundations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Columns & Girders

  
	
   

  	
   

  	
   

  	
  b.

  	
  Stairways

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Insulated Metal Siding

  
	
   

  	
   

  	
   

  	
  b.

  	
  Concrete & Built-Up Roofing

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Reactant Live Storage Tanks

  
	
   

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Carbon Steel Tanks

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  Water Treatment Building

  
	
   

  	
   

  	
  1.

  	
  Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slabs

  
	
   

  	
   

  	
   

  	
  c.

  	
  Walls

  
	
   

  	
   

  	
   

  	
  d.

  	
  Equipment Foundations

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Steel Structures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Columns & Girders

  
	
   

  	
   

  	
   

  	
  b.

  	
  Stairways

  
	
   

  	
   

  	
   

  	
  c.

  	
  Equipment Platforms

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Enclosures

  
	
   

  	
   

  	
   

  	
  a.

  	
  Insulated Metal Siding

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  Cooling Tower

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1. Concrete

  
	
   

  	
   

  	
   

  	
  a.

  	
  Foundations

  
	
   

  	
   

  	
   

  	
  b.

  	
  Base Slabs

  
	
   

  	
   

  	
   

  	
  c.

  	
  Poured Hyperbolic Natural Draft Tows

  

 

74

 

	
   

  	
   

  	
  I.

  	
  Station Auxiliary

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1. Concrete

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  a.

  	
  Equipment Foundations

  

 

 

	
  EQUIPMENT AND SYSTEM COMPONENTS

  
	
   

  
	
  A.

  	
  Service Building

  
	
   

  
	
   

  	
  1.

  	
  Masonry Blockwork

  
	
   

  	
  2.

  	
  Fire Protection Equipment

  
	
   

  	
  3.

  	
  Restrooms, Lockers, and Showers

  
	
   

  	
  4.

  	
  HVAC

  
	
   

  	
  5.

  	
  Roof Drains and Plumbing

  
	
   

  	
  6.

  	
  Lighting

  
	
   

  	
  7.

  	
  Communications

  
	
   

  	
  8.

  	
  Office, Lab, and Kitchen Equipment

  
	
   

  	
  9.

  	
  Maintenance Shop Equipment

  
	
   

  	
  10.

  	
  Material Storage Bins and Shelves

  
	
   

  	
  11.

  	
  Freight Elevator

  
	
   

  	
  12.

  	
  Passenger Elevator

  
	
   

  	
   

  	
   

  
	
  B.

  	
  As Fired Sample House

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  HVAC

  
	
   

  	
  2.

  	
  Building Drains

  
	
   

  	
  3.

  	
  Fire Protection

  
	
   

  	
  4.

  	
  Lighting

  
	
   

  	
  5.

  	
  Communications

  
	
   

  	
  6.

  	
  Coal Silos

  
	
   

  	
  7.

  	
  Piping Systems

  
	
   

  	
   

  	
   

  
	
  C.

  	
  Screenwell

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Masonry Blockwork

  
	
   

  	
  2.

  	
  Multiplex System

  
	
   

  	
  3.

  	
  HVAC

  
	
   

  	
  4.

  	
  Horizontal Pumps

  
	
   

  	
  5.

  	
  Vertical Pumps

  
	
   

  	
  6.

  	
  Traveling Water Screens

  
	
   

  	
  7.

  	
  Stop Log Gates and Screens

  
	
   

  	
  8.

  	
  Bridge Crane

  
	
   

  	
  9.

  	
  Strainers

  
	
   

  	
  10.

  	
  480 Volt Equipment

  

 

75

 

	
   

  	
  11.

  	
  208/110 Volt Equipment

  
	
   

  	
  12.

  	
  Conduit and Cable Tray

  
	
   

  	
  13.

  	
  Lighting

  
	
   

  	
  14.

  	
  Communications

  
	
   

  	
  15.

  	
  Multiplex System

  
	
   

  	
  16.

  	
  Roof Drains and Plumbing

  
	
   

  	
   

  	
   

  
	
  D.

  	
  Stack

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Communications

  
	
   

  	
   

  	
   

  
	
  E.

  	
  Coal Handling

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Coal Barge Unloader

  
	
   

  	
  2.

  	
  Conduit and Cable Tray

  
	
   

  	
  3.

  	
  Lighting

  
	
   

  	
  4.

  	
  Communications

  
	
   

  	
   

  	
   

  
	
  Transfer House

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Barge Unloader Bin

  
	
   

  	
  2.

  	
  Feeders and Chutes

  
	
   

  	
  3.

  	
  Dust Collection/Suppression Equipment

  
	
   

  	
  4.

  	
  Sprinkler System

  
	
   

  	
  5.

  	
  Monorail and Trolley Hoist

  
	
   

  	
  6.

  	
  Conduit and Cable Tray

  
	
   

  	
  7.

  	
  Lighting

  
	
   

  	
  8.

  	
  Communications

  
	
   

  	
   

  	
   

  
	
  As Delivered Sample House

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Feeders and Chutes

  
	
   

  	
  2.

  	
  Dust Collection/Suppression Equipment

  
	
   

  	
  3.

  	
  As Delivered Sampling System

  
	
   

  	
  4.

  	
  Sprinkler System

  
	
   

  	
  5.

  	
  Control Room - Static Wall Siding

  
	
   

  	
  6.

  	
  Fire Protection System

  
	
   

  	
  7.

  	
  Conduit and Cable Tray

  
	
   

  	
  8.

  	
  Lighting

  
	
   

  	
  9.

  	
  Communications

  
	
   

  	
   

  	
   

  
	
  Coal Dock Electrical Service Building

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Masonry Blockwork

  
	
   

  	
  2.

  	
  Suspended Ceiling

  
	
   

  	
  3.

  	
  Static Wall Siding

  

 

76

 

	
   

  	
  4.

  	
  HVAC

  
	
   

  	
  5.

  	
  Fire Protection System

  
	
   

  	
  6.

  	
  Domestic Piping

  
	
   

  	
  7.

  	
  Conduit and Cable Tray

  
	
   

  	
  8.

  	
  Lighting

  
	
   

  	
  9.

  	
  Communications

  
	
   

  	
  10.

  	
  4160 Volt Equipment

  
	
   

  	
  11.

  	
  480 Volt Equipment

  
	
   

  	
  12.

  	
  208/110 Volt Equipment

  
	
   

  	
  13.

  	
  Multiplex System

  
	
   

  	
   

  	
   

  
	
  Radial Stacker

  
	
   

  	
   

  	
   

  
	
   

  	
  I.

  	
  Radial Stacker

  
	
   

  	
  2.

  	
  HVAC Equipment

  
	
   

  	
  3.

  	
  Unit Substation

  
	
   

  	
  4.

  	
  Motor Control Centers

  
	
   

  	
   

  	
   

  
	
  Reclaim Hopper and Tunnel

  
	
   

  	
   

  	
   

  
	
   

  	
  1. Hopper

  
	
   

  	
  2.

  	
  Feeders and Chutes

  
	
   

  	
  3.

  	
  Vertical Pumps

  
	
   

  	
  4.

  	
  Conduit and Cable Tray

  
	
   

  	
  5. Lighting

  
	
   

  	
   

  	
   

  
	
  Crusher House

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Feeders and Chutes

  
	
   

  	
  2.

  	
  Crusher Bin

  
	
   

  	
  3.

  	
  Dust Collection/Suppression Equipment

  
	
   

  	
  4.

  	
  Magnetic Separators and Scales

  
	
   

  	
  5.

  	
  Crusher

  
	
   

  	
  6.

  	
  Conduit and Cable Tray

  
	
   

  	
  7.

  	
  Lighting

  
	
   

  	
  8.

  	
  Communications

  
	
   

  	
  9.

  	
  Piping Systems

  
	
   

  	
   

  	
   

  
	
  Crusher House Electrical Building

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Masonry Walls

  
	
   

  	
  2.

  	
  Static Wall Siding

  
	
   

  	
  3.

  	
  Fire Protection Equipment

  
	
   

  	
  4.

  	
  Domestic Water

  
	
   

  	
  5.

  	
  Conduit and Cable Tray

  
	
   

  	
  6.

  	
  Lighting

  
	
   

  	
  7.

  	
  Communications

  

 

77

 

	
   

  	
  8.

  	
  Piping Systems

  
	
   

  	
  9.

  	
  4160 Volt Equipment

  
	
   

  	
  10.

  	
  480 Volt Equipment

  
	
   

  	
  11.

  	
  208/110 Volt Equipment

  
	
   

  	
  12.

  	
  Multiplex System

  
	
   

  	
   

  	
   

  
	
  Coal Maintenance Building

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Masonry Blockwork

  
	
   

  	
  2.

  	
  Suspended Ceiling

  
	
   

  	
  3.

  	
  Dry Wall Partitions

  
	
   

  	
  4.

  	
  HVAC

  
	
   

  	
  5.

  	
  Sprinkler System

  
	
   

  	
  6.

  	
  Hoist and Lifts

  
	
   

  	
   

  	
   

  
	
  F.

  	
  Reactant Handling Barge Unloader

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Limestone Barge Unloader

  
	
   

  	
  2.

  	
  Conduit and Cable Tray

  
	
   

  	
  3.

  	
  Lighting

  
	
   

  	
  4.

  	
  Communications

  
	
   

  	
   

  	
   

  
	
  Transfer House

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Feeders

  
	
   

  	
  2.

  	
  Hoppers

  
	
   

  	
  3.

  	
  Piping Systems

  
	
   

  	
  4.

  	
  Conduit and Cable Tray

  
	
   

  	
  5.

  	
  Lighting

  
	
   

  	
   

  	
   

  
	
  Live Active Pile Enclosure

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Reclaimer

  
	
   

  	
  2.

  	
  Conduit and Cable Tray

  
	
   

  	
  3.

  	
  Lighting

  
	
   

  	
   

  	
   

  
	
  Dead Storage Pile

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Hopper

  
	
   

  	
  2.

  	
  Chutes and Feeders

  
	
   

  	
  3.

  	
  Sump Pumps

  
	
   

  	
  4.

  	
  Conduit and Cable Tray

  
	
   

  	
  S.

  	
  Lighting

  
	
   

  	
   

  	
   

  
	
  Reactant Prep. Building

  

 

78

 

	
   

  	
  1.

  	
  Masonry Blockwork

  
	
   

  	
  2.

  	
  HVAC Equipment

  
	
   

  	
  3.

  	
  Fire Protection Equipment

  
	
   

  	
  4.

  	
  Piping Systems

  
	
   

  	
  5.

  	
  Limestone Crushers and Hoppers

  
	
   

  	
  6.

  	
  Compressors

  
	
   

  	
  7.

  	
  Lube Oil Systems

  
	
   

  	
  8.

  	
  Feeders and Chutes

  
	
   

  	
  9.

  	
  Bridge Crane

  
	
   

  	
  10.

  	
  4160 Volt Equipment

  
	
   

  	
  11.

  	
  480 Volt Equipment

  
	
   

  	
  12.

  	
  208/110 Volt Equipment

  
	
   

  	
  13.

  	
  Conduit and Cable Tray

  
	
   

  	
  14.

  	
  Lighting

  
	
   

  	
  15.

  	
  Communications

  
	
   

  	
  16.

  	
  Multiplex System

  
	
   

  	
   

  	
   

  
	
  Reactant Live Storage Tanks

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Tank Agitators

  
	
   

  	
   

  	
   

  
	
  G.

  	
  Water Treatment Building

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Masonry Blockwork

  
	
   

  	
  2.

  	
  Static Wall Siding

  
	
   

  	
  3.

  	
  HVAC

  
	
   

  	
  4.

  	
  Fire Protection Equipment

  
	
   

  	
  S.

  	
  Monorail

  
	
   

  	
  6.

  	
  Piping Systems

  
	
   

  	
  7.

  	
  Sanitary Waste Treatment Equipment

  
	
   

  	
  8.

  	
  Water Treatment Equipment

  
	
   

  	
  9.

  	
  Condensate Storage Tank

  
	
   

  	
  10.

  	
  Conduit and Cable Tray

  
	
   

  	
  11.

  	
  4160 Volt Equipment

  
	
   

  	
  12.

  	
  480 Volt Equipment

  
	
   

  	
  13.

  	
  208/110 Volt Equipment

  
	
   

  	
  14.

  	
  Lighting

  
	
   

  	
  15.

  	
  Communications

  
	
   

  	
  16.

  	
  Multiplex System

  
	
   

  	
  17.

  	
  Motor Driven Fire Pump

  
	
   

  	
  18.

  	
  Chemical Injection Equipment

  
	
   

  	
  19.

  	
  Demineralizer Water System

  
	
   

  	
   

  	
   

  
	
  H.

  	
  Cooling Tower

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Cooling Tower Pumps

  

 

79

 

	
   

  	
  2.

  	
  Circulating Water Lines

  
	
   

  	
  3.

  	
  Condenser

  
	
   

  	
  4.

  	
  480 Volt Equipment

  
	
   

  	
  5.

  	
  Lighting

  
	
   

  	
  6.

  	
  Communications

  
	
   

  	
   

  	
   

  
	
  I.

  	
  Station Auxiliary

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  138 Volt Equipment

  
	
   

  	
  2.

  	
  6900 Volt Equipment

  
	
   

  	
  3.

  	
  480 Volt Equipment

  
	
   

  	
  4.

  	
  208/110 Volt Equipment

  
	
   

  	
  5.

  	
  Sprinkler System

  
	
   

  	
   

  	
   

  
	
  OTHER EQUIPMENT, SYSTEMS, AND STRUCTURES

  
	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Fuel Oil Tanks, Piping, Pump House, and
  Electrical Building

  
	
  2.

  	
   

  	
  Ash Pond, Pipe Rack, and Pipe

  
	
  3.

  	
   

  	
  Emergency Ash Pond

  
	
   

  	
   

  	
   

  
	
  SITE IMPROVEMENTS

  
	
   

  	
   

  	
   

  
	
  1.

  	
  General Site Grating and Drainage

  
	
  2.

  	
  Helicopter Pad

  
	
  3.

  	
  Monitoring Wells

  
	
  4.

  	
  Roadways

  
	
  5.

  	
  Guard Facilities

  
	
  6.

  	
  Underground Electrical Ducts

  
	
  7.

  	
  Sanitary Sewer Lines

  
	
  8.

  	
  Shoreline Protection

  
	
  9.

  	
  Fire Protection Lines

  
	
  10.

  	
  Potable Water Lines

  
	
  11.

  	
  Cathodic Protection

  

 

80

 

APPENDIX D

KNOWN DEFECTS AT CLOSING

 

The attached list of known defects for
Trimble County Unit I and the Trimble County General Plant Facilities as they
pertain to Trimble County Unit 1 includes items for which construction is not
complete as well as items where a deficiency is noted, and to the best of Louisville’s
knowledge, information, and belief the attached list is current as of Closing.

 

	
   

  	
  LOUISVILLE GAS AND ELECTRIC COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Chris Hermann

  
	
   

  	
   

  	
  Vice President and General Manager

  
	
   

  	
   

  	
  Wholesale Electric Business

  
					

 

81

 

KNOWN DEFECTS AND OPEN WARRANTY
CLAIMS AT CLOSING

 

Known design defects:

 

•                  Replace boiler
penthouse roof and sidewalls. Original roof was installed with
non-specification material.

 

Open warranty claims:

 

•                  Replace FGD
module purge air and vent dampers. (ABB)

 

•                  Modify demister
wash lance seals. (ABB)

 

•                  Redesign
precipitator high voltage insulator compartment heater/blower system. (ABB)

 

•                  Replace
generator field breaker. (GE)

 

•                  Replace boiler
feed pump turbine turning gears. (GE)

 

•                  Modify FGD pump
bay trolley system. (ABB)

 

•                  Modify induced
draft fan variable-frequency drive speed-control circuit. (Ross Hill)

 

•                  Backcharge for
repair work on induced draft fan motors (Buffalo Forge)

 

82

 

APPENDIX E

DEED

 

THIS DEED is made and entered into this 1st
day of February, 1993, by and between LOUISVILLE GAS AND ELECTRIC COMPANY, a
Kentucky corporation, of 220 West Main Street, P.O. Box 32010, Louisville,
Kentucky 40232 (“Grantor”) and INDIANA MUNICIPAL POWER AGENCY, a body corporate
and politic and a political subdivision of the State of Indiana, of 11610 North
College Avenue, Carmel, Indiana 46032 (“Grantee”).

 

WITNESSETH:

 

That for and in consideration of the sum of
Seven Million Two Hundred Eight Thousand Seven Hundred and Fifty~Nine Dollars
($7,208,759.00) and other good and valuable consideration, the receipt of which
is hereby acknowledged, Grantor has bargained and sold and does hereby grant
and convey to Grantee in fee simple with covenant of GENERAL WARRANTY, the
following described property located in Trimble County, Kentucky, being a
12.88~ undivided interest as tenants in common in the real property beneath
Trimble County Unit 1 (“the Property”):

 

Being a
certain parcel of land located to the north of Kentucky Highway 754 and to the
west of Kentucky Highway 1838, north of Wise’s Landing in Trimble County,
Kentucky and being more particularly described as follows:

 

Beginning at a
3 inch x 3 inch concrete monument in the northwest right-of-way line of
Kentucky Highway 754 at its intersection with the west right-of-way of Wise’s
Landing road; thence North 17° 30’ 19” West, 1925.28 feet to an iron pin being
the True Point of Beginning Also known as plant grid coordinate N 32+50.00,
E17+82.00; thence North 29° 02’ 25” West, 176.00 feet to a scribe mark in
concrete and being plant grid coordinate N 34+26.00, E 17÷82.00, said line
being Column Line N; thence North 60° 57’ 35” East, 42.00 feet to a scribe mark
in concrete and being plant grid coordinate N34+26.00, E 18+24.00; thence North
4° 38’ 59” West, 42.27 feet to plant grid coordinate N 34+62.00, E 18+48.00;
thence North 60° 57’ 35” East, 759.17 feet to plant grid coordinate N 34÷62.00,
E 26+07.17, said line being Column Line 9, common line between Unit No. 1 and
Unit No. 2 (Future); thence South 29° 02’ 25” East, 55.25 feet to a R R spike
being plant grid coordinate N 34÷06.75, E 26+07.17; thence South 60° 57’ 35”
West, 57.17 feet to plant grid coordinate N 34+06.75, E 25+50.00; thence South
29° 02’ 25” East, 156.75 feet to plant grid coordinate N 32÷50.00, E 25÷50.00,
said line being Column Line A; thence South 60° 57’ 35” West, 768.00 feet to
the True Point of Beginning, said line being Column’s Line 17, common column
line between Unit No. 1 and the Service Building. Said tract containing 3.766
acres. Being a part of the same conveyed to Grantor by deed of record in the
office of the Trimble County Clerk in Deed Book No. 49, Page No. 602.

 

TO HAVE AND TO HOLD the Property, with all
appurtenances and privileges thereunto belonging, unto the Grantee, its
successors and assigns.

 

83

 

Grantor covenants that it is lawfully seized
of fee simple title to the Property and has full right and power to convey
same, subject to the rights of Illinois Municipal Electric Agency (“IMEA”)
which owns a 12.12% undivided interest as tenants in common and subject to the
Participation Agreement dated February 28, 1991 by and between Grantor and IMEA
and the Participation Agreement dated February 1, 1993, by and between Grantor
and Grantee and incorporated by reference herein, memoranda of which are on
file in the Office of the Trimble County Clerk, which contain, among other
things, certain restrictions on resale of the Property, the right Q~ first
refusal upon transfer of the Property, the right of IMEA and Grantee to
participate in the ownership of the next generating unit built at the Trimble
County Site, and waiver of the right of partition of the Property, and otherwise
the Property is free and clear of all encumbrances except those relating to the
IMEA sale that are of record and all ad valorem taxes and assessments assessed
against the Property for 1993 • and all subsequent years which Grantee assumes
and agrees to pay.

 

IN TESTIMONY WHEREOF, witness the signature
of the Grantor as of the day, month and year first above-written.

 

	
   

  	
  LOUISVILLE GAS AND ELECTRIC COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Chris Hermann

  
	
   

  	
   

  	
  Vice President and General Manager

  
	
   

  	
   

  	
  Wholesale Electric Business

  
					

 

84

 

CONSIDERATION CERTIFICATE

 

Grantor and Grantee hereby certify that the
consideration reflected in the foregoing Deed is the full consideration paid
for the Property.

 

	
   

  	
  LOUISVILLE GAS AND ELECTRIC COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Chris

  
	
   

  	
   

  	
  Vice President and General Manager,

  
	
   

  	
   

  	
  Wholesale Electric Business

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDIANA MUNICIPAL POWER AGENCY

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Frank R. Rudolph,

  
	
   

  	
   

  	
  Chairman

  
							

 

 

	
  COMMONWEALTH OF KENTUCKY

  	
  )

  
	
   

  	
  )(SS

  
	
  COUNTY OF JEFFERSON

  	
  )

  

 

The foregoing Deed and Consideration
Certificate were signed, acknowledged and sworn to before me on this 29th day
of January, 1993, by Chris Hermann , Vice President and General Manager,
Wholesale Electric Business of LOUISVILLE GAS AND ELECTRIC COMPANY, a Kentucky
corporation, on behalf of the corporation.

 

	
  My Commission expires:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  State of Kentucky at Large

  
					

 

85

 

	
  STATE OF INDIANA

  	
  )

  
	
   

  	
  )SS

  
	
  COUNTY OF HAMILTON

  	
  )

  

 

The foregoing Consideration Certificate was
signed, acknowledged and sworn to before me on this 29th day of January , 1993
, by Frank R. Rudolf, as Chairman of Indiana Municipal Power Agency, a body
corporate and politic and a political subdivision of the State of Indiana, on
behalf of the corporation.

 

	
  My Commission expires:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  State of Indiana

  
					

 

 

	
  (AFFIX SEAL]

  
	
   

  
	
  THIS INSTRUMENT PREPARED BY:

  
	
   

  
	
   

  	
   

  
	
  C. Kent Hatfield

  
	
  John M. Franck II

  
	
  MIDDLETON & REUTLINGER

  
	
  2500 Brown & Williamson Tower

  
	
  Louisville, Kentucky 40202

  
	
  Telephone (502) 584-1135

  

 

86

 

APPENDIX F

 

EASEMENT

 

THIS EASEMENT dated the 1st day of February,
1993, by and between LOUISVILLE GAS AND ELECTRIC COMPANY, a Kentucky
corporation located at 220 West Main Street, P.O. Box 32010, Louisville,
Kentucky 40232, (the “Grantor”) , and INDIANA MUNICIPAL POWER AGENCY, a body
corporate and politic and a political subdivision of the State of Indiana,
located at 11610 North College Avenue, Carmel, Indiana 46032 (the “Grantee”).

 

FOR A VALUABLE CONSIDERATION, the receipt of
which is hereby acknowledged, Grantor does hereby grant and convey unto
Grantee, its successors and assigns, a nonexclusive easement to use the Trimble
County Site to the extent necessary for use by Grantee with respect to its
proportional ownership of Trimble County Unit 1 as defined in the Participation
Agreement by and between Grantor and Grantee dated February 1, 1993
(“Participation Agreement”) . The Trimble County Site is located in Trimble
County, Kentucky (the “Burdened Property” ) , as shown on Exhibit “A” attached
hereto and made a part hereof. The Burdened Property was conveyed to Grantor by
Deeds referenced on Exhibit “B” attached hereto and made a part hereof.

 

Grantor grants this easement upon the following
terms and conditions:

 

1.                                      Participation
Agreement. Grantee will at all times abide by the terms of the Participation
Agreement.

 

2.                                      Use by Grantee.
The Burdened Property may be used by Grantee only for the purposes consistent
with the terms of the Participation Agreement.

 

3.                                      Use by Grantor.
Grantor reserves the right to fully use and enjoy the Burdened Property as well
as to transfer or convey portions thereof for any use or purpose which does not
unreasonably interfere with the exercise by Grantee of the rights granted by
the Participation Agreement. Should Grantee’s release of this Easement be
requested as to such portions transferred or conveyed, such release shall not
be unreasonably withheld. Grantee acknowledges that this nonexclusive easement shall
in no way restrict or prohibit Grantor from constructing additional generating
units or facilities or expanding present units or facilities which shall also
have a nonexclusive use of the Trimble County Site, to the extent necessary and
as determined in Grantor’s sole discretion.

 

4.                                      Indemnification.
Grantee will indemnify and hold Grantor harmless from and against any and all
losses, liabilities, costs, expenses, damages, claims, and causes of action
whatsoever, including reasonable attorney’s fees, arising from this Easement.

 

5.                                      Binding Effect.
This Easement shall be binding upon and inure to the benefit of Grantor and
Grantee, and their respective successors and assigns, but shall not be
transferable or assignable by Grantee except as permitted by and consistent
with the Participation Agreement.

 

6.                                      Termination. This
Easement shall terminate (i) upon the mutual agreement of Grantor and Grantee,
or (ii) if Trimble County Unit 1 ceases to be used or is abandoned, or (iii)

 

87

 

upon the failure by Grantee to remedy any
default in the performance of any term or condition of the Participation
Agreement, or (iv) upon termination of the Participation Agreement .

 

7.                                      Release. Upon
termination of this Easement, Grantee shall execute and deliver to Grantor
within ten (10) days of written demand therefor, a good and sufficient
quitclaim deed to all rights granted hereby. If Grantee fails or refuses to
deliver such deed, written notice by Grantor reciting the failure or refusal of
Grantee and terminating this grant, shall after thirty (30) days from the date
of recording be conclusive evidence against Grantee and all persons claiming
under Grantee, of the termination of this Easement.

 

8.                                      Matters of
Record. This Easement is subject to all easements, restrictions and other
matters of record.

 

IN WITNESS WHEREOF, the parties hereto have
executed this Easement on the date above set forth.

 

	
   

  	
  GRANTOR

  
	
   

  	
   

  
	
   

  	
  LOUISVILLE GAS AND ELECTRIC COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Chris

  
	
   

  	
   

  	
  Vice President and General Manager,

  Wholesale Electric Business

  
	
   

  	
   

  
	
   

  	
  GRANTEE

  
	
   

  	
   

  
	
   

  	
  INDIANA MUNICIPAL POWER AGENCY

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Frank R. Rudolph,

  
	
   

  	
   

  	
  Chairman

  
						

 

88

 

	
  COMMONWEALTH OF KENTUCKY

  	
  )

  
	
   

  	
  )(SS

  
	
  COUNTY OF JEFFERSON

  	
  )

  

 

The foregoing Deed and Consideration
Certificate were signed, acknowledged and sworn to before me on this 29th day
of January, 1993, by Chris Hermann , Vice President and General Manager,
Wholesale Electric Business of LOUISVILLE GAS AND ELECTRIC COMPANY, a Kentucky
corporation, on behalf of the corporation.

 

	
  My Commission expires:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  State of Kentucky at Large

  
					

 

	
  STATE OF INDIANA

  	
  )

  
	
   

  	
  )SS

  
	
  COUNTY OF HAMILTON

  	
  )

  

 

The foregoing Consideration Certificate was
signed, acknowledged and sworn to before me on this 29th day of January , 1993
, by Frank R. Rudolf, as Chairman of Indiana Municipal Power Agency, a body
corporate and politic and a political subdivision of the State of Indiana, on
behalf of the corporation.

 

	
  My Commission expires:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  State of Indiana

  
					

 

 

	
  (AFFIX SEAL]

  
	
   

  
	
  THIS INSTRUMENT PREPARED BY:

  
	
   

  
	
   

  	
   

  
	
  C. Kent Hatfield

  
	
  John M. Franck II

  
	
  MIDDLETON & REUTLINGER

  
	
  2500 Brown & Williamson Tower

  
	
  Louisville, Kentucky 40202

  
	
  Telephone (502) 584-1135

  

 

89

 

EXHIBIT A

 

Property Plat

 

90

 

EXHIBIT B

 

The following list of references are the
sources of title wherein Louisville Gas and Electric Company acquired properties
located in Trimble County as they pertain to the Trimble County Site. Deeds are
of record in the Office of the Clerk of Trimble County, Kentucky.

 

1.                                       DB 49 Page 602
Deed dated 4-30-1974 From Thomas Manby, Jr. Trustee. (Original Plant Site)

 

2.                                       DB 51 Page 769
Deed Dated 4-16-1976 From Thomas Manby Jr. Trustee. (Part of Original Plant
Site, located on North End of Site)

 

3.                                       DB 58 Page 321
Deed Dated 11-29-1982 From Allison Schlegel Dickey & Dianna Dey Dickey.
(Located on North End of Site)

 

4.                                       DB 65 Page 424
Deed Dated 1-22~199O From Allison Schlegel Dickey & Dianna Dey Dickey.
(Located on North End of Site)

 

5.                                       DB 63 Page 615
Deed Dated 4-2O~-1988 From Charles G. Middleton III, Trustee. (Ravine Site)

 

91

 

APPENDIX G

 

EASEMENT

 

THIS EASEMENT dated the 1st day of July, 19 9
3 , by and between INDIANA MUNICIPAL POWER AGENCY, a body corporate and politic
and a political subdivision of the State of Indiana, with its offices located
at 11610 North College Avenue, Carmel, Indiana 46032 (the “Grantor”) and
LOUISVILLE GAS AND ELECTRIC COMPANY, a Kentucky corporation, located at 220
West Main Street, P.O. Box 32010, Louisville, Kentucky 40232, (the “Grantee”)

 

FOR VALUABLE CONSIDERATION, the receipt of
which is hereby acknowledged, Grantor does hereby grant and convey unto
Grantee, its successors and assigns, a nonexclusive easement to use any real
property owned by Grantor on the Trimble County Site to the extent necessary
for use by Grantee and other owners with respect to their proportional
ownership of Trimble County Unit 1 as defined in the Participation Agreement by
and between Grantor and Grantee dated February 1, 1993 (“Participation
Agreement”) . The property owned by Grantor at the Trimble County Site is located
in Trimble County, Kentucky as shown on Exhibit “A” attached hereto and made a
part hereof (the “Burdened Property”) . A 12.88 percent undivided interest as
tenants in common of the Burdened Property was conveyed to Grantor by Deed
dated February 1, 1993, of record in Deed Book
      , Page
      , in the Office of the Clerk of Trimble
County, Kentucky.

 

Grantor grants this easement upon the
following terms and conditions:

 

1.                                       Participation
Agreement.  Grantee will at all times
abide by the terms of the Participation Agreement.

 

2 .                                    Use by Grantee
and Grantor .  The Burdened Property
may be used only for the purposes consistent with the terms of the
Participation Agreement.

 

3.                                       Indemnification.
Grantee will indemnify and hold Grantor harmless from and against any and all
losses, liabilities, costs, expenses, damages, claims, and causes of action
whatsoever, including reasonable attorney’s fees, arising from Grantee’s use of
this Easement.

 

4.                                       Binding
Effect. This Easement shall be binding upon and inure to the benefit of
Grantor and Grantee, and their respective successors and assigns, but shall not
be transferable or assignable by Grantee except as permitted by and consistent
with the Participation Agreement.

 

5.                                       Termination.
This Easement shall terminate (i) upon the mutual agreement of Grantor and
Grantee, or (ii) if Trimble County Unit 1 ceases to be used or is abandoned or
(iii) upon the failure by Grantee to remedy any default in the performance of
any term or condition of the Participation Agreement, or (iv) upon termination
of the Participation Agreement.

 

6.                                       Release.
Upon termination of this Easement, Grantee shall execute and deliver to Grantor
within ten (10) days of written demand therefor, a good and sufficient
quitclaim deed to all easement rights granted hereby. If Grantee fails or
refuses to deliver such deed, written notice by

 

92

 

Grantor reciting the failure or refusal of
Grantee and terminating this grant, shall after thirty (30) days from the date
- of recording be conclusive evidence against Grantee and all persons claiming
under Grantee of the termination of this Easement.

 

7.                                       Matters of
Record. This Easement is subject to all easements, restrictions and other
matters of record.

 

IN WITNESS WHEREOF, the parties hereto have
executed this Easement on the date above set forth.

 

	
   

  	
  GRANTOR

  
	
   

  	
   

  
	
   

  	
  LOUISVILLE GAS AND ELECTRIC COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Chris

  
	
   

  	
   

  	
  Vice President and General Manager,

  Wholesale Electric Business

  
	
   

  	
   

  
	
   

  	
  GRANTEE

  
	
   

  	
   

  
	
   

  	
  INDIANA MUNICIPAL POWER AGENCY

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Frank R. Rudolph,

  
	
   

  	
   

  	
  Chairman

  
						

 

93

 

	
  COMMONWEALTH OF KENTUCKY

  	
  )

  
	
   

  	
  )(SS

  
	
  COUNTY OF JEFFERSON

  	
  )

  

 

The foregoing Deed and Consideration
Certificate were signed, acknowledged and sworn to before me on this 29th day
of January, 1993, by Chris Hermann , Vice President and General Manager,
Wholesale Electric Business of LOUISVILLE GAS AND ELECTRIC COMPANY, a Kentucky
corporation, on behalf of the corporation.

 

	
  My Commission expires:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  State of Kentucky at Large

  
					

 

	
  STATE OF INDIANA

  	
  )

  
	
   

  	
  )SS

  
	
  COUNTY OF HAMILTON

  	
  )

  

 

The foregoing Consideration Certificate was
signed, acknowledged and sworn to before me on this 29th day of January , 1993
, by Frank R. Rudolf, as Chairman of Indiana Municipal Power Agency, a body
corporate and politic and a political subdivision of the State of Indiana, on
behalf of the corporation.

 

	
  My Commission expires:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  State of Indiana

  
					

 

	
  (AFFIX SEAL]

  
	
   

  
	
  THIS INSTRUMENT PREPARED BY:

  
	
   

  
	
   

  	
   

  
	
  C. Kent Hatfield

  
	
  John M. Franck II

  
	
  MIDDLETON & REUTLINGER

  
	
  2500 Brown & Williamson Tower

  
	
  Louisville, Kentucky 40202

  
	
  Telephone (502) 584-1135

  

 

94

 

EXHIBIT A

 

Being a certain parcel of land located to the
north of Kentucky Highway 754 and to the west of Kentucky Highway 1838, north
of Wise’s Landing in Trimble County, Kentucky and being more particularly
described as follows:

 

Beginning at a 3 inch x 3 inch concrete
monument in the northwest right-of-way line of Kentucky Highway 754 at its
intersection with the west right- of -way of Wise “ s Landing road; thence
North 17° 30’ 19” West, 1925.28 feet to an iron pin being the True Point of Beginning.  Also known as plant grid coordinate N
32+50.00, El7+82.00; thence North 29° 02’ 25” West, 176.00 feet to a scribe
mark in concrete and being plant grid coordinate N 34+26.00, E 17+82.00, said
line being Column Line N; thence North 60° 57’ 35” East, 42.00 feet to a scribe
mark in concrete and being plant grid coordinate N34+26.00, E 18+24.00; thence
North 4° 38’ 59” West, 42.27 feet to plant grid coordinate N 34+62.00, E
18+48.00; thence North 60° 57’ 35” East, 759.17 feet to plant grid coordinate N
34+62.00, E 26+07.17, said line being Column Line 9, common line between Unit
No. 1 and Unit No. 2 (Future); thence South 29° 02’ 25” East, 55.25 feet to a R
R spike being plant grid coordinate N 34+06.75, E 26+07.17; thence South 60°
57’ 35” West, 57.17 feet to plant grid coordinate N 34+06.75, E 25+50.00; thence
South 29° 02’ 25” East, 156.75 feet to plant grid coordinate N 32+50.00, E
25+50.00, said line being Column Line A; thence South 60° 57’ 35” West, 768.00
feet to the True Point of Beginning, said line being Column Line 17, common
column line between Unit No. 1 and the Service Building. Said tract containing
3.766 acres. Being a part of the same conveyed to Grantor by deed of record in
the office of the Trimble County Clerk in Deed Book No.
      , Page No.      .

 

95EXHIBIT
10.44

 

 

PARTICIPATION AGREEMENT

 

BY AND AMONG

 

LOUISVILLE GAS AND ELECTRIC COMPANY

220 West Main Street

Post Office Box 32010 (40232)

Louisville, Kentucky 40202

 

AND

 

KENTUCKY UTILITIES COMPANY

220 West Main Street

Post Office Box 32010 (40232)

Louisville, Kentucky 40202

 

AND

 

INDIANA MUNICIPAL POWER AGENCY

11610 North College Avenue

Carmel, Indiana 46032

 

AND

 

ILLINOIS MUNICIPAL ELECTRIC AGENCY

919 South Spring Street

Springfield, Illinois 62704

 

 

TABLE OF CONTENTS

 

	
  ARTICLE
  1. DEFINITIONS AND INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Definitions.

  	
   

  
	
   

  	
  1.2

  	
  Rules of Interpretation.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  2. OWNERSHIP

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Ownership.

  	
   

  
	
   

  	
  2.2

  	
  Additional Generating
  Units.

  	
   

  
	
   

  	
  2.3

  	
  Modification of Existing
  Property.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  3. DEVELOPMENT CLOSING

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Development Closing.

  	
   

  
	
   

  	
  3.2

  	
  Development Costs.

  	
   

  
	
   

  	
  3.3

  	
  Deliveries
  of Louisville at the Development Closing.

  	
   

  
	
   

  	
  3.4

  	
  Effect
  of Development Closing on Article 15 Rights.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  4. REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  IMPA
  Representations and Warranties.

  	
   

  
	
   

  	
  4.2

  	
  Louisville
  Representations and Warranties.

  	
   

  
	
   

  	
  4.3

  	
  Kentucky
  Utilities Representations and Warranties.

  	
   

  
	
   

  	
  4.4

  	
  IMEA
  Representations and Warranties.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  5. DEVELOPMENT AND CONSTRUCTION

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Responsibility for
  Development.

  	
   

  
	
   

  	
  5.2

  	
  Responsibility for Permits.

  	
   

  
	
   

  	
  5.3

  	
  Development Schedule.

  	
   

  
	
   

  	
  5.4

  	
  Authorization to Construct.

  	
   

  
	
   

  	
  5.5

  	
  Responsibility for
  Construction.

  	
   

  
	
   

  	
  5.6

  	
  Construction Schedule.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  6. CONSTRUCTION CLOSING AND WITHDRAWAL

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Construction Closing.

  	
   

  
	
   

  	
  6.2

  	
  Closing Actions.

  	
   

  
	
   

  	
   

  	
  6.2.1                        Payment to Louisville.

  	
   

  
	
   

  	
   

  	
  6.2.2                        Conveyance of Real
  Property.

  	
   

  
	
   

  	
   

  	
  6.2.3                        Licenses and Easements.

  	
   

  
	
   

  	
   

  	
  6.2.4                        Transaction Documents.

  	
   

  
	
   

  	
  6.3

  	
  Conditions Precedent.

  	
   

  
	
   

  	
  6.4

  	
  Deliveries at
  Construction Closing.

  	
   

  
	
   

  	
   

  	
  6.4.1                        Payment
  of Funds by IMPA.

  	
   

  
	
   

  	
   

  	
  6.4.2                        Payment
  of Funds by IMEA.

  	
   

  
	
   

  	
   

  	
  6.4.3                        Payment
  of Funds by Kentucky Utilities.

  	
   

  
	
   

  	
   

  	
  6.4.4                        General
  Warranty Deeds.

  	
   

  
	
   

  	
   

  	
  6.4.5                        Licenses
  to Trimble County General Plant Facilities.

  	
   

  

 

 

	
   

  	
   

  	
  6.4.6                        Non-Exclusive
  Easements of Trimble County Site.

  	
   

  
	
   

  	
   

  	
  6.4.7                        Reserved.

  	
   

  
	
   

  	
   

  	
  6.4.8                        Representations
  and Warranties.

  	
   

  
	
   

  	
   

  	
  6.4.9                        Conditions.

  	
   

  
	
   

  	
   

  	
  6.4.10                  Release
  from Lien of Louisville’s Indenture.

  	
   

  
	
   

  	
   

  	
  6.4.11                  Opinion
  of Counsel for Louisville.

  	
   

  
	
   

  	
   

  	
  6.4.12                  Opinion
  of Counsel for Kentucky Utilities.

  	
   

  
	
   

  	
   

  	
  6.4.13                  Opinion
  of Counsel for IMPA.

  	
   

  
	
   

  	
   

  	
  6.4.14                  Opinion
  of Counsel for IMEA.

  	
   

  
	
   

  	
   

  	
  6.4.15                  Transaction
  Documents.

  	
   

  
	
   

  	
   

  	
  6.4.16                  Title
  Commitment.

  	
   

  
	
   

  	
   

  	
  6.4.17                  Property
  Taxes.

  	
   

  
	
   

  	
  6.5

  	
  Withdrawal.

  	
   

  
	
   

  	
   

  	
  6.5.1                        Withdrawal
  Prior to Construction Closing.

  	
   

  
	
   

  	
   

  	
  6.5.2                        Withdrawal
  of IMPA or IMEA.

  	
   

  
	
   

  	
   

  	
  6.5.3                        Withdrawal
  by the Companies or IMPA and IMEA.

  	
   

  
	
   

  	
   

  	
  6.5.4                        No
  Withdrawal During Construction Phase.

  	
   

  
	
   

  	
   

  	
  6.5.5                        Breach
  by IMPA or IMEA During the Construction Phase.

  	
   

  
	
   

  	
   

  	
  6.5.6                        CCNs
  Not Filed.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7. OPERATING ARRANGEMENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Authority for
  Operation and Management.

  	
   

  
	
   

  	
  7.2

  	
  Electric Capacity
  Entitlements.

  	
   

  
	
   

  	
  7.3

  	
  Scheduling and
  Dispatching of Electric Generation.

  	
   

  
	
   

  	
   

  	
  7.3.1                        Submittal
  of Schedules.

  	
   

  
	
   

  	
   

  	
  7.3.2                        Scheduling
  Procedures

  	
   

  
	
   

  	
   

  	
  7.3.3                        Utilization
  of Electric Capacity Entitlement and Companies’ System  Power.

  	
   

  
	
   

  	
   

  	
  7.3.4                        Dispatching
  Procedures.

  	
   

  
	
   

  	
   

  	
  7.3.5                        Ancillary
  Services.

  	
   

  
	
   

  	
   

  	
  7.3.6                        Holidays.

  	
   

  
	
   

  	
   

  	
  7.3.7                        Records.

  	
   

  
	
   

  	
   

  	
  7.3.8                        Outage
  Schedules.

  	
   

  
	
   

  	
  7.4

  	
  Pre-Commercial Energy.

  	
   

  
	
   

  	
  7.5

  	
  Operations Management.

  	
   

  
	
   

  	
   

  	
  7.5.1                        Administration
  of Operating Work and Incremental Capital Assets.

  	
   

  
	
   

  	
   

  	
  7.5.2                        Purchasing
  Necessary Goods and Services.

  	
   

  
	
   

  	
   

  	
  7.5.3                        Procurement
  of Fuel.

  	
   

  
	
   

  	
   

  	
  7.5.4                        Expenditure
  of Funds.

  	
   

  
	
   

  	
   

  	
  7.5.5                        Insurance.

  	
   

  
	
   

  	
   

  	
  7.5.6                        Enforcement
  of Claims.

  	
   

  
	
   

  	
   

  	
  7.5.7                        Processing
  Claims.

  	
   

  
	
   

  	
   

  	
  7.5.8                        Delivery
  of Operating Data.

  	
   

  
	
   

  	
  7.6

  	
  Environmental Laws
  and Regulations.

  	
   

  
	
   

  	
  7.7

  	
  Environmental Fines
  and Penalties.

  	
   

  
	
   

  	
  7.8

  	
  General Facilities
  and Constraints.

  	
   

  
	
   

  	
  7.9

  	
  Rules and
  Regulations in Industry Practices.

  	
   

  

 

ii

 

	
  ARTICLE 8. INCREMENTAL CAPITAL ASSETS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Estimate of Costs.

  	
   

  
	
   

  	
  8.2

  	
  Responsibility for Costs.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9. EXPENSES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Payment
  of Expenses and Charges Prior to the Commercial Operation Date.

  	
   

  
	
   

  	
  9.2

  	
  Monthly
  Expenses and Charges After the Commercial Operation Date.

  	
   

  
	
   

  	
   

  	
  9.2.1                        Fuel/Reactant
  Operation Expenses.

  	
   

  
	
   

  	
   

  	
  9.2.2                        Fixed
  Operation and Maintenance Expenses.

  	
   

  
	
   

  	
   

  	
  9.2.3                        Non-Fuel
  Operating Component.

  	
   

  
	
   

  	
   

  	
  9.2.4                        Working
  Capital Component.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10. BILLING, PAYMENTS, AND
  RECORDS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Payments
  before Commercial Operation Date.

  	
   

  
	
   

  	
  10.2

  	
  Billings
  by the Companies after the Commercial Operation Date.

  	
   

  
	
   

  	
  10.3

  	
  Payments
  after the Commercial Operation Date.

  	
   

  
	
   

  	
  10.4

  	
  Records.

  	
   

  
	
   

  	
  10.5

  	
  Timing of Certain Payments.

  	
   

  
	
   

  	
  10.6

  	
  Payment to Specified
  Account.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11. INTERCONNECTION AND
  TRANSMISSION SERVICES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12. TAXES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  Management of Tax Matters.

  	
   

  
	
   

  	
  12.2

  	
  Sharing of Taxes and Related
  Payments

  	
   

  
	
   

  	
  12.3

  	
  Payment of Title Taxes and Fees.

  	
   

  
	
   

  	
  12.4

  	
  Exclusion of Income Taxes.

  	
   

  
	
   

  	
  12.5

  	
  Non-creation of Taxable Entity.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13. INSURANCE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13.1

  	
  Procurement of Insurance.

  	
   

  
	
   

  	
   

  	
  13.1.1                  Sharing
  of Insurance Costs.

  	
   

  
	
   

  	
   

  	
  13.1.2                  The
  Parties Named as Insured.

  	
   

  
	
   

  	
   

  	
  13.1.3                  Procurement
  of Additional Insurance for the Parties.

  	
   

  
	
   

  	
   

  	
  13.1.4                  Sharing
  of Refunds from Insurance Premiums.

  	
   

  
	
   

  	
   

  	
  13.1.5                  Sharing
  of Insurance Proceeds.

  	
   

  
	
   

  	
  13.2

  	
  Destruction.

  	
   

  
	
   

  	
   

  	
  13.2.1                  Damage
  or Destruction Fully Covered By Insurance.

  	
   

  
	
   

  	
   

  	
  13.2.2                  Damage
  or Destruction Not Fully Covered by Insurance.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 14. PARTITION OF OR TRANSFERS OF
  INTEREST

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14.1

  	
  Special
  Nature of Trimble County Unit 2 Project - Waiver of Right of Partition.

  	
   

  
	
   

  	
  14.2

  	
  Transfer of Ownership
  Interests.

  	
   

  
	
   

  	
   

  	
  14.2.1                  Conditions
  of Transfer.

  	
   

  
	
   

  	
   

  	
  14.2.2                  Further
  Conditions of Transfer.

  	
   

  
	
   

  	
   

  	
  14.2.3                  Non-applicability
  of Certain Provisions.

  	
   

  
	
   

  	
   

  	
  14.2.4                  Transfer
  of Associated Rights and Interests.

  	
   

  
						

 

iii

 

	
   

  	
   

  	
  14.2.5                  Louisville
  and Kentucky Utilities.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 15. ASSIGNMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  15.1

  	
  Limitation of
  Assignability.

  	
   

  
	
   

  	
  15.2

  	
  Successors and Assigns.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 16. LIABILITY AND DEFAULT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  16.1

  	
  Liability to Third Parties.

  	
   

  
	
   

  	
  16.2

  	
  Liability
  Among the Parties; No Consequential Damages.

  	
   

  
	
   

  	
  16.3

  	
  Indemnification.

  	
   

  
	
   

  	
  16.4

  	
  Nature and Survival of
  Representations and Warranties.

  	
   

  
	
   

  	
  16.5

  	
  Default.

  	
   

  
	
   

  	
   

  	
  16.5.1                  Events
  of Default.

  	
   

  
	
   

  	
   

  	
  16.5.2                  Curing
  Event of Default in Regard to Paying Money.

  	
   

  
	
   

  	
   

  	
  16.5.3                  Curing
  Event of Default for Other Than Failure to Pay Money.

  	
   

  
	
   

  	
   

  	
  16.5.4                  Non-Applicability
  of Cure Provisions.

  	
   

  
	
   

  	
   

  	
  16.5.5                  Appointment
  of a Receiver.

  	
   

  
	
   

  	
   

  	
  16.5.6                  Additional
  Obligations.

  	
   

  
	
   

  	
   

  	
  16.5.7                  Notice.

  	
   

  
	
   

  	
  16.6

  	
  Force Majeure.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 17. MANAGEMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  17.1

  	
  Coordination Committee.

  	
   

  
	
   

  	
  17.2

  	
  Coordination
  Committee Formation.

  	
   

  
	
   

  	
  17.3

  	
  Powers of
  Coordination Committee.

  	
   

  
	
   

  	
  17.4

  	
  Budget Approval.

  	
   

  
	
   

  	
   

  	
  17.4.1                  Development
  Budget.

  	
   

  
	
   

  	
   

  	
  17.4.2                  Construction
  Budget.

  	
   

  
	
   

  	
   

  	
  17.4.3                  Annual
  Capital Budget.

  	
   

  
	
   

  	
   

  	
  17.4.4                  Operation
  and Maintenance Budget.

  	
   

  
	
   

  	
  17.5

  	
  Vote by Coordination
  Committee.

  	
   

  
	
   

  	
  17.6

  	
  Meetings.

  	
   

  
	
   

  	
  17.7

  	
  Records.

  	
   

  
	
   

  	
  17.8

  	
  Amendments.

  	
   

  
	
   

  	
  17.9

  	
  Information.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 18. DISAGREEMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18.1

  	
  Consultation.

  	
   

  
	
   

  	
  18.2

  	
  Disagreement.

  	
   

  
	
   

  	
  18.3

  	
  Arbitration.

  	
   

  
	
   

  	
  18.4

  	
  Obligations To Make Payments.

  	
   

  
	
   

  	
  18.5

  	
  Interest.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 19. REMEDIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  19.1

  	
  All Remedies - Setoff.

  	
   

  
	
   

  	
  19.2

  	
  Injunctive
  Relief and Specific Performance.

  	
   

  
	
   

  	
  19.3

  	
  No Remedy Exclusive.

  	
   

  

 

iv

 

	
   

  	
  19.4

  	
  Failure to Participate
  in Incremental Capital Assets.

  	
   

  
	
   

  	
  19.5

  	
  Failure
  to Participate in Construction Costs.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 20. MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  20.1

  	
  Governing Law.

  	
   

  
	
   

  	
  20.2

  	
  Notice to Parties.

  	
   

  
	
   

  	
  20.3

  	
  Article Headings
  Not to Affect Meaning.

  	
   

  
	
   

  	
  20.4

  	
  Counterparts.

  	
   

  
	
   

  	
  20.5

  	
  Emergency.

  	
   

  
	
   

  	
  20.6

  	
  Severability.

  	
   

  
	
   

  	
  20.7

  	
  Integration.

  	
   

  
	
   

  	
  20.8

  	
  Computation of Time.

  	
   

  
	
   

  	
  20.9

  	
  Waiver.

  	
   

  
	
   

  	
  20.10

  	
  Equal Opportunity Clause.

  	
   

  
	
   

  	
  20.11

  	
  Inflation.

  	
   

  
	
   

  	
  20.12

  	
  Condemnation.

  	
   

  
	
   

  	
  20.13

  	
  Americans with
  Disabilities Act.

  	
   

  
	
   

  	
  20.14

  	
  Amendments.

  	
   

  
	
   

  	
  20.15

  	
  No Agency or Third Party Beneficiary.

  	
   

  
	
   

  	
  20.16

  	
  Obligations Are Several.

  	
   

  
	
   

  	
  20.17

  	
  Cooperation.

  	
   

  
	
   

  	
  20.18

  	
  Intent.

  	
   

  
	
   

  	
  20.19

  	
  Approvals.

  	
   

  
	
   

  	
  20.20

  	
  Access.

  	
   

  
	
   

  	
  20.21

  	
  Further Assurances.

  	
   

  
	
   

  	
  20.22

  	
  Joint Effect.

  	
   

  
	
   

  	
  20.23

  	
  Certain Costs.

  	
   

  
	
   

  	
  20.24

  	
  Good Utility Practice.

  	
   

  
	
   

  	
  20.25

  	
  Affiliate Transactions.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 21. TERM AND TERMINATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21.1

  	
  Termination.

  	
   

  
	
   

  	
   

  	
  21.1.1                  Retirement.

  	
   

  
	
   

  	
   

  	
  21.1.2                  Construction
  Closing Does Not Occur.

  	
   

  
	
   

  	
   

  	
  21.1.3                  Withdrawal
  of the Companies.

  	
   

  
	
   

  	
   

  	
  21.1.4                  Withdrawal
  of IMPA and IMEA.

  	
   

  
	
   

  	
  21.2

  	
  Retirement of Property.

  	
   

  
	
   

  	
  21.3

  	
  Retirement Costs.

  	
   

  
	
   

  	
  21.4

  	
  Effect of
  Withdrawal or Transfer on Agent.

  	
   

  
					

 

APPENDICES

 

	
   

  	
   

  	
   

  
	
  Appendix
  A

  	
   

  	
  Trimble
  County Unit 2

  
	
  Appendix
  B

  	
   

  	
  Trimble
  County General Plant Facilities

  
	
  Appendix
  C

  	
   

  	
  Form
  of License Agreement

  
	
  Appendix
  D

  	
   

  	
  Certain
  Development Costs

  
	
  Appendix
  E

  	
   

  	
  Form
  of Deed

  

 

v

 

	
  Appendix
  F

  	
   

  	
  Form
  of Easement

  
	
  Appendix
  G

  	
   

  	
  Estimated
  Interconnection Costs

  
	
  Appendix
  H

  	
   

  	
  Approved
  Development Budget

  
	
  Appendix
  I

  	
   

  	
  Interconnection
  and Operating Agreement

  

 

vi

 

PARTICIPATION AGREEMENT

 

 

This Participation
Agreement, dated as of February 9, 2004, is among Louisville Gas and
Electric Company, a Kentucky corporation (“Louisville” or a “Party”), Kentucky
Utilities Company, a Kentucky corporation (“Kentucky Utilities” or a “Party”),
Indiana Municipal Power Agency, a body corporate and politic and a political
subdivision of the State of Indiana (“IMPA” or a “Party”), and Illinois
Municipal Electric Agency, a body politic and corporate, municipal corporation
and unit of local government of the State of Illinois (“IMEA” or a “Party,”
and, collectively with Louisville, Kentucky Utilities and IMPA, the “Parties”).

 

WHEREAS, Louisville and
Kentucky Utilities each are regulated public utilities that own and operate
facilities for the generation, transmission, and distribution of electric power
and energy in their respective service territories; and

 

WHEREAS, IMPA is a joint
agency and is authorized to own and operate electric generation and
transmission facilities to supply power and energy to its members; and

 

WHEREAS, IMEA is a joint
action agency and is authorized to own and operate electric generation and
transmission facilities to supply power and energy to its members; and

 

WHEREAS, Louisville and
IMEA are party to that certain Participation Agreement, dated
September 24, 1990 (the “IMEA Participation Agreement”), pursuant to
which, among other things, IMEA acquired from Louisville: a twelve and twelve
one-hundredths percent (12.12%) undivided ownership interest, as a tenant in
common, in a four hundred ninety-five (495) megawatt coal-fired generating unit
(“Trimble County Unit 1”) located at the Trimble County Generating Station
operated by Louisville; a non-exclusive license to use certain of the general
plant facilities; and a non-exclusive easement over a certain portion of the
site on which the Trimble County Generating Station is located pertaining to
IMEA’s use of Trimble County Unit 1; and

 

WHEREAS, Louisville and
IMPA are party to that certain Participation Agreement (the “IMPA Participation
Agreement”) dated February 1, 1993, pursuant to which, among other things,
IMPA acquired from Louisville: a twelve and eighty-eight one-hundredths percent
(12.88%) undivided ownership interest as a tenant in common in Trimble County
Unit 1; a non-exclusive license to use certain of the general plant
facilities; and a non-exclusive easement over a certain portion of the site on
which the Trimble County Generating Station is located pertaining to IMPA’s use
of Trimble County Unit 1; and

 

WHEREAS, the IMEA Participation
Agreement and the IMPA Participation Agreement (collectively, the “Unit 1
Participation Agreements”) each provide certain rights of first refusal in
favor of IMEA and IMPA, respectively, to participate in ownership in the event
that Louisville shall apply to the Kentucky Public Service Commission for a
certificate of public convenience and necessity for the installation at the
Trimble County Site of a second coal-fired generating unit for use by its
system as a base-load plant; and

 

 

WHEREAS, Louisville,
together with Kentucky Utilities, is currently contemplating the design,
procurement and construction of a second coal-fired base-load generating unit
at the Trimble County Site and anticipates applying for CCNs therefor in
calendar year 2004; and

 

WHEREAS, IMEA and IMPA
desire to participate in the ownership of such second coal-fired generating
unit.

 

NOW, THEREFORE, in
consideration of the premises and of the mutual covenants herein set forth, and
subject to the terms and conditions herein set forth, the Parties agree as
follows:

 

ARTICLE 1.

DEFINITIONS AND INTERPRETATION

 

1.1                                 Definitions.

 

Affiliate. 
An “affiliate” of, or a Person “affiliated with” a specified Person, is
a Person that directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with the Person specified.  The term “control” (including the terms
“controlling,” “controlled by,” and “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person, whether through the ownership of
voting securities, by contract, or otherwise.

 

Affiliate Contract. 
Affiliate Contract has the meaning specified in Article 20.25.

 

Agreed Rate. 
The lesser of (i) two (2) percent per annum above the “Prime Rate” as
published in the “Money Rates” table of The  Wall  Street  Journal
from time-to-time and (ii) the maximum rate of interest permitted by Applicable
Law.

 

Agreement. 
This Participation Agreement among Louisville, Kentucky Utilities, IMPA
and IMEA dated as of the date set forth in the first paragraph of this
Agreement.

 

Annual Capital Budget. 
Annual Capital Budget has the meaning specified in Section 17.4.3.

 

Annual O&M Budget. 
Annual O&M Budget has the meaning specified in Section 17.4.4.

 

Applicable Law. 
Any applicable statute, law, treaty, rule, code, ordinance, regulation,
permit, license, approval, interpretation, certificate or order of any
Governmental Authority, or any judgment, decision, decree, injunction, writ,
order or like action of any court, arbitrator or other Governmental Authority.

 

Applicable Transmission
Provider.  The Midwest Independent System Operator, its
successor or other applicable transmission provider or transmission arrangement
applicable to a Party.

 

2

 

Attributes. 
The attributes of Trimble County Unit 2 (e.g., capacity, ramp rate,
ancillary services, etc.).

 

Authorization to
Construct.  Authorization of the Coordination Committee
pursuant to Article 17.3(x) for the Companies to commence the Construction
Work (or to issue full releases under contracts pursuant to which limited Work
has been released) on the date of the Construction Closing, and thereafter
pursue the Construction Work, including executing (or releasing Construction
Work under) final design, equipment and construction contracts authorizing
equipment procurement and installation, and authorizing or performing all other
necessary activities and procurements to commence and complete construction,
start-up and interconnection of Trimble County Unit 2 and the Trimble County
General Plant Facilities.  The
Authorization to Construct shall specify the expected date of the Construction
Closing, the expected Net Electric Generating Capacity, a description of the
technology and unit configuration, major equipment specifications, fuel type,
and the expected Construction Schedule.

 

Authorized Person. 
An officer of Louisville; an officer of Kentucky Utilities; the
President or a Vice President of IMPA; or the General Manager and CEO of IMEA.

 

Auxiliary Power. 
Power required for operation of Trimble County Unit 2, a reasonable
portion of the Trimble County General Plant Facilities, and a reasonable
portion of any other shared Trimble County Site electric usage.

 

Available. 
The state in which a unit is capable of providing service regardless of
the capacity level that can be provided.

 

Best Efforts. 
Best Efforts signify a diligent, good faith, and commercially reasonable
level of effort to achieve the identified goal or result.  Such level of effort does not require efforts
or actions that are not commercially reasonable under the circumstances faced
by the Party obligated to employ Best Efforts.

 

Booked. 
With respect to Development Costs owed to a non-Affiliate of the
Companies, the date paid.  With respect
to Development Costs to be reimbursed to Louisville, Kentucky Utilities or any
Affiliate of the Companies, the date such Development Costs are recorded on the
books of Louisville, Kentucky Utilities or any Affiliate of the Companies.

 

CCNs. 
The certificates of public convenience and necessity to be sought by the
Companies from the KPSC and by Kentucky Utilities from the VSCC for the
installation at the Trimble County Site of a second coal-fired generating unit
for use in their respective systems as a base-load plant.

 

Commercial Operation Date. 
The date upon which Trimble County Unit 2 and the Trimble County General
Plant Facilities (to the extent modifications or additions are necessary to
accommodate Trimble County Unit 2) are determined by the Companies to be ready
to enter commercial service.

 

Commission Approvals. 
Licenses, certificates, approvals, consents, permits or other
permissions of the FERC, SEC, ICC, IURC, KPSC, KSB or VSSC.

 

3

 

Companies. 
Except as provided in Articles 6.5.1 and 14.2.5, Louisville and Kentucky
Utilities.  

 

Construction Budget. 
Construction Budget has the meaning specified in Article 17.4.2.

 

Construction Closing. 
The delivery of documents and certificates and the payment of money, all
as contemplated in Article 6.

 

Construction
Contractor(s).  Construction Contractor(s) has the meaning
specified in Article 5.5.

 

Construction Contract(s). 
The contract(s) entered into by the Companies, as agent for the Parties,
with Construction Contractors.

 

Construction Costs. 
The costs of Construction Work, including reasonably documented internal
expenses of the Companies incurred in connection with the Construction Work and
the costs described in the second sentence of Article 12.3.

 

Construction Phase. 
The Construction Phase commences on the date of the Construction Closing
and concludes on the Commercial Operation Date or such later date as is
necessary to complete the original construction of Trimble County Unit 2 and
the Trimble County General Plant Facilities.

 

Construction Schedule. 
The schedule of Construction Work to be developed by the Companies
prior to the Construction Closing, showing, to the extent then ascertainable,
construction milestones and the expected Commercial Operation Date.

 

Construction
Work.  Work performed during the Construction Phase.

 

Coordination Committee. 
The committee established pursuant to Article 17.

 

Defaulting Party. 
Defaulting Party has the meaning specified in Article 19.1.

 

Deferred Development
Costs.  Deferred Development Costs has the meaning
specified in Article 3.2.

 

Delivery Point. 
The high side of the main step-up transformer adjacent to Trimble County
Unit 2 at the Trimble County Plant.

 

Development Budget. 
Development Budget has the meaning specified in Article 17.4.1.

 

Development Closing. 
The delivery of documents as contemplated in Article 3.

 

Development Costs. 
The costs of the Development Work, including reasonably documented
internal expenses of the Companies incurred in connection with the Development
Work and the costs described in the second sentence of Article 12.3.

 

Development Phase. 
The Development Phase began on or about July 1, 2001, and ends on
the date of the Construction Closing.

 

4

 

Development Reasons. 
Development Reasons means (i) Force Majeure, (ii) a decision by the
Companies not to proceed with the development of the Trimble County Unit 2
Project because it cannot be developed on a commercially reasonable basis or
(iii) a decision by the Companies not to proceed with the development of the
Trimble County Unit 2 Project because Commission Approvals or other permits and
approvals cannot be obtained from Governmental Authorities on a commercially
reasonable basis.

 

Development Work. 
Work performed during the Development Phase.

 

Dispatch, Dispatched or
Dispatching.  Requesting, in accordance with the terms and
conditions of this Agreement, the use of Electric Capacity Entitlement
utilizing real-time generation control hardware and software that interfaces
with the Companies’ generation control system.

 

Disputing Parties. 
Disputing Parties has the meaning specified in Article 18.4.

 

Electric Capacity
Entitlement.  The percentage of the Net Electric Generating
Capacity to which a Party is entitled under Article 7.2 as it may be
otherwise adjusted in accordance with Article 7.

 

Emergency. 
A condition that, in the Companies’ reasonable opinion, does or may
present a physical threat to persons or property on or near the Trimble County
Site, does or may seriously interfere with the safety or operation of the
interconnected power system, or may cause or contribute to an imminent
disruption of electric service to customers of the Parties.

 

Energy Allocation. 
Energy Allocation has the meaning specified in Article 7.3.

 

Escrow Account. 
Escrow Account has the meaning specified in Article 18.4.

 

E.S.T. 
Eastern Standard Time.

 

Event of Default. 
Event of Default has the meaning specified in Article 16.5.1.

 

Execution Date. 
The date as of which the Parties enter into this Agreement, which date
appears at the beginning of this Agreement.

 

Expected Ramp Rate
Capability.  The expected ramp rate capability of Trimble
County Unit 2 as determined from time to time by the Coordination Committee
with respect to various conditions (e.g., temperature, humidity, unit
conditions, etc.).

 

FERC. 
United States Federal Energy Regulatory Commission.

 

Filing Date. 
The later of (i) the date on which both petitions for the CCNs are filed
by the Companies or (ii) the date on which the last of the two (2) petitions
for the CCNs is filed by the Companies.

 

Fixed Operation and
Maintenance Expenses.  Fixed Operation and Maintenance Expenses are
calculated as the sum of the following expenses as they directly relate to the

 

5

 

operation and maintenance
of the Trimble County Unit 2 Project, as recorded in the accounting records for
the Trimble County Unit 2 Project under the Uniform System of Accounts:

 

(i)                                     Operation supervision and engineering
(Account 500)

 

(ii)                                  Steam expenses (Account 502 except for
scrubber reactant)

 

(iii)                               Electric expenses (Account 505)

 

(iv)                              Miscellaneous steam power expenses
(Account 506)

 

(v)                                 Rents (Account 507)

 

(vi)                              Allowances (Account 509)

 

(vii)                           Maintenance supervision and engineering
(Account 510)

 

(viii)                        Maintenance of structures (Account 511)

 

(ix)                                Maintenance of boiler plant (Account 512)

 

(x)                                   Maintenance of electric plant (Account
513)

 

(xi)                                Maintenance of miscellaneous steam plant
(Account 514)

 

Expenses in Account 509
shall not be allocated to IMPA or IMEA except to the extent the Companies
obtain allowances on behalf of IMPA or IMEA pursuant to Article 7.6.

 

Force Majeure. 
Any cause beyond the reasonable control of a Party, and which by using
its Best Efforts the Party is unable to overcome, including the following: acts
of God; strikes, lockouts, or other industrial disturbances; acts of public
enemies; acts, orders, or the absence of necessary orders and permits of any
kind, from any Governmental Authority; delay in transportation; unforeseen soil
conditions; equipment, material, supplies, labor, or machinery shortages;
epidemics; landslides; lightning; earthquakes; fire; hurricanes; tornadoes;
storms; floods; washouts; drought; arrest; war; civil disturbances;
insurrections; riots; acts of terrorism; explosions; breakage or accident to
machinery, equipment, transmission lines, pipes, or canals; partial or entire
failure of utility service; breach of contract by any supplier, contractor,
subcontractor, laborer, or materialman; sabotage; injunction; blight; famine;
blockage; quarantine; or any other similar or dissimilar cause or event not
reasonably within the control of the Party.

 

Fuel/Reactant Operation
Expenses.  Fuel/Reactant Operation Expenses are
calculated as the sum of the following expenses as they relate to the operation
of the Trimble County Unit 2 Project as recorded in the accounting records for
the Trimble County Unit 2 Project under the Uniform System of Accounts:

 

(i)                                     Fuel (Account 501)

 

(ii)                                  Scrubber reactant expenses in Steam
Expenses (Account 502)

 

6

 

(iii)                               Ammonia (Account 512)

 

Good Utility Practice. 
At a particular time, any of the practices, methods, or acts, which, in
the exercise of reasonable judgment in the light of the facts known at the time
the decision was made, would reasonably have been expected to accomplish the desired
result or further the possibility of achieving such result, at a reasonable
cost consistent with reliability and safety and in accordance with Applicable
Law pertaining to the Trimble County Unit 2 Project.  Such practices, methods, or acts shall include
any of the practices, methods, or acts generally engaged in or approved by
other members of the electric utility industry at, prior to, or subsequent to
the time the decision was made, provided, however, practices, methods or acts
that have previously been engaged in by members of the electric utility
industry but, at the time the decision was made, have been generally
discredited will not be considered Good Utility Practice.  Good Utility Practice is not intended to be
limited to the optimum practice, method, or act to the exclusion of all others,
but rather to encompass a range of reasonable practices, methods, or acts.

 

Governmental Authority. 
Any United States federal, state or local governmental entity, authority
or agency, court, tribunal, regulatory commission or other body, whether
legislative, judicial or executive, civilian or military (or a combination or
permutation thereof).

 

ICC. 
Illinois Commerce Commission.

 

IMEA. 
IMEA has the meaning specified in the first (1st) paragraph
of this Agreement.

 

IMEA Participation
Agreement.  The IMEA Participation Agreement has the
meaning specified in the fourth (4th) Whereas clause of this
Agreement.

 

IMPA. 
IMPA has the meaning specified in the first (1st) paragraph
of this Agreement.

 

IMPA Participation
Agreement.  IMPA Participation Agreement has the meaning
specified in the fifth (5th) Whereas clause of this Agreement.

 

Incremental Capital
Assets.  All assets of the Trimble County Unit 2
Project that are not included in Accounts 101, 106, or 107 of the Uniform
System of Accounts on the Commercial Operation Date or such later date as is
necessary to complete the original construction of Trimble County Unit 2 or the
Trimble County General Plant Facilities and which, over the life of Trimble
County Unit 2, are necessary or desirable for the continued reliable,
economical operation of Trimble County Unit 2.

 

Initial Capital Assets. 
All assets of the Trimble County Unit 2 Project that are included in
Accounts 101, 106, or 107 of the Uniform System of Accounts on the Commercial
Operation Date, or such later date as is necessary to complete the original
construction of the Trimble County Unit 2 Project.

 

Initial Construction
Budget.  Initial Construction Budget has the meaning
specified in Article 17.4.2.

 

Interconnection and
Operating Agreement.  An agreement, a copy of which is attached
hereto as Appendix I, pursuant to which Trimble County Unit 2 will be
interconnected to the

 

7

 

grid, by and among the
Applicable Transmission Provider and one or more of the Companies, in its or
their capacities as “Transmission Owner” and “Generator” as such terms are
therein defined.

 

IURC. 
Indiana Utility Regulatory Commission.

 

KPSC. 
Kentucky Public Service Commission.

 

KSB. 
Kentucky State Board on Electric Transmission and Generating Siting.

 

Kentucky Utilities. 
Kentucky Utilities has the meaning specified in the first (1st)
paragraph of this Agreement.

 

Louisville. 
Louisville has the meaning specified in the first (1st)
paragraph of this Agreement.

 

Major Change. 
Major Change has the meaning specified in Article 17.4.2.

 

Minimum Generation. 
Minimum Generation means (i) the level of generation below which Trimble
County Unit 2 cannot operate in a stable manner without stabilization fuel
while in compliance with the standard of conduct established in
Article 20.24, (ii) such greater level as may be appropriate from time to
time consistent with the standard of conduct established in Article 20.24
(e.g., for required or recommended testing, etc.), or (iii) during the ramp
from synchronization to the level described in clause (i) and any ramp up to
the level described in clause (ii), the actual level of generation from time to
time during the ramp.

 

NERC. 
North American Electric Reliability Council.

 

Net Electric Generating
Capacity.  The maximum continuous ability to produce
electric energy that Trimble County Unit 2 can be ramped up to at any
particular time, less Auxiliary Power, taking into account all relevant
conditions and factors affecting or limiting the capability of the unit to
produce electric power at such time, including availability and quality of
fuel, any mechanical or other defects, breakdowns, malfunctions, and
environmental and permit limitations then existing.

 

Net Normal Operating
Capacity.  The amount, measured in kilowatts, designated
from time to time by the Coordination Committee as the steady hourly output,
less Auxiliary Power, which Trimble County Unit 2 can produce under normal,
day-to-day conditions of unit operations that allow reliable long-term
operation, adjusted due to seasonal variations in ambient temperature,
condensing water availability and/or temperature and other factors that vary
seasonally. 

 

Net Seasonal Capacity. 
The capacity of Trimble County Unit 2 as determined according to testing
criteria defined in the East Central Area Reliability Coordination Agreement’s
Document No. 4 entitled, “Criteria and Method for the Uniform Rating of
Generating Equipment” or any successor document.

 

8

 

Non-Defaulting Parties. 
Non-Defaulting Parties has the meaning specified in Article 19.1.

 

O&M. 
O&M has the meaning specified in Article 17.4.4.

 

Offered Interest. 
Offered Interest has the meaning specified in Article 14.2.

 

Operating Work. 
All engineering, contract preparation or contract negotiation,
purchasing, repair, supervision, recruitment, training, expediting, inspection,
accounting, testing, protection, operating, management, maintenance, and all
other work and activities associated with operating the Trimble County Unit 2
Project that are not included in Development Work or Construction Work, but
excluding all work on any Incremental Capital Assets.

 

Ownership Interest. 
The interests of a Party in the Trimble County Unit 2 Project.

 

Party or Parties. 
Party or Parties has the meaning specified in the first (1st)
paragraph of this Agreement.

 

Percentage. 
Each Party’s Percentage is a percentage equal to that Party’s percentage
ownership interest in Trimble County Unit 2 and the Trimble County Unit 2
Site.

 

Person. 
Any individual, corporation, partnership, joint venture, association,
joint stock company, trust, limited liability company, unincorporated
organization, Governmental Authority or any other form of entity.

 

Plant Subjects. 
Plant Subjects has the meaning specified in Article 18.2.

 

Ramping Request. 
A Request by a Party with respect to a period of time for an amount of
that Party’s Electric Capacity Entitlement that is greater than or less than
that Requested by that Party for the immediately preceding period of time.

 

Refund Amount. 
Refund Amount has the meaning specified in Article 6.5.6.

 

Return Notice. 
Return Notice has the meaning specified in Article 14.2.

 

Request, Requested or
Requesting.  The act of requesting the use of Electric
Capacity Entitlement by Scheduling or Dispatching in accordance with the terms
of this Agreement.

 

Schedule, Scheduled or
Scheduling.  The act of requesting, in accordance with the
terms and conditions of this Agreement, the use of a fixed megawatt amount of
Electric Capacity Entitlement in each hour. 
The megawatt amount that is Scheduled may vary from hour to hour in
accordance with Article 7.

 

SEC. 
United States Securities and Exchange Commission.

 

Taxes. 
Taxes has the meaning specified in Article 12.1.

 

Transaction Documents. 
Those documents referenced in Article 6.2.4.

 

9

 

Transferring Party. 
Transferring Party has the meaning specified in Article 14.2.

 

Transmission Service
Arrangement.  Transmission Service Arrangement means the
respective agreement or arrangement between each Party and the Applicable
Transmission Provider for the transmission of its Electric Capacity Entitlement
to such Party’s points of delivery.

 

Trimble County General
Plant Facilities.  Facilities on the Trimble County Site
identified in Appendix B that are necessary for use by IMPA and IMEA with
respect to their respective Ownership Interest, for which IMPA and IMEA shall
each be granted a non-exclusive license pursuant to Article 6.2.3.

 

Trimble County Plant. 
The generating and ancillary facilities at a site along the Ohio River
at river mile 571.4 at Wises Landing in Trimble County, Kentucky, which include
Trimble County Unit 1, the Trimble County General Plant Facilities (as
defined in the Unit 1 Participation Agreements) and other generating
facilities located thereon; and will include Trimble County Unit 2, the Trimble
County General Plant Facilities and other generating facilities to be
constructed on the site in the future.

 

Trimble County Site. 
Certain land, consisting of approximately 2,200 acres, and certain
rights in land owned by Louisville, including:

 

(i)                                     that portion of the land underlying
Trimble County Unit 1 in which undivided interests were conveyed to IMPA
and IMEA under the Unit 1 Participation Agreements (the “Trimble County
Unit 1 Site”), respectively; and

 

(ii)                                  Trimble County Unit 2 Site.

 

Trimble County
Unit 1.  Trimble County Unit 1 has the meaning
specified in the fourth (4th) Whereas clause of this Agreement.

 

Trimble County
Unit 1 Site.  Trimble County Unit 1 Site has the
meaning specified in clause (i) of the definition of Trimble County Site.

 

Trimble County Unit 2. 
The nominal seven hundred fifty (750) net megawatt coal-fired unit
expected to be located at the Trimble County Site as more particularly
described in Appendix A, as supplemented from time to time by the Parties.

 

Trimble County Unit 2
Project.  The Trimble County Unit 2 Project shall
consist of Trimble County Unit 2, Trimble County General Plant Facilities and
the Trimble County Unit 2 Site.

 

Trimble County Unit 2
Site.  Trimble County Unit 2 Site has the meaning
specified in Article 6.2.2.

 

Uniform System of
Accounts.  The FERC’s “Uniform System of Accounts
Prescribed for Public Utilities and Licensees (Class A and Class B),”
in effect as of the Execution Date, as such Uniform System of Accounts may be
modified from time to time.  References
in this Agreement

 

10

 

to any specific account
number shall mean the account number in effect as of the Execution Date or to
any successor account.

 

Unit 1 Participation
Agreements.  Unit 1 Participation Agreements has the
meaning specified in the sixth (6th) Whereas clause of this
Agreement.

 

VSCC. 
Virginia State Corporation Commission.

 

Withdrawal Event. 
Withdrawal Event has the following meaning as it applies to the
specified Parties:  with respect to the
Companies, an Event of Default that is the responsibility of the Companies has
occurred and is continuing, any applicable cure period associated with such
Event of Default has expired, and such Event of Default has resulted or will
result in the cancellation, termination, or suspension of the construction of
Trimble County Unit 2 for a period of at least ninety (90) calendar days.  With respect to IMPA or IMEA, an Event of
Default has occurred and is continuing for failure to make a payment of
Construction Costs (or the supervisory fee thereon) otherwise due and owing
hereunder and any applicable cure period associated with such Event of Default
has expired.

 

Withholding Party. 
Withholding Party has the meaning specified in Section 18.4.

 

Work. 
All necessary or desirable work, services, equipment, materials and
supplies arising out of or in connection with the development or completion of
the Trimble County Unit 2 Project, its integration into the Trimble County
Plant, and its interconnection with the Louisville 345 kV system at the Trimble
County Plant switchyard as determined in accordance with the Interconnection
and Operating Agreement, including site preparation, acquisition of
interconnection transmission right-of-way, design, engineering, permitting,
procurement, construction, training, start-up, commissioning, testing,
management, administration, expediting, inspecting and other services, all
items, materials (including, all water, utilities, chemicals, reactants,
lubricating and fuel oils and other consumables), and equipment whether or not
such items, services, materials, or equipment are expressly specified herein,
as recorded in the accounting records for the Trimble County Unit 2 Project
under the Uniform System of Accounts. 
Work shall include work, services, items, materials or equipment
provided or undertaken directly by one or both of the Companies or their
Affiliates or performed under contracts, including the preparation,
negotiation, and administration of such contracts, and shall include and the
services of consultants, experts and attorneys in connection therewith.  Work shall not include any efforts or
expenses made or incurred by a Party to negotiate this Agreement, obtain the
approval of Boards of Directors, Boards of Commissioners, members, parent
companies or any of their Affiliates in planning for or in anticipation of
participation in the Trimble County Unit 2 Project as well as any Commission
Approvals.  Notwithstanding the
foregoing, work related to obtaining a siting permit for Trimble County Unit 2
whether such permit is part of the process of obtaining the CCNs or any other
permit or approval of the KPSC shall constitute part of the Work.

 

1.2                                 Rules of Interpretation.

 

(i)                                     The terms defined above have the meanings
set forth above for all purposes, and such meanings are equally applicable to
both the singular and plural forms of the terms defined.

 

11

 

(ii)                                  The words “include,” “includes,” and
“including” shall be deemed to be followed by “without limitation” whether or
not they are in fact followed by such words or words of like import.

 

(iii)                               Any agreement, instrument or Applicable
Law defined or referred herein means such agreement or instrument or Applicable
Law as from time to time amended, modified, or replaced, restated or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of Applicable Law) by succession of a comparable
successor Applicable Law and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments incorporated
therein.

 

(iv)                              References to a Person are also deemed to
include references to its successors and assigns permitted by Article 14
or Article 15.

 

(v)                                 Any term defined above by reference to
any agreement, instrument or Applicable Law has such meaning whether or not
such agreement, instrument or Applicable Law is in effect.

 

(vi)                              “Hereof,” “herein,” “hereunder” and
comparable terms refer, unless otherwise expressly indicated, to the entire
agreement or instrument in which such terms are used and not to any particular
article, section or other subdivision thereof or attachment thereto.  References in an instrument to “Article,”
“Section,” “Subsection” or another subdivision or to an attachment are, unless
the context otherwise requires, to an article, section, subsection or
subdivision of or an attachment to such agreement or instrument.  All references to exhibits or appendices in
any agreement or instrument are to exhibits or appendices attached to such instrument
or agreement.

 

(vii)                           The word “or” will have the inclusive
meaning represented by the phrase “and/or.”

 

(viii)                        “Shall” and “will” have equal force and
effect.

 

ARTICLE 2.

OWNERSHIP

 

2.1                                 Ownership.

 

Trimble County Unit 2
shall be owned by the Parties as tenants in common.  The undivided ownership interest of each
Party shall be free and clear of the lien of any indenture or mortgage, deed of
trust, bond resolution, or other instrument (hereinafter called “indenture”)
establishing a lien upon some or all of the property of the other Parties.  The Percentages of the Parties shall be:  the Companies, seventy-five percent (75.0%);
IMPA, twelve and eighty-eight one hundredths percent (12.88%); and, IMEA twelve
and twelve one-hundredths percent (12.12%), respectively.  On or before the tenth (10th)
calendar day prior to the Construction Closing, the Companies will notify the
other Parties in writing of the exact Percentages of Louisville and of Kentucky
Utilities in Trimble County Unit 2. 
Louisville shall retain ownership of the Trimble County General Plant
Facilities as described in Appendix B attached hereto, provided, however,
Louisville shall grant non-exclusive licenses to use such facilities in
accordance with Article 6.2.3. 
Louisville retains ownership of the Trimble County Site except

 

12

 

for those portions of the
Trimble County Site to be conveyed to IMPA, IMEA and Kentucky Utilities
pursuant to Article 6.2.2, and except for that portion of the Trimble
County Site previously conveyed to IMPA and IMEA pursuant to the Unit 1
Participation Agreements.

 

The Parties acknowledge
that various items of property included in the Trimble County Unit 2 Project
may be leased from time-to-time in lieu of purchasing such items.  Nothing in this Agreement shall preclude the
Parties from leasing such items.  Such
leased property shall be held by the Parties in an undivided leasehold as
tenants in common.

 

2.2                                 Additional
Generating Units.

 

The Companies shall have
the sole and exclusive right to own, install, enlarge, modify and operate any
generating unit or units other than Trimble County Unit 2, as well as any other
facility, including necessary appurtenances thereto, on the Trimble County
Site, provided, however, such other units or facilities shall not be so
installed, enlarged, modified, and operated, as the case may be, as to
unreasonably impair (economically or operationally) the operation of Trimble
County Unit 2, and provided, further, that with respect to Trimble County Unit
1, the rights of Louisville, IMPA and IMEA shall be determined in accordance
with the Unit 1 Participation Agreements.

 

2.3                                 Modification of Existing Property.

 

Subject to the approval
of the Coordination Committee, and in accordance with the terms of this
Agreement, the Companies shall have the right to use, enlarge, modify or
relocate any facilities installed as a part of Trimble County Unit 2 or the
Trimble County General Plant Facilities in connection with the installation,
enlargement, modification, or operation, as the case may be, of such other unit
or units or facilities described in Article 2.2, provided, however:

 

(i)                                     Such use, enlargement, modification, or
relocation of Trimble County Unit 2 facilities or Trimble County General Plant Facilities
shall not unreasonably impair (economically or operationally) the operation of
Trimble County Unit 2; and

 

(ii)                                  The cost of such use, enlargement,
modification or relocation of Trimble County Unit 2 facilities or Trimble
County General Plant Facilities, in connection with such other unit or units or
facilities, shall be borne by the Companies (except that if such use,
enlargement, or relocation of Trimble County Unit 2 facilities or Trimble
County General Plant Facilities is in connection with the installation,
enlargement, modification of any additional unit or units or facilities that
are owned or to be owned by the Parties in common, then the cost of such use,
enlargement, modification, or relocation of said Trimble County Unit 2
facilities or Trimble County General Plant Facilities shall be shared by the
Parties in proportion to their respective ownership interests in such
additional unit or units or facilities), provided, however, that for the
purposes of this Article 2.3(ii), subject to Article 14 or
Article 15, and so long as Louisville and Kentucky Utilities are
Affiliates, the Ownership Interest of Kentucky Utilities herein shall be deemed
to be an interest of Louisville when assessing whether facilities are owned by
the Parties in common; and

 

(iii)                               Such action shall not enlarge or diminish
the respective Ownership Interests of the Parties in any part of the Trimble
County Unit 2 Project; and

 

13

 

(iv)                              Such action shall not enlarge or diminish
the Parties’ respective obligations to share in the costs of any part of the
Trimble County Unit 2 Project; and

 

(v)                                 Where modification of existing property
and rights requires revisions to existing documents setting forth the
respective rights and interests of the Parties, or where new conveyances are
required to properly effectuate the modifications to property and rights made
hereunder, the Parties shall cooperate to promptly execute and deliver such
documents.

 

ARTICLE 3.

DEVELOPMENT CLOSING

 

3.1                                 Development Closing.

 

The Development Closing
shall occur simultaneously with the execution of this Agreement at such
location and time as may be selected by the Parties, on such date as mutually
agreed upon by the Parties.

 

3.2                                 Development Costs.

 

On April 1, 2004,
IMPA and IMEA shall each pay to the Companies, in immediately available
funds, their proportionate share of the sum (the “Deferred Development Costs”)
of (i) the aggregate Development Costs (based on their respective Percentages)
incurred by the Companies prior to such date, (ii) interest at the Agreed Rate
computed from the date that each such Development Cost was Booked to
April 1, 2004, and (iii) the supervisory fee thereon as described in
Article 9.1.  Such sums shall be
wired to a single account that is specified by the Companies not less than ten
(10) calendar days prior to April 1, 2004. 
The Parties agree that the aggregate amount of Development Costs
incurred by the Companies to and until the last day of December 2003, is
as set forth in Appendix D.  After the
Development Closing, invoicing and payment of Development Costs shall be as
provided in Article 9.1.

 

3.3                                 Deliveries of Louisville at the
Development Closing.

 

Louisville shall deliver
to IMPA, IMEA and Kentucky Utilities a title insurance commitment of
Commonwealth Land Title Insurance Company, dated within ten (10) calendar days
of the date of the Development Closing, with respect to that portion of the
Trimble County Site on which Trimble County Unit 2 is likely to be constructed,
which commitment shall be in form and substance satisfactory to each of IMPA
and IMEA.

 

3.4                                 Effect of Development Closing on
Article 15 Rights.

 

Upon execution of this
Agreement, IMEA and IMPA each waive any rights it may have pursuant of
Article 15 of the Unit 1 Participation Agreement to which it is a Party,
subject to the reinstatement of such rights only to the extent expressly
provided in this Agreement.

 

14

 

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES

 

4.1                                 IMPA Representations and Warranties.

 

IMPA hereby represents
and warrants to the Companies and IMEA as follows:

 

(i)                                     IMPA Organization. 
IMPA is a body corporate and politic and a political subdivision of the
State of Indiana, duly organized, validly existing and in good standing under
the laws of the State of Indiana, has the full power, legal capacity, and
authority to enter into this Agreement and related agreements, to carry out the
transactions contemplated by this Agreement, and to carry on its business as it
is now being conducted.  IMPA has
delivered to the other Parties a true and complete copy of the Contract
Creating the IMPA and its by-laws as amended to date.

 

(ii)                                  Authority Relative to This Agreement. 
The execution, delivery, and performance by IMPA of this Agreement have
been duly authorized by all necessary corporate action on the part of
IMPA.  The execution, delivery, and
performance by IMPA of this Agreement do not contravene any Applicable Law,
applicable to IMPA or its properties, or the Contract Creating the IMPA or its
by-laws and do not and will not contravene the provisions of, or constitute a
default under, any indenture, mortgage, contract, or other instrument to which
IMPA is a party or by which IMPA is bound, and this Agreement constitutes a
legal, valid, and binding obligation of IMPA, enforceable in accordance with
its terms, except as limited by applicable bankruptcy, insolvency,
reorganization, or similar laws at the time in effect.

 

(iii)                               Approvals and Consents. 
Any consent or approval of, giving of notice to, registration with, or
taking of any other action by any applicable Governmental Authority in
connection with the execution, delivery, and performance of this Agreement by
IMPA required to be obtained by IMPA on or before the date hereof have been
obtained.

 

(iv)                              Legal Proceedings. 
There is no materially adverse legal action, suit, arbitration,
governmental investigation, or other legal or administrative proceeding, or any
order, decree, or judgment in progress, pending or in effect, or to the
knowledge of IMPA threatened in writing against or relating to IMPA in
connection with or relating to the transactions contemplated by this Agreement,
and IMPA does not know or have any reason to be aware of any basis for the
same.

 

4.2                                 Louisville Representations and
Warranties.

 

Louisville hereby
represents and warrants to IMPA, IMEA and Kentucky Utilities as follows:

 

(i)                                     Louisville Organization. 
Louisville is a corporation duly organized and validly existing under
the laws of the Commonwealth of Kentucky, and has corporate power to carry on
its business as it is now being conducted and as it is contemplated to be
conducted.  Louisville has delivered to
the other Parties a true and complete copy of its articles of incorporation and
by-laws as amended to date.

 

15

 

(ii)                                  Authority Relative to This Agreement. 
The execution, delivery, and performance by Louisville of this Agreement
have been duly authorized by all necessary corporate action on the part of
Louisville, do not contravene any Applicable Law, applicable to Louisville or
its properties, or the articles of incorporation or by-laws of Louisville and
do not and will not contravene the provisions of, or constitute a default
under, any indenture, mortgage, contract, or other instrument to which
Louisville is a party or by which Louisville is bound, and this Agreement
constitutes a legal, valid, and binding obligation of Louisville, enforceable
in accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, or similar laws at the time in effect.

 

(iii)                               Approvals and Consents. 
Any consent or approval of, giving of notice to, registration with, or
taking of any other action by any applicable Governmental Authority in
connection with the execution, delivery, and performance of this Agreement by
Louisville required to be obtained by Louisville on or before the date hereof
have been obtained.

 

(iv)                              Legal Proceedings. 
There is no materially adverse legal action, suit, arbitration,
governmental investigation, or other legal or administrative proceeding, or any
order, decree, or judgment in progress, pending or in effect, or to the
knowledge of Louisville threatened in writing against or relating to Louisville
in connection with or relating to the transactions contemplated by this
Agreement, and Louisville does not know or have any reason to be aware of any
basis for the same.

 

4.3                                 Kentucky Utilities Representations
and Warranties.

 

Kentucky Utilities hereby
represents and warrants to IMPA, IMEA and Louisville as follows:

 

(i)                                     Kentucky Utilities Organization. 
Kentucky Utilities is a corporation duly organized and validly existing
under the laws of the Commonwealth of Kentucky, and has corporate power to
carry on its business as it is now being conducted and as it is contemplated to
be conducted.  Kentucky Utilities has
delivered to the other Parties a true and complete copy of its articles of
incorporation and by-laws as amended to date.

 

(ii)                                  Authority Relative to This Agreement. 
The execution, delivery, and performance by Kentucky Utilities of this
Agreement have been duly authorized by all necessary corporate action on the
part of Kentucky Utilities, do not contravene any Applicable Law, applicable to
Kentucky Utilities or its properties, or the articles of incorporation or
by-laws of Kentucky Utilities and do not and will not contravene the provisions
of, or constitute a default under, any indenture, mortgage, contract, or other
instrument to which Kentucky Utilities is a party or by which Kentucky
Utilities is bound, and this Agreement constitutes a legal, valid, and binding
obligation of Kentucky Utilities, enforceable in accordance with its terms,
except as limited by applicable bankruptcy, insolvency, reorganization, or
similar laws at the time in effect.

 

(iii)                               Approvals and Consents. 
Any consent or approval of, giving of notice to, registration with, or
taking of any other action by any applicable Governmental Authority in
connection with the execution, delivery, and performance of this Agreement by
Kentucky

 

16

 

Utilities required to be
obtained by Kentucky Utilities on or before the date hereof have been obtained.

 

(iv)                              Legal Proceedings. 
There is no materially adverse legal action, suit, arbitration,
governmental investigation, or other legal or administrative proceeding, or any
order, decree, or judgment in progress, pending or in effect, or to the
knowledge of Kentucky Utilities threatened in writing against or relating to
Kentucky Utilities in connection with or relating to the transactions
contemplated by this Agreement, and Kentucky Utilities does not know or have
any reason to be aware of any basis for the same.

 

4.4                                 IMEA Representations and Warranties.

 

IMEA hereby represents
and warrants to the Companies and IMPA as follows:

 

(i)                                     IMEA Organization. 
IMEA is a body politic and corporate, municipal corporation and unit of
local government of the State of Illinois duly organized and validly existing under
the laws of the State of Illinois, and has full power, legal capacity and
authority to enter into this Agreement and related agreements, to carry out the
transactions contemplated by this Agreement, and to carry on its business as it
is now being conducted.  IMEA has
delivered to the other Parties a true and complete copy of its Agency Agreement
and by-laws as amended to date.

 

(ii)                                  Authority Relative to This Agreement. 
The execution, delivery, and performance by IMEA of this Agreement have
been duly authorized by all necessary corporate action on the part of
IMEA.  The execution, delivery, and
performance by IMEA of this Agreement do not contravene any law, or any
governmental rule, regulation, or order applicable to IMEA or its properties,
or the Agency Agreement or by-laws of IMEA and do not and will not contravene
the provisions of, or constitute a default under, any indenture, mortgage,
contract, or other instrument to which IMEA is a party or by which IMEA is
bound, and this Agreement constitutes a legal, valid, and binding obligation of
IMEA, enforceable in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, or similar laws at the time in effect.

 

(iii)                               Approvals and Consents. 
Any consent or approval of, giving of notice to, registration with, or
taking of any other action by any applicable Governmental Authority in
connection with the execution, delivery, and performance of this Agreement
required to be obtained by IMEA on or before the date hereof have been
obtained.

 

(iv)                              Legal Proceedings. 
There is no materially adverse legal action, suit, arbitration,
governmental investigation, or other legal or administrative proceeding, or any
order, decree, or judgment in progress, pending or in effect, or to the
knowledge of IMEA threatened in writing against or relating to IMEA in
connection with or relating to the transactions contemplated by this Agreement,
and IMEA does not know or have any reason to be aware of any basis for the
same.

 

17

 

ARTICLE 5.

DEVELOPMENT AND CONSTRUCTION

 

5.1                                 Responsibility for Development.

 

The Parties agree to
jointly develop the Trimble County Unit 2 Project.  Trimble County Unit 2 is intended to consist
of a single coal-fired steam-electric generating unit of a super-critical
design and associated facilities with a Net Electric Generating Capacity of
approximately seven hundred fifty (750) megawatts, generally as described in
the “Trimble County Unit 2 Project Approach” prepared by Burns & McDonnell
Engineering Company, dated September 30, 2002, as further described in
Appendix A and Appendix B, and as further developed and refined during the
Development Phase.  The Parties will use
their respective Best Efforts to complete the Development Phase by
December 1, 2005, subject to Article 6.5.

 

Subject to the provisions
of Article 6.5, the Companies, as agent of the Parties, shall have the
authority and obligation to manage, control, administer, enter into contracts,
perform services and make all decisions necessary and appropriate for the
performance of the Development Work.  The
Companies shall discharge such obligations in accordance with the provisions of
this Agreement, including the standard of conduct established in
Article 20.24 and Article 17. 
IMPA and IMEA do hereby appoint the Companies to be their
attorneys-in-fact, which appointment is coupled with an interest, to act in
their names, places and steads in the negotiation, execution and administration
of contracts with Affiliates and non-Affiliates of the Companies in connection
with the Development Work.  Such
appointment shall not be revocable during the Development Phase.

 

5.2                                 Responsibility for Permits.

 

Except for Commission
Approvals required to be obtained by IMEA or IMPA, the Companies shall be
responsible for obtaining all environmental, land use and other licenses,
permits and approvals for construction and operation of the Trimble County Unit
2 Project.  IMPA shall be responsible for
obtaining any Commission Approvals or other approvals of Governmental
Authorities applicable to its ownership or participation in the Trimble County
Unit 2 Project or the execution, delivery and performance of this Agreement by
IMPA.  IMEA shall be responsible for
obtaining any Commission Approvals or other approvals of Governmental
Authorities applicable to its ownership or participation in the Trimble County
Unit 2 Project or the execution, delivery and performance of this
Agreement by IMEA.

 

5.3                                 Development Schedule.

 

The Parties expect to
complete the Development Phase of the Trimble County Unit 2 Project by
December 31, 2005.  The Parties
recognize that there are and will likely be uncertainties relating to the
obtaining of necessary licenses, permits and approvals for the Trimble County
Unit 2 Project, some of which are beyond the control of some or all of the
Parties.  Notwithstanding such
uncertainties, during the Development Phase, the Parties shall exercise their
respective Best Efforts to seek and obtain according to the following milestone
schedule, the joint and individual decisions, approvals and commitments
necessary to achieve Construction Closing:

 

18

 

(i)                                     Agreement by each Party and the
Applicable Transmission Provider of a Transmission Service Arrangement by
July 1, 2004;

 

(ii)                                  Execution of the Interconnection and
Operating Agreement with the Applicable Transmission Provider by
December 1, 2003;

 

(iii)                               Decisions from applicable Governmental
Authorities with respect to necessary Commission Approvals by July 1,
2005;

 

(iv)                              Receipt of final major environmental
permits, not subject to appeal, rehearing or review by February 1, 2005;

 

(v)                                 Final authorization, including
arrangements for project funding by each Party by November 1, 2005; and

 

(vi)                              Construction Closing by December 31,
2005.

 

5.4                                 Authorization to Construct.

 

At least thirty (30)
calendar days prior to the conclusion of the Development Phase and the
Construction Closing, the Parties, acting through the Coordination Committee,
shall undertake consideration and issuance of the Authorization to Construct
and determine whether or not to proceed to the Construction Closing.  The Parties currently expect to achieve a
Commercial Operation Date between October 1, 2009, and March 1, 2010,
which date range is subject to adjustment based on the facts and circumstances
that arise during the Development Phase and the Construction Phase.

 

5.5                                 Responsibility for Construction.

 

The Companies, as agent
for the Parties, shall have the authority and obligation to manage, control,
administer, perform services and make all decisions necessary and appropriate
for the supervision of the Construction Work, including the supervision of the
design, procurement and construction of the Trimble County Unit 2 Project.  The Companies shall discharge such
obligations in accordance with the provisions of this Agreement, including the
standard of conduct established in Article 20.24 and Article 17.  The Companies, as agent of the Parties, shall
be entitled to contract with one or more Persons (the “Construction
Contractors”) for the performance of the Construction Work in a good and
workmanlike manner and in all material respects in accordance with Applicable
Laws.  IMPA and IMEA do hereby appoint
the Companies to be their attorneys-in-fact, which appointment is coupled with
an interest to act in their names, places and steads in the negotiation,
execution and administration of the Construction Contracts and the performance
of their other obligations in connection with the Construction Work.  Such appointment shall not be revocable
during the Construction Phase.

 

5.6                                 Construction Schedule.

 

The Companies shall
manage, administer and perform support services in aid of the construction
effort in accordance with the standard of conduct established in
Article 20.24, with

 

19

 

the goal of achieving the
expected Commercial Operation Date specified in the Authorization to Construct,
within the Construction Budget, subject to Article 17.

 

ARTICLE 6.

CONSTRUCTION CLOSING AND WITHDRAWAL

 

6.1                                 Construction Closing.

 

The Construction Closing
shall occur on or before December 31, 2005 (as such date may be extended
by the decision of the Coordination Committee or otherwise in accordance with
Article 21.1.2), subject to the right of each Party to withdraw in
accordance with and subject to the provision of Article 6.5, or this
Agreement shall terminate as provided in Article 21.  The Construction Closing shall occur on such
date and at such location and time as the non-withdrawing Parties shall agree.

 

6.2                                 Closing Actions.

 

6.2.1                        Payment to Louisville.

 

At the Construction
Closing, IMPA shall pay Louisville the sum of 
twelve thousand eight hundred eighty dollars ($12,880), IMEA shall pay
Louisville the sum of twelve thousand one hundred twenty dollars ($12,120), and
Kentucky Utilities shall pay Louisville the sum calculated by multiplying one
hundred thousand dollars ($100,000) by the Percentage of Kentucky Utilities,
respectively, representing their proportionate share of the purchase price for
the land and easements conveyed by Louisville pursuant to this Agreement.  Such payments shall be made to a single
account that is specified by Louisville at least ten (10) calendar days prior
to the Construction Closing.

 

6.2.2                        Conveyance of Real Property.

 

At the Construction Closing, Louisville shall sell and
convey to IMPA and IMEA by general warranty deed, substantially in the form
shown in Appendix E, an undivided ownership interest of twelve and eighty-eight
one-hundredths percent (12.88%) and twelve and twelve one-hundredths percent
(12.12%), respectively, in that portion of the real estate constituting the
Trimble County Site underlying Trimble County Unit 2 (the “Trimble County Unit 2
Site”) to be held as tenants in common. 
Prior to the Construction Closing, Louisville shall sell and convey to
Kentucky Utilities by general warranty deed, substantially in the form shown in
Appendix E, an undivided ownership interest in its Percentage of the Trimble
County Unit 2 Site.  Upon such
conveyances, the undivided percentage ownership interests of the Trimble County
Unit 2 Site will be as follows:  the
Companies — seventy-five percent (75.00%); IMPA — twelve and eighty-eight
one-hundredths percent (12.88%); and IMEA — twelve and twelve one-hundredths
percent (12.12%).

 

6.2.3                        Licenses and Easements.

 

Louisville shall grant to
each IMPA, IMEA and Kentucky Utilities non-exclusive licenses, substantially in
the form of Appendix C, to use the Trimble County General Plant Facilities
and non-exclusive easements, substantially in the form of Appendix F, over
that portion of the Trimble County Site owned by Louisville, as the Trimble
County General Plant

 

20

 

Facilities and the
Trimble County Site pertain to IMPA’s, IMEA’s and Kentucky Utilities’ ownership
and use of Trimble County Unit 2.  IMPA,
IMEA and Kentucky Utilities acknowledge that the Trimble County General Plant
Facilities to be licensed hereunder are also subject to the pre-existing
non-exclusive licenses to IMPA and IMEA to all or a part of such facilities
delivered in accordance with the Unit 1 Participation Agreements.

 

6.2.4                        Transaction Documents.

 

At the Construction
Closing, the Parties shall execute and/or deliver the documents to be executed
by them as contemplated by or referenced in Articles 6.3 or 6.4, together with
such other documents and instruments as the Coordination Committee unanimously
determines are necessary or desirable to confirm completion of the Development
Phase and to enable and allow the Parties to proceed with the Construction
Phase and the completion of the Trimble County Unit 2 Project.

 

6.3                                 Conditions Precedent.

 

The following conditions
constitute the conditions precedent to each Party’s participation in the
Construction Closing.  If any such
condition is not satisfied, each Party, in its sole discretion, is entitled to
waive such condition with respect to its participation in the Construction
Closing:

 

(i)                                     The Coordination Committee shall have issued
the Authorization to Construct in accordance with Article 17.3(x).

 

(ii)                                  The Transaction Documents, including
design, major, equipment and construction contracts are in substantially final
form and have been approved by the Coordination Committee.

 

(iii)                               The Construction Budget and the
Construction Schedule shall have been approved by the Coordination
Committee.

 

(iv)                              The final major environmental permits for
the construction of Trimble County Unit 2 have been duly issued, are in full
force and effect and are not subject to appeal, reconsideration or review.

 

(v)                                 All other necessary regulatory approvals,
including Commission Approvals, necessary for the execution, delivery and
performance of this Agreement, land use approvals, and other licenses, permits
and approvals for the construction of the Trimble County Unit 2 Project (other
than those, which in light of the status of the project as of the date of the
Construction Closing, are not yet required to have been obtained pursuant to
Applicable Law and can be obtained without substantial difficulty, expense or
delay) have been duly issued, are in full force and effect and are not subject
to appeal, reconsideration or review.

 

(vi)                              The
Interconnection and Operating Agreement is in full force and effect and one or
more of the Companies, in the capacity as “Generator” thereunder, shall have
assigned a portion of its or their rights and obligations to IMPA and IMEA, as
appropriate, such that the “Generator” constitutes all of the Parties to this
Agreement in accordance with the Parties’

 

21

respective Percentages.  IMPA and IMEA, as appropriate, also shall
have assumed the assigned obligations under the Interconnection and Operating
Agreement.

 

(vii)                           Each Party shall have tendered at the
Construction Closing the documents, instruments and other items that it is
required to deliver at the Construction Closing pursuant to Article 6.4,
subject only to the delivery by the other Parties of the documents, instruments
and other items that they are obligated to deliver at the Construction Closing
pursuant to Article 6.4.

 

(viii)                        Each of the representations and
warranties of Louisville, Kentucky Utilities, IMPA and IMEA, respectively,
contained in Article 4 shall be true and correct as of the Construction
Closing.

 

(ix)                                Each of the Parties shall have performed
all obligations and complied with all covenants that are to be performed or
complied with in all material respects necessary to be performed or complied
with on or before the Construction Closing.

 

(x)                                   Each of the Parties shall have entered
into their respective Transmission Service Arrangement with the Applicable
Transmission Provider and such arrangement shall be in full force and effect.

 

(xi)                                Each of the Parties shall have tendered
at the Construction Closing written evidence of the approval of its Board of
Directors or Board of Commissioners, as applicable, to proceed with the
Construction Closing and the transactions contemplated herein.

 

6.4                                 Deliveries at Construction Closing.

 

6.4.1                        Payment of Funds by IMPA.

 

The moneys required to be
paid by IMPA to Louisville at the Construction Closing in accordance with
Article 6.2.1 shall be paid in immediately available funds.

 

6.4.2                        Payment of Funds by IMEA.

 

The moneys required to be
paid by IMEA to Louisville at the Construction Closing in accordance with
Article 6.2.1 shall be paid in immediately available funds.

 

6.4.3                        Payment of
Funds by Kentucky Utilities.

 

The moneys required to be
paid by Kentucky Utilities at the Construction Closing in accordance with
Article 6.2.1 shall be paid in immediately available funds.

 

6.4.4                        General Warranty Deeds.

 

Louisville shall deliver
to IMPA, IMEA and Kentucky Utilities general warranty deeds in accordance with
Article 6.2.2.

 

6.4.5                        Licenses to
Trimble County General Plant Facilities.

 

Louisville shall deliver
to IMPA, IMEA, and Kentucky Utilities licenses to use the Trimble County
General Plant Facilities in accordance with Article 6.2.3.

 

22

 

6.4.6                        Non-Exclusive
Easements of Trimble County Site.

 

Louisville shall deliver
to IMPA, IMEA, and Kentucky Utilities non-exclusive easements over a portion of
the Trimble County Site in accordance with Article 6.2.3.

 

6.4.7                        Reserved.

 

6.4.8                        Representations and Warranties.

 

Each Party shall deliver
a certificate executed by an Authorized Person of such Party to each of the
other Parties certifying that the representations and warranties of such Party
as contained in Article 4 are true and correct as of the date of the
Construction Closing.

 

6.4.9                        Conditions.

 

Each Party shall deliver
a certificate executed by an Authorized Person of such Party to each of the
other Parties certifying that all of the conditions to its obligations to the
Construction Closing have been satisfied or waived.

 

6.4.10                  Release from Lien of Louisville’s
Indenture.

 

Louisville shall furnish
to each of IMPA, IMEA, and Kentucky Utilities a properly executed release of
that portion of the real property being conveyed to IMPA, IMEA and Kentucky
Utilities at the Construction Closing from the lien of any and all indentures
(other than indentures created by IMPA, IMEA or Kentucky Utilities).

 

6.4.11                  Opinion of Counsel for Louisville.

 

Louisville shall furnish
to IMPA, IMEA, and Kentucky Utilities an opinion of counsel for Louisville,
which may include counsel employed directly by Louisville, and which counsel
shall be satisfactory to the Parties, in form and substance satisfactory to the
Parties, dated the date of the Construction Closing, to the effect that:

 

(i)                         Louisville is a corporation duly
organized and validly existing under the laws of the Commonwealth of Kentucky
and has the corporate power and authority to carry on its business as presently
conducted and to enter into and perform its obligations under this Agreement;
and

 

(ii)                      The execution, delivery, and performance
by Louisville of this Agreement have been duly authorized by all necessary
corporate action on the part of Louisville, do not contravene any law, or any
governmental rule, regulation, or order applicable to Louisville or its
properties, or the articles of incorporation or by-laws of Louisville, and do
not and will not contravene the provisions of, or constitute a default under,
any indenture, mortgage, contract, or other instrument to which Louisville is a
party or by which Louisville is bound; and

 

(iii)                   The documents executed by Louisville in connection
with the Construction Closing have been duly authorized, executed, and
delivered by Louisville; and

 

(iv)                  Any consent or approval of, giving of notice to,
registration with or taking of any other action by, any Governmental Authority,
including Commission Approvals, in connection

 

23

 

with the execution, delivery, and performance of this Agreement
required to be obtained by Louisville on or before the Construction Closing has
been obtained; and

 

(v)                     There is no action, suit, or proceeding pending
against Louisville that would materially adversely affect the ability of
Louisville to perform its obligations under this Agreement.

 

6.4.12                  Opinion of Counsel for Kentucky
Utilities.

 

Kentucky Utilities shall
furnish to IMPA, IMEA, and Louisville an opinion of counsel for Kentucky
Utilities, which may include counsel employed directly by Kentucky Utilities,
and which counsel shall be satisfactory to the Parties, in form and substance
satisfactory to the Parties, dated the date of the Construction Closing, to the
effect that:

 

(i)                         Kentucky Utilities is a corporation duly
organized and validly existing under the laws of the Commonwealth of Kentucky
and has the corporate power and authority to carry on its business as presently
conducted and to enter into and perform its obligations under this Agreement;
and

 

(ii)                      The execution, delivery, and performance
by Kentucky Utilities of this Agreement has been duly authorized by all
necessary corporate action on the part of Kentucky Utilities, do not contravene
any law, or any governmental rule, regulation, or order applicable to Kentucky
Utilities or its properties, or the articles of incorporation or by-laws of Kentucky
Utilities, and do not and will not contravene the provisions of, or constitute
a default under, any indenture, mortgage, contract, or other instrument to
which Kentucky Utilities is a party or by which Kentucky Utilities is bound;
and

 

(iii)                   The documents executed by Kentucky Utilities in
connection with the Construction Closing have been duly authorized, executed,
and delivered by Kentucky Utilities; and

 

(iv)                  Any consent or approval of, giving of notice to,
registration with or taking of any other action by, any Governmental Authority,
including Commission Approvals, in connection with the execution, delivery, and
performance of this Agreement required to be obtained by Kentucky Utilities on
or before the Construction Closing has been obtained.

 

(v)                     There is no action, suit, or proceeding pending
against Kentucky Utilities that would materially adversely affect the ability
of Kentucky Utilities to perform its obligations under this Agreement.

 

6.4.13                  Opinion of Counsel for IMPA.

 

IMPA shall furnish to the
Companies and IMEA an opinion of counsel for IMPA, which may include counsel
employed directly by IMPA, and which counsel shall be satisfactory to the
Parties, in form and substance satisfactory to the Parties, dated the date of
the Construction Closing, to the effect that:

 

24

 

(i)                         IMPA is a body corporate and politic and
a political subdivision of the State of Indiana and has the corporate power,
legal capacity, and authority to carry on its business as presently conducted
and to enter into and perform its obligations under this Agreement; and

 

(ii)                      The execution, delivery, and performance
by IMPA of this Agreement have been duly authorized by all necessary corporate
action on the part of IMPA, do not contravene any law, or any governmental
rule, regulation, or order, applicable to IMPA or its properties, or the
Contract Creating the IMPA, or the by-laws of IMPA and do not and will not
contravene the provisions of, or constitute a default under, any indenture,
mortgage, contract, or other instrument to which IMPA is a party or by which
IMPA is bound; and

 

(iii)                   This Agreement has been duly executed and delivered by
IMPA and constitutes the legal, valid, and binding obligations of IMPA
enforceable in accordance with its respective terms, except as limited by
applicable bankruptcy, insolvency, reorganization, or similar laws at the time
in effect; and

 

(iv)                  Any consent or approval of, giving of notice to,
registration with, or taking of any other action by, any Governmental
Authority, including Commission Approvals, in connection with the execution,
delivery, and performance of this Agreement required to be obtained by IMPA on
or before the Construction Closing has been obtained.

 

(v)                     There is no action, suit, or proceeding pending
against IMPA that would materially adversely affect the ability of IMPA to
perform its obligations under this Agreement.

 

6.4.14                  Opinion of Counsel for IMEA.

 

IMEA shall furnish to the
Companies and IMPA an opinion of counsel for IMEA, which counsel shall be
satisfactory to the Parties, in form and substance satisfactory to the Parties,
dated the date of the Construction Closing to the effect that:

 

(i)                         IMEA is a body politic and corporate,
municipal corporation and unit of local government of the State of Illinois and
has the corporate power, legal capacity, and authority to carry on its business
as presently conducted and to enter into and perform its obligations under this
Agreement; and

 

(ii)                      The execution, delivery, and performance
by IMEA of this Agreement have been duly authorized by all necessary corporate
action on the part of IMEA, do not contravene any law, or any governmental
rule, regulation, or order, applicable to IMEA or its properties, or the Agency
Agreement, or the by-laws of IMEA and do not and will not contravene the
provisions of, or constitute a default under, any indenture, mortgage,
contract, or other instrument to which IMEA is a party or by which IMEA is
bound; and

 

(iii)                   This Agreement has been duly executed and delivered by
IMEA and constitutes the legal, valid, and binding obligations of IMEA
enforceable in accordance with its respective terms, except as limited by
applicable bankruptcy, insolvency, reorganization, or similar laws at the time
in effect; and

 

25

 

(iv)                  Any consent or approval of, giving of notice to,
registration with, or taking of any other action by, any Governmental
Authority, including Commission Approvals, in connection with the execution, delivery,
and performance of this Agreement required to be obtained by IMEA on or before
the Construction Closing has been obtained.

 

(v)                     There is no action, suit, or proceeding pending
against IMEA that would materially adversely affect the ability of IMEA to
perform its obligations under this Agreement.

 

6.4.15                  Transaction Documents.

 

The Parties shall execute
and deliver the Transaction Documents in accordance with Article 6.2.4.

 

6.4.16                  Title Commitment.

 

Louisville shall deliver
to IMPA and IMEA a title insurance commitment of Commonwealth Land Title
Insurance Company, dated within ten (10) calendar days prior to the date of the
Construction Closing, with respect to the Trimble County Unit 2 Site which
commitment shall be in form and substance (other than specific metes and
bounds) similar to the title commitment delivered by Louisville as a condition
of the Development Closing in all material respects.

 

6.4.17                  Property Taxes.

 

Louisville shall deliver
to IMPA and IMEA evidence that it has paid all property taxes that are assessed
on the real property conveyed to IMPA and IMEA (as applicable) hereunder,
except for property taxes assessed but not yet payable by the time of the
Construction Closing.

 

6.5                                 Withdrawal.

 

6.5.1                        Withdrawal Prior to Construction
Closing.

 

If at any time, a Party
determines that it will not participate in the Construction Closing, it shall
give prompt written notice to the other Parties of its withdrawal from this
Agreement, which notice shall specify the reasons for such withdrawal in
reasonable detail.  Effective thirty (30)
calendar days after giving such notice, the notifying Party shall cease to be a
party to this Agreement.  Except as
specifically provided herein, a Party that withdraws from this Agreement in
accordance with this Article 6.5.1 shall remain liable for all of its
obligations incurred hereunder prior to the date of withdrawal and shall not be
entitled to a refund or return of any amounts paid or expended under this
Agreement.  If either Louisville or
Kentucky Utilities (but not both) gives notice of withdrawal under this
Article 6.5.1 prior to the Construction Closing, the other shall
automatically succeed to its withdrawing Affiliate’s Ownership Interest, assume
the obligations related thereto and be entitled to exercise the rights of its
withdrawing Affiliate hereunder.  Upon
such withdrawal, the defined term “Companies” shall be deemed to refer only to
such non-withdrawing Party.

 

6.5.2                        Withdrawal of IMPA or IMEA.

 

If, prior to the
Construction Closing, either (but not both) IMPA or IMEA gives notice of its
withdrawal in accordance with Article 6.5.1 above, the other Parties shall
assume such Party’s

 

26

 

Ownership Interest in
proportion to their respective Percentages immediately prior to such
assumption.  A Party withdrawing under
this Article 6.5.2 shall have no further liability to the other Parties on
account of such withdrawal, provided, however, such Party shall remain liable
for all of its obligations incurred prior to date of its withdrawal and
provided, further, such Party shall not be entitled to a refund or return of
any amounts paid or expended under this Agreement.  The rights of such withdrawing Party pursuant
to Article 15 of the applicable Unit 1 Participation Agreement shall
not be thereafter reinstated.

 

6.5.3                        Withdrawal by the Companies or IMPA
and IMEA.

 

If,
on or prior to the Construction Closing, Louisville and Kentucky Utilities shall give notice of withdrawal in accordance
with Article 6.5.1, then upon receipt of notice by the remaining
Parties, this Agreement shall terminate in accordance with Article 6.5.6
or 21.1.3, as appropriate.  If, on or
prior to the Construction Closing, IMPA and IMEA give notice of withdrawal in
accordance with Article 6.5.1, then upon receipt of notice by the
remaining Parties, this Agreement shall terminate in accordance with
Article 21.1.4.

 

6.5.4                        No Withdrawal During Construction
Phase.

 

No Party shall cause a
Withdrawal Event to occur during the Construction Phase, provided, however, a
Party may transfer its Ownership Interest during the Construction Phase on the
following conditions:  If any Party (for
purposes of this Article 6.5.4, a “Withdrawing Party”) shall desire to withdraw
from this Agreement after the Construction Closing but prior to the Commercial
Operation Date:  (i) the Withdrawing
Party shall use its Best Efforts to expeditiously transfer its Ownership
Interest to one or more third parties pursuant to the terms and conditions of
Article 14.2; (ii) the Parties will continue the construction of
Trimble County Unit 2 in an expeditious manner, and will otherwise continue to
perform their respective obligations under this Agreement; (iii) the
Withdrawing Party shall remain responsible for its proportionate share of all
Construction Costs (and the supervisory fee thereon, as applicable) pursuant to
this Agreement until the transfer of its Ownership Interest has been completed;
and (iv) any costs incurred by the Withdrawing Party in connection with
the transfer of its Ownership Interest shall be borne solely by the Withdrawing
Party.

 

6.5.5                        Breach by IMPA or IMEA During the
Construction Phase.

 

The Parties agree that it
would be extremely difficult and impracticable under the presently known and
anticipated facts and circumstances to ascertain and fix the actual damages
that would be incurred if, during the Construction Phase, a Withdrawal Event
occurs with respect to IMPA or IMEA. 
Upon receipt of written notice by the Companies, as the exclusive remedy
of the Companies for breach of Article 6.5.4 by IMPA or IMEA, all rights
of the non-paying Party hereunder shall terminate and the non-paying Party
shall transfer all of its right, title and interest in and to the Trimble
County Unit 2 Project (free and clear of all liens, security interests,
charges, claims and other encumbrances) to the remaining Parties in proportion
to their respective Percentages.  The
Parties agree to promptly undertake any and all reasonable actions, including
the execution, delivery and filing of appropriate instruments, to effect the
transactions contemplated by this Article 6.5.5.

 

Upon the conclusion of
the Construction Work, the Companies shall determine the actual per kilowatt
cost of the Trimble County Unit 2 Project. 
In consideration of the transfer of all of

 

27

 

its right, title and
interest in and to the Trimble County Unit 2 Project (free and clear of all
liens, security interests, charges, claims and other encumbrances) to the other
Parties in proportion to their respective Percentages and in full and complete
settlement and release of all claims, causes of action, liabilities, damages or
expenses of the other Parties, direct or indirect, known or unknown, that such
other Parties have or may have in the future against the non-paying Party
arising out of such non-payment, the other Parties, as liquidated damages and
not as a penalty, will pay to the non-paying Party an amount determined by the
formula set forth below.  The amount to
be paid by the paying Parties shall be in proportion to their respective
Percentages.

 

X ÷Y = Z

 

A ÷ Z = N

 

N x $1000/kilowatt = P

 

where:

 

X =  Aggregate Development Costs and
Construction Costs (plus the supervisory fees paid thereon) paid by all Parties
to complete the Trimble County Unit 2 Project

 

Y =  Actual Net Normal Operating
Capacity of Trimble County Unit 2, adjusted to 59°F on the Commercial Operation Date, measured in kilowatts

 

Z =  Actual per kilowatt Development
Costs and Construction Costs (plus the supervisory fees thereon) of the Trimble
County Unit 2 Project

 

A =  Aggregate Development Costs and
Construction Costs (plus the supervisory fees paid thereon) actually paid by
the non-Paying Party

 

N =  The number of kilowatts actually paid for by the non-paying
Party

 

P =   Payment to non-paying
Party

 

6.5.6                        CCNs Not Filed.

 

If
the Companies (i) do not file petitions for the CCNs on or prior to
December 31, 2004, or (ii) file petitions for the CCNs but exercise their rights to withdraw
pursuant to Article 6.5.1 on or prior to the date that is one hundred
eighty (180) days after the Filing Date, this Agreement shall terminate on the
date of such withdrawal or December 31, 2004, if the Filing Date has not
occurred, and no Party shall have any further liability, each to the other, on
account of such termination, provided, however, the Companies shall refund to
each of IMPA and IMEA an amount equal to the sum of Development Costs, the
supervisory fee thereon and interest on the Deferred Development Costs paid by
such Party to the Companies (the “Refund Amount”).  Upon such termination, the respective rights
of each of IMPA and IMEA pursuant to Article 15 of the Unit 1
Participation Agreement to which it is a party shall be reinstated.

 

28

 

ARTICLE 7.

OPERATING ARRANGEMENTS

 

7.1                                 Authority for Operation and
Management.

 

From and after the
Commercial Operation Date and subject to the provisions of Article 17, the
Companies shall have the sole obligation and authority to manage, control,
maintain (including adding Incremental Capital Assets in accordance with
Article 17.4.3) and operate the Trimble County Unit 2 Project, as agent
for the Parties, giving due consideration to each Party’s respective interest
of which the Companies are aware, and the Companies shall take all steps that
they deem necessary or appropriate for that purpose.  The Companies shall discharge such obligation
and authority in accordance with the standard of conduct established in
Article 20.24 and the other provisions of this Agreement.  IMPA and IMEA do hereby appoint the Companies
to be their attorney-in-fact for such purposes, which appointment is coupled
with an interest, to act in their names, places and steads, and which
appointment shall not be revocable during the term of this Agreement.  The Companies may not assign their obligation
or authority to manage, control, maintain and operate the Trimble County Unit 2
Project without prior written consent of the Parties, which consent shall not
be unreasonably withheld.

 

7.2                                 Electric Capacity Entitlements.

 

Each
Party’s Electric Capacity Entitlement at any one time shall be the Net Electric
Generating Capacity at that time multiplied by that Party’s Percentage.  The Net Electric Generating Capacity shall
not exceed the applicable Net Normal Operating Capacity except under criteria
established by the Coordination Committee. 
The Companies shall declare the Net Seasonal Capacity of Trimble County
Unit 2 twice annually.

 

The
Parties shall each be entitled to take up to their respective Electric Capacity
Entitlement through Scheduled or Dispatched transactions in accordance with the
standard of conduct established in Article 20.24.

 

Electric
Capacity Entitlements and Energy Allocations shall begin at the Commercial
Operation Date and continue until Trimble County Unit 2 ceases to be used
for the generation of electric energy and is permanently retired from service.

 

7.3                                 Scheduling and Dispatching of Electric
Generation.

 

When
Trimble County Unit 2 is Available, each Party shall have the right, in
its sole discretion, to Schedule or Dispatch in accordance with provisions
of this Agreement all or any part of its Electric Capacity Entitlement,
provided, however, throughout all periods when Trimble County Unit 2 is
being operated, each Party shall Schedule or Dispatch no less than its
share of Minimum Generation from time to time. 
Each Party’s share of Minimum Generation shall be that Party’s
Percentage of Minimum Generation, provided, however, if one or more Parties
have Scheduled or Dispatched for any one time in excess of their share of
Minimum Generation, the other Parties share of Minimum Generation for that time
will be reduced by the amount of such excess allocated among them in proportion
to their Percentages.  If any Party fails
to take its entire share of Minimum Generation, that Party will be responsible
for all attendant costs and losses and the Companies may take appropriate
corrective actions consistent

 

29

 

with
the standard of conduct established in Article 20.24.  If Trimble County Unit 2 is off line, but
Available, the Companies shall cause Trimble County Unit 2 to start up and
commence operating at the Request of any Party at any time.

 

The
energy Scheduled or Dispatched by a Party with respect to any hour represents
that Party’s requested energy delivery for that hour.  Except to the extent otherwise provided in
the following paragraph regarding ramping, each Party will be allocated (its “Energy
Allocation”) the actual Trimble County Unit 2 production (net of Auxiliary
Power) pro rated to each Party in proportion to the amount of energy they each
Requested for that hour.  The Requested
energy delivery per hour and the current Energy Allocation per hour will be
used every five (5) minutes to forecast each Party’s Energy Allocation for the
hour.  Each Party will be provided the
current forecast of its hourly Energy Allocation approximately every five (5)
minutes through electronic means at such Party’s request and cost.

 

No
Party may at any time submit a Ramping Request for a ramp rate greater than
that Party’s Percentage of the then Expected Ramp Rate Capability.  If at any time for any reason Trimble County
Unit 2 is unable to produce the aggregate ramp rate required to fulfill two or
more Parties’ overlapping Ramping Requests, the then actual ramping capability
of Trimble County Unit 2 will be allocated among such Parties in proportion to
their respective Percentages, with no Party being thereby allocated a greater
ramp rate than it Requested.  The ramping
as provided by this paragraph will be reflected in the integrated Energy
Allocation to each Party during ramping.

 

7.3.1                        Submittal of Schedules.

 

Unless
and until it has elected to Dispatch pursuant to Article 7.3.4 by written
notice to the Companies, each Party shall Schedule with the Companies’
generation dispatch staff the amount of electric energy to be delivered for
each hour of each day.  The
Schedule for each day shall be submitted prior to 12:00 noon E.S.T. of the
day prior to that day (or if the day prior is a Saturday, Sunday or holiday
recognized by the Companies, the last normal work day prior to the weekend
and/or holiday) (or at such other time as is required or permitted by prevailing
industry practices applicable to the Companies at the time such
Schedule is made).  The Scheduling
Party may change Schedules at any time after the deadline for submitting such
Schedule only with the mutual consent of the Companies, which consent shall
not be unreasonably withheld.

 

The
Companies will endeavor to provide the Parties by telephonic, electronic or
other means notice of any non-outage related occurrence expected to cause
Trimble County Unit 2 to over or under produce more than ten (10) MWh
integrated over any one (1) hour as soon as reasonably practicable after they
become aware of such expected change.   
IMEA and IMPA may contact the Companies’ designated contact person at
any time for an update on unit conditions and expected changes in unit
conditions.

 

7.3.2                        Scheduling
Procedures.  Each Party
shall be entitled to Schedule, in accordance with Article 7.3.1, up to the
Net Normal Operating Capacity multiplied by its Percentage (with the result of
that product rounded to the nearest whole applicable increment) in any hour,
provided that, except as mutually agreed by the Parties, the change in any
Party’s Schedule from hour to hour shall not exceed such Party’s
Percentage of the Expected Ramp Rate Capability over the applicable ramping
period.  Each Scheduling Party will be
liable pursuant to Article

 

30

 

7.3.3
for any energy imbalance services required as a result of (i) the portion of
the actual ramp rate of Trimble County Unit 2 allocated to the Scheduling Party
being different than the ramp rate Requested by the Scheduling Party and (ii)
the Energy Allocation for that Scheduling Party being different from the energy
Scheduled by that Scheduling Party.  A
Scheduling Party may Schedule a ramp greater than its Percentage of the
Expected Ramp Rate Capability if it has reached an agreement with the Companies
to provide any necessary greater ramp rate and energy from the Companies’
system.  The availability and price of
system ramping and energy will be determined at the sole discretion of the
Companies and established by agreement between the Companies and the applicable
Party prior to the Schedule change.

 

All
Schedules shall be in increments of whole megawatts unless applicable industry
rules permit smaller increments and may in no event exceed a Party’s Electric
Capacity Entitlement.  Schedules shall
show the requested output for each hour of the Schedule period, the
beginning and end times of any required ramping and the requested ramp rate.

 

7.3.3                        Utilization of Electric Capacity
Entitlement and Companies’ System Power.

 

No
Party will deliberately (i) utilize more than its Electric Capacity Entitlement
or any portion of another Party’s Energy Allocation or (ii) fail to take all of
its Energy Allocation.  Parties will be
required to change Schedules on an hourly basis after reserve-sharing energy is
utilized within industry scheduling standards, or to change Dispatch signals in
real-time to comply with this requirement. 
Notwithstanding the preceding sentence, the Parties recognize that
variations in the real time operations of Trimble County Unit 2 may result in
unplanned variances between a Party’s Energy Allocation and the amount of
energy Requested by that Party.  Such
variances and the resulting inadvertent utilization by a Party of more or less
electric energy on an integrated hourly basis than its Energy Allocation (the
Party’s “energy imbalance”) will be rounded to the nearest whole megawatt hour
(or such smaller increment that becomes customary in the industry ) and then
will be treated as follows:

 

(x)                                   For that portion of a Party’s energy
imbalance that is within a deviation band of +/- 1.5% (or +/-2MW, if greater)
of the Party’s Requested energy that hour (the “deviation band”), the amounts
will be recorded and aggregated over each calendar month.  At the end of the month, the Companies and
the Party will negotiate in good faith to eliminate any net balance for that
month by in kind transfers of energy during the following thirty (30) days.  For any net balance not so eliminated by
in-kind transfers within thirty (30) days, the Party will purchase or sell such
energy from or to the Companies.  The
price for such energy sold to the Companies will be ninety percent (90%) of the
Companies’ average system lambda (based on fuel cost only) for the hours in the
applicable month during which the Party inadvertently utilized less than its
Energy Allocation.  The price for such
energy purchased from the Companies will be the greater of (a) $100.00 per
megawatt-hour, or (b) the Companies’ average actual incremental cost to supply
that amount of energy for the hours in the applicable month during which the
Party inadvertently utilized more than its Energy Allocation.

 

(y)                                 For that
portion of a Party’s energy imbalance that is outside the deviation band for
that hour, that Party will purchase or sell such energy from or to the
Companies.  The price for such energy
sold to the Companies will be ninety percent (90%) of the Companies’ system
lambda (based on fuel cost only) for that hour. 
The price for such energy purchased from the

 

31

 

Companies
will be the greater of (a) $100.00 per megawatt-hour, or (b) the Companies
actual incremental cost to supply such energy that hour.

 

(z)                                   Each Party will
remain responsible for all costs associated with the production of its Energy
Allocation.

 

7.3.4                        Dispatching Procedures.

 

Any
Party that elects to Dispatch its Electric Capacity Entitlement shall install
and maintain (or
otherwise obtain the necessary access and use of) the necessary generation
control hardware and software that interfaces with the Companies’ generation
control system at its own expense to implement such Dispatch.  At the request of IMEA or IMPA, the Companies
will provide IMEA or IMPA with a not-to-exceed price from a vendor that is not
an Affiliate of the Companies to accommodate IMEA’s or IMPA’s interfaces with
the Companies’ generation control system. 
At the completion of the installation, IMEA or IMPA, as applicable, will
reimburse the Companies for the actual charges imposed by the vendor.  The Parties will agree in advance to the cost
allocation of any future costs required to modify, upgrade or maintain the
dispatch capability of Trimble County Unit 2 associated with the Companies’
generation control system.

 

A
Dispatching Party shall be entitled to Dispatch up to its Electric Capacity
Entitlement.  Each Party that is
Dispatching its Electric Capacity Entitlement will have the right to change its
desired output of its portion of Trimble County Unit 2 at any time, subject to
the allocation of the unit’s ramping capability as provided in
Article 7.3.  Real-time Dispatch
shall be executed within the accuracy of the Companies’ generation control
system. The real-time Dispatch signal from a Party will be integrated over each
hour to determine the Requested energy delivery for that hour.  In the event of a failure of any Party’s
generation control system to control the output of Trimble County Unit 2, Dispatching
for the affected Party or Parties will be accomplished manually by the Parties
coordinating the desired energy to be Dispatched through a contact person
designated by the Companies for such purpose.

 

7.3.5                        Ancillary Services.

 

For Dispatching purposes, the Parties shall share in the
Attributes of Trimble County Unit 2 in proportion to their respective
Percentages as follows:

 

(i)                                     Regulation.  Any Party that is Dispatching its Electric
Capacity Entitlement may use such Dispatching provisions to provide, through
Trimble County Unit 2, a reasonable degree of regulation services for its
system through appropriate use of automatic real-time generation control
equipment normally expected of control areas (including generation only control
areas) or load balancing authorities as defined by the North American Electric
Reliability Council (“NERC”) or other industry standard setting bodies.  If the Dispatching activities of any of the
Parties is found to have an adverse impact on the performance of Trimble County
Unit 2 by causing extreme ramping up or down of the output of the generator,
the Coordination Committee will address the issue at the request of any Party
and establish guidelines for appropriate load following behavior by all
Parties.

 

32

 

(ii)                                  Operating
Reserves.  When
Trimble County Unit 2 is on line, any Party that is Dispatching may designate
the difference between its Electric Capacity Entitlement and the amount of such
Electric Capacity Entitlement that it is currently Dispatching as operating
reserves to any industry entity that is obligated or permitted to monitor or
require such reserves.

 

(iii)                               Var Output.  Each Party shall be entitled to its
Percentage of the var capability of Trimble County Unit 2 and may utilize such
vars itself or sell them to other entities, including the other Parties.  The Coordination Committee will establish the
procedures for requesting vars and having such requests fulfilled, which
procedures shall be comparable to those set forth in this Agreement for
Electric Capacity Entitlement.  No Party
will be obligated to buy vars from another Party.  No Party will utilize another Party’s var
capability without the other Parties’ permission.  If industry practices permit, each Party may
sell varhours to other entities.  If the
Companies are compensated for providing var support with respect to IMPA’s and
IMEA’s use of Trimble County Unit 2, the vars used to provide such support will
be deemed to be IMEA’s and IMPA’s and the Companies will pass through such
compensation to IMEA and IMPA as applicable.

 

(iv)                              Other Ancillary
Services.  If, through changes in industry practices or
otherwise, additional services can be derived or are required from Trimble
County Unit 2, such services will be shared among the Parties in proportion to
their respective Percentages.

 

7.3.6                        Holidays.

 

Prior
to each calendar year, the Companies shall notify the Parties of the holidays
to be recognized by the Companies for that year.  In the event the Companies fail to provide
such notice, the holidays shall be the same as for the prior year.

 

7.3.7                        Records.

 

The Companies shall
maintain records adequate to determine each Party’s energy utilization per
hour.

 

7.3.8                        Outage Schedules.

 

The
Companies shall submit to the Parties, as far in advance as practicable,
schedules showing the expected start date and time (“Start”) and duration for
planned outages of Trimble County Unit 2. 
The Companies will adjust such plans to accommodate any Party’s request,
where such adjustment would not harm any other Party and where, in the
Companies’ sole judgment, it is practicable to do so in accordance with the
standard of conduct established in Article 20.24.  The Companies shall seek the unanimous
approval of the other Parties to change the Start of planned outages once the
outage plan has been submitted by the Companies and accepted by the other
Parties, provided, however, if such approval is not granted, the Companies
shall have the right to change the Start of planned outages up to (and
including) forty-five (45) days before then planned Start.  The Companies may change the Start of planned
outages less than forty-five (45) days before the then scheduled Start only if
they receive the unanimous consent of the other Parties (which consent shall
not be unreasonably withheld) or if such change is required for protection of
the Trimble County Unit 2 Project or the electric system for reasons consistent
with the standard of conduct established in Article 20.24.

 

33

 

For
maintenance outages (and unplanned postponed outages, if possible), the
Companies shall not change the Start within 48 hours prior to the then planned
Start without the unanimous consent of the other Parties (which consent shall
not be unreasonably withheld) unless such change is required for protection of
the Trimble County Unit 2 Project or the electric system for reasons consistent
with the standard of conduct established in Article 20.24.  Should any of the Parties desire a
schedule for maintenance outages (or unplanned postponed outages, if
possible) that the Companies believe is impracticable or which another Party
believes is injurious to it, any Party shall be entitled to submit the
scheduling issue to the Coordination Committee for resolution provided that
adequate time (at least 48 hours) is available to convene the Coordination
Committee and resolve the conflict.  The
terms, “planned,” “maintenance” and “unplanned postponed,” when used to
describe outages, are intended to have the meanings ascribed to them by the
NERC Generation Availability Data System.

 

7.4                                 Pre-Commercial Energy.

 

Any
net electric energy output from Trimble County Unit 2 prior to the
Commercial Operation Date shall be classified as pre-commercial energy.  Each Party shall be liable for and pay its
Percentage of all costs associated with such energy production including fuel
and reactant costs and any automatic reserve sharing or other similar charges
imposed on the Companies as a result of fluctuations in the energy produced by
Trimble County Unit 2.  Each Party shall
also take and dispose of its Percentage of all pre-commercial energy and will
be liable for applicable energy imbalance charges should it fail to do so;
provided, IMEA and IMPA shall each have the option (which option may only be
exercised by giving the Companies notice at least ninety (90) days prior to the
first scheduled production of pre-commercial energy by Trimble County Unit 2)
to sell all of its Percentage of such energy to the Companies at a price each
month per megawatt hour equal to the average cost that month of fuel and
reactant used to produce a megawatt hour of electric energy at Trimble County
Unit 1.

 

7.5                                 Operations Management.

 

7.5.1                        Administration of Operating Work and
Incremental Capital Assets.

 

The
Companies shall perform all work, or execute and enforce (including any
renegotiation and settlement of) all contracts, contractual obligations and
arrangements for Operating Work and Incremental Capital Assets, including any
and all warranties on equipment, facilities, materials, and services furnished
pursuant to any such contracts. 
Warranties claims and other claims arising under this Article shall
be administered in accordance with the provisions of Articles 7.5.6 and 7.5.7.

 

7.5.2                        Purchasing Necessary Goods and
Services.

 

The
Companies shall purchase and procure, through and from any source they may
select, the equipment, apparatus, machinery, tools, services, materials and
supplies, and spare parts necessary for the performance of Operating Work or as
Incremental Capital Assets.

 

7.5.3                        Procurement of Fuel.

 

At
all times, the Companies shall maintain an adequate supply of fuel in
accordance with the standard of conduct established in Article 20.24.  At any time when the Companies determine

 

34

 

to
enter into fuel procurement negotiations for all or any part of the fuel
requirements of Trimble County Unit 2, the Companies shall notify the other
Parties in a reasonable and timely manner specifying the characteristics of the
fuel being sought and the schedule for procurement.  During the Companies’ Trimble County
Unit 2 fuel procurement negotiations, if IMPA or IMEA notify the Companies
in a reasonable and timely manner and in accordance with the proposed
procurement schedule, of alternative fuel supplies with equivalent or better
quantities, quality, delivered cost, and/or other factors that affect Trimble
County Unit 2 operation such that overall costs and reliability of Trimble
County Unit 2 are improved, then such alternate supplies shall be considered by
the Companies, in good faith, for Trimble County Unit 2 fuel procurement.  No such alternative fuel supplies shall be
selected unless the alternative fuel supplies meet or exceed the fuel
specifications for Trimble County Unit 2 as defined by the Companies and
the delivered cost of the alternative fuels results in a decrease in total fuel
cost for Trimble County Unit 2.

 

7.5.4                        Expenditure of Funds.

 

The
Companies shall expend funds in accordance with the terms and conditions of
this Agreement.

 

7.5.5                        Insurance.

 

The
Companies shall arrange for the placement and maintenance of insurance, as
provided in Article 13.

 

7.5.6                        Enforcement of Claims.

 

During
the term of this Agreement, the Companies shall have the obligation to
investigate, present and prosecute known claims with respect to the Trimble
County Unit 2 Project, including claims against insurers and indemnitors
providing insurance or indemnities with respect to any loss of or damage to any
property of the Trimble County Unit 2 Project, or any interest of the Parties
pertaining thereto, and with respect to any liability of the Parties covered by
insurance or an indemnity agreement.  To
the extent that such loss, damage, or liability is not covered by insurance or
by an indemnity agreement, the Companies shall present and prosecute claims
therefor against any Persons who may be liable therefor, provided, however, the
Companies are not required to resort to litigation or an alternative resolution
procedure against an Affiliate of the Companies or to initiate, present, or
prosecute any claim which, in their sole judgment exercised in good faith, is
without sufficient merit to warrant such enforcement, or otherwise is inconsistent
with the Parties’ general business interests related to the Trimble County Unit
2 Project.  Nothing herein shall require
the Companies to invoke any certain type of enforcement procedure, or to seek,
or to continue to seek, enforcement of any claim, when in the Companies’ sole
judgment, the Parties’ general business interests related to the Trimble County
Unit 2 Project are better served by settling or withdrawing such claim.   If the amount of any such claim by the
Parties against non-Affiliates of the Companies arising out of the (i)
Development Phase or the Construction Phase exceeds five hundred thousand
dollars ($500,000) or (ii) Operating Phase exceeds two hundred fifty thousand
dollars ($250,000), the Companies shall notify the Parties of the existence and
nature of such claim and shall also notify the Parties if and when any
settlement of any such claim is accomplished by the Companies.

 

In
the event that the Companies do not diligently attempt to settle or, failing
settlement, prosecute a claim nothing herein shall prevent IMEA or IMPA from
prosecuting such claim or 

 

35

 

demand
in its own name, to the extent of, and as such claim or demand affects its
interest, provided, however, with respect to material claims against Affiliates
of the Companies, IMEA and IMPA shall refrain from prosecution or demands until
the Companies have had a reasonable period to settle or resolve such claim as
provided below.  Costs and expenses IMPA
or IMEA incurs in prosecuting such claim shall be borne by IMPA or IMEA, as the
case may be and the proceeds recovered are to be shared by the Parties
prosecuting such claim in proportion to their respective Percentages.

 

The
Companies shall provide prompt written notice to IMPA and IMEA of any material
claim against any Affiliate of the Companies of which they have knowledge.  Invoices disputes or other claims involving
amounts less than two hundred fifty thousand dollars ($250,000) shall not
constitute “material claims” for purposes of this Article 7.5.6.  The Companies, on behalf of the Parties,
shall be entitled to settle or resolve claims against their Affiliates,
provided, however, the Companies shall not be entitled to settle or resolve a
material claim without the prior consent of the Parties, which consent shall
not be unreasonably withheld.  Other than
settling or resolving claims against Affiliates in good faith and in accordance
with this Article 7.5.6, the Companies shall neither take any action nor
refrain from taking any action that might impair the ability of IMEA or IMPA to
prosecute such claims as provided herein.

 

Any
Party, at its own expense, may intervene in any proceeding on a claim pursuant
to this Article as an additional party to assert or defend its respective
Ownership Interest and rights.

 

7.5.7                        Processing Claims.

 

During
the term of this Agreement, the Companies shall have the obligation, as
appropriate, to investigate, adjust, defend and settle claims against the
Parties, or any of them, arising out of or attributable to the Work,
Incremental Capital Assets, or the past or future performance or nonperformance
of the obligations and duties of the Parties under or pursuant to this
Agreement, including any claim resulting from death or injury to persons or damage
to property, when such claims are not covered by valid and collectible
insurance carried by the Parties; and, whenever and to the extent reasonable,
present and prosecute claims against any third party, including insurers, for
any costs, losses, and damages incurred in connection with such claims.  If the amount of any such claim against the
Parties by a non-Affiliate of the Companies exceeds one hundred thousand
dollars ($100,000) and is not covered by valid and collectible insurance
carried by the Parties, the Companies shall notify the Parties of the existence
and nature of such claim and shall also notify the Parties if and when any
settlement of any such claim is accomplished by the Companies.  Settlement of such claims in excess of two
million dollars ($2,000,000) shall be reported to and approved in advance by
the Coordination Committee.

 

In
the event of (i) a claim by an Affiliate of the Companies or (ii) any
other claim that the Companies have not diligently attempted to settle or
defend, nothing herein contained shall prohibit IMEA or IMPA from defending
such claim to the extent of and as such claim affects its interest.  Costs and expenses incurred in connection
with any such defense or demand shall be borne by the defending Party or
Parties, provided, however, if the resolution of such claim accrues to the
benefit of non-defending Parties, such non-defending Parties shall share the
defense costs and expenses incurred in accordance with their respective
Percentages, but only to the extent of the fair value of the benefits received
from such resolution.

 

36

 

The
Companies shall provide prompt written notice to IMPA and IMEA of all pending
material claims by any Affiliate of the Companies.  Invoice disputes or other claims involving
amounts less than two hundred fifty thousand dollars ($250,000) shall not
constitute “material claims” within the meaning of this Article 7.5.7
(unless and until such claim is the subject of arbitration or litigation), and
may be settled by the Companies. 
Material claims by Affiliates of the Companies may also be settled by
the Companies, subject to the consent of IMPA and IMEA, which consent shall not
be unreasonably withheld.  Other than
settling or resolving claims by their Affiliates in good faith and in
accordance with this Article 7.5.7, the Companies shall neither take any
action nor refrain from taking any action that might impair the ability of IMEA
or IMPA to defend such claim.

 

Any
Party, at its own expense, may intervene in any proceeding on a claim pursuant
to this Article as an additional party to assert or defend as to its
respective Ownership Interest and rights.

 

7.5.8                        Delivery of Operating Data.

 

As
promptly as practicable after the end of each month, the Companies shall render
to the Parties a statement setting forth mutually agreed upon operating data as
may be needed for reports and records.

 

7.6                                 Environmental Laws and Regulations.

 

Each
Party shall be responsible for its share, in proportion to its Percentage, of
any obligations, costs, or burdens of any kind, resulting from any federal,
state, or local environmental law, regulation, or requirement, as amended from
time to time.  Similarly, each Party
shall be entitled to its share, in proportion to its Percentage, of any rights,
credits, entitlements, or allowances associated with such law, regulation, or
requirement, as amended from time to time.

 

Each
Party’s rights to generation from Trimble County Unit 2 shall be
conditioned upon such Party’s compliance with such environmental laws,
regulations, or requirements and such Party’s possession of required
environmental rights, credits, entitlements, or allowances needed for such
generation.

 

Any
Party, to the extent its rights, credits, entitlements or allowances are
insufficient to allow the desired level of generation from that Party’s share
of Trimble County Unit 2 may acquire such rights, credits, entitlements or
allowances from another Party, if available, under terms and at prices
agreeable to such Parties.

 

The
Companies shall provide information to the other Parties regarding rights,
credits, entitlements or allowances that have been used or consumed by those
Parties.  Each Party shall keep the
Companies informed as to that Party’s available rights, credits, entitlements,
or allowances for use at the Trimble County Unit 2 Project and shall forecast
that Party’s need for additions thereto. 
On not less than ten (10) calendar days’ prior written notice to IMPA or
IMEA, as appropriate, and provided that IMPA or IMEA, as appropriate, has not
obtained such rights, credits, entitlements or allowances and provided written
evidence thereof to the Companies within such ten (10) calendar day period, the
Companies shall have the right to

 

37

 

obtain
such rights, credits, entitlements or allowances for IMPA or IMEA, at IMPA’s or
IMEA’s respective cost, (including reasonable documented transaction costs), if
necessary to ensure continued operation of Trimble County Unit 2.

 

7.7                                 Environmental Fines and Penalties.

 

The
Companies shall indemnify IMPA and IMEA against administrative fines and civil
penalties arising out of the operation of the Trimble County Unit 2 Project
imposed for violations of applicable environmental laws and regulations,
resulting from acts or omissions inconsistent with the standard of conduct
established in Article 20.24 of either of the Companies or any Affiliate
of Louisville or Kentucky Utilities when acting in the capacity of plant operators.  Exclusions from this special indemnification
shall include operation and maintenance costs incurred as a result of
environmental Applicable Law, Incremental Capital Assets incurred in
environmental compliance, occurrences from acts of IMPA, IMEA or third parties
or from equipment failure or malfunction, remedial measures imposed by
administrative agencies for environmental purposes, reimbursement of response
costs under Comprehensive Environmental Response Compensation and Liability Act
(“CERCLA”) and K.R.S. Chapter 224 and amendments thereto, or any similar or
subsequently enacted legislation covering the same subject matter as CERCLA and
K.R.S. Chapter 224, and any claims of personal injury or property damage.

 

7.8                                 General Facilities and Constraints.

 

Subject
to Articles 2.2 and 2.3, should a condition or circumstance exist that
would constrain the full and simultaneous utilization of Trimble County
Unit 2 and other then existing generating units at the Trimble County
Site, the Companies shall allocate the available resources between or among
such units (including Trimble County Unit 2).  If the Parties’ interests in the affected
units are not uniform (i.e., one or more Parties have substantially different
interests in one or more of the affected units than in others) and the
allocation of resources made by the Companies does not result in generation
from the affected units proportionate to their respective capacities, the
Parties, to the extent possible, agree to make such economic adjustments among
themselves, together with the owners of such other units, as to accomplish a
fair economic result.  For the purposes
of this Article 7.8, subject to Article 14 and Article 15, and
so long as they are Affiliates of each other, the interest of Kentucky
Utilities in Trimble County Unit 2 and any affected units shall be deemed
to be an interest of Louisville when assessing whether the Parties’ interests
in the affected units are uniform.

 

7.9                                 Rules and Regulations in Industry
Practices.

 

The
Coordination Committee may, by unanimous agreement, adopt and amend rules from
time to time to amend the operating arrangements set forth in this
Article 7.  When unanimously adopted
or amended, such rules shall supersede the applicable provisions of this
Article 7. The Parties agree that they will cause the Coordination
Committee to unanimously adopt and amend rules from time to time as necessary
to reflect changes in industry standards, Applicable Law, and the rules and
regulations of transmission organizations that apply to the Parties so that the
following principles are maintained in a manner similar to the way this Article

 

38

 

7
reflects these principles relative to the state of the industry, Applicable
Law, and such rules and regulations as of the date of this Agreement:

 

(i)                                     The Parties
recognize that Trimble County Unit 2 is physically located in the control area
operated by the Companies.  As such, IMPA
and IMEA need the Companies’ cooperation to Schedule or Dispatch their respective
Ownership Interests in Trimble County Unit 2.  So long as this remains the case, the rules
shall provide for such cooperation.

 

(ii)                                  The rules will
be consistent with the standard of conduct established in Article 20.24.

 

(iii)                               At any one
moment in time, each Party shall be entitled to the benefit of its Percentage
share but not more than its Percentage share of any of the Attributes.

 

(iv)                              No Party will
deliberately take any action that might result in its taking at any one moment
a greater share of the Attributes than that to which it is entitled.

 

(v)                                 Each Party is
responsible for transmission and transmission costs for its Allocated Energy.

 

(vi)                              No Party will
be entitled to be better situated than it would have been had it operated its
own generating unit of a capacity equal to its Electric Capacity
Entitlement.  Similarly, no Party shall
be less favorably situated than it would have been had it operated its own
generating unit of a capacity equal to its Electric Capacity Entitlement.

 

(vii)                           No Party shall
have rights to services or attributes associated with another Party’s system of
generation and transmission without paying fair compensation for such services
or attributes in accordance with then current industry standards.

 

(viii)                        None of the Parties will vote against any
proposed rule to amend the operating provisions set forth in Article 7 to
the extent such rule is proposed by another Party to enable it to form a
generation only control area containing that other Party’s Electric Capacity Entitlement
or to use dynamic scheduling, so long as such rule does not involve (a)
providing any Party more than its Percentage share of any of the Attributes at
any time, or (b) allocating the costs and burdens of such rule to Parties that
do not benefit from it.

 

ARTICLE 8.

INCREMENTAL CAPITAL ASSETS

 

8.1                                 Estimate of Costs.

 

Prior to beginning work
on any Incremental Capital Asset which the Companies expect to cost more than
$2,000,000, an estimate of such work shall be furnished by the Companies in
reasonable detail to the Coordination Committee for use by it in anticipating
its financial requirements.  Such
estimate shall be subject to revision periodically to reflect more current
information on such Incremental Capital Asset.

 

39

 

8.2                                 Responsibility for Costs.

 

Subsequent to the
Commercial Operation Date, the costs of each Incremental Capital Asset shall be
borne by the Parties in proportion to their respective Percentages.  The amount incurred for Incremental Capital
Assets during each month shall be included in the monthly billings provided for
in Article 10.

 

ARTICLE 9.

EXPENSES

 

9.1                                 Payment of Expenses and Charges
Prior to the Commercial Operation Date. 

 

The Parties will share
all Development Costs and Construction Costs in proportion to their respective
Percentages.  During the Development
Phase (following the Development Closing) and the Construction Phase (or until
such later date as payments remain due in respect of such phases), no later
than the fifteenth (15th) calendar day of each calendar month, the
Companies shall provide to each Party an invoice of Development Costs
(including Deferred Development Costs) or Construction Costs (and, in each
case, the supervisory fees thereon) that have been incurred and, without
duplication, that will be incurred and become payable by the Companies on or
prior to the last calendar day of the next succeeding calendar month (“Future
Amounts”).  In consideration for the
undertaking of the Companies to supervise the Development Work and the
Construction Work, the Companies shall be entitled to a supervisory fee equal
to two percent (2%) of the aggregate amount of Development Costs and
Construction Costs to be paid by each of IMPA and IMEA.  Each invoice prepared by the Companies for
IMPA and IMEA under this Article 9.1 shall include such fee.  Payments of invoiced amounts are due on or
before the fifteenth (15th) calendar day of the month subsequent to
the month in which the invoice is received provided, however, IMPA’s and IMEA’s
respective share of Deferred Development Costs, shall be due and payable to the
Companies on April 1, 2004.  It is
the intent of the Parties that the issuance of invoices for payment by the
Companies, and the subsequent payments to the Companies shall be made at such
times as may be necessary to allow timely payment to the contractors by the
Companies in accordance with the terms of payment of applicable contracts,
including the Construction Contracts.  In
the event the aforementioned payment procedures do not allow for receipt of
payment from the Parties or timely payments by the Companies to contractors,
including Construction Contractors, for amounts greater than $1,000,000 from
time to time, the Companies may issue an additional invoice each month, in
accordance with the foregoing terms of this paragraph, with payment due no
sooner than fourteen (14) calendar days after receipt of such invoice.  To the extent amounts due in respect of an
invoice include amounts to be paid under the Construction Contracts, each Party
shall be provided with copies of the invoices under such contracts.  The Companies shall have the sole authority
and obligation to determine the validity of such invoices.  Invoices shall be accompanied by reasonable
documentation of all other amounts specified therein.  In the event that IMPA or IMEA incurs
Development Costs or Construction Costs at the request of the Companies during
the period subsequent to Development Closing and during the Development Phase
or the Construction Phase, the Parties will aggregate such expenses and, at
least once per quarter but not more often than monthly, make such inter-Party
payments so that each Party pays its proportionate share of such costs.

 

40

 

9.2                                 Monthly Expenses and Charges After
the Commercial Operation Date.

 

In addition to
Development Costs and Construction Costs (and, in each case, the supervisory
fee thereon) that are incurred and are invoiced pursuant to Article 9.1,
following the Commercial Operation Date, the Parties will share all costs
associated with the Trimble County Unit 2 Project in proportion to their
respective Percentages.  These costs are
set forth below in four (4) components for billing and accounting
purposes.  The Parties intend that these
components incorporate all costs that are or could be associated with the
Trimble County Unit 2 Project.  Should
any item or category of cost not fall within the technical definitions of any
of the four components, the Parties agree to adjust the billing components so
as to include such item or category.

 

Starting on the
Commercial Operation Date, the Parties shall pay, in accordance with
Article 10, a monthly amount equal to the sum of the four components
delineated in Articles 9.2.1, 9.2.2, 9.2.3, and 9.2.4.

 

9.2.1                        Fuel/Reactant Operation Expenses.

 

All Fuel/Reactant
Operation Expenses of Trimble County Unit 2 will be prorated to the Parties,
according to the net electric energy delivered to the Delivery Point for each
Party as compared to the total net energy delivered to the Delivery Point by
Trimble County Unit 2.

 

9.2.2                        Fixed Operation and Maintenance Expenses.

 

A Fixed Operation and
Maintenance Expenses component shall be shared by the Parties in proportion to
their respective Percentages.  The
Companies shall allocate a reasonable portion of all Fixed Operation and
Maintenance Expenses shared among all generating and other assets or
enterprises located on the Trimble County Site to Trimble County Unit 2 in its
annual Operation and Maintenance Budget, pursuant to Article 17.4.4, and
in accordance with procedures established by the Coordination Committee.

 

9.2.3                        Non-Fuel Operating Component.

 

A non-fuel operating
component shall be shared by the Parties in proportion to their respective
Percentages, calculated monthly as the sum of the following four (4) items as
they relate to the operation and maintenance of Trimble County Unit 2:

 

(i)                                     Taxes other than federal and state income
taxes (Account 408.1), except that those categories of taxes, or payments in
lieu thereof, that are directly billed to the Parties by the taxing authority
and paid by the Parties, shall not be contained in this item.

 

(ii)                                  Administrative and general expenses as
recorded in Accounts 920 – 930 as recorded under the Uniform System of
Accounts.

 

(iii)                               Lease payments, which result from a
third-party-financed Incremental Capital Asset or lease payments for other
items of property pursuant to Article 2.1.

 

(iv)                              Penalties (Account 426.3), except for
those environmental penalties against which the Companies have agreed to
indemnify IMPA and IMEA under Article 7.7.

 

41

 

The Companies shall
allocate a reasonable portion of all non-fuel operating costs shared among all
generating and other assets or enterprises located on the Trimble County Site
to Trimble County Unit 2 in its Annual O&M Budget, pursuant to
Article 17.4.4, and in accordance with procedures established by the
Coordination Committee.

 

9.2.4                        Working Capital Component.

 

A working capital
component shall be shared by the Parties in proportion to their respective
Percentages.  Prior to the Commercial
Operation Date, at a date determined by the Coordination Committee, the
Companies shall calculate the estimated amount of working capital necessary for
the operations of the Trimble County Unit 2 Project.  IMPA and IMEA shall fund their respective
share of working capital to the Companies prior to the Commercial Operation
Date.  This component is composed of the
items listed below, to the extent that each of these items relates to the
Trimble County Unit 2 Project:

 

(i)                                     Fuel stocks (Account 151)

 

(ii)                                  Fuel stock expenses undistributed
(Account 152)

 

(iii)                               Plant materials and operating supplies
(Account 154)

 

(iv)                              Stores expense undistributed (Account
163)

 

(v)                                 Prepayments (Account 165)

 

(iv)                              Miscellaneous deferred debits (Account
186)

 

After the Commercial
Operation Date, the Companies, on a monthly basis, shall compute the additions
or reductions in working capital by multiplying the beginning monthly balances
of the above items by the respective Percentage of IMPA and IMEA.  Resulting changes in working capital shall be
paid or credited monthly in accordance with the billing procedures set forth in
Article 10.2.

 

The Companies shall
allocate a reasonable portion of all working capital costs shared among all
generating and other assets or enterprises located on the Trimble County Site
to Trimble County Unit 2 in its Annual O&M Budget, pursuant to
Article 17.4.4, and in accordance with procedures established by the
Coordination Committee.

 

ARTICLE 10.

BILLING, PAYMENTS, AND RECORDS

 

10.1                           Payments before Commercial
Operation Date.

 

During the Development
Phase and the Construction Phase of the Trimble County Unit 2 Project, all
payments will be made by the Parties pursuant to Article 3,
Article 6, and Article 9, as each Article applies.

 

42

 

10.2                           Billings by the Companies after the
Commercial Operation Date.

 

As promptly as practicable,
but in any event not more than twelve (12) working days after the end of each
calendar month during the term of this Agreement following the Commercial
Operation Date, the Companies shall prepare and send to each Party an invoice,
in such detail and with such segregations as may be needed for operating and
accounting records, to indicate monthly amounts due under this Agreement.

 

10.3                           Payments after the Commercial
Operation Date.

 

After the Commercial
Operation Date, amounts due by a Party as specified in invoices issued by the
Companies pursuant to Article 10 shall be due and payable in immediately
available funds on the thirtieth (30th) calendar day following the invoice
date.  Amounts owed by any Party to
another Party under this Agreement, other than under Articles 10.1 and 10.2,
shall be settled in accordance with the procedures set forth in such provisions
as give rise to the obligations.  In the
absence of specific procedures, amounts shall be due by the thirtieth (30th)
calendar day following receipt of a written demand or invoice therefor.  Interest on unpaid amounts shall accrue at
the Agreed Rate from the date due until the date upon which payment is
made.  Payments by any Party to another
Party based on over-billing shall bear interest at the Agreed Rate beginning on
the thirty-first (31st) calendar day after the invoice (or demand)
date and running until such amount is repaid or credited.  Unless otherwise agreed upon, a calendar
month shall be the standard monthly period for the purpose of settlements under
this Agreement.

 

10.4                           Records.

 

The Companies will record
their accounting information in accordance with generally accepted accounting
principles, as modified by the requirements or permitted practices of
applicable regulatory authorities.  For
the purpose of this Agreement, all account references are to the Uniform System
of Accounts.  In the event of any changes
in FERC’s accounting procedures that might result in charges different from
those contemplated by the Agreement, the Parties will agree upon the
appropriate changes to the Agreement to achieve the original intent of the
Parties, unless otherwise mutually agreed by the Parties.

 

The Parties shall keep
and maintain such records as may be necessary or useful in carrying out this
Agreement.  Each Party shall keep such
records as may be needed to afford a clear history of all transactions under
this Agreement and make copies of such records available to the other Parties
upon request.  Each Party shall have the
right during normal business hours, but no more than once each calendar year,
at its own expense, to audit, or cause independent certified public accountants
of its choice to audit, the accounting and other records relating to
transactions under this Agreement and shall have the right to make copies of
records as necessary, provided that neither IMPA nor IMEA shall be permitted to
retain documents (whether hard copy or electronically) that one or both of the
Companies has designated as confidential or proprietary where to do so would
make such records open records under any “open records” or “public records”
Applicable Law.  No Party shall make use
of records of another Party without the express written consent of such Party,
except for disclosure or use that is permitted by this Agreement or where
required by Applicable Law, or for purposes of litigation or alternative
dispute resolution procedures.  All such
records shall be considered the

 

43

 

confidential and
proprietary business records of the Party that generated the particular record
in question.  Any such consent shall not
be withheld unreasonably.

 

10.5                           Timing of Certain Payments.

 

If the due date for any
payment to be made to any Party pursuant to this Agreement falls on a Saturday,
Sunday or other calendar day on which the Federal Reserve wire transfer system
is not available, then such due date shall be deemed to be the next calendar
day on which such wire transfer system is available.

 

10.6                           Payment to Specified Account.

 

All payments under this
Agreement to a Party or Parties shall be made in immediately available funds to
an account or accounts specified by such Party or Parties.  Such Party or Parties may change the account
or accounts on no less than five (5) calendar days written notice to the other
Parties.

 

ARTICLE 11.

INTERCONNECTION AND TRANSMISSION SERVICES

 

The Parties shall share
proportionately the actual costs of interconnection of Trimble County Unit 2 in
accordance with the Interconnection and Operating Agreement.  Such costs are estimated, as of the date
hereof, in Appendix G.  Actual costs of
interconnection include necessary transmission upgrades and additions required
to reliably and safely connect Trimble County Unit 2 to the regional
transmission grid, without facility upgrades or additions related to
transmission delivery to particular points of delivery.  Ongoing costs of interconnection, as
determined in accordance with the Interconnection and Operating Agreement, shall
be borne by the Parties in proportion to their respective Percentages.  Although, as contemplated by
Article 6.3(vi), IMPA and IMEA are expected to be parties to the
Interconnection and Operating Agreement they will not be entitled to receive transmission
credits from the transmission owners group of the Companies unless the
Companies specifically receive transmission revenue from the Applicable
Transmission Provider for IMPA’s and IMEA’s use of the interconnection upgrade.

 

Each Party covenants to
use its respective Best Efforts to secure a Transmission Service Arrangement
with the Applicable Transmission Provider in accordance with the
schedule established in Article 5.3. 
Each Party shall pay the costs and expenses associated with its Transmission
Service Arrangement with the Applicable Transmission Provider and shall bear
its individual system upgrade expenses required to deliver its proportionate
share of Trimble County Unit 2 output to its respective points of delivery from
the Trimble County Plant switchyard.  The
Parties agree to cooperate and reasonably assist each other in the efforts of
the individual Parties to secure their transmission needs.  Actual costs of requested cooperation shall
be fairly allocated to and paid or reimbursed by the Party or Parties
benefiting therefrom.

 

44

 

ARTICLE 12.

TAXES

 

12.1                           Management of Tax Matters.

 

Except for any payments
of taxes or payments in lieu thereof which are directly billed to IMPA or IMEA
by any taxing authority and which IMPA and IMEA shall pay directly, and except
for any rulings that IMPA or IMEA might require in connection with the issuance
of tax-exempt bonds, the Companies shall have the authority and responsibility
for administering, coordinating, filing returns, making property tax
declarations, paying, seeking official tax rulings or determinations, and other
related functions pertaining to all taxes, payments in lieu of taxes,
assessments, impositions, charges, and related costs of every kind and nature,
ordinary, or extraordinary, general or special, foreseen or unforeseen, settled
or pending settlement, including property, sales, use, and payroll taxes,
connected with or arising out of the development, construction, ownership,
operation, maintenance, alteration, repair, rebuilding, use or retirement of
the Trimble County Unit 2 Project or any part thereof, (collectively “Taxes”)
which are or may be imposed by any taxing authority, whether federal, state,
local, municipal, interregional, or quasi-governmental authority, provided, however,
unless specifically authorized in writing by IMPA and/or IMEA, such authority
shall not extend to any act or action affecting any exemption or special tax
treatment arising out of the Trimble County Unit 2 Project to which IMPA or
IMEA may be entitled.  IMPA and IMEA do
hereby appoint the Companies to be their attorneys-in-fact, which appointment
is coupled with an interest, to act in their names, places and steads for the
purpose of exercising the tax authority described herein, filing returns, making
property tax declarations, payment negotiating, seeking adjustments or
revisions, protesting, seeking official tax rulings or determinations,
contesting, making application for and claiming any and all exclusions,
exemptions, deductions, credits and elections pertaining to all such taxes,
payments in lieu of taxes, assessments, impositions, charges, and related
costs. Such appointment shall not be revocable during the term of this
Agreement.  IMPA, IMEA, their agents, or
assigns shall promptly join in any action reasonably required which is
consistent with the exercise by the Companies of the tax authority described
herein and the status of IMPA and IMEA as governmental entities.

 

12.2                           Sharing of Taxes and Related Payments 

 

All Taxes shall be shared
and borne by the Parties in proportion to their respective Percentages,
provided, however, IMPA and IMEA shall be entitled to the entire benefit to the
extent of actual realizations, of their respective exemptions from and
reductions of taxes, including property, sales, use, and payroll taxes,
connected with or arising out of the ownership, operation, maintenance,
alteration, repair, rebuilding, use, or retirement of the Trimble County Unit 2
Project or any part thereof, which may be realized because of the provisions of
the Constitutions of the Commonwealth of Kentucky, the State of Indiana, the
State of Illinois, or the United States of America, or statutes, ordinances,
rules, regulations, or laws applicable to IMPA and/or IMEA but not to the
Companies.

 

The portion of Taxes that
are to be borne by IMPA and IMEA, respectively, as set forth in this
Article 12.2 shall be billed to and paid by IMPA and IMEA in accordance
with Articles 9

 

45

 

and 10, as applicable, except
for those which are paid by IMPA and IMEA, respectively, directly to the taxing
authority.

 

12.3                           Payment of Title Taxes and Fees.

 

All Taxes, recording fees
and other impositions relating to the transfer of real property, if any,
incurred in connection with the conveyances contemplated in this Agreement
shall be borne by the transferees of such real property.  Except as provided in the first sentence of
this Article 12.3 or in Article 12.2, all Taxes arising out of the
Development Work or the Construction Work shall be deemed to be Development
Costs or Construction Costs, respectively.

 

12.4                           Exclusion of Income Taxes.

 

Notwithstanding the
generality of Article 12.1 above, the Parties agree that the foregoing
provisions of this Article 12 shall not apply to any tax on or measured by
net income.

 

12.5                           Non-creation of Taxable Entity.

 

Notwithstanding any other
provision of this Agreement, the Parties do not intend to create hereby at law
any joint venture, partnership, association taxable as a corporation, or other
entity for the conduct of any business for profit.  The Parties agree to elect under
Section 761(a) of the Internal Revenue Code of 1986, as amended, to
exclude the transactions created by this Agreement from the application of
Subchapter K, Chapter 1 of the Code, and the Parties agree to revise
the terms of this Agreement to the extent and in a manner necessary to permit
such election.

 

ARTICLE 13.

INSURANCE

 

13.1                           Procurement of Insurance.

 

Except with regard to
directors and officers liability insurance, the Companies shall maintain in
force, for the benefit of the Parties as their interests in the Trimble County
Unit 2 Project shall appear, such insurance and self-insurance as the
Coordination Committee shall determine to be appropriate.

 

13.1.1                  Sharing of Insurance Costs.

 

The costs of insurance
policies referenced in Article 13.1 shall be shared by the Parties in
proportion to their respective Percentages. 
IMPA and IMEA shall also pay any additional premium that results from
IMPA and IMEA being named as an additional insured party on the Companies’
existing policies.  The Parties shall
also bear proportionate responsibility for costs of and any losses incurred
within the limits of any deductibles or self-insured retentions on policies of
insurance.  The Parties’ share of such
insurance costs and the costs arising from claims covered by self-insurance
shall be shared by the Parties in proportion to their respective Percentages
and shall be paid in accordance with Articles 9 and 10, as applicable.

 

46

 

13.1.2                  The Parties Named as Insured.

 

IMPA and IMEA shall be
named as either insureds or additional insureds on such insurance
policies.  The Companies shall cause the
insurance underwriters to furnish the Parties with a certificate of insurance
of each such insurance policy.  In
addition, the Companies shall have each of such policies endorsed to provide
that IMPA and IMEA shall be given the same advance notice of cancellation or
material change as is required to be given to the Companies.  Subject to the decisions of the Coordination
Committee, a loss or claim, if any, under such insurance policies shall be
adjusted and settled by the Companies with the insurance underwriters.

 

13.1.3                  Procurement of Additional Insurance for
the Parties.

 

Any Party may obtain at
its cost additional insurance beyond that provided for in this Article 13
to insure its interest in the Trimble County Unit 2 Project.  With respect to such additional insurance:

 

(i)                                     the proceeds from any claim arising
through such additional insurance shall be disbursed to the Party providing the
insurance; and

 

(ii)                                  the loss or claim, if any, under such
additional insurance shall be adjusted and settled by the Party providing the
insurance.

 

13.1.4                  Sharing of Refunds from Insurance Premiums.

 

Any refunds of insurance
premiums shall be allocated among the Parties on the same basis as the premium
payment allocation from which such refund was derived.

 

13.1.5                  Sharing of Insurance Proceeds.

 

In the event of damage to
property insured under this Article 13, it is agreed that the proceeds
from insurance obtained by the Companies on behalf of the Parties shall be
shared by the Parties on a pro rata basis based on their relative payments of
insurance premiums covering the damaged property.

 

13.2                           Destruction.

 

13.2.1                  Damage or Destruction Fully Covered
By Insurance.

 

If property insured under
this Article 13 or any portion thereof should be damaged or destroyed to
the extent that the cost of repairs or reconstruction is estimated to be
covered by the aggregate amount of insurance coverage (without regard to any
deductible) carried by the Companies for the benefit of the Parties pursuant to
Article 13, then the Companies shall cause such repairs or reconstruction
to be made so that such property shall be restored to substantially the same
general condition, character, or use as existed prior to such damage or
destruction, provided, however, if the estimate is wrong, and the insurance
proceeds are insufficient to pay the cost of repair or reconstruction, the
Parties shall share the cost not reimbursed by such insurance in proportion to
their respective Percentages.

 

47

 

13.2.2                  Damage or Destruction Not Fully
Covered by Insurance.

 

If Trimble County Unit 2,
the Trimble County General Plant Facilities or any portion thereof as they
pertain to Trimble County Unit 2, should be damaged or destroyed to the extent
that the cost of repairs or reconstruction is estimated to be more than the
aggregate amount of insurance coverage (without regard to any deductible)
carried by the Companies for the benefit of the Parties or by one or more of
the other Parties for the benefit of the Parties pursuant to Article 13
hereof and covering the cost of such repairs or reconstruction, then, if the
Companies elect to repair and reconstruct such property and upon agreement of
the Companies and the other Parties, the Companies shall cause such repairs or
reconstruction to be made and the Companies and the other Parties shall share
the costs of such repairs or reconstruction not reimbursed by such insurance,
in proportion to their respective Percentages, provided, however:

 

(i)                                     If IMPA or IMEA elects not to join the
Companies in repairing and reconstructing such property, then, at the
Companies’ election, the Parties shall determine the monetary amount to be paid
by the Companies to IMPA or IMEA or by IMPA or IMEA to the Companies, as
provided for in paragraph (ii) of this Article 13.2.2.  Upon payment of such monetary amount by the
Companies to IMPA or IMEA or by IMPA or IMEA to the Companies, as the case may
require as set forth in said paragraph (ii), IMPA or IMEA shall transfer its
entire Ownership Interest in Trimble County Unit 2 and the Trimble County Unit
2 Site, its license to use the Trimble County General Plant Facilities, and its
easement to the Trimble County Site, to the Companies free and clear of all
liens, security interests, charges, claims and other encumbrances, and this Agreement
shall be (a) appropriately amended if only one Party other than the
Companies elects not to join the Companies in repairing and reconstructing such
property or (b) deemed to have expired if IMEA and IMPA both elect not to
so join the Companies.

 

(ii)                                  The monetary amount to be paid to or
received from IMPA or IMEA pursuant to the provisions of paragraph (i) of this
Article 13.2.2 shall be determined in accordance with the following
equation:

 

P=W*X

 

Where:

 

P   =                                           the
monetary amount to be paid to or received from IMPA or IMEA. If P is positive,
the monetary amount shall be paid to IMPA or IMEA; and if P is negative, the
monetary amount shall be received from IMPA or IMEA.

 

W   =                                     IMPA’s/or
IMEA’s Percentage before transfer of IMPA’s/or IMEA’s Ownership Interest.

 

X   =                                         the
fair market value (as determined by an independent appraiser selected jointly
by the Parties) of (i) Trimble County Unit 2 and (ii) the Trimble
County Unit 2 Site and the Trimble County General Plant Facilities as they
pertain to IMPA’s or IMEA’s use of Trimble County Unit 2, at the time IMPA or
IMEA elects not to join the 

 

48

Companies in repairing and reconstructing Trimble County Unit 2 or the
Trimble County General Plant Facilities. 
Fair market value shall be determined after taking into account all
applicable costs of dismantling, demolishing, and removal of equipment, facilities,
and structures; security; maintenance; disposing of debris; and any site work
necessary to remove the effects of such damage or destruction.  Fair market value may be a negative figure
where appropriate.

 

ARTICLE 14.

PARTITION OF OR TRANSFERS OF INTEREST

 

14.1                           Special Nature of Trimble County Unit
2 Project - Waiver of Right of Partition.

 

The Parties
recognize that Trimble County Unit 2 is an integral part of the facilities
required to provide adequate service in their respective service territories
and that the physical partition of the Trimble County Unit 2 Project or any
material part thereof would be impossible and impractical and wholly
inconsistent with the purposes for which this Agreement is made.

 

Each of the
Parties agrees that it will not take any action at any time by judicial
proceedings or otherwise, to partition the Trimble County Unit 2 Project or any
part thereof, in any way, whether by partition in kind or by sale and division
of the proceeds thereof.  Each of the
Parties further waives the right of partition and the benefit of all statutory
or common law that may now or hereafter authorize such partition of the Trimble
County Unit 2 Project or any part thereof. 
In the event any such right of partition shall hereafter accrue, each Party
shall from time-to-time upon the written request of the other Party execute and
deliver such further instruments as may be necessary to confirm the foregoing
waiver and release of its right to partition. The foregoing provisions of this
Article 14.1 shall be binding upon and inure to the benefit of the
Parties, their respective successors and assigns, including mortgagees,
receivers, trustees, or other representatives and their respective successors
and assigns, and shall run with the land. 
The Parties agree to insert a similar covenant in any contract with
another party, which acquires all or any portion of a Percentage, which
covenant will be enforceable by any Party.

 

14.2                           Transfer of Ownership Interests.

 

If any Party
(“Transferring Party”) shall desire to transfer (whether by sale, conveyance,
assignment, lease, or otherwise) all or any portion of its Ownership Interest
(the “Offered Interest”), it may only do so in a bona fide arm’s length
transaction, subject to Articles 14.2.1, 14.2.2, 14.2.3, 14.2.4, and
14.2.5.  Prior to making any such
transfer, the Transferring Party shall give not less than forty-five (45)
calendar days’ written notice to the other Parties, of the proposed transaction
and the identity of the proposed purchaser(s). 
Any such transaction or transactions shall not be consummated until each
of the other Parties has determined not to exercise its right of first refusal
as set forth in this Article 14.2. 
Such notice shall fully disclose the terms of the proposed transaction
or transactions.  Upon receipt of such
notice, each other Party shall have a right of first refusal to acquire the
Offered Interest, upon the same terms and conditions that the Transferring
Party and the proposed purchaser(s) have agreed upon.  If each

 

49

 

Party agrees to exercise its right of first refusal, each such Party
shall acquire the Offered Interest in proportion to its respective Percentage
prior to the proposed transfer.  If a
Party elects not to exercise its right of first refusal, the remaining Parties
shall acquire the Offered Interest in proportion to their then existing
Percentages.  If only one Party elects to
exercise its right of first refusal, it must acquire the entire Offered
Interest by the Transferring Party. 
Within forty-five (45) calendar days following receipt of the notice
from the Transferring Party, each of the other Parties shall give written
notice to the Transferring Party stating whether or not it elects to acquire
the Offered Interest (the “Return Notice”). 
A failure to give the Return Notice shall be deemed to be an election
not to acquire such interest.  If a Party
or Parties elects or elect to exercise its or their rights to acquire such
interest, the Transferring Party and such Party or Parties as soon as
practicable, shall execute such instruments as may be necessary and appropriate
to effectuate such sale, conveyance, transfer, assignment, lease, or other
disposition, as the case may be, to such Party or Parties, free and clear of
all liens, security interests, charges, claims, and other encumbrances for
which the Transferring Party, as between the Parties, is responsible, including
the indenture(s) of the Transferring Party.

 

14.2.1                  Conditions of Transfer.

 

If none of the
Parties elects to acquire the Offered Interest in the Trimble County Unit 2
Project as provided in Article 14.2, the Transferring Party may consummate
its proposed transaction and dispose of the Offered Interest, provided,
however, the other Parties have approved the proposed purchaser(s) as suitable
as a joint owner(s) of Trimble County Unit 2, although such approval may not
unreasonably be withheld, conditioned or delayed, and provided, further, where
one or more of the Companies is a Transferring Party, the other Parties’ rights
to approve the prospective purchaser as suitable shall be limited to situations
in which the proposed transfer reduces the Companies’ aggregate Percentage to
less than fifty percent (50%) or where such proposed transfer conveys, in whole
or in part, the Companies’ rights and obligations for the operation of Trimble
County Unit 2 and the Trimble County General Plant Facilities under this
Agreement to the proposed purchaser(s). 
Grounds for withholding such approval may include financial condition,
experience in the operation and management of coal-fired generation, if
applicable, and other factors as may materially adversely affect the other
Parties’ interests hereunder.  The
Transferring Party shall require (as a condition of or in connection with the
sale, conveyance, transfer, assignment, lease, or other disposition, and for
the benefit of the other Party) the proposed purchaser(s) to assume and agree
to be bound by the provisions of this Agreement and any amendments thereto, and
in furtherance thereof the provisions of this Agreement shall be amended
appropriately.

 

Upon consummation of the transfer, the Transferring Party shall be
released from its obligations under this Agreement, and from any claims,
liabilities or debts, that arise in respect of the transferred interest on or
after the date of such transfer.  The
consummation of any such transfer shall not release the Transferring Party from
any of its debts or liabilities to the other Parties which, at the time of the
consummation of the transaction, have accrued under this Agreement, unless the
Parties shall agree in writing to the contrary. 
Any purported or attempted transfer of an interest in violation of this
Article 14 shall be void and of no effect.

 

50

 

14.2.2                  Further Conditions of Transfer.

 

The right of the Transferring Party to dispose of the Offered Interest
to one or more non-Affiliates of the Transferring Party, as set forth in
Article 14.2, is subject to the further condition that the other Parties
shall be given written notice thereof and shall have the further right of first
refusal, to the same extent and by the same procedure described in
Article 14.2 if the Transferring Party:

 

(i)                                     undertakes
to consummate its proposed transaction at a time subsequent to two hundred
forty (240) calendar days following the other Parties’ receipt of the written
notice first referred to in Article 14.2;

 

(ii)                                  undertakes
to, without the consent of the other Parties, which consent will not be
unreasonably withheld, dispose of such Offered Interest to Persons other than
those whose identity was disclosed in said notice; or

 

(iii)                               undertakes
to dispose of the Offered Interest upon substantially different terms and
conditions than were disclosed in said notice.

 

14.2.3                  Non-applicability of Certain Provisions.

 

The provisions of the foregoing Articles 14.2, 14.2.1 and 14.2.2 shall
continue for the duration of this Agreement and shall be applicable to each and
every occasion and whenever a Party desires to dispose of (whether by sale,
conveyance, transfer, assignment, lease, or otherwise) all or any portion of
its Ownership Interest, provided, however, such provisions  (excluding the last paragraph of Article 14.2.1)
shall not be applicable to, and each of the Parties hereby consents to, the
following:

 

(i)                                     the
transfer, sale, or assignment to a financially responsible Affiliate or
successor of a Party;

 

(ii)                                  the
transfer, assignment, pledge, hypothecation, mortgage, or grant (by indenture
of mortgage, deed of trust, or otherwise) by any Party of its Ownership
Interest, together with all or substantially all of its other electric utility
property, for the purpose of securing bonds or other obligations for borrowed
money issued or to be issued by it, including the effect of any after-acquired
property clause of any such indenture of mortgage, deed of trust, or other
instrument now existing or hereafter created by such Party, or the realization
on or enforcement of such security or the exercise by the trustee or the
mortgagee, or as the case may be, or the beneficiaries of such security of any
of the rights, powers, or privileges provided for with respect thereto;

 

(iii)                               the
transfer by a Party to one or more third parties of its Ownership Interest,
together with all or substantially all of its other electric generating assets,
whether by sale or pursuant to or as a result of a merger, consolidation, or
corporate reorganization; or

 

(iv)                              the
transfer by the Companies of any interest in Trimble County Unit 2, which
transfer would not reduce the Companies’ aggregate Percentage to a level below
seventy-five percent (75%).

 

51

 

All transfers
of interest described in clauses (i) through (iv) of this Article 14.2.3
shall be conditioned upon the transferee, by written agreement or by operation
of law, assuming the obligations of this Agreement, and any amendments thereto,
of the Transferring Party; except that transferees under (ii) and (iii) above
shall not be subject to this condition prior to any exercise of ownership,
control, or possession by transferee over the interest transferred.  In furtherance of such transfer, the Parties
shall amend this Agreement appropriately.

 

14.2.4                  Transfer of Associated Rights and
Interests.

 

No transfer
(whether by sale, conveyance, assignment, lease, or otherwise) of any Ownership
Interest shall be permitted, or shall become effective, unless the interest
transferred includes a corresponding and equivalent transfer of associated
rights and interests under this Agreement, including its rights and interests
in Trimble County Unit 2, the Trimble County General Plant Facilities, and the
Trimble County Unit 2 Site (and the licenses and easements associated
therewith), and unless such transfer is made in full compliance with this
Article 14.

 

14.2.5                  Louisville and Kentucky Utilities.

 

In the event
that Louisville and Kentucky Utilities cease to be Affiliates of each other,
the agency established hereunder shall devolve upon either Louisville or
Kentucky Utilities as specified by both of them in a written notice to the
other Parties.  This Agreement shall
thereupon also be amended and restated by the Parties to appropriately reflect
such change and the severing of such affiliated relationship.

 

ARTICLE 15.

ASSIGNMENT

 

15.1                           Limitation of Assignability.

 

This Agreement
shall not be assignable by any Party without the written consent of the other
Parties, except that no such consent under this Article 15.1 shall be
required for the assignment of this Agreement (i) as an incident to the
disposition of Ownership Interests in accordance with Articles 14.2, 14.2.1,
14.2.2 or 14.2.3 hereof or (ii) as an incident to the disposition of its
Ownership Interest to the trustee for the revenue bonds issued by IMPA or IMEA
to pay the costs of the acquisition of IMPA’s or IMEA’s Ownership Interest.

 

15.2                           Successors and Assigns.

 

This Agreement
shall inure to the benefit of and be binding upon the Parties and their
respective successors and upon the assigns of the Parties when such assignment
is made in accordance with the provisions of Article 15.1.

 

52

 

ARTICLE 16.

LIABILITY AND DEFAULT

 

16.1                           Liability to Third Parties.

 

Subject to any
express provision to the contrary in this Agreement, any liability or any
payment, cost, expense, or obligation arising from a claim of liability (after
application thereto of any insurance coverage or proceeds) to one or more third
parties against one or more of the Parties and arising from the planning,
engineering, design, licensing, procurement, construction, installation,
completion, operation, use, management, control, maintenance, replacement,
alteration, modification, renewal, rebuilding or repair, retirement, disposal,
or salvaging of the Trimble County Unit 2 Project or any part thereof; or from
any other action or failure to act by any Party (or its employees, agents, or
contractors) in carrying out any of the provisions of this Agreement in regard
to the Trimble County Unit 2 Project or any part thereof, shall be several and
not joint and shall be shared by the Parties in proportion to their respective
Percentages in all circumstances except where such liability or claim of
liability is the result of gross negligence or intentional wrongdoing on the
part of less than all of the Parties. 
If, by reason of any such liability or claim of liability (after
application thereto of any insurance coverage or proceeds) to one or more third
parties, any Party shall be called upon to make any payment or to incur any
cost, expense, or obligation in excess of that for which it is responsible
under the provisions of the preceding sentence, then the other Parties shall
reimburse the Party making such excess payment or incurring any such excess
cost, expense, or obligation to the full extent of the excess.

 

16.2                           Liability Among the Parties; No
Consequential Damages.

 

Except as
stated in Articles 6.5.5, 6.5.6, 7.7, 13.2.2, 19.4, 19.5, and 21.1.3 a Party
(or its employees, agents or contractors) shall not be liable to the other
Parties for any loss, cost, damage, or expense incurred by the Parties as a
result of any action or failure to act, under any circumstances, by that Party
(or its employees, agents, or contractors) in carrying out any of the
provisions of this Agreement, unless such loss, cost, damage, or expense is the
result of (i) gross negligence or intentional wrongdoing on the part of that
Party, (ii) a Withdrawal Event occurs with respect to that Party after the
Construction Closing or (iii) the performance of Companies’ obligations during
the Development Phase or Construction Phase falling below the standard of
conduct established in Article 20.24. 
For purposes of this paragraph “contractors” shall not be interpreted to
mean Persons under contracts entered into by all of the Parties or by the
Companies when acting as the agent of the Parties.

 

Notwithstanding
any other provision of this Agreement, the maximum aggregate liability of the
Companies to IMEA or IMPA in connection with any loss, cost, damage or expense
arising under clause (iii) above shall be limited to the aggregate amount of
the supervisory fee paid to the Companies by such Party pursuant to
Article 9.1.

 

Notwithstanding
any other provision of this Agreement, in no event shall any Party be liable to
another Party with respect to any claim, whether based on contract, tort
(including negligence), patent, trademark or service mark, or otherwise, for
any indirect, special, incidental, or consequential damages.

 

53

 

In no event
shall any Party be excused from liability for its fraudulent acts.

 

16.3                           Indemnification.

 

Subject to
Article 16.2 hereof, each Party (“breaching Party”) hereby agrees to
indemnify and hold the other Parties (“non-breaching Parties”) harmless from,
against, and in respect of and shall on demand reimburse the non-breaching
Parties for:

 

(i)                                     any
and all loss, liability, or damage resulting from any untrue representation,
breach of warranty, or non-fulfillment of any covenant or agreement by the
breaching Party contained herein or in any certificate, document, or instrument
delivered to the non-breaching Parties hereunder; and

 

(ii)                                  any
and all loss suffered by the non-breaching Parties due to the breaching Party’s
failure to perform or satisfy any obligation assumed pursuant to this
Agreement; or

 

(iii)                               any
and all loss resulting from actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including legal fees and expenses,
incident to any of the foregoing or incurred in investigating or attempting to
avoid the same or to oppose the imposition thereof, or in successfully
enforcing this indemnity.  The provisions
of this paragraph (iii) shall not apply unless it shall be finally adjudicated
by a court having jurisdiction of the subject matter and the Parties that a
Party has committed a breach identified in paragraph (i) or (ii) of this
Article 16.3.

 

16.4                           Nature and Survival of Representations
and Warranties.

 

Each representation,
warranty, indemnity, covenant, and agreement made by the Parties in this
Agreement or in any document, certificate, or other instrument delivered by or
on behalf of the Parties pursuant to this Agreement or in connection herewith,
shall survive the Development Closing and the Construction Closing,
respectively.

 

16.5                           Default.

 

16.5.1                  Events of Default.

 

The following
shall be an Event of Default under this Agreement:

 

(i)                                     Failure
to Make Payment.  Subject to
Article 18.4, failure by any Party to make any payment to the other
Parties required under this Agreement within sixty (60) calendar days after the
date on which such payment becomes due, or failure by any Party to give any
credit to the other Parties required under this Agreement for a period of sixty
(60) calendar days after the date on which such credit becomes due, or failure
by any Party to make payment for a period of sixty (60) calendar days after the
date on which such payment becomes due, when failure to do so is likely to
result in a lien on any of the property subject to this Agreement or otherwise
adversely affects the interests of the other Parties, provided, however, that
no Party shall be in default if the amount it owes hereunder can be, and is,
offset in whole within sixty (60) calendar days after the date on which such
amount became due and payable, by the Party to whom that sum is owed under this
Agreement.

 

54

 

(ii)                                  Failure
to Perform.  Failure by a Party to
perform any material obligation, duty, or responsibility in accordance with the
provisions of this Agreement.

 

16.5.2                  Curing Event of Default in Regard to
Paying Money.

 

As to any
Event of Default resulting from the failure to pay money, the defaulting Party
may remedy its Event of Default (when such default is the failure to pay money)
by paying to the non-defaulting Parties on or before ninety (90) calendar days
from the date the payment becomes due:

 

(i)                                     the
sums due;

 

(ii)                                  interest
on the sums due at the Agreed Rate from the date due until paid; and

 

(iii)                               any
other costs reasonably incurred by the non-defaulting Parties as a result of
such Event of Default.

 

16.5.3                  Curing Event of Default for Other
Than Failure to Pay Money.

 

An Event of
Default other than the failure to pay money may be cured by the Party in
default by performing such act as is necessary to cure the Event of Default and
by paying the non-defaulting Parties on or before ninety (90) calendar days
from the date such Event of Default occurred, any sums due under
Article 16.3.

 

16.5.4                  Non-Applicability of Cure Provisions.

 

The cure
periods set forth in Articles 16.5.2 and 16.5.3 are intended to allow a Party
to have the opportunity to cure a specific Event of Default and, unless
otherwise provided, do not otherwise extend the time required for the
performance of any other obligation of a Party under this Agreement.

 

16.5.5                  Appointment of a Receiver.

 

If an Event of
Default occurring after the Commercial Operation Date continues for a period of
one hundred eighty (180) calendar days, then the non-defaulting Parties may
have a receiver appointed by a state or federal court sitting in Louisville,
Kentucky, to take control of and operate the defaulting Party’s interest in the
Trimble County Unit 2 Project and perform in accordance with the terms of this
Agreement.

 

16.5.6                  Additional Obligations.

 

With respect
to any Party as to which an Event of Default has occurred, such Party shall use
its Best Efforts to take any and all such further actions and shall execute and
file where appropriate any and all such further legal documents and papers as
may be reasonable under the circumstances in order to facilitate the carrying
out of this Agreement or otherwise effectuate its purpose, including action to
seek any required governmental or regulatory approval and to obtain any other
required consent, release, amendment, or other similar document.

 

16.5.7                  Notice.

 

55

 

To entitle a
Party hereto to exercise any remedy conferred upon or reserved by it in this
Article 16, notice shall be provided in accordance with Article 20.2
hereof.

 

16.6                           Force Majeure.

 

In no event
shall any Party be liable to the other Parties for failure by such Party to
perform any of its obligations under this Agreement because of Force
Majeure.  Nothing contained herein shall
be construed to require a Party to settle any strike, lockout, work stoppage,
or other industrial disturbance or dispute in which it may be involved or to
take an appeal from any action of a Governmental Authority.  Any Party rendered unable to fulfill any of
its obligations under this Agreement by reason of Force Majeure shall exercise
Best Efforts to remove such inability with all reasonable dispatch.  In the event any Party is unable, in whole or
in part, to perform any of its obligations by reason of Force Majeure, other
than obligations to make payments hereunder, the obligations of the Party
relying thereon, insofar as such obligations are affected by such Force
Majeure, shall be suspended during the continuance thereof but no longer.  The Party invoking Force Majeure shall notify
the other Parties of the full particulars of the Force Majeure and the time and
date when the Force Majeure occurred. 
Notices given by telephone under this Article 16.6 shall be
confirmed promptly by electronic mail or facsimile transmission.  When the Force Majeure ceases, the Party
relying thereon shall give immediate notice thereof to the other Parties by
electronic mail or facsimile transmission. 
This Agreement shall not be terminated by reason of Force Majeure but
shall remain in full force and effect. 
Force Majeure does not include financial inability to pay, and shall
not, in any event, excuse payment for obligations already incurred hereunder at
the time a claim is made.

 

ARTICLE 17.

MANAGEMENT

 

17.1                           Coordination Committee.

 

From time to
time various administrative, financial, and technical matters may arise in
connection with the terms and conditions of this Agreement which will require
the cooperation and consultation of the Parties and the exchange of
information.  As a means of providing for
such consultation, interchange, decision making, or ratification, a
Coordination Committee is hereby established with functions as described in
Article 17.3 below.  However, such
committee shall not diminish in any manner the authority of the Companies as
set forth in this Agreement

 

17.2                           Coordination Committee Formation.

 

Within thirty
(30) calendar days after the Execution Date, each Party shall designate a
representative and an alternate that are to serve on the Coordination Committee
and shall give written notice to the other Parties of such designations.  In the event that any Ownership Interest of a
Party, in whole or in part, shall be assigned or otherwise transferred to a
replacement or an additional Party in accordance with the provisions of this
Agreement, such replacement or additional Party shall designate a
representative and an alternate to serve on the Coordination Committee.  Any change in the representative or alternate
of a Party on the Coordination Committee shall be made by written notice to the
other Parties.  Each Party shall be
responsible for the personal expenses of its representatives.

 

56

 

17.3                           Powers of Coordination Committee.

 

The
Coordination Committee shall be responsible for and shall take actions, which
it determines are necessary or advisable during the term of this
Agreement.   The Coordination Committee
shall address activities necessary or advisable to plan, license, acquire
licenses, permits and approvals for, construct, acquire, complete, maintain,
operate, assure the security of, and decommission the Trimble County Unit 2
Project, including:

 

(i)                                     the
making of such agreements and modifications of existing agreements and the
taking of such other action as the Coordination Committee deems necessary or
that may be required under the regulations or directives of any Governmental
Authority having jurisdiction thereof, with respect to the development,
construction, acquisition and completion of the Trimble County Unit 2 Project
for commercial service; the procurement, replacement, modification, or renewal
of all or any part thereof; the making of additions, betterments, or
improvements thereto; the operation and maintenance thereof; and the
retirement, decommissioning, storage, or salvaging of all or any part thereof;

 

(ii)                                  the
execution and filing with Governmental Authorities having jurisdiction of
applications, amendments, reports, and other documents and filings required in
connection with the licensing and other regulatory matters, including
applications for extension or renewal of the terms of any licenses and permits
required by any Governmental Authority;

 

(iii)                               the
adjustment of losses and settlement of any losses covered by insurance on the
Trimble County Unit 2 Project;

 

(iv)                              the
pursuit and defense of claims and causes of action of any kind relating to the
Trimble County Unit 2 Project, including the filing or defense of suits, appeals
thereof, and settlement of claims and suits subject to the right of any Party
to conduct its own action in any litigation in which it is a party or in which
it is entitled to intervene pursuant to this Agreement;

 

(v)                                 the
establishment of such subcommittees as it believes appropriate and provide for
membership, meetings, voting procedures and such other rules of procedure as it
deems appropriate consistent with the provisions of this Article 17.

 

(vi)                              the
determination from time to time of the Net Electric Generating Capacity and the
Net Seasonal Capacity of Trimble County Unit 2;

 

(vii)                           the
approval of budgets for development, construction, operation and maintenance,
and Incremental Capital Assets, as described in Article 17.4;

 

(viii)                        acting
upon any matter brought before the Coordination Committee by a Party;

 

(ix)                                performing
such other duties as set forth in this Agreement; and

 

(x)                                   prior
to and as a condition of the Construction Closing, undertaking due
consideration of and issuance of the Authorization to Construct.

 

57

 

17.4                           Budget Approval.

 

17.4.1                  Development Budget.

 

Prior to the
Development Closing, the Companies shall provide a budget of the total
Development Costs, together with interest thereon in accordance with
Article 3.2 and the supervisory fees thereon applicable to IMPA and IMEA
in accordance with Article 9.1 (the “Development Budget”), which shall
include all applicable charges incurred prior to Development Closing and to be
paid in accordance with Article 9.1, and the Companies’ best estimates of
all applicable charges from Development Closing to the Construction Closing,
including a reasonable contingency.  The
proposed Development Budget will include such level of detail as may be reasonably
required by the Parties for their budgets, books and records, as well as
estimated expenditures at certain milestones throughout the development of the
Trimble County Unit 2 Project.  The
Parties will share all Development Costs in proportion to their respective
Percentages.

 

The Parties
must approve, by unanimous vote, the Development Budget submitted by the
Companies, with such changes as the Parties deem necessary or appropriate and
such approved Development Budget will be attached hereto as Appendix H.  After the initial Development Budget is
approved, the Companies are authorized to expend the amounts contained therein.

 

The Companies
may submit a revised Development Budget to the Coordination Committee for
approval or disapproval.

 

After the Development
Closing and during the Development Phase, the Companies shall provide status
reports on the Development Schedule, Development Work, Development Costs (and
the supervisory fees thereon), Development Budget, Construction Schedule, and
Construction Budget on a monthly basis and at such other times as the Companies
believe elements thereof will change significantly.  Such reports shall disclose material
developments affecting the Development Work (and the schedule impact
thereof), the Development Costs, the Development Budget, the Construction
Schedule or the Construction Budget.

 

17.4.2                  Construction Budget.

 

Not less than
ninety (90) calendar days prior to the Construction Closing, the Companies will
submit a proposed budget for Construction Costs (including the supervisory fees
thereon in accordance with Article 9.1) (the “Construction Budget”) to the
Coordination Committee.  The proposed
Construction Budget will include all Construction Costs (including the supervisory
fees thereon in accordance with Article 9.1) and a reasonable contingency
established by the Companies.  The
proposed Construction Budget will include such level of detail as may be
reasonably required by the Parties for their budgets, books and records, as
well as estimated expenditures at certain milestones throughout the
construction of the Trimble County Unit 2 Project.  The proposed Construction Budget shall
include an estimated cash flow of payments expected to be made by the Parties
during the Construction Phase in accordance with Article 9.1.  The Coordination Committee shall approve the
Construction Budget submitted by the Companies, with such changes as the
Coordination Committee deems necessary or appropriate.  After the Construction Closing has occurred,
the Companies will be authorized to expend the amounts authorized in the
Construction Budget in effect as of the date of the Construction

 

58

 

Closing (the “Initial Construction Budget”) contained therein.  IMPA and IMEA shall pay the Companies
directly for their respective proportionate share of all approved Construction
Costs (and the supervisory fees thereon in accordance with Article 9.1) on
a monthly basis, in accordance with Articles 9 and 10.

 

After the
Construction Closing has occurred, the Companies shall provide status reports
thereon not less than monthly and such other times as they believe the costs of
the Initial Capital Assets of the Trimble County Unit 2 Project will change
significantly.  The Companies shall have
the authority to approve change orders to the Construction Contracts whether
initiated by the Companies or by a Construction Contractor, provided that
Companies shall not direct discretionary changes that would be in excess of the
then existing Construction Budget (including budgeted contingency) without the
unanimous consent of the Coordination Committee.  If any individual change to the Initial
Construction Budget (after utilizing all budgeted contingency) exceeds one percent
(1%) of the Initial Construction Budget or any combination of change orders and
changes to the Construction Budget results in a cumulative increase in the
initial Construction Budget (after utilizing all budgeted contingency) by more
than five percent (5%) of the Initial Construction Budget a (“Major Change”),
the Companies will consult with the Coordination Committee and seek an
amendment to the Construction Budget. 
Any change orders to the engineering, equipment or other Construction
Contracts that change the guaranteed performance, including the Net Electric
Generating Capacity, major equipment, or the guaranteed completion dates of the
Trimble County Unit 2 Project shall not be authorized by the Companies without
prior consultation with and approval of the Coordination Committee.

 

The Companies
will be authorized to expend the amounts in the Construction Budget as revised
from time-to-time in accordance with this Article 17.4.2.  At any time, regardless of actual
construction expenditures, the Companies may submit a revised Construction
Budget for the Trimble County Unit 2 Project to the Coordination Committee for
approval or disapproval.

 

After the
Construction Closing and during the Construction Phase, the Companies shall
provide status reports on the Construction Schedule, Construction Work,
Construction Costs (together with the supervisory fees thereon in accordance
with Article 9.1), and Construction Budget on a monthly basis.  Such reports shall disclose material
developments affecting the Construction Schedule, the Construction Work, the
Construction Costs or the Construction Budget.

 

17.4.3                  Annual Capital Budget. 

 

For
Incremental Capital Assets after completion of the original construction of the
Trimble County Unit 2 Project, the Companies shall prepare and submit to the
Coordination Committee an annual Trimble County Unit 2 Project capital budget
(the “Annual Capital Budget”) no later than August 1 of each year for the
subsequent year.  The Coordination
Committee must approve the Annual Capital Budget submitted by the Companies with
such changes as the Coordination Committee deems necessary or appropriate,
after which the Companies will be authorized to expend the amounts contained
therein.  After approval of the Annual
Capital Budget, no further review by the Coordination Committee is required
unless the actual, total capital expenditures are anticipated to exceed the
approved Annual Capital Budget by fifteen percent (15%) or more.  In this event, the Companies will submit a
revised Annual

 

59

 

Capital Budget to the Coordination Committee for its approval or
disapproval on a quarterly basis.  The
Companies are not authorized to expend construction funds in excess of one
hundred fifteen percent (115%) of the total amount approved by the Coordination
Committee in the Annual Capital Budget (as revised) except in the event of an
Emergency.  In the event an Emergency
requires expenditure of funds in excess of the approved Annual Capital Budget,
the Companies shall advise the Coordination Committee immediately and request
timely approval or disapproval.  Such
approval or disapproval may be obtained via a telephone or electronic meeting
to be confirmed later in writing.  In the
absence of timely approval, the Companies shall take whatever actions they deem
necessary to support the continued safe and efficient operation of Trimble
County Unit 2.

 

17.4.4                  Operation and Maintenance Budget. 

 

For operation
and maintenance (“O&M”) expenses, the Companies shall prepare and submit to
the Coordination Committee an annual Trimble County Unit 2 Project O&M
budget (the “Annual O&M Budget”) no later than August 1 of each
year.  Such Annual O&M Budget shall
include goals as to unit efficiency and availability for the ensuing year.  The Coordination Committee must approve the
Annual O&M Budget submitted by the Companies with such changes as the
Coordination Committee deems necessary or appropriate.  After the Annual O&M Budget is approved,
the Companies will be authorized to expend the amounts contained therein.  Further, after approval of the Annual O&M
Budget, no further review by the Coordination Committee is required unless the
actual, total O&M expenditures are anticipated to exceed the budgeted
amounts by fifteen percent (15%) or more. 
In this event, the Companies will submit on a quarterly basis a revised
Annual O&M Budget to the Coordination Committee for its approval or
disapproval.  The Companies are not
authorized to expend O&M funds in excess of one hundred fifteen percent
(115%) of the total amount approved by the Coordination Committee in the Annual
O&M Budget (as revised) except in the event of an Emergency.  In the event an Emergency requires the
expenditure of funds in excess of the approved Annual O&M Budget, the
Companies shall advise the Coordination Committee promptly and request timely
approval or disapproval.  Such approval
may be obtained via a telephone or electronic meeting to be confirmed later in
writing.  In the absence of timely
approval the Companies shall take whatever actions they deem necessary to
support the continued safe and efficient operation of Trimble County Unit 2.

 

17.5                           Vote by Coordination Committee.

 

Except as
provided otherwise in this Agreement or by agreement of all Parties, all
actions taken by the Coordination Committee shall be by majority vote, with
each Party entitled to vote in shares equal to its Percentage.

 

17.6                           Meetings.

 

The Chairman
of the Coordination Committee shall rotate annually among the Parties on each
anniversary of the Execution Date.  The
Chairman shall be responsible for calling meetings, except as hereinbelow
provided, and establishing the agenda. 
Each Party, however, shall have the right to have items included on the
agenda.  The Coordination Committee may
also act without a meeting by telephone or electronic conference or voting by
correspondence or electronic mail.  The
Coordination Committee shall meet regularly, but not less often than once

 

60

 

in each calendar quarter during development and construction of the
Trimble County Unit 2 Project and not less than annually after the Commercial
Operation Date, and at such other times as requested by any Coordination
Committee member upon thirty (30) calendar days’ prior written notice.  Meetings may be attended by other
representatives of the Parties in addition to the members of the Coordination
Committee.

 

17.7                           Records.

 

The
Coordination Committee shall keep written records of all meetings.

 

17.8                           Amendments.

 

The Coordination Committee shall have no authority to modify or amend
the terms of this Agreement.

 

17.9                           Information.

 

The Companies
shall use their Best Efforts to keep all members of the Coordination Committee
informed of all significant matters with respect to the development,
construction, operation and maintenance of the Trimble County Unit 2 Project
including, plans, specifications, engineering studies, environmental reports,
budgets, estimates and schedules.   Upon
the request of any Coordination Committee member, the Companies shall furnish
or make available any and all other information relating to the development,
construction and operation and maintenance of the Trimble County Unit 2
Project.

 

ARTICLE 18.

DISAGREEMENT

 

18.1                           Consultation.

 

In accordance
with the provisions of Article 18, the members of the Coordination
Committee will consult in connection with any major matter arising under this
Agreement.

 

18.2                           Disagreement.

 

If any
disagreement arises on major development, construction or operation and
maintenance matters pertaining to the Trimble County Unit 2 Project, major
capital matters pertaining to the Trimble Unit 2 Project, or major retirement
matters, or other matters arising under this Agreement, pertaining to the
Trimble County Unit 2 Project (“Plant Subjects”), such matters shall be
discussed by the Coordination Committee and timely mutual agreement sought in
regard thereto.  If each of the members
of the Coordination Committee agrees to the resolution of any Plant Subject,
such agreement shall be reported in writing to and shall be binding upon the
Parties within the authority of the Coordination Committee as provided in
Article 17.  In the unlikely event
that each of the members of the Coordination Committee is unable to reach agreement
within a reasonable time (giving due cognizance to the operating and
maintenance schedules of Trimble County Unit 2 and all other pertinent
circumstances) with respect to any Plant Subject under consideration, a Vice
President of Louisville, a Vice President of Kentucky

 

61

 

Utilities, the President of IMPA or the General Manager and CEO of IMEA
can, by written notice to the other members of the Coordination Committee,
withdraw the matter from consideration by the Coordination Committee and submit
the same for resolution to a Vice President of Louisville, a Vice President of
Kentucky Utilities, the President of IMPA and the General Manager and CEO of
IMEA. If these senior representatives of the Parties agree to a resolution of
the matter, such agreement shall be reported in writing to and shall be binding
upon the Parties; but if said senior representatives fail to resolve the matter
within seven (7) calendar days after its submission to them, then the matter
may proceed to resolution as provided in Article 18.3.

 

18.3                           Arbitration.

 

If a
disagreement should arise with respect to any Plant Subject which is not
resolved by the Coordination Committee or the senior representatives of the
Parties as provided in Article 18.2 or any other disagreement concerning
this Agreement, then such disagreement may be settled by arbitration by a
single arbitrator as hereinafter provided, in accordance with the provisions of
this Article 18.3. If, after the procedure for resolving such disagreement
by the Coordination Committee or the senior representatives of the Parties as
provided in Article 18.2 has been exhausted, a Party desires that such
disagreement shall be settled by arbitration, it shall serve written notice
upon the other Parties setting forth in detail such disagreement with respect
to which arbitration is desired.  Such
disagreement shall be settled by arbitration if, after receipt of such written
notice, all of the Parties shall agree in writing that such disagreement shall
be settled by arbitration.  Within a
period of thirty (30) calendar days from the date of such agreement in writing
to settle such disagreement by arbitration, the Parties shall mutually agree
upon an arbitrator.  If the arbitrator is
not so selected within the specified thirty (30)-calendar day period, either
Party may, upon written notice to the other Parties, apply to the American
Arbitration Association for the appointment of the arbitrator or arbitrators
who have not been so selected and such association shall thereupon be empowered
to select such arbitrator.

 

The
arbitration proceedings shall be conducted in Louisville, Kentucky, unless
otherwise mutually agreed.  The
Arbitrator shall afford adequate opportunity to both of the Parties to present
information with respect to the disagreement submitted to arbitration and may
request further information from any Party. 
Except as provided in the preceding sentence, the Parties may, by mutual
agreement, specify the rules that are to govern any proceeding before the
arbitrator and limit the matters to be considered by the arbitrator, in which
event the arbitrator shall be governed by the terms and conditions of such
agreement.  In the absence of any such
agreement respecting the rules that are to govern any proceeding, the then
current rules of the American Arbitration Association for the conduct of
commercial arbitration shall govern the proceedings, except that if such rules
shall conflict with the then current provisions of the laws of Kentucky
relating to arbitration, such conflict shall be governed by the then current
provisions of the laws of Kentucky relating to arbitration.

 

Procedural
matters pertaining to the conduct of the arbitration and the award shall be
made by the arbitrator.  The Parties
shall, however, be entitled to all discovery provided for by the Kentucky Rules
of Civil Procedure.  The findings and
award of the arbitrator shall be final and conclusive with respect to the
disagreement submitted for arbitration and shall be binding upon the Parties,
except as otherwise provided by Applicable Law. 
Each Party shall equally

 

62

 

share the fee and expenses of the arbitrator and shall also be
responsible for the costs and expenses incurred
by it in the preparation of its case to the arbitrators.  Judgment upon the award may be entered in any
court having jurisdiction.  In the event
all of the Parties do not agree to arbitrate, each shall have the right to take
appropriate judicial action.

 

18.4                           Obligations To Make Payments.

 

If a disagreement
should arise out of the Development Work, the Construction Work, the Operating
Work, the construction or acquisition of any Incremental Capital Asset or from
any Plant Subject which is not resolved by the Coordination Committee or the
senior representatives of the Parties as provided in Article 18.2, then,
pending the resolution of the disagreement by arbitration (if applicable)
and/or litigation, the Companies shall continue to pursue the Development Work,
the Construction Work, operate Trimble County Unit 2, or construct or procure
necessary Incremental Capital Assets, as the case may be, in a manner
consistent with this Agreement, and the Parties shall continue to make all
payments required in accordance with the applicable provisions of this
Agreement.  Notwithstanding the
foregoing, a Party may, in good faith, withhold payment of amounts that it
disputes are properly due and payable under this Agreement (a “Withholding
Party”), provided, however, any such right to withhold payment is subject to
the following conditions:  (i) the
aggregate amount withheld will not, in the aggregate at any time, exceed
$1,000,000, (ii) prior to the date on which the payment(s) to be withheld would
otherwise be due, the Withholding Party shall (a) give a detailed written
notice to the Party or Parties otherwise entitled to payment of the amount to
be withheld and the basis on which the Withholding Party asserts that the
amount withheld is not due and owing, (b) deposit the full amount of the
withheld payment(s) in an interest-bearing escrow account (the “Escrow
Account”) and (c) commence the dispute resolution process set forth in
Article 18.2 by requesting a meeting of the Coordination Committee to
resolve the dispute.  The Escrow Account
shall be established by all Parties to the dispute (the “Disputing Parties”) in
a reputable financial institution conducting fiduciary business in the United
States, as agreed upon by the Parties. 
The agreement establishing the Escrow Account shall provide that the
escrowed sums are not to be released except upon the signature of all Disputing
Parties, and shall contain such other provisions as the Disputing Parties and
the escrow agent shall agree upon.  At
such time that the dispute is decided in accordance with Article 18 or otherwise
resolved, the Disputing Parties shall direct the escrow agent to release the
escrowed sums, including interest earned thereon, in accordance with the
decision or other resolution.  If the
amount received by the receiving Party is less than the amount required in
accordance with Article 18.5, the Withholding Party shall reimburse the
difference to the Party or Parties entitled to payment.  The cost of establishing and maintaining the
Escrow Account shall be initially borne by the Withholding Party, but shall be
ultimately borne by the Disputing Parties in inverse proportion to their
entitlement to the escrowed proceeds and interest thereon.  By way of example, if a Disputing Party is
ultimately entitled to all of the proceeds of the Escrow Account, the other
Disputing Parties shall bear the cost of establishing and maintaining the
Escrow Account.

 

18.5                           Interest.

 

In the event that a Party withholds payment
pursuant to Article 18.4 or otherwise fails to make a payment when due
and it is determined in accordance with Article 18 or otherwise agreed
that all or any portion of such funds should have been paid when invoiced or
otherwise

 

63

 

due, the Party that withheld such payment or otherwise failed to make
full payment shall pay to the appropriate Parties the full amount overdue,
together with interest thereon at the Agreed Rate from the date such sums were
originally due to the date paid.  In the
event that it is determined in accordance with Article 18 or otherwise
agreed that a Party has received an overpayment under this Agreement, the Party
that received such overpayment shall reimburse the overpaying Party the amount
of such overpayment together with interest thereon at the Agreed Rate from the
date such sum was overpaid to the date of such reimbursement.

 

ARTICLE 19.

REMEDIES

 

19.1                           All Remedies - Setoff.

 

In the event
any Party (the “Defaulting Party”) fails to pay when due any amount owing by it
to the other Parties (the “Non-Defaulting Parties”) under this Agreement or
fails to perform or observe any covenant, condition, or agreement to be
performed or observed under this Agreement or the Interconnection and Operating
Agreement, each Non-Defaulting Party shall have available to it all remedies,
legal and equitable, including those available in order to enforce payment of
any such amount or performance or observance of any such covenant, condition,
or agreement, subject to the defaulting Party’s rights to cure default under
Article 16.5.  All overdue payments
shall bear interest at the Agreed Rate. 
Further, the Non-Defaulting Parties shall have the right to setoff
against any amount owed to them by the Defaulting Party the amount of any
payment which such Party has failed to pay when due under this Agreement or the
Interconnection and Operating Agreement. 
In addition, the Non-Defaulting Parties shall have the other rights and
remedies available to them under this Article 19.

 

19.2                           Injunctive Relief and Specific
Performance.

 

The Parties
hereto agree and acknowledge that the failure to perform any of their
respective obligations (except with respect to Article 6.5.4 hereof) under
this Agreement, including the execution of documents which may be reasonably
requested pursuant to this Agreement, would cause irreparable injury to the
other Parties and that the remedy at law for any violation or threatened
violation thereof would be inadequate, and further agree that the other Parties
shall be entitled to a temporary or permanent injunction, specific performance
or other equitable relief specifically to enforce such obligation without the
necessity of proving the inadequacy of its legal remedies.

 

19.3                           No Remedy Exclusive.

 

Except as otherwise provided in this Agreement, no remedy conferred
upon or reserved to the Parties hereto in this Agreement is intended to be
exclusive of any other remedy or remedies available hereunder or now or
hereafter existing at law, in equity, or by statute or otherwise, but each and
every such remedy shall be cumulative and shall be in addition to every other
such remedy.  The pursuit by any Party of
any specific remedy shall not be deemed to be an election of that remedy to the
exclusion of any other or others, whether provided hereunder or by law, equity,
or statute.

 

64

 

19.4                           Failure to Participate in Incremental
Capital Assets.

 

If IMPA or
IMEA fails to make any payment of its share of the cost of Incremental Capital
Assets, the Companies shall have the right, at their election, to give written
notice of such failure to the Party that has failed to make such payment.  In addition to the right to receive interest
on such overdue payment, if such payment (with interest due thereon at the
Agreed Rate) remains unpaid ninety (90) calendar days after the giving of the
written notice first referred to in this paragraph, then (i) the non-paying
Party’s rights to make any further payments of its share of the cost of the
Incremental Capital Asset shall thereupon terminate, and (ii) the respective
Ownership Interest shall be adjusted in accordance with the following formula:

 

ADD = ALGE*IPCT/(INP+ALGE)

 

where:

 

	
  ADD

  	
  =

  	
   

  	
  Additional Ownership Interest accruing to the Party or Parties as a
  result of making the additional investment to complete construction of
  Incremental Capital Assets (there shall be a corresponding reduction in the
  Ownership Interest of the non-paying Party.

  
	
   

  	
   

  	
   

  	
   

  
	
  INP

  	
  =

  	
   

  	
  Investment made by the non-paying Party or Parties for its or their
  respective Ownership Interest to the time of the written notice first
  referred to in this Article 19.4.

  
	
   

  	
   

  	
   

  	
   

  
	
  ALGE

  	
  =

  	
   

  	
  Additional investment made by the paying Party or Parties to complete
  construction of Incremental Capital Assets as aforesaid.

  
	
   

  	
   

  	
   

  	
   

  
	
  IPCT

  	
  =

  	
   

  	
  The non-paying Party’s Percentage at the time of the written notice
  first referred to in this Article 19.4.

  

 

If either IMPA or IMEA fails to make a payment of its share of the cost
of an Incremental Capital Asset, but not both, then the Companies will notify
the other paying Party and such other paying Party shall fund its proportionate
share (based on its relative Percentage) of the additional investment of the
non-paying Party.  The Companies will
then calculate the portion of the ADD to which they and the other Paying Party
are entitled based on their respective additional investments.

 

19.5                           Failure to Participate in
Construction Costs.

 

In the event that a Party
votes in the Coordination Committee against an amendment to the Construction
Budget that constitutes a Major Change, such Party shall give written notice to
the other Parties, within five (5) calendar days of such vote, specifying
whether it will or will not make payment of its share of the additional
Construction Costs (and the supervisory fee thereon in accordance with
Article 9.1) arising from such amendment to the Construction Budget.  If such Party gives notice that it will not
make such payment or if such Party fails to make such payment, its rights to
make such payment shall thereupon terminate and the Ownership Interests in the
Trimble County Unit 2 Project shall be adjusted in accordance with the
following formula:

 

65

 

ADD = IINV/(NC*$1100/kW)

 

where:

 

	
  ADD

  	
  =

  	
   

  	
  Additional percentage of the Trimble County Unit 2 to be transferred
  from the nonfunding Party to the funding Parties in proportion to their
  respective Percentages.

  
	
   

  	
   

  	
   

  	
   

  
	
  IINV

  	
  =

  	
   

  	
  Incremental investment made by the funding Party resulting from the
  nonfunding Party’s failure to pay.

  
	
   

  	
   

  	
   

  	
   

  
	
  NC

  	
  =

  	
   

  	
  Nominal capacity of the unit at 59? F in kilowatts.

  

 

ARTICLE 20.

MISCELLANEOUS

 

20.1                           Governing Law.

 

The validity,
interpretation, and performance of this Agreement and each of its provisions
shall be governed by the laws of the Commonwealth of Kentucky, except that the
power and authority of IMPA to enter into this Agreement shall be governed by
the laws of the State of Indiana and the power and authority of IMEA to enter
into this Agreement shall be governed by the laws of the State of Illinois.

 

20.2                           Notice to Parties.

 

Unless
otherwise specifically provided in this Agreement, any notice, consent, or
other communication required to be made under this Agreement shall be addressed
to or made by such officer, agent, representative, or employee of a Party as
such Party may, from time-to-time, designate in writing, provided, however, any
written notices hereunder shall be delivered in person, by certified mail, or
by recognized next working day carrier, to the named officer of the Party at
the address listed below, provided, further that any Party may, from
time-to-time, change such designated officer or the address thereof by giving
written notice of such change to the other Parties.  Notice shall be deemed given when received.  Any requirement for notice in writing may be
met by telecopy or other electronic means of communicating written or printed
material, if promptly confirmed in writing in a manner permitted by the
previous sentence.

 

To Louisville:

 

Vice President of Generation

LOUISVILLE GAS AND ELECTRIC COMPANY

220 West Main Street

Post Office Box 32010 (40232)

Louisville, Kentucky 40202

 

To Kentucky Utilities:

 

66

 

Vice President of Generation

KENTUCKY UTILITIES COMPANY

220 West Main Street

Post Office Box 32010 (40232)

Louisville, Kentucky 40202

 

To IMPA:

 

President

INDIANA MUNICIPAL POWER AGENCY

11610 North College Avenue

Carmel, Indiana 46032

 

To IMEA:

 

General Manager & CEO

ILLINOIS MUNICIPAL ELECTRIC AGENCY

919 South Spring Street

Springfield Illinois 62704

 

20.3                           Article Headings Not to Affect
Meaning.

 

The
descriptive headings of the various articles of this Agreement have been
inserted for convenience of reference only and shall in no way modify or
restrict any of the terms or provisions hereof.

 

20.4                           Counterparts.

 

This Agreement
(and any amendments hereto) may be executed simultaneously in four or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

20.5                           Emergency.

 

Notwithstanding
any other provision of this Agreement to the contrary, in the event of an
Emergency, the Companies shall be entitled to take such action without
consultation with the Coordination Committee as to best protect and promote the
development, construction, completion operation, safety or security of the
Trimble County Unit 2 Project.

 

20.6                           Severability.

 

In the event
that any provision of this Agreement, or the application of any such provision
to any Person or circumstance, shall be held invalid or unenforceable, the
remainder of this Agreement, or the application of such provision to Persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby.

 

67

 

20.7                           Integration.

 

The terms and
provisions contained in this Agreement and the Interconnection and Operating
Agreement constitute the entire agreement between the Parties in regard to the
respective matters of said Agreement, and shall supersede all previous
communications, representations, or agreements, either oral or written, between
the Parties with respect to the respective subject matters of said agreements.

 

20.8                           Computation of Time.

 

In computing
any period of time prescribed or allowed by this Agreement, the calendar day of
the act, event, or default from which the designated period of time begins to
run shall not be counted.  The last
calendar day of the period so computed shall be counted, unless it is a
Saturday, Sunday, or legal holiday recognized by the Companies, in which event
the period shall run until the end of the next calendar day which is neither a
Saturday, Sunday, nor legal holiday.

 

20.9                           Waiver.

 

Any waiver at
any time, by any Party, of its rights with respect to another Party, or with
respect to any other matter arising in connection with this Agreement, shall
not be considered a waiver with respect to any subsequent default or matter.

 

20.10                     Equal Opportunity Clause. 

 

During the
performance of those parts of this Agreement relating to the construction by a
Party of any Initial or Incremental Capital Assets, such Party agrees as
follows:

 

(i)                                     Such
Party will not discriminate against any employee or applicant for employment
because of any protected class status, such as race, color, religion, sex, age
or national origin.  Such Party will take
affirmative action to insure that applicants are employed, and that employees
are treated, during employment, without regard to their protected class status.  Such action shall include, but not be limited
to, the following:  employment,
upgrading, demotion, or transfer; recruitment or recruitment advertising;
layoff or termination; rates of pay or other forms of compensation; and
selection for training, including apprenticeship.  Such Party agrees to post, in conspicuous places,
available to employees and applicants for employment, notices setting forth the
provisions of this non-discrimination clause;

 

(ii)                                  Such
Party will, in all solicitations or advertisements for employees place by or on
behalf of such Party, state that all qualified applicants will receive
consideration for employment without regard to race, color, religion, sex, age
or national origin;

 

(iii)                               Such
Party will send to each labor union or representative of workers with which it
has a collective bargaining agreement or other contract or understanding, a
notice, to be provided, advising the said labor union or workers’
representative of such Party’s commitments under this Article 20.10, and
shall post copies of the notice in conspicuous places, available to employees
and applicants for employment;

 

68

 

(iv)                              Such
Party will comply with all provisions of Executive Order No. 11246 of
September 24, 1965, and of the rules, regulations, and relevant orders of
the Secretary of Labor;

 

(v)                                 Such
Party will furnish all information and reports required by Executive Order No.
11246 of September 24, 1965, and by the rules, regulations, and orders of
the Secretary of Labor, or pursuant thereto, and will permit access to its books,
records, and accounts by the administering agency and the Secretary of Labor,
for purposes of investigation, to ascertain compliance with such rules,
regulations, and orders;

 

(vi)                              In
the event of such Party’s non-compliance with the non-discrimination clauses of
this Agreement, or with any of the said rules, regulations, or orders, this
Agreement may be canceled, terminated, or suspended, in whole or in part, and
such Party may be declared ineligible for further Government contracts or
federally assisted construction contracts in accordance with procedures
authorized in Executive Order No. 11246 of September 24, 1965, and such
other sanctions may be imposed and remedies invoked as provided in said
Executive Order or by rule, regulation, or order of the Secretary of Labor, or
as otherwise provided by law;

 

(vii)                           Such
Party will includes the words “During the performance of this contract, the
contractor agrees as follows:” followed by the provisions of sections (i)
through (vi) of this Article 20.10 in every subcontract or purchase order,
unless exempted by rules, regulations, or orders or the Secretary of Labor
issued pursuant to Section 204 of Executive Order No. 11246 of
September 24, 1965, so that such provisions will be binding upon each subcontractor
or vendor.  Such Party will take such
action with respect to any subcontract or purchase order as the administering
agency may direct as a means of enforcing such provisions, including sanctions
for non-compliance; provided, however, that in the event such Party becomes
involved in, or is threatened with, litigation by a subcontractor or vendor as
a result of such direction by the administering agency, such Party may request
the United States to enter into such litigation to protect the interests of the
United States;

 

(viii)                        For
purposes of this Agreement, the term “this Agreement,” as used in this
Article 20.10 shall mean those parts of this Agreement relating to the
construction by such Party of any additions, betterments, or improvements to
the property.  Nothing in this
Article 20 shall be construed to prevent such Party from resisting,
challenging, contesting, or appealing any law, statute, regulation, or decision
of any federal, state, or local government or agency which such Party claims to
be in invalid, unlawful, arbitrary, or capricious.

 

20.11                     Inflation.

 

Monetary thresholds as
expressed in this Agreement in Articles 7.5.6, 7.5.7, and 8.1, each shall
be adjusted on each anniversary of the Execution Date hereof by the percentage
change in the Producer Price Index Turbines and Turbine Generator Sets (PPI PCU
3511#(N), June 1982 = 100) during the immediately succeeding year.  Adjustments shall be made on final revised
data.  If such index ceases to be
published, a similar index shall be selected by the Parties in substitution
thereof.  If such index is rebased,
appropriate adjustments to this formula will be made by the Parties to carry
out the original intention of the Parties.

 

69

 

20.12                     Condemnation.

 

In the event
any portion of the Trimble County Unit 2 Project shall be condemned and taken
by exercise of any right of eminent domain or for public or quasi-public use,
and the Parties hereto are able to continue their use and operation of the
remaining portion thereof, this Agreement shall not terminate.  The proceeds of any payment of any award or
compensation arising from such condemnation (net of any unrecovered expenses of
any nature incurred by the Parties with respect thereto, which expenses shall
be fully reimbursed to the Party or Parties incurring such expenses) shall be
apportioned between the Parties on the basis of their respective
Percentages.  In the event that all or
substantially all of the Trimble County Unit 2 Project shall be condemned and
taken by exercise of any right of eminent domain or for public or quasi-public
use, this Agreement shall terminate as of the date of said taking and the
proceeds of any award or compensation arising from such condemnation (net of
any unrecovered expenses of any nature incurred by the Parties with respect
thereto, which expenses shall be fully reimbursed to the Party or Parties
incurring such expenses) shall be apportioned between the Parties on the basis
of their respective Percentages.

 

20.13                     Americans with Disabilities Act.

 

In
constructing, maintaining and operating the Trimble County Unit 2 Project, the
Companies shall comply with the Americans with Disabilities Act.

 

20.14                     Amendments.

 

This Agreement
may be amended only by a written instrument duly executed by the Parties.  When so amended, the Parties shall execute a
conformed copy of the Agreement, which conformed copy shall contain all
amendments to the Agreement and shall thereafter govern the Parties.

 

20.15                     No Agency or Third Party Beneficiary.

 

Except as
expressly provided herein, nothing in this Agreement is intended to or shall
create an agency whereby a Party becomes an agent for another Party in any
relationship with any Person.  This
Agreement is solely among the Companies, IMPA and IMEA and shall not be
construed to create any third-party beneficiary relationship with any other
Person.

 

20.16                     Obligations Are Several.

 

The duties,
obligations and liabilities of the Parties are intended to be several and not
joint or collective, and no Party shall be jointly and severally liable for the
acts, omissions, or obligations of any other Party.

 

20.17                     Cooperation.

 

The Parties
shall cooperate with each other and provide information as may be necessary to
facilitate, among other things, the filing of applications for authorizations,
permits, licenses, or financing and the execution of such other documents as
may be reasonably necessary to carry out

70

 

the provisions of this Agreement, subject to reasonable protections
necessary to preserve each Party’s confidential or proprietary information.

 

20.18                     Intent.

 

The Parties agree that all
discussions and negotiations related to this Agreement relate expressly to the
Trimble County Unit 2 Project and do not amend and may not be used by any Party
to interpret any provision or course of conduct arising out of the Unit 1
Participation Agreements.  Similarly, any
similarity to or difference between the provisions of this Agreement and the
provisions of the Unit 1 Participation Agreements shall not be used in any
way, directly or indirectly, to interpret the meaning or intent of the parties
to the Unit 1 Participation Agreements.

 

20.19                     Approvals.

 

The Parties
shall use their respective Best Efforts to obtain as quickly as possible all
requisite governmental, regulatory, and judicial approvals, including
Commission Approvals, where applicable, of the consummation of the transactions
contemplated herein.

 

20.20                     Access.

 

Official
representatives of the Parties and their designees, including any Party’s bond
trustee, shall have the right, upon sufficient advance notice to the Companies,
to enter upon the Trimble County Unit 2 Project facilities subject to all
safety, insurance, and industrial security requirements and the need for
efficient operation of the Trimble County Unit 2 Project.

 

20.21                     Further Assurances.

 

The Parties
shall execute such other instruments, if any, as may be necessary or
appropriate to confirm the respective rights and interests of the Parties hereunder
and to maintain their respective Ownership Interests.

 

20.22                     Joint Effect.

 

Preparation of this Agreement
and its appendices has been a joint effort of the Parties and the resulting
document (or any portion thereof) is not to be construed more severely against
one of the Parties than against the others.

 

20.23                     Certain Costs.

 

In the course of undertaking the Development
Work, the Construction Work, the Operating Work or the construction or
procurement of Incremental Capital Assets, the Companies are entitled to take
actions, that in their reasonable judgment are in the best interests of the Trimble County Unit 2
Project.  If such actions cause
Louisville, Kentucky Utilities, or both of them to experience a cost or expense
outside the Trimble County Unit 2 Project, a fair share of such cost or expense
shall be allocated to the Trimble County Unit 2 Project to be shared by the
Parties in proportion to their respective Percentages, provided that such
actions have been 

 

71

 

presented
to and approved unanimously by the Coordination Committee, which approval shall
not be unreasonably withheld.

 

20.24                     Good Utility Practice.

 

Each Party hereby agrees to
perform the Work and other obligations to be performed by it under this
Agreement in accordance with Good Utility Practice.

 

20.25                     Affiliate Transactions.

 

The Companies shall be entitled to engage,
contract with or otherwise arrange for the use of any of their employees, the
employees of Affiliates, Affiliates or non-Affiliates in connection with
the performance of the Companies’ obligations under this Agreement.  The cost of engaging, contracting with or
otherwise arranging for the use of any employee, the employees of Affiliates,
Affiliates or non-Affiliates shall be charged and allocated to the Parties on
the same basis as such cost would be charged and allocated to any other
generating station owned by either of the Companies when so engaging,
contracting with or otherwise arranging for the use of its employees, employees
of Affiliates, Affiliates or non-Affiliates. 
If the Companies desire to enter into a contract or other arrangement
with an Affiliate (each such contract or other arrangement an “Affiliate
Contract”), such contract or arrangement shall be negotiated and administered
in good faith, on a basis no less favorable than an arms’ length basis, have
terms, when taken as a whole, at least as favorable to the Parties as those
available in the market from non-Affiliates. 
If any Affiliate Contract, amendment thereof, or any aspect of the work
or obligations required thereunder is approved unanimously by the Coordination
Committee, IMPA and IMEA shall be deemed to have waived any right to object to
the terms and conditions of such Affiliate Contract, amendment or aspect to the
extent so approved, including on grounds of the absence of good faith, lack of
arms’ length negotiations or the presence of terms not at least as favorable to
the Parties as those available in the market from non-Affiliates.

 

ARTICLE 21.

TERM AND TERMINATION

 

21.1                           Termination.

 

21.1.1                  Retirement.

 

This Agreement
shall terminate at such time as those activities that are necessary to retire
Trimble County Unit 2 from service have been completed.  Retirement from service shall include:  dismantling, demolishing, and removal of
equipment, facilities, and structures; security; maintenance; disposing of
debris; and any site work necessary to lawfully and responsibly effect such
retirement.  Termination of this
Agreement, however, shall not terminate or affect, as between the Parties, the
continued liability, if any, of the Parties for environmental considerations or
other obligations imposed by Applicable Law, nor shall it terminate or affect,
as between the Parties, the receipt and pro rata sharing of benefits, if any,
accruing to the Parties for environmental allowances or other entitlements
provided by Applicable Law.

 

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21.1.2                  Construction Closing Does Not Occur.

 

Except as set
forth in this Article 21.1.2 or Article 2.1.3, if the Construction
Closing has not occurred on or before December 31, 2005 (as such date may
be extended by the Coordination Committee or as provided in this
Article 21.1.2), (i) this Agreement shall terminate and no Party shall
have any further liability, each to the other, on account of such termination,
(ii) each Party shall remain liable for all of its obligations incurred prior
to the date of such termination and shall not be entitled to a refund or return
of any amounts paid or expended under this Agreement, and (iii) the respective
rights of IMPA or IMEA pursuant to Article 15 of the Unit 1
Participation Agreements shall not be reinstated.  Notwithstanding the foregoing, if the
conditions to the participation of each of IMPA and IMEA in the Construction
Closing as set forth in Article 6 have been satisfied or waived by IMPA
and IMEA respectively and, IMPA and IMEA, in good faith, tender the payments
required pursuant to Article 6.2.1, and are otherwise willing to close the
transactions contemplated herein at the Construction Closing on or before
December 31, 2005 (as such date may be extended by the Coordinating
Committee), and the Companies are not able to close, but, in good faith,
continue to pursue the development of the Trimble County Unit 2 Project or a
substantially similar project based on the Development Work, then the last day
for the Construction Closing to occur shall be extended from December 31,
2005, to and until the earlier of the date upon which the Companies withdraw
pursuant to Article 6.5.1 or the Companies schedule a Construction
Closing on no less than seven (7) days’ notice if such closing is scheduled to
occur on or prior to January 31, 2006, or forty-five (45) days’ notice if
such closing is scheduled to occur after January 31, 2006.  Should the Companies fail to pursue the
development of the Trimble County Unit 2 Project or a substantially similar
project based on the Development Work, the Companies shall be deemed to have
withdrawn under Article 6.5.1 and the rights of each of IMPA and IMEA
pursuant to Article 15 of the Unit 1 Participation Agreement to which it
is a party shall be reinstated.

 

21.1.3                  Withdrawal of the Companies.

 

If the
Companies withdraw from this Agreement pursuant to Article 6.5.1 after the
period specified in clause (i) or (ii) of Article 6.5.6, and IMPA and IMEA
do not withdraw and are then prepared to proceed in accordance with this
Agreement to the Construction Closing, this Agreement shall terminate on the
date of such withdrawal and no Party shall have further liability, each to the
other, on account of such termination, except as provided below.  If such withdrawal by the Companies is
primarily for Development Reasons, this Agreement shall terminate and each
Party shall remain liable for its obligations incurred hereunder prior to the
date of withdrawal and no Party shall be entitled to a refund or return for any
amounts paid or expended under this Agreement. 
If such withdrawal by the Companies is primarily for reasons other than
Development Reasons, each Party shall be liable for its obligations incurred
hereunder prior to the date of such withdrawal, provided, however, the
Companies shall refund the Refund Amount to IMPA and IMEA.  Upon any withdrawal by the Companies under
this Article 21.1.3, the rights of each of IMPA and IMEA pursuant to
Article 15 the Unit 1 Participation Agreement to which it is a party
shall be reinstated.

 

21.1.4                  Withdrawal of IMPA and IMEA.

 

If IMPA and
IMEA shall both withdraw from this Agreement pursuant to Article 6.5 and
the Companies then intend to proceed to develop the Trimble County Unit 2
Project, this

 

73

 

Agreement shall terminate on the date of such withdrawal and no Party
shall have further liability, each to the other, on account of such
termination, provided, however, each Party shall remain liable for all of its
obligations incurred prior to the date of such termination and shall not be
entitled to a refund or return of any amounts paid or expended under this
Agreement and, provided, further, the rights of each of IMPA and IMEA pursuant
to Article 15 of the Unit 1 Participation Agreement to which it is a
party shall not be reinstated.

 

21.2                           Retirement of Property.

 

The
Coordination Committee shall have authority in decisions regarding the
retirement from service of any and all property constituting a portion of
Trimble County Unit 2 or the Trimble County General Plant Facilities which, in
the Coordination Committee’s judgment, is damaged, worn out, uneconomic,
unreliable, obsolescent, or otherwise unfit for use.  However, Trimble County Unit 2 shall not be
retired from service as a generating unit without the written consent of the
Parties prior to the earlier of:

 

(i)                                     the
expiration of thirty-five (35) years following the Commercial Operation Date of
Trimble County Unit 2; or

 

(ii)                                  the
final maturity date of the project revenue bonds originally issued by IMPA or
IMEA to finance their respective initial Ownership Interests or to pay the cost
of any improvements or repairs issued thereafter, or the final maturity date of
any bonds issued by IMPA or IMEA to refund such originally issued bonds.

 

21.3                           Retirement Costs.

 

All costs
(less salvage credits, if any) associated with retirement of the Trimble County
Unit 2 Project or portions thereof including: 
dismantling, demolishing, and removal of equipment, facilities, and
structures (including the cost of transportation and handling incidental
thereto); security; maintenance; disposing of debris; and any site work
necessary to lawfully and responsibly effect such retirement, shall be shared
by the Parties in proportion to their respective Percentages.  Payments for these costs (less salvage
credits, if any) as they are incurred, shall be made in accordance with the
provisions of Article 10.  If such
salvage credits exceed such costs, the difference shall be shared by the
Parties in proportion to their respective Percentages.

 

21.4                           Effect of Withdrawal or Transfer on
Agent.

 

Except as
provided below, at such time as IMPA or IMEA withdraws from this Agreement or
transfers all of its Ownership Interest in accordance with this Agreement, the
agency granted to the Companies by IMPA and IMEA hereunder, as appropriate,
shall be revoked prospectively and all prior acts shall remain valid and
binding, subject to the conditions and limitations set forth in this
Agreement.  Notwithstanding the
foregoing, the appointment of the Companies as agent for the Parties hereunder
shall continue (i) with respect to the agency granted pursuant to
Article 12.1, for as long as necessary after such withdrawal or transfer
for the Companies to fulfill their responsibilities under Article 12.1 in
respect of periods during which IMPA or IMEA was a Party to this Agreement and
(ii) as necessary to manage and administer executory contracts, real estate and
permits and approvals of the agent or the Parties.  IMPA and IMEA each further agree that upon
withdrawal or transfer of its Ownership Interest it will

 

74

 

cooperate with the Companies and take any and all further actions and
shall execute and file where appropriate any and all such further legal
documents and papers as may be reasonable under the circumstances in order to
facilitate such withdrawal or transfer and the continued development,
construction or operation of the Trimble County Unit 2 Project, including
action to seek any required governmental or regulatory approval and to obtain
any other required consent, release, amendment, or other similar document.

 

75

 

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
duly executed.

 

 

 

	
   

  	
   

  	
   

  	
  LOUISVILLE GAS AND ELECTRIC COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  KENTUCKY UTILITIES COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  INDIANA MUNICIPAL POWER AGENCY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ILLINOIS MUNICIPAL ELECTRIC AGENCY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]