Exhibit
10(aa)


 


AMENDMENT NO. 1 TO CREDIT AGREEMENT


 


This
Amendment No. 1 to Credit Agreement (this “Amendment”) is dated as
of April     , 2009, by and among THE DAYTON POWER AND
LIGHT COMPANY, an Ohio corporation (the “Borrower”), the lending
institutions party to the Credit Agreement, as hereinafter defined (the “Lenders”),
and KEYBANK NATIONAL ASSOCIATION, a national banking association, as
administrative agent for the Lenders (the “Administrative Agent”).


 


WHEREAS,
the Borrower, the Administrative Agent and the Lenders are parties to that
certain Credit Agreement, dated as of November 21, 2006, which provides,
among other things, for revolving loans, all upon certain terms and conditions
stated therein (as amended, restated or otherwise modified from time to time,
the “Credit Agreement”);


 


WHEREAS,
the Borrower has requested, and the Administrative Agent and the Lenders have
agreed, to amend the Credit Agreement to modify certain provisions thereof;


 


NOW,
THEREFORE, in consideration of the premises and of the mutual covenants herein
contained and for other valuable considerations, the Borrower, the
Administrative Agent and the Lenders hereby agree as follows:


 


Section 1.  Definitions.  Each capitalized term used herein and not
otherwise defined in this Amendment shall be defined in accordance with the
Credit Agreement.


 


Section 2.  Amendments to Credit Agreement.


 


2.1           Amendments to Section 1.1.  Section 1.1 of the Credit Agreement is
hereby amended to amend and restate the definitions of  “Applicable Facility Fee Rate,” “Applicable
Margin,” “Base Rate” and “Unfunded Liabilities” in their
entirety as follows:


 


“Applicable Facility Fee Rate” means,
on any date of determination, a rate that is determined based upon the S&P
Rating, the Moody’s Rating or the Fitch Rating, as follows:


 


	
  S&P Rating

  	
   

  	
  Moody’s Rating

  	
   

  	
  Fitch Rating

  	
   

  	
  Applicable Facility

  Fee Rate

  
	
  A– or higher

  	
   

  	
  A3 or higher

  	
   

  	
  A– or higher

  	
   

  	
  30.00 basis points

  
	
  BBB+

  	
   

  	
  Baa1

  	
   

  	
  BBB+

  	
   

  	
  35.00 basis points

  
	
  BBB

  	
   

  	
  Baa2

  	
   

  	
  BBB

  	
   

  	
  40.00 basis points

  
	
  BBB–

  	
   

  	
  Baa3

  	
   

  	
  BBB–

  	
   

  	
  50.00 basis points

  
	
  Lower than BBB-

  	
   

  	
  Lower than Baa3

  	
   

  	
  Lower than BBB-

  	
   

  	
  62.50 basis points

  



 


If at any time each Rating Agency issues a
different rating, then the Applicable Facility Fee Rate shall be determined
based on the intermediate rating at such time. 
If at any time two Rating Agencies issue the same rating, which is
different than the other Rating Agency, the rating issued by such other Rating
Agency shall be disregarded, and the Applicable Facility Fee Rate shall be
determined based on the two identical ratings at such time.  If there is no S&P Rating and Fitch
Rating, then the Applicable Facility Fee Rate shall be determined based on the
Moody’s Rating.  If there is no Moody’s
Rating and Fitch Rating, then the Applicable Facility Fee Rate 


 

















 


shall be determined based on
the S&P Rating.  If there is no Moody’s
Rating and S&P Rating, then the Applicable Facility Fee Rate shall be
determined based on the Fitch Rating.  If
at any time only two Rating Agencies issue a rating and there is a difference
of two or more rating levels between such Rating Agencies, then the Applicable
Facility Fee Rate  shall be determined based on the
intermediate rating levels at the midpoint between the ratings issued by such
Rating Agencies at such time or, if there is no midpoint, based on the higher
intermediate level.  If (i) there is
no S&P Rating, Moody’s Rating and Fitch Rating or (ii) an Event of
Default has occurred and is continuing, the Applicable Facility Fee Rate shall
be the highest rate per annum indicated therefor in the above table.  The S&P Rating, Moody’s Rating and Fitch
Rating in effect on any date for purposes of determining the Applicable
Facility Fee Rate shall be that S&P Rating, Moody’s Rating and Fitch Rating
in effect at the close of business on such date.  Each change in the Applicable Facility Fee
Rate resulting from a publicly announced change in the S&P Rating, the
Fitch Rating and/or the Moody’s Rating shall be effective during the period
commencing on the date of the public announcement thereof and ending on the
date immediately preceding the effective date of the next change.


 


 “Applicable
Margin” means, on any date of determination, a rate that is determined,
based upon the S&P Rating, the Moody’s Rating or the Fitch Rating, as
follows:


 


	
  S&P
  Rating

  	
   

  	
  Moody’s Rating

  	
   

  	
  Fitch Rating

  	
   

  	
  Applicable

  Margin for

  Eurodollar Loans

  	
   

  	
  Applicable

  Margin for Base

  Rate Loans

  
	
  A– or higher

  	
   

  	
  A3 or higher

  	
   

  	
  A– or higher

  	
   

  	
  200.00 basis points

  	
   

  	
  100.0 basis points

  
	
  BBB+

  	
   

  	
  Baa1

  	
   

  	
  BBB+

  	
   

  	
  225.00 basis points

  	
   

  	
  125.0 basis points

  
	
  BBB

  	
   

  	
  Baa2

  	
   

  	
  BBB

  	
   

  	
  250.00 basis points

  	
   

  	
  150.0 basis points

  
	
  BBB-

  	
   

  	
  Baa3

  	
   

  	
  BBB-

  	
   

  	
  275.00 basis points

  	
   

  	
  175.0 basis points

  
	
  Lower than BBB-

  	
   

  	
  Lower than Baa3

  	
   

  	
  Lower than BBB-

  	
   

  	
  300.00 basis points

  	
   

  	
  200.0 basis points

  



 


If at any time each Rating Agency issues a
different rating, then the Applicable Margin shall be determined based on the
intermediate rating at such time.  If at
any time two Rating Agencies issue the same rating, which is different than the
other Rating Agency, the rating issued by such other Rating Agency shall be
disregarded, and the Applicable Margin shall be determined based on the two
identical ratings at such time.  If there
is no S&P Rating and Fitch Rating, then the Applicable Margin shall be
determined based on the Moody’s Rating. 
If there is no Moody’s Rating and Fitch Rating, then the Applicable
Margin shall be determined based on the S&P Rating.  If there is no Moody’s Rating and S&P
Rating, then the Applicable Margin shall be determined based on the Fitch
Rating.  If at any time only two Rating
Agencies issue a rating and there is a difference of two or more rating levels
between such Rating Agencies, then the Applicable Margin shall be determined
based on the intermediate rating levels at the midpoint between the ratings
issued by such Rating Agencies at such time or, if there is no midpoint, based
on the higher intermediate level.  If (i) there
is no S&P Rating, Moody’s Rating and Fitch Rating or (ii) an Event of
Default has occurred and is continuing, the Applicable Margin shall be the
highest rate per annum indicated therefor in the above table.  The S&P Rating, Moody’s Rating and Fitch
Rating in effect on any date for purposes of determining the Applicable Margin
shall be that S&P Rating, Moody’s Rating and Fitch Rating in effect at the
close of business on such date.  


 


2

















 


Each change in the
Applicable Margin resulting from a publicly announced change in the S&P
Rating, the Fitch Rating and/or the Moody’s Rating shall be effective during
the period commencing on the date of the public announcement thereof and ending
on the date immediately preceding the effective date of the next change.


 


“Base Rate” means, for any day, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum shall at
all times be equal to the greatest of:  (i) the
rate of interest established by KeyBank in Cleveland, Ohio, from time to time,
as its “prime rate,” whether or not publicly announced, which interest rate may
or may not be the lowest rate charged by it for commercial loans or other
extensions of credit; (ii) the Federal Funds Effective Rate in effect from
time to time, determined one Business Day in arrears, plus 1/2 of 1% per
annum; and (iii) the Adjusted Eurodollar Rate that would be applicable for
a Eurodollar Loan requested two Business Days prior to such date with a one
month interest period, plus 1.00% per annum.


 


“Unfunded Liabilities” means the
amount, if any, by which the present value of all vested and unvested accrued
benefits under all Single Employer Plans exceeds the fair market value of all
such Plan assets allocable to such benefits, all as set forth in the then most
recent annual actuarial valuation report for such Plans provided to the
Borrower or any of its Subsidiaries using the actuarial assumptions set forth
in such report and permitted by applicable law or, in the context of a notice
of intent to terminate, or termination of, a Plan, determined as of the date of
the Plan’s termination using PBGC actuarial assumptions for Plan terminations.


 


2.2           Amendments to Section 9.1.  Section 9.1(i) of the Credit
Agreement is hereby amended and restated in its entirety as follows:


 


(i)            ERISA:  (i) any member of the Borrower’s
Controlled Group shall fail to pay when due an amount or amounts aggregating in
excess of $30,000,000 which it shall have become liable to pay under Title IV
of ERISA, or notice of intent to terminate a Plan or Plans of such Borrower
which in the aggregate have Unfunded Liabilities in excess of $30,000,000 shall
be filed under Title IV of ERISA by such Borrower or any member of the
Controlled Group, any plan administrator of the Plan or Plans or any
combination of the foregoing or any Reportable Event that would reasonably be
expected to have a Material Adverse Effect shall occur in connection with any
Plan; (ii) the Borrower or any member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Borrower or any other member of the Controlled Group as withdrawal
liability (determined as of the date of such notification), exceeds $10,000,000
or requires payment exceeding $10,000,000 per annum; or (iii) the Borrower
or any other member of the Controlled Group shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
if as a result of such reorganization or termination the aggregate annual
contribution of the Borrower and the other members of the Controlled Group
(taken as a whole) to all Multiemployer Plans that are then in reorganization
or being terminated have been or will be increased over the amounts contributed
to such Multiemployer Plans for the respective plan years of each such
Multiemployer Plan immediately preceding the plan in year in which the
reorganization or termination occurs by an amount exceeding $10,000,000; or


 


Section 3.  Effectiveness.


 


3.1           Conditions Precedent.  The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent:


 


3

















 


(i)            Amendment Executed.  This Amendment shall have been executed by the
Borrower, the Administrative Agent and the Required Lenders, and counterparts
hereof as so executed shall have been delivered to the Administrative Agent.


 


(ii)           Fees, etc.  The Borrower shall have paid (i) an
amendment fee to the Administrative Agent, for the pro rata benefit of each
Lender executing this Amendment based on the Commitment of such Lender, in an
amount equal to 25 basis points times the amount of such Lender’s Commitment,
(ii) to the Administrative Agent for its own account, the fees separately
agreed to between the Borrower and the Administrative Agent, and (iii) all
reasonable out-of-pocket fees and expenses of the Administrative Agent and of
special counsel to the Administrative Agent in connection with the preparation,
negotiation, execution and delivery of this Amendment.


 


3.2           Effective Date.  This Amendment shall be effective on the date
upon which the conditions precedent set forth in Section 3.1 above are
satisfied.  Unless otherwise specifically
set forth herein, each of the amendments and other modifications set forth in
this Amendment shall be effective on and after such date.


 


Section 4.  Representations and Warranties.  The Borrower hereby represents and warrants
to the Administrative Agent and the Lenders that (a) it has the legal
power and authority to execute and deliver this Amendment, (b) the officer
executing this Amendment on its behalf has been duly authorized to execute and
deliver the same and bind it with respect to the provisions hereof, (c) no
Default or Event of Default exists under the Credit Agreement, nor will any
occur immediately after the execution and delivery of this Amendment, and (d) as
of the date hereof, such it has no claim or offset against, or defense or
counterclaim to, its obligations or liabilities under the Credit Agreement or
any other Credit Document.


 


Section 5.  Miscellaneous.


 


5.1           Credit Agreement Unaffected.  Each reference that is made in the Credit
Agreement or any Credit Document to the Credit Agreement shall hereafter be
construed as a reference to the Credit Agreement, as amended hereby.  Except as herein otherwise specifically
provided, all provisions of the Credit Agreement shall remain in full force and
effect and be unaffected hereby.  This
Amendment is a Credit Document.


 


5.2           Counterparts.  This Amendment may be
executed in any number of counterparts, by different parties hereto in separate
counterparts and by facsimile signature, each of which when so executed and
delivered shall be deemed to be an original and all of which taken together
shall constitute but one and the same agreement.


 


5.3           Expenses.  The Borrower agrees to pay on demand all
costs and expenses incurred by the Administrative Agent in connection with the
preparation, negotiation and execution of this Amendment, including without
limitation, the reasonable costs, fees, expenses and disbursements of the
Administrative Agent’s legal counsel.


 


5.4           Severability.  Any term or provision of this Amendment held
by a court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of this Amendment, and the effect thereof
shall be confined to the term or provision so held to be invalid or
unenforceable.


 


4

















 


5.5           Entire Agreement.  This Amendment is specifically limited to the
matters expressly set forth herein.  This
Amendment and all other instruments, agreements and documents executed and
delivered in connection with this Amendment embody the final, entire agreement
among the parties hereto with respect to the subject matter hereof and
supersede any and all prior commitments, agreements, representations and
understandings, whether written or oral, relating to the matters covered by
this Amendment, and may not be contradicted or varied by evidence of prior,
contemporaneous or subsequent oral agreements or discussions of the parties
hereto.  There are no oral agreements
among the parties hereto relating to the subject matter hereof or any other
subject matter relating to the Credit Agreement.


 


5.6           Governing Law.  The rights and obligations of all parties
hereto shall be governed by the laws of the State of New York, without regard
to principles of conflicts of laws.


 


5.7           JURY TRIAL WAIVER.  THE BORROWER, THE ADMINISTRATIVE AGENT AND
EACH OF THE LENDERS HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG
THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISING
OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AMENDMENT OR ANY NOTE OR OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
OR THE TRANSACTIONS RELATED THERETO.


 


[Signature Pages Follow.]


 


5

















 


	
   

  	
  THE
  DAYTON POWER AND LIGHT COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  KEYBANK
  NATIONAL ASSOCIATION,

  
	
   

  	
  as a Lender, LC Issuer and as
  the Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK, N.A.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIFTH
  THIRD BANK

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


6
















 




 





 


CREDIT AGREEMENT


 


Among


 


THE DAYTON POWER AND LIGHT COMPANY

as Borrower


 


THE LENDING INSTITUTIONS NAMED THEREIN

as Lenders


 


And


 


KEYBANK NATIONAL ASSOCIATION

as an LC Issuer, the Administrative Agent
and

Lead Arranger


 


 






 


dated as of

November 21, 2006








 


$220,000,000 Revolving Facility


 




 





 

















 


	
  ARTICLE
  I.

  	
  DEFINITIONS
  AND TERMS

  	
  6

  
	
  Section 1.1

  	
  Certain
  Defined Terms

  	
  6

  
	
  Section 1.2

  	
  Computation
  of Time Periods

  	
  24

  
	
  Section 1.3

  	
  Accounting
  Terms

  	
  25

  
	
  Section 1.4

  	
  Terms
  Generally

  	
  25

  
	
  ARTICLE
  II.

  	
  AMOUNT
  AND TERMS OF LOANS

  	
  25

  
	
  Section 2.1

  	
  Establishment
  of the Credit Facility

  	
  25

  
	
  Section 2.2

  	
  Commitments
  for Loans

  	
  25

  
	
  Section 2.3

  	
  Borrowing,
  Continuation or Conversion of Loans

  	
  25

  
	
  Section 2.4

  	
  Letters
  of Credit

  	
  26

  
	
  Section 2.5

  	
  Funding
  Obligations; Disbursement of Funds

  	
  31

  
	
  Section 2.6

  	
  Evidence
  of Obligations

  	
  32

  
	
  Section 2.7

  	
  Interest

  	
  32

  
	
  Section 2.8

  	
  Increased
  Costs; Illegality

  	
  34

  
	
  Section 2.9

  	
  Breakage
  Compensation

  	
  35

  
	
  Section 2.10

  	
  Increased
  Costs to LC Issuers

  	
  36

  
	
  Section 2.11

  	
  Change
  of Lending Office; Replacement of Lenders

  	
  36

  
	
  ARTICLE
  III.

  	
  FEES;
  COMMITMENTS

  	
  37

  
	
  Section 3.1

  	
  Fees

  	
  37

  
	
  Section 3.2

  	
  Increase
  in Commitments

  	
  38

  
	
  Section 3.3

  	
  Voluntary
  Termination/Reduction of Commitments

  	
  39

  
	
  Section 3.4

  	
  Termination
  of Commitments

  	
  39

  
	
  ARTICLE
  IV.

  	
  PAYMENTS

  	
  39

  
	
  Section 4.1

  	
  Repayment
  of Loans

  	
  39

  
	
  Section 4.2

  	
  Voluntary
  Prepayments

  	
  39

  
	
  Section 4.3

  	
  Mandatory
  Payments and Prepayments

  	
  40

  
	
  Section 4.4

  	
  Method
  and Place of Payment

  	
  41

  
	
  Section 4.5

  	
  Net
  Payments

  	
  41

  
	
  ARTICLE
  V.

  	
  CONDITIONS
  PRECEDENT

  	
  43

  
	
  Section 5.1

  	
  Conditions
  Precedent at Closing Date

  	
  43

  
	
  Section 5.2

  	
  Conditions
  Precedent to the Making of Loans

  	
  44

  
	
  Section 5.3

  	
  Conditions
  Precedent to the Conversion or Continuation of Loans

  	
  45

  
	
  ARTICLE
  VI.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  45

  
	
  Section 6.1

  	
  Corporate
  Status

  	
  45

  
	
  Section 6.2

  	
  Corporate
  Power and Authority

  	
  46

  
				



 

















 


	
  Section 6.3

  	
  No
  Violation

  	
  46

  
	
  Section 6.4

  	
  Governmental
  Approvals

  	
  46

  
	
  Section 6.5

  	
  Litigation,
  etc.

  	
  46

  
	
  Section 6.6

  	
  Use
  of Proceeds; Margin Regulations

  	
  47

  
	
  Section 6.7

  	
  Financial
  Statements

  	
  47

  
	
  Section 6.8

  	
  Solvency

  	
  47

  
	
  Section 6.9

  	
  No
  Material Adverse Change

  	
  47

  
	
  Section 6.10

  	
  Tax
  Returns and Payments

  	
  47

  
	
  Section 6.11

  	
  Title
  to Properties

  	
  48

  
	
  Section 6.12

  	
  Lawful
  Operations; Compliance with Agreements

  	
  48

  
	
  Section 6.13

  	
  Environmental
  Matters

  	
  48

  
	
  Section 6.14

  	
  ERISA

  	
  48

  
	
  Section 6.15

  	
  Intellectual
  Property

  	
  49

  
	
  Section 6.16

  	
  Investment
  Company Act; Federal Power Act

  	
  49

  
	
  Section 6.17

  	
  True
  and Complete Disclosure

  	
  49

  
	
  ARTICLE
  VII.

  	
  AFFIRMATIVE
  COVENANTS

  	
  49

  
	
  Section 7.1

  	
  Reporting
  Requirements

  	
  50

  
	
  Section 7.2

  	
  Books,
  Records and Inspections

  	
  51

  
	
  Section 7.3

  	
  Insurance

  	
  51

  
	
  Section 7.4

  	
  Payment
  of Taxes and Claims

  	
  51

  
	
  Section 7.5

  	
  Preservation
  of Existence, etc.

  	
  52

  
	
  Section 7.6

  	
  Good
  Repair

  	
  52

  
	
  Section 7.7

  	
  Compliance
  with Statutes, Regulations, Orders, Restrictions

  	
  52

  
	
  Section 7.8

  	
  Fiscal
  Years, Fiscal Quarters

  	
  52

  
	
  Section 7.9

  	
  Use
  of Proceeds

  	
  52

  
	
  Section 7.10

  	
  Senior
  Debt

  	
  52

  
	
  ARTICLE
  VIII.

  	
  NEGATIVE
  COVENANTS

  	
  53

  
	
  Section 8.1

  	
  Changes
  in Business

  	
  53

  
	
  Section 8.2

  	
  Merger,
  Consolidation, Asset Sales

  	
  53

  
	
  Section 8.3

  	
  Liens

  	
  54

  
	
  Section 8.4

  	
  Investments

  	
  54

  
	
  Section 8.5

  	
  Financial
  Covenant

  	
  55

  
	
  Section 8.6

  	
  Transactions
  with Affiliates

  	
  55

  
	
  Section 8.7

  	
  Material
  Agreements

  	
  55

  
	
  Section 8.8

  	
  Use
  of Proceeds/Margin Regulations

  	
  55

  
				



 


3

















 


	
  Section 8.9

  	
  No
  Dividend Restrictions

  	
  55

  
	
  Section 8.10

  	
  Swap
  Agreements

  	
  56

  
	
  ARTICLE
  IX.

  	
  EVENTS
  OF DEFAULT

  	
  56

  
	
  Section 9.1

  	
  Events
  of Default

  	
  56

  
	
  Section 9.2

  	
  Acceleration;
  Remedies

  	
  58

  
	
  Section 9.3

  	
  Application
  of Liquidation Proceeds

  	
  58

  
	
  ARTICLE
  X.

  	
  THE
  ADMINISTRATIVE AGENT

  	
  59

  
	
  Section 10.1

  	
  Appointment

  	
  59

  
	
  Section 10.2

  	
  Delegation
  of Duties

  	
  60

  
	
  Section 10.3

  	
  Exculpatory
  Provisions

  	
  60

  
	
  Section 10.4

  	
  Reliance
  by Administrative Agent

  	
  60

  
	
  Section 10.5

  	
  Notice
  of Default

  	
  60

  
	
  Section 10.6

  	
  Non-Reliance

  	
  61

  
	
  Section 10.7

  	
  Indemnification

  	
  61

  
	
  Section 10.8

  	
  The
  Administrative Agent in Individual Capacity

  	
  61

  
	
  Section 10.9

  	
  Successor
  Administrative Agent

  	
  62

  
	
  Section 10.10

  	
  Other
  Agents

  	
  62

  
	
  ARTICLE
  XI.

  	
  MISCELLANEOUS

  	
  62

  
	
  Section 11.1

  	
  Payment
  of Expenses

  	
  62

  
	
  Section 11.2

  	
  Right
  of Setoff

  	
  64

  
	
  Section 11.3

  	
  Notices

  	
  64

  
	
  Section 11.4

  	
  Benefit
  of Agreement

  	
  65

  
	
  Section 11.5

  	
  No
  Waiver; Remedies Cumulative

  	
  67

  
	
  Section 11.6

  	
  Payments
  Pro Rata; Sharing of Setoffs

  	
  68

  
	
  Section 11.7

  	
  Governing
  Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial

  	
  69

  
	
  Section 11.8

  	
  Counterparts

  	
  69

  
	
  Section 11.9

  	
  Integration

  	
  69

  
	
  Section 11.10

  	
  Headings
  Descriptive

  	
  70

  
	
  Section 11.11

  	
  Amendment
  or Waiver

  	
  70

  
	
  Section 11.12

  	
  Survival
  of Indemnities

  	
  71

  
	
  Section 11.13

  	
  Domicile
  of Loans

  	
  71

  
	
  Section 11.14

  	
  Confidentiality

  	
  71

  
	
  Section 11.15

  	
  Lender
  Register

  	
  72

  
	
  Section 11.16

  	
  General
  Limitation of Liability

  	
  72

  
	
  Section 11.17

  	
  Limitations
  on Liability of the LC Issuers

  	
  72

  
				



 


4

















 


	
  Section 11.18

  	
  No
  Duty

  	
  73

  
	
  Section 11.19

  	
  Lenders
  and Agent Not Fiduciary to Borrower

  	
  73

  
	
  Section 11.20

  	
  Survival
  of Representations and Warranties

  	
  73

  
	
  Section 11.21

  	
  Severability

  	
  73

  
	
  Section 11.22

  	
  Independence
  of Covenants

  	
  73

  
	
  Section 11.23

  	
  Interest
  Rate Limitation

  	
  74

  
	
  Section 11.24

  	
  Treasury
  Regulations

  	
  74

  
	
  Section 11.25

  	
  USA Patriot Act

  	
  74

  



 


	
  Exhibit A

  	
  -

  	
  Revolving
  Note

  
	
  Exhibit B-1

  	
  -

  	
  Notice
  of Borrowing, Continuation or Conversion

  
	
  Exhibit B-2

  	
   

  	
  LC
  Request

  
	
  Exhibit C

  	
  -

  	
  Compliance
  Certificate

  
	
  Exhibit D

  	
  -

  	
  Closing
  Certificate

  
	
  Exhibit E

  	
  -

  	
  Assignment
  Agreement

  
	
  Exhibit F

  	
  -

  	
  Legal
  Opinion of General Counsel of the Borrower

  



 


5
















 


This CREDIT AGREEMENT, dated
as of November 21, 2006, is entered into by and among the following:


 


(i)            THE DAYTON POWER AND LIGHT COMPANY, an Ohio
corporation (the “Borrower”);


 


(ii)           the Lenders, defined below,
from time to time party hereto; and


 


(iii)          KEYBANK
NATIONAL ASSOCIATION, a national banking association, as the Administrative
Agent, defined below, and Lead Arranger.


 


RECITALS:


 


A.            The Borrower has applied to
the Lenders for a credit facility to replace its existing senior debt facility
and to provide working capital and funds for other lawful purposes.


 


B.            Subject to and upon the
terms and conditions set forth herein, the Lenders are willing to make
available to the Borrower the credit facility provided for herein.


 


AGREEMENT:


 


In consideration of the
premises and the mutual covenants contained herein, the parties hereto agree as
follows:


 


ARTICLE I.


 


DEFINITIONS AND TERMS


 


Section 1.1             Certain Defined Terms.  As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires:


 


“Acquisition” means
any acquisition (a) on a going concern basis (whether by purchase, lease
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, and (b) of
a majority of the outstanding equity or other similar interests in any such
Person (whether by merger, stock purchase or otherwise).


 


“Adjusted Eurodollar Rate”
means, with respect to each Interest Period for a Eurodollar Loan, (a) the
rate per annum appearing on the applicable electronic page of Reuters or
any successor to or substitute for such service, providing rate quotations
comparable to those currently provided by such service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to Dollar deposits in the London interbank market),
at approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period, as the rate for Dollar deposits with a
maturity comparable to such Interest Period, divided (and rounded to the
nearest one one hundredth of 1%) by (b) a percentage equal to 100% minus
the then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves
and without benefit of credits for proration, exceptions or offsets that may be
available from time to time) applicable to any member bank of the Federal
Reserve System in respect of Eurocurrency liabilities as defined in Regulation
D (or any successor category of liabilities under Regulation D); provided, however, that if the rate referred to in clause (a) above
is not available at any such time for any reason, then the rate referred to in
clause (a) shall instead be the average (rounded to the nearest one one
hundredth of 1%) of the rates at which Dollar deposits of $5,000,000 are
offered to 


 


6

















 


the
Reference Banks in the London interbank market at approximately 11:00 a.m.
(London time), two Business Days prior to the commencement of such Interest
Period, for contracts that would be entered into at the commencement of such
Interest Period.


 


“Administrative Agent”
means KeyBank in its capacity as administrative agent for the Lenders, together
with any successor to the Administrative Agent appointed pursuant to Section 10.9.


 


“Affiliate” means,
with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with
such Person, or, in the case of any Lender that is an investment fund, the
investment advisor thereof and any investment fund having the same investment
advisor.  A Person shall be deemed to
control a second Person if such first Person possesses, directly or indirectly,
the power (a) to vote 10% or more of the securities having ordinary voting
power for the election of directors or managers of such second Person or (b) to
direct or cause the direction of the management and policies of such second
Person, whether through the ownership of voting securities, by contract or
otherwise.  Notwithstanding the
foregoing, (i) a director, officer or employee of a Person shall not,
solely by reason of such status, be considered an Affiliate of such Person; and
(ii) neither the Administrative Agent nor any Lender shall in any event be
considered an Affiliate of the Borrower or any of its Subsidiaries.


 


“Agent Fee Letter”
means the Agent Fee Letter, dated as of the date hereof, between the Administrative
Agent and the Borrower, as the same may from time to time be amended, restated,
supplemented or otherwise modified.


 


“Aggregate Revolving
Facility Exposure” means, at any time, the sum of (a) the aggregate
principal amounts of all Loans outstanding at such time and (b) the
aggregate amount of the LC Outstandings at such time.


 


“Agreement” means
this Credit Agreement, as the same may from time to time be amended, restated,
supplemented or otherwise modified.


 


“Applicable Facility Fee
Rate” means, on any date of determination, a rate that is determined based
upon the S&P Rating, the Moody’s Rating or the Fitch Rating, as follows:


 


	
  S&P
  Rating

  	
   

  	
  Moody’s Rating

  	
   

  	
  Fitch Rating

  	
   

  	
  Applicable Facility

  Fee Rate

  
	
  A or higher

  	
   

  	
  A2 or higher

  	
   

  	
  A or higher

  	
   

  	
  6.00 basis points

  
	
  A–

  	
   

  	
  A3

  	
   

  	
  A–

  	
   

  	
  7.00 basis points

  
	
  BBB+

  	
   

  	
  Baa1

  	
   

  	
  BBB+

  	
   

  	
  8.00 basis points

  
	
  BBB

  	
   

  	
  Baa2

  	
   

  	
  BBB

  	
   

  	
  10.00 basis points

  
	
  BBB–

  	
   

  	
  Baa3

  	
   

  	
  BBB–

  	
   

  	
  12.50 basis points

  
	
  Lower than BBB-

  	
   

  	
  Lower than Baa3

  	
   

  	
  Lower than BBB-

  	
   

  	
  17.50 basis points

  



 


If at any time each Rating Agency
issues a different rating, then the Applicable Facility Fee Rate shall be
determined based on the intermediate rating at such time.  If at any time two Rating Agencies issue the
same rating, which is different than the other Rating Agency, the rating issued
by such other 


 


7

















 


Rating
Agency shall be disregarded, and the Applicable Facility Fee Rate shall be
determined based on the two identical ratings at such time.  If there is no S&P Rating and Fitch Rating,
then the Applicable Facility Fee Rate shall be determined based on the Moody’s
Rating.  If there is no Moody’s Rating
and Fitch Rating, then the Applicable Facility Fee Rate shall be determined
based on the S&P Rating.  If there is
no Moody’s Rating and S&P Rating, then the Applicable Facility Fee Rate
shall be determined based on the Fitch Rating. 
If at any time only two Rating Agencies issue a rating and there is a
difference of two or more rating levels between such Rating Agencies, then the
Applicable Facility Fee Rate  shall be
determined based on the intermediate rating levels at the midpoint between the
ratings issued by such Rating Agencies at such time or, if there is no
midpoint, based on the higher intermediate level.  If (i) there is no S&P Rating, Moody’s
Rating and Fitch Rating or (ii) an Event of Default has occurred and is
continuing, the Applicable Facility Fee Rate shall be the highest rate per
annum indicated therefor in the above table. 
The S&P Rating, Moody’s Rating and Fitch Rating in effect on any
date for purposes of determining the Applicable Facility Fee Rate shall be that
S&P Rating, Moody’s Rating and Fitch Rating in effect at the close of
business on such date.  Each change in
the Applicable Facility Fee Rate resulting from a publicly announced change in
the S&P Rating, the Fitch Rating and/or the Moody’s Rating shall be
effective during the period commencing on the date of the public announcement
thereof and ending on the date immediately preceding the effective date of the next
change.


 


“Applicable Lending
Office” means, with respect to each Lender, the office or offices
designated by such Lender to the Administrative Agent as such Lender’s lending
office or offices for purposes of this Agreement.


 


“Applicable Margin”
means, on any date of determination, a rate that is determined, based upon the
S&P Rating, the Moody’s Rating or the Fitch Rating, as follows:


 


	
  S&P
  Rating

  	
   

  	
  Moody’s Rating

  	
   

  	
  Fitch Rating

  	
   

  	
  Applicable Margin

  for Eurodollar

  Loans

  	
   

  	
  Applicable

  Margin for Base

  Rate Loans

  
	
  A or higher

  	
   

  	
  A2 or higher

  	
   

  	
  A or higher

  	
   

  	
  19.00 basis points

  	
   

  	
  0.0 basis points

  
	
  A–

  	
   

  	
  A3

  	
   

  	
  A–

  	
   

  	
  23.00 basis points

  	
   

  	
  0.0 basis points

  
	
  BBB+

  	
   

  	
  Baa1

  	
   

  	
  BBB+

  	
   

  	
  27.00 basis points

  	
   

  	
  0.0 basis points

  
	
  BBB

  	
   

  	
  Baa2

  	
   

  	
  BBB

  	
   

  	
  35.00 basis points

  	
   

  	
  0.0 basis points

  
	
  BBB-

  	
   

  	
  Baa3

  	
   

  	
  BBB-

  	
   

  	
  47.50 basis points

  	
   

  	
  0.0 basis points

  
	
  Lower than BBB-

  	
   

  	
  Lower than Baa3

  	
   

  	
  Lower than BBB-

  	
   

  	
  60.00 basis points

  	
   

  	
  0.0 basis points

  



 


If at any time each Rating
Agency issues a different rating, then the Applicable Margin shall be
determined based on the intermediate rating at such time.  If at any time two Rating Agencies issue the
same rating, which is different than the other Rating Agency, the rating issued
by such other Rating Agency shall be disregarded, and the Applicable Margin
shall be determined based on the two identical ratings at such time.  If there is no S&P Rating and Fitch
Rating, then the Applicable Margin shall be determined based on the Moody’s
Rating.  If there is no Moody’s Rating
and Fitch Rating, then the Applicable Margin shall be determined based on the
S&P Rating.  If there is no Moody’s
Rating and S&P Rating, then the Applicable Margin shall be determined based
on the Fitch Rating.  If at any time only
two Rating Agencies issue a rating and there is a difference of two or more
rating levels between such Rating Agencies, then the Applicable Margin shall be
determined based on the intermediate rating levels 


 


8

















 


at
the midpoint between the ratings issued by such Rating Agencies at such time
or, if there is no midpoint, based on the higher intermediate level.  If (i) there is no S&P Rating, Moody’s
Rating and Fitch Rating or (ii) an Event of Default has occurred and is
continuing, the Applicable Margin shall be the highest rate per annum indicated
therefor in the above table.  The S&P
Rating, Moody’s Rating and Fitch Rating in effect on any date for purposes of
determining the Applicable Margin shall be that S&P Rating, Moody’s Rating
and Fitch Rating in effect at the close of business on such date.  Each change in the Applicable Margin
resulting from a publicly announced change in the S&P Rating, the Fitch
Rating and/or the Moody’s Rating shall be effective during the period
commencing on the date of the public announcement thereof and ending on the
date immediately preceding the effective date of the next change.


 


“Applicable Utilization
Fee Rate” means, on any date of determination, a rate that is determined
based upon the S&P Rating, the Moody’s Rating or the Fitch Rating, as
follows:


 


	
  S&P
  Rating

  	
   

  	
  Moody’s Rating

  	
   

  	
  Fitch Rating

  	
   

  	
  Applicable Facility

  Fee Rate

  
	
  A or higher

  	
   

  	
  A2 or higher

  	
   

  	
  A or higher

  	
   

  	
  5.00 basis points

  
	
  A–

  	
   

  	
  A3

  	
   

  	
  A–

  	
   

  	
  5.00 basis points

  
	
  BBB+

  	
   

  	
  Baa1

  	
   

  	
  BBB+

  	
   

  	
  5.00 basis points

  
	
  BBB

  	
   

  	
  Baa2

  	
   

  	
  BBB

  	
   

  	
  5.00 basis points

  
	
  BBB–

  	
   

  	
  Baa3

  	
   

  	
  BBB–

  	
   

  	
  5.00 basis points

  
	
  Lower than BBB–

  	
   

  	
  Lower than Baa3

  	
   

  	
  Lower than BBB–

  	
   

  	
  10.00 basis points

  



 


If at any time each Rating
Agency issues a different rating, then the Applicable Utilization Fee Rate
shall be determined based on the intermediate rating at such time.  If at any time two Rating Agencies issue the
same rating, which is different than the other Rating Agency, the rating issued
by such other Rating Agency shall be disregarded, and the Applicable
Utilization Fee Rate shall be determined based on the two identical ratings at
such time.  If there is no S&P Rating
and Fitch Rating, then the Applicable Utilization Fee Rate shall be determined
based on the Moody’s Rating.  If there is
no Moody’s Rating and Fitch Rating, then the Applicable Utilization Fee Rate
shall be determined based on the S&P Rating.  If there is no Moody’s Rating and S&P
Rating, then the Applicable Utilization Fee Rate shall be determined based on
the Fitch Rating.  If at any time only
two Rating Agencies issue a rating and there is a difference of two or more
rating levels between such Rating Agencies, then the Applicable Utilization Fee
Rate  shall be determined based on the
intermediate rating levels at the midpoint between the ratings issued by such
Rating Agencies at such time or, if there is no midpoint, based on the higher
intermediate level.  If (i) there is
no S&P Rating, Moody’s Rating and Fitch Rating or (ii) an Event of
Default has occurred and is continuing, the Applicable Utilization Fee Rate
shall be the highest rate per annum indicated therefor in the above table.  The S&P Rating, Moody’s Rating and Fitch
Rating in effect on any date for purposes of determining the Applicable
Utilization Fee Rate shall be that S&P Rating, Moody’s Rating and Fitch
Rating in effect at the close of business on such date.  Each change in the Applicable Utilization Fee
Rate resulting from a publicly announced change in the S&P Rating, the
Fitch Rating and/or the Moody’s Rating shall be effective during the period
commencing on the date of the public announcement thereof and ending on the
date immediately preceding the effective date of the next change.


 


9

















 


“Approved Fund” means
a fund that is administered or managed by a Lender or an Affiliate of a Lender.


 


“Asset Sale” means
the sale, transfer or other disposition (including by means of Sale and
Lease-Back Transactions, and by means of mergers, consolidations, and
liquidations of a corporation, partnership or limited liability company of the
interests therein of the Borrower or any of its Subsidiaries) by the Borrower
or any of its Subsidiaries to any Person of any of their respective assets, provided that the term Asset Sale specifically excludes any
sales, transfers or other dispositions of inventory, or obsolete or excess
furniture, fixtures, equipment or other Property, real or personal, tangible or
intangible, in each case in the ordinary course of business.


 


“Assignment Agreement”
means an Assignment Agreement substantially in the form of Exhibit E.


 


“Augmenting Lender”
has the meaning provided in Section 3.2(a).


 


“Authorized Officer”
means any of the following officers of the Borrower: the Chief Executive
Officer, the Chief Financial Officer, the President, the Chief Operating
Officer, any Group Vice President, any Vice President or the Treasurer.


 


“Bankruptcy Code”
means Title 11 of the United States Code entitled “Bankruptcy,” as now or
hereafter in effect, or any successor thereto.


 


“Base Rate” means,
for any period, a fluctuating interest rate per annum as shall be in effect
from time to time which rate per annum shall at all times be equal to the
greater of (a) the rate of interest established by KeyBank in Cleveland,
Ohio, from time to time, as its prime rate, whether or not publicly announced,
which interest rate may or may not be the lowest rate charged by it for
commercial loans or other extensions of credit; and (b) the Federal Funds
Effective Rate in effect from time to time, determined one Business Day in
arrears, plus 1/2 of 1% per annum.


 


“Base Rate Loan”
means each Loan bearing interest at a rate based upon the Base Rate.


 


“Borrower” has the
meaning provided in the first paragraph of this Agreement.


 


“Borrowing” means the
incurrence of Loans consisting of one Type of Loan, by the Borrower from all of
the Lenders on a pro rata basis on a given date
(or resulting from Conversions or Continuations on a given date), having in the
case of Eurodollar Loans the same Interest Period.


 


“Business Day” means,
(a) for all purposes other than as covered by clause (b) below, any
day that is not a Saturday, Sunday or day on which commercial banks in the city
in which the Payment Office is located are authorized or required by law or
other governmental actions to close and (b) with respect to all notices
and determinations in connection with, and payments of principal and interest
on, Eurodollar Loans, any day that is a Business Day described in clause (a) and
that is also a day for trading by and between banks in Dollar deposits in the
London interbank market.


 


“Capital Lease”
means, as applied to any Person, any lease of any Property (whether real,
personal or mixed) by such Person, as lessee, that, in conformity with GAAP, is
accounted for as a capital lease on the balance sheet of that Person.


 


“Capitalized Lease
Obligations” means all obligations under Capital Leases of the Borrower or
any of its Subsidiaries in each case taken at the amount thereof accounted for
as liabilities and identified 


 


10

















 


as
“capital lease obligations” (or any similar words) on a consolidated balance
sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP.


 


“Cash Equivalents”
means any of the following:


 


(a)           securities issued or directly and fully guaranteed
or insured by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit
of the United States of America is pledged in support thereof) having
maturities of not more than one year from the date of acquisition;


 


(b)           Dollar denominated time deposits, certificates of
deposit and bankers’ acceptances of (i) any Lender or (ii) any bank
whose short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Moody’s is at least P-1 or the equivalent thereof
(any such bank, an “Approved Bank”), in each case with maturities of not
more than three months from the date of acquisition;


 


(c)           commercial paper issued by any Lender or Approved
Bank or by the parent company of any Lender or Approved Bank and commercial
paper issued by, or guaranteed by, any industrial or financial company with a
short- term commercial paper rating of at least A-1 or the equivalent thereof
by S&P or at least P-1 or the equivalent thereof by Moody’s, or guaranteed
by any industrial company with a long term unsecured debt rating of at least A
or A2, or the equivalent of each thereof, from S&P or Moody’s, as the case
may be, and in each case maturing within 90 days after the date of acquisition;


 


(d)           fully collateralized repurchase agreements entered
into with any Lender or Approved Bank having a term of not more than 30 days
and covering securities described in clause (a) above;


 


(e)           investments in money market funds substantially all
the assets of which are comprised of securities of the types described in
clauses (a) through (d) above;


 


(f)            investments in money market funds access to which is
provided as part of “sweep” accounts maintained with a Lender or an Approved
Bank;


 


(g)           investments in industrial development revenue bonds
that (i) “re-set” interest rates not less frequently than quarterly, (ii) are
entitled to the benefit of a remarketing arrangement with an established  broker dealer, and (iii) are supported
by a direct pay letter of credit covering principal and accrued interest that
is issued by an Approved Bank;


 


(h)           investments in pooled funds or investment accounts
consisting of investments of the nature described in the foregoing clause (g);
and


 


(i)            other investments not specifically described in any
of clauses (a) through (h) above that have been approved in writing
by the Administrative Agent.


 


“CERCLA” means the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as the same may be amended from time to time, 42 U.S.C. § 9601 et seq.


 


11

















 


“Change
of Control” means any of the following:


 


(a)           during any 12-month period (or, if less, during the
period beginning on the Closing Date and ending on the date of determination),
individuals who at the beginning of such period constituted the Parent’s  Board of Directors (together with any new directors whose
election by the Parent’s Board of Directors or whose nomination for election by
the Parent’s  shareholders was approved by a
vote of a majority of the directors who either were directors at the beginning
of such period or whose election or nomination was previously so approved)
cease for any reason to constitute a majority of the Board of Directors of the
Parent;


 


(b)           any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the 1934 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) becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the 1934 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 (such right, an “option right”), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 20% 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); 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.


 


“Closing Date” means
the date on which the conditions specified in Section 5.1 are satisfied.


 


“Closing Fee Letter”
means the Closing Fee Letter, dated as of the date hereof, between the Borrower
and the Administrative Agent, for the benefit of the Lenders, as the same may
from time to time be amended, restated, supplemented or otherwise modified.


 


“Code” means the
Internal Revenue Code of 1986, as amended from time to time, and the
regulations promulgated thereunder.


 


“Commercial Letter of
Credit” means any letter of credit or similar instrument issued for the
purpose of providing the primary payment mechanism in connection with the
purchase of materials, goods or services in the ordinary course of business.


 


“Commitment” means,
with respect to each Lender, its obligation to make Loans to the Borrower from
time to time pursuant to Section 2.1, in an aggregate principal amount at
any one time outstanding not to exceed the amount, if any, set forth opposite
such Lender’s name on Annex I as its “Commitment” or in the case of
any Lender that becomes a party hereto pursuant to an Assignment Agreement, the
obligation of such Lender to make Loans in an aggregate principal amount at any
one time outstanding not to exceed the amount set forth as the “Amount of
Assigned Share” in each Assignment Agreement to which such Lender is a party
thereto as the assignee, as any such Commitments may be reduced from time to
time pursuant to Section 3.3, 3.4 and/or 9.2, increased from time to time
pursuant to Section 3.2, and/or adjusted from time to time as a result of
assignments to or from such Lender pursuant to Section 11.4.


 


12

















 


“Compliance Certificate”
means a certificate, substantially in the form of the attached Exhibit C.


 


“Consolidated Net Income”
means, for any period, the net income (or loss), without deduction for minority
interests, of the Borrower and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP.


 


“Consolidated Net Worth”
means, at any time, all amounts that, in conformity with GAAP, would be
included under the caption “total stockholders’ equity” (or any like caption)
on a consolidated balance sheet of the Borrower as of such time, provided that in no event shall Consolidated Net Worth
include any amounts in respect of Redeemable Stock.


 


“Consolidated Tangible
Assets” means at any time the consolidated total assets of the Borrower and
its Subsidiaries calculated on a consolidated basis as of such time, but
excluding therefrom goodwill, patents, patent applications, permits,
trademarks, trade names, copyrights, licenses, franchises, experimental expense,
organizational expense, unamortized debt discount and expense, the excess of
cost of shares acquired over book value of related assets and such other assets
that are properly classified as “intangible assets” in accordance with GAAP.


 


“Consolidated Total
Capitalization” means the sum of Consolidated Total Debt and Consolidated
Net Worth and, to the extent not
otherwise included, preferred stock of the Borrower.


 


“Consolidated Total Debt”
means the sum (without duplication) of all Indebtedness of the Borrower and of
each of its Subsidiaries, all as determined on a consolidated basis.


 


“Continue”, “Continuation”
and “Continued” each refers to a continuation of Eurodollar Loans for an
additional Interest Period as provided in Section 2.3.


 


“Controlled Group” means
all members of a controlled group of corporations or other business entities
and all trades or businesses (whether or not incorporated) under common control
that, together with the Borrower or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.


 


“Convert”, “Conversion”
and “Converted” each refers to a conversion of Loans of one Type into
Loans of another Type, pursuant to Section 2.3.


 


“Credit Documents”
means this Agreement, the Notes, if any, the Agent Fee Letter, the Closing Fee
Letter, each Letter of Credit and each other LC Document.


 


“Credit Event” means
any Borrowing, Conversion, Continuation or any LC Issuance.


 


“Credit Facility”
means the credit facility established under this Agreement pursuant to which (a) the
Lenders shall make Loans to the Borrower, and shall participate in LC
Issuances, pursuant to the Commitment of each such Lender, and (b) each LC
Issuer shall issue Letters of Credit for the account of the Borrower in
accordance with the terms of this Agreement.


 


“Default” means any
event, act or condition that with notice or lapse of time, or both, would
constitute an Event of Default.


 


“Defaulting Lender”
means any Lender with respect to which a Lender Default is in effect.


 


“Dollars” and the
sign “$” each means lawful money of the United States.


 


13

















 


“Eligible Assignee”
means (a) a Lender (other than a Defaulting Lender), (b) an Affiliate
of a Lender (other than a Defaulting Lender), (c) an Approved Fund, and (d) any
other Person (other than a natural person) approved by (i) the
Administrative Agent, and (ii) unless an Event of Default has occurred and
is continuing, the Borrower (each such approval not to be unreasonably withheld
or delayed); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include the Borrower or any of
the Affiliates or Subsidiaries of the Borrower.


 


“Energy-Related Business”
means any business engaged in or directly related to:  (a) the production, sale, brokerage,
management, transportation, delivery or other provision of energy products,
including but not limited to, electricity, natural gas, oil, coal, propane and
renewable energy producing materials, (b) the provision of energy
conservation services, including, but not limited to, energy audits,
installation of energy conservation devices, energy efficient equipment and
related systems, (c) the provision of services and equipment in connection
with the procurement of such energy products or conservation of energy, (d) engineering,
consulting, construction, operational or maintenance services in connection
with such energy products, the conservation of energy or with equipment
utilizing such energy products or (e) the manufacturing of equipment used
in connection with energy production or conservation.


 


“Environmental Claims”
means any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of non-compliance or violation,
investigations or proceedings relating in any way to any Environmental Law or
any permit issued under any such law, including, without limitation, (a) any
and all claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to
any applicable Environmental Law, and (b) any and all claims by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from the storage, treatment or
Release (as defined in CERCLA) of any Hazardous Materials or arising from
alleged injury or threat of injury to health, safety or the environment.


 


“Environmental Law”
means any applicable Federal, state, foreign or local statute, law, rule,
regulation, ordinance, code, binding and enforceable guideline, binding and
enforceable written policy and rule of common law now or hereafter in
effect and in each case as amended, and any binding and enforceable judicial or
administrative interpretation thereof, including, without limitation, any
judicial or administrative order, consent, decree or judgment issued to or
rendered against the Borrower or any of its Subsidiaries relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. § 1251 et seq.; the Clean Air Act,
42 U.S.C. § 7401 et seq.;
the Safe Drinking Water Act, 42 U.S.C. § 300f et seq.;
the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.;
the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. §
11001 et seq., the Hazardous Material
Transportation Act, 49 U.S.C. § 5101 et seq. and
the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.
(to the extent it regulates occupational exposure to Hazardous Materials); and
any state and local or foreign counterparts or equivalents, in each case as
amended from time to time.


 


“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and the regulations promulgated thereunder.


 


“Eurodollar Loans”
means each Loan bearing interest at a rate based on the Adjusted Eurodollar
Rate.


 


“Event of Default”
has the meaning provided in Section 9.1.


 


“Exemption Certificate”
has the meaning provided in Section 4.5(b)(ii).


 


14
















 


“Existing Credit
Agreement” means the Credit Agreement, dated as of May 31, 2005, among
the Borrower, the lenders party thereto, and KeyBank, as administrative agent.


 


“Facility Fees” has
the meaning provided in Section 3.1(a).


 


“Federal Funds Effective
Rate” means, for any period, a fluctuating interest rate equal for each day
during such period to the weighted average of the rates on overnight Federal
Funds transactions with members of the Federal Reserve System arranged by
Federal Funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such transactions
received by the Administrative Agent from three Federal Funds brokers of
recognized standing selected by the Administrative Agent.


 


“Fees” means all
amounts payable pursuant to, or referred to in, Section 3.1, together with
any other fees payable pursuant to this Agreement or any other Credit Document.


 


“Fitch” means Fitch
Investors Service Inc. and its successors.


 


“Fitch Rating” means,
on any date of determination, the rating accorded the Borrower’s senior
unsecured long-term debt by Fitch (or if the Obligations are secured, the
rating accorded to the Borrower’s senior secured long-term debt by Fitch), or
if such rating is unavailable, the Borrower’s long-term issuer default rating
accorded to it by Fitch.


 


“FPA” means the
Federal Power Act, as amended, and all rules and regulations promulgated
thereunder.


 


“GAAP” means
generally accepted accounting principles in the United States of America as in
effect from time to time.


 


“Governmental Authority”
means any nation or government, any state or other political subdivision
thereof, any agency, authority, instrumentality, regulatory body, court,
administrative tribunal, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.


 


“Guaranty Obligations”
means as to any Person (without duplication) any obligation of such Person
guaranteeing any Indebtedness (“primary Indebtedness”) of any other
Person (the “primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary Indebtedness
or any Property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such
primary Indebtedness or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency of
the primary obligor, (c) to purchase Property, securities or services
primarily for the purpose of assuring the owner of any such primary
Indebtedness of the ability of the primary obligor to make payment of such
primary Indebtedness, or (d) otherwise to assure or hold harmless the
owner of such primary Indebtedness against loss in respect thereof, provided, however, that the term Guaranty Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business.  The amount
of any Guaranty Obligation shall be deemed to be an amount equal to the stated
or determinable amount of the primary Indebtedness in respect of which such
Guaranty Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.


 


15

















 


“Hazardous Materials”
means (a) any petrochemical or petroleum products, radioactive materials,
asbestos in any form that is or could become friable, urea formaldehyde foam
insulation, transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas; and (b) any
chemicals, materials or substances defined as or included in the definition of “hazardous
substances”, “hazardous wastes”, “hazardous materials”, “restricted hazardous
materials”, “extremely hazardous wastes”, “restrictive hazardous wastes”, “toxic
substances”, “toxic pollutants”, “contaminants” or “pollutants”, or words of
similar meaning and regulatory effect, under any applicable Environmental Law.


 


“Increasing Lender”
has the meaning provided in Section 3.2(a).


 


“Indebtedness” means,
with respect to any Person, all of the following (without duplication):


 


(a)           all indebtedness of such Person for borrowed money;


 


(b)           all bonds, notes, debentures and similar debt
securities of such Person;


 


(c)           the deferred purchase price of capital assets or
services that in accordance with GAAP would be shown on the liability side of
the balance sheet of such Person;


 


(d)           non-contingent obligations to reimburse any other
Person in respect of amounts paid under a letter of credit or similar
instrument to the extent that such reimbursement obligations remain outstanding
after such obligations become non-contingent;


 


(e)           all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances;


 


(f)            all Indebtedness of a second Person secured by any
Lien on any Property owned by such first Person, whether or not such
Indebtedness has been assumed;


 


(g)           all Capitalized Lease Obligations of such Person;


 


(h)           the present value, determined on the basis of the
implicit interest rate, of all basic rental obligations under all Synthetic
Leases of such Person;


 


(i)            the full outstanding balance of trade receivables,
notes or other instruments sold with full recourse (and the portion thereof
subject to potential recourse, if sold with limited recourse), other than in
any such case any thereof sold solely for purposes of collection of delinquent
accounts;


 


(j)            the stated value, or liquidation value if higher, of
all Redeemable Stock of such Person; and


 


(k)           all Guaranty Obligations of such Person;


 


provided,
however, that (i) neither trade payables nor other similar accrued
expenses, in each case arising in the ordinary course of business, nor
obligations in respect of insurance policies or performance or surety bonds
that themselves are not guarantees of Indebtedness (nor drafts, acceptances or
similar instruments evidencing the same nor obligations in respect of letters
of credit supporting the payment of the same), shall constitute Indebtedness;
and (ii) the Indebtedness of any Person shall in any event include
(without duplication) the Indebtedness of any other entity (including any
general partnership in which 


 


16

















 


such
Person is a general partner) to the extent such Person is liable thereon as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide expressly
that such Person is not liable thereon.


 


“Interest Period”
means, with respect to each Eurodollar Loan, a period of one, two, three or six
months as selected by the Borrower, provided that (a) the
initial Interest Period for any Borrowing of Eurodollar Loans shall commence on
the date of such Borrowing (the date of a Borrowing resulting from a Conversion
or Continuation shall be the date of such Conversion or Continuation) and each
Interest Period occurring thereafter in respect of such Borrowing shall
commence on the day on which the next preceding Interest Period expires; (b) if
any Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period,
such Interest Period shall end on the last Business Day of such calendar month;
(c) if any Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day, provided that if any Interest Period would otherwise expire on a day that
is not a Business Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on the next preceding
Business Day; (d) no Interest Period for any Eurodollar Loan may be
selected that would end after the Maturity Date; and (e) if, upon the
expiration of any Interest Period, the Borrower has failed to (or may not)
elect a new Interest Period to be applicable to the respective Borrowing of
Eurodollar Loans as provided above, the Borrower shall be deemed to have
elected to Convert such Borrowing to a Base Rate Loan effective as of the
expiration date of such current Interest Period.


 


“Investment” means (a) any
direct or indirect purchase or other acquisition by the Borrower or any of its
Subsidiaries of any of the capital stock or other equity interest of any other
Person, including any partnership or joint venture interest in such Person; (b) any
loan or advance to, guarantee or assumption of debt or purchase or other
acquisition of any other debt (other than accounts receivable arising in the
ordinary course of business on terms customary in the trade) of, any Person by
the Borrower or any of its Subsidiaries; or (c) any purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit or all or a substantial part of
the business of, such Person.


 


“KeyBank” means
KeyBank National Association, a national banking association, together with its
successors and assigns.


 


“LC Commitment Amount”
means $50,000,000.


 


“LC Documents” means,
with respect to any Letter of Credit, any documents executed in connection with
such Letter of Credit, including the Letter of Credit itself.


 


“LC Fee” means any of
the fees payable pursuant to Section 3.1(c) or Section 3.1(d) in
respect of Letters of Credit.


 


“LC Issuance” means
the issuance of any Letter of Credit by any LC Issuer for the account of the
Borrower in accordance with the terms of this Agreement, and shall include any
amendment thereto that increases the Stated Amount thereof or extends the
expiry date of such Letter of Credit.


 


“LC Issuer” means
KeyBank or any of its Affiliates, or such other Lender that is requested by the
Borrower and agrees to be an LC Issuer hereunder and is approved by the
Administrative Agent.


 


17

















 


“LC Outstandings”
means, at any time, the sum, without duplication, of (a) the aggregate
Stated Amount of all outstanding Letters of Credit and (b) the aggregate
amount of all Unpaid Drawings with respect to Letters of Credit.


 


“LC Participant” has
the meaning provided in Section 2.4(g)(i).


 


“LC
Participation” has the meaning provided in Section 2.4(g)(i).


 


“LC Request” has the
meaning provided in Section 2.4(b).


 


“Leaseholds” means,
with respect to any Person, all the right, title and interest of such Person as
lessee or licensee in, to and under leases or licenses of land, improvements
and/or fixtures.


 


“Lenders” means the
Persons listed on Annex I and any other Person that becomes a party
hereto pursuant to an Assignment Agreement, other than any such Person that
ceases to be a party hereto pursuant to an Assignment Agreement.


 


“Lender Default”
means (a) the refusal (which has not been retracted) of a Lender in
violation of the requirements of this Agreement to make available its portion
of any incurrence of Loans or (b) a Lender having notified the
Administrative Agent and/or the Borrower that it does not intend to comply with
its obligations under Section 2.2.


 


“Lender Register” has
the meaning provided in Section 11.15.


 


“Letter of Credit”
means any Standby Letter of Credit or Commercial Letter of Credit, in each case
issued by any LC Issuer under this Agreement pursuant to Section 2.4 for
the account of the Borrower.


 


“Lien” means any
mortgage, pledge, security interest, encumbrance, lien or charge of any kind
(including any agreement to give any of the foregoing, any conditional sale or
other title retention agreement or any lease in the nature thereof).


 


“Loan” has the
meaning provided in Section 2.2.


 


“Margin Stock” has
the meaning provided in Regulation U.


 


“Material Adverse Effect”
means any or all of the following:  (a) a
material adverse effect on the business, operations, Property, assets,
liabilities, financial or other condition, or prospects of the Borrower and its
Subsidiaries, taken as a whole, or when used with reference to any other
Person, such Person and its Subsidiaries, taken as a whole, as the case may be;
(b) a material adverse effect on the ability of the Borrower to perform
its obligations under the Credit Documents to which it is a party; (c) a
material adverse effect on the ability of the Borrower and its Subsidiaries,
taken as a whole, to pay their liabilities and obligations as they mature or
become due; or (d) a material adverse effect on the validity,
effectiveness or enforceability, as against the Borrower, of any of the Credit
Documents to which it is a party.


 


“Maturity Date” means
the earlier to occur of (a) November 21, 2011, or (b) the date
on which (i) the Total Commitment is terminated pursuant to Section 9.2(a) and/or
(ii) all Loans and other Obligations are declared due and payable pursuant
to Section 9.2(b).


 


18

















 


“Minimum Borrowing Amount”
means (a) for Base Rate Loans, $1,000,000, with minimum increments
thereafter of $500,000, and (b) for Eurodollar Loans, $5,000,000, with
minimum increments thereafter of $500,000.


 


“Moody’s” means Moody’s
Investors Service, Inc. and its successors.


 


“Moody’s Rating”
means, on any date of determination, the rating accorded the Borrower’s senior
unsecured long-term debt by Moody’s (or if the Obligations are secured, the
rating accorded to the Borrower’s senior secured long-term debt by Moody’s), or
if such rating is unavailable, the Borrower’s long-term issuer credit rating
accorded to it by Moody’s.


 


“Multiemployer Plan”
means a Plan maintained pursuant to a collective bargaining agreement or any
other arrangement as to which the Borrower or any member of the Controlled
Group is a party to which more than one employer is obligated to make
contributions.


 


“1933 Act” means the
Securities Act of 1933, as amended.


 


“1934 Act” means the
Securities Exchange Act of 1934, as amended.


 


“Non-Defaulting Lender”
means each Lender other than a Defaulting Lender.


 


“Non-Increasing Lender”
has the meaning provided in Section 3.2(b).


 


“Note” has the
meaning provided in Section 2.6(d).


 


“Notice of Borrowing,
Continuation or Conversion” has the meaning provided in Section 2.3(b).


 


“Notice Office” means
the office of the Administrative Agent at 127 Public Square, Cleveland, Ohio
44114, Attention: Yvette M. Dyson-Owens (facsimile: (216) 689-5962), or such
other office of the Administrative Agent, as the Administrative Agent may
designate to the Borrower from time to time.


 


“Obligations” means
all amounts, direct or indirect, contingent or absolute, of every type or
description, and at any time existing, owing by the Borrower to the
Administrative Agent or any Lender or any LC Issuer pursuant to the terms of
this Agreement or any other Credit Document (including, without limitation,
interest and fees that accrue after the commencement by or against the Borrower
of any insolvency proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding and any and all indemnification obligations
hereunder).


 


“Operating Lease”
means, with respect to any Person, any lease of any Property (whether real,
personal or mixed) by such Person as lessee that, in conformity with GAAP, is
not accounted for as a Capital Lease on the balance sheet of such Person.


 


“Parent” means DPL
Inc., an Ohio corporation.


 


“Payment Office”
means the office of the Administrative Agent at 127 Public Square, Cleveland,
Ohio 44114, Attention: Yvette M. Dyson-Owens (facsimile: (216) 689-5962), or
such other office of the Administrative Agent, as the Administrative Agent may
designate to the Borrower from time to time.


 


“PBGC” means the
Pension Benefit Guaranty Corporation established pursuant to Section 4002
of ERISA, or any successor thereto.


 


19

















 


“Percentage” means,
at any time for any Lender, the percentage obtained by dividing such Lender’s
Commitment by the Total Commitment, provided, that
if the Total Commitment has been terminated, the Percentage for each Lender
shall be determined by dividing such Lender’s Commitment immediately prior to
such termination by the Total Commitment immediately prior to such termination.


 


“Permitted Acquisition”
means and includes any Acquisition as to which all of the following conditions
are satisfied:  (a) such Acquisition
(i) involves a line or lines of an Energy-Related Business, and (ii) involves
a Person or a line or lines of business that are located and operated in the
United States; (b) no Default or Event of Default shall exist prior to or
immediately after giving effect to such Acquisition; (c) such Acquisition
is not being consummated on a hostile basis and has been approved by the Board
of Directors of the target Person and no material challenge to such Acquisition
shall be pending or threatened by any shareholder or director of the seller or
Person to be acquired, and (d) as of the date of the consummation of such
Acquisition, all approvals required in connection therewith shall have been
obtained.


 


“Permitted Liens”
means Liens permitted by Section 8.3.


 


“Permitted Restrictive
Covenant” means (a) any covenant or restriction contained in this
Agreement, (b) any covenant or restriction contained in any other
agreement that is less burdensome than any covenant or restriction contained in
this Agreement, (c) in the case of transfers by any Subsidiary of the
Borrower to the Borrower or another Subsidiary of the Borrower of any property
or assets, any agreement setting forth customary restrictions on the
subletting, assignment or transfer of any property or asset that is a lease,
license or conveyance of similar property or assets; (d) in the case of
transfers by any Subsidiary of the Borrower to the Borrower or another
Subsidiary of the Borrower of any property or assets, any agreement with the
holder of a Lien otherwise permitted to exist under Section 8.3(e)(ii) restricting
on customary terms the transfer of any property or assets subject thereto; (e) any
agreement evidencing or setting forth the terms of any refunding, refinancing
or replacement Indebtedness the incurrence of which is not prohibited by this
Agreement that contains any such restrictions to the extent such restrictions
are no less favorable to the Borrower or any of its Subsidiaries or to the
rights or interest of the Lenders than the terms in effect in the Indebtedness
being so refunded, refinanced or replaced immediately prior to such refunding,
refinancing or replacement; (f) any agreement that has been entered into
by the Borrower or any of its Subsidiaries for the sale, lease, transfer or
other disposition of any of its property or assets so long as such sale, lease,
transfer or other disposition is otherwise permitted to be made under Section 8.2;
and (g) any agreement evidencing Indebtedness outstanding on the date a
Person first becomes a Subsidiary of the Borrower; provided,
that such agreement was not created in contemplation of the purchase or other
acquisition of such Person by the Borrower or any of its Subsidiaries and does
not extend to or cover any property or assets other than the property or assets
of the Person becoming such Subsidiary.


 


“Person” means any
individual, partnership, joint venture, firm, corporation, limited liability
company, association, trust or other entity or any government or political
subdivision or any agency, department or instrumentality thereof.


 


“Plan” means an employee
pension benefit plan that is covered by Title IV of ERISA or subject to minimum
funding standards under Section 412 of the Code as to which the Borrower
or any member of the Controlled Group may have any liability.


 


“Property” means,
with respect to any Person, any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased
or operated by such Person.


 


“Rating Agency” means
any of Fitch, Moody’s or S&P.


 


20

















 


“RCRA” means the
Resource Conservation and Recovery Act, as the same may be amended from time to
time, 42 U.S.C. § 6901 et seq.


 


“Real Property”
means, with respect to any Person, all of the right, title and interest of such
Person in and to land, improvements and fixtures, including Leaseholds.


 


“Redeemable Stock”
means, with respect to any Person, any capital stock or similar equity
interests of such Person that (a) is by its terms subject to mandatory
redemption, in whole or in part, pursuant to a sinking fund, scheduled
redemption or similar provisions, at any time prior to the latest Maturity
Date; or (b) otherwise is required to be repurchased or retired on a
scheduled date or dates, upon the occurrence of any event or circumstance, at
the option of the holder or holders thereof, or otherwise, at any time prior to
the latest Maturity Date under this Agreement, other than any such repurchase
or retirement occasioned by a “change of control” or similar event.


 


“Reference Banks”
means (a) KeyBank and (b) any other Lender or Lenders selected as a
Reference Bank by the Administrative Agent.


 


“Regulation D” means
Regulation D of the Board of Governors of the Federal Reserve System as from
time to time in effect and any successor to all or a portion thereof
establishing reserve requirements.


 


“Regulation U” means
Regulation U of the Board of Governors of the Federal Reserve System as from
time to time in effect and any successor to all or a portion thereof
establishing margin requirements.


 


“Related Parties”
means, with respect to any Person, such Person’s Affiliates and the directors,
officers, employees, agents and advisors of such Person and of such Affiliate.


 


“Reportable Event”
means a reportable event as defined in Section 4043 of ERISA and the regulations
issued under such section, with respect a Plan, excluding, however, such events
as to which the PBGC has by regulations waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such event; provided, however, that a failure to meet the minimum
funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance any such waiver of
the notice requirement in accordance with either Section 4043(a) of
ERISA or Section 412(d) of the Code.


 


“Required Lenders”
means, (a) if there are no more than two Lenders, both Lenders or, (b) if
there are more than two Lenders, Non-Defaulting Lenders whose Revolving
Facility Exposure and Unutilized Commitment constitute at least 51% of the sum
of the Aggregate Revolving Facility Exposure and Unutilized Commitments of
Non-Defaulting Lenders.


 


“Revolving Facility
Exposure” means, for any Lender at any time, the sum of (a) the
principal amount of Loans made by such Lender and outstanding at such time, and
(b) such Lender’s share of the LC Outstandings at such time.


 


“S&P” means
Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc.,
and its successors.


 


“S&P Rating”
means, on any date of determination, the rating accorded to the Borrower’s
senior unsecured long-term debt by S&P (or if the Obligations are secured,
the rating accorded to the Borrower’s senior secured long-term debt by
S&P).


 


21

















 


“Sale and Lease-Back
Transaction” means any arrangement with any Person providing for the
leasing by the Borrower or any Subsidiary of the Borrower of any Property
(except for temporary leases for a term, including any renewal thereof, of not
more than one year and except for leases between the Borrower and a Subsidiary
of the Borrower or between Subsidiaries of the Borrower), which Property has
been or is to be sold or transferred by the Borrower or such Subsidiary to such
Person.


 


“SEC” means the
United States Securities and Exchange Commission.


 


“SEC Regulation D”
means Regulation D as promulgated under the 1933 Act, as the same may be in
effect from time to time.


 


“Single Employer Plan”
means a Plan maintained by the Borrower or any member of the Controlled Group
for employees of the Borrower or any member of the Controlled Group.


 


“Standard Permitted Liens”
means the following:


 


(a)           Liens for taxes not yet delinquent or Liens for
taxes being contested in good faith and by appropriate proceedings for which
adequate reserves in accordance with GAAP have been established;


 


(b)           Liens in respect of Property or assets imposed by
law that were incurred in the ordinary course of business, such as carriers’,
warehousemen’s, materialmen’s and mechanics’ Liens and other similar Liens
arising in the ordinary course of business, that (i) do not secure payment
obligations more than 60 days past due; (ii) do not, in the aggregate,
materially detract from the value of such Property or assets or materially
impair the use thereof in the operation of the business of the Borrower or any
of its Subsidiaries and do not secure any Indebtedness; or (iii) are
contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on the books of the Borrower or its
respective Subsidiary, as the case may be;


 


(c)           bankers’ Liens and rights of setoff arising by
operation of law and contractual rights of setoff;


 


(d)           Liens arising from judgments, decrees or attachments
in circumstances not constituting an Event of Default under Section 9.1(g);


 


(e)           Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security; and mechanic’s Liens, carrier’s Liens, and other Liens to secure the
performance of tenders, statutory obligations, contract bids, government
contracts, performance and return-of-money bonds and other similar obligations,
incurred in the ordinary course of business (exclusive of obligations in
respect of the payment for borrowed money), whether pursuant to statutory
requirements, common law or consensual arrangements;


 


(f)            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 any of its Subsidiaries and any interest or title of a
lessor under any lease not in violation of this Agreement;


 


(g)           easements, rights-of-way, zoning or other
restrictions, charges, encumbrances, defects in title, prior rights of other
Persons, and obligations contained in similar instruments, in each case that do
not involve, and are not likely to involve at any future time, either
individually or in the aggregate, (i) a substantial and prolonged
interruption or disruption of the business 


 


22

















 


activities of the Borrower
and its Subsidiaries considered as an entirety, or (ii) a Material Adverse
Effect;


 


(h)           precautionary filing of Uniform Commercial Code
financing statements by lessors in connection with Operating Leases;


 


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


 


(j)            rights of consignors of goods, whether or not
perfected by the filing of a financing statement under the UCC.


 


“Standby Letter of Credit”
means any standby letter of credit issued for the purpose of supporting workers
compensation, liability insurance, releases of contract retention obligations,
contract performance guarantee requirements and other bonding obligations or
for other lawful purposes.


 


“Stated Amount” of
each Letter of Credit shall mean the maximum amount available to be drawn
thereunder (regardless of whether any conditions or other requirements for
drawing could then be met).


 


“Subsidiary” means, with
respect to any Person, (a) any corporation more than 50% of whose stock of
any class or classes having by the terms thereof ordinary voting power to elect
a majority of the directors of such corporation (irrespective of whether at the
time stock of any class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time
owned by such Person directly or indirectly through Subsidiaries and (b) any
partnership, limited liability company, association, joint venture or other
entity in which such Person directly or indirectly through Subsidiaries, has
more than a 50% equity interest at the time or in which the Borrower, one or
more other Subsidiaries of the Borrower, or the Borrower and one or more
Subsidiaries of the Borrower, directly or indirectly, has the power to direct
the policies, management and affairs thereof. 
Unless otherwise expressly provided, all
references herein to “Subsidiary” shall mean a Subsidiary of the Borrower.


 


“Substantial Portion”
means, with respect to the Property of the Borrower and its Subsidiaries,
Property that (a) represents more than 10% of the Consolidated Tangible
Assets of the Borrower and its Subsidiaries as would be shown in the
consolidated financial statements of the Borrower and its Subsidiaries as at
the beginning of the twelve-month period ending with the month in which such
determination is made or (b) is responsible for more than 10% of the
consolidated net sales or of the Consolidated Net Income of the Borrower and
its Subsidiaries as reflected in the financial statements referred to in clause
(a) above.


 


“Swap Agreement”
means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity
options, forward commodity contracts, equity or equity index swaps or options,
bond or bond price or bond index swaps or options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward
foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), irrespective of whether any such
transaction is governed by or subject to any master agreement, and (b) any
and all transactions of any kind, and the related confirmations, that are
subject to the terms and conditions of, or governed by, any form of master
agreement published by the International 


 


23

















 


Swaps
and Derivatives Association, Inc., any International Foreign Exchange
Master Agreement, or any other master agreement (any such master agreement,
together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.


 


“Synthetic Lease”
means any lease (a) that is accounted for by the lessee as an Operating
Lease, and (b) under which the lessee is intended to be the “owner” of the
leased Property for Federal income tax purposes.


 


“Taxes” has the
meaning provided in Section 4.5(a).


 


“Total Commitment”
means the sum of the Commitments of the Lenders.


 


“Type” means any type
of Loan determined with respect to the interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan.


 


“UCC” means the
Uniform Commercial Code as in effect from time to time.  Unless otherwise specified, the UCC shall
refer to the UCC as in effect in the State of Ohio.


 


“Unfunded Liabilities”
means the amount, if any, by which the present value of all vested and unvested
accrued benefits under all Single Employer Plans exceeds the fair market value
of all such Plan assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plans using PBGC actuarial assumptions
for single employer plan terminations.


 


“United States” and “U.S.”
each means United States of America.


 


“Unpaid Drawing”
means, with respect to any Letter of Credit, the aggregate amount of the draws
made on such Letter of Credit that have not been reimbursed by the Borrower or
converted to a Loan pursuant to Section 2.4(f)(i), and, in each case, all
interest that accrues thereon pursuant to this Agreement.


 


“Unutilized Commitment”
means, at any time, with respect to any Lender, the excess of (a) such
Lender’s Commitment at such time over (b) such Lender’s Revolving Facility
Exposure at such time.


 


“Unutilized Total
Commitment” means, at any time, the excess of (a) the Total Commitment
at such time over (b) the Aggregate Revolving Facility Exposure at such
time.


 


“USA Patriot Act”
means the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001.


 


“Utilization Fees”
has the meaning provided in Section 3.1(b).


 


“Wholly-Owned Subsidiary”
means each Subsidiary of the Borrower at least 95% of whose capital stock,
equity interests and partnership interests, other than director’s qualifying
shares or similar interests, are owned directly or indirectly by the Borrower.


 


Section 1.2             Computation of Time Periods.  In this Agreement in the computation of
periods of time from a specified date to a later specified date, the word “from”
means “from and including,” the words “to” and “until” each means “to but
excluding,” and the word “through” means “through and including.”


 


24
















 


Section 1.3             Accounting Terms.  Except as otherwise specifically provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time.


 


Section 1.4             Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have
the same meaning and effect as the word “shall”.  Unless the context requires otherwise, (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended, restated,
supplemented or otherwise modified (subject to any restrictions on such
amendments, restatements, supplements or modifications set forth herein), (b) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (c) the
words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to
Sections, Annexes, Schedules and Exhibits shall be construed to refer to
Sections of, and Annexes, Schedules and Exhibits to, this Agreement, and (e) the words “asset” and “property” (or “Property”)
shall be construed to have the same meaning and effect and to refer to any and
all Real Property, tangible and intangible assets and properties, including
cash, securities, accounts and contract rights, and interests in any of the
foregoing.


 


ARTICLE II.


 


AMOUNT AND TERMS OF LOANS


 


Section 2.1             Establishment of the Credit
Facility.  On the
Closing Date, and subject to and upon the terms and conditions set forth in
this Agreement and the other Credit Documents, the Administrative Agent, the
Lenders, and each LC Issuer agree to establish the Credit Facility for the
benefit of the Borrower; provided,
however, that at no time will (i) the
Aggregate Credit Facility Exposure exceed the Total Credit Facility Amount, or (ii) the
Credit Facility Exposure of any Lender exceed the aggregate amount of such
Lender’s Commitment.


 


Section 2.2             Commitments for Loans.  Subject to and upon the terms and conditions
herein set forth, each Lender severally agrees to make a revolving loan or
revolving loans (each a “Loan” and, collectively, the “Loans”) to
the Borrower, which Loans (a) may be incurred
by the Borrower at any time and from time to time on and after the Closing Date
and prior to the Maturity Date; (b) except as
otherwise provided herein, may, at the option of the Borrower, be incurred and
maintained as, or Converted into, Loans that are Base Rate Loans or Eurodollar
Loans, in each case denominated in Dollars, provided that
all Loans made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of Loans of the same Type; (c) may be repaid or prepaid and re-borrowed in
accordance with the provisions hereof; and (d) shall not be made if, after
giving effect to any such Loan, (i) the Revolving Facility Exposure of any
Lender would exceed such Lender’s Commitment, (ii) the Aggregate Revolving
Facility Exposure would exceed the Total Commitment, or (iii) the Borrower
would be required to prepay Loans or cash collateralize Letters of Credit
pursuant to 4.3(a).


 


Section 2.3             Borrowing,
Continuation or Conversion of Loans.


 


(a)           Borrowings, Continuations
and Conversions.  The
Borrower may, in accordance with the provisions set forth in this Section and
subject to the other terms and conditions of this Agreement, (i) request
Borrowings, (ii) Convert all or a portion of the outstanding principal
amount of Loans of one Type into a Borrowing or Borrowings of another Type of
Loans that can be made pursuant to the terms of 


 


25

















 


this Agreement and (iii) Continue
a Borrowing of Eurodollar Loans at the end of the applicable Interest Period as
a new Borrowing of Eurodollar Loans with a new Interest Period, provided that (A) any Conversion of Eurodollar Loans
into Base Rate Loans shall be made on, and only on, the last day of an Interest
Period for such Eurodollar Loans, (B) Base Rate Loans may only be
Converted into Eurodollar Loans if no Default under Section 9.1(a) or
Event of Default is in existence on the date of the Conversion unless the
Required Lenders otherwise agree, and (C) Base Rate Loans may not be
Converted into Eurodollar Loans during any period when such Conversion is not
permitted under Section 2.8.


 


(b)           Notice of Borrowings,
Continuation and Conversion.  Each Borrowing, Continuation or Conversion of
a Loan shall be made upon notice in the form provided for below, which notice
shall be provided by the Borrower to the Administrative Agent at the Notice
Office not later than (i) in the case of each Borrowing of or Continuation
of or Conversion into a Eurodollar Loan, 12:00 noon (local time at its Notice
Office) at least three Business Days’ prior to the date of such Borrowing,
Continuation or Conversion and (ii) in the case of each Borrowing of or
Conversion into a Base Rate Loan, 12:00 noon (local time at its Notice Office)
on the proposed date of such Borrowing or Conversion.  Each such request shall be made by an
Authorized Officer delivering written notice of such request substantially in
the form of Exhibit B (each such notice, a “Notice of Borrowing,
Continuation or Conversion”) or by telephone (to be confirmed immediately
in writing by delivery of an Authorized Officer of a Notice of Borrowing,
Continuation or Conversion), and in any event each such request shall be
irrevocable and shall specify (A) the aggregate principal amount of the
Loans to be made (which shall be in the Minimum Borrowing Amount) pursuant to
such Borrowing or, if applicable, the Borrowings to be Continued or Converted, (B) the
date of the Borrowing, Continuation or Conversion (which shall be a Business
Day), (C) whether the Borrowing will consist of Base Rate Loans or
Eurodollar Loans or, in the case of a Continuation or Conversion, the Loans to
be Continued or Converted, and (D) if applicable, the initial Interest
Period thereto or, in the case of a Continuation, the new Interest Period.  Without in any way limiting the obligation of
the Borrower to confirm in writing any telephonic notice permitted to be given
hereunder, the Administrative Agent may act prior to receipt of written
confirmation without liability upon the basis of such telephonic notice
believed by the Administrative Agent in good faith to be from an Authorized
Officer entitled to give telephonic notices under this Agreement on behalf of
the Borrower.  In each such case, the
Administrative Agent’s record of the terms of such telephonic notice shall be
conclusive absent manifest error.


 


(c)           Minimum Borrowing Amount.  The aggregate principal amount of each
Borrowing by the Borrower shall not be less than the Minimum Borrowing
Amount.  No partial Conversion of a
Borrowing of Eurodollar Loans shall reduce the outstanding principal amount of
the Eurodollar Loans made pursuant to such Borrowing to less than the Minimum
Borrowing Amount applicable thereto.


 


(d)           Maximum Borrowings.  More than one Borrowing may be incurred by
the Borrower on any day, provided that  (i) if there are two
or more Borrowings on a single day by the Borrower that consist of Eurodollar
Loans, each such Borrowing shall have a different initial Interest Period, and  (ii) at no time shall
there be more than six Borrowings of Eurodollar Loans outstanding hereunder.


 


(e)           Notice to Lenders. The
Administrative Agent shall promptly give each Lender written notice (or
telephonic notice promptly confirmed in writing) of (i) each proposed
Borrowing, (ii) such Lender’s proportionate share thereof and (iii) the
other matters covered by the Notice of Borrowing, Continuation or Conversion
relating thereto.


 


Section 2.4             Letters of Credit.


 


(a)           LC Issuances.  Subject to and upon the terms and conditions
set forth herein, the Borrower may request an LC Issuer at any time and from
time to time to issue, for the account of 


 


26

















 


the Borrower, and each LC
Issuer agrees to issue from time to time, Letters of Credit in a form
acceptable to such LC Issuer and the Administrative Agent and denominated and
payable in Dollars; provided, however, that notwithstanding the
foregoing, no LC Issuance shall be made if, after giving effect thereto, (i) the
LC Outstandings would exceed the LC Commitment Amount, (ii) the Revolving
Facility Exposure of any Lender would exceed such Lender’s Commitment, (iii) the
Aggregate Revolving Facility Exposure would exceed the Total Commitment, or (iv) the
Borrower would be required to prepay Loans or cash collateralize Letters of
Credit pursuant to Section 4.3(a). Subject to Section 2.4(c), each
Letter of Credit shall have an expiry date (including any renewal periods)
occurring not later than the earlier of (y) one year from the date of
issuance thereof, or (z) 30 Business Days prior to the Maturity Date.


 


(b)           LC Requests.  Whenever the Borrower desires that a Letter
of Credit be issued for its account, the Borrower shall give the Administrative
Agent and the applicable LC Issuer written or telephonic notice (in the case of
telephonic notice, promptly confirmed in writing if so requested by the
Administrative Agent) which, if in the form of written notice, shall be
substantially in the form of Exhibit B-2 (each such request, a “LC
Request”), or transmit by electronic communication (if arrangements for
doing so have been approved by the applicable LC Issuer), prior to 11:00 A.M.
(local time at the Notice Office) at least three Business Days (or such shorter
period as may be acceptable to the relevant LC Issuer) prior to the proposed
date of issuance (which shall be a Business Day), which LC Request shall
include such supporting documents that such LC Issuer customarily requires in
connection therewith.  In the event of
any inconsistency between any of the terms or provisions of any LC Document and
the terms and provisions of this Agreement respecting Letters of Credit, the terms
and provisions of this Agreement shall control.


 


(c)           Auto-Renewal Letters of Credit.  If the Borrower so requests in any applicable
LC Request, each LC Issuer shall agree to issue a Letter of Credit that has
automatic renewal provisions; provided,
however, that any Letter of
Credit that has automatic renewal provisions must permit such LC Issuer to
prevent any such renewal at least once in each twelve-month period (commencing
with the date of issuance of such Letter of Credit) by giving prior notice to
the beneficiary thereof not later than a day in each such twelve-month period
to be agreed upon at the time such Letter of Credit is issued.  Once any such Letter of Credit that has
automatic renewal provisions has been issued, the Lenders shall be deemed to
have authorized (but may not require) such LC Issuer to permit the renewal of
such Letter of Credit at any time to an expiry date not later than 30 Business
Days prior to the Maturity Date; provided,
however, that such LC Issuer
shall not permit any such renewal if (i) such LC Issuer has determined
that it would have no obligation at such time to issue such Letter of Credit in
its renewed form under the terms hereof, or (ii) it has received notice
(which may be by telephone or in writing) on or before the day that is two
Business Days before the date that such LC Issuer is permitted to send a notice
of non-renewal from the Administrative Agent, any Lender or the Borrower that
one or more of the applicable conditions specified in Section 5.2 is not
then satisfied.


 


(d)           Applicability of ISP98 and UCP.  Unless otherwise expressly agreed by the
applicable LC Issuer and the Borrower, when a Letter of Credit is issued, (i) the
rules of the “International Standby Practices 1998” published by the
Institute of International Banking Law & Practice (or such later
version thereof as may be in effect at the time of issuance) shall apply to
each Standby Letter of Credit, and (ii) the rules of the Uniform
Customs and Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce at the time of issuance (including the
International Chamber of Commerce’s decision published by the Commission on
Banking Technique and Practice on April 6, 1998 regarding the European
single currency (euro)) shall apply to each Commercial Letter of Credit.


 


27

















 


(e)           Notice of LC Issuance.  Each LC Issuer shall, on the date of each LC
Issuance by it, give the Administrative Agent, each applicable Lender and the
Borrower written notice of such LC Issuance, accompanied by a copy to the
Administrative Agent of the Letter of Credit or Letters of Credit issued by
it.  Each LC Issuer shall provide to the
Administrative Agent a quarterly (or monthly if requested by any applicable
Lender) summary describing each Letter of Credit issued by such LC Issuer and
then outstanding and an identification for the relevant period of the daily
aggregate LC Outstandings represented by Letters of Credit issued by such LC
Issuer.


 


(f)            Reimbursement Obligations.


 


(i)            The Borrower hereby agrees to reimburse each LC
Issuer, by making payment directly to such LC Issuer in immediately available
funds at the payment office of such LC Issuer, for any Unpaid Drawing with
respect to any Letter of Credit immediately after, and in any event on the date
on which, such LC Issuer notifies the Borrower of such payment or disbursement
(which notice to the Borrower shall be delivered reasonably promptly after any
such payment or disbursement), such payment to be made in Dollars, with
interest on the amount so paid or disbursed by such LC Issuer, to the extent
not reimbursed prior to 1:00 P.M. (local time at the payment office of the
applicable LC Issuer) on the date of such payment or disbursement, from and
including the date paid or disbursed to but not including the date such LC
Issuer is reimbursed therefor at a rate per annum that shall be the rate then
applicable to Loans pursuant to Section 2.09(a)(i) that are Base Rate
Loans or, if not reimbursed on the date of such payment or disbursement, at the
Default Rate, any such interest also to be payable on demand.  If by 11:00 A.M. on the Business Day
immediately following notice to it of its obligation to make reimbursement in
respect of an Unpaid Drawing, the Borrower has not made such reimbursement out
of its available cash on hand or, in the case of the Borrower, a
contemporaneous Borrowing hereunder (if such Borrowing is otherwise available
to the Borrower), (x) the Borrower will in each case be deemed to have
given a Notice of Borrowing for Loans that are Base Rate Loans in an aggregate
principal amount sufficient to reimburse such Unpaid Drawing (and the
Administrative Agent shall promptly give notice to the Lenders of such deemed
Notice of Borrowing), (y) the Lenders shall, unless they are legally
prohibited from doing so, make the Loans contemplated by such deemed Notice of
Borrowing (which Loans shall be considered made under Section 2.02), and (z) the
proceeds of such Loans shall be disbursed directly to the applicable LC Issuer
to the extent necessary to effect such reimbursement and repayment of the
Unpaid Drawing, with any excess proceeds to be made available to the Borrower
in accordance with the applicable provisions of this Agreement.


 


(ii)           Obligations Absolute.  The Borrower’s obligation under this Section to
reimburse each LC Issuer with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that the Borrower may have or have had against such LC Issuer, the
Administrative Agent or any Lender, including, without limitation, any defense
based upon the failure of any drawing under a Letter of Credit to conform to
the terms of the Letter of Credit or any non-application or misapplication by
the beneficiary of the proceeds of such drawing; provided, however,
that the Borrower shall not be obligated to reimburse an LC Issuer for any
wrongful payment made by such LC Issuer under a Letter of Credit as a result of
acts or omissions constituting willful misconduct or gross negligence on the
part of such LC Issuer.


 


28

















 


(g)           LC Participations.


 


(i)            Immediately upon each LC Issuance, the LC Issuer of
such Letter of Credit shall be deemed to have sold and transferred to each
Lender with a Commitment, and each such Lender (each an “LC Participant”)
shall be deemed irrevocably and unconditionally to have purchased and received
from such LC Issuer, without recourse or warranty, an undivided interest and
participation (an “LC Participation”), to the extent of such Lender’s
Percentage of the Stated Amount of such Letter of Credit in effect at such time
of issuance, in such Letter of Credit, each substitute Letter of Credit, each
drawing made thereunder, the obligations of the Borrower under this Agreement
with respect thereto (although LC Fees relating thereto shall be payable
directly to the Administrative Agent for the account of the Lenders as provided
in Section 3.1(c) and the LC Participants shall have no right to
receive any portion of any fees of the nature contemplated by Section 3.1(d) or
in the Agent Fee Letter), the obligations of the Borrower under any LC
Documents pertaining thereto, and any security for, or guaranty pertaining to,
any of the foregoing.


 


(ii)           In determining whether to pay under any Letter of
Credit, an LC Issuer shall not have any obligation relative to the LC
Participants other than to determine that any documents required to be delivered
under such Letter of Credit have been delivered and that they appear to comply
on their face with the requirements of such Letter of Credit.  Any action taken or omitted to be taken by an
LC Issuer under or in connection with any Letter of Credit, if taken or omitted
in the absence of gross negligence or willful misconduct, shall not create for
such LC Issuer any resulting liability.


 


(iii)          If an LC Issuer makes any payment under any Letter
of Credit and the Borrower shall not have reimbursed such amount in full to
such LC Issuer pursuant to Section 2.4(f), such LC Issuer shall promptly
notify the Administrative Agent, and the Administrative Agent shall promptly
notify each LC Participant of such failure, and each LC Participant shall
promptly and unconditionally pay to the Administrative Agent for the account of
such LC Issuer, the amount of such LC Participant’s Percentage of such payment
in Dollars and in same-day funds; provided,
however, that no LC Participant
shall be obligated to pay to the Administrative Agent its Percentage of such
unreimbursed amount for any wrongful payment made by such LC Issuer under a
Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of such LC Issuer.  If the Administrative Agent so notifies any
LC Participant required to fund a payment under a Letter of Credit prior to
11:00 A.M. (local time at its Notice Office) on any Business Day, such LC
Participant shall make available to the Administrative Agent for the account of
the relevant LC Issuer such LC Participant’s Percentage of the amount of such
payment on such Business Day in same-day funds. 
If and to the extent such LC Participant shall not have so made its
Percentage of the amount of such payment available to the Administrative Agent
for the account of the relevant LC Issuer, such LC Participant agrees to pay to
the Administrative Agent for the account of such LC Issuer, forthwith on
demand, such amount, together with interest thereon, for each day from such
date until the date such amount is paid to the Administrative Agent for the
account of such LC Issuer at the Federal Funds Effective Rate.  The failure of any LC Participant to make
available to the Administrative Agent for the account of the relevant LC Issuer
its Percentage of any payment under any Letter of Credit shall not relieve any
other LC Participant of its obligation hereunder to make available to the
Administrative Agent for the account of such LC Issuer its Percentage of any
payment under any Letter of Credit on the date required, as specified above,
but no LC Participant shall be responsible for the failure of any other LC
Participant to make available to the 


 


29

















 


Administrative Agent for the
account of such LC Issuer such other LC Participant’s Percentage of any such
payment.


 


(iv)          Whenever an LC Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such LC Issuer any payments from the LC Participants pursuant to
subpart (iii) above, such LC Issuer shall pay to the Administrative Agent
and the Administrative Agent shall promptly pay to each LC Participant that has
paid its Percentage thereof, in same-day funds, an amount equal to such LC
Participant’s Percentage of the principal amount thereof and interest thereon
accruing after the purchase of the respective LC Participations, as and to the
extent so received.


 


(v)           The obligations of the LC Participants to make
payments to the Administrative Agent for the account of each LC Issuer with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of
this Agreement under all circumstances, including, without limitation, any of
the following circumstances:


 


(A)          any lack of validity or
enforceability of this Agreement or any of the other Credit Documents;


 


(B)           the existence of any claim,
set-off defense or other right that the Borrower may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), the Administrative
Agent, any LC Issuer, any Lender, or other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between the
Borrower and the beneficiary named in any such Letter of Credit), other than
any claim that the Borrower may have against any applicable LC Issuer for gross
negligence or willful misconduct of such LC Issuer in making payment under any
applicable Letter of Credit;


 


(C)           any draft, certificate or
other document presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;


 


(D)          the surrender or impairment
of any security for the performance or observance of any of the terms of any of
the Credit Documents; or


 


(E)           the occurrence of any
Default or Event of Default.


 


(vi)          To the extent any LC Issuer is not indemnified by
the Borrower, the LC Participants will reimburse and indemnify such LC Issuer,
in proportion to their respective Percentages, for and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature that
may be imposed on, asserted against or incurred by such LC Issuer in performing
its respective duties in any way related to or arising out of LC Issuances by
it; provided, however, that no LC Participants shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, 


 


30

















 


costs, expenses or
disbursements resulting from such LC Issuer’s gross negligence or willful
misconduct.


 


Section 2.5             Funding
Obligations; Disbursement of Funds.


 


(a)           Several Nature of Funding
Obligations.  The
Commitments of each Lender hereunder and the obligation of each Lender to make
Loans and acquire and fund LC Participations, as the case may be, are several
and not joint obligations.  No Lender
shall be responsible for any default by any other Lender in its obligation to
make Loans or fund any participation hereunder and each Lender shall be
obligated to make the Loans provided to be made by it and fund its
participations required to be funded by it hereunder, regardless of the failure
of any other Lender to fulfill any of its Commitments hereunder.  Nothing herein and no subsequent termination
of the Commitments pursuant to Section 3.4 shall be deemed to relieve any
Lender from its obligation to fulfill its commitments hereunder and in
existence from time to time or to prejudice any rights that the Borrower may
have against any Lender as a result of any default by such Lender hereunder.


 


(b)           Borrowings Pro Rata.  All Loans made, and LC Participations
acquired by each Lender, shall be made or acquired, as the case may be, on a pro rata basis based upon each Lender’s Percentage of the
amount of such Borrowing or Letter of Credit in effect on the date the
applicable Borrowing is to be made or the Letter of Credit is to be issued.


 


(c)           Notice to Lenders. The
Administrative Agent shall promptly give each Lender, as applicable, written
notice (or telephonic notice promptly confirmed in writing) of each proposed
Borrowing, or Conversion or Continuation thereof, and LC Issuance, and of such
Lender’s proportionate share thereof or participation therein and of the other
matters covered by the Notice of Borrowing, Continuation or Conversion, or LC
Request, as the case may be, relating thereto.


 


(d)           Funding of Loans.  No later than 2:00 P.M. (local time at
the Payment Office) on the date specified in each Notice of Borrowing,
Continuation or Conversion, each Lender will make available its pro rata share, if any, of each Borrowing requested to be
made on such date in the manner provided below. 
All amounts shall be made available to the Administrative Agent in
Dollars and immediately available funds at the Payment Office and the
Administrative Agent promptly will make available to the Borrower by depositing
to its account at the Payment Office the aggregate of the amounts so made
available in the type of funds received.


 


(e)           Advance Funding.  Unless the Administrative Agent shall have
been notified by any Lender prior to the date of Borrowing that such Lender
does not intend to make available to the Administrative Agent its portion of
the Borrowing or Borrowings to be made on such date, the Administrative Agent
may assume that such Lender has made such amount available to the
Administrative Agent on such date of Borrowing, and the Administrative Agent,
in reliance upon such assumption, may (in its sole discretion and without any
obligation to do so) make available to the Borrower a corresponding
amount.  If such corresponding amount is
not in fact made available to the Administrative Agent by such Lender and the
Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount
from such Lender.  If such Lender does
not pay such corresponding amount forthwith upon the Administrative Agent’s
demand therefor, the Administrative Agent shall promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent.  The Administrative
Agent shall also be entitled to recover from such Lender or the Borrower, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (x) if
paid by such Lender, the 


 


31

















 


overnight Federal Funds
Effective Rate or (y) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with Section 2.7, for the respective
Loans (but without any requirement to pay any amounts in respect thereof
pursuant to Section 2.7).


 


(f)            Rights Not Prejudiced. Nothing
herein and no subsequent termination of the Commitments pursuant to Section 3.3
or 3.4 shall be deemed to relieve any Lender from its obligation to fulfill its
commitments hereunder and in existence from time to time or to prejudice any
rights that the Borrower may have against any Lender as a result of any default
by such Lender hereunder.


 


Section 2.6             Evidence of
Obligations.


 


(a)           Loan Accounts of Lenders.  The Obligations of the Borrower owing to each
Lender shall be evidenced by, and each Lender shall maintain in accordance with
its usual practice, an account or accounts established by such Lender, which
account or accounts shall include the amounts of principal and interest payable
and paid to such Lender from time to time hereunder.


 


(b)           Loan Accounts of
Administrative Agent.  The
Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type
thereof and the Interest Period and applicable interest rate if such Loan is a
Eurodollar Loan, (ii) the amount of any principal
due and payable or to become due and payable from the Borrower to each Lender
hereunder, and (iii) the amount of any sum
received by the Administrative Agent hereunder for the account of the Lenders
and each Lender’s share thereof.


 


(c)           Effect of Loan Accounts.  The entries made in the accounts maintained
pursuant to Section 2.6(a) and (b) shall be prima facie
evidence of the existence and amounts of the obligations recorded therein; provided, that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not
in any manner affect the obligation of the Borrower to repay or prepay the
Loans or any other amounts in accordance with the terms of this Agreement.


 


(d)           Notes.  Upon request of any Lender, the Borrower’s
obligation to pay the principal of, and interest on, the Loans made to it by
each Lender shall be evidenced  by a promissory note
of the Borrower substantially in the form of Exhibit A with blanks
appropriately completed in conformity herewith (each a “Note” and,
collectively, the “Notes”), provided that
the decision of any Lender not to request a Note shall in no way detract from
the Borrower’s obligation to repay the Loans and other amounts owing by the
Borrower to such Lender.  Any Note issued
by the Borrower to a Lender shall:  (i) be executed by the Borrower; (ii) be payable to the order of such Lender and be
dated on or prior to the Closing Date; (iii) be
payable in the principal amount of the Loans evidenced thereby; (iv) mature on the Maturity Date; (v) bear interest as provided in Section 2.7 in
respect of the Base Rate Loans or Eurodollar Loans, as the case may be,
evidenced thereby; (vi) be subject to mandatory
prepayment as provided in Section 4.3; and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.


 


Section 2.7             Interest.


 


(a)           Interest on Base Rate Loans.  During such periods as a Loan is a Base Rate
Loan, it shall bear interest at a fluctuating rate per annum that shall at all
times be equal to the Base Rate in effect from time to time plus the Applicable Margin in effect from time to time for
such Loan.


 


(b)           Interest on Eurodollar Loans.  During such periods as a Loan is a Eurodollar
Loan, it shall bear interest at a rate per annum that shall at all times during
an Interest Period therefor be the relevant Adjusted Eurodollar Rate for such
Eurodollar Loan for such Interest Period plus the
Applicable Margin in effect from time to time for such Loan.


 


32

















 


(c)           Default Interest.  Notwithstanding the above provisions, if a
Default under Section 9.1(a) or an Event of Default has occurred and
is continuing, then, upon written notice by the Administrative Agent (which
notice the Administrative Agent shall give at the direction of the Required
Lenders), (i) all outstanding amounts of principal and, to the extent
permitted by law, all overdue interest, in respect of each Loan shall bear
interest, payable on demand, at a rate per annum equal to 2% per annum above
the interest rate that is or would be applicable from time to time pursuant to Section 2.7(a),
and (ii) the LC Fees shall be increased by an additional 2% per annum in
excess of the LC Fees otherwise applicable thereto.  If any amount (other than the principal of
and interest on the Loans) payable by the Borrower under the Credit Documents
is not paid when due, upon written notice by the Administrative Agent (which
notice the Administrative Agent shall give at the direction of the Required
Lenders), such amount shall bear interest, payable on demand, at a rate per
annum equal to 2% per annum above the interest rate that is or would be
applicable from time to time pursuant to Section 2.7(a).


 


(d)           Accrual and
Payment of Interest.  Interest
shall accrue from and including the date of any Borrowing to but excluding the
date of any prepayment or repayment thereof and shall be payable:


 


(i)            in respect of each Base Rate
Loan, in arrears on the last Business Day of each December, March, June and
September and on the Maturity Date;


 


(ii)           in respect of each
Eurodollar Loan, on the last day of each Interest Period applicable thereto
and, in the case of an Interest Period in excess of three months, on the dates
that are successively 90 days after the commencement of such Interest Period
and on the Maturity Date;


 


(iii)          in respect of any repayment
or prepayment of any Loan (other than a prepayment of a Base Rate Loan), on the
date of such repayment or prepayment;


 


(iv)          in respect of any Conversion
of any Eurodollar Loan prior to the end of the current Interest Period
therefor, on the effective date of such Conversion; and


 


(v)           in respect of any interest
payment pursuant to Section 2.7(c), on demand.


 


(e)           Computations of Interest.  All computations of interest on Eurodollar
Loans and other amounts (other than Base Rate Loans) hereunder shall be made on
the actual number of days elapsed over a year of 360 days, and all computations
of interest on Base Rate Loans and Unpaid Drawings hereunder shall be made on
the actual number of days elapsed over a year of 365 or 366 days, as
applicable.


 


(f)            Information as to Interest
Rates.  The Administrative Agent upon
determining the interest rate for any Borrowing or any change in interest rate
applicable to any Borrowing as a result of a change in the Applicable Margin, a
change in the Base Rate, the implementation of the default rate or otherwise,
shall promptly notify the Borrower and the Lenders thereof, provided that (i) any such change shall be immediately
effective as and when such change occurs without regard to when the
Administrative Agent provides any such notice, and (ii) the failure of the
Administrative Agent to give any such notice shall in no way detract from or
affect the obligation of the Borrower to pay interest at the changed rate.  If the Administrative Agent is unable to
determine the Adjusted Eurodollar Rate for any Borrowing of Eurodollar Loans
based on the quotation service referred to in clause (i) of the definition
of the term Adjusted Eurodollar Rate, it will promptly so notify the Reference
Banks and each Reference Bank will furnish the Administrative Agent timely
information for the purpose of determining the Adjusted Eurodollar Rate for
such Borrowing.  If any one or more of
the Reference Banks shall not timely furnish such information, the
Administrative Agent shall determine the Adjusted Eurodollar Rate for such
Borrowing on the basis of timely information furnished by the remaining
Reference Banks.


 


33

















 


Section 2.8             Increased
Costs; Illegality.


 


(a)           If (x) in the case of
clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Lender, shall have determined on a
reasonable basis (which determination shall, absent manifest error, be final
and conclusive and binding upon all parties hereto):


 


(i)            on any date for determining
the Adjusted Eurodollar Rate for any Interest Period that, by reason of any
changes arising after the Closing Date affecting the London interbank market,
adequate and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of Adjusted Eurodollar Rate;
or


 


(ii)           at any time, that such
Lender shall incur increased costs or reductions in the amounts received or receivable
hereunder in an amount that such Lender deems material with respect to any
Eurodollar Loans (other than any increased cost or reduction in the amount
received or receivable resulting from the imposition of or a change in the rate
of taxes or similar charges) because of (x) any change since the Closing
Date in any applicable law, governmental rule, regulation, guideline, order or
request (whether or not having the force of law), or in the interpretation or
administration thereof and including the introduction of any new law or
governmental rule, regulation, guideline, order or request (such as, for
example, but not limited to, a change in official reserve requirements, but, in
all events, excluding reserves includable in the Adjusted Eurodollar Rate
pursuant to the definition thereof) and/or (y) other circumstances
adversely affecting the London interbank market or the position of such Lender
in such market; or


 


(iii)          at any time, that the making
or continuance of any Eurodollar Loan has become unlawful by compliance by such
Lender in good faith with any change since the Closing Date in any law,
governmental rule, regulation, guideline or order, or the interpretation or
application thereof, or would conflict with any thereof not having the force of
law but with which such Lender customarily complies or has become impracticable
as a result of a contingency occurring after the Closing Date that materially
adversely affects the London interbank market;


 


then, and in each such event, such Lender (or the Administrative
Agent in the case of clause (i) above) shall (x) on or promptly
following such date or time and (y) within 10 Business Days of the date on
which such event no longer exists give notice (by telephone confirmed in
writing) to the Borrower and to the Administrative Agent of such determination
(which notice the Administrative Agent shall promptly transmit to each of the
other Lenders).  Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be
available until such time as the Administrative Agent notifies the Borrower and
the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing, Continuation
or Conversion given by the Borrower with respect to Eurodollar Loans that have
not yet been incurred, Converted or Continued shall be deemed rescinded by the
Borrower or, in the case of a Notice of Borrowing, Continuation or Conversion,
shall, at the option of the Borrower, be deemed converted into a Notice of
Borrowing, Continuation or Conversion for Base Rate Loans to be made on the
date of Borrowing contained in such Notice of Borrowing, Continuation or
Conversion, (y) in the case of clause (ii) above, the Borrower shall
pay to such Lender, upon written demand therefor, such additional amounts (in
the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender shall determine) as shall be required to
compensate such Lender, for such increased costs or reductions in amounts
receivable hereunder (a written notice as to the additional amounts owed to
such Lender, showing the basis for the calculation thereof, which basis must be
reasonable, submitted to the Borrower by such Lender shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) and (z) in
the case of clause (iii) above, the Borrower shall


 


34
















 


take one of the actions specified in Section 2.8(b) as
promptly as possible and, in any event, within the time period required by law.


 


(b)           At any time that any
Eurodollar Loan is affected by the circumstances described in Section 2.8(a)(ii) or
(iii), the Borrower may (and in the case of a Eurodollar Loan affected pursuant
to Section 2.8(a)(iii) the Borrower shall) either
(i) if the affected Eurodollar Loan is then being made pursuant to
a Borrowing, by giving the Administrative Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was notified by
a Lender pursuant to Section 2.8(a)(ii) or (iii), cancel such
Borrowing, convert the related Notice of Borrowing, Continuation or Conversion
into one requesting a Borrowing of Base Rate Loans or require the affected
Lender to make its requested Loan as a Base Rate Loan, or (ii) if
the affected Eurodollar Loan is then outstanding, upon at least one Business
Day’s notice to the Administrative Agent, require the affected Lender to
Convert each such Eurodollar Loan into a Base Rate Loan, provided
that if more than one Lender is affected at any time, then all affected Lenders
must be treated the same pursuant to this Section 2.8(b).


 


(c)           If any Lender shall have
determined that after the Closing Date, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged by law with the interpretation or
administration thereof, or compliance by such Lender or its parent corporation
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank, or comparable agency, in
each case made subsequent to the Closing Date, has or would have the effect of
reducing by an amount reasonably deemed by such Lender to be material the rate
of return on such Lender’s or its parent corporation’s capital or assets as a
consequence of such Lender’s commitments or obligations hereunder to a level
below that which such Lender or its parent corporation could have achieved but
for such adoption, effectiveness, change or compliance (taking into
consideration such Lender’s or its parent corporation’s policies with respect
to capital adequacy), then from time to time, within 15 days after demand by
such Lender (with a copy to the Administrative Agent), the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or its parent corporation for such reduction. 
Each Lender, upon determining in good faith that any additional amounts
will be payable pursuant to this Section 2.8(c), will give prompt written
notice thereof to the Borrower, which notice shall set forth, in reasonable
detail, the basis of the calculation of such additional amounts, which basis
must be reasonable, although the failure to give any such notice shall not
release or diminish any of the Borrower’s obligations to pay additional amounts
pursuant to this Section 2.6(c) upon the subsequent receipt of such
notice.


 


(d)           Notwithstanding anything in
this Agreement to the contrary,  no Lender shall be
entitled to compensation or payment or reimbursement of other amounts under Section 2.8
or 4.5 for any amounts incurred or accruing prior to the Closing Date or more
than 270 days prior to the giving of notice to the Borrower of additional costs
or other amounts of the nature described in such Sections.


 


Section 2.9             Breakage Compensation.  The Borrower shall compensate each applicable
Lender, upon its written request (which request shall set forth the detailed
basis for requesting and the method of calculating such compensation), for all
reasonable losses, costs, expenses and liabilities (including, without
limitation, any loss, cost, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Lender
to fund its Eurodollar Loans that such Lender may sustain):  (i) if for any reason (other than
a default by such Lender or the Administrative Agent) a Borrowing of Eurodollar
Loans does not occur on a date specified therefor in a Notice of Borrowing,
Conversion or Continuation (whether or not withdrawn by the Borrower); (ii) if any repayment, prepayment, Conversion or
Continuation of any of its Eurodollar Loans occurs on a date that is not the
last day of an Interest Period applicable thereto; (iii) if
any prepayment of any of its Eurodollar Loans is not made on any date specified
in a notice of prepayment given by the Borrower; (iv) as
a result 


 


35

















 


of an assignment by a Lender
of any Eurodollar Loan other than on the last day of the Interest Period
applicable thereto pursuant to a request by the Borrower pursuant to Section 2.8(b);
or (v) as a consequence of (x) any other
default by the Borrower to repay or prepay its Eurodollar Loans when required
by the terms of this Agreement or (y) an election made pursuant to Section 2.8(b).  The Borrower shall pay such Lender the amount
shown as due on any such request within 10 days after receipt thereof.


 


Section 2.10           Increased Costs
to LC Issuers.  If after
the Closing Date, the adoption of any applicable law, rule or regulation,
or any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
LC Issuer or any Lender with any request or directive (whether or not having
the force of law) by any such authority, central bank or comparable agency (in
each case made subsequent to the Closing Date) shall either (i) impose,
modify or make applicable any reserve, deposit, capital adequacy or similar
requirement against Letters of Credit issued by such LC Issuer or such Lender’s
participation therein, or (ii) impose on such LC Issuer or any Lender any
other conditions affecting this Agreement, any Letter of Credit or such Lender’s
participation therein; and the result of any of the foregoing is to increase
the cost to such LC Issuer or such Lender of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such LC Issuer or such Lender hereunder (other than
any increased cost or reduction in the amount received or receivable resulting
from the imposition of or a change in the rate of taxes or similar charges),
then, upon demand to the Borrower by such LC Issuer or such Lender (a copy of
which notice shall be sent by such LC Issuer or such Lender to the
Administrative Agent), the Borrower shall pay to such LC Issuer or such Lender
such additional amount or amounts as will compensate any such LC Issuer or such
Lender for such increased cost or reduction. 
A certificate submitted to the Borrower by any LC Issuer or any Lender,
as the case may be (a copy of which certificate shall be sent by such LC Issuer
or such Lender to the Administrative Agent), setting forth, in reasonable
detail, the basis for the determination of such additional amount or amounts
necessary to compensate any LC Issuer or such Lender as aforesaid shall be
conclusive and binding on the Borrower absent manifest error, although the
failure to deliver any such certificate shall not release or diminish the
Borrower’s obligations to pay additional amounts pursuant to this Section 3.04.


 


Section 2.11           Change of
Lending Office; Replacement of Lenders.


 


(a)           Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of Section 2.8(a)(ii) or
(iii) or 2.8(c) with respect to such Lender, it will, if requested by
the Borrower, use reasonable efforts (subject to overall policy considerations
of such Lender) to designate another Applicable Lending Office for any Loans or
Commitment affected by such event, provided that
such designation is made on such terms that such Lender and its Applicable
Lending Office suffer no economic, legal or regulatory disadvantage, with the
object of avoiding the consequence of the event giving rise to the operation of
any such Section.


 


(b)           If any Lender requests any
compensation, reimbursement or other payment under Section 2.8(a)(ii) or
(iii), 2.8(c) or 3.2(b) with respect to such Lender, or if any Lender
is a Defaulting Lender, then the Borrower may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with the restrictions
contained in Section 11.4(c)), all its interests, rights and obligations
under this Agreement to an Eligible Assignee that shall assume such
obligations; provided that
(i) the Borrower shall have received the prior written consent of
the Administrative Agent, which consent shall not be unreasonably withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, 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, including any breakage
compensation under Section 2.7 and any amounts 


 


36

















 


accrued and owing to such
Lender under Section 2.8(a)(ii) or (iii), 2.8(c) or 3.2(b)), and (iii) in the case of any such assignment resulting
from a claim for compensation, reimbursement or other payments required to be
made under Section 2.8(a)(ii) or (iii), 2.8(c) or 3.2(b) with
respect to such Lender, such assignment will result in a reduction in such
compensation, reimbursement or payments. 
A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.


 


(c)           Nothing in this Section 2.11
shall affect or postpone any of the obligations of the Borrower or the right of
any Lender provided in Section 2.8.


 


ARTICLE III.


 


FEES; COMMITMENTS


 


Section 3.1             Fees.


 


(a)           Facility Fees.  The Borrower agrees to pay to the
Administrative Agent facility fees (“Facility Fees”) for the account of
each Non-Defaulting Lender that has a Commitment for the period from the
Closing Date to the Maturity Date, computed for each day at a rate per annum
equal to the Applicable Facility Fee Rate in effect for such day times the
amount of such Non-Defaulting Lender’s Commitment in effect on such day.  Facility Fees shall be due and payable in
arrears on the last Business Day of each December, March, June and September and
on the Maturity Date.


 


(b)           Utilization Fee.  The Borrower agrees to pay to the
Administrative Agent utilization fees (the “Utilization Fees”) for the
account of each Non-Defaulting Lender that has a Commitment for each day on
which the Aggregate Revolving Facility Exposure exceeds 50% of the Total
Commitment, computed for each such day at a rate per annum equal to the
Applicable Utilization Fee Rate times the Revolving Facility Exposure of such
Non-Defaulting Lender on such day. 
Utilization Fees, if any, shall be due and payable quarterly in arrears
on the last Business Day of each December, March, June and September and
on the Maturity Date.


 


(c)           LC Fees.


 


(i)            Standby Letters of Credit.  The Borrower agrees to pay to the
Administrative Agent, for the ratable benefit of each Lender with a Commitment
based upon each such Lender’s Percentage, a fee in respect of each Letter of
Credit issued hereunder that is a Standby Letter of Credit for the period from
the date of issuance of such Letter of Credit until the expiration date thereof
(including any extensions of such expiration date that may be made at the
election of the account party or the beneficiary), computed for each day at a
rate per annum equal to (A) the Applicable Margin for Loans that are
Eurodollar Loans in effect on such day times (B) the Stated Amount of such
Letter of Credit on such day.  The
foregoing fees shall be payable quarterly in arrears on the last Business Day
of each December, March, June and September and on the Maturity Date.


 


(ii)           Commercial Letters of Credit.  The Borrower agrees to pay to the
Administrative Agent for the ratable benefit of each Lender based upon each
such Lender’s Percentage, a fee in respect of each Letter of Credit issued
hereunder that is a Commercial Letter of Credit in an amount equal to (A) the
Applicable Margin for Loans that are Eurodollar Loans in effect on the date of
issuance times (B) the Stated Amount of such Letter of Credit.  The foregoing fees shall be payable on the
date of issuance of such Letter of Credit.


 


37

















 


(d)           Fronting Fees.  The Borrower agrees to pay directly to each
LC Issuer, for its own account, a fee in respect of each Letter of Credit
issued by it, payable on the date of issuance (or any increase in the amount,
or renewal or extension) thereof, computed at the rate of 0.125% per annum on
the Stated Amount thereof for the period from the date of issuance (or increase,
renewal or extension) to the expiration date thereof (including any extensions
of such expiration date which may be made at the election of the beneficiary
thereof).


 


(e)           Additional Charges of LC
Issuer.  The Borrower agrees to pay
directly to each LC Issuer upon each LC Issuance, drawing under, or amendment,
extension, renewal or transfer of, a Letter of Credit issued by it such amount
as shall at the time of such LC Issuance, drawing under, amendment, extension,
renewal or transfer be the processing charge that such LC Issuer is customarily
charging for issuances of, drawings under or amendments, extensions, renewals
or transfers of, letters of credit issued by it.


 


(f)            Other Fees.  The Borrower shall pay to the Administrative
Agent, on the Closing Date and thereafter, for its own account and/or for
distribution to the Lenders, such fees as heretofore agreed by the Borrower and
the Administrative Agent or the Lenders as set forth in the Agent Fee Letter,
the Closing Fee Letter or any other similar agreement.


 


(g)           Computations of Fees.  All computations of Facility Fees,
Utilization Fees, LC Fees and other Fees hereunder shall be made on the actual
number of days elapsed over a year of 360 days.


 


Section 3.2             Increase in
Commitments.


 


(a)           At any time after the
Closing Date, the Borrower may, by written notice to the Administrative Agent,
request that the Total Commitment be increased by an amount not to exceed
$50,000,000 in the aggregate for all such increases from the Closing Date until
the Maturity Date, provided that
no Default or Event of Default has occurred and is continuing at the time of
such request and on the date of any such increase.  The Administrative Agent shall deliver a copy
of such request to each Lender.  The
Borrower shall set forth in such request the amount of the requested increase
in the Total Commitment (which shall be in minimum increments of $10,000,000
and a minimum amount of $10,000,000) and the date on which such increase is
requested to become effective (which shall be not less than 10 Business Days
nor more than 60 days after the date of such notice and that, in any event,
must be at least 60 days prior to the Maturity Date).  The Borrower may arrange for one or more
banks or other entities that are Eligible Assignees to provide a Commitment
hereunder pursuant to this Section 3.2(a) (each such Person so
agreeing being an “Augmenting Lender”) and/or the Borrower may offer to
each Lender the opportunity to increase its Commitment by its Percentage of the
proposed increased amount.  Each Lender
shall, by notice to the Borrower and the Administrative Agent given not more
than 10 days after the date of the Administrative Agent’s notice, either agree
to increase its Commitment by all or a portion of the offered amount (each such
Lender so agreeing being an “Increasing Lender”) or decline to increase
its Commitment (and any such Lender that does not deliver such a notice within
such period of 10 days shall be deemed to have declined to increase its
Commitment and each Lender so declining or being deemed to have declined being
a “Non-Increasing Lender”).  Each
Augmenting Lender shall execute all such documentation as the Administrative
Agent shall reasonably specify to evidence its Commitment and/or its status as
a Lender with a Commitment hereunder. 
Any increase in the Total Commitment may be made in an amount that is
less than the increase requested by the Borrower if the Borrower is unable to
arrange for, or chooses not to arrange for, Augmenting Lenders.


 


(b)           Each of the parties hereto
agrees that the Administrative Agent may take any and all actions as may be
reasonably necessary to ensure that after giving effect to any increase in the
Total Commitment pursuant to this Section 3.2(b), the outstanding Loans
(if any) are held by the Lenders with 


 


38

















 


Commitments in accordance
with their new Percentages. This may be accomplished at the discretion of the
Administrative Agent:  (w) by
requiring the outstanding Loans to be prepaid with the proceeds of new
Borrowings; (x) by causing the Non-Increasing Lenders to assign portions
of their outstanding Loans to Increasing Lenders and Augmenting Lenders; (y) by
permitting the Borrowings outstanding at the time of any increase in the Total
Commitment pursuant to this Section 3.2(b) to remain outstanding
until the last days of the respective Interest Periods therefor, even though
the Lenders would hold such Borrowings other than in accordance with their new
Percentages; or (z) by any combination of the foregoing.  Any
prepayment or assignment described in this paragraph (ii) shall be subject
to Section 2.7 hereof but otherwise without premium or penalty.  In addition, in connection with any increase
in the Total Commitment pursuant to this Section the Administrative Agent
may, in consultation with the Borrower, appoint any Lender as a Syndication
Agent, Documentation Agent, Co-Agent or other similar title.


 


Section 3.3             Voluntary
Termination/Reduction of Commitments.  Upon at least three Business Days’ prior
irrevocable written notice (or telephonic notice confirmed in writing) to the
Administrative Agent at the Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Lenders), the Borrower shall have
the right to:


 


(a)           terminate in whole the Total
Commitment, provided that (i) all
outstanding Loans and Unpaid Drawings are contemporaneously prepaid in
accordance with Section 4.2, and (ii) either  there are no outstanding Letters of Credit or  the Borrower shall contemporaneously cause all
outstanding Letters of Credit to be surrendered for cancellation (any such
Letters of Credit to be replaced by letters of credit issued by other financial
institutions acceptable to each LC Issuer and the Lenders); or


 


(b)           partially and permanently
reduce the Unutilized Total Commitment, provided that (i) any such reduction shall apply to
proportionately and permanently reduce the Commitment of each of the Lenders;  (ii) such reduction shall apply to proportionately
and permanently reduce the LC Commitment Amount, but only to the extent that
the Unused Total Commitment would be reduced below any such limits; (iii) no
such reduction shall be permitted if the Borrower would be required to make a
mandatory prepayment of Loans or cash collateralize Letters of Credit pursuant
to Section 4.3(a), and (iv) any partial
reduction of the Unutilized Total Commitment pursuant to this Section 3.3(b) shall
be in the amount of at least $10,000,000 (or, if greater, in integral multiples
of $500,000).


 


Section 3.4             Termination of Commitments.  The Total Commitment (and the Commitment of
each Lender) shall terminate on the Maturity Date.


 


ARTICLE IV.


 


PAYMENTS


 


Section 4.1             Repayment of Loans.  The Borrower shall repay the aggregate
principal amount of each outstanding Loan to the Administrative Agent for the
ratable account of the Lenders on the earlier of (a) 364 days after the
date such Loan is made or deemed made and (b) the Maturity Date.


 


Section 4.2             Voluntary Prepayments.  The Borrower shall have the right to prepay
any of its Loans, in whole or in part, without premium or penalty (except as
specified below), from time to time on the following terms and conditions:


 


(a)           the Borrower shall give the
Administrative Agent at the Notice Office written or telephonic notice (in the
case of telephonic notice, promptly confirmed in writing if so requested by the
Administrative Agent) of its intent to prepay the Loans, the amount of such
prepayment and (in the case of Eurodollar Loans) the specific Borrowing(s) pursuant
to which made, which notice shall be received by 


 


39

















 


the Administrative Agent by (i) 12:00
noon (local time at the Notice Office) three Business Days prior to the date of
such prepayment, in the case of any prepayment of Eurodollar Loans, or (ii) 12:00
noon (local time at the Notice Office) one Business Day prior to the date of
such prepayment, in the case of any prepayment of Base Rate Loans, and which
notice shall promptly be transmitted by the Administrative Agent to each of the
Lenders;


 


(b)           in the case of prepayment of
any Borrowings, each partial prepayment of any such Borrowing shall be in an
aggregate principal of at least $2,000,000 or an integral multiple of
$1,000,000 in excess thereof, in the case of Base Rate Loans, and at least
$1,000,000 or an integral multiple of $500,000 in excess thereof, in the case
of Eurodollar Loans;


 


(c)           no partial prepayment of any
Loans made pursuant to a Borrowing shall reduce the aggregate principal amount
of such Loans outstanding pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount applicable thereto;


 


(d)           each prepayment in respect
of any Loans made pursuant to a Borrowing shall be applied pro rata
among such Loans; and


 


(e)           each prepayment of
Eurodollar Loans pursuant to this Section 4.2 on any date other than the
last day of the Interest Period applicable thereto, in the case of Eurodollar
Loans shall be accompanied by any amounts payable in respect thereof under Section 2.7.


 


Section 4.3             Mandatory
Payments and Prepayments.  The
Loans shall be subject to mandatory repayment or prepayment in accordance with
the following provisions:


 


(a)           Mandatory Payments. The Loans
shall be subject to mandatory repayment or prepayment (in the case of any
partial prepayment conforming to the requirements as to the amounts of partial
prepayments set forth in Section 4.2(b))), and the LC Outstandings shall
be subject to cash collateralization requirements, in accordance with the
following provisions:


 


(i)            Maturity Date.  The entire principal amount of all
outstanding Loans shall be repaid in full on the Maturity Date.


 


(ii)           Loans Exceed the Commitments.  If on any date (after giving effect to any
other payments on such date) (A) the Aggregate Credit Facility Exposure
exceeds the Total Credit Facility Amount, or (B) the Revolving Facility
Exposure of any Lender exceeds such Lender’s Commitment, then,
in the case of each of the foregoing, the Borrower shall, on such day, prepay
on such date the principal amount of Loans and, after Loans have been paid in
full, Unpaid Drawings, in an aggregate amount at least equal to such excess.


 


(iii)          LC Outstandings Exceed LC
Commitment  If on any
date the LC Outstandings exceed the LC Commitment Amount, then
the Borrower shall, on such day, pay to the Administrative Agent an amount in
cash equal to such excess and the Administrative Agent shall hold such payment
as security for the reimbursement obligations of the Borrower hereunder in
respect of Letters of Credit pursuant to a cash collateral agreement to be
entered into in form and substance reasonably satisfactory to the
Administrative Agent, each LC Issuer and the Borrower (which shall permit
certain investments in Cash Equivalents satisfactory to the Administrative Agent,
each LC Issuer and the Borrower until the proceeds are applied to any Unpaid
Drawings or to any other Obligations in accordance with any such cash
collateral agreement).


 


40

















 


(b)           Particular Loans to be Prepaid.  With respect to each repayment or prepayment
of Loans required by this Section 4.3, the Borrower shall designate the
Types of Loans that are to be repaid or prepaid and the specific Borrowing(s) pursuant
to which such repayment or prepayment is to be made, provided
that (i) the Borrower shall first so designate
all Loans that are Base Rate Loans and Eurodollar Loans with Interest Periods
ending on the date of repayment or prepayment prior to designating any other
Eurodollar Loans for repayment or prepayment, (ii) if
the outstanding principal amount of Eurodollar Loans made pursuant to a
Borrowing is reduced below the applicable Minimum Borrowing Amount as a result
of any such repayment or prepayment, then all the Loans outstanding pursuant to
such Borrowing shall be Converted into Base Rate Loans, and
(iii) each repayment and prepayment of any Loans made pursuant to a
Borrowing shall be applied pro rata among
such Loans. In the absence of a designation by the Borrower as described in the
preceding sentence, the Administrative Agent shall, subject to the above, make
such designation in its sole discretion with a view, but no obligation, to
minimize breakage costs owing under Section 2.7. Any repayment or
prepayment of Eurodollar Loans pursuant to this Section 4.3 shall in all
events be accompanied by such compensation as is required by Section 2.7.


 


Section 4.4             Method and Place of Payment.


 


(a)           Except as otherwise
specifically provided herein, all payments under this Agreement shall be made
to the Administrative Agent for the ratable (based on its pro rata
share) account of the Lenders entitled thereto, not later than 12:00 noon
(local time at the Payment Office) on the date when due and shall be made at
the Payment Office in immediately available funds and in lawful money of the
United States of America, it being understood that written notice by the
Borrower to the Administrative Agent to make a payment from the funds in the
Borrower’s account at the Payment Office shall constitute the making of such
payment to the extent of such funds held in such account.  Any payments under this Agreement that are
made later than 12:00 noon (local time at the Payment Office) shall be deemed
to have been made on the next succeeding Business Day. Whenever any payment to
be made hereunder shall be stated to be due on a day that is not a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
and, with respect to payments of principal, interest shall be payable during
such extension at the applicable rate in effect immediately prior to such
extension.


 


(b)           If at any time insufficient
funds are received by and available to the Administrative Agent to pay fully
all amounts of principal, interest and Fees then due hereunder and an Event of
Default is not then in existence, such funds shall be applied (i) first, towards
payment of interest and Fees then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest and Fees then due
to such parties, and (ii) second,
towards payment of principal then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal then due to such
parties.


 


Section 4.5             Net Payments.


 


(a)           All payments made by the
Borrower hereunder, under any Note or any other Credit Document, will be made
without setoff, counterclaim or other defense. 
Except as provided for in Section 4.5(b), all such payments will be
made free and clear of, and without deduction or withholding for, any present
or future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
such payments (but excluding any tax imposed on or measured by the net income
or net profits of a Lender pursuant to the laws of the jurisdiction under which
such Lender is organized or the jurisdiction in which the Applicable Lending
Office of such Lender is located or any subdivision thereof or therein) and all
interest, penalties or similar liabilities with respect to such non-excluded
taxes, levies imposts, duties, fees, assessments or other charges (all such
non-excluded taxes, levies, imposts, duties, fees assessments or other charges
being referred to collectively as “Taxes”).  If any Taxes are so levied or imposed, the
Borrower agrees to pay the full amount of such Taxes and such 


 


41

















 


additional amounts as may be
necessary so that every payment by it of all amounts due hereunder, under any
Note or under any other Credit Document, after withholding or deduction for or
on account of any Taxes, will not be less than the amount provided for herein
or in such Note or in such other Credit Document.  Subject to Section 2.8(d), the Borrower
will furnish to the Administrative Agent within 45 days after the date the
payment of any Taxes (or any withholding or deduction on account thereof) is
made, certified copies of tax receipts, or other evidence satisfactory to the
Lender, evidencing such payment by the Borrower.  The Borrower will indemnify and hold harmless
the Administrative Agent and each Lender, and reimburse the Administrative
Agent or such Lender upon its written request, for the amount of any Taxes
levied against, imposed on, or paid by the Administrative Agent or any Lender
within 30 days of any written request therefor.


 


(b)           Each Lender that is not
incorporated under the laws of the United States of America or any State
thereof (each a “Non-U.S. Lender”) agrees to provide to the Borrower and
the Administrative Agent on or prior to the Closing Date, or in the case of a
Lender that is an assignee or transferee of an interest under this Agreement
pursuant to Section 11.4 (unless the respective Lender was already a
Lender hereunder immediately prior to such assignment or transfer and such
Lender is in compliance with the provisions of this Section 4.5(b)), on
the date of such assignment or transfer to such Lender, and from time to time
thereafter if required by the Borrower or the Administrative Agent: (i) an accurate and complete original signed copy of
Internal Revenue Service Form W-8BEN, W-8ECI, W-8EXP or W-8IMY (or
successor, substitute or other appropriate form and, in the case of Form W-8IMY,
any related documentation necessary to establish the claimed exemption)
certifying to such Lender’s entitlement to a complete exemption from U.S.
withholding tax with respect to payments to be made under this Agreement, any
Note or any other Credit Document, and (ii) in the case of a Lender
seeking to qualify for the portfolio interest exemption, a certificate in form
and substance acceptable to the Administrative Agent (any such certificate, an “Exemption
Certificate”) certifying to such Lender’s entitlement to such
exemption.  In addition, each Lender
agrees that from time to time after the Closing Date, when a lapse in time or
change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Borrower and the
Administrative Agent a new accurate and complete original signed copy of the
applicable Internal Revenue Service Form, including any related documentation
or Exemption Certificate, and such other forms as may be required to confirm or
establish the entitlement of such Lender to a continued exemption from U.S.
withholding tax with respect to payments under this Agreement, any Note or any
other Credit Document.  Notwithstanding
anything to the contrary contained in Section 4.5(a), but subject to Section 11.4(c) and
the immediately succeeding sentence, (x) the Borrower shall be entitled,
to the extent it is required to do so by law, to deduct or withhold Taxes
imposed by the United States (or any political subdivision or taxing authority
thereof or therein) from interest, fees or other amounts payable hereunder for
the account of any Non-U.S. Lender that has not provided to the Borrower such
forms or such Exemption Certificate and related documentation that establish a
complete exemption from such deduction or withholding and (y) the Borrower
shall not be obligated pursuant to Section 4.5(a) to gross-up
payments to be made to a Lender in respect of Taxes imposed by the United
States or any additional amounts with respect thereto (I) to the extent
such Taxes result from a Lender’s failure to provide the Borrower the Internal
Revenue Service forms required to be provided to the Borrower pursuant to this Section 4.5(b) or
(II) to the extent that such forms do not establish a complete exemption
from withholding of such Taxes at the time the Lender first became a Lender
under this Agreement.  The Borrower
agrees to pay additional amounts and indemnify each Lender in the manner set
forth in Section 4.5(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any Taxes
deducted or withheld by it as a result of any changes after the Closing Date in
any applicable law, treaty, governmental rule, regulation, guideline or order,
or in the interpretation thereof, relating to the deducting or withholding of
income or similar Taxes.


 


42

















 


(c)           The Borrower will indemnify
and hold harmless the Administrative Agent and each Lender, and reimburse each
upon its written request within 30 days thereof, for the amount of any
documentary, excise, stamp, property or other similar taxes, duties, fees,
assessments or other charges imposed with respect to the execution, delivery,
filing or enforcement of any Credit Document.


 


(d)           If any Lender, in its sole
opinion, determines that it has finally and irrevocably received or been
granted a refund in respect of any Taxes paid as to which indemnification has
been paid by the Borrower pursuant to this Section, it shall promptly remit
such refund (including any interest received in respect thereof), net of all
out-of-pocket costs and expenses; provided, that
the Borrower agrees to promptly return any such refund (plus interest) to such
Lender if such Lender is required to repay such refund to the relevant taxing
authority. Any such Lender shall provide the Borrower with a copy of any notice
of assessment from the relevant taxing authority (redacting any unrelated
confidential information contained therein) requiring repayment of such refund.  Nothing
contained herein shall impose an obligation on any Lender to apply for any such
refund.


 


(e)           If the Borrower is required
to pay additional amounts to the Administrative Agent or any Lender pursuant to
this Section 4.5, then the Administrative Agent or such Lender shall use
reasonable efforts (consistent with legal and regulatory restrictions) to
change the jurisdiction of its office, branch, subsidiary or affiliate, or take
other appropriate action, so as to eliminate any additional payment by the Borrower
that may thereafter accrue, if such change or other action, in the judgment of
the Administrative Agent or such Lender, as the case may be, is not otherwise
disadvantageous to the Administrative Agent or such Lender.


 


ARTICLE V.


 


CONDITIONS PRECEDENT


 


Section 5.1             Conditions Precedent at
Closing Date.  This
Agreement shall become effective upon the satisfaction of each of the following
conditions:


 


(a)           Credit Agreement.  This Agreement shall have been executed by
the Borrower, the Administrative Agent, each LC Issuer and each of the Lenders.


 


(b)           Notes.  The Borrower shall have executed and
delivered to the Administrative Agent a Note for the account of each Lender
that has requested a Note.


 


(c)           Fees and Expenses.  The Borrower shall have (i) executed and
delivered to the Administrative Agent the Agent Fee Letter and the Closing Fee
Letter and (ii) paid or caused to be paid all Fees required to be paid by
it on the Closing Date pursuant to Section 3.1 and all reasonable fees and
expenses of the Administrative Agent and of special counsel to the
Administrative Agent that have been invoiced at least two Business Days prior
to such date in connection with the preparation, negotiation, execution and
delivery of this Agreement and the other Credit Documents and the consummation
of the transactions contemplated hereby and thereby.


 


(d)           Corporate Resolutions and
Approvals.  The
Administrative Agent shall have received certified copies of the resolutions of
the Board of Directors of the Borrower, approving the Credit Documents, and of
all documents evidencing other necessary corporate action, governmental
approvals, if any, and other consents or approvals with respect to the
execution, delivery and performance by the Borrower of the Credit Documents.


 


43

















 


(e)           Incumbency Certificates.  The Administrative Agent shall have received
a certificate of the Secretary or an Assistant Secretary of the Borrower,
certifying the names and true signatures of the officers of the Borrower
authorized to sign the Credit Documents and any other documents to which the
Borrower is a party that may be executed and delivered in connection herewith.


 


(f)            Corporate Charter and Good
Standing Certificates.  The
Administrative Agent shall have received: 
(i) an original certified copy of the Articles of Incorporation of
the Borrower and any and all amendments and restatements thereof, certified as
of a recent date by the relevant Secretary of State and certified by the
Secretary or an Assistant Secretary of the Borrower as being true, correct and
complete and in full force and effect as of the Closing Date; (ii) the
code of regulations of the Borrower and any and all amendments and restatements
thereof certified by the Secretary or an Assistant Secretary of the Borrower as
being true, correct, and complete and in full force and effect as of the
Closing Date; and (iii) an original good standing certificate from the
Secretary of State of the state of incorporation, dated as of a recent date,
certifying as to the good standing of the Borrower.


 


(g)           Opinions of Counsel.  The Administrative Agent shall have received
opinions of counsel, which shall be addressed to the Administrative Agent and
each of the Lenders and dated the Closing Date, from the General Counsel of the
Borrower, in substantially the form of Exhibit F.


 


(h)           Existing Credit Agreement.  The Borrower shall have terminated the
commitments of the lenders under each of the Existing Credit Agreement, repaid
any borrowings thereunder and terminated or released all Liens granted in
connection therewith and provided evidence, in form and substance satisfactory
to the Administrative Agent, of the same to the Administrative Agent.


 


(i)            Financial Statements.  The Administrative Agent and the Lenders shall
have received the financial statements referred to in Section 6.7(a),
which financial statements shall be acceptable to the Administrative Agent and
the Lenders.


 


(j)            Borrower’s Closing
Certificate.  The
Administrative Agent shall have received a certificate in the form attached
hereto as Exhibit D, dated the Closing Date, of an Authorized
Officer of the Borrower to the effect that, at and as of the Closing Date and
both before and after giving effect to the initial Borrowings hereunder, if
any, on the Closing Date, and the application of the proceeds thereof:  (i) all conditions set forth in Section 5.1
have been satisfied; (ii) no Default or Event of Default has occurred or
is continuing; and (iii) all representations and warranties of the
Borrower contained herein or in the other Credit Documents are true and correct
in all material respects with the same effect as though such representations
and warranties had been made on and as of the Closing Date, except that as to
any such representations and warranties that expressly relate to an earlier
specified date, such representations and warranties are only represented as
having been true and correct in all material respects as of the date when made.


 


Section 5.2             Conditions
Precedent to the Making of Loans.


 


(a)           The obligations
of the Lenders and each LC Issuer to make or participate in each Loan and/or LC
Issuance are subject, at the time thereof, to the satisfaction of the following
conditions:


 


(i)            Notice of Borrowing,
Continuation or Conversion.  The Administrative Agent (and in the case of
subpart (B) below, the applicable LC Issuer) shall have received, as
applicable, (A) a Notice of Borrowing, Continuation or Conversion meeting
the requirements of Section 2.3 with respect to the Borrowing of a Loan, or
(B) an LC Request meeting the requirements of Section 2.4(b) with
respect to each LC Issuance.


 


44
















 


(ii)           No Default; Representations
and Warranties.  At the time
of the making of a Loan to the Borrower or LC Issuance and after giving effect
thereto, (A) there shall exist no Default or
Event of Default, (B) all representations and
warranties of the Borrower contained herein (other than the representation and
warranty contained in Section 6.9) or in the other Credit Documents shall
be true and correct in all material respects with the same effect as though
such representations and warranties had been made on and as of the date such
Loan is made, except to the extent that such representations and warranties
expressly relate to an earlier specified date, in which case such
representations and warranties shall have been true and correct in all material
respects as of the date when made, and (C) the aggregate of the principal
amount of all outstanding Loans and LC Outstandings shall not exceed the amount
authorized under the Borrower’s order of The Public Utilities Commission of
Ohio (or any successor thereto) in effect at such time that authorizes the
Borrower to incur Indebtedness hereunder.


 


(iii)          Other Documents. The Borrower
shall have delivered to the Administrative Agent copies of such approvals and
other documents as the Administrative Agent, the LC Issuer or any Lender
(through the Administrative Agent) may reasonably request.


 


(b)           The acceptance of the
benefits of each Loan shall constitute a representation and warranty by the
Borrower to each of the Lenders and each LC Issuer that all of the applicable conditions
specified in Sections 5.1 and 5.2 have been satisfied as of the times
referred to in such Sections.  All of the
certificates, legal opinions and other documents and papers referred to in this
Article V, unless otherwise specified, shall be delivered to the
Administrative Agent for the account of each of the Administrative Agent and
the Lenders and, except for the Notes, in sufficient counterparts for the
Administrative Agent and the Lenders, and the Administrative Agent will
promptly distribute to the Lenders their respective Notes and the copies of
such other certificates, legal opinions and documents.


 


Section 5.3             Conditions Precedent to the
Conversion or Continuation of Loans.  The obligations of the Lenders to Convert or
Continue any Loan are subject, at the time thereof, to the receipt by the
Administrative Agent of a Notice of Borrowing, Continuation or Conversion
meeting the requirements of Section 2.3 with respect to the Conversion or
Continuation, as applicable, of a Loan.


 


ARTICLE VI.


 


REPRESENTATIONS AND WARRANTIES


 


To induce the Lenders and
each LC Issuer to enter into this Agreement and to make the Loans and to issue
and to participate in the Letters of Credit provided for herein, the Borrower
makes the following representations and warranties to, and agreements with, the
Lenders and each LC Issuer, all of which shall survive the execution and
delivery of this Agreement and the making of each Loan:


 


Section 6.1             Corporate Status.  Each of the Borrower and its Subsidiaries (a) is a duly organized or formed and validly
existing corporation, partnership or limited liability company, as the case may
be, in good standing under the laws of the jurisdiction of its formation and
has the corporate, partnership or limited liability company power and
authority, as applicable, to own its Property and assets and to transact the
business in which it is engaged, and (b) has
been duly qualified and is authorized to do business in all jurisdictions where
it is required to be so qualified except where the failure to be so qualified
would not have a Material Adverse Effect. 
Each Subsidiary of the Borrower (and the direct and indirect ownership
interest of the Borrower therein) as of the date hereof and the jurisdiction of
incorporation of Borrower and each such Subsidiary as of the date hereof is
listed on Schedule 6.1.


 


45

















 


Section 6.2             Corporate Power and
Authority.  The
Borrower has the corporate or other organizational power and authority to
execute, deliver and carry out the terms and provisions of the Credit Documents
to which it is party and has taken all necessary corporate or other
organizational action to authorize the execution, delivery and performance of
the Credit Documents to which it is party. 
The Borrower has duly executed and delivered each Credit Document to
which it is party and each Credit Document to which it is party constitutes the
legal, valid and binding agreement or obligation of the Borrower enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws generally affecting creditors’ rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).


 


Section 6.3             No Violation.  Neither the execution, delivery and
performance by the Borrower of the Credit Documents to which it is party nor
compliance with the terms and provisions thereof (a) will
contravene any provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any Governmental Authority applicable to the Borrower
or its properties and assets, (b) will conflict
with or result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the Property or
assets of the Borrower pursuant to the terms of any material promissory note,
bond, debenture, indenture, mortgage, deed of trust, credit or loan agreement,
or any other agreement or other instrument, to which the Borrower is a party or
by which it or any of its Property or assets are bound or to which it may be
subject, or (c) will violate any provision of
the certificate or articles of incorporation, regulations or bylaws, or other
charter documents of the Borrower.


 


Section 6.4             Governmental Approvals.  No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any Governmental Authority is required in connection with (i) any
extension of credit hereunder when made, (ii) the execution, delivery and
performance by the Borrower of any Credit Document to which it is a party or (iii) the
legality, validity, binding effect or enforceability of any Credit Document to
which the Borrower is a party, except for orders, consents, approvals,
licenses, authorizations, validations, filings, recordings, registrations
and/or exemptions required with respect to such extension of credit that have
been obtained or made and are in full force and effect at the time of such
extension of credit.


 


Section 6.5             Litigation, etc.


 


(a)           There are no actions, suits
or proceedings pending or, to, the knowledge of the Borrower, threatened with
respect to the Borrower or any of its Subsidiaries (i) that
have, or could reasonably be expected to have, a Material Adverse Effect except
as set forth on Schedule 6.5, or (ii) that
question the validity or enforceability of any of the Credit Documents, or of
any action to be taken by any of the Borrower pursuant to any of the Credit
Documents.


 


(b)           No action, suit, proceeding
or investigation has been instituted, or to the knowledge of the Borrower or
any of its Subsidiaries, threatened, and no rule, regulation, order, judgment
or decree has been issued or proposed to be issued by any Governmental
Authority that, solely as a result of the incurrence of Indebtedness or the
entering into this Agreement or any other Credit Document or any transaction
contemplated hereby or thereby, would cause or deem the Administrative Agent or
the Lenders or any Affiliate of any of them to be subject to, or not exempted
from, regulation under the FPA.


 


46

















 


Section 6.6             Use of
Proceeds; Margin Regulations.


 


(a)           The proceeds of all Loans
and LC Issuances will be utilized to provide working capital and funds for
general corporate and other lawful purposes not inconsistent with the
requirements of this Agreement (including, without limitation, to backstop the
issuance of commercial paper).


 


(b)           The Borrower is not engaged
in the business of extending credit for the purpose of purchasing or carrying
any Margin Stock.  At no time would more
than 25% of the value of the assets of the Borrower or its consolidated
Subsidiaries that are subject to any “arrangement” (as such term is used in Section 221.2(g) of
such Regulation U) hereunder be represented by Margin Stock.


 


Section 6.7             Financial Statements.  The Borrower has
furnished to the Lenders and the Administrative Agent complete and correct
copies of (a) the audited consolidated balance
sheets of the Borrower and its consolidated Subsidiaries as of December 31,
2005 and the related audited consolidated statements of income, shareholders’
equity, and cash flows of the Borrower and its consolidated Subsidiaries for
the fiscal years then ended, accompanied by the report thereon of KPMG LLP; and (b) the condensed consolidated balance sheets of
the Borrower and its consolidated Subsidiaries as of September 30, 2006,
and the related condensed consolidated statements of income and of cash flows
of the Borrower and its consolidated Subsidiaries for the fiscal period then
ended.  All such financial statements
have been prepared in accordance with GAAP, consistently applied (except as
stated therein), and fairly present in all material respects the financial
position of the entities described in such financial statements as of the
respective dates indicated and the consolidated results of their operations and
cash flows for the respective periods indicated, subject in the case of any
such financial statements that are unaudited, to normal audit adjustments, none
of which shall be material.  As of the
Closing Date, the Borrower and its Subsidiaries do not have any material or
significant contingent liability (other than any liability incident to any
litigation, arbitration or proceeding that could not reasonably be expected to
have a Material Adverse Effect) that is not reflected in the foregoing
financial statements or the notes thereto in accordance with GAAP.


 


Section 6.8             Solvency.  The Borrower is not insolvent as defined in
any applicable state or federal statute, nor will the Borrower be rendered
insolvent by the execution and delivery of this Agreement or any of the Credit
Documents to the Administrative Agent, each LC Issuer and the Lenders.


 


Section 6.9             No Material Adverse Change.  At no time during the period from December 31,
2005 through the date of this Agreement has there been a change in the
financial or other condition, business, affairs or prospects of the Borrower
and its Subsidiaries taken as a whole, or their properties and assets
considered as an entirety, except for  changes none
of which, individually or in the aggregate, has had or could reasonably be
expected to have, a Material Adverse Effect.


 


Section 6.10           Tax Returns and Payments.  The Borrower and each of its Subsidiaries has
filed all federal income tax returns and all other material tax returns,
domestic and foreign, required to be filed by it and has paid all material
taxes and assessments payable by it that have become due, other than those not
yet delinquent and except for those contested in good faith.  The Borrower and each of its Subsidiaries has
established on its books such charges, accruals and reserves in respect of
taxes, assessments, fees and other governmental charges for all fiscal periods
as are required by GAAP.  The Borrower
does not know of any proposed assessment for additional federal, foreign or
state taxes for any period, or of any basis therefor, that, individually or in
the aggregate, taking into account such charges, accruals and reserves in
respect thereof as the Borrower and its Subsidiaries have made, could reasonably
be expected to have a Material Adverse Effect.


 


47

















 


Section 6.11           Title to Properties.  The Borrower and each of its Subsidiaries has
good and marketable title, in the case of Real Property, and good title (or
valid Leaseholds, in the case of any leased Property), in the case of all other
Property, to all of its material properties and assets free and clear of Liens
other than Liens permitted under Section 8.3.  The interests of the Borrower and each of its
Subsidiaries in the properties reflected in the most recent balance sheet
referred to in Section 6.7, taken as a whole, were sufficient, in the
judgment of the Borrower, as of the date of such balance sheet for purposes of
the ownership and operation of the businesses conducted by the Borrower and
such Subsidiaries.


 


Section 6.12           Lawful Operations;
Compliance with Agreements.  The Borrower and each of its
Subsidiaries:  (a) holds all
necessary federal, state and local governmental licenses, registrations, certifications,
permits and authorizations necessary to conduct its business; (b) is in full compliance with all material
requirements imposed by law, regulation or rule, whether federal, state or
local, that are applicable to it, its operations, or its properties and assets,
including without limitation, applicable requirements of Environmental Laws;
and (c) is in full compliance with all material terms, covenants and
conditions of any promissory note, bond, debenture, indenture, mortgage, deed
of trust, credit or loan agreement, or any other agreement or other instrument,
to which it is a party or by which it or any of its Property or assets are
bound or to which it may be subject, except in the case of clause (a), (b) or
(c) of this Section 6.12 for any failure to obtain and maintain in
effect, or noncompliance, that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.


 


Section 6.13           Environmental Matters.  The Borrower and
each of its Subsidiaries is in compliance with all Environmental Laws governing
its business, except to the extent that any such failure to comply (together
with any resulting penalties, fines or forfeitures) would not reasonably be
expected to have a Material Adverse Effect. 
All licenses, permits, registrations or approvals required for the
conduct of the business of the Borrower and each of its Subsidiaries under any
Environmental Law have been secured and the Borrower and each of its
Subsidiaries is in substantial compliance therewith, except for such licenses,
permits, registrations or approvals the failure to secure or to comply
therewith is not reasonably likely to have a Material Adverse Effect.  Neither the Borrower nor any of its
Subsidiaries has received written notice, or otherwise knows, that it is in any
respect in noncompliance with, breach of or default under any applicable writ,
order, judgment, injunction, or decree to which the Borrower or such Subsidiary
is a party or that would affect the ability of the Borrower or such Subsidiary
to operate any Real Property and no event has occurred and is continuing that,
with the passage of time or the giving of notice or both, would constitute
noncompliance, breach of or default thereunder, except in each such case, such
noncompliance, breaches or defaults as would not reasonably be expected to, in
the aggregate, have a Material Adverse Effect. 
There are no Environmental Claims pending or, to the best knowledge of
the Borrower, threatened wherein an unfavorable decision, ruling or finding
would reasonably be expected to have a Material Adverse Effect.  There are no facts, circumstances, conditions
or occurrences on any Real Property now or at any time owned, leased or
operated by the Borrower or any of its Subsidiaries or on any Property adjacent
to any such Real Property, that are known by the Borrower or as to which the
Borrower or any such Subsidiary has received written notice, that could
reasonably be expected:  (i) to form the basis of an
Environmental Claim against the Borrower or any of its Subsidiaries or any Real
Property of the Borrower or any of its Subsidiaries; or (ii) to
cause such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property under any Environmental
Law, except in each such case, such Environmental Claims or restrictions that
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.


 


Section 6.14           ERISA.


 


(a)           Each Plan complies in all
material respects with all applicable requirements of law and regulations, no
Reportable Event has occurred with respect to any Plan, neither the Borrower
nor any 


 


48

















 


other member of the
Controlled Group has withdrawn from any Plan or initiated steps to do so, and
no steps have been taken to reorganize or terminate any Plan.


 


(b)           Neither the Borrower nor any
of its Subsidiaries is an entity deemed to hold “plan assets” within the
meaning of 29 C.F.R. § 2510.3-101 of an employee benefit plan (as defined in Section 3(3) of
ERISA) which is subject to Title I of ERISA or any plan (within the meaning of Section 4975
of the Code), and neither the execution of this Agreement nor the making of
Loans hereunder gives rise to a prohibited transaction within the meaning of Section 406
of ERISA or Section 4975 of the Code.


 


Section 6.15           Intellectual Property.  The Borrower and each of its Subsidiaries has
obtained or has the right to use all material patents, trademarks, service
marks, trade names, copyrights, licenses and other rights with respect to the
foregoing necessary for the present and planned future conduct of its business,
without any known conflict with the rights of others, except for such patents,
trademarks, service marks, trade names, copyrights, licenses and rights, the
loss of which, and such conflicts, that in any such case individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect.


 


Section 6.16           Investment Company Act;
Federal Power Act.  None of the Borrower or any of its Subsidiaries is
subject to regulation with respect to the creation or incurrence of
Indebtedness under the Investment Company Act of 1940, as amended.  None of the Borrower or any of its
Subsidiaries, or any Affiliate of any of them, is subject to regulation under the FPA or under applicable state or
other laws and regulations respecting the rates or the financial or
organizational regulation of electric utilities, as a result of the creation or incurrence of the Obligations or
the entering into this Agreement or any other Credit Document or the
consummation of any transaction contemplated hereby or thereby.


 


Section 6.17           True and Complete Disclosure.  All factual information (taken as a whole)
heretofore or contemporaneously furnished by or on behalf of the Borrower or
any of its Subsidiaries in writing to the Administrative Agent or any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of such Person in writing to any
Lender will be, true and accurate in all material respects on the date as of
which such information is dated or certified and not incomplete by omitting to
state any material fact necessary to make such information (taken as a whole)
not misleading at such time in light of the circumstances under which such
information was provided, except that any such future information consisting of
pro forma information and financial projections prepared by the Borrower is
only represented herein as being based on good faith estimates and assumptions
believed by such Persons to be reasonable at the time made, it being recognized
by the Lenders that such projections as to future events are not to be viewed
as facts and that actual results during the period or periods covered by any
such projections may differ materially from the projected results.


 


ARTICLE VII.


 


AFFIRMATIVE COVENANTS


 


The Borrower hereby
covenants and agrees that on the Closing Date and thereafter so long as this
Agreement is in effect and until such time as the Total Commitment has been
terminated, no Notes remain outstanding and the Loans, together with interest,
Fees and all other Obligations incurred hereunder and under the other Credit
Documents, have been paid in full:


 


49

















 


Section 7.1             Reporting
Requirements.


 


The
Borrower will furnish to each Lender and the Administrative Agent:


 


(a)           Annual Financial Statements.  As soon as available and in any event within
90 days after the close of each fiscal year of the Borrower, commencing with
the fiscal year ending December 31, 2006, the consolidated and
consolidating balance sheets of the Borrower and its consolidated Subsidiaries
as at the end of such fiscal year and the related consolidated and
consolidating statements of income, of stockholders’ equity and of cash flows
for such fiscal year, in each case setting forth comparative figures for the
preceding fiscal year, all in reasonable detail and accompanied by an opinion
with respect to such consolidated financial statements of independent public
accountants of recognized national standing selected by the Borrower, which
opinion shall be unqualified and shall (i) state
that such accountants audited such consolidated financial statements in
accordance with generally accepted auditing standards, that such accountants
believe that such audit provides a reasonable basis for their opinion, and that
in their opinion such consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal year and the
consolidated results of their operations and cash flows for such fiscal year in
conformity with generally accepted accounting principles, or (ii) contain such statements as are customarily
included in unqualified reports of independent accountants in conformity with
the recommendations and requirements of the American Institute of Certified
Public Accountants (or any successor organization).


 


(b)           Quarterly Financial
Statements.  As soon as
available and in any event within 45 days after the close of each of the first
three quarterly accounting periods in each fiscal year of the Borrower, the
unaudited consolidated and consolidating balance sheets of the Borrower and its
consolidated Subsidiaries as at the end of such quarterly period and the
related unaudited consolidated and consolidating statements of income and of
cash flows for such quarterly period and/or for the fiscal year to date, and
setting forth, in the case of such unaudited consolidated statements of income
and of cash flows, comparative figures for the related periods in the prior
fiscal year, and that shall be certified on behalf of the Borrower by the Chief
Financial Officer or other Authorized Officer, subject to changes resulting
from normal year-end audit adjustments.


 


(c)           Officer’s Compliance
Certificates.  At the time
of the delivery of the financial statements provided for in Sections 7.1(a) and
(b), a Compliance Certificate signed by an Authorized Officer, which shall
include calculations of the financial covenants set forth in Section 8.5.


 


(d)           Notice of Default,
Litigation or Material Adverse Effect.  Promptly, and in any event within three
Business Days, in the case of clause (i) below, or five Business Days,
after the Borrower or any of its Subsidiaries obtains knowledge thereof, notice
of (i) the occurrence of any event that constitutes a Default or Event of
Default, which notice shall specify the nature thereof, the period of existence
thereof and what action the Borrower has taken or proposes to take with respect
thereto, and (ii) the commencement of, or any other material development
concerning, any litigation, governmental or regulatory proceeding pending
against the Borrower or any of its Subsidiaries, or any other event that could
reasonably be expected to have a Material Adverse Effect.


 


(e)           ERISA.  As soon as possible and in any event within
ten days after the Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by an Authorized Officer, describing
such Reportable Event and the action that the Borrower proposes to take with
respect thereto.


 


50

















 


(f)            Single Employer Plans. Within 270
days after the close of each fiscal year of the Borrower, the Borrower will
deliver to each of the Lenders a statement of the Unfunded Liabilities,
certified as correct by an actuary enrolled under ERISA.


 


(g)           Environmental Notices.  Promptly, and in any event within 10 days
after receipt thereof by the Borrower or any Subsidiary of the Borrower, a copy
of (a) any notice or claim to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of the release by
the Borrower, any of its Subsidiaries, or any other Person of any Hazardous
Materials into the environment, and (b) any notice alleging any violation
of any Environmental Law by the Borrower or any of its Subsidiaries, which in
the case of either (a) or (b) above could reasonably be expected to
have a Material Adverse Affect.


 


(h)           Annual and Quarterly
Reports, Proxy Statements and other Reports Delivered to Stockholders Generally.  Promptly after transmission thereof to its
stockholders, copies of all annual, quarterly and other reports and all proxy
statements that the Borrower furnishes to its stockholders generally.


 


(i)            Other Information.  Promptly, but in any event within 10 Business
Days upon request therefor, such other information or documents (financial or
otherwise) relating to the Borrower or any of its Subsidiaries as the
Administrative Agent or any Lender (through the Administrative Agent) may
reasonably request from time to time.


 


Section 7.2             Books, Records and
Inspections.  The
Borrower will, and will cause each of its Subsidiaries to, (a) keep
proper books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of the Borrower
or such Subsidiaries, as the case may be, in accordance with GAAP; and (b) permit, upon at least two Business Days’ notice
to the Chief Financial Officer of the Borrower, officers and designated
representatives of the Administrative Agent or any of the Lenders to visit and
inspect any of the properties or assets of the Borrower and any of its
Subsidiaries in whomsoever’s possession (but only to the extent the Borrower or
such Subsidiary has the right to do so to the extent in the possession of
another Person), to examine the books of account of the Borrower and any of its
Subsidiaries, and make copies thereof and take extracts therefrom, and to
discuss the affairs, finances and accounts of the Borrower and of any of its Subsidiaries
with, and be advised as to the same by, its and their officers and independent
accountants and independent actuaries, if any, all at such reasonable times and
intervals and to such reasonable extent as the Administrative Agent or any of
the Lenders may request. All costs and expenses incurred by the Administrative
Agent or any Lender in connection with any of the foregoing shall be paid by
the Administrative Agent or such Lender, as the case may be, unless an Event of
Default shall have occurred and be continuing at the time such costs and/or
expenses are incurred, in which case all such costs and expenses shall be paid
by the Borrower.


 


Section 7.3             Insurance.  The Borrower will, and will cause each of its
Subsidiaries to, (i) maintain insurance
coverage by such insurers and in such forms and amounts and against such risks
as are generally consistent with the insurance coverage maintained by the
Borrower and its Subsidiaries at the date hereof, and (ii) forthwith
upon any Lender’s written request, furnish to such Lender such information
about such insurance as such Lender may from time to time reasonably request,
which information shall be prepared in form and detail satisfactory to such
Lender and certified by an Authorized Officer.


 


Section 7.4             Payment of Taxes and Claims.  The Borrower will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits,
or upon any properties belonging to it, prior to the 


 


51

















 


date on which penalties
attach thereto, and all lawful claims that, if unpaid, might become a Lien or
charge upon any properties of the Borrower or any of its Subsidiaries; provided that neither the Borrower nor any of its
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim that is being contested in good faith and by proper proceedings if it has
maintained adequate reserves with respect thereto in accordance with GAAP.  Without limiting the generality of the
foregoing, the Borrower will, and will cause each of its Subsidiaries to, pay
in full all of its wage obligations to its employees in accordance with the
Fair Labor Standards Act (29 U.S.C. Sections 206-207) and any comparable
provisions of applicable law.


 


Section 7.5             Preservation of Existence,
etc.  The Borrower will, and will
cause each of its Subsidiaries to, (a) preserve, renew and maintain in
full force and effect its legal existence and good standing under the laws of
the jurisdiction of its organization except in a transaction permitted by Section 8.2;
(b) take all reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary or desirable in the normal conduct
of its business, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.


 


Section 7.6             Good Repair.  The Borrower will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever’s possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements, thereto, to the extent and in the manner customary for
companies in similar businesses.


 


Section 7.7             Compliance with Statutes,
Regulations, Orders, Restrictions.  The Borrower will, and will cause each of its
Subsidiaries to, comply, in all material respects, with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed
by, all Governmental Authorities, in respect of the conduct of its business and
the ownership of its Property, including, without limitation, ERISA and all
applicable Environmental Laws other than those the noncompliance with which
would not have, and that would not be reasonably expected to have, a Material
Adverse Effect.


 


Section 7.8             Fiscal Years, Fiscal Quarters.  The Borrower shall not change any of its or
any of its Subsidiaries’ fiscal years or fiscal quarters (other than the fiscal
year or fiscal quarters of a Person that becomes a Subsidiary, made at the time
such Person becomes a Subsidiary to conform to the Borrower’s fiscal year and
fiscal quarters).


 


Section 7.9             Use of Proceeds.  The Borrower will, and will cause each of its
Subsidiaries to, use LC Issuances and the proceeds of all Loans for working
capital and for general corporate and other lawful purposes not inconsistent
with the requirements of this Agreement (including, without limitation, to
backstop the issuance of commercial paper).


 


Section 7.10           Senior Debt.  The Borrower will at all times ensure that (a) the claims of the Lenders in respect of the
Obligations of the Borrower will not be subordinate to, and will in all
respects rank at least pari passu with
or senior to, the claims of every unsecured creditor of the Borrower, and (b) any Indebtedness of the Borrower that is
subordinated in any manner to the claims of any other creditor of the Borrower
will be subordinated in like manner to such claims of the Lenders.


 


52

















 


ARTICLE VIII.


 


NEGATIVE COVENANTS


 


The Borrower hereby
covenants and agrees that on the Closing Date and thereafter for so long as
this Agreement is in effect and until such time as the Total Commitment has
been terminated, no Notes remain outstanding and the Loans, together with
interest, Fees and all other Obligations incurred hereunder and under the other
Credit Documents, have been paid in full:


 


Section 8.1             Changes in Business.  Neither the Borrower nor any of its
Subsidiaries will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, that would then be engaged in by
the Borrower and its Subsidiaries, would be substantially changed from the
general nature of the business engaged in by the Borrower and its Subsidiaries
on the Closing Date.


 


Section 8.2             Merger, Consolidation, Asset
Sales.  The Borrower will not, and
will not permit any of its Subsidiaries to, (a) wind up, liquidate or
dissolve its affairs, (b) enter into any transaction of merger or
consolidation, (c) make or otherwise effect any Asset Sale, or (d) agree
to do any of the foregoing at any future time, except that the following shall
be permitted:


 


(i)            a Subsidiary of the Borrower
may merge with the Borrower, provided that
the surviving Person in any such merger shall be the Borrower;


 


(ii)           any Subsidiary of the Borrower
may merge with another Subsidiary of the Borrower;


 


(iii)          any Subsidiary of the
Borrower may merge with any Person (other than the Borrower or any other
Subsidiary of the Borrower), provided that (A) the
surviving Person in any such merger shall be such Subsidiary and (B) immediately
before and after such merger there shall not exist any Default or Event of
Default;


 


(iv)          the Borrower may merge with
any Person (other than a Subsidiary of the Borrower), provided
that (A) the surviving Person in any such merger shall be the Borrower and
(B) immediately before and after such merger there shall not exist any
Default or Event of Default;


 


(v)           any Subsidiary of the
Borrower may make or effect any Asset Sale to the Borrower or another
Wholly-Owned Subsidiary of the Borrower;


 


(vi)          the Borrower may wind up,
voluntarily liquidate or dissolve any Subsidiary if (A) such Subsidiary is
not a “Significant Subsidiary” (as defined in Regulation S-X under the 1933
Act), and (B) the winding up, voluntary liquidation or dissolution of such
Subsidiary will not result in an Event of Default hereunder or otherwise have a
Material Adverse Effect;


 


(vii)         in addition to any Asset
Sale permitted pursuant to any other subpart in this Section 8.2, the
Borrower and its Subsidiaries may make or effect other Asset Sales 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 Asset Sales on and
after the Closing Date does not constitute a Substantial Portion of the
Property of the Borrower and its Subsidiaries at the time of and after giving
effect to any such Asset Sale and (B) at least 80% of the total
consideration received by the Borrower or any of its Subsidiaries, as
applicable, for such Asset Sale or series of Asset Sales consists of cash or
Cash Equivalents;


 


53

















 


(viii)        the Borrower and its
Subsidiaries shall be permitted to create, incur, assume and suffer to exist
Liens permitted pursuant to Section 8.3; and


 


(ix)           the Borrower and its
Subsidiaries shall be permitted to make and dispose of the Investments
permitted pursuant to Section 8.4.


 


Section 8.3             Liens.  The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon or with respect to any Property or assets of any kind (real or personal,
tangible or intangible) of the Borrower or any such Subsidiary whether now
owned or hereafter acquired, or sell any such Property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
Property or assets (including, without limitation, sales of accounts receivable
or notes with or without recourse to the Borrower or any of its Subsidiaries,
other than for purposes of collection of delinquent accounts in the ordinary
course of business) or assign any right to receive income, or file or permit
the filing of any financing statement under the UCC or any other similar notice
of Lien under any similar recording or notice statute, except that the
foregoing restrictions shall not apply to:


 


(a)           the Standard Permitted
Liens;


 


(b)           Liens (i) in
existence on the Closing Date that are listed, and the Indebtedness secured
thereby and the Property subject thereto on the Closing Date described, on Schedule 8.3,
or (ii) arising out of the refinancing,
extension, renewal or refunding of any Indebtedness secured by any such Liens, provided that the principal amount of such Indebtedness is
not increased and such Indebtedness is not secured by any additional assets;


 


(c)           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 or
otherwise modified from time to time, between the Borrower and The Bank of New
York;


 


(d)           Liens on Property of the
Borrower in connection with collateralized pollution control bonds;


 


(e)           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 or refinancing thereof, so long as the aggregate principal amount so
extended 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, however,
that the aggregate principal amount of Indebtedness at any time outstanding
secured by a Lien described in this subsection (e) shall not exceed an
amount equal to 5% of the Consolidated Tangible Assets at such time.


 


Section 8.4             Investments.  The Borrower will not, and will not permit
any of its Subsidiaries to, make or hold any Investments, except (a) Investments
held by the Borrower or any of its Subsidiaries


 


54
















 


in cash or Cash Equivalents;
(b) Investments of the Borrower in any of its Subsidiaries; (c) Investments
of a Subsidiary of the Borrower in the Borrower or another Subsidiary of the
Borrower; (d) Permitted Acquisitions; (e) Investments by the Borrower
and its Subsidiaries in account debtors received in connection with the
bankruptcy or reorganization, or in settlement of the delinquent obligations of
financially troubled suppliers or customers, in the ordinary course of
business; (f) promissory notes, earn-outs, other contingent payment
obligations and other non-cash consideration received by Borrower or any of its
Subsidiaries as partial payment of the total consideration of any Asset Sale
made in accordance with Section 8.2(vii); (g) loans and advances by
the Borrower and its Subsidiaries to their respective employees in an aggregate
amount not to exceed $1,000,000, at any time outstanding; (h) Investments
comprised of the purchase of receivables from other energy marketers as
required from time to time by one or more applicable Governmental Authorities; (i) other
Investments held by the Borrower or its Subsidiaries on the Closing Date that
are listed on Schedule 8.4; and (j) Investments by the
Borrower and its Subsidiaries not otherwise permitted under this Section 8.4
in an aggregate amount not to exceed $5,000,000, at any time.


 


Section 8.5             Financial Covenant.  The Borrower will not at any time permit the
ratio of (i) Consolidated Total Debt to (ii) Consolidated Total Capitalization to exceed
0.65 to 1.00.


 


Section 8.6             Transactions with Affiliates.  The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any transaction or series of
transactions with any Affiliate (other than, in the case of the Borrower, any
Subsidiary of the Borrower, and in the case of a Subsidiary of the Borrower,
the Borrower or another Subsidiary of the Borrower) other than in the ordinary
course of business of and pursuant to the reasonable requirements of the
Borrower’s or such Subsidiary’s business and upon fair and reasonable terms no
less favorable to the Borrower or such Subsidiary than would be obtained in a
comparable arm’s-length transaction with a Person other than an Affiliate,
except (i) sales of goods 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, or (ii) agreements and transactions with and payments
to officers, directors and shareholders that are either (A) entered
into in the ordinary course of business and not prohibited by any of the
provisions of this Agreement, or (B) 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.


 


Section 8.7             Material Agreements.  Neither the Borrower nor any Subsidiary of
the Borrower shall default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement, instrument
or other document to which the Borrower or such Subsidiary, as applicable, is a
party, which default could reasonably be expected to have a Material Adverse
Effect.


 


Section 8.8             Use of Proceeds/Margin
Regulations.  The
Borrower will not, and will not permit any of its Subsidiaries to, use any part
of the proceeds of any Borrowing, directly or indirectly, to purchase or carry
Margin Stock, or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock, in violation of any of the provisions of Regulation
T, U or X of the Board of Governors of the Federal Reserve System.


 


Section 8.9             No Dividend Restrictions.  The Borrower shall not permit any of its
Subsidiaries to enter into any agreement or otherwise create or cause or permit
to exist or become effective any consensual restriction limiting the ability
(whether by covenant, event of default or otherwise) of such Subsidiary to (i) pay
dividends or make any other distributions on shares of such Subsidiary’s
capital stock held by the Borrower or any other Subsidiary of the Borrower or (ii) pay
any other obligation owed to the Borrower or any other Subsidiary of the
Borrower, provided, however,
that this clause (ii) shall not apply to Permitted Restrictive Covenants.


 


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Section 8.10           Swap Agreements.  The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any Swap Agreement other than Swap
Agreements pursuant to which the Borrower or such Subsidiary has hedged its
reasonably estimated interest rate, foreign currency or commodity exposure, and
not for speculative purposes.


 


ARTICLE IX.


 


EVENTS OF DEFAULT


 


Section 9.1             Events of Default.  Any of the following specified events shall
constitute an Event of Default (each an “Event of Default”):


 


(a)           Payments:  the Borrower shall (i) default
in the payment when due (whether at maturity, on a date fixed for a scheduled
repayment, on a date on which a required prepayment is to be made, upon
acceleration or otherwise) of any principal of the Loans or any reimbursement
obligation in respect of any Unpaid Drawing; or (ii) default,
and such default shall continue for five or more days, in the payment when due
of any interest on the Loans or any Fees or any other amounts owing hereunder
or under any other Credit Document;


 


(b)           Representations:  any representation, warranty or statement
made by the Borrower herein or in any other Credit Document (other than
pursuant to Section 6.14(b)) or in any statement or certificate delivered
or required to be delivered pursuant hereto or thereto shall prove to be untrue
in any material respect on the date as of which made or deemed made;


 


(c)           Certain Covenants:  the Borrower shall default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.1, 7.2(b), 7.5, 7.9 or 7.10 or Article VIII of this
Agreement;


 


(d)           Other Covenants:  the Borrower shall default in the due
performance or observance by it of any term, covenant or agreement contained in
this Agreement or any other Credit Document, other than those referred to in Section 9.1(a),
(b) or (c) above, and such default is not remedied within 30 days
after the date on which the Borrower receives
written notice of such default from the Administrative Agent or any Lender (any
such notice to be identified as a “notice of default” and to refer specifically
to this paragraph);


 


(e)           Cross Default
Under Other Agreements:  the
Borrower or any of its Subsidiaries shall (i) default
in any payment with respect to any Indebtedness (other than the Obligations),
and all grace periods applicable to such payment shall have expired, in an
aggregate amount in excess of $10,000,000, regardless of whether the holder or
holders of said Indebtedness (or a trustee or agent on behalf of such holder or
holders) exercises its rights, if any, to cause such Indebtedness to become due
and payable prior to its stated maturity; or (ii) default
in the observance or performance of any agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto (and all grace periods applicable to such
observance, performance or condition shall have expired), or any other event
shall occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause any such
Indebtedness to become due prior to its stated maturity, or any such
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable, or shall be required to be prepaid (other than by a regularly
scheduled required prepayment or redemption, prior to the stated maturity
thereof).


 


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(f)            Invalidity of Credit
Documents:  any
material provision of any Credit Document, at any time after its execution and
delivery and for any reason other than as expressly permitted hereunder or
under such Credit Document or satisfaction in full of all the Obligations,
ceases to be in full force and effect; or the Borrower or any other Person
(other than the Administrative Agent or any Lender) contests in any manner the
validity or enforceability of any provision of any Credit Document; or the
Borrower denies in writing that it has any or further liability or obligation
under any Credit Document, or purports to revoke, terminate or rescind any
Credit Document;


 


(g)           Judgments:  one or more
judgments, orders or decrees shall be entered against the Borrower and/or any
of its Subsidiaries involving a liability (other than a liability covered by
insurance, as to which the carrier has adequate claims paying ability and has
not effectively reserved its rights) of $10,000,000 or more in the aggregate
for all such judgments, orders and decrees for the Borrower and its
Subsidiaries, and any such judgments or orders or decrees shall not have been
vacated, discharged or stayed or bonded pending appeal within 30 days from the
entry thereof;


 


(h)           Bankruptcy:  any of the following shall occur:


 


(i)            the Borrower or any of its
Subsidiaries (the Borrower and each such Subsidiary, each a “Principal Party”)
shall commence a voluntary case concerning itself under the Bankruptcy Code;


 


(ii)           an involuntary case is
commenced against any Principal Party under the Bankruptcy Code and the
petition is not dismissed within 60 days after commencement of the case;


 


(iii)          a custodian (as defined in
the Bankruptcy Code) is appointed for, or takes charge of, a Substantial
Portion of the Property of any Principal Party;


 


(iv)          any Principal Party
commences (including by way of applying for or consenting to the appointment
of, or the taking of possession by, a rehabilitator, receiver, custodian, trustee,
conservator or liquidator (collectively, a “conservator”) of itself or
all or a Substantial Portion of its Property) any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency, liquidation, rehabilitation, conservatorship or
similar law of any jurisdiction whether now or hereafter in effect relating to
such Principal Party;


 


(v)           any such proceeding of the
type set forth in clause (iv) above is commenced against any Principal
Party to the extent such proceeding is consented to by such Person or remains
undismissed for a period of 60 days;


 


(vi)          any Principal Party is
adjudicated insolvent or bankrupt;


 


(vii)         any order of relief or other
order approving any such case or proceeding is entered;


 


(viii)        any Principal Party suffers
any appointment of any conservator or the like for it or any Substantial
Portion of its Property that continues undischarged or unstayed for a period of
60 days;


 


(ix)           any Principal Party makes a
general assignment for the benefit of creditors;


 


(x)            any Principal Party
generally does not pay its debts as such debts become due; or


 


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(xi)           any corporate (or similar
organizational) action is taken by any Principal Party for the purpose of
effecting any of the foregoing;


 


(i)            ERISA:  (i) the
Unfunded Liabilities of all Single Employer Plans shall exceed in the aggregate
$30,000,000 or any Reportable Event that would reasonably be expected to have a
Material Adverse Effect shall occur in connection with any Plan; (ii) the
Borrower or any member of the Controlled Group shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred withdrawal liability to
such Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Borrower or any other
member of the Controlled Group as withdrawal liability (determined as of the
date of such notification), exceeds $10,000,000 or requires payment exceeding $10,000,000
per annum; or (iii) the Borrower or any other member of the Controlled
Group shall have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contribution of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans
that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding the
plan in year in which the reorganization or termination occurs by an amount exceeding
$10,000,000; or


 


(j)            Change of Control:  there occurs a Change of Control.


 


Section 9.2             Acceleration; Remedies.  Upon the occurrence of any Event of Default,
and at any time thereafter, if any Event of Default shall then be continuing,
the Administrative Agent shall, upon the written request of the Required
Lenders, by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Administrative Agent or any
Lender to enforce its claims against the Borrower in any manner permitted under
applicable law:


 


(a)           declare the Total Commitment
terminated, whereupon the Commitment of each Lender shall forthwith terminate
immediately without any other notice of any kind;


 


(b)           declare the principal of and
any accrued interest in respect of all Loans, all Unpaid Drawings and all other
Obligations owing hereunder to be, whereupon the same shall become, forthwith
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower;


 


(c)           terminate any Letter of
Credit that may be terminated in accordance with its terms; and/or


 


(d)           exercise any other right or
remedy available under any of the Credit Documents or applicable law;


 


provided that, if an Event of Default specified in Section 9.1(h) (other
than Section 9.1(h)(x)) shall occur, the result that would occur upon the
giving of written notice by the Administrative Agent as specified in clauses (a) and/or
(b) above shall occur automatically without the giving of any such notice.


 


Section 9.3             Application of Liquidation
Proceeds.  All monies
received by the Administrative Agent or any Lender from the exercise of
remedies hereunder or under the other Credit Documents or under any other
documents relating to this Agreement shall, unless otherwise required by the
terms of the other Credit Documents or by applicable law, be applied as
follows:


 


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(a)           first, to the
payment of all expenses (to the extent not otherwise paid by the Borrower)
incurred by the Administrative Agent and the Lenders in connection with the
exercise of such remedies, including, without limitation, all reasonable costs
and expenses of collection, reasonable documented attorneys’ fees, court costs
and any foreclosure expenses;


 


(b)           second, to the
payment pro rata of interest then accrued on the
outstanding Loans and Unpaid Drawings;


 


(c)           third, to the
payment pro rata of any fees then accrued and
payable to the Administrative Agent or any Lender under this Agreement in
respect of the Loans and/or Letters of Credit;


 


(d)           fourth, to the
payment pro rata of  the
principal balance then owing on the outstanding Loans and Unpaid Drawings;


 


(e)           fifth, to the
payment to the Lenders of any amounts then accrued and unpaid under
Sections 2.6, 2.7, and 4.5, and if such proceeds are insufficient to pay
such amounts in full, to the payment of such amounts pro rata;


 


(f)            sixth, to the
Administrative Agent for the benefit of each LC Issuer to cash collateralize
the Stated Amount of outstanding Letters of Credit;


 


(g)           seventh, to the
payment pro rata of all other amounts owed by
the Borrower to the Administrative Agent or any Lender or LC Issuer under this
Agreement or any other Credit Document; and


 


(h)           finally, any remaining
surplus after all of the Obligations have been paid in full, to the Borrower or
to whomsoever shall be lawfully entitled thereto.


 


ARTICLE X.


 


THE ADMINISTRATIVE AGENT


 


Section 10.1           Appointment.  Each Lender hereby irrevocably designates and
appoints KeyBank as Administrative Agent to act as specified herein and in the
other Credit Documents, and each such Lender hereby irrevocably authorizes
KeyBank as the Administrative Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Credit Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental
thereto. The Administrative Agent agrees to act as such upon the express
conditions contained in this Article X. 
Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in the other
Credit Documents, nor any fiduciary relationship with any Lender or LC Issuer,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent.  The provisions of
this Article X are solely for the benefit of the Administrative Agent, and
the Lenders, and neither the Borrower nor any of its Subsidiaries shall have
any rights as a third party beneficiary of any of the provisions hereof.  In performing its functions and duties under
this Agreement, the Administrative Agent shall act solely as agent of the
Lenders and does not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for the Borrower or any
of its Subsidiaries.


 


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Section 10.2           Delegation of Duties.  The Administrative Agent may execute any of
its duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by Section 10.3.


 


Section 10.3           Exculpatory Provisions.  Neither the Administrative Agent nor any of
its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to
be taken by it or such Person under or in connection with this Agreement or any
other Credit Document (except for its or such Person’s own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the
Lenders for any recitals, statements, representations or warranties made by the
Borrower or any of its Subsidiaries or any of their respective officers
contained in this Agreement, any other Credit Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Credit Document or for any failure of the Borrower or any Subsidiary of
the Borrower or any of their respective officers to perform its obligations
hereunder or thereunder.  The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower or any of its Subsidiaries.  The Administrative Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectability or sufficiency of this Agreement or any Credit
Document or for any representations, warranties, recitals or statements made
herein or therein or made in any written or oral statement or in any financial
or other statements, instruments, reports, certificates or any other documents
in connection herewith or therewith furnished or made by the Administrative
Agent to the Lenders or by or on behalf of the Borrower or any of its Subsidiaries
to the Administrative Agent or any Lender or be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the
use of the proceeds of the Loans or of the existence or possible existence of
any Default or Event of Default.


 


Section 10.4           Reliance by Administrative
Agent.  The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, e-mail or other electronic transmission, facsimile
transmission, telex or teletype message, statement, order or other document or
conversation believed by it, in good faith, to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrower or any of its Subsidiaries), independent accountants and other experts
selected by the Administrative Agent. 
The Administrative Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Credit Document unless it
shall first receive such advice or concurrence of the Required Lenders as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action.  The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement and the other Credit Documents in accordance with a request of the
Required Lenders (or all of the Lenders, or all of the Lenders (other than any
Defaulting Lender), as applicable, as to any matter that, pursuant to Section 11.11,
can only be effectuated with the consent of all Lenders, or all Lenders (other
than any Defaulting Lender), as the case may be), and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders.


 


Section 10.5           Notice of Default.  The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a “notice of default.” If the 


 


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Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders.  The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders, provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.


 


Section 10.6           Non-Reliance.  Each Lender expressly acknowledges that
neither the Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates have made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the Borrower or any of its respective
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. 
Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent, or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and its respective Subsidiaries and made its
own decision to make its Loans hereunder and enter into this Agreement.  Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent, or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement, and to make
such investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and its Subsidiaries.  The Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial
and other conditions, prospects or creditworthiness of the Borrower or any of
its Subsidiaries that may come into the possession of the Administrative Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.


 


Section 10.7           Indemnification.  The Lenders agree to indemnify the
Administrative Agent and its Related Parties ratably according to their
respective Loans and Percentages of the Unutilized Total Commitment, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, reasonable expenses or disbursements of any
kind whatsoever that may at any time (including, without limitation, at any
time following the payment of the Obligations) be imposed on, incurred by or
asserted against the Administrative Agent or such Related Party in any way
relating to or arising out of this Agreement or any other Credit Document, or
any documents contemplated by or referred to herein or the transactions
contemplated hereby or any action taken or omitted to be taken by the
Administrative Agent or such Related Party under or in connection with any of
the foregoing, but only to the extent that any of the foregoing is not paid by
the Borrower, provided that no Lender shall be
liable to the Administrative Agent or such Related Party for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent resulting
solely from the Administrative Agent’s or such Related Party’s gross negligence
or willful misconduct.  If any indemnity
furnished to the Administrative Agent or any Related Party for any purpose
shall, in the opinion of the Administrative Agent, be insufficient or become
impaired, the Administrative Agent may call for additional indemnity and cease,
or not commence, to do the acts indemnified against until such additional
indemnity is furnished.  The agreements
in this Section 10.7 shall survive the payment of all Obligations.


 


Section 10.8           The Administrative Agent in
Individual Capacity.  The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower, its Subsidiaries
and their Affiliates as though not acting as Administrative Agent
hereunder.  With respect to the Loans
made by it and all Obligations owing to it, the Administrative Agent shall have



 


61

















 


the same rights and powers
under this Agreement as any Lender and may exercise the same as though it were
not the Administrative Agent, and the terms “Lender” and “Lenders” shall
include the Administrative Agent in its individual capacity.


 


Section 10.9           Successor Administrative
Agent.  The Administrative Agent may
resign at any time upon not less than 30 days notice to the Lenders, each LC
Issuer and the Borrower.  Upon receipt of
any such notice of resignation, the Required Lenders shall have the right to
appoint a successor, provided that,
so long as no Event of Default shall have occurred and be continuing, the
Borrower shall have the right to consent to any such successor Administrative
Agent, such consent not to be unreasonably withheld.  If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the
Lenders and each LC Issuer, appoint a successor Administrative Agent, provided that if the Administrative Agent shall notify the
Borrower and the Lenders that no such successor is willing to accept such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (i) the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder and under the
other Credit Documents (except that in the case of any collateral security held
by the Administrative Agent on behalf of the Lenders or any LC Issuer under any
of the Credit Documents, the retiring Administrative Agent shall continue to
hold such collateral security for the benefit of the Lenders until such time as
a successor Administrative Agent is appointed) and (ii) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and LC Issuer
directly, until such time as the Required Lenders (with the consent of the
Borrower, if applicable) appoint a successor Administrative Agent as provided
for above in this paragraph.  Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and
the retiring Administrative Agent shall be discharged from all of its duties
and obligations hereunder or under the other Credit Documents (if not already
discharged therefrom as provided above in this paragraph).  The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such
successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Credit
Documents, the provisions of this Article and Section 11.1 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.


 


Section 10.10         Other Agents.  Any Lender identified herein as a Co-Agent,
Syndication Agent, Documentation Agent, Co-Documentation Agent, Managing Agent,
Manager, Lead Arranger, Arranger or any other corresponding title, other than “Administrative
Agent,” shall have no right, power, obligation, liability, responsibility or
duty under this Agreement or any other Credit Document except those applicable
to all Lenders as such. Each Lender acknowledges that it has not relied, and
will not rely, on any Lender so identified in deciding to enter into this
Agreement or in taking or not taking any action hereunder.


 


ARTICLE XI.


 


MISCELLANEOUS


 


Section 11.1           Payment of
Expenses.


 


(a)           Irrespective of whether the
transactions contemplated hereby are consummated, the Borrower agrees to pay
(or reimburse the Administrative Agent for) all reasonable out-of-pocket costs 


 


62

















 


and expenses of the
Administrative Agent in connection with the negotiation, preparation,
syndication, administration and execution and delivery of the Credit Documents
and the documents and instruments referred to therein and the syndication of
the Commitments, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent and its Affiliates.


 


(b)           The Borrower agrees to pay,
or reimburse the Administrative Agent for, all reasonable out-of-pocket costs
and expenses of the Administrative Agent in connection with any amendment,
waiver, consent or other modification of or relating to any of the Credit
Documents, including, without limitation, the reasonable fees and disbursements
of counsel to the Administrative Agent.


 


(c)           The Borrower agrees to pay,
or reimburse the Administrative Agent and the Lenders for, all reasonable
out-of-pocket costs and expenses of the Administrative Agent and the Lenders in
connection with the enforcement of any of the Credit Documents  or the other documents and instruments
referred to therein, including, without limitation,  the
reasonable fees and disbursements of each counsel to the Administrative Agent
and any Lender (including allocated costs of internal counsel).


 


(d)           Without limitation of the
preceding Section 11.1(c), in the event of the bankruptcy, insolvency,
rehabilitation or other similar proceeding in respect of the Borrower or any of
its Subsidiaries, the Borrower agrees to pay all costs of collection and
defense, including reasonable attorneys’ fees in connection therewith and in
connection with any appellate proceeding or post-judgment action involved
therein, which shall be due and payable together with all required service or
use taxes.


 


(e)           Without duplication of any
of the Borrower’s obligations under Section 4.5(c), the Borrower agrees to
pay and hold the Administrative Agent and each of the Lenders harmless from and
against any and all present and future stamp and other similar taxes with
respect to the foregoing matters and save the Administrative Agent and each of
the Lenders harmless from and against any and all liabilities with respect to
or resulting from any delay or omission (other than to the extent attributable
to any such indemnified Person) to pay such taxes.


 


(f)            The Borrower agrees to
indemnify the Administrative Agent, each Lender, and their respective Related
Parties (collectively, the “Indemnitees”) from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
reasonably incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of


 


(i)            any investigation,
litigation or other proceeding (whether or not any Lender is a party thereto)
related to the entering into and/or performance of any Credit Document or the
use of the proceeds of any Loans hereunder or the consummation of any
transactions contemplated in any Credit Document, other than any such
investigation, litigation or proceeding arising out of transactions solely
between or among one or more of the Lenders and/or the Administrative Agent
(except any such investigation, litigation or other proceeding brought by one
or more Lenders against or involving the Administrative Agent), transactions
solely involving the assignment by a Lender of all or a portion of its Loans
and Commitments, or the granting of participations therein, as provided in this
Agreement, or arising solely out of any examination of a Lender by any
regulatory or other governmental authority having jurisdiction over it, or


 


(ii)           the actual or alleged
presence of Hazardous Materials in the air, surface water or groundwater or on
the surface or subsurface of any Real Property owned, leased or at any time
operated by the Borrower or any of its Subsidiaries, the release, generation,
storage, transportation, handling or disposal of Hazardous Materials at any
location, whether or not owned or operated by the Borrower or any of its
Subsidiaries, if the Borrower or any such Subsidiary could have or is alleged
to have any responsibility in respect thereof, the non-compliance of any 


 


63

















 


such Real Property with foreign, federal,
state and local laws, regulations and ordinances (including, without
limitation, applicable permits thereunder) applicable thereto, or any
Environmental Claim asserted against the Borrower or any of its Subsidiaries,
in respect of any such Real Property,


 


including, in each case, without limitation, the reasonable
documented fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding (but excluding in each case
under this clause (f) any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified or of any other Indemnitee who is
such Person or an Affiliate of such Person). To the extent that the undertaking
to indemnify, pay or hold harmless any Person set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Borrower shall make the maximum contribution to the payment and
satisfaction of each of the indemnified liabilities that is permissible under
applicable law.


 


Section 11.2           Right of Setoff.  In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Lender and each LC Issuer is hereby authorized at any time or
from time to time, without presentment, demand, protest or other notice of any
kind to the Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or owing by
such Lender or such LC Issuer (including, without limitation, by branches,
agencies and Affiliates of such Lender or LC Issuer wherever located) to or for
the credit or the account of the Borrower against and on account of the
Obligations and liabilities of the Borrower to such Lender or LC Issuer under
this Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations of the Borrower purchased by such
Lender pursuant to Section 11.4(c), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether such Lender or LC Issuer shall have made any
demand hereunder and although such Obligations, liabilities or claims, or any
of them, shall be contingent or unmatured. 
Each Lender and LC Issuer agrees promptly to notify the Borrower after
any such set off and application, provided, however,
that the failure to give such notice shall not affect the validity of such set
off and application.


 


Section 11.3           Notices.


 


(a)           Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subparagraph (c) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopier as follows:


 


(i)            if to the Borrower, to The
Dayton Power and Light Company, 1065 Woodman Drive, Dayton, Ohio  45432, Attention: Joseph R. Boni III
(Telecopier No. (937) 259-7147; Telephone No. (937) 259-7230);


 


(ii)           if to the Administrative
Agent, to KeyBank National Association, 127 Public Square, Cleveland,
Ohio 44114, Attention: Yvette M. Dyson-Owens (Telecopier No. (216) 689-5962;
Telephone No. (216) 689-4358); and


 


(iii)          if to a Lender, to it at its
address (or telecopier number) set forth on Annex I hereto or, in
the case of any Lender that becomes a party to this Agreement by way of
assignment under Section 11.4 of this Agreement, to it at the address set
forth in the Assignment Agreement to which it is a party;


 


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(b)           Receipt of Notices.  Notices and communications sent by hand or
overnight courier service, or mailed by certified or registered mail, shall be
deemed to have been given when received; notices sent by telecopier shall be
deemed to have been given when sent and receipt has been confirmed by
telephone.  Notices delivered through
electronic communications to the extent provided in subparagraph (c) below,
shall be effective as provided in such subparagraph (c).


 


(c)           Electronic Communications.  Notices and other communications to the
Administrative Agent, an LC Issuer or any Lender pursuant to Section 7.1(a),
(b), (c), (h), (i) or (j) may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent.  The Administrative Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications. Unless the Administrative Agent otherwise prescribes, (i) notices
and other communications sent to an e-mail address shall be deemed received
upon the sender’s receipt of an acknowledgement from the intended recipient
(such as by the “return receipt requested” function, as available, return
e-mail or other written acknowledgement), provided that
if such notice or other communication is not sent during the normal business hours
of the recipient, such notice or communication shall be deemed to have been
sent at the opening of business on the next business day for the recipient, and
(ii) notices or communications posted to an Internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient at
its e-mail address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying the
website address therefor.


 


(d)           Change of Address.  Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
each of the other parties hereto.


 


Section 11.4           Benefit of Agreement.


 


(a)           Successors and Assigns Generally.  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns, provided that
the Borrower may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of all the Lenders (other than any
Defaulting Lender), and, provided, further,
that any assignment by a Lender of its rights and obligations hereunder shall
be effected in accordance with Section 11.4(c).


 


(b)           Participations.  Notwithstanding the foregoing, each Lender
may at any time grant participations in any of its rights hereunder or under
any of the Notes to any Person (other than the Borrower or any of its
Affiliates or a natural Person), provided that
in the case of any such participation,


 


(i)            the participant shall not have any rights under this
Agreement or any of the other Credit Documents, including, without limitation,
rights of consent, approval or waiver (the participant’s rights against such
Lender in respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the participant relating thereto),


 


(ii)           such Lender’s obligations under this Agreement (including,
without limitation, its Commitment hereunder) shall remain unchanged,


 


(iii)          such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,


 


65

















 


(iv)          such Lender shall remain the holder of any Note for all
purposes of this Agreement, and


 


(v)           the Borrower, the Administrative Agent, and the other
Lenders shall continue to deal solely and directly with the selling Lender in
connection with such Lender’s rights and obligations under this Agreement, and
all amounts payable by the Borrower hereunder shall be determined as if such
Lender had not sold such participation, except that the participant shall be
entitled to the benefits of Sections 2.6, 2.7 and 4.5 of this Agreement to
the extent that such Lender would be entitled to such benefits if the participation
had not been entered into or sold (provided that
the participant shall only be entitled to the benefits of Section 4.5 to
the extent that it complies with the requirements of that section as though it
were a Lender),


 


and, provided further,
that no Lender shall transfer, grant or sell any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (w) extend the final scheduled maturity of the Loans in which
such participant is participating, or reduce the rate or extend the time of
payment of interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant’s participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default shall not constitute a change
in the terms of any such Commitment), (x) release any guarantor from its
guaranty of any of the Obligations, except strictly in accordance with the
terms of the Credit Documents, or (y) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement.


 


(c)           Assignments by Lenders.  Any Lender may assign all, or if less than
all, a fixed portion, of its Loans, LC Participations and/or Commitment and its
rights and obligations hereunder to one or more Eligible Assignees, each of
which shall become a party to this Agreement as a Lender by execution of an
Assignment Agreement, provided that


 


(i)            except in the case of (x) an assignment of the
entire remaining amount of the assigning Lender’s Loans and/or Commitment or (y) an
assignment to another Lender, an Affiliate of such Lender or an Approved Fund
with respect to such Lender, the aggregate amount of each such assignment of
such Commitment (which for this purpose includes the Loans outstanding
thereunder), shall not be less than $5,000,000 (or, if greater, in integral
multiples of $1,000,000),


 


(ii)           in the case of any assignment to an Eligible Assignee at
the time of any such assignment the Lender Register shall be deemed modified to
reflect the Commitments of such new Lender and of the existing Lenders,


 


(iii)          upon surrender of the old Notes, if any, upon request of
the new Lender, new Notes will be issued, at the Borrower’s expense, to such
new Lender and to the assigning Lender, such new Notes to be in conformity with
the requirements of Section 2.6 (with appropriate modifications) to the
extent needed to reflect the revised Commitments,


 


(iv)          unless waived by the Administrative Agent, the
Administrative Agent shall receive at the time of each such assignment, from the
assigning or assignee Lender, the payment of a non-refundable assignment fee of
$3,500,


 


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and, provided further,
that such transfer or assignment will not be effective until the Assignment
Agreement in respect thereof is recorded by the Administrative Agent on the
Lender Register maintained by it as provided herein.


 


To the extent of any
assignment pursuant to this Section 11.4(c) the assigning Lender
shall be relieved of its obligations hereunder with respect to its assigned
Commitments.


 


At the time of each
assignment pursuant to this Section 11.4(c) to a Person that is not
already a Lender hereunder and that is not a United States Person (as such term
is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective assignee Lender shall provide to the Borrower and the
Administrative Agent the appropriate Internal Revenue Service Forms (and, if
applicable, an Exemption Certificate) described in Section 4.5(b).  To the extent that an assignment of all or
any portion of a Lender’s Commitment and related outstanding Obligations
pursuant to this Section 11.4(c) would, at the time of such
assignment, result in increased costs under Section 4.5 from those being
charged by the respective assigning Lender prior to such assignment, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).


 


Nothing in this Section 11.4(c) shall
prevent or prohibit (i) any Lender that is a bank, trust company or other
financial institution from pledging its Notes or Loans to a Federal Reserve
Bank in support of borrowings made by such Lender from such Federal Reserve
Bank, or (ii) any Lender that is a trust, limited liability company,
partnership or other investment company from pledging its Notes or Loans to a
trustee or agent for the benefit of holders of certificates or debt securities
issued by it.  No such pledge, or any
assignment pursuant to or in lieu of an enforcement of such a pledge, shall
relieve the transferor Lender from its obligations hereunder.


 


(d)           No SEC Registration or Blue Sky
Compliance.  Notwithstanding any
other provisions of this Section 11.4, no transfer or assignment of the
interests or obligations of any Lender hereunder or any grant of participation
therein shall be permitted if such transfer, assignment or grant would require
the Borrower to file a registration statement with the SEC or to qualify the
Loans under the “Blue Sky” laws of any State.


 


(e)           Representations of Lenders.  Each Lender initially party to this Agreement
hereby represents, and each Person that becomes a Lender pursuant to an assignment
permitted by this Section 11.4 will, upon its becoming party to this
Agreement, represent that it is a commercial lender, other financial
institution or other “accredited” investor (as defined in SEC Regulation D)
that makes or acquires loans in the ordinary course of its business and that it
will make or acquire Loans for its own account in the ordinary course of such
business, provided that subject to the preceding
Sections 11.4(b) and (c), the disposition of any promissory notes or
other evidences of or interests in Indebtedness held by such Lender shall at
all times be within its exclusive control.


 


Section 11.5           No Waiver; Remedies Cumulative.  No failure or delay on the part of the
Administrative Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
the Borrower and the Administrative Agent or any Lender shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder.  No notice to or
demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Administrative Agent or the Lenders to any other or
further action in any circumstances without notice or demand.  Without limiting the generality of the
foregoing, the making of a Loan or any LC Issuance shall not be construed as a
waiver of any Default 


 


67

















 


or Event of Default,
regardless of whether the Administrative Agent, any Lender or any LC Issuer may
have had notice or knowledge of such Default or Event of Default at the
time.  The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
that the Administrative Agent or any Lender would otherwise have.


 


Section 11.6           Payments Pro Rata; Sharing of Setoffs.


 


(a)           The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Borrower in
respect of any Obligations, it shall distribute such payment to the Lenders
(other than any Lender that has expressly waived in writing its right to
receive its pro rata share thereof) pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.  As to any such payment received by the
Administrative Agent prior to 1:00 P.M. (local time at the Payment Office)
in funds that are immediately available on such day, the Administrative Agent
will use all reasonable efforts to distribute such payment in immediately
available funds on the same day to the Lenders as aforesaid.


 


(b)           Each of the Lenders agrees that, if
it should receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff or banker’s
lien, by counterclaim or cross action, by the enforcement of any right under
the Credit Documents, or otherwise) that is applicable to the payment of the
principal of, or interest on, the Loans, LC Participations or Fees (other than
Fees that are intended to be paid solely to the Administrative Agent or an LC
Issuer and amounts payable to a Lender under Sections 2.8, 2.9 or 2.10), of a
sum that with respect to the related sum or sums received by other Lenders is
in a greater proportion than the total of such Obligation then owed and due to
such Lender bears to the total of such Obligation then owed and due to all of
the Lenders immediately prior to such receipt, then such Lender receiving such
excess payment shall purchase for cash without recourse or warranty from the other
Lenders an interest in the Obligations to such Lenders in such amount as shall
result in a proportional participation by all of the Lenders in such amount, provided that (i) if all or
any portion of such excess amount is thereafter recovered from such Lender,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest, and (ii) the
provisions of this Section 11.6(b) shall not be construed to apply to
any payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement, or any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans to any
assignee or participant pursuant to Section 11.4, other than to the
Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of
this Section 11.6(b) shall apply). 
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.


 


(c)           Notwithstanding anything to the
contrary contained herein, the provisions of the preceding Sections 11.6(a) and
(b) shall be subject to the express provisions of this Agreement that
require, or permit, differing payments to be made to Lenders that are not
Defaulting Lenders, as opposed to Defaulting Lenders.


 


(d)           If any Lender shall fail to make any
payment required to be made by it to the Administrative Agent pursuant to Section 2.3(b),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision of this Agreement), apply any amounts thereafter received by
the Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations to the Administrative Agent under such Sections until all such
unsatisfied obligations are fully paid.


 


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Section 11.7           Governing Law;
Submission to Jurisdiction; Venue; Waiver of Jury Trial.


 


(a)           THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.  TO THE FULLEST
EXTENT PERMITTED BY LAW, THE BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE
STATE OF NEW YORK GOVERNS THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS.  Any legal action or
proceeding with respect to this Agreement or any other Credit Document may be
brought in the Supreme Court of the State of New York sitting in New York
County or in the United States District Court of the Southern District of New
York, and, by execution and delivery of this Agreement, the Borrower hereby
irrevocably accepts for itself and in respect of its Property, generally and
unconditionally, the jurisdiction of the aforesaid courts.  The Borrower hereby further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to the Borrower at its address for notices
pursuant to Section 11.3, such service to become effective 30 days after
such mailing or at such earlier time as may be provided under applicable
law.  Nothing herein shall affect the
right of the Administrative Agent or any Lender to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against the Borrower in any other jurisdiction.


 


(b)           The Borrower hereby irrevocably
waives any objection that it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement or any other Credit Document brought in the courts referred
to in Section 11.7(a) above and hereby further irrevocably waives and
agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.


 


(c)           EACH OF THE PARTIES TO
THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OF THE OTHER CREDIT DOCUMENTS (INCLUDING, WITHOUT LIMITATION, ANY
AMENDMENTS, WAIVERS OR OTHER MODIFICATIONS RELATING TO ANY OF THE FOREGOING),
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.  EACH PARTY HERETO HEREBY (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
PARAGRAPH.


 


Section 11.8           Counterparts.  This Agreement may be executed in any number
of counterparts and by the different parties hereto on 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 agreement.


 


Section 11.9           Integration.  This Agreement, the other Credit Documents
and any separate letter agreements with respect to fees payable to the
Administrative Agent, for its own account and benefit and/or for the account,
benefit of, and distribution to, the Lenders, constitute the entire contract
among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof or thereof.


 


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Section 11.10         Headings Descriptive.  The headings of the several sections and
other portions of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.


 


Section 11.11         Amendment or Waiver.


 


(a)           Neither this Agreement nor any other
Credit Document, nor the terms hereof or thereof, may be amended, changed,
waived or otherwise modified unless such amendment, change, waiver or other
modification is in writing and signed by the Borrower and the Administrative
Agent, and also signed (or consented to in writing by) the Required Lenders, provided that


 


(i)            no change in, or waiver or other modification otherwise affecting,
the amount or time of any scheduled or mandatory reduction in or termination of
the Total Commitment provided for in Section 3.3 to which a Lender shall
be entitled, shall be made without the written consent of each Lender;


 


(ii)           no change, waiver or other modification shall:


 


(A)          increase (1) the Commitment of any Lender hereunder,
without the written consent of such Lender, or (2) the Total Commitment,
without the consent of all of the Lenders;


 


(B)           extend or postpone the Maturity Date or any other maturity
date provided for herein that is applicable to any Loan of any Lender, extend
or postpone any scheduled expiration or termination date provided for herein
that is applicable to a Commitment of any Lender, or extend or postpone the
expiration date of any Letter of Credit as to which such Lender is an LC
Participant beyond the latest expiration date for a Letter of Credit provided
for herein, without the written consent of such Lender;


 


(C)           reduce the principal amount of any Loan made by any Lender,
or reduce the rate or extend the time of payment of, or excuse the payment of,
interest thereon (other than as a result of waiving the applicability of any
post-default increase in interest rates), without the written consent of such
Lender; or


 


(D)          reduce the amount of any Unpaid Drawings as to which any
Lender is an LC Participate, or reduce the rate or extend the time of payment
of, or excuse the payment of, interest thereon (other than as a result of
waiving the applicability of any post-default increase in interest rates),
without the written consent of such Lender; or


 


(E)           reduce the rate or extend the time of payment of, or
excuse the payment of, any Fees to which any Lender is entitled hereunder,
without the written consent of such Lender; and


 


(iii)                               no change,
waiver or other modification or termination shall, without the written consent
of each Lender (other than a Defaulting Lender) affected thereby,


 


(A)          release the Borrower from any obligations as a guarantor of
its Subsidiaries’ obligations under any Credit Document, except in accordance
with the express terms of this Agreement;


 


70

















 


(B)           amend, modify or waive any provision of this Section 11.11,
or Section 9.3, 10.7, 11.1, 11.4 or 11.6, or any other provision of any of
the Credit Documents pursuant to which the consent or approval of all Lenders,
or a number or specified percentage or other required grouping of Lenders is by
the terms of such provision explicitly required;


 


(C)           reduce the percentage specified in, or otherwise modify,
the definition of Required Lenders; or


 


(D)          consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement, except in accordance
with the express terms of this Agreement.


 


Any waiver, consent, amendment or other modification
with respect to this Agreement given or made in accordance with this Section 11.11
shall be effective only in the specific instance and for the specific purpose
for which it was given or made.


 


(b)           No provision of Section 2.4 or
any other provision in this Agreement specifically relating to Letters of
Credit may be amended without the consent of any LC Issuer adversely affected
thereby.


 


(c)           No provision of Article X may be
amended without the consent of the Administrative Agent.


 


Section 11.12         Survival of Indemnities.  All indemnities set forth herein including,
without limitation, in Section 2.8, 2.9, 2.10, 4.5, 10.7 or 11.1 shall
survive the execution and delivery of this Agreement and the making and
repayment of Loans.


 


Section 11.13         Domicile of Loans.  Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender, provided that the Borrower shall not be
responsible for costs arising under Section 2.8 resulting from any such
transfer (other than a transfer pursuant to Section 2.11) to the extent
not otherwise applicable to such Lender prior to such transfer.


 


Section 11.14         Confidentiality.


 


(a)           The Administrative Agent, each LC Issuer
and the Lenders each agrees to maintain the confidentiality of all Confidential
Information (as defined below), except that Confidential Information may be
disclosed (i) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Confidential Information and instructed to keep such Confidential Information
confidential), (ii) to any direct or indirect
contractual counterparty in any swap, hedge or similar agreement (or to any
such contractual counterparty’s professional advisor, so long as such
contractual counterparty (or such professional advisor) agrees to be bound by
the provisions of this Section 11.14, (iii) to
the extent requested by any regulatory authority, (iv) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (v) to any other party
to this Agreement, (vi) to any other creditor
of the Borrower that is a direct or intended beneficiary of any of the Credit
Documents, (vii) in connection with the
exercise of any remedies hereunder or under any of the other Credit Documents,
or any suit, action or proceeding relating to this Agreement or any of the
other Credit Documents or the enforcement of rights hereunder or thereunder, (viii) subject to an agreement containing provisions
substantially the same as those of this Section 11.14, to any assignee of
or participant in, or any prospective assignee of or participant in, any of its
rights or obligations under this Agreement, (ix) with
the consent of the Borrower, or (x) to the
extent 


 


71

















 


such Confidential
Information (A) becomes publicly available other than as a result of a
breach of this Section 11.14, or (B) becomes available to the
Administrative Agent, any LC Issuer or any Lender on a non-confidential basis
from a source other than the Borrower.


 


(b)           As used in this Section, “Confidential
Information” shall mean all information received from the Borrower relating
to the Borrower or its business, other than any such information that is
available to the Administrative Agent, any LC Issuer or any Lender on a
non-confidential basis prior to disclosure by the Borrower, provided that in the case of information received from the
Borrower after the Closing Date, such information is clearly identified at the
time of delivery as confidential.


 


Section 11.15         Lender Register.  The Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this Section 11.15,
to maintain a register (the “Lender Register”) on or in which it will
record the names and addresses of the Lenders, and the Commitments from time to
time of each of the Lenders, the Loans made to the Borrower by each of the
Lenders and each repayment and prepayment in respect of the principal amount of
such Loans of each such Lender.  Failure
to make any such recordation, or (absent manifest error) any error in such
recordation, shall not affect the Borrower’s obligations in respect of such
Loans.  With respect to any Lender, the
transfer of the Commitment of such Lender and the rights to the principal of,
and interest on, any Loan made pursuant to such Commitment shall not be
effective until such transfer is recorded on the Lender Register maintained by
the Administrative Agent with respect to ownership of such Commitment and Loans
and prior to such recordation all amounts owing to the transferor with respect
to such Commitment and Loans shall remain owing to the transferor.  The registration of assignment or transfer of
all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Lender Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment Agreement
pursuant to Section 11.4(c).  The
Borrower agrees to indemnify the Administrative Agent from and against any and
all losses, claims, damages and liabilities of whatsoever nature that may be
imposed on, asserted against or incurred by the Administrative Agent in
performing its duties under this Section 11.15, except to the extent
attributable to the gross negligence or willful misconduct of the
Administrative Agent. The Lender Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.


 


Section 11.16         General Limitation of Liability.  No claim may be made by the Borrower, any Lender,
the Administrative Agent, any LC Issuer or any other Person against the
Administrative Agent, any LC Issuer or any other Lender or the Affiliates,
directors, officers, employees, attorneys or agents of any of them for any
damages other than actual compensatory damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related
to the transactions contemplated by this Agreement or any of the other Credit
Documents, or any act, omission or event occurring in connection therewith; and
the Borrower, each Lender, the Administrative Agent and each LC Issuer hereby,
to the fullest extent permitted under applicable law, waives, releases and
agrees not to sue or counterclaim upon any such claim for any special, consequential
or punitive damages, whether or not accrued and whether or not known or
suspected to exist in its favor.


 


Section 11.17         Limitations on Liability of the LC
Issuers.  The Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any Letter
of Credit with respect to its use of such Letters of Credit.  Neither any LC Issuer nor any of its officers
or directors shall be liable or responsible for: (a) the use that may be
made of any Letter of Credit or any acts or omissions of any beneficiary or
transferee in connection therewith; (b) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (c) payment by an LC Issuer against presentation of documents that
do not comply with the terms of a Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of Credit;
or (d) any other circumstances whatsoever in making or 


 


72

















 


failing to make payment
under any Letter of Credit, except
that the Borrower shall have a claim against an LC Issuer, and an LC Issuer
shall be liable to the Borrower, to the extent of any direct, but not
consequential, damages suffered by the Borrower that the Borrower proves were
caused by (i) such LC Issuer’s willful misconduct or gross negligence in
determining whether documents presented under a Letter of Credit comply with
the terms of such Letter of Credit or (ii) such LC Issuer’s willful
failure to make lawful payment under any Letter of Credit after the
presentation to it of documentation strictly complying with the terms and
conditions of such Letter of Credit.  In
furtherance and not in limitation of the foregoing, an LC Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation.


 


Section 11.18         No Duty.  All attorneys, accountants, appraisers,
consultants and other professional Persons (including, without limitation, the
firms or other entities on behalf of which any such Person may act) retained by
the Administrative Agent or any Lender with respect to the transactions
contemplated by the Credit Documents shall have the right to act exclusively in
the interest of the Administrative Agent or such Lender, as the case may be,
and shall have no duty of disclosure, duty of loyalty, duty of care, or other
duty or obligation of any type or nature whatsoever to the Borrower, to any of
its Subsidiaries, or to any other Person, with respect to any matters within
the scope of such representation or related to their activities in connection
with such representation.  The Borrower
agrees, on behalf of itself and its Subsidiaries, not to assert any claim or
counterclaim against any such Persons with regard to such matters, all such
claims and counterclaims, now existing or hereafter arising, whether known or
unknown, foreseen or unforeseeable, being hereby waived, released and forever
discharged.


 


Section 11.19         Lenders and Agent Not Fiduciary to
Borrower.  The relationship among the
Borrower and its Subsidiaries, on the one hand, and the Administrative Agent,
each LC Issuer and the Lenders, on the other hand, is solely that of debtor and
creditor, and the Administrative Agent, each LC Issuer and the Lenders have no
fiduciary or other special relationship with the Borrower and its Subsidiaries,
and no term or provision of any Credit Document, no course of dealing, no
written or oral communication, or other action, shall be construed so as to
deem such relationship to be other than that of debtor and creditor.


 


Section 11.20         Survival of Representations and
Warranties.  All representations and
warranties herein shall survive the making of Loans and all LC Issuances
hereunder, the execution and delivery of this Agreement, the Notes and the
other documents (the forms of which are attached as Exhibits hereto), the issue
and delivery of the Notes, any disposition thereof by any holder thereof, and
any investigation made by the Administrative Agent or any Lender or any other
holder of any of the Notes or on its behalf. 
All statements contained in any certificate or other document delivered
to the Administrative Agent or any Lender or any holder of any Notes by or on
behalf of the Borrower or of its Subsidiaries pursuant hereto or otherwise
specifically for use in connection with the transactions contemplated hereby
shall constitute representations and warranties by the Borrower hereunder, made
as of the respective dates specified therein or, if no date is specified, as of
the respective dates furnished to the Administrative Agent or any Lender.


 


Section 11.21         Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.


 


Section 11.22         Independence of Covenants.  All covenants hereunder shall be given
independent effect so that if a particular action, event, condition or
circumstance is not permitted by any of such covenants, the fact that it would
be permitted by an exception to, or would otherwise be within the 


 


73

















 


limitations or restrictions
of, another covenant, shall not avoid the occurrence of a Default or an Event
of Default if such action is taken or event, condition or circumstance exists.


 


Section 11.23         Interest Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts that are treated as interest on such
Loan under applicable law (collectively the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) that may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Base Rate to the date
of repayment, shall have been received by such Lender.


 


Section 11.24         Treasury Regulations.  The Borrower acknowledges that the
Administrative Agent and/or one or more of the Lenders may treat the Loans as
part of a transaction that is subject to Treasury Regulation Section 1.6011-4
or Section 301.6112-1, and the Administrative Agent and such Lender or
Lenders, as applicable, may file such IRS forms or maintain such lists and
other records as they may determine is required by such Treasury Regulations.


 


Section 11.25         USA Patriot Act.  Each Lender subject to the USA Patriot Act
hereby notifies the Borrower that pursuant to the requirements of the USA
Patriot Act, it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the USA Patriot Act.


 


[Remainder of page intentionally left blank; signature pages follow.]


 


74
















 


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


 


	
   

  	
   

  	
  THE DAYTON POWER AND LIGHT COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  KEYBANK NATIONAL ASSOCIATION,

  
	
   

  	
   

  	
  as a Lender, LC Issuer and as
  the Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FIFTH THIRD BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


Signature Page


to


The Dayton Power and Light
Company Credit Agreement


 

















 


ANNEX I


 


INFORMATION AS TO LENDERS


 


	
  Name
  of Lender

  	
   

  	
  Commitments

  	
   

  	
  Notice Address

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  KeyBank
  National Association

  	
   

  	
  Commitment:

   

  $80,000,000

  	
   

  	
  KeyBank
  National Association

  127 Public Square

  Cleveland, Ohio 44114

  Facsimile: (216) 689-5962

  Attention: Yvette M. Dyson-Owens

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan
  Chase Bank, N.A.

  	
   

  	
  Commitment:

   

  $70,000,000

  	
   

  	
  JPMorgan
  Chase Bank, N.A.

  10 S. Dearborn, Floor 7

  Mail Code IL1-0010

  Chicago, Illinois 60603

  Facsimile: (312) 385-7096

  Attention: Joyce King

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fifth
  Third Bank

  	
   

  	
  Commitment:

   

  $70,000,000

  	
   

  	
  Fifth
  Third Bank

  5050 Kingsley Drive

  1 MOC 2B

  Cincinnati, Ohio 45263

  



 


E-1

















 


EXHIBIT
A


 


REVOLVING NOTE


 


	
  $

  	
   

  	
  Cleveland, Ohio

  
	
   

  	
   

  	
  , 20    

  



 


FOR VALUE RECEIVED, the
undersigned, THE DAYTON POWER AND LIGHT COMPANY, an Ohio corporation (herein,
together with its successors and assigns, the “Borrower”), hereby
promises to pay to the order of
                                 (the
“Lender”), in lawful money of the United States of America and in
immediately available funds, at the Payment Office (such term and certain other
capitalized terms used herein without definition shall have the meanings
ascribed thereto in the Credit Agreement referred to below) of KeyBank National
Association (the “Administrative Agent”), the principal sum of
                         DOLLARS
AND 00/100 ($                      )
or, if less, the then unpaid principal amount of all Loans made by the Lender
to the Borrower pursuant to the Credit Agreement, on the Maturity Date.


 


The Borrower promises also
to pay interest in like currency and funds at the Payment Office on the unpaid
principal amount of each Loan made by the Lender from the date of such Loan
until paid at the rates and at the times provided in Section 2.7 of the
Credit Agreement.


 


This Note is one of the
Notes referred to in the Credit Agreement, dated as of November 21, 2006,
among the Borrower, the lending institutions from time to time party thereto
(including the Lender), and the Administrative Agent (as the same may from time
to time be amended, restated, supplemented or otherwise modified, the “Credit
Agreement”), and is entitled to the benefits thereof and of the other
Credit Documents.  As provided in the
Credit Agreement, this Note is subject to mandatory prepayment prior to the
Maturity Date, in whole or in part.


 


In case an Event of Default
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Credit Agreement.


 


The
Borrower hereby waives presentment, demand, protest or notice of any kind in
connection with this Note.  No failure to
exercise, or delay in exercising, any rights hereunder on the part of the
holder hereof shall operate as a waiver of any such rights.


 


THIS
NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.


 


THE BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS NOTE
OR ANY OF THE OTHER CREDIT DOCUMENTS (INCLUDING, WITHOUT LIMITATION, ANY
AMENDMENTS, WAIVERS OR OTHER MODIFICATIONS RELATING TO ANY OF THE FOREGOING),
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.


 


IN
WITNESS WHEREOF, the undersigned has duly executed this Note as of the date
first written above.


 


E-2

















 


	
   

  	
   

  	
  THE
  DAYTON POWER AND LIGHT COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


E-3

















 


EXHIBIT
B-1


 


NOTICE OF BORROWING, CONTINUATION OR
CONVERSION


 


	
   

  	
  ,
  200    

  



 


KeyBank National Association,

as Administrative Agent for the Lenders party

to the Credit Agreement referred to below

127 Public Square

Cleveland, Ohio 44114

Attention:  Yvette M. Dyson-Owens


 


Re:          Notice of
Borrowing, Continuation or Conversion


 


Ladies and Gentlemen:


 


[For a Borrowing:


 


The undersigned, The Dayton
Power and Light Company, an Ohio corporation (the “Company”), refers to
the Credit Agreement, dated as of November 21, 2006 (as amended, modified
or supplemented from time to time, the “Credit Agreement,” the terms
defined therein being used herein as therein defined), among the Company, as
Borrower, the lending institutions from time to time party thereto (the “Lenders”),
and KeyBank National Association, as Administrative Agent for such Lenders, and
hereby gives you notice, irrevocably, pursuant to Section 2.3(b) of
the Credit Agreement, that the undersigned hereby requests one or more
Borrowings under the Credit Agreement, and in that connection therewith sets
forth in the schedule attached hereto the information relating to each such
Borrowing (collectively the “Proposed Borrowing”) as required by Section 2.3(b) of
the Credit Agreement.


 


The undersigned hereby
specifies that the Proposed Borrowing will consist of Loans as indicated in the
schedule attached hereto.


 


The undersigned hereby
certifies that the following statements are true on the date hereof, and will
be true on the date of the Proposed Borrowing:


 


(A)          the representations and warranties of the Borrower
contained in the Credit Agreement (other than the representation and warranty
contained in Section 6.9 of the Credit Agreement) and the other Credit
Documents are and will be true and correct in all material respects, before and
after giving effect to the Proposed Borrowing and to the application of the
proceeds thereof, as though made on such date, except to the extent that such
representations and warranties expressly relate to an earlier specified date,
in which case such representations and warranties were true and correct in all
material respects as of the date when made; and


 


(B)           no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof.


 


[For
a Continuation:


 


The undersigned, The Dayton
Power and Light Company, an Ohio corporation (the “Company”), refers to
the Credit Agreement, dated as of November 21, 2006 (as amended, modified
or supplemented from time to time, the “Credit Agreement,” the terms
defined therein being used herein as therein 


 


E-4

















 


defined),
among the Company, as Borrower, the lending institutions from time to time
party thereto (the “Lenders”), and KeyBank National Association, as
Administrative Agent for such Lenders, and hereby gives you notice,
irrevocably, pursuant to Section 2.3(b) of the Credit Agreement, that
the undersigned hereby requests one or more Continuations of Loans, consisting
of one Type of Loan, pursuant to Section 2.3(a) of the Credit
Agreement, and in that connection therewith sets forth in the schedule attached
hereto the information relating to each such Continuation.]


 


[For a Conversion:


 


The undersigned, The Dayton
Power and Light Company, an Ohio corporation (the “Company”), refers to
the Credit Agreement, dated as of November 21, 2006 (as amended, modified
or supplemented from time to time, the “Credit Agreement,” the terms
defined therein being used herein as therein defined), among the Company, as
Borrower, the lending institutions from time to time party thereto (the “Lenders”),
and KeyBank National Association, as Administrative Agent for such Lenders, and
hereby gives you notice, irrevocably, pursuant to Section 2.3(b) of
the Credit Agreement, that the undersigned hereby requests one or more
Conversions of Loans, consisting of one Type of Loan, into Loans of another
Type, pursuant to Section 2.3(a) of the Credit Agreement, and in that
connection therewith sets forth in the schedule attached hereto the information
relating to each such Conversion.]


 


	
   

  	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE
  DAYTON POWER AND LIGHT COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


E-5
















 


BORROWING SCHEDULE


 


Proposed Borrowing #1:


 


	
  Business
  Day

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Interest Period

  	
   

  
	
  of

  	
   

  	
   

  	
   

  	
  Aggregate

  	
   

  	
  if Loans are

  	
   

  
	
  Proposed

  	
   

  	
  Type of

  	
   

  	
  Amount

  	
   

  	
  Eurodollar

  	
   

  
	
  Borrowing

  	
   

  	
  Loans

  	
   

  	
  of Loans

  	
   

  	
  Loans

  	
   

  
	
   

  	
   

  	
  Base
  Rate Loans

  	
   

  	
   

  	
   

  	
  One
  Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Eurodollar
  Loans

  	
   

  	
   

  	
   

  	
  Two
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Three
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  , 200

  	
   

  	
  [Circle one of above]

  	
   

  	
  $

  	
   

  	
   

  	
  Six
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [Circle one of above]

  	
   

  
									



 


Proposed Borrowing #2:


 


	
  Business Day

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Interest Period

  	
   

  
	
  of

  	
   

  	
   

  	
   

  	
  Aggregate

  	
   

  	
  if Loans are

  	
   

  
	
  Proposed

  	
   

  	
  Type of

  	
   

  	
  Amount

  	
   

  	
  Eurodollar

  	
   

  
	
  Borrowing

  	
   

  	
  Loans

  	
   

  	
  of Loans

  	
   

  	
  Loans

  	
   

  
	
   

  	
   

  	
  Base
  Rate Loans

  	
   

  	
   

  	
   

  	
  One
  Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Eurodollar
  Loans

  	
   

  	
   

  	
   

  	
  Two
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Three
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  , 200

  	
   

  	
  [Circle one of above]

  	
   

  	
  $

  	
   

  	
   

  	
  Six
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [Circle one of above]

  	
   

  
									



 


E-6

















 


CONTINUATION SCHEDULE


 


Proposed Continuation #1


[of
the Loans described in the first table below


into
the Loans described in the second table below]


 


	
   

  	
   

  	
   

  	
   

  	
  Aggregate

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Amount

  	
   

  	
  Interest Period

  	
   

  
	
  Date of Loans

  	
   

  	
  Type of Loans

  	
   

  	
  of Loans

  	
   

  	
  of Loans

  	
   

  
	
   

  	
   

  	
  Eurodollar
  Loans

  	
   

  	
   

  	
   

  	
  One
  Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Two
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  , 200

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Three
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  Six
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [Circle one of above]

  	
   

  
									



 


	
   

  	
   

  	
   

  	
   

  	
  Aggregate

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Amount

  	
   

  	
  Interest Period

  	
   

  
	
  Date of Loans

  	
   

  	
  Type of Loans

  	
   

  	
  of Loans

  	
   

  	
  of Loans

  	
   

  
	
   

  	
   

  	
  Eurodollar Loans

  	
   

  	
   

  	
   

  	
  One Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Two Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  , 200

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Three Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  Six Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [Circle one of above]

  	
   

  
									



 


E-7

















 


Proposed Continuation #2


[of
the Loans described in the first table below


into
the Loans described in the second table below]


 


	
   

  	
   

  	
   

  	
   

  	
  Aggregate

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Amount

  	
   

  	
  Interest Period

  	
   

  
	
  Date of Loans

  	
   

  	
  Type of Loans

  	
   

  	
  of Loans

  	
   

  	
  of Loans

  	
   

  
	
   

  	
   

  	
  Eurodollar
  Loans

  	
   

  	
   

  	
   

  	
  One
  Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Two
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  , 200

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Three
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  Six
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [Circle one of above]

  	
   

  
									



 


	
   

  	
   

  	
   

  	
   

  	
  Aggregate

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Amount

  	
   

  	
  Interest Period

  	
   

  
	
  Date of Loans

  	
   

  	
  Type of Loans

  	
   

  	
  of Loans

  	
   

  	
  of Loans

  	
   

  
	
   

  	
   

  	
  Eurodollar
  Loans

  	
   

  	
   

  	
   

  	
  One
  Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Two
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  , 200

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Three
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  Six
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [Circle one of above]

  	
   

  
									



 


E-8

















 


CONVERSION SCHEDULE


 


Proposed Conversion #1


[of
the Loans described in the first table below


into
the Loans described in the second table below]


 


	
   

  	
   

  	
   

  	
   

  	
  Aggregate

  	
   

  	
  Interest Period

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Amount

  	
   

  	
  if Loans are

  	
   

  
	
  Date of Loans

  	
   

  	
  Type of Loans

  	
   

  	
  of Loans

  	
   

  	
  Eurodollar Loans

  	
   

  
	
   

  	
   

  	
  Base
  Rate Loans

  	
   

  	
   

  	
   

  	
  One
  Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Eurodollar
  Loans

  	
   

  	
   

  	
   

  	
  Two
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Three
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  , 200

  	
   

  	
  [Circle one of Above]

  	
   

  	
  $

  	
   

  	
   

  	
  Six
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [Circle one of above]

  	
   

  
									



 


	
   

  	
   

  	
   

  	
   

  	
  Aggregate

  	
   

  	
  Interest Period

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Amount

  	
   

  	
  if Loans are

  	
   

  
	
  Date of Loans

  	
   

  	
  Type of Loans

  	
   

  	
  of Loans

  	
   

  	
  Eurodollar Loans

  	
   

  
	
   

  	
   

  	
  Base Rate Loans

  	
   

  	
   

  	
   

  	
  One Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Eurodollar Loans

  	
   

  	
   

  	
   

  	
  Two Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Three Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  , 200

  	
   

  	
  [Circle one of Above]

  	
   

  	
  $

  	
   

  	
   

  	
  Six Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [Circle one of above]

  	
   

  
									



 


E-9

















 


Proposed Conversion #2


[of
the Loans described in the first table below

into the Loans described in the second table below]


 


	
   

  	
   

  	
   

  	
   

  	
  Aggregate

  	
   

  	
  Interest Period

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Amount

  	
   

  	
  if Loans are

  	
   

  
	
  Date of Loans

  	
   

  	
  Type of Loans

  	
   

  	
  of Loans

  	
   

  	
  Eurodollar Loans

  	
   

  
	
   

  	
   

  	
  Base
  Rate Loans

  	
   

  	
   

  	
   

  	
  One
  Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Eurodollar
  Loans

  	
   

  	
   

  	
   

  	
  Two
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Three
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  , 200

  	
   

  	
  [Circle one of Above]

  	
   

  	
  $

  	
   

  	
   

  	
  Six
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [Circle one of above]

  	
   

  
									



 


	
   

  	
   

  	
   

  	
   

  	
  Aggregate

  	
   

  	
  Interest Period

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Amount

  	
   

  	
  if Loans are

  	
   

  
	
  Date of Loans

  	
   

  	
  Type of Loans

  	
   

  	
  of Loans

  	
   

  	
  Eurodollar Loans

  	
   

  
	
   

  	
   

  	
  Base
  Rate Loans

  	
   

  	
   

  	
   

  	
  One
  Month

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Eurodollar
  Loans

  	
   

  	
   

  	
   

  	
  Two
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Three
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  , 200

  	
   

  	
  [Circle one of Above]

  	
   

  	
  $

  	
   

  	
   

  	
  Six
  Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [Circle one of above]

  	
   

  
									



 


E-10

















 


EXHIBIT
B-2


 


LC REQUEST


 


	
   

  	
  , 20    

  



 


KeyBank
National Association,

as Administrative Agent for the Lenders party

to the Credit Agreement referred to below

127 Public Square

Cleveland, Ohio 44114

Attention:  Yvette M. Dyson-Owens


 


Ladies
and Gentlemen:


 


The undersigned, The Dayton
Power and Light Company, an Ohio corporation (the “Company”), refers to
the Credit Agreement, dated as of November 21, 2006 (as amended, modified
or supplemented from time to time, the “Credit Agreement,” the terms
defined therein being used herein as therein defined), among the Company, as
Borrower, the lending institutions from time to time party thereto (the “Lenders”),
and KeyBank National Association, as Administrative Agent for such Lenders.


 


Pursuant to Section 2.4(b) of
the Credit Agreement, the undersigned hereby requests that KeyBank National
Association, as LC Issuer, issue a Letter of Credit on
                          ,
20     (the “Date of Issuance”) in the aggregate
face amount of
$                          ,
for the account of the Borrower.


 


The beneficiary of the
requested Letter of Credit will be
                    ,
and such Letter of Credit will be in support of                       
and will have a stated termination date of
                          .


 


The undersigned hereby
certifies that the following statements are true on the date hereof, and will
be true on the Date of Issuance:


 


(A)          the representations and warranties of the Credit Parties
contained in the Credit Agreement (other than the representation and warranty
contained in Section 6.9 of the Credit Agreement) and the other Credit
Documents are and will be true and correct in all material respects, before and
after giving effect to the issuance of the Letter of Credit, as though made on
such date, except to the extent that such representations and warranties
expressly relate to an earlier specified date, in which case such
representations and warranties were true and correct in all material respects
as of the date when made; and


 


(B)           no Default or Event of Default has occurred and is
continuing, or would result after giving effect to the issuance of the Letter
of Credit requested hereby.


 


Copies of all documentation
with respect to the supported transaction are attached hereto.


 


 


	
   

  	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE
  DAYTON POWER AND LIGHT COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  



 


E-11
















 


EXHIBIT
C


 


COMPLIANCE CERTIFICATE


 


For Fiscal Quarter ended
                                   


 


THE UNDERSIGNED HEREBY CERTIFIES THAT:


 


(1)           I am the duly elected
                                              
of THE DAYTON POWER AND LIGHT COMPANY, an Ohio corporation (the “Borrower”);


 


(2)           I am familiar with the terms
of that certain Credit Agreement, dated as of November 21, 2006, among the
undersigned, the Lenders, as defined in the Credit Agreement, and KeyBank
National Association, as Administrative Agent (as the same may from time to
time be amended, restated, supplemented or otherwise modified, the “Credit
Agreement”, the terms defined therein being used herein as therein
defined), and the terms of the other Credit Documents, and I have made, or have
caused to be made under my supervision, a review in reasonable detail of the
transactions and condition of the Borrower and its Subsidiaries during the
accounting period covered by the attached financial statements;


 


(3)           The review described in
paragraph (2) above did not disclose, and I have no knowledge of, the
existence of any condition or event that constitutes or constituted a Default
or Event of Default, at the end of the accounting period covered by the
attached financial statements or as of the date of this Certificate;


 


(4)           The Borrower hereby
represents that the representations and warranties made by the Borrower
contained in the Credit Agreement (other than the representation and warranty
contained in Section 6.9 of the Credit Agreement) and each other Credit
Document are true and correct in all material respects as though made on and as
of the date hereof, except to the extent that such representations and
warranties expressly relate to an earlier specified date, in which case such
representations and warranties were true and correct in all material respects
as of the date when made; and


 


(5)           Set forth on Attachment I
hereto are calculations of the covenants set forth in Sections 8.5 of the
Credit Agreement, which calculations show compliance with the terms thereof.


 


IN WITNESS WHEREOF, I have
signed this certificate on
                              ,
20    .


 


	
   

  	
  THE
  DAYTON POWER AND LIGHT COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


E-12

















 


EXHIBIT
D


 


CLOSING CERTIFICATE


 


Pursuant to Section 5.1(j) of the
Credit Agreement, dated as of November 21, 2006 (the “Credit Agreement”;
all capitalized terms used herein have the meaning given to them in the Credit
Agreement unless otherwise defined herein), among THE DAYTON POWER AND LIGHT
COMPANY, an Ohio corporation (the “Borrower”), the lending institutions
party thereto (collectively, the “Lenders”) and KEYBANK NATIONAL
ASSOCIATION, as administrative agent for the Lenders under the Credit Agreement
(“Agent”), the undersigned, being the duly elected, qualified and acting
                                          
of the Borrower hereby certifies on behalf of the Borrower as follows:


 


1.             all conditions precedent set
forth in Section 5.1 of the Credit Agreement have been satisfied;


 


2.             both before and after giving
effect to any Borrowings made on the date hereof and the application of the
proceeds thereof, no Default or Event of Default has occurred or is continuing;
and


 


3.             both before and after giving
effect to any Borrowings made on the date hereof and the application of the
proceeds thereof, all representations and warranties of the Borrower contained
in the Credit Agreement and in the other Credit Documents are true and correct
in all material respects with the same effect as though such representations
and warranties had been made on and as of the date hereof, except that, as to
any such representations and warranties that expressly relate to an earlier
specified date, such representations and warranties are only represented as
having been true and correct in all material respects as of the date when made.


 


IN WITNESS WHEREOF, the
undersigned has executed this Certificate on November 21, 2006.


 


	
   

  	
  THE
  DAYTON POWER AND LIGHT COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


E-13

















 


EXHIBIT
E


 


ASSIGNMENT AGREEMENT


 


DATE:                 


 


Reference is made to the
Credit Agreement described in Item 2 of Annex I annexed hereto (as the same may
from time to time be amended, restated, supplemented or otherwise modified, the
“Credit Agreement”).  Unless
defined in Annex I attached hereto, terms defined in the Credit Agreement are
used herein as therein defined.


 


                            
(the “Assignor”) and
                            
(the “Assignee”) hereby agree as follows:


 


1.             The Assignor hereby sells
and assigns to the Assignee without recourse and without representation or
warranty (other than as expressly provided herein), and the Assignee hereby
purchases and assumes from the Assignor, that interest in and to all of the
Assignor’s rights and obligations under the Credit Agreement as of the date
hereof that represents the percentage interest specified in Item 4 of Annex I
(the “Assigned Share”) of all of Assignor’s outstanding rights and
obligations under the Credit Agreement indicated in Item 4 of Annex I,
including, without limitation, all rights and obligations with respect to the
Assigned Share of the Assignor’s Commitment and of the Loans and the Notes held
by the Assignor.  After giving effect to
such sale and assignment, the Assignee’s Commitment will be as set forth in
Item 4 of Annex I.


 


2.             The Assignor (i) represents
and warrants that it is duly authorized to enter into and perform the terms of
this Assignment Agreement, that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest is free and
clear of any liens or security interests; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit
Agreement or the other Credit Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or
the other Credit Documents or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or the other
Credit Documents or any other instrument or document furnished pursuant
thereto.


 


3.             The Assignee (i) represents
and warrants that it is duly authorized to enter into and perform the terms of
this Assignment Agreement; (ii) confirms that it has received a copy of
the Credit Agreement and the other Credit Documents, together with copies of
the financial statements referred to therein and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into this Assignment Agreement; (iii) agrees that it will,
independently and without reliance upon the Administrative Agent, the Assignor
or any other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iv) appoints and
authorizes each Agent to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement and the other Credit Documents
as are delegated to such Agent by the terms thereof, together with such powers
as are reasonably incidental thereto; [and] (v) agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Credit Agreement are required to be performed by it as 


 


E-14

















 


a
Lender[; and (vi) to the extent legally entitled to
do so, attaches the forms described in Section 4.5(b)(ii) of the
Credit Agreement](1).


 


4.             Following the execution of
this Assignment Agreement by the Assignor and the Assignee, an executed
original hereof (together with all attachments) will be delivered to the
Administrative Agent. The effective date of this Assignment Agreement shall be
the date of execution hereof by the Assignor, the Assignee and the consent
hereof by the Administrative Agent and the receipt by the Administrative Agent
of the administrative fee referred to in Section 11.4(c) of the
Credit Agreement, unless otherwise specified in Item 5 of Annex I hereto (the “Settlement
Date”).


 


5.             Upon the delivery of a fully
executed original hereof to the Administrative Agent, as of the Settlement
Date, (i) the Assignee shall be a party to the Credit Agreement and, to
the extent provided in this Assignment Agreement, shall have the rights and
obligations of a Lender thereunder and under the other Credit Documents and (ii) the
Assignor shall, to the extent provided in this Assignment Agreement, relinquish
its rights and be released from its obligations under the Credit Agreement and
the other Credit Documents.


 


6.             It is agreed that upon the
effectiveness hereof, the Assignee shall be entitled to (x) all interest
on the Assigned Share of the Loans at the rates specified in Item 6 of Annex I,
and (y) all Facility Fees (if applicable) on the Assigned Share of the
Commitment at the rate specified in Item 7 of Annex I, that, in each case,
accrue on and after the Settlement Date, such interest and, if applicable,
Facility Fees, to be paid by the Administrative Agent, upon receipt thereof
from the Borrower, directly to the Assignee. It is further agreed that all
payments of principal made by the Borrower on the Assigned Share of the Loans
that occur on and after the Settlement Date will be paid directly by the
Administrative Agent to the Assignee. 
Upon the Settlement Date, the Assignee shall pay to the Assignor an
amount specified by the Assignor in writing that represents the Assigned Share
of the principal amount of the respective Loans made by the Assignor pursuant
to the Credit Agreement that are outstanding on the Settlement Date, net of any
closing costs, and that are being assigned hereunder. The Assignor and the
Assignee shall make all appropriate adjustments in payments under the Credit
Agreement for periods prior to the Settlement Date directly between themselves
on the Settlement Date.


 


7.             THIS ASSIGNMENT AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.


 


*  *  *


 


IN WITNESS WHEREOF, the
parties hereto have caused this Assignment Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first above
written.


 




	
  [NAME OF ASSIGNOR],

  	
   

  	
  [NAME OF ASSIGNEE],

  
	
  as Assignor

  	
   

  	
  as Assignee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  






 






(1)           If the Assignee is organized
under the laws of a jurisdiction outside the United States.


 


E-15

















 


[Consented to](2) and Accepted:


 


	
  KEYBANK
  NATIONAL ASSOCIATION,

  	
   

  
	
  as Administrative Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  [Consented
  to:](3)

  	
   

  
	
   

  	
   

  
	
  THE
  DAYTON POWER AND LIGHT COMPANY

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  



 






(2)           To be added only if the
consent of the Administrative Agent is required by the terms of the Credit
Agreement.


(3)           To be added only if the
consent of the Borrower is required by the terms of the Credit Agreement.


 


E-16

















 


ANNEX I


TO


ASSIGNMENT AND ASSUMPTION AGREEMENT


 


1.             The Borrower:


 


THE DAYTON POWER AND LIGHT COMPANY


 


2.             Name and Date
of Credit Agreement:


 


Credit Agreement, dated as of November 21,
2006, among The Dayton Power and Light Company, the Lenders from time to time
party thereto, and KeyBank National Association, as Administrative Agent.


 


3.             Date of
Assignment Agreement:


 


                    ,
            


 


4.             Amounts (as of
date of item #3 above):


 


	
   

  	
   

  	
  Commitment

  	
   

  	
  Loans

  	
   

  
	
  Aggregate Amount for all Lenders

  	
   

  	
  $

  	
        

  	
   

  	
  $

  	
        

  	
   

  
	
  Assigned Share

  	
   

  	
        

  	
  %

  	
        

  	
  %

  
	
  Amount of Assigned Share

  	
   

  	
  $

  	
        

  	
   

  	
  $

  	
        

  	
   

  
	
  Amount Retained by Assignor

  	
   

  	
  $

  	
        

  	
   

  	
  $

  	
        

  	
   

  



 


5.             Settlement
Date:


 


                    ,
            


 


	
  6.             Rate of Interest

  	
   

  
	
  to
  the Assignee:

  	
  As set forth in
  Section 2.7 of the Credit Agreement (unless otherwise agreed to by the
  Assignor and the Assignee).(4)

  
	
   

  	
   

  
	
  7.             Fees:

  	
  As set forth in
  Section 3.1(a), (b) and (c) of the Credit Agreement (unless
  otherwise agreed to by the Assignor and the Assignee).(5)

  



 






(4)           The Borrower and the Administrative Agent shall
direct the entire amount of the interest to the Assignee at the rate set forth
in Section 2.7 of the Credit Agreement, with the Assignor and Assignee
effecting any agreed upon sharing of interest through payments by the Assignee
to the Assignor.


(5)           The Borrower and the Administrative Agent shall
direct the entire amount of the Fees payable to the Assignor to the Assignee
pursuant to Sections 3.1(a), (b) and (c) of the Credit Agreement at
the respective rates set forth in the Credit Agreement, with the Assignor and
the Assignee effecting any agreed upon sharing of Facility Fees through payment
by the Assignee to the Assignor.


 


E-17

















 


8.             Notices:


 




	
  ASSIGNOR:

  	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Attention:

  
	
  Telephone
  No.:

  	
   

  	
  Telephone
  No.:

  
	
  Facsimile
  No.:

  	
   

  	
  Facsimile
  No.:

  






 


9.             Payment
Instructions:


 




	
  ASSIGNOR:

  	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ABA
  No.

  	
   

  	
  ABA
  No.

  
	
  Account
  No.:

  	
   

  	
  Account
  No.:

  
	
  Reference:

  	
   

  	
  Reference:

  
	
  Attention:

  	
   

  	
  Attention:

  
	
  Telephone
  No.:

  	
   

  	
  Telephone
  No.:

  
	
  Facsimile
  No.:

  	
   

  	
  Facsimile
  No.:

  






 


E-18

















 


EXHIBIT
F


 


(Legal Opinion of General
Counsel of the Borrower)


 


See attached.


 


E-19
















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
   

  	
   

  
	
   

  	
   

  



 

















 


CLOSING CERTIFICATE


 


Pursuant to Section 5.1(j) of the
Credit Agreement, dated as of November 21, 2006 (the “Credit Agreement”;
all capitalized terms used herein have the meaning given to them in the Credit
Agreement unless otherwise defined herein), among THE DAYTON POWER AND LIGHT
COMPANY, an Ohio corporation (the “Borrower”), the lending institutions
party thereto (collectively, the “Lenders”) and KEYBANK NATIONAL
ASSOCIATION, as administrative agent for the Lenders under the Credit Agreement
(“Agent”), the undersigned, being the duly elected, qualified and acting
Treasurer of the Borrower hereby certifies on behalf of the Borrower as
follows:


 


1.             all conditions precedent set forth in Section 5.1
of the Credit Agreement have been satisfied;


 


2.             both before and after giving effect to any Borrowings
made on the date hereof and the application of the proceeds thereof, no Default
or Event of Default has occurred or is continuing; and


 


3.             both before and after giving effect to any Borrowings
made on the date hereof and the application of the proceeds thereof, all
representations and warranties of the Borrower contained in the Credit
Agreement and in the other Credit Documents are true and correct in all
material respects with the same effect as though such representations and
warranties had been made on and as of the date hereof, except that, as to any
such representations and warranties that expressly relate to an earlier
specified date, such representations and warranties are only represented as
having been true and correct in all material respects as of the date when made.


 


IN WITNESS WHEREOF, the
undersigned has executed this Certificate on November 21, 2006.


 


	
   

  	
  THE
  DAYTON POWER AND LIGHT COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:
   Joseph R. Boni III

  
	
   

  	
  Title:
     Treasurer

  



 

















 


November 21, 2006


 


KeyBank
National Association


as
Administrative Agent under the


Credit
Agreement referred to below


 


-and-


 


Each
of the Lenders a party to


the
Credit Agreement referred


to
below


 


Ladies
and Gentlemen:


 


I
am the Vice President, General Counsel and Corporate Secretary of The Dayton
Power and Light Company, an Ohio corporation (the “Company”).  In such capacity, I have reviewed the Credit
Agreement dated as of November 21, 2006 (the “Credit Agreement”) among the
Company, the lending institutions party thereto (the “Lenders”) and KeyBank
National Association, as Administrative Agent.


 


I
am rendering this opinion to you, at the request of the Company, pursuant to Section 5.1(g) of
the Credit Agreement.  Unless otherwise
defined herein, terms defined in the Credit Agreement are used herein as
therein defined.


 


In
connection with this opinion, I have examined the following:


 


(i)            the
Credit Agreement;


 


(ii)           the
separate promissory notes issued on the date hereof (the “Notes” and, together
with the Credit Agreement, the “Loan Documents”) payable to the order of
certain of the Lenders executed and delivered by the Company pursuant to Section 5.1(b) of
the Credit Agreement; and


 


(iii)          such
corporate records of the Company, such certificates of officers of the Company
and of governmental authorities, and such matters of law as I have considered
necessary under the circumstances.


 

















 


In
rendering this opinion, I have assumed the genuineness of all signatures (other
than the signatures of the officers of the Company executing the Loan Documents
on behalf of the Company) and the authenticity of all documents submitted to me
as originals and the conformity to the original of all documents submitted to
me as certified or photostatic copies. 
Moreover, I have assumed the following:


 


A.            each
certificate issued by any governmental authority is accurate, correct, complete
and authentic;


 


B.            all
natural persons are legally competent and have sufficient legal capacity;


 


C.            each
of the parties to the Loan Documents (other than the Company) has the requisite
power and authority to execute, deliver and perform each of the Loan Documents
to which it is a party, and each of the Loan Documents has been duly
authorized, executed and delivered by each of the parties thereto (other than
the Company);


 


D.            each of the Loan
Documents constitutes a legal, valid and binding obligation of each of the
parties thereto (other than the Company), enforceable against such party in
accordance with its terms;


 


E.             any
required consent, approval or authorization of, notice or declaration to,
license from, or filing or registration with any governmental authority which
any party to the Loan Documents (other than the Company) is required to obtain,
give or make has been duly obtained, given or made, as appropriate, and any
applicable notice or appeal period has passed;


 


F.             except
as set forth in the Loan Documents and the other agreements, documents and
instruments executed and delivered in connection therewith, there is no
agreement or understanding (written or oral) between or among any of the
parties to the Loan Documents, and there is no usage of trade or course of
prior dealing between or among such parties, which would, in either case,
define, supplement, modify or qualify the terms of any of the Loan Documents;


 


G.            the
conduct of the parties to the Loan Documents has complied with any requirement
of good faith, fair dealing and conscionability; such parties will perform
their obligations thereunder 


 


2

















 


reasonably, in good faith and with fair dealing; and such parties will
act reasonably, in good faith and with fair dealing in taking action,
exercising discretion or making determinations thereunder; and


 


H.            there
has not been any mutual mistake of fact, fraud, duress or undue influence in
connection with the execution and delivery of the Loan Documents.


 


In
addition, I have assumed the accuracy and correctness of (i) all
statements of fact contained in certificates of officers of the Company, (ii) all
statements of fact contained in certificates of governmental authorities and (iii) all
statements of fact and factual representations and warranties contained in the
Loan Documents.  I have not reviewed the dockets
or records of any court or other governmental authority.  Nothing contrary to the facts contained in
such certificates, statements or representations and warranties, however, has
come to my attention. Whenever this opinion with respect to the existence or
absence of facts is stated to be based upon my knowledge or awareness, it is
intended to signify that no information has come to my attention that would
give me actual knowledge of the existence or absence of such facts.  However, I have not undertaken any
independent investigation to determine the existence or absence of such facts,
and no inference as to my knowledge of the existence or absence of such facts
should be drawn from my participation in the transactions contemplated by the
Credit Agreement.


 


My
opinion is limited solely to matters governed by the laws of the State of Ohio
and the federal laws of the United States.


 


Based
upon, and subject to, the foregoing, it is my opinion that:


 


(a)           The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Ohio with the requisite corporate power and authority to
execute and deliver, and to perform its obligations under, the Loan Documents
and to conduct the business in which it is now engaged.


 


(b)           The execution, delivery and
performance by the Company of the Loan Documents has been duly authorized by
all necessary corporate action on its part and does not: (i) violate or
contravene the Articles of Incorporation or Regulations of the Company; (ii) violate
or contravene any applicable law, rule or regulation of the State of Ohio
or any applicable federal law, rule or regulation or any order, writ,
judgment, injunction, decree or award known to me which is binding on the
Company or any of its Subsidiaries; or (iii) violate or contravene any
material indenture, instrument or 


 


3

















 


agreement
to which the Company or any of its Subsidiaries is a party or is subject or by
which the Company or any of its Subsidiaries or any of their properties is
bound or conflict with or constitute a default under any such indenture,
instrument or agreement or result in, or require, the creation or imposition of
any Lien in or on any property of the Company or any of its Subsidiaries
pursuant to any such indenture, instrument or agreement.


 


(c)           Each of the Loan Documents has been
duly executed and delivered by the Company and constitutes under the laws of
the State of Ohio and the federal laws of the United States a legal, valid and
binding obligation of the Company, enforceable in accordance with its terms.


 


(d)           No authorization
from, approval or consent of, notice or declaration to, license from, or
registration or filing with, any governmental authority or regulatory body of
the State of Ohio or any federal governmental authority or regulatory body is
required on the part of the Company in connection with the execution and
delivery by the Company of the Loan Documents or the performance by the Company
of its obligations thereunder or the legality, validity, binding effect or
enforceability of any of the Loan Documents, other than authorizations and
approvals that have been obtained and are in full force and effect.


 


(e)           Neither the Company nor any
Subsidiary is a “holding company” within the meaning of the Public Utility
Holding Company Act of 2005.


 


(f)            Other than as set forth in Schedule
6.5 to the Credit Agreement, I am not aware of any action, suit or proceeding
before or by any court, any other governmental authority or any arbitration
panel pending or threatened against or affecting the Company or any of its
Subsidiaries which would have a Material Adverse Effect or which seeks to
restrain or enjoin, or questions the execution, delivery or performance of, the
Loan Documents.


 


(g)           The borrowings by the Borrower under
the Credit Agreement and the application of the proceeds thereof as provided in
the Credit Agreement will not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.


 


(h)           The Borrower is not required to
register as an “investment company” (under, and as defined in, the Investment
Company Act of 1940, as amended (the “1940 Act”)) and is not a company
controlled by a company required to register as such under the 1940 Act.


 


4

















 


(i)            The Borrower is regulated as a
public utility by the Federal Energy Regulatory Commission and by the Public
Utilities Commission of Ohio.


 


This
opinion is subject to the following qualifications and limitations:


 


(1)           The
enforceability of the Loan Documents may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization, moratorium,
rearrangement, liquidation, conservatorship or other laws affecting the rights
of creditors generally.


 


(2)           The
enforceability of the Loan Documents and the availability of specific
performance, injunctive relief and other forms of equitable relief are subject
to general principles of equity (regardless of whether considered in a
proceeding in equity or at law), commercial reasonableness, public policy and
conscionability.


 


(3)           No opinion is
expressed with respect to the enforceability under the laws of the State of
Ohio of any provision of the Loan Documents which purports to require payment or
reimbursement of attorneys’ fees or litigation expenses of another party.


 


(4)           No opinion is
expressed with respect to the title (or the quality or character thereof) to
any property or the existence or absence of any lien or encumbrance thereon.


 


(5)           No opinion is
expressed with respect to any provision of the Loan Documents that purports to:


 


(i)            release,
exculpate, hold harmless, exempt a party from, require indemnification or
contribution or prohibit future business activity to the extent such release,
exculpation, hold harmless, exemption, indemnity, contribution or prohibition
is contrary to public policy;


 


(ii)           provide
the right to exercise remedies upon the occurrence of a non-material breach of
the Loan Documents (including material breaches of non-material provisions
thereof);


 


5

















 


(iii)          define,
waive or set standards for good faith, reasonableness, commercial
reasonableness, fair dealing or diligence;


 


(iv)          govern
the election of remedies or provide that remedies are cumulative; or


 


(v)           require
the payment or reimbursement of any fee, cost or expense that may be deemed to
be unreasonable in nature or amount.


 


(6)           No opinion is
expressed with respect to:


 


(i)            compliance with any registration,
filing, notification, anti-fraud or other provision of any federal or state
securities law, rule or regulation;


 


(ii)           the enforceability of (x) provisions
which purport to establish evidentiary standards; (y) provisions relating
to waiver of rights or remedies (or the delay or omission of enforcement
thereof), disclaimers, liability limitations, releases of legal or equitable
rights (including the right to a jury trial), submission to the jurisdiction
and venue of any court, liquidated damages (including provisions which may
operate as a penalty) or the creation of rights and remedies not permitted
under applicable law or contrary to public policy; or (z) provisions which
purport to prohibit, restrict or limit the ability of a person to transfer
rights or interests in property;


 


(iii)          the enforceability of any provision
that purports to preclude amendment or modification of the Loan Documents
orally or through conduct, custom or course of performance, action or dealing;


 


(iv)          matters relating to employee benefit
laws and regulations (including the Employee Retirement Income Security Act of
1974, as amended) or federal, state or local tax laws and regulations;


 


(v)           any provision of the Loan Documents
which requires the payment of interest on interest; or


 


6

















 


(vi)          federal or state antitrust, unfair
competition or similar laws and regulations.


 


No opinion may be inferred or implied beyond the matters expressly
stated herein.  The opinions that are
expressed herein are solely for your benefit in connection with the
transactions contemplated by the Credit Agreement and may not be relied upon in
any manner for any other purpose or by any other person (other than your
permitted assigns or participants under the Credit Agreement).  This opinion is as of its date, and I
disclaim any undertaking or obligation to advise you of changes that hereafter
may be brought to my attention.


 


Very truly yours,


 


 


7

















 


THE DAYTON POWER AND LIGHT COMPANY


 


CORPORATE SECRETARY’S CERTIFICATE


 


 


Pursuant to Sections 5.1(d),
(e) and (f) of the Credit Agreement, dated as of November 21,
2006 (the “Credit Agreement”; all capitalized terms used herein have the
meaning given to them in the Credit Agreement unless otherwise defined herein),
among THE DAYTON POWER AND LIGHT COMPANY, an Ohio corporation (the “Borrower”),
the lending institutions party thereto (collectively, the “Lenders”) and
KEYBANK NATIONAL ASSOCIATION, as administrative agent for the Lenders under the
Credit Agreement (“Agent”), I, Miggie E. Cramblit, the duly elected and
qualified Vice President, General Counsel and Corporate Secretary of the
Borrower, do hereby certify as follows:


 


1.             Attached hereto as Exhibit A-1 is a true, correct
and complete copy of a certain resolution adopted by the Board of Directors of
the Borrower at a meeting duly called and held on November 16, 2006, at
which a quorum was present and acting throughout, that grant the authority for
officers to approve the Credit Documents, and such resolution has not
thereafter been modified or rescinded and is in full force and effect on the
date hereof.  Attached as Exhibit A-2
hereto are true, correct and complete copies of all of the other documents
evidencing other necessary corporate action, governmental approvals or other
consents or approvals with respect to the execution, delivery and performance
by the Borrower of the Credit Documents.


 


2.             The person named below is on the date hereof, and has
been at all times pertinent hereto, a duly elected, qualified and acting
officer of the Borrower, holding the office set forth opposite his name, and
the signature appearing opposite the name of such person is his genuine
signature.  Furthermore, said officer
shall be considered to be an Authorized Officer who is authorized to sign the
Credit Documents and any other documents to which the Borrower is a party.  You may rely on the authority granted in this
certificate until notified in writing by the Borrower of any change.


 


	
  Name

  	
   

  	
  Title

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Joseph
  R. Boni III

  	
   

  	
  Treasurer

  	
   

  	
   

  



 


 


3.             Attached hereto as Exhibit B
is a true, correct and complete original copy of the Amended Articles of
Incorporation of the Borrower and all amendments thereto, certified by the Ohio
Secretary of State.  There has been no
amendment to the Amended Articles of Incorporation of the Borrower since the
date of the Ohio Secretary of State’s certificate attached hereto as Exhibit B,
and the Amended Articles of Incorporation of the Borrower are in full force and
effect as of the date hereof.


 
















 


4.             Attached hereto as Exhibit C is a true, correct and
complete copy of the Regulations of the Borrower, which have not been modified
since April 9, 1981, and which are in full force and effect as of the date
hereof.


 


5.             Attached hereto as Exhibit D is a true, correct and
complete copy of a Good Standing Certificate from the Ohio Secretary of State
dated as of November     , 2006, certifying the good
standing of the Borrower.


 


IN WITNESS WHEREOF, the
undersigned has signed this certificate as of this 21st day of
November, 2006.


 


 


	
   

  	
   

  
	
   

  	
  Miggie E. Cramblit

  
	
   

  	
  Vice President, General
  Counsel and Corporate Secretary

  



 


The person named below is
on the date hereof, and has been at all times pertinent hereto, a duly elected,
qualified and acting officer of the Borrower, holding the office or offices set
forth opposite her name and the signature appearing opposite the name of such
person is her genuine signature. 
Furthermore, said officer shall be considered to be an Authorized Officer
who is authorized to sign the Credit Documents to which the Borrower is a
party.  You may rely on the authority
granted in this certificate until notified in writing by the Borrower of any
change.


 


	
  Name

  	
   

  	
  Title

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Miggie E. Cramblit

  	
   

  	
  Vice President, General
  Counsel and Corporate Secretary

  	
   

  	
   

  



 


 


	
   

  	
   

  
	
   

  	
  Joseph R. Boni III

  
	
   

  	
  Treasurer

  



 

















 


Exhibit A-1


 

















 


Exhibit A-2


 

















 


Exhibit B


 

















 


Exhibit C


 

















 


Exhibit D


 
















 


SCHEDULE 6.1


 


SUBSIDIARIES


 


The
Borrower holds shares of interest in the following Subsidiaries, all of which
are wholly-owned:


 


(a)                                  DPL RTC
Management Company, an Ohio corporation that owned and managed regulatory
transition fees.  It currently does no business.


 


(b)                                 DPL GTC
Management Company, an Ohio corporation that owned and managed customer
transition fees.  It currently does no
business.


 


(c)                                  DPL Finance
Company, Inc., a Delaware corporation that provides financing
opportunities among affiliated companies.


 


(d)                                 DPL EM, LLC, a
Delaware limited liability company that owns and manages emission credits.


 

















 


SCHEDULE 6.5


 


PENDING OR THREATENED
LITIGATION, ARBITRATIONS, GOVERNMENTAL

INVESTIGATIONS, PROCEEDINGS OR INQUIRIES


 


	
  A.

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Sierra
  Club v. The Dayton Power and Light Company

  
	
   

  	
  (“DP&L”)

  
	
   

  	
   

  
	
  Court:

  	
  U.S.
  District Court for the Southern District of Ohio

  
	
   

  	
   

  
	
  Case
  No.:

  	
  04-CV-905

  
	
   

  	
   

  
	
  Filing
  Date:

  	
  September 21,
  2004

  



 


This
is a civil action which, as amended, covers alleged violations of the Clean Air
Act at the Stuart Electric Generating Station. 
Discovery is pending, and DP&L and its partners intend to vigorously
defend this matter.


 


	
  B.

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  South
  Dayton Landfill

  
	
   

  	
   

  
	
  Agency:

  	
  United
  States Environmental Protection Agency (“USEPA”)

  
	
   

  	
   

  
	
  Issue:

  	
  Superfund
  Site

  
	
   

  	
   

  
	
  Alleged Damages:

  	
  Estimated
  clean-up cost is unknown.

  



 


USEPA
alleges DP&L is a potentially responsible party among numerous others and
may share in the cost of the clean-up activities.  DP&L has not joined the PRP group formed
for this site because available information does not demonstrate that DP&L
contributed hazardous waste to this site.


 


	
  C.

  	
   

  
	
   

  	
   

  
	
  Matter:

  	
  Investigation
  by Public Utilities Commission of Ohio (“PUCO”)

  
	
   

  	
   

  
	
  Agency:

  	
  PUCO

  
	
   

  	
   

  
	
  Respondent:

  	
  DP&L
  and other public utilities

  
	
   

  	
   

  
	
  Filing
  Date:

  	
  March 20,
  2003

  



 

















 


	
  Issue:

  	
  Desirability,
  feasibility and timing for declaring retail ancillary, metering, billing
  and/or collection services are competitive retail electric services in Ohio
  that consumers may obtain from any supplier

  



 


DP&L
has filed its comments with this case. 
The PUCO has not issued findings or orders to date.


 


	
  D.

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  DP&L,
  DPL Inc. and MVE, Inc. v. Forster, et al.

  
	
   

  	
   

  
	
  Court:

  	
  Montgomery
  County Court of Common Pleas

  
	
   

  	
   

  
	
  Case
  No.

  	
  04-CV-5657

  
	
   

  	
   

  
	
  Filing
  Date:

  	
  August 24,
  2004

  
	
   

  	
   

  
	
  Issue:

  	
  DP&L,
  its corporate and affiliate filed this action in the Montgomery County Court
  of Common Pleas, Dayton, Ohio, asserting legal claims against
  Messrs. Forster and Koziar and Ms. Muhlenkamp relating to the
  termination of the Valley Partners Agreements, challenging the validity of
  the purported amendments to the deferred compensation plans and to the
  employment and consulting agreements with Messrs. Forster and Koziar and
  Ms. Muhlenkamp, and with the propriety of the distributions from the
  plans to these defendants. Discovery is pending. Trial is scheduled to
  commence April 30, 2007.

  
	
   

  	
   

  
	
  E.

  	
   

  
	
   

  	
   

  
	
  Matter:

  	
  Pending
  informal inquiries by Securities and Exchange Commission

  
	
   

  	
  Pending
  investigation by U.S. Attorney’s Office for Southern District of Ohio assisted
  by FBI

  
	
   

  	
   

  
	
  Issue:

  	
  The
  recent resignation and/or retirement of selected executive officers and
  matters raised in the internal memorandum of DP&L’s previous controller
  to DPL Inc.’s Board of Directors including, but not limited to, allegations
  concerning disclosure and reporting matters, executive compensation,
  destruction of DP&L’s property and violation of fiduciary
  responsibilities

  
	
   

  	
   

  
	
  Amount
  at risk:

  	
  Unknown

  



 


2

















 


DPL
Inc. and DP&L are currently subject to investigations/inquiries by the SEC
and the FBI on behalf of the U.S. Attorney’s Office and have pledged their
complete cooperation.


 


	
  F.

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Tremont
  City Landfill

  
	
   

  	
   

  
	
  Agency:

  	
  USEPA

  
	
   

  	
   

  
	
  Issue:

  	
  Superfund
  Site

  
	
   

  	
   

  
	
  Alleged
  Damages:

  	
  Estimated
  clean-up cost is unknown.

  



 


USEPA
alleges DP&L is a potentially responsible party among numerous others and
may share in the cost of the clean up activities.  DP&L has not joined the PRP group formed
for this site because available information does not demonstrate that DP&L
contributed hazardous waste to this site.


 


G.


 


	
  Name:

  	
  Forster
  et al. v. AlpInvest/Lexington 2005, LLC, et al.

  
	
   

  	
   

  
	
  Court:

  	
  New
  York state court

  
	
   

  	
   

  
	
  Case
  No.:

  	
  05/600926

  
	
   

  	
   

  
	
  Filing
  Date:

  	
  March 15,
  2005

  
	
   

  	
   

  
	
  Issue:

  	
  Mr. Forster
  and Ms. Muhlenkamp filed a lawsuit in New York state court against the
  purchasers of the DPL private equity portfolio and against DP&L’s outside
  counsel regarding purported entitlements in connection with the purchase of
  the portfolio. While DP&L is not a defendant in this case, we have
  acknowledged indemnity obligations. DP&L, DPL Inc. and MVE, Inc.
  jointly filed a Motion for Preliminary Injunction on March 28, 2005 in
  the Ohio litigation (See F. above) since there is substantial identity of
  issues between these cases. The trial court has stayed all activity on this
  case until the conclusion of the analogous Ohio litigation (See D. above).

  
	
   

  	
   

  
	
  H.

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Application
  for Rate Stabilization Surcharge

  
	
   

  	
   

  
	
  Agency:

  	
  PUCO

  



 


3

















 


	
  Date:

  	
  April 4,
  2005

  
	
   

  	
   

  
	
  Issue:

  	
  Pursuant
  to its PUCO-approved stipulation to extend the market development period
  through December 31, 2005, DP&L was authorized to seek a rate
  stabilization surcharge for an amount not to exceed 11% of generation rates
  to reflect increased costs associated with fuel, environmental compliance,
  taxes, regulatory charges and security measures. On April 4, 2005,
  DP&L filed its rate stabilization surcharge request. If approved as
  filed, the surcharge would produce approximately $76 million in additional
  revenues in 2006. This rate was approved by the PUCO in late 2005 and is
  currently under appeal to the Ohio Supreme Court.

  
	
   

  	
   

  
	
  I.

  	
   

  
	
   

  	
   

  
	
  Name

  	
  Ohio
  Franchise Tax

  
	
   

  	
   

  
	
  Agency:

  	
  Ohio
  Department of Taxation; Board of Tax Appeals

  
	
   

  	
   

  
	
  Date:

  	
  February 13,
  2006

  
	
   

  	
   

  
	
  Issue:

  	
  Ohio
  Department of Tax has assessed DP&L for tax years 2004 and audit
  adjustment of $90.8 million. DP&L has petitions for reassessment and a
  request for corrected assessments. On October 12, 2006 DP&L signed a
  memorandum of understanding that limits our potential exposure after all
  judicial proceedings are completed to a maximum of $50.7 million. DP&L
  plans to vigorously defend this matter.

  
	
   

  	
   

  
	
  J.

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Fair
  Labor Standards Act Claim

  
	
   

  	
   

  
	
  Agency:

  	
  Department
  of Labor

  
	
   

  	
   

  
	
  Date:

  	
  September 2006

  
	
   

  	
   

  
	
  Issue:

  	
  DP&L
  became aware of an unasserted claim regarding the calculation of overtime
  rates for our unionized workforce. DP&L will vigorously defend any claim
  made if and when asserted.

  



 


4

















 


SCHEDULE 8.3


 


LIENS


 


None.


 

















 


SCHEDULE 8.4


 


EXISTING INVESTMENTS


 


Deposits and Deposit Accounts


 


Lease, utility or other similar deposits made in the
ordinary course of business.  Deposits
and deposit accounts made with financial institutions in the ordinary course of
business.


 


Employee Advances


 


Payroll, travel and similar advances to cover matters
expected at the time of such advances ultimately to be treated as expenses for
accounting purposes and that are made in the ordinary course of business.


 


Various loans and advances to employees for office
equipment, tuition, and moving expenses made in the ordinary course of
business.


 


Equity
in certain non-Subsidiaries


 


4.9% equity ownership
interest in an electric generation company. 
As of September 30, 2006, DP&L could be responsible for the
repayment of 4.9%, or $21.8 million, of a $445 million debt obligation of
such entity that matures in 2026.