Exhibit 10(c)

 

FIRST AMENDMENT AGREEMENT

 

FIRST AMENDMENT AGREEMENT dated as of November 18, 2011 (this “Amendment”),
among THE DAYTON POWER AND LIGHT COMPANY, an Ohio corporation (the “Borrower”),
the lenders party to the Credit Agreement (as defined below) (collectively, the
“Lenders”), and BANK OF AMERICA, N.A., as Administrative Agent and an L/C Issuer
(the “Administrative Agent”).

 

PRELIMINARY STATEMENTS:

 

(1)           The Borrower, the Lenders and the Administrative Agent have
entered into a Credit Agreement dated as of April 20, 2010 (as may be amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”).
Capitalized terms used but not defined in this Amendment shall have the meanings
assigned to them in the Credit Agreement.

 

(2)           The Borrower has requested that the Lenders modify and amend
certain provisions of the Credit Agreement as more particularly set forth below.

 

(3)           The Lenders, the Administrative Agent and L/C Issuer are willing
to amend the Credit Agreement as described in Preliminary Statement 2 above on
the terms, conditions and to the extent expressly set forth in this Amendment.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:

 

Section 1.01.        Amendments to Section 1.01.  (a)  The definitions of
“Acquisition”, “Business Day”, “Change in Law”, “Change of Control” and “ERISA
Event” are hereby deleted from the Credit Agreement in their entirety and are
substituted with the following:

 

“Acquisition” means any acquisition (a) on a going concern basis (whether by
purchase, merger or otherwise) of assets constituting a business or a division
or line of business of a Person that is not a Subsidiary of the Borrower or (b)
of a majority of the outstanding Equity Interests in any such Person (whether by
merger, stock purchase or otherwise).

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized or required to close under the Laws of, or are
in fact closed in, the state where the Administrative Agent’s Office is located
or in New York, New York, and, if such day relates to any Eurodollar Rate Loan,
means any such day that is also a London Banking Day.

 

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“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following:  (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation, implementation or application thereof by
any Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States
regulatory authorities, in each case pursuant to Basel III, shall in each case
be deemed to be a “Change in Law”, regardless of the date enacted, adopted or
issued.

 

“Change of Control” means:

 

(a)           any “person” or “group” (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act, but excluding any employee benefit plan of such
person or its subsidiaries, and any person or entity acting in its capacity as
trustee, agent or other fiduciary or administrator of any such plan), other than
AES (directly or indirectly) becomes the “beneficial owner” (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person or group shall be
deemed to have “beneficial ownership” of all securities that such person or
group has the right to acquire, whether such right is exercisable immediately or
only after the passage of time (such right, an “option right”)), directly or
indirectly, of 35% or more of the equity securities of the Parent entitled to
vote for members of the board of directors or equivalent governing body of the
Parent on a fully-diluted basis (and taking into account all such securities
that such person or group has the right to acquire pursuant to any option
right);

 

(b)           during any period of 12 consecutive months, a majority of the
members (excluding vacancies) of the board of directors or other equivalent
governing body of the Parent cease to be composed of individuals (i) who were
members of that board or equivalent governing body on the first day of such
period, (ii) whose election or nomination to that board or equivalent governing
body was approved by individuals referred to in clause (i) above constituting at
the time of such election or nomination at least a majority of that board or
equivalent governing body or (iii) whose election or nomination to that board or
other equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing body ; or

 

(c)           the Parent shall cease to own, free and clear of all Liens and
other encumbrances and on a fully diluted basis, 100% of the outstanding shares
of all classes of stock of the Borrower ordinarily having the right to vote at
an election of directors, or any contingency shall occur that causes any class
of stock of the Borrower, the shares of which are not owned by the Parent, to
have the right to vote at an election of directors.

 

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“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b)
the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which such entity was a
“substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) the assessment of withdrawal liability under Title IV of ERISA upon
the Borrower or any ERISA Affiliate in connection with the Borrower’s or any
ERISA Affiliate’s complete or partial withdrawal from a Multiemployer Plan or
the Borrower’s or any ERISA Affiliate’s notification that a Multiemployer Plan
is in reorganization; (d) the filing of a notice of intent to terminate or the
treatment of a Pension Plan amendment as a termination under Section 4041 or
4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a
Pension Plan; (f) any event or condition which constitutes grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; or (g) the imposition of any liability under Title
IV of ERISA upon the Borrower or any ERISA Affiliate, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA.”

 

(b)           The following definitions are hereby added to Section 1.01 of the
Credit Agreement in appropriate alphabetical order:

 

““Acquisition Transaction” means the acquisition by AES or any Subsidiary
thereof, of at least a majority of the outstanding stock of the Parent.

 

“AES” means The AES Corporation.

 

“Short Term Investments” means short-term investments as defined by GAAP.”

 

Section 1.02         Amendments to Section 4.02(a).  Section 4.02(a) of the
Credit Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:

 

“4.02 Conditions to all Credit Extensions.  The obligation of each Lender and
each L/C Issuer to honor any Request for Credit Extension (other than a Loan
Notice requesting only a conversion of Loans to the other Type, or a
continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:

 

(a)           The representations and warranties of the Borrower contained in
Article V shall be true and correct in all material respects on and as of the
date of such Credit Extension, except that (i) if a qualifier relating to
materiality, Material Adverse Effect or a similar concept applies, such
representation or warranty shall be required to be true and correct in all
respects, (ii) to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct in all material respects as of such earlier date (except that if a
qualifier relating to materiality, Material Adverse Effect or a similar concept
applies, such representation or warranty shall be required to be true and
correct in all respects), (iii) for purposes of this Section 4.02, the
representations and warranties contained in subsections (a) and (b) of Section
5.05 shall be deemed to refer to the most recent statements furnished pursuant
to clauses

 

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(a) and (b), respectively, of Section 6.01 and (iv) the representations and
warranties contained in Section 5.05(c) and 5.06(a)(ii) do not need to be true
and correct for any Borrowing.”

 

Section 1.03.        Amendments to Section 5.03.  Section 5.03 of the Credit
Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:

 

“5.03      Governmental Authorization; Other Consents.  No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Borrower of this Agreement or any other Loan Document, except for
such approvals, consents, exemptions, authorizations, actions, notices and
filings (a) that have been obtained or made on or before the Closing Date and
are in full force and effect, and (b) from The Public Utilities Commission of
Ohio which are necessary or required annually in order to permit the Borrower to
incur or keep outstanding Obligations hereunder.”

 

Section 1.04         Amendments to Section 5.05.  Section 5.05 of the Credit
Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:

 

“5.05      Financial Statements; No Material Adverse Effect.

 

(a)           The Audited Financial Statements (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present in all material respects
the financial condition of the Borrower and its Subsidiaries as of the date
thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; and (iii) show all material
indebtedness and other liabilities, direct or contingent, of the Borrower and
its Subsidiaries as of the date thereof, including liabilities for Taxes,
material commitments and Indebtedness (other than any liability incident to any
litigation, arbitration or proceeding that could not reasonably be expected to
have a Material Adverse Effect (excluding the effects of the Acquisition
Transaction and any financing therefor, if any)).

 

(b)           The unaudited consolidated balance sheets of the Borrower and its
Subsidiaries dated March 31, 2011, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for the fiscal quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments.

 

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(c)           Since the date of the Audited Financial Statements, there has been
no event or circumstance, either individually or in the aggregate, that has had
or could reasonably be expected to have a Material Adverse Effect (excluding the
effects of the Acquisition Transaction and any financing therefor, if any).”

 

Section 1.05         Amendments to Section 5.06(a).  Section 5.06(a) of the
Credit Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:

 

“(a)         There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of the Borrower, threatened, at law, in equity, in
arbitration or before any Governmental Authority, by or against the Borrower or
any of its Subsidiaries that (i) question the validity or the enforceability of
the Loan Documents, or any of any action to be taken by the Borrower pursuant to
any of the Loan Documents, or (ii) either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect (excluding the
effects of the Acquisition Transaction and any financing therefor, if any).”

 

Section 1.06         Amendments to Section 5.12.  Section 5.12 of the Credit
Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:

 

“5.12      ERISA Compliance.

 

(a)           Each Pension Plan of the Borrower and its Subsidiaries is in
compliance in all material respects with the applicable provisions of ERISA, the
Code and other Federal or state laws.  Neither the Borrower nor any Subsidiary
has, or has at any time during the preceding six years had, an obligation to
contribute to a Multiemployer Plan.  Each Pension Plan of the Borrower and its
Subsidiaries that is intended to be a qualified plan under Section 401(a) of the
Code has received a favorable determination letter from the Internal Revenue
Service to the effect that the form of such Pension Plan is qualified under
Section 401(a) of the Code and the trust related thereto has been determined by
the Internal Revenue Service to be exempt from federal income tax under Section
501(a) of the Code, or an application for such a letter is currently being
processed by the Internal Revenue Service.  To the best knowledge of the
Borrower, nothing has occurred that would prevent or cause the loss of such
tax-qualified status.

 

(b)           There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Pension Plan of the Borrower and its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.  There has been no
nonexempt prohibited transaction or violation of the fiduciary responsibility
rules with respect to any Pension Plan of the Borrower and its Subsidiaries that
has resulted or could reasonably be expected to result in a Material Adverse
Effect.

 

(c)           (i) No ERISA Event with respect to any Pension Plan of the
Borrower or its Subsidiaries has occurred, and neither the Borrower nor any
Subsidiary is aware of

 

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any fact, event or circumstance that could reasonably be expected to constitute
or result in an ERISA Event with respect to any such Pension Plan ; (ii) the
Borrower and each Subsidiary has met in all material respects all applicable
requirements under the Pension Funding Rules in respect of each Pension Plan of
the Borrower and its Subsidiaries, and no waiver of the minimum funding
standards under the Pension Funding Rules has been applied for or obtained;
(iii) as of the most recent valuation date for any Pension Plan of the Borrower
and its Subsidiaries, the funding target attainment percentage (as defined in
Section 430(d)(2) of the Code) is 60% or higher and neither the Borrower nor any
Subsidiary knows of any facts or circumstances that could reasonably be expected
to cause the funding target attainment percentage for any such Pension Plan to
drop below 60% as of the most recent valuation date; (iv) neither the Borrower
nor any Subsidiary has incurred any liability to the PBGC other than for the
payment of premiums, and there are no premium payments which have become due
that are unpaid; (v) neither the Borrower nor any Subsidiary has engaged in a
transaction that could be subject to Section 4069 or Section 4212(c) of ERISA;
and (vi) no Pension Plan of the Borrower and its Subsidiaries has been
terminated by the plan administrator thereof nor by the PBGC, and no event or
circumstance has occurred or exists that could reasonably be expected to cause
the PBGC to institute proceedings under Title IV of ERISA to terminate any such
Pension Plan.

 

(d)           For the avoidance of doubt, references to “Pension Plan” and
“Multiemployer Plan” in this Section 5.12 refer only to Pension Plans and
Multiemployer Plans of the Borrower and its Subsidiaries and do not refer to the
Pension Plans or Multiemployer Plans of other ERISA Affiliates of the Borrower
and its Subsidiaries.”

 

Section 1.07         Amendments to Section 6.03.  Section 6.03 of the Credit
Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:

 

“6.03      Notices.  Promptly, after an officer of the Borrower has knowledge
thereof, notify the Administrative Agent and each Lender:

 

(a)           of the occurrence of any Default;

 

(b)           of any (i) breach or non-performance of, or any default under, a
Contractual Obligation of the Borrower or any Subsidiary; (ii) any dispute,
litigation, investigation, proceeding or suspension between the Borrower or any
Subsidiary and any Governmental Authority; or (iii) the commencement of, or any
material development in, any litigation or proceeding affecting the Borrower or
any Subsidiary, including pursuant to any applicable Environmental Laws, in each
case under any of the foregoing clauses (i), (ii) and (iii) where such event
could reasonably be expected to have a Material Adverse Effect;

 

(c)           of the occurrence of any ERISA Event;

 

(d)           of any material change in accounting policies or financial
reporting practices by the Borrower or any Subsidiary;

 

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(e)           of any amendment to the Organization Documents of the Borrower
filed by the Borrower in the applicable office in the jurisdiction where it is
organized; and

 

(f)            Any Rating change.”

 

Section 1.08         Amendments to Section 6.09.  Section 6.09 of the Credit
Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:

 

“6.09      Books and Records.  Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made in all material respects of all financial transactions and
matters involving the assets and business of the Borrower or such Subsidiary, as
the case may be.”

 

Section 1.09         Amendments to Section 7.01.  Section 7.01 of the Credit
Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:

 

“7.01      Liens.  Create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, other
than the following:

 

(a)           Liens pursuant to any Loan Document;

 

(b)           Liens existing on the date hereof and listed on Schedule 7.01 and
any renewals, refinancings or extensions thereof, provided that the amount
secured or benefited thereby is not increased;

 

(c)           Liens for Taxes, assessments or charges or levies on property not
yet delinquent or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto are
maintained in accordance with GAAP;

 

(d)           Liens imposed by law, such as carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s or other like Liens arising in the
ordinary course of business which do not secure obligations overdue for a period
of more than 60 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained;

 

(e)           Liens, pledges or deposits in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other social
security legislation, other than Liens imposed by ERISA;

 

(f)            deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety and appeal
bonds, indemnity or performance bonds and other obligations of a like nature
incurred in the ordinary course of business;

 

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(g)           easements, rights-of-way, zoning, restrictions or other similar
encumbrances or imperfections in title and obligations contained in similar
instruments and prior rights of other Persons which, do not materially interfere
with the ordinary conduct of the business of the Borrower and its Subsidiaries
or could not reasonably be expected to have a Material Adverse Effect;

 

(h)           Liens securing judgments, decrees or attachments not constituting
an Event of Default under Section 8.01(h);

 

(i)            Liens on property of the Borrower securing the Borrower’s First
Mortgage Bonds issued pursuant to the Indenture, dated as of October 1, 1935, as
amended, supplemented, refinanced, replaced or otherwise modified from time to
time, between the Borrower and The Bank of New York Mellon (or its predecessors
or successors);

 

(j)            Liens on property of the Borrower in connection with
collateralized pollution control bonds;

 

(k)           Liens on property of the Borrower in connection with any
construction project or generating plant as security for any Indebtedness
incurred for the purpose of financing all or part of such construction project
or generating plant, and in each case, Liens and charges incidental thereto;
provided that the aggregate amount of Indebtedness secured by Liens permitted
pursuant to this clause (k) shall not exceed $500,000,000;

 

(l)            banker’s liens and rights of setoff arising by operation of law
and contractual rights of setoff;

 

(m)          leases or subleases granted in the ordinary course of business to
others not interfering in any material respect with the business of the Borrower
or its Subsidiaries and any interest or title of a lessee under any lease not in
violation of this Agreement;

 

(n)           purported Liens evidenced by the filing of precautionary Uniform
Commercial Code financing statements relating solely to operating leases of
personal property entered into in the ordinary course of business;

 

(o)           the right reserved to, or vested in, any municipality or public
authority by the terms of any right, power, franchise, grant, license or permit,
or any provision of law, to purchase or capture or designate a purchaser of any
property;

 

(p)           Liens with respect to cash collateral deposited by the Borrower
with counterparties in the ordinary course of Borrower’s purchase and sale of
energy, power, interest rate hedges, coal and other commodities;

 

(q)           Liens arising from the rights of lessors under leases (including
financing statements regarding property subject to such lease) permitted under
this Agreement; provided that such Liens are only in respect of property subject
to, and secure only, the respective lease (and any other lease with the same or
affiliated lessor);

 

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(r)            any (i) Lien existing on any property at the time such property
is acquired by the Borrower or any of its Subsidiaries or on any property of any
Person at the time such Person becomes, or is merged into, a Subsidiary of the
Borrower; provided that (A) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming, or being merged into,
such Subsidiary, as the case may be, (B) such Lien shall not attach or apply to
any other property or assets of the Borrower or any of its Subsidiaries, and
(C) such Lien shall secure only those obligations that it secures on the date of
such acquisition or the date such Person becomes, or is merged into, such
Subsidiary, as the case may be, and any extension, renewal, refunding or
refinancing thereof, so long as the aggregate principal amount so extended,
renewed, refunded or refinanced is not increased, and (ii) Lien securing
Indebtedness in respect of purchase money obligations for the acquisition,
lease, construction or improvement of fixed assets or Capital Lease Obligations,
provided that (A) such Lien only attaches to such fixed assets being acquired,
leased, constructed or improved and (B) the Indebtedness secured by such Lien
does not exceed the cost or fair market value, whichever is lower, of the fixed
assets being acquired, leased, constructed or improved on the date of
acquisition, lease, construction or improvement; provided that the aggregate
principal amount of Indebtedness at any time outstanding secured by a Lien
described in this subsection (r) shall not exceed an amount equal to 5% of the
Consolidated Tangible Assets at such time;

 

(s)            Liens incurred in connection with an obligation to cash
collateralize letters of credit or swing line loans; and

 

(t)            Liens, in addition to those listed above, securing Indebtedness
and other obligations in an aggregate amount at any time not exceeding the
greater of (i) $50,000,000 and (ii) 2.5% of Consolidated Tangible Assets.”

 

Section 1.10         Amendments to Section 7.02(a).  Section 7.02(a) of the
Credit Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:

 

“(a)         Investments held by the Borrower or such Subsidiary in the form of
cash, cash equivalents or other Short Term Investments;”

 

Section 1.11         Amendments to Section 7.04.  Section 7.04 of the Credit
Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:

 

“7.04      Dispositions.  Make any Disposition or enter into any agreement to
make any Disposition, except:

 

(a)           Dispositions of surplus, obsolete or worn out property, whether
now owned or hereafter acquired, in the ordinary course of business;

 

(b)           Dispositions of inventory in the ordinary course of business;

 

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(c)           Dispositions of equipment or real property to the extent that
(i) such property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;

 

(d)           Dispositions of property by any Subsidiary to the Borrower or to a
wholly-owned Subsidiary;

 

(e)           Dispositions permitted by Sections 7.01, 7.02 and 7.03;

 

(f)            Dispositions of property having a fair market value of less than
$5,000,000 individually; and

 

(g)           Dispositions by the Borrower and its Subsidiaries not otherwise
permitted under this Section 7.04 so long as (A) the aggregate amount (based
upon the fair market value of the assets) of all property sold or otherwise
disposed pursuant to all such Dispositions on and after the Closing Date at the
time of and after giving effect to any such Disposition does not constitute a
Substantial Portion of the property of the Borrower and its Subsidiaries and
(B) at least 80% of the total consideration received by the Borrower or any of
its Subsidiaries, as applicable, for such Disposition or series of Dispositions
consists of cash or cash equivalents;

 

provided, however, that any Disposition pursuant to clauses (a) through
(g) shall be for fair market value.”

 

Section 1.12         Amendments to Section 7.06.  Section 7.06 of the Credit
Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:

 

“7.06      Transactions with Affiliates.  Enter into any transaction of any kind
with any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
the Borrower or such Subsidiary as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate; provided that the foregoing restriction shall not apply
to (a) transactions between or among the Borrower and any of its Subsidiaries or
between and among any Subsidiaries, (b) sales of goods by the Borrower or any of
its Subsidiaries to an Affiliate for use or distribution outside the United
States that in the good faith judgment of the Borrower complies with any
applicable legal requirements of the Code, (c) agreements and transactions with
and payments to officers, directors and shareholders that are either (i) entered
into in the ordinary course of business and not prohibited by any of the
provisions of this Agreement or (ii) entered into outside the ordinary course of
business, approved by the directors or shareholders of the Borrower, and not
prohibited by any of the provisions of this Agreement, or (d) the issuances of
securities or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, stock option and stock
ownership plans or similar employee benefit plans and other compensation
arrangements with respect to the procurement of services with their

 

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respective officers and employees, and any employment agreements entered into by
Borrower or any Subsidiary, in each case approved by the Borrower or any
Subsidiary in good faith.”

 

Section 1.13         Amendments to Section 8.01(e).  Section 8.01(e) of the
Credit Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:

 

“(e)         Cross-Default.  (i) The Borrower or any Subsidiary (A) defaults in
any payment (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise and after applicable notices have been given and grace
periods have expired) in respect of any Indebtedness or Guarantee (other than
Indebtedness hereunder and Indebtedness under Swap Contracts) having an
aggregate outstanding principal amount (including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than $50,000,000,
or (B) defaults in the performance of any other agreement or condition relating
to any such Indebtedness or Guarantee or contained in any instrument or
agreement evidencing, securing or relating thereto (after all applicable notices
have been given and grace periods have expired), or any other event occurs, the
effect of which default or other event is to cause, or to permit the holder or
holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required
and after all applicable grace periods have expired, such Indebtedness to be
demanded or to become due or to be repurchased, prepaid, defeased or redeemed
(automatically or otherwise), or an offer to repurchase, prepay, defease or
redeem such Indebtedness to be made, prior to its stated maturity, or such
Guarantee to become payable or cash collateral in respect thereof to be
demanded; or (ii) there occurs under any Swap Contract an Early Termination Date
(as defined in such Swap Contract) resulting from (A) any event of default under
such Swap Contract as to which the Borrower or any Subsidiary is the Defaulting
Party (as defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which the Borrower or any Subsidiary is
an Affected Party (as so defined) and, in either event, the Swap Termination
Value owed by the Borrower or such Subsidiary as a result thereof is greater
than $50,000,000; or”

 

Section 1.14         Amendments to Section 8.01(i).  Section 8.01(i) of the
Credit Agreement is hereby deleted in its entirety and the following is hereby
substituted therefor:

 

“(i)          ERISA.  (i) An ERISA Event occurs with respect to a Pension Plan
or Multiemployer Plan which has resulted in liability of the Borrower under
Title IV of ERISA to the Pension Plan, a Multiemployer Plan or the PBGC in an
aggregate amount in excess of $50,000,000, and the Borrower or any ERISA
Affiliate fails to make any payment in satisfaction of such liability after the
expiration of any applicable grace period, in accordance with applicable law or
any agreement entered into in respect thereof, (ii) the Borrower or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable grace
period, any installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multiemployer Plan in an

 

11

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aggregate amount in excess of $50,000,000 or (iii) an ERISA Event occurs with
respect to a Pension Plan or Multiemployer Plan which could reasonably be
expected to result in a Material Adverse Effect; or”

 

Section 1.15         Amendments to Section 8.01(k).  Section 8.01(k) of the
Credit Agreement is deleted in its entirety and the following is substituted
therefor:

 

“(k)         Change of Control.  There occurs any Change of Control, other than
a Change of Control resulting from (i) the Acquisition Transaction or (ii) the
pledge (but not the foreclosure, any transfer-in-lieu of foreclosure or any
other transfer except as collateral security) by AES or a subsidiary of AES of
any equity interest in the Parent to secure its corporate obligations.”

 

Section 1.16         Amendments to Section 10.04(b).  Section 10.04(b) of the
Credit Agreement is deleted in its entirety and the following is substituted
therefor:

 

“(b)         Indemnification by the Borrower.  The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and each L/C
Issuer, and each Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (including
the fees, charges and disbursements of any counsel for any Indemnitee), incurred
by any Indemnitee or asserted against any Indemnitee by any third party or by
the Borrower arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder, the
consummation of the transactions contemplated hereby or thereby, or, in the case
of the Administrative Agent (and any sub-agent thereof) and its Related Parties
only, the administration of this Agreement and the other Loan Documents
(including in respect of any matters addressed in Section 3.01), (ii) any Loan
or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the any L/C Issuer to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory, whether brought by a third party or by the Borrower, and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses, (A) (x) are determined
by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or
(y) result from a claim brought by the Borrower against an Indemnitee for breach
in bad faith of such Indemnitee’s obligations hereunder or under any other Loan
Document, if the Borrower has obtained a final and nonappealable judgment in its
favor on such claim as determined by a court of competent jurisdiction or
(B) arise out of any claim, litigation,

 

12

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investigation or proceeding that does not involve an act or omission by the
Borrower or any of its affiliates and that is brought by an Indemnitee against
any other Indemnitee.”

 

Section 1.17         Amendments to Section 10.13.  Section 10.13 of the Credit
Agreement is deleted in its entirety and the following is substituted therefor:

 

“10.13    Replacement of Lenders.  (i) If any Lender requests compensation under
Section 3.04, (ii) if the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 3.01 or 3.04, (iii) if any Lender gives a notice under Section 3.02,
(iv) if any Lender is a Defaulting Lender, (v) if any Lender is a Restricted
Lender (as defined below), or (vi) if the long term local issuer credit rating,
or the equivalent rating, by S&P of any Lender has dropped below BBB+ and the
long term bank deposit credit rating, or the equivalent rating, by Moody’s has
dropped below Baa1; then, in the case of clauses (i) through (v), the Borrower,
and in the case of clause (vi), the Administrative Agent, may, at the sole
expense and effort of the Borrower or, in the case of clause (vi), the sole
expense of the Borrower and the joint effort of the Borrower and the
Administrative Agent, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in, and consents required by,
Section 10.06), all of its interests, rights and obligations under this
Agreement and the related Loan Documents to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that:

 

(a)           the Borrower shall have paid to the Administrative Agent the
assignment fee specified in Section 10.06(b);

 

(b)           such Lender shall have received payment of an amount equal to 100%
of the outstanding principal of its Loans and L/C Advances, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Loan Documents (including any amounts under Section 3.05) from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts);

 

(c)           in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter;

 

(d)           in the case of any such assignment by a Restricted Lender, the
assignee must have approved in writing the substance of the amendment, waiver or
consent which caused the assignor to be a Restricted Lender; and

 

(e)           such assignment does not conflict with applicable Laws.

 

A Lender shall not be required to make any such assignment or delegation if, a
reasonable time prior thereto, as a result of a waiver by such Lender or
otherwise, the

 

13

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circumstances entitling the Borrower or the Administrative Agent to require such
assignment and delegation cease to apply.

 

For the purposes of this Section 10.13, a “Restricted Lender” means a Lender
that fails to approve an amendment, waiver or consent requested by the Borrower
pursuant to Section 10.01 that has received the written approval of not less
than the Required Lenders but also requires the approval of such Lender.”

 

Section 1.18  Exhibit C.  Exhibit C to the Agreement is deleted in its entirety
and replaced by a new Exhibit C in the form attached hereto as Exhibit A.

 

Section 1.19  Representations and Warranties.  The Borrower hereby represents
and warrants to the Administrative Agent and the Lenders, as follows:

 

(a)  The representations and warranties set forth in Article III of the Credit
Agreement and in each other Loan Document are true and correct in all material
respects on and as of the date hereof and on and as of the Effective Date (as
defined below) with the same effect as though made on and as of the date hereof
or the Effective Date, as the case may be, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties shall be true and correct in all
material respects on and as of such earlier date), except that for purposes of
this Amendment, the representations and warranties contained in of Section 5.05
of the Credit Agreement shall be deemed to refer to the most recent statements
furnished pursuant to Section 5.05 of the Credit Agreement.

 

(b)           Immediately after giving effect to this Amendment, on the date
hereof and on the Effective Date, no Default or Event of Default has occurred
and is continuing.

 

(c)  The execution, delivery and performance of this Amendment by the Borrower
has been duly authorized by all requisite corporate or other organizational
action.

 

(d)  This Amendment constitutes the legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms, subject
to Debtor Relief Laws and general equity and public policy principles.

 

(e)  The execution, delivery and performance of this Amendment by the Borrower
does not and will not (i) contravene the terms of any of the Borrower’s
Organization Documents; (ii) conflict with or result in any breach or
contravention of, or (except for the Liens created under the Loan Documents) the
creation of any Lien under, or require any payment to be made under (A) any
Contractual Obligation to which the Borrower is a party or (B) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which Borrower or their respective property is subject; or (iii) violate any
Law, except in any case referred to in clause (ii) or (iii), to the extent the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

 

14

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The Borrower hereby acknowledges that this Amendment is granted by the Required
Lenders party hereto in express reliance upon the accuracy of the foregoing
representations and warranties.

 

Section 1.20         Effectiveness.  This Amendment shall become effective only
upon satisfaction of the following conditions precedent (the first date upon
which each such condition has been satisfied being herein called the “Effective
Date”):

 

(a)  The Administrative Agent shall have received duly executed counterparts of
this Amendment which, when taken together, bear the authorized signatures of the
Borrower, the Administrative Agent, the L/C Issuer and the Required Lenders.

 

(b)  The representations and warranties set forth in Section 1.19 hereof shall
be true and correct on and as of the Effective Date.

 

(c)  The Administrative Agent shall have received all fees and expenses required
to be paid by the Borrower pursuant to Section 1.24 of this Amendment.

 

(d)  The Lenders shall have received such other documents, consents, legal
opinions, instruments and certificates as they shall reasonably request and such
other documents, legal opinions, instruments and certificates shall be
satisfactory in form and substance to the Lenders and their counsel.  All
corporate and other proceedings taken or to be taken in connection with this
Amendment and all documents incidental thereto, whether or not referred to
herein, shall be satisfactory in form and substance to the Lenders and their
counsel.

 

Section 1.21         Instrument Pursuant to Credit Agreement.  This Amendment
is, and from and after the Effective Date shall be deemed to be, a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreement.

 

Section 1.22         Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES
(BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).

 

Section 1.23         Counterparts.  This Amendment may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.

 

Section 1.24         Fees and Expenses.  The Borrower shall pay reasonable fees,
costs and expenses of the Administrative Agent in connection with the
preparation, execution and delivery of this Amendment and the other instruments
and documents to be delivered hereunder or related hereto (including, without
limitation, the reasonable fees and expenses of counsel for the Administrative
Agent).

 

15

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Section 1.25         Severability.  In case any provision in or obligation under
this Amendment shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

 

Section 1.26         Integration.  This Amendment represents the agreement of
the Borrower, the Administrative Agent and the Required Lenders with respect to
the subject matter hereof, and there are no promises, undertakings,
representations or warranties relative to the subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.

 

Section 1.27         Confirmation.  Except as expressly provided, herein, all of
the terms of the Credit Agreement and the other Loan Documents shall continue in
full force and effect and are hereby ratified and confirmed in all respects.

 

Section 1.28         Loan Documents.  Except as expressly set forth herein, the
amendments and modifications provided herein shall not by implication or
otherwise limit, constitute a waiver of, or otherwise affect the rights and
remedies of the Lenders or the Administrative Agent under the Credit Agreement
or any other Loan Document, nor shall they constitute a waiver of any Default or
Event of Default, nor shall they alter, modify, amend or in any way affect any
of the terms, conditions, obligations, covenants or agreements contained in the
Credit Agreement or any other Loan Document.  Each of the amendments provided
herein shall apply and be effective only with respect to the provisions of the
Credit Agreement specifically referred to by such amendment.  Except as
expressly amended herein, the Credit Agreement shall continue in full force and
effect in accordance with the provisions thereof.

 

(Signature Pages Follow)

 

16

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Amendment to be duly executed and delivered as of the date first above written.

 

 

Borrower:

 

 

 

THE DAYTON POWER AND LIGHT COMPANY

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Amendment to be duly executed and delivered as of the date first above written.

 

 

Administrative Agent and L/C Issuer:

 

 

 

 

 

BANK OF AMERICA, N.A., as Administrative Agent

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

Lenders:

 

 

 

 

 

BANK OF AMERICA, N.A., as a Lender and as L/C Issuer

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Amendment to be duly executed and delivered as of the date first above written.

 

 

PNC BANK, NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Amendment to be duly executed and delivered as of the date first above written.

 

 

U.S. BANK, NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Amendment to be duly executed and delivered as of the date first above written.

 

 

FIFTH THIRD BANK, as a Lender

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Amendment to be duly executed and delivered as of the date first above written.

 

 

JPMORGAN CHASE BANK, N.A., as a Lender

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

EXHIBIT C

 

FORM OF COMPLIANCE CERTIFICATE

 

Financial Statement Date:  , 20

 

To:  Bank of America, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of April 20, 2010
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein
as therein defined), among The Dayton Power and Light Company, an Ohio
corporation (the “Borrower”), the Lenders from time to time party thereto, Bank
of America, N.A., as Administrative Agent and an L/C Issuer, and PNC Capital
Markets, LLC and U.S. Bank National Association, as Co-Syndication Agents.

 

The undersigned Responsible Officer, solely in his/her capacity as a Responsible
Officer of the Borrower and not in his/her individual capacity and without
personal liability to the Administrative Agent or the Lenders with respect
hereto, on behalf of the Borrower, hereby certifies as of the date hereof that
he/she is the of the Borrower, and that, as such, he/she is authorized to
execute and deliver this Certificate to the Administrative Agent on the behalf
of the Borrower, and that:

 

[Use following paragraph 1 for fiscal year-end financial statements]

 

1.                                      The Borrower has delivered the year-end
audited financial statements required by Section 6.01(a) of the Agreement for
the fiscal year of the Borrower ended as of the above date, together with the
report and opinion of an independent certified public accountant required by
such section.

 

[Use following paragraph 1 for fiscal quarter-end financial statements]

 

1.                                      The Borrower has delivered the unaudited
financial statements required by Section 6.01(b) of the Agreement for the fiscal
quarter of the Borrower ended as of the above date.  Such financial statements
fairly present the financial condition, results of operations and cash flows of
the Borrower and its Subsidiaries in accordance with GAAP as at such date and
for such period, subject only to normal year-end audit adjustments and the
absence of footnotes.

 

2.                                      The undersigned has reviewed and is
familiar with the terms of the Agreement and has made, or has caused to be made
under his/her supervision, a reasonably detailed review of the transactions and
condition (financial or otherwise) of the Borrower during the accounting period
covered by such financial statements, and

 

[select one:]

 

--------------------------------------------------------------------------------

 

[to the knowledge of the undersigned, as of the date hereof no Default has
occurred and is continuing.]

 

—or—

 

[to the knowledge of the undersigned, the following is a list of each such
Default and its nature and status:]

 

3.                                      The representations and warranties of
the Borrower contained in Article V of the Agreement are true and correct in all
material respects on and as of the date hereof, except that (i) if a qualifier
relating to materiality, Material Adverse Effect or a similar concept applies,
such representation or warranty is true and correct in all respects, (ii) to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they are true and correct in all material respects as of
such earlier date (except that if a qualifier relating to materiality, Material
Adverse Effect or a similar concept applies, such representation or warranty is
true and correct in all respects), (iii) for purposes of this Compliance
Certificate, the representations and warranties contained in subsections (a) and
(b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01 of the Credit Agreement, including the statements in connection
with which this Compliance Certificate is delivered and (iv) the representations
and warranties contained in Section 5.05(c) and 5.06(a)(ii) do not need to be
true and correct.

 

4.                                      The financial covenant analyses and
information set forth on Schedule 1 attached hereto are true and accurate in all
material respects on and as of the date of this Compliance Certificate.

 

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
of                                       ,
                                        .

 

 

THE DAYTON POWER AND LIGHT COMPANY

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

For the Quarter/Year ended                            (“Statement Date”)

 

SCHEDULE 1
to the Compliance Certificate
($ in 000’s)

 

Section 7.11 — Consolidated Total Debt to Consolidated Total Capitalization.

 

I.

 

Consolidated Total Debt at Statement Date:

 

$

 

 

 

 

 

 

 

II.

 

Consolidated Total Capitalization at Statement Date:

 

 

 

 

 

 

 

 

 

A.

Consolidated Total Debt (Line I above):

 

$

 

 

 

 

 

 

 

 

 

 

B.

+ Consolidated Net Worth:

 

$

 

 

 

 

 

 

 

 

 

 

C.

+ Preferred stock of the Borrower:

 

$

 

 

 

 

 

 

 

 

 

 

D.

= Consolidated Total Capitalization:

 

$

 

 

 

 

 

 

 

 

III.

 

Ratio (Line I + Line II.D):

 

to 1.00

 

 

 

 

 

 

 

Maximum permitted:

 

0.65 to 1.00

 

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