CONNONNEALTH OF KENTUCKY

BEFORE THE PUBLIC SERVICE CONNISSION

In the Natter of:

INVESTIGATION OF CARDINAL UTILITIES'N' LARRAINE P. KINBRELLt AND STEVE POPE ) ) ) CASE NO. 90-189 ) ALLEGED VIOLATIONS OF KRS CHAPTER 278 )

IN RE:

CARDINAL UTILITIES'NC ~ PETITION OF NATURAL RESOURCES AND ENVIRONNENTAI PROTECTION CABINET

0 R D E R

On August 13, 1990, the Public Service Commission received a petition from the Natural Resources and Environmental Protection Cabinet, In Re: Cardinal Utilities, Inc., which is attached hereto and marked as Exhibit A. The petition requests that the Public

Service Commission find that Cardinal Utilities, Inc. ("Cardinal" ) is in default of the regulations and requirements of the Public Service Commission and the water quality statutes and regulations administered by the Natural Resources and Environmental Protection Cabinet. The petition further requests that the Public Service Commission make demand upon Irrevocable Letter of Credit No. 162 issued by Peoples First National Bank and Trust Company of Paducah, Kentucky, for and on behalf of the Natural Resources and

Environmental Protection Cabinet so that the funds may be deposited with the Franklin Circuit Court Clerk in Civil Action No. 89-CI-046, where the petitioner is seeking to have a receiver appointed to disburse available funds for the repair and maintenance of Cardinal. The Commission, on its own motion, consolidates the petition of the Natural Resources and Environmental Protection Cabinet with Commission Case No. 90-189, finding that the two actions involve common questions of law and fact. IT IS THEREFORE ORDERED that: 1. The petition of the Natural Resources and Environmental Protection Cabinet styled In Re: Cardinal Utilities, Inc. is hereby consolidated with Case No. 90-189< Investigation of Cardinal Utilities, Inc.; Larraine P. Kimbrellt «nd Steve Pope, Alleged Violations of KRS Chapter 278. 2. At the hearing scheduled for September 12, 1990, at gi00 a.m,, Cardinal Utilities, Inc., Steve Pope and Iarraine Kimbrell shall, in addition to the matters addressed in the Commission's Order dated July 9, 1990, be prepared to show causes (a) why the transfer of the stock of Cardinal from Larraine Kimbrell to Steve Pope should not be declared void an& invalid for failure to obtain prior Commission approval as required by KRS 278 '20> an& {b) why the Public Service Commission should not make demand upon Irrevocable Letter of Credit No. 162 issued by Peoples First National Bank and Trust Company of Paducah, Kentucky, for default by Cardinal of the terms oi said letter of credit.

-2- Done at Frankfort, Kentucky, this 15th day of August, 1990.

PUBLIC SERVICE CONNISSION

Vi'ce 'ChaIrman '

Commission

ATTEST:

Executive Dirac

AUG 13 1990

ousLIG sFRVIGE COMMISSIOII COMMONWEALTH OF KENTUCKY PUBLIC SERVICE COMMISSION

IN Rgc CARDINAL UTILITIES, INC. CASE NO.

PETITION OF NATURAL RESOURCES AND ENVIRONMENTAI PROTECTION CABINET

4 a a 4 % 4 4 a 0

Comes the Natural Resources and Environmental Protection Cabinet, by counsel, and respectfully requests the Public Servioe Commission find that Cardinal Utilities, Ino. is in default of the regulations and requirements of the Public Servioe Commission and the water quality statutes and regulations administered by the Natural Resources and Environmental Protection Cabinet. As grounds for its Motion, Petitioner statess 1. Ms. LarIaine P, Kimbrell, 901 North 32nd Street,- Paducah, Kentucky 42001, incorporated Cardinal Utilities on or about November 22, 1985. (A copy of the Articles are incorporated herein and attached hereto as Petitioner's Exhibit 1.) 2. Cardinal Utilities pursuant to its artioles of incorporation was incorporated to own and operate sewage treatment plants and any connection coll'ection system in McCracken, Marshall and Graves counties of Kentucky. 3. Ms. Kimbrell was issued three hundred (300) share of stock .in the Cardinal Utilities on November 26, 1985, and served as president of the corporation. (A copy of

Exhibit A Stock Certificate is incorporated herein and attached hereto as Petitioner's Exhibit 2.)'. Pursuant to Public Service Commission rules and regulations, Ns. Kimbrell as president of Cardinal Utilities, made application on January 20, 1986 f'r a line of credit with Peoples Fit st National Bank and Trust Company, Paducah, Kentucky, (A copy oi" the application is incor porated herein and attached hereto as Petitioner 's Exhibit 3.) 5. Peoples First National Bank and Trust Company, Paducah, Kentucky, issued an Irrevocable Letter of Credit, No. 162, in the amount of ten thousand dollars (410,000) in favor of the Public Service Commission, 730 Schenkel Lane, Frankfort, Kentucky. (A copy of Irr evocable Letter of Credit No. 162 and supporting documents are incorporated herein and attached hereto as Petitioner's Exhibit 4.) 6. One of the conditions of the Irrevocable Letter of Credit, No. 162, which is valid from January 20, 1986, to January 20, 1991, is that Cardinal Utilities shall provide at all time adequate, safe and sanitary sewage collection, treatment and disposal service for all facilities in accordance with all applicable rules and regulations of the Commission and the Natural Resources and Environmental .Protection Cabinet. 7. Further. conditions of the letter of credit require that Cardinal Utilities shall remedy defaults in the sewage facilities and make repair necessary for the operation of the systems pursuant to the Commission's requirements and any other governmental agencies having jurisdiction over the operation. The failure of Cardinal Utilities to remedy default within thirty (30) days after notice shall be a failure to remedy the default. 8. To the best of the Petitioner's information, knowledge and belief, the Public Service Commission has not granted approval of the stook transfer from Ms. Larraine P. Kimbrell to any other person. 9. The Petitioner, Natural Resources and Environmental Protection Cabinet, filed an enforcement action against Cardinal Utilities, Inc., Larraine P. Kimbrell, Steve Pope and Jiffy Hart Fine Foods, Ino., d/b/a Southern Pride Truck Stop on January 11, 1989, in Franklin Circuit Court Civil Action No. 89-CI-0046. (A copy of the Complaint is incorporated herein and attached hereto as Petitioner's Exhibit 5.) 10. Following a hearing, the Franklin Circuit Court entered an Order on February 7, 1989, requiring Cardinal Utilities, Inc., Larraine Kimbrell and Steve Pope to perform the repair and maintenance necessary to the six (6) facilities to ensure that the discharge is within KPDES permit limits on or before March 2, 1989. (A copy of the February 7, 1989 Order is incorporated herein and attached h'ereto as Petitioner's Exhibit 6;) 11. The Court in the February .7, 1989, Order entered a Temporary Injunction enjoining and prohibiting any additional sewer connections in the areas served by Green . Acres, Gateway, Blandville West, Fieldmont and Holifield Heights until further Orders of the Court. This Temporary In)unction is still in effect. 12. The Franklin Circuit Court entered an Order on March 30, 1990, requiring Steve Pope as the operator of the facilities to report all ma)or malfunctions which occur at the six (6) wastewater treatment plants - Gateway, Golden Acres, Fieldmont, Green Aores, Blandv i lie and Hol iiield Heights - to the Paducah Regional Office the day he discovers a malfunction or should he discover a malfunction in the evening, or on the holiday or weekend, he shall report the malfunction the next day the Paducah Regional Office is open. (A copy of the March 30, 1990 Order is incorporated herein and attached hereto as Petitioner's

Exhibit 7 ' 13. The Court further ordered that Steve Pope shall have forty-eight (48) hours to repair all malfunctions, including repair s to blowers or motors, except in extr aordinary cir cumstances. Should he fail to repair the mali'unction within forty-eight (4B) hours, he shall be fined fifty dollars (S50) per day for each day a malfunction continues. 14. Inspectors from the Paducah Regi,onal Office have '. made frequent .inspection's of the facilities and have cited Cardinal Utilities for numerous violations since the Franklin Circuit Ccturt civil action has been f'lied. 15. Steve Pope, th'e operator of the systems and ostensibly the owner oi the Cardinal Utilities, In'c., has failed and continues to refuse to report malfunctions to the Paducah Regional Office. WHEREFORE, the Petitioner, Natural Resources and Environmental Protection Cabinet, respectfully petitions the Public Service Commission to issue a default citation to Cardinal Utilities, Inc., and Ns. Larraine P. Kimbrell. Petitioner i'urther requests that the Public Service Commission make demand upon Irrevocable Letter of Credit No. 162 issued by Peoples First National Bank and Trust Company of Paducah, Kentucky, for and on behalf of the Petitioner and further request the funds be deposited with the Franklin Circuit Court Clerk. Petitioner is seeking in its Civil Action No. 89-CI-0046 appointment of a receiver to disburse any funds available from the Letter of Credit fcr repair and maintenance of the six (6) systems which are not in operation or in an extremely poor state of repair. Respectfully submitted,

t(ill& ~.-/ «1 CHARLES W. KURTZ Natural Resources and Environmental Protection Cabinet Department of Law Fifth Floor, Capital Plaza Tower . Frankfort, Kentucky 40601 {502) 564-5576

COUNSEL FOR PETITIONER CERTIFICATE OF SERVICE I hereby certify that a true arid accurate copy of the foregoing PETITION OF NATURAL RESOURCES AND ENVIRONMENTAL PROTECTION CABINET was mailed, postage pre.- paid, to the +clicking this "fk day of C4u.~ l 1990: Hon. David Ullerich P.O. Box 2522 Paducah, Kentucky 42002-2522 Cardinal Utilities, Inc. P.O. Box 7766 Paducah, Kentucky 42002-7766 Mrs. Larraine P. Kimbrell 901 North 32nd Street Paducah, Kentucky 42002-06 10 Steve Pope 901 North 32nd Street Paducah, Kentucky 42002-06 10 Hon. Jerry Wuetcher Public Service Commission 730 Schenkel Lane P.O. Box 6 15 Frankfort, Kentucky 40602 Hon. Richard Lewis 1100 Main Street P.O. Box 430 Benton, Kentucky 42025 Mr. Donald Elias Purchase Area Development District P.O. Box 588 U.S. Highway 45N Mayfield, Kentucky 42066 Hon. Jeanne M. Box Alagia, Day, Marshall, Mintmire A Chauvin 113 West Main Street P.O. Drawer 1036 Frankfort, Kentucky '40602 Hs. Betty Erfokson Marshall County Health Department 307 East 12th Street Be'nton, Kentucky 42025 Public Service Commission 730 Schenkel Cane P.O. Box 615 Franki'ort, Kentucky 40602

Charles W. Kurtz kak890 ARTICLES OF INCOEPOllATION

CARDINAL UTILITIES, INC.

A corporation 1s hereby ogaaiaed under the laws of the Cousonwealth of kentucky, to be known aa: CANDINAL UTII ITIES, INC.

The duration of this oocporatioa shall be perpetual. III

The purpose o! Che corporat1oa shall be to eagage la the business to purchase, lease, oonstruot, 1aatal'I, uaiacain, altar J aad operate sewerage treatsent plaacu and aay coaneotiag oollentton systeua, aa say sent the requireueats of the puhlio Service'osuission an4 such other appropriate agencies of che onusoawealth of Eeatuoky having duris41ocioa, Federal Ifous1ng Aduiaiacration, aad Veterans Aduiaiatracioa la Marshall aad graves Counties, Eencuoky, aad ~ ia suoh ocher areas is the vloiaicy thereof; to aoquire real estate

~sd ueoessary eau~ate either by purohass, great ~ lease, gift or ia aay other saauer for che iastallatioas akd ooastruotloas of sewerage treatsant pleats aad oolleotloa systess for the operatioa thereof; to colleot sunh fees for ita servtnes ss ay .b'e approve4 by the Eeatuoky publio gervioe Coaissioa; co sell, lease, barter or great tappisg rights to parsons desiriag to uae the sewerage creatsaat erst~ thereof; to carsiaate servioe to oustosers who fail to psy approved !ees for authorised aeyvicea; ia the nese of the corporation to encusl»r. sortgngn, pledge, nell, lease, traaster and convey, real cr persona) proi»rty owned by the horporation; nnd general)y to engage in, do nnd pnrfors aay act or ~aterprine connected therewith that a natural peraoa sight do. )V

Tbe authorised stock of tbia corpnratioa ahull coa ~1st of Two Thousand (2,000) shares of c~s stooh of ao par value, with each chare having euunl voting rights.

The registered office of 'the corporatioa shall he 001 North 32nd Street, Paducah, Keatuchy i2001. The registered agent of tho corporatioa shall be Larraiae P. Kisbrell, whoso address ia 00'1 North 32ad Street, Pa4ucah, Kentuchy 4200),. Vl

The nusber of directors coaslstisg tbe initial soars ot Directors shall be aot loss thea oao (1) nor Nore than three (3) as to be deterslaed at the first hosting of the lsoorporators, aad the aase asd address of ths person wbo ls to servo as 4irecror until tbe first seetlsg ot tho ~barebolders or until her successors have hoes oloote4 aa4 qualify, is: LOSSSlNS P. KlNSSSKL 001 North 32nd Street Pa4ucah, Keatuehy 42001

Vll The sass ao4 a44ress of the lacorporator of this corporatina is: )4SSSXNS.P. Kl~ $01 North Sga4 Street Ps4ucah, Kestuohy 42001

2 vjjj

The authority to sane by-lars should be vested io the Soars of Directors and sny be exercised by an affirsative vote of tnv sa)ority of the duly elected directors, sub)ect only to the paver of the stockholders to chasse or repeal such by-java by an aftirsntjve vote ct Lh» sa)ority of tbe atochholders.

Tha Officers shall consist bf a Presi4eat, Vice Presideat nad Secretary-Treasurer asd such other officers as say be provided by the by-lass free ties to tiss, as4 all officers shall serve for such ters as tbe by lass ay provide, There shall be no lisitatioa oa tbe ausber of offices to b» beld by any person. The Officers of the corporation ~hall exercise such porers na say be vested is thee fros tjse to tiso by tbe by-laos. The Officers o! tbe corporatioa shall be electe4 by the Soar4 of Directors until aad ualese a differeat provieioa i~ sa4e for their eleotios by the affirm+ tive vote of ~ safority of the atoohbo14ers. SjTNNSS 'ths aihaaturs of ths jacorporator at paducah, Neatuchy, this ~y of Novesber, 1SSS.

tmajsN r. Njhshsu

STSTN OP NNNTDCNF ) ) SS:. CDUNTT j)t WCIQCKNN ) 1, N. S. Neltoa, Jr., a Notary Public, sithia asd for ths State asd Couaty aforssai4, 40 hereby certifv vi v ~I foredoind articles of lacorporstios sere siSae4 before m hp the jocorporator, Latraiae p. Qsbrell, asd uho aahaoslodded her eissature for the purpose of iaoorperatinN aai4 bustaess as herslaabovs stated. NITNSSS sy head aad seal ot ottloe this ~y ot Novoshsr, 1945.

Ny Coevaiasioa Eayirss: Nay S, 118y.

NQraay PUSLIC'll syays-ay-usar, aNysca

eW ihattsmsht O 4 ULLNlCH~ hhELTON AND ~~~ ~ail'~ ~ ~li%ISMif

~ i tkII ~ '~msaimm ill 'HR)~, s!% ~a=='4 Ql~ —Qg Larrains P 444TSRRB RNDRR5040 w ===.-4~+& ~~@ye ~+M~ ACI ~AfkllVAf4ttsW44t +~ 4mV~84e4M~~ +'~Noveabea SS, 1QB5 Qgll /)f

4'I/IIQ IJ I ) 2 I 3 il'L1 J l~gvl 1 Jl>J ' L .:.a. g HK~4%i [gg 8 5 la I i (ia% C: ~R i .~F~~ TDalei'ILEDJanuary 20, 1986 JllN il 1986,

PUBLIC SEiw'l! CK 'OMMISSION RPPL.ICATION FOR LETTER OF CREO1T EComnercial Form)

Larraine Rimbrtll, 'Pres, of Cardinal Utilities, Inc.hereby applies to Peoples First National bank and Trust Company ("Bank" ) for an lrrevocablt Letter af Credit in favor af puhl

Bank in tht fallowing manner; " utr +voherclal Loan cc™A™enl, up to the aggregate amount of 5 1O OOD.OO

The of Credit shall bt valid fram January 20'986 atty 91 ta January 2 , applicant promists tO txeCutt the appropriate dacuments'heto pledge ts security 1'or this letter of credit arrangement the following dtscribed collateral: N/a

This letter of credit shel'I be honored by Bank upan prtstntment tO the Bank'S authOriaed reprtaentatiVRS Of the fallowing documentations from the beneficiary of this letter of credit; Proof of Default or Failure ta Rtmtdv Default

The Bank may defer acceptance of tht abave stated doc~ntary evidence until close of the 3rd banking day following receipt of the documents.

The applicant acknawledgts that the Bank. upon issuanct of the Lette~ of Credit, may honor the demands for payment by beneficiary upon proper presentmant of tht doc~ntatian described abave. The Bank is under no abligation to inquire as to the ltgality or propriety of making any payment pursuant to said letter, and shall not be held responsible by the applicant, his heirs, successors and assigns for any payment maCh under said letttr. so long as proper documentation has been presented to Bank in a time'ly fashion.

Authorised By: Cardinal abilities, Inc. {Two signatures requiredl ~11Cant~

rrcsl ntnT T lt1t Sf'aryane i . ~aum 901 North 32nd Street Executive v. P. Title Raartas

—vr until the Public Service Camission notifies us that stock and assets htve been transfer".td to a person or tntity other than Larraine Kimbrell. WOES FILED t!RST'ATIONAL BANK Bt FRUSP CONPANy

Arrohe isoat taa asti JAN ot l986 Kentucur Avenue al eouhn Ao eoxaaoo eaovcAH. KKNTucKY aaoot PUBLIC SDt,'/'GB COMMISSION Aubrey W. Lippert Cnairman ot tne Board and President January 20, 1986

Public Service Commission 730 Schenkel Lane Frankfort, Kentucky 40601

Irrevocable Letter of Credit No. 162 Gentlemen:

We hereby establish our irrevocable letter of credit in your favor at the request of and for the account of Ns. Larraine Kimbrell, Paducah, Kentucky, President of Card1nal Utilities Company, up to the aggregate amount of Ten Thousand and 00/100 ($10,000) U.S. Dollars, available to you by draft at sight drawn on us and accompanied by the original of th1s letter of credit and by an order of the Public Service Cottmtisslon (KCotmnissionu) finding the following:

1. A mater1al and continuing default by Cardinal Uti11ties Co. (KCard1nalu) (a) to prov1de at all times adequate, safe and sanitary sewage collect1on, treatment and disposal service for al'I facilities 1n accordance with ail applicable rules and regulations of the Comm1ssion and the Natural Resources and Environmental Protect1on Cabinet (KCabinetu); {b) to ma1ntain adequate records of any tests relating to the sewage facil1ties and to keep such records open to inspect1on by the Cotmsission, the Cab1net and the ratepayers; or FIl.EO 'N 21)986

PUBLIC SEFS'.C,K Publ1c Ser vice Coxvnission COMMISSICiV January 20, 1986 Page 2

(c) at its own cost and expense, to remedy defaults in the sewage facil1t1es and make such adjustments, repairs, installations or improvements to the sewage faci 11ties as may be reasonably necessary for the operation of the sewage facilities to conform its operat1ons to the lawful and reasonable requirements of the Convsission or any other governmental agency having jurisdiction over its operation (hereafter referred to individually or collectively as the "Default" ); and The failure of Card1nal to remedy the Default within 30 days after notice of the Default has been received by Cardinal from any ratepayer or the CNmsission (or two days 1n the event of a com- plete shutdown of the sewage facilities or the suspension of sewer services to the ratepayers of Cardinal), except in cases of disaster, war, riots, 1nsurrection, labor troubles, strikes or other causes beyond the control of Cardinal (hereafter "Fa1lure to Remedy the Default" ).

The cosssission w111 notify us when either: l. The Commission has approved the transfer of the stock or assets of Cardinal to a person or entity other than Ns. Larra1ne Kimbre)l; or

2. The CossNssion has found a Default by Cardinal and Failure to Remedy the Default. FILED JAN 21 1988,

PUBLIC SKFiIGE COMMISSION . Public Service Commission January 20, }986 Page 3

The draft drawn under this credit must be marked: "Drawn under Peoples First National Bank 6 Trust Company Letter of Credit No. 162 dated January 20, 1986." Ne hereby agree with you that the draft drawn under and in compliance with the terms of this letter of credit shall be duly honored upon presentation to the drawee. This letter of credit shall be valid until the earlier of (I} the approval by the Comnission of the transfer of the stock or assets of Cardinal to a person or entity other than Ns. Larraine Kimbrell, or (2} five years from the date hereof.

very truly yours,

Peoples Fi~st National Bank 6 MELTON JI.ND ULLERICH

~ ~4Ã~/. W~~ ,.W~ ~zooszwor

NRRIICNT K, NKNTON,JR. January 20, 1986 IIKTIII K. FlJ RRN'K ~AN cI IS86

Hon. Forest M. Skaggs, Secretary PUBLIC SER'IIICB Public Service Commission 730 Schenkel Lane COMMISSIQQ P. O. Box 615 Frankfort, Kentucky 40602 Re: Case No. 9480 Cardinal Utilities, Inc. Dear Mr. Skaggs: Enclosed is an original executed copy of a letter of credit by and between the Public Service Commission (the "Commission" ), Cardinal Utilities, Inc. ("Cardinal" ), and Peoples First National Bank & Trust Company of Paducah, Kentucky. This letter closely follows the Commission's "Sample Sewer Treatment Plant Third Party Agreement" (Revised 1-13-83), and we believe it satisfies the Commis- sion's requirement of "evidence of financial integrity such as will insure the continuity of sewage service" found in 807 KAR 5:071, Section 3(l)(a). The letter of credit will be valid until the earlier of the transfer of the stock or assets of Cardinal to a person or entity other than Ms. Larraine Kimbrell, or five years from the date thereof. We believe that if Ms. Kimbrell does not possess the financial integrity required to own and operate Cardinal, this will be demonstrated within the next five years. In addition, we believe that Cardinal itself will be able to show the required financial integrity at the expiration of the five-year period.

We trust that the enclosed letter of credit completes the Commission's file in the above-referenced matter. If additional information is necessary, please telephone the undersigned at (502) 442-5442 as we are anxious to assist 'the Commission in resolving this matter. Thank you. Very truly yours, MJMELTON ANDa~QULLERICH w ulailaa WHtflla SPPaaN ~ISOOISSI ' wlltlsl .l1R I ~ a s ss N 's.. E SSI OOhhl SWISH'N I tilt ttOPLEC fIIEET EEARONAl MNL 4 TIWt CO PADUCAHAV. IS ISSMSI ISSN IW WOSN W MMMM, MW M OOOSNWO WOWNM IWM SW ENSSM ~MNM NN Msss s ow ~ NN IININ so sosss NNSW w NMI NMNNM w ~w SNMI SWNL TSN MSO SW Ml Os MON Mt ONION W MWWSW Ol Nl WS SWSW:. tWSNSSNOSW,WOMW . IWSNSWWWSWMNWS~SIMONSMSNSOSTSN MM W M =.= SW IISO Mat, OWNS S SSNMO. IO SS Was,ONMSMIM OWN,WO SWW M WIN W SOWI S IMSOSMI INSSSN S MO OI WWI II SW SINS MW Wl INSI OI ISI WIN ~Nits INOI MIIMSI, SMWS IWWSII S SWt ENO Wt NWI OISM M NM OSNI SW WM W ~St OIS' M OW OMSNM I MNM WIM IS NN OEOISI ISW WO IMSMNW 'S SN WWO SWNWM OWS, WWSNN MOINS IMW IS Wy OMSISNSI MS WStet IWWE IOMNE IN WI MIS4 QSON MMNE W ESEIII I ISW SNNO'Ell SS WI SWSSt M NW ESO II NI IOSII WINS NIMWt ISSMSSWS tSIOOS SM EII WS I 4ltst SO SW SWS MSWI I ISOI SSO SW MW SONME Ol MWM'ONSSSSSOSO ~ ENNW M W~OIOWIWMSW cd P)

ONWE IOAN AOREENENT

THIS LOAN AOREENENT, sade and entec'ed into this Cc~ day of Daoeaber, 19B5, by and between t.arratne P. Kinbcell, stogie, 901 North 32nd St~eat, Paduoah, Kentucky t2001, (hec'eiaafter referred co as "BCRR0WER"), and peoples Ftrsc National Bank an4 Trust Conpany, P.O. Sox 2200, Paduoah, Kentuoky 42002-2200,

(hereinafter c et'erred to as Bank).

W I TNESSETH:

WHEREAS, Bank has loaned Soc'rower a one tain sua of annoy as evtdenoed by a Prontssory Note and Line of Cre4it Agreenent froa Borrower to Bank, dated 1985, in the principal sure of S100,000.00; and WHEREAS, as additional consideration for said Note an4 Liae of Credit and in order to induna Bank to nake auoh loans as called for tn said Agc'assent, the parties hec'eto agc'ee that the following Ceres and oonditions shall rennin in offcut throughout the life of sat4 t.tae of Cre4it and until suoh tice» as all fun)a advanced, puc suant Co sane, are paid ia full; NO'W THEREFORE, it is agreed as follows: l. That Boccowec shall not «naunber, nortgage, or oause liens to be planed against any c'eal estate, sow owne4 or hec'eafter aoqutred by hec', whish would enauaber sai4 real estate in exoese of a total. of 950,000.00. 2. In 'Che event of Che failure of the Borrower'o oonply With any of the provisions of Che Not ~, i.tne of Cc'e4it Agraenent, AND PROMISSORY DEMAND NOTE

100.000.00 oat Ney 2S. 1000 fsdscah. Cctntnry

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~gainst Sorrover by or vita tho oonsont ot Sorrovoc under eny benkruptoy, inaoltonoy oc roorgenisation lav, or. la tha event ot the appolcctaont Oy e roooiver er trustee ~ er ln 'the event ef an ssslpnaeaC, by tho Sorrovor yor the bonoyit ot oredltors, thea an4 ln any suoh steat, all indebtedaesa ovs4 by Sorrevor to Sask shall, at tho option ot Sank, boooao lasedidatoly duo an4 payable an4 tho Sec rover shall bo oonsl4ore4 as ia detault.

I~ This Lsreeaen'b nsy be sodiyied or enended only ln vritlns ekeouted by all parties hereto. This Adreesent shall bo bln4inS on tho patties, their heirs, oseoutore, and s4sinistrators, suoosssors as4 assisns. IS CCITSSSS SSSSNr, this Adrs~nb vas ekeOuto4 oa ths 4ato and year yiret above vritteo.

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OLNleD %ace ~ Stcserasiltccan'c ASQSNMSNF 00 SOSN3WNON KNOW ALL IIENbY YNRSE FERSENT(L O»t tbe adecddnsd la ooaskhcadsa at tbe nua of oas do(bc (01.001 sad othsc Food sa4 cslusbh cossdsssuos. »ceipt ot ubich 4 becsby ecknouhdd»L be»by seds, ussshcs sn4 ssshss uato SIEVE P(btb. i0 bls risbt, 4th snd htsce» is snd to the subeccktuos fcc stock in 100 Sbacoa o! oo-yac caeen of Oscdtnal Utilisiw, Iao.' ocpocauon otysnhed undec tbs htcs et O»0»h ot Kentucky ~nd becsby sutbochsa. sequens ss4 dbsch estd cecpccadsa to l»w s cscdbcsh cs csctOku»s bn 4» said cbscss in O» ns»e of shd to Stets I(ape oc utch otb» ye»oa as bs»sy scorn, uyos pays»nt by bi» ot Ihe s»ousia 4w on 4» ssl4 ntscdpoon snd nspthnce with tbe oo»c tsc»s aad condidow ot »id ntecrptioa.

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ACNOIOICNFoi Ctl SCNFINNI ALI MEN SY TERSE FERSEIFFS, that the dec»Cued'NOW laosnsahsadoa ot 4» nw ot oss doSsc (01,00) sn4 od»c Cond sn4 vshsbh consi4ecaka, secs(yt ot tch(A is beceby ~cknocclodS»L becsby»Ss, tcsact»s aad»slyssuato JCN ~out sllbls clchL Otlssndhtecest ia ssd In 0» subscdptka foc shet la 100 Ntacuu of oc»cent oc (hctNnai OCCLlsieo, lno. ~ scocyocsdw otpsshsduscku 4» hus st Iha Shss OC ssd h»sby sutbochsa cosuesh snd dbech lab( ocpocsoon to I»us ~ cscobcsh oc ctokuoEtes tiu ths said sbs»s h o» asa» of sa4 to Jan bchuhsotcor ce such otbsc yscsoa as bo»sy oc4ec, uyos pays»t» by hbn ot Ibs an»sais 4w os Ibe ssi4 ubscdydos ss4 c ~~uiib 0» odta tscuu aa4 ~ss ot sets esne»lptha. IN WFFN RES W REROF, I bose b»santo sss»y hued end sssl I&4 00th dsy of Wl +P~ c.''.~. V 'X... rnwscw p SCQOIINSNF OF NISCCEWININ IN0% klL IIEN SV eeulLNRW, a&a h I 0 I 4HI (ll.N) ~ Nh ~ ~ hSh . u l 4 ~. ~ekaoulodpnL bundry seSs, Icsests» ea4 acs(SI» unto ~ "-- all hhttthb QhaadhttseeahW4 IO the nt' tes SteA la a ocposadw eeaelaa4 uadsc iho hus ot ths Stale ot " ~a4 htseby wpwh ead dkech»id ~s 'lo lsn» a «~ oc toc 0» sebi sbecse~h 4» ~ot asd to ~ I»,utch oO»c p»soa es he »ay os4sc, upon yoyusecd by hi» oC Ihe maah dw on Ihe ssl4 hi% ~l I l~~ Nf WFFNRRR wNRbboy, I bess hscsun» ess ety banc and seal Ihh day ot 10 . CAIOI3INAI UTILJTICS, INC'a aox Vvaa ~AOUCAH, KENTUCKT aaob1

Repaics to bs made to plants to bring up to public Service Commission Regulations l

Kolitisld Ksiohts pump and clean airators 75 F 00 rstinish concrete 120.00 comminutoc 2,500.00 labor 360.00 3,2'25.00 Pislabel'75.00ldmont pump and clean 5)0.00 coctsinutor repaic 500.00 nsv cence 390.00 coot on building 100 F 00 gtsvel 510.00 360.00 2,370.00 Qoidsn acres airatora 234.00 pump and clean 425 F 00 cence 530.00 rapsli'iavel 510 ~ 00 comminutor cepsit 500.DD chlotine boa rePait 150.00 labor 720.00 3g069.00 acean acres pump and clean 500.00 replace aic lines 400 F 00 airatoi ~ 200 F 00 hangars 112.00 comminu'tot 549.00 tajleil'alves )23 '5 fencing 780.00 gravel 255 F 00 labot 1,200.00 4 I2P alandvills'est Pump and olean gravel 170.00 comainutor 85.00 (newI 2l500 F 00 piping 400.00 ~ ail'store 130.00 valves 323*75 18'.420.25 vace trough 300.00 labor 720.'00 ~223.50 COMMONWEALTH OF KENTUCKY FRANKLIN CIRCUIT COURT 4 ClvlL AcTICN No.. z st q G!,0 O ~ DIVISION NU. I U

COMMONWEALTH OF KENTUCKY, NATURAL RESOURCES AND ENVIRONMENTAL PROTECTION CABINET PLAINTIFF

VS. NOTICE AND MOTION FOR INJUNCTIVE RELIEF F I LE D In,; i:",---„ CARDINAL UTILITIES, INC., LORAINNE P. KIMBRELL FI ..'-.. ',';

1 1 1 1 1 1 1 1 I 1 ~ 1 1 ~ 1 1 1 1

NOTICE The Defendants will please take notice that the following Motion for Injunctive Relief will be brought on for hearing before the Franklin Circuit Court on the .>/ST day of .ki'!'-!Z,'=!.',1989, at gC.'wc~ cP,u1. or as soon

as counsel mayV'hereafter be heard fat the Franklin Circuit Courthouse, 218 St, Clair Street, Frankfort, Kentucky 40601.

MOTION

Plaintiff, Commonwealth of Kentucky, Natural Resources and

Environmental Protection Cabinet, by counsel, moves this Court to grant injunctive relief in the above-styled action on the grounds that the Plaintiff's rights are being

violated by the Defendants, and the Plaintiff will suffer immediate and irreparable

injury pending a final judgment in, this action as is clearly demonstrated by the Verified Coinplaint filed with the Circuit Court Clerk in this action, and as will be

demonstrated by the evidence presented at a hearing on this Motion. plaintiff prays that the injunctive relief include provisions enjoining the Defendants herein, their officers, agents, employees, and all other perso'ns acting in concert with the Defendants from discharging or allowing the discharge of untreated wastewater into the waters of the Commonwealth.

plaintiff further prays that the court enjoin Oefendants, Cardinal Utilities, Inc., Lorainne P, Kimbrell and Steve Pope, from allowing additional sewer connections to the systems serving 6reen Acres. Gateway, Blandville, Fieldmont and Holifield subdivisions.

NATLIRAL RESOURCES ANO ENVIR MENT PROTECTI CABINET

CHARLES W. KURTZ Qepartment of Law Fifth Floor, Capital Plaza Tower Frankfort, Kentucky 40601 {502)S64-5576

COUNSEL FOR PLAINTIFF CERTIFICATE OF SERVICE

I hereby certify that a true and accurate copy ofthe foregoing NOTICE AND MOTION FOR INJUNCTIVE RELfEF was mailed, postage pre-paid, to the follawing thisthe /j'Pity af M~Ai~, 1989:

Pope, Process/'teve Agent Cardinal Utilities, Inc. P.O. Bax 7766 Paducah. Kentucky 42002-7766

Ms. I.arainne P. Kimbrell 901 Narth 32nd Street Paducah, Kentucky 42001

Stew Pope 901 North 32nd Street Paducah, Kentucky 420024610

Jae l..Wallace Process Agent Jiffy Mart Fine Faods, Inc. Route 1, Massac Church Road Paducah, Kentucky 42001

Charles W. Kurtz CONNONWEALTH OF KENTUCKY FRANKLIN CIRCUIT COURT CIVIL ACTION NO. 4 DIVISION NO. ~~ t) S ~ I 0 0 0

CONNONWEALTH OF KENTUCKY g NATURAL RESOURCES AND ENVIRONNENTAL PROTECTION CABZNET PLAZNTIFF

VSo VERIFIED CONPLAZNT

'".:q CARDINAL UTZLITIESFODDER'NCo~ INC ~ i I,A",; ! LORAZNNE P ~ KZNBRELL ~ STEVE POPEr and JIFFY WART FINE ~ d/b/a F.':-. '! !IQU)7 SOUTHERN PRZDE TRUCK PLAEA .'."- .:":,:;WatiDQ@ANTS

* I * 0 * 4 4 *

Comes the Plaintiff, Commonwealth of Kentucky, Natural Resources and Environmental Protection Cabinet, by counsel, and for its Verified Complaint and request for in]unctive relief against the Deiandants, states as follower 1. The Plaintiff, Commonwealth of Kentucky, Natural Resources and Environmental Protection Cabinet (hereinafter referred to as the Cabinet), is charged with the statutory duty of enforcing the laws of the Commonwealth relating to water quality and pollution as set forth in Kentucky Revised Statutes (KRS) Chapter 224 and the regulations promulgated pursuant thereto.

2 ~ The Franklin Circuit Court has jurisdiction to hear the injunctive relief requeSted pursuant to KRS 224.995. 3. Each of the above named Defendants, Cardinal Utilities, Inc., Lorainne p. Kimbrell, Steve Pope, and Jiffy Matt Pine Foods, Znc., d/b/a Southern pride Truck Plasa, are. a "person" as defined in KRS 224.005(12). 4. At all times pertinent and material to this Verified Complaint and request for in]unctive relief, Lorainne P. Kimbrell, Steve Pope and Cardinal Utilities, Znc., operated sewage treatment facilities serving Fieldmont SuMivision, Green Acres Subdivision and Blandville West Subdivision, all in NcCracken County, Kentuckys Golden Acres SuMivision and Gateway SuMivision in Narshall County, Kentuckyr and aolifield Heights SuMivision, in Graves County, Kentucky. 5. At all times pertinent and material to this Verified Complaint, Jiffy Nart Pine Foods, Inc., d/b/a Southern Pride Truck Plass, operated in NcCracken County, Kentucky, and discharged wastewater into the Pieldmont Sewage Treatment Facility operated by Cardinal Utilities,- Znc. 6. On or about October 12, 1987, an authorised agent of the Cabinet issued to Cardinal Utilities, Znc., a notice of violation for environmental violations at the Gateway Subdivision in N¹rshall County, Kentucky, Violations cited included degradation of the surface waters of the Commonwealth, 401 KAR Sc031i failure to report a spill or by-pass, 401 KAR 5c015r failure to apply secondary treatment to effluent, 401 KAR 5>035't and violation of the conditions . of KPDES Permit No. KY 0044181. , 7. On or about November 10, 1907, an authorired agent of the Cabinet issued to Cardinal Utilities, Inc., a notice of violation for violations at Green Acres Subdivision in NcCracken County. The Defendant was cited for allowing the effluent to exceed permit limit ~ . 8. On or about August 14, 1987, an authoriaed agent of the Cabinet issued to Cardinal Utilities, Inc., a notice of violation for violations at Fieldmont Subdivision in NcCracken County. Violations cited included failure to meet limits of KPDES Permit No. Ky 0058971. 9. The Cabinet alleges that Lorainne P. Kimbrell and Steve Pope< as owners and operators, of the six wastewater treatment facilities in the Cardinal Utilities< Inc. group have failed to maintain and operate the facilities pursuant to KRS Chapter 224 and the Kentucky Administrative Regulations. 10. Periodic inspections made by the Cabinet at the wastewater treatment planta serving Holif ield Heights Subdivision, Gateway Subdivision, Golden Acres Subdivision, Slandville West Subdivision, Green Acres Subdivision and Fieldmont Subdivision show that each and every one of the facilities is discharging untreated wastewater into the water ~ of the Commonwealth. 11. Jiffy Wart Fine Foods, Inc., d/b/a Southern Pride Truck'lass, discharges iani'tery wastewater from the Truck Plass into the Fieldmont Subdivision, a discharge plant owned by Cardinal Utilities, Znc. 12. On or about. June 26, 1987, the Cabinet issued to Jiffy Wart Fine Foods, Znc., d/b/a Southern Pride Truck Plass, a notice of violation which alleged that the Defendant had violated 401 KAR 5i005, construction of wastewater linea without Division of Water approvalg and 401 KAR 5~031, polluting the waterways of the Commonwealth. 13. On or about August 19, 1967, the Cabinet issued to Jiffy Wart Fine Foods, Znc., d/b/a Southern Pride Truck Plass, a notice of violation which alleged that the Defendant had violated 401 KAR 5>005, failure to submit plans to the Division of Watert and 401 KAR 5c031, pollution

of streams of the Commonwealth by way of Fieldmont Subdivision wastewater treatment facility. 14. On or about October 28, 1987, the Cabinet issued to Jiffy Wart Fine Foods, Znc., d/b/a Southern Pride Truck Plass> a notice of violation which alleged that the Defendant had violated KRS 224.060, indirectly discharging pollutants into the waterways of the Commonwealth. 15. The aforementioned acts and omissions of the named Defendants constitute violations of KRS Chapter 224 and the regulations promulgated pursuant thereto. 16. The Defendants herein are subject to in)unctive relief sought by the Cabinet pursuant to KRS 224.995 for violations of'RS Chapter. 224.' WHEREPORE, the Plaintiff respectfully praysi 1. That the Defendants be ad]udged in violation of the applicable provisions of KRS Chapter 226 and the regulations promulgated pursuant thereto. 2. That the Defendants be assessed a civil penalty in the amount of ten thousand dollars (010,000) per day for each violation of KRS Chapter 226. 3. That Cardinal Vtilities, Inc., torainne P. Kimbrell and Steve Pope, be temporary and permanently en)oi,ned from continuing th» discharge of untreated wastewater from the treatment facilitiss seLving Pleldmont SuMivision, Green Acres SuMivision, Rlandville West SubdiVieio, Golden Acres SuMivision< Gateway SuMivision and Holifield Heights

SuMivis ion „ 4. That Lorainne P. Kimbrell, Steve Pope and Cardinal Utilities, Xnc. be an]oined from failing to forthvith bring each and every one oi their wastewater treatment facilities into compliance with the KPDES permit limits. 5. That the Court impose a tap on ban prohibiting additional sewer connections in the systems serving Green Acres Subdivision, Gatevood Subdivision, Blandville West SuMivision, Pieldmont SuMivision and Holif ield Heights SuMivi sion. 6. That, Jiffy Mart Pine Poods, Inc., d/b/a Southern Pride Truck Plaza, be ordered to Perform all remedial. measures that are diemed necessary by the Cabinet to abate the violations cited above. 7. That 'the Cabinet he awarded each and every item o5 relief to »hich it may aPPear entitled.

NATURAL RESOURCES AND ENVXRQNNENTAL PROTE XON CASZNET

CEARLES W» RUNTS Department o5 Law youth Plcorg Capital Plass Tower Prankfort. Kentucky 00601 {$02) 566-5576

CQUNSEL POR PLAZNTZPP VBRIPICATION

1. Nancy Pouser. Acting Wanager, Enforcement/Compliance Branch, Dlvlslon oy Wateri Departmerit tor Bnvlronmental Protection, Natural Resources and Environmental protection Cabinet, have read the yoregolng Verllled Coinplalnt, and verily that all the allegations contained therein are true and correct to the best ot my hnoeledge and belief

NATURAL RESOURCES AND ENVIRONXBNTAL PROTECTION CABINET

NAIVCY FQQSBR~ ACTINO NANAOBR ENPORCERENT/COMPLIANCE BRANCH

Subscribed and sworn to betore me by Nancy Pouser, this the I day oy January, 1989.

NOTARY PUBLIC

lly Commlsslon Expires~~/M 37i l 9'A I / FILED

( | COMMONWEALTH OF KENTUCKY FRANKLIN CIRCUIT COURT ('R((HKg(N C(R U cIYIL AGTI0N N0.89-ci-0046 sir (cP (wARS "'o((RI DIVISION NO. II HALL, CIZR((

COMMONWEALTH OF KENTUCKYs NATURAL RESOURCES AND VS'RDERENVIRONHENTAL PROTECTION CABINET PLAINTIFF

CARDINAL UTILITIES> P. KIMBRELL,IN'ORRAINE STEVE POPEe JIFFY MART FINE FOODS, INC ~ d/b/a SOUTHERN PRIDE TRUCK PLAZA DEFENDANT

~ e v 0 0 e 0 e 0 0 0 0

This matter came on to be heard on January 31, 1989, on the Plaintii'f's motion for in)unctive reliei", The parties were present with counsel and were heard. The Parties agree and present to the Court that the six (6) sewage treatment i"acilities operated by Defendants, Cardinal Utilities, Inc., Lorraine P. Kimbrell and Steve Pope, servi,ng Fieldmont Subdivision, Green Acres Subdivision and Blandville West Subdivision, McCracken County, Golden Acres Subdivision and Gateway Subdivision, Marshall County, and Holiiield Heights, Graves County, are discharging inadequately treated wastewater into the waters of the 'Commonwealth of Kentucky. The par ties further agr ee that the discharge from the six (6) facilities 'xceeds Kentucky Pollutant Discharge Elimination System (KPDES) permit limits and there have been no discharge monitoring reports filed for the facilities for the third quarter oi'988. The Court being sufficiently advised> ORDERS Cardinal Utilities, Inc., Lorraine Kimbrell and Steve Pope, to perform the repair and maintenance necessary to the six (6) facilities to ensure that the discharge is within KPDES permit limits on or before March 2, 1989. The Court hereby issues a Temporary In]unction enjoining and prohibiting any additional se~er connections in the areas served by Green Aores, Gateway, Blandville West, Pieldmont and Holifield Heights until further Orders of this Court. IT IS FURTHER ORDERED that Cardinal Utilities, Steve Pope, and Lorraine Kimbrell shall peri"orm all repair and maintenance necessary at the six (6) facilities to ensure that there are no tutor e spills or disoharges oi untreated wastewater from the faoilities into the waters of the Commonwealth and Defendants are ordered to sample and submit discharge monitoring reports as required by the KPDES permits. .All matters included in the Yeriiied Complaint, Defendants'nswer, Counterclaim and 'rossclaim not addressed in this . Order , are reserved for future adgudication by this Court.

AGREED TOR

David K. Ullerich 233 North Seventh Street Paducah, Kentuoky 42001

'1 > / 'i'6'ikey l(~ aP!." Charles W. Kurts Department of Law Fifth Floor, Capital Plass Touer Frankfort, Kentucky 40601

Jac289 COMMOiPEEALTH OF KENTUCKY FRANKLIN CIRCUIT COURT CIVIL ACTION iNO, 89-CI-0046 DIVISION NO. II

COMMOiiEALTH OF KENTUCKY, iNATURAL RESOURCES AiND ENVIROiNMENTAL PROTECTION CABINET PLAINTIFF ij

VS. ORDER ):)f„.

CARDINAL UTILITIES. INC „et al. DEFFP+NTS cl.i vx ~ 1 4 e 4 4 4I

This matter came on to be heard March 27, 1990, on the PlaintlfPs

Motion for Contempt. The parties were present, by counsel, and were heard. The Court being suFiciently advised finds that Defendant, Cardinal Utilities, Inc., and Steve Pope. are not at this time in contempt. The Court ORDERS that Steve Pope. as president of Cardinal Utilities, Inc., and as the operator of the f'acilities shall report all major malfunctions which occur at the six (6) wastewater treatment plants - Gateway, Golden Acres, Fieldmont, Green Acres, BlandviHe and Holiiield Heights —to the

Paducah Regional Office the day he discovers a malfunction or should he discover a malfunction in the evening, or on a holiday or weekend, he shall report the malfunction the next day the Paducah Regional Office is open. The Court FURTHER ORDERS that Steve Pope shall have forty-eight (48) hours to repair all malfunctions, including repairs to blowers or motors, except in extraordinary circumstances. Should he fail to repair the malfunc-. tion within forty-eight (48) hours, he shaH be fined fifty dollars (850),per day for.each day a malfunction continues., IT IS FURTHER ORDERED that Steve Pope shall have a laboratory sample the discharge from the six (6) facilities —Gateway, Golden Acres, Fieldmont, Green Acres, Blandville and Holifield Heights —and file the analysis on Discharge Monitoring Reports to the Division of Water monthly starting with March of 1990. The Discharge Monitoring Reports shall be filed with the Division of Water on the tenth day following the month the discharge samples are gathered. The Temporary Injunction entered February 7, 1989, enjoining and

prohibiting any additional sewer connections in areas served by Green Acres, Gateway, Blandville West, Fieldmont and Holifield Heights shall remain in effect until further order of this Court.

JUDGE, FRAVKI.IX CIRCU1T COURT

kch390