Document:

EXHIBIT
4.3

 

 

July
8, 2005

 

 

Kentucky Utilities Company

(as Borrower)

 

 

Fidelia Corporation

(as Lender)

 

 

 

LOAN AGREEMENT

 

 

 

Contents

 

	
  Clause

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  TERM LOAN

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  AVAILABILITY OF REQUESTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  INTEREST

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  REPAYMENT AND PREPAYMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  PAYMENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  TERMINATION EVENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  OPERATIONAL BREAKDOWN

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  NOTICES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  ASSIGNMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  SEVERABILITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  COUNTERPARTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  LAW

  	
   

  

 

 

THIS AGREEMENT
made on July 8, 2005

 

Between

 

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

 

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

 

Whereas

 

(A)          The
Lender and the Borrower hereby enter into an agreement for the provision by the
Lender to the Borrower of a loan in the amount of $50,000,000 (the Loan
Amount).

 

Now it is hereby agreed
as follows:

 

1.             Definitions

 

1.1           In
this Agreement

 

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

 

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

 

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

 

Final
Repayment Date means July 8, 2015;

 

Interest
Payment Date means January 8 and July 8 of each year
during the term of this agreement, provided, that:

 

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

 

Loan
Amount means $50,000,000;

 

Maturity
Date means the Final Repayment Date;

 

1

 

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

 

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

 

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

 

2.             Term Loan

 

2.1           This Agreement shall come into effect on July 8,
2005 (the “Effective Date”).

 

2.2           The Lender grants to the Borrower upon the terms
and conditions of this Agreement a term loan in an amount of $50,000,000.

 

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

 

3.             Availability of
Requests

 

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

 

4.             Interest

 

4.1           The rate of interest on the Loan Amount is 4.735%.

 

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

 

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

 

2

 

5.             Repayment and Prepayment

 

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

 

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

 

5.3           A certificate from the Lender as to the amount
due at any time from the Borrower to the Lender under this Agreement shall, in
the absence of manifest error, be conclusive.

 

6.             Payments

 

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

 

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

 

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

 

3

 

7.             Termination Events

 

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

 

7.2           The following shall constitute an Event of Default
hereunder:

 

	
  7.2.1

  	
   

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

  
	
   

  	
   

  	
   

  
	
  7.2.2

  	
   

  	
  Bankruptcy proceedings are initiated against the Borrower;

  
	
   

  	
   

  	
   

  
	
  7.2.3

  	
   

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

  
	
   

  	
   

  	
   

  
	
  7.2.4

  	
   

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

  

 

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

 

If
a Termination Event occurs according to Clauses (7.2.1) or (7.2.3) or (7.2.4)
of this Section, Lender shall at its discretion grant Borrower a reasonable
grace period unless such grace period shall be detrimental to the Lender. If
the Termination Event is uncured at the expiration of such period, the Loan
Amount outstanding together with interest will become due and payable
immediately.

 

8.             Operational Breakdown

 

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

 

4

 

9.             Notices

 

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

 

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

 

9.3           Communications to the Lender shall be addressed
to: Fidelia Corporation, 919 N. Market Street, Suite 504, Wilmington, Delaware
19801, fax# (302) 778-5014, Attn: President.

 

10.          Assignment

 

10.1         The Lender may at any time assign, novate or otherwise
transfer all or any part of its rights and obligations under this Agreement to
any affiliate of the Lender.

 

11.          Severability

 

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

 

12.          Counterparts

 

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

 

5

 

13.          Law

 

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

 

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

 

 

	
  SIGNED
  by 

  	
  /s/ Daniel
  K. Arbough

  	
   

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  Kentucky Utilities

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED
  by 

  	
  /s/ Udo
  Koch

  	
   

  	
  )

  	
   

  
	
   

  	
  Udo Koch,
  President

  	
  )

  	
   

  
	
   

  	
  Fidelia
  Corporation

  	
  )

  	
   

  
						

 

6Exhibit 4.4

 

	
  PROMISSORY NOTE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  U.S. $50,000,000

  	
   

  	
  Louisville, Kentucky,
  July 8, 2005

  

 

 

Kentucky Utilities
Company (“KU”), for value received, hereby promises to pay to the order of
FIDELIA Corporation (“FIDELIA”), in lawful money of the United States of
America (in freely transferable U.S. dollars and in same day funds), in
accordance with the method of payment specified in that certain KU Loan
Agreement dated as of July 8, 2005, between FIDELIA and KU (“the Agreement”),
the principal sum of $50,000,000, which amount shall be payable at such times
as provided in the Agreement.

 

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

 

KU hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.

 

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

 

	
   

  	
  Kentucky Utilities Company

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel K. Arbough

  	
   

  
	
   

  	
   

  	
   Daniel K. Arbough

  
	
   

  	
   

  	
   Director of Corporate Finance & Treasurer

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