Exhibit 4.11


 


 




 





 


THE DAYTON POWER AND LIGHT
COMPANY


 


AND


 


THE BANK OF NEW YORK MELLON

(formerly The Bank of New York


(formerly Irving Trust Company))

                                         Trustee


 






 


Forty-Sixth Supplemental
Indenture


 






 


Dated as of December 1, 2008


 




 





 

















 


THE DAYTON POWER AND LIGHT COMPANY


 


FORTY-SIXTH SUPPLEMENTAL INDENTURE

DATED AS OF DECEMBER 1, 2008


 






 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  PARTIES

  	
  1

  
	
   

  	
   

  
	
  RECITALS

  	
  1

  
	
   

  	
   

  
	
  GRANTING CLAUSES

  	
  8

  
	
   

  	
   

  	
   

  
	
  FIRST.

  	
  REAL PROPERTY AND
  INTERESTS IN REAL PROPERTY

  	
  9

  
	
   

  	
   

  	
   

  
	
  SECOND.

  	
  ELECTRIC GENERATION
  PLANTS

  	
  9

  
	
   

  	
   

  	
   

  
	
  THIRD.

  	
  TRANSMISSION LINES

  	
  9

  
	
   

  	
   

  	
   

  
	
  FOURTH.

  	
  SUBSTATIONS AND
  SUBSTATION SITES

  	
  9

  
	
   

  	
   

  	
   

  
	
  FIFTH.

  	
  ELECTRIC DISTRIBUTION
  SYSTEMS

  	
  10

  
	
   

  	
   

  	
   

  
	
  SIXTH.

  	
  LIQUEFIED PETROLEUM GAS
  PRODUCTION AND STORAGE FACILITIES

  	
  10

  
	
   

  	
   

  	
   

  
	
  SEVENTH.

  	
  GAS DISTRIBUTION
  SYSTEMS

  	
  10

  
	
   

  	
   

  	
   

  
	
  EIGHTH.

  	
  OFFICE AND DEPARTMENTAL
  BUILDINGS

  	
  11

  
	
   

  	
   

  	
   

  
	
  NINTH.

  	
  TELEPHONE LINES

  	
  11

  
	
   

  	
   

  	
   

  
	
  TENTH.

  	
  FRANCHISES

  	
  11

  
	
   

  	
   

  	
   

  
	
  ELEVENTH.

  	
  OTHER REAL ESTATE AND
  APPURTENANCES

  	
  11

  
	
   

  	
   

  	
   

  
	
  TWELFTH.

  	
  PROPERTY HEREAFTER TO
  BECOME SUBJECT TO THE LIEN OF THE FIRST MORTGAGE AS AMENDED

  	
  12

  
	
   

  	
   

  	
   

  
	
  HABENDUM CLAUSE

  	
  13

  
	
   

  	
   

  
	
  SUBJECT CLAUSE

  	
  13

  
	
   

  	
   

  	
   

  
	
  GRANT IN TRUST

  	
  13

  
				



 


i

















 


	
  ARTICLE ONE.

  	
  BONDS OF THE VARIABLE
  RATE POLLUTION CONTROL SERIES 2008-A DUE 2040 AND ISSUE THEREOF

  	
  14

  
	
  SECTION 1.

  	
  SERIES AND FORM OF
  SERIES A NEW BONDS

  	
  14

  
	
  SECTION 2.

  	
  ISSUE OF SERIES A NEW
  BONDS

  	
  14

  
	
  SECTION 3.

  	
  DATES, INTEREST, ETC.
  OF SERIES A NEW BONDS

  	
  14

  
	
  SECTION 4.

  	
  DEFINITIONS

  	
  15

  
	
  SECTION 5.

  	
  DENOMINATIONS AND
  EXCHANGEABILITY OF SERIES A NEW BONDS; TEMPORARY BONDS MAY BE AUTHENTICATED
  AND DELIVERED 

  	
  15

  
	
  SECTION 6.

  	
  MANDATORY REDEMPTION

  	
  16

  
	
  SECTION 7.

  	
  EXTRAORDINARY OPTIONAL
  REDEMPTION

  	
  16

  
	
  SECTION 8.

  	
  OPTIONAL REDEMPTION

  	
  16

  
	
  SECTION 9.

  	
  NOTICE OF REDEMPTION

  	
  17

  
	
  SECTION 10.

  	
  CANCELLATION

  	
  17

  
	
  SECTION 11.

  	
  SERIES A NEW BONDS
  DEEMED PAID IN ADDITIONAL CIRCUMSTANCES

  	
  17

  
	
  SECTION 12.

  	
  SURRENDER OF SERIES A
  NEW BONDS IN CERTAIN CIRCUMSTANCES

  	
  18

  
	
  SECTION 13.

  	
  APPLICATION OF ARTICLE
  TEN OF FIRST MORTGAGE AS AMENDED

  	
  18

  
	
  SECTION 14.

  	
  FORM OF SERIES A
  NEW BONDS

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO.

  	
  BONDS OF THE VARIABLE
  RATE POLLUTION CONTROL SERIES 2008-B DUE 2040 AND ISSUE THEREOF

  	
  18

  
	
  SECTION 1.

  	
  SERIES AND FORM OF
  SERIES B NEW BONDS

  	
  18

  
	
  SECTION 2.

  	
  ISSUE OF SERIES B NEW
  BONDS

  	
  19

  
	
  SECTION 3.

  	
  DATES, INTEREST, ETC.
  OF SERIES B NEW BONDS

  	
  19

  
	
  SECTION 4.

  	
  DEFINITIONS

  	
  19

  
	
  SECTION 5.

  	
  DENOMINATIONS AND
  EXCHANGEABILITY OF SERIES B NEW BONDS; TEMPORARY BONDS MAY BE AUTHENTICATED
  AND DELIVERED

  	
  20

  
	
  SECTION 6.

  	
  MANDATORY REDEMPTION

  	
  20

  
	
  SECTION 7.

  	
  EXTRAORDINARY OPTIONAL
  REDEMPTION

  	
  21

  
	
  SECTION 8.

  	
  OPTIONAL REDEMPTION

  	
  21

  
	
  SECTION 9.

  	
  NOTICE OF REDEMPTION

  	
  22

  
	
  SECTION 10.

  	
  CANCELLATION

  	
  22

  
	
  SECTION 11.

  	
  SERIES
  B NEW BONDS DEEMED PAID IN ADDITIONAL CIRCUMSTANCES

  	
  22

  
	
  SECTION 12.

  	
  SURRENDER OF SERIES B
  NEW BONDS IN CERTAIN CIRCUMSTANCES

  	
  22

  
	
  SECTION 13.

  	
  APPLICATION OF ARTICLE
  TEN OF FIRST MORTGAGE AS AMENDED

  	
  23

  
	
  SECTION 14.

  	
  FORM OF SERIES B
  NEW BONDS

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE.

  	
  COVENANTS OF THE
  COMPANY

  	
  23

  



 


ii

















 


	
  SECTION 1.

  	
  CONFIRMATION OF
  COVENANTS BY COMPANY IN FIRST MORTGAGE

  	
  23

  
	
  SECTION 2.

  	
  COVENANT OF THE COMPANY
  AND LEGAL OPINIONS TO RECORDING

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOUR.

  	
  MISCELLANEOUS

  	
  23

  
	
  SECTION 1.

  	
  AUTHENTICATION AND
  DELIVERY OF NEW BONDS IN ADVANCE OF THE RECORDING OF FORTY-FIFTH SUPPLEMENT
  INDENTURE

  	
  23

  
	
  SECTION 2.

  	
  DEFINITIONS IN FIRST
  MORTGAGE SHALL APPLY TO FORTY-FIFTH SUPPLEMENTAL INDENTURE

  	
  24

  
	
  SECTION 4.

  	
  EXECUTION IN
  COUNTERPARTS

  	
  24

  
	
   

  	
   

  	
   

  
	
  TESTIMONIUM

  	
  S-1

  
	
   

  	
   

  	
   

  
	
  SIGNATURES 

  	
  S-1, S-2

  
	
   

  	
   

  
	
  ACKNOWLEDGMENTS 

  	
  S-3, S-4

  
	
   

  	
   

  
	
  Exhibit A -
  Form of Series A New Bond

  	
   

  
	
   

  	
   

  
	
  Exhibit B -
  Form of Series B New Bond

  	
   

  



 


iii

















 


FORTY-SIXTH
SUPPLEMENTAL INDENTURE, dated as of December 1, 2008, between THE DAYTON
POWER AND LIGHT COMPANY, a corporation of the State of Ohio (hereinafter
sometimes called the Company), party of the first part, and THE BANK OF NEW
YORK MELLON (formerly The Bank of New York (formerly Irving Trust Company)), a
corporation of the State of New York (hereinafter sometimes called the
Trustee), as Trustee, party of the second part.


 


WHEREAS,
the Company has heretofore executed and delivered to Irving Trust Company (now
The Bank of New York Mellon) a certain Indenture, dated as of October 1,
1935 (hereinafter sometimes called the First Mortgage), to secure the payment
of the principal of and interest on an issue of bonds of the Company, unlimited
in aggregate principal amount (hereinafter sometimes called the Bonds); and


 


WHEREAS,
the Company has issued under the First Mortgage its Bonds of a series known as
the First and Refunding Mortgage Bonds, 31⁄2% Series Due 1960, authorized in
unlimited aggregate principal amount, all of which have been redeemed or
otherwise retired; and


 


WHEREAS,
in Article Two of the First Mortgage it is provided in substance, among
other things, that the Bonds may be issued in series, the Bonds of each series
maturing on such dates and bearing interest at such rates, respectively, as the
Board of Directors of the Company may determine prior to the authentication
thereof; and


 


WHEREAS,
the Company has heretofore executed and delivered to the Trustee forty-five
supplemental Indentures numbered, dated and, except as set forth below,
providing for their respective series of First Mortgage Bonds, all as set forth
in the tabulation below:


 


	
  Supplemental

  Indenture

  	
   

  	
  Dated As Of

  	
   

  	
  Series

  Provided For

  	
   

  	
  Principal

  Amount

  Outstanding

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First

  	
   

  	
  March 1, 1937

  	
   

  	
  31/4%
  Series

  Due 1962

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Second

  	
   

  	
  January 1, 1940

  	
   

  	
  3% Series

  Due 1970

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Third

  	
   

  	
  October 1, 1945

  	
   

  	
  23/4%
  Series

  Due 1975

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fourth

  	
   

  	
  January 1, 1948

  	
   

  	
  3% Series

  Due 1978

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fifth

  	
   

  	
  December 1, 1948

  	
   

  	
  3% Series A

  Due 1978

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sixth

  	
   

  	
  February 1, 1952

  	
   

  	
  31/4%
  Series

  Due 1982

  	
   

  	
  None

  



 


1

















 


	
  Supplemental

  Indenture

  	
   

  	
  Dated As Of

  	
   

  	
  Series

  Provided For

  	
   

  	
  Principal

  Amount

  Outstanding

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Seventh

  	
   

  	
  September 1, 1954

  	
   

  	
  3% Series

  Due 1984

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Eighth

  	
   

  	
  November 1, 1957

  	
   

  	
  5% Series

  Due 1987

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ninth

  	
   

  	
  March 1, 1960

  	
   

  	
  51/8%
  Series

  Due 1990

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tenth

  	
   

  	
  June 1, 1963

  	
   

  	
  4.45% Series

  Due 1993

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Eleventh

  	
   

  	
  May 1, 1967

  	
   

  	
  55/8%
  Series

  Due 1997

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Twelfth

  	
   

  	
  June 15, 1968

  	
   

  	
  63/4%
  Series

  Due 1998

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thirteenth

  	
   

  	
  October 1, 1969

  	
   

  	
  81/4%
  Series

  Due 1999

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fourteenth

  	
   

  	
  June 1, 1970

  	
   

  	
  91/2%
  Series

  Due 2000

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fifteenth

  	
   

  	
  August 1, 1971

  	
   

  	
  81/8%
  Series

  Due 2001

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sixteenth

  	
   

  	
  October 3, 1972

  	
   

  	
  None issued

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Seventeenth

  	
   

  	
  November 1, 1973

  	
   

  	
  8% Series

  Due 2003

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Eighteenth

  	
   

  	
  October 1, 1974

  	
   

  	
  101/8%
  Series

  Due 1981

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nineteenth

  	
   

  	
  August 1, 1975

  	
   

  	
  10.70% Series

  Due 2005

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Twentieth

  	
   

  	
  November 15, 1976

  	
   

  	
  83/4%
  Series

  Due 2006

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Twenty-First

  	
   

  	
  April 15, 1977

  	
   

  	
  6.35% Series

  Due 2007

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Twenty-Second

  	
   

  	
  October 15, 1977

  	
   

  	
  81/2% Series

  Due 2007

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Twenty-Third

  	
   

  	
  April 1, 1978

  	
   

  	
  8.95% Series

  Due 1998

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Twenty-Fourth

  	
   

  	
  November 1, 1978

  	
   

  	
  91/2%
  Series

  Due 2003

  	
   

  	
  None

  



 


2

















 


	
  Supplemental

  Indenture

  	
   

  	
  Dated As Of

  	
   

  	
  Series

  Provided For

  	
   

  	
  Principal

  Amount

  Outstanding

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Twenty-Fifth

  	
   

  	
  August 1, 1979

  	
   

  	
  101/4%
  Series

  Due 1999

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Twenty-Sixth

  	
   

  	
  December 1, 1979

  	
   

  	
  121/8%
  Series

  Due 2009

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Twenty-Seventh

  	
   

  	
  February 1, 1981

  	
   

  	
  145/8%
  Series

  Due 1988

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Twenty-Eighth

  	
   

  	
  February 18, 1981

  	
   

  	
  141/2%
  Series

  Due 1988

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Twenty-Ninth

  	
   

  	
  September 1, 1981

  	
   

  	
  17% Series

  Due 1991

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thirtieth

  	
   

  	
  March 1, 1982

  	
   

  	
  163/4%
  Series

  Due 2012

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thirty-First

  	
   

  	
  November 1, 1982

  	
   

  	
  111/2%
  Series

  Due 2012-A

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thirty-Second

  	
   

  	
  November 1, 1982

  	
   

  	
  111/2%
  Series

  Due 2012-B

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thirty-Third

  	
   

  	
  December 1, 1985

  	
   

  	
  91/2%
  Series

  Due 2015

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thirty-Fourth

  	
   

  	
  April 1, 1986

  	
   

  	
  9% Series

  Due 2016

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thirty-Fifth

  	
   

  	
  December 1, 1986

  	
   

  	
  87/8%
  Series

  Due 2016

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thirty-Sixth

  	
   

  	
  August 15, 1992

  	
   

  	
  6.40% Pollution

  Control Series

  1992-A

  Due 2027

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  6.40% Pollution

  Control Series

  1992-B

  Due 2027

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thirty-Seventh

  	
   

  	
  November 15, 1992

  	
   

  	
  6.50% Pollution

  Control Series

  1992-C

  Due 2022

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thirty-Eighth

  	
   

  	
  November 15, 1992

  	
   

  	
  8.40% Series

  Due 2022

  	
   

  	
  None

  



 


3

















 


	
  Supplemental

  Indenture

  	
   

  	
  Dated As Of

  	
   

  	
  Series

  Provided For

  	
   

  	
  Principal

  Amount

  Outstanding

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thirty-Ninth

  	
   

  	
  January 15, 1993

  	
   

  	
  8.15% Series

  Due 2026

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fortieth

  	
   

  	
  February 15, 1993

  	
   

  	
  77/8%
  Series

  Due 2024

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Forty-First

  	
   

  	
  February 1, 1999

  	
   

  	
  None issued

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Forty-Second

  	
   

  	
  September 1, 2003

  	
   

  	
  5.125% Series

  Due 2013

  	
   

  	
  $470,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Forty-Third

  	
   

  	
  August 1, 2005

  	
   

  	
  4.80%

  Pollution

  Control Series

  2005-A

  Due 2034

  	
   

  	
  $41,300,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  4.80%

  Pollution

  Control Series

  2005-B

  Due 2034

  	
   

  	
  $137,800,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  4.70%

  Pollution

  Control Series

  2005-C

  Due 2028

  	
   

  	
  $35,275,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Forty-Fourth

  	
   

  	
  September 1, 2006

  	
   

  	
  4.80%

  Pollution

  Control

  Series 2006

  Due 2036

  	
   

  	
  $100,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Forty-Fifth

  	
   

  	
  November 1, 2007

  	
   

  	
  Variable Rate

  Pollution

  Control

  Series 2007

  Due 2040

  	
   

  	
  $90,000,000

  



 


WHEREAS,
said Eleventh Supplemental Indenture, which created the 55/8% Series Due 1997, provided in its Article Three
for certain amendments to the First Mortgage, as theretofore amended, each such
amendment to become effective on the earliest date on which either (a) there
shall not be any Bonds outstanding of Series Due 1975, Series Due
1978, Series A, Due 1978, Series Due 1982, Series Due 1984, or Series Due
1993, or (b) there shall have been executed and delivered a supplemental
indenture or indentures embodying said amendment (either alone or


 


4

















 


with other amendments) consented to by the holders of
seventy-five per centum (75%) in aggregate principal amount of the Bonds
at the time outstanding of the series enumerated in the foregoing
clause (a), or of each said series of which Bonds are then outstanding;
and


 


WHEREAS,
said Fifteenth Supplemental Indenture, which created the 81/8% Series Due 2001, provided (a) in
its Article Four for an amendment to the First Mortgage, as theretofore
amended, to become effective on the date on which the amendments provided for
by Section 3 of Article Three of said Eleventh Supplemental Indenture
shall become effective and (b) in its Article Five for certain
additional amendments to the First Mortgage, as theretofore amended, to become
effective on the earliest date on which either (i) there shall not be any
Bonds outstanding of Series Due 1975, Series Due 1978, Series A,
Due 1978, Series Due 1982, Series Due 1984, Series Due 1993, Series Due
1997, Series Due 1998, Series Due 1999, or Series Due 2000, or (ii) there
shall have been executed and delivered a supplemental indenture or indentures
embodying said amendments (either alone or with other amendments) consented to
by the holders of seventy-five per centum (75%) in aggregate principal
amount of the Bonds at the time outstanding of the series enumerated in the
foregoing clause (i), or of each said series of which Bonds are then
outstanding; and


 


WHEREAS,
the Company has heretofore executed and delivered to the Trustee a Sixteenth
Supplemental Indenture dated as of October 3, 1972, which provided in its Article One
for an amendment of Article Five of the First Mortgage, as theretofore
amended, altering the requirements for the opinion of counsel to be delivered
to the Trustee as a condition precedent to the authentication and delivery of
additional Bonds under Article Five or the withdrawal of cash under Article Seven
of the First Mortgage, as theretofore amended; and


 


WHEREAS,
none of the Bonds of Series Due 1975, Series Due 1978, Series A,
Due 1978, Series Due 1982, Series Due 1984, or Series Due 1993
remain outstanding and the amendments contained in said Eleventh Supplemental
Indenture have become effective; and


 


WHEREAS,
none of the Bonds of Series Due 1975, Series Due 1978, Series A,
Due 1978, Series Due 1982, Series Due 1984, Series Due 1993, Series Due
1997, Series Due 1998, Series Due 1999, or Series Due 2000
remain outstanding and the amendments contained in said Fifteenth Supplemental
Indenture that did not theretofore become effective by virtue of the Sixteenth
Supplemental Indenture have become effective; and


 


WHEREAS,
said Forty-Second Supplemental Indenture, which created the 51/8% Series Due 2013, provided in its Article Two
for certain amendments to the First Mortgage, as theretofore amended, to become
effective on the earliest date on which either (i) there shall not be any
Bonds outstanding of 6.35% Series Due 2007, Pollution Control Series 1992-A
Due 2027, Pollution Control Series 1992-B Due 2027, Pollution Control Series 1992-C
Due 2022, Series Due 2026 and Series Due 2024, or (ii) there
shall have been executed and delivered a supplemental indenture or indentures
embodying said amendment (either alone or with other amendments) consented to
by the holders of seventy-five per centum (75%) in aggregate principal
amount of the Bonds at the time outstanding of the series enumerated in the
foregoing clause (i); and


 


5

















 


WHEREAS,
none of the Bonds of 6.35% Series Due 2007, Pollution Control Series 1992-A
Due 2027, Pollution Control Series 1992-B Due 2027, Pollution Control Series 1992-C
Due 2022, Series Due 2026 and Series Due 2024 remain outstanding and
the amendments contained in said Forty-Second Supplemental Indenture have become
effective; and


 


WHEREAS,
the First Mortgage as amended by the First through the Forty-Fifth Supplemental
Indentures is hereinafter called the First Mortgage as amended; and


 


WHEREAS,
it is provided in Article Seven of the First Mortgage as amended, among
other things, that the Company may issue additional Bonds thereunder upon the
deposit with the Trustee of cash equal to the principal amount of such
additional Bonds to be issued; it is provided in Article Six of the First
Mortgage as amended, among other things, that if Bonds are paid, retired,
redeemed, canceled or surrendered to the Trustee for cancellation (except when
canceled pursuant to certain provisions of the First Mortgage as amended), the
Company may issue additional Bonds thereunder in principal amount equivalent to
the principal amount of the Bonds so paid, retired, redeemed, canceled or
surrendered to the Trustee for cancellation; it is provided in Article Five
of the First Mortgage as amended, among other things, that the Company may issue
additional Bonds thereunder upon the basis of property additions in accordance
with and subject to the conditions, provisions and limitations set forth in
said Article Five; and it is provided in Article Eighteen of the
First Mortgage as amended, among other things, that the Company and the Trustee
may from time to time enter into one or more indentures supplemental to the
First Mortgage as amended for the purposes, among other things which may be
therein set forth, to mortgage or pledge additional property under the First
Mortgage as amended and to establish the terms and provisions of any series of
Bonds other than the 31⁄2 % Series Due 1960; and


 


WHEREAS,
the Company, pursuant to resolutions duly adopted by its Board of Directors at
a meeting of said Board of Directors duly called and held, has determined under
and in accordance with the provisions of the First Mortgage as amended and of
this Forty-Sixth Supplemental Indenture to create two new series of Bonds to be
known as its (a) First Mortgage Bonds, Variable Rate Pollution Control Series 2008-A
Due 2040 (hereinafter sometimes called the Series A New Bonds), which
shall be limited to the aggregate principal amount of $50,000,000; and (b) First
Mortgage Bonds, Variable Rate Pollution Control Series 2008-B Due 2040
(hereinafter sometimes called the Series B New Bonds), which shall be
limited to the aggregate principal amount of $50,000,000 (such Series A
New Bonds and Series B New Bonds being hereinafter sometimes collectively
called the New Bonds); and


 


WHEREAS,
the Series A New Bonds are to be issued by the Company to the Ohio Air
Quality Development Authority (hereinafter called the Authority), or its
assignee, to evidence and secure the obligations of the Company to repay the
loan of the proceeds of the sale of the Series A Project Bonds (as
hereinafter defined) made by the Authority to the Company, pursuant to a
certain Loan Agreement, dated as of December 1, 2008, between the
Authority and the Company (hereinafter called the Series A Loan
Agreement), to assist in the refunding of the Authority’s State of Ohio
Collateralized Air Quality Development Revenue Bonds, 2007 Series A (The
Dayton Power and Light Company Project) (hereinafter called the Refunded Bonds)
and


 


6

















 


the financing of the Company’s portion of additional
costs of acquisition, construction and installation of certain “air quality
facilities” (as that term is defined and used in Section 3706.01, of the
Ohio Revised Code) installed in connection with: Units 7 and 8 at the Miami
Fort Generating Station located in Hamilton County, Ohio as to which the
Company at the date hereof owns an undivided 36% interest as tenant in common
with another public utility company, Unit 2 at the Killen Generating Station
located in Adams County, Ohio as to which the Company at the date hereof owns
an undivided 67% interest as tenant in common with another public utility
company, Units 1-4 at the J. M. Stuart Generating Station located in Brown and
Adams Counties, Ohio as to which the Company at the date hereof owns an
undivided 35% interest as tenant in common with two other public utility
companies, and Unit 4 at the Conesville Generating Station in Coshocton County,
Ohio as to which the Company at the date hereof owns an undivided 16.5%
interest as tenant in common with two other public utility companies (such
interests in said facilities being hereinafter called the Project); and


 


WHEREAS,
the Series B New Bonds are to be issued by the Company to the Authority,
or its assignee, to evidence and secure the obligations of the Company to repay
the loan of the proceeds of the sale of the Series B Project Bonds (as
hereinafter defined) made by the Authority to the Company, pursuant to a
certain Loan Agreement, dated as of December 1, 2008, between the
Authority and the Company (hereinafter called the Series B Loan
Agreement), to assist in the refunding of the Refunded Bonds and the financing
of the Company’s portion of additional costs of acquisition, construction and
installation of the Project; and


 


WHEREAS,
the loans by the Authority in respect of the refunding of the Refunded Bonds
and of the Project are to be funded by the proceeds derived from the sale by
the Authority of (a) State of Ohio Collateralized Air Quality Development
Revenue Refunding Bonds, 2008 Series A (The Dayton Power and Light Company
Project), in the aggregate principal amount of $50,000,000 (hereinafter called
the Series A Project Bonds); and (b) State of Ohio Collateralized Air
Quality Development Revenue Refunding Bonds, 2008 Series B (The Dayton
Power and Light Company Project), in the aggregate principal amount of
$50,000,000 (hereinafter called the Series B Project Bonds); and


 


WHEREAS,
the Series A Project Bonds are to be issued under a certain Trust
Indenture, dated as of December 1, 2008 (hereinafter called the Series A
Project Bonds Indenture), between the Authority and The Bank of New York
Mellon, as Trustee (hereinafter in such capacity called the Series A
Project Bond Trustee), and the Series A New Bonds are to be assigned by
the Authority to the Series A Project Bond Trustee as security for the
payment of the principal of, and premium, if any, and interest on the Series A
Project Bonds and are to be delivered by the Company on behalf of the Authority
directly to the Series A Project Bond Trustee; and


 


WHEREAS,
the Series B Project Bonds are to be issued under a certain Trust
Indenture, dated as of December 1, 2008 (hereinafter called the Series B
Project Bonds Indenture), between the Authority and The Bank of New York
Mellon, as Trustee (hereinafter in such capacity called the Series B
Project Bond Trustee), and the Series B New Bonds are to be assigned by
the Authority to the Series B Project Bond Trustee as security for the
payment of the principal of,


 


7

















 


and premium, if any, and interest on the Series B
Project Bonds and are to be delivered by the Company on behalf of the Authority
directly to the Series B Project Bond Trustee; and


 


WHEREAS,
each of the Series A New Bonds and the Series B New Bonds, and the
respective Trustee’s certificates to be endorsed thereon, are to be
respectively and substantially in the forms established hereby and approved by
the aforesaid resolutions, which are substantially in the forms of Exhibit A
and Exhibit B hereto, respectively; and


 


WHEREAS,
at a meeting of the Board of Directors of the Company, the Board of Directors
adopted a resolution that authorized officers of the Company to approve the
form, terms and provisions of this Forty-Sixth Supplemental Indenture
(including the forms of the New Bonds), and the execution by the Company of
this Forty-Sixth Supplemental Indenture; and


 


WHEREAS,
all things necessary to make the New Bonds hereinafter described, when duly
authenticated by the Trustee and issued by the Company, valid, binding and
legal obligations of the Company, and to make this Indenture a valid and
binding agreement supplemental to the First Mortgage as amended, have been done
and performed.


 


NOW,
THEREFORE, THIS INDENTURE WITNESSETH


 


that,
in order further to secure the payment of all the Bonds at any time issued and
outstanding under the First Mortgage as amended or this Forty-Sixth
Supplemental Indenture according to their tenor, purport and effect, as well
the interest thereon as the principal thereof, and further to secure the
performance and observance of all the covenants and conditions therein and in
the First Mortgage as amended and herein contained, and further to set forth
the terms and conditions upon which the New Bonds are to be issued, secured and
held, and for and in consideration of the premises and of the acceptance or
purchase of the New Bonds by the holders or registered owners thereof, and of
the sum of one dollar, lawful money of the United States of America, to the
Company duly paid by the Trustee at or before the ensealing and delivery of
this Forty-Sixth Supplemental Indenture, the receipt whereof is hereby
acknowledged, the Company has executed and delivered this Forty-Sixth Supplemental
Indenture, and has granted, bargained, sold, released, conveyed, assigned,
transferred, pledged, set over and confirmed, and by these presents does grant,
bargain, sell, release, convey, assign, transfer, pledge, set over and confirm
unto the Trustee, and to its successor or successors in said trust, and to it
and its and their assigns forever, and does hereby subject to the lien of the
First Mortgage as heretofore and hereby amended all the following described
properties (all of which properties are included in and constitute a part of
the “mortgaged property” and the “mortgaged and pledged property” as such terms
are used and defined in the First Mortgage as heretofore and hereby amended and
whenever used in the First Mortgage as heretofore and hereby amended such terms
include and refer to such properties), to wit:


 


8

















 


FIRST.


 


REAL
PROPERTY AND INTERESTS IN REAL PROPERTY.


 


All
and singular, all real property and interests in real property acquired by the
Company between November 1, 2007, the date of the Forty-Fifth Supplemental
Indenture, and the date of this Forty-Sixth Supplemental Indenture, and owned
by the Company at the latter date.


 


SECOND.


 


ELECTRIC
GENERATING PLANTS.


 


All
electric generating plants and stations of the Company acquired by it between November 1,
2007, the date of the Forty-Fifth Supplemental Indenture, and the date of this
Forty-Sixth Supplemental Indenture, and owned by it at the latter date,
including all power houses, buildings, structures and works, and the land on
which the same are situated, and all other lands and easements, rights-of-way,
permits, privileges, towers, poles, wires, machinery, equipment, appliances,
appurtenances and supplies forming a part of such plants and stations, or any
of them, or occupied, enjoyed or used in connection therewith.


 


THIRD.


 


TRANSMISSION
LINES.


 


All
electric overhead and underground transmission lines of the Company acquired by
it between November 1, 2007, the date of the Forty-Fifth Supplemental
Indenture, and the date of this Forty-Sixth Supplemental Indenture, and owned
by it at the latter date, including towers, poles, pole lines, conduits,
manholes, switching devices, insulators, and other structures, appliances,
devices and equipment, and all the property forming a part thereof or
appertaining thereto, and all service lines extending therefrom, together with
all real property, rights-of-way, easements, permits, privileges, franchises,
and rights for or relating to the construction, maintenance or operation
thereof, through, over, under or upon any private property or any public way
within as well as without the corporate limits of any municipal corporation.


 


FOURTH.


 


SUBSTATIONS
AND SUBSTATION SITES.


 


All
substations and switching stations of the Company acquired by it between November 1,
2007, the date of the Forty-Fifth Supplemental Indenture, and the date of this
Forty-Sixth Supplemental Indenture, and owned by it at the latter date, for
transforming or otherwise regulating electric current at any of its plants,
together with all buildings, transformers, wires, cables, insulators,
structures, appliances, devices, equipment and all other property, real or
personal, forming a part of, or appertaining thereto, or used, occupied or enjoyed
in connection with any of such substations and switching stations.


 


9
















 


FIFTH.


 


ELECTRIC DISTRIBUTION SYSTEMS.


 


All electric
distribution systems of the Company acquired by it between November 1,
2007, the date of the Forty-Fifth Supplemental Indenture, and the date of this
Forty-Sixth Supplemental Indenture, and owned by it at the latter date,
including substations, transformers, switchboards, towers, poles, wires,
insulators, conduits, cables, manholes, appliances, devices, equipment and all
other property, real or personal, forming a part of or appertaining thereto, or
used, occupied or enjoyed in connection with such distribution systems or any
of them, together with all rights-of-way, easements, permits, privileges,
franchises, and rights in or relating to the construction, maintenance or
operation thereof, through, over, under or upon any private property or public
ways within as well as without the corporate limits of any municipal
corporation.


 


SIXTH.


 


LIQUEFIED PETROLEUM GAS PRODUCTION
AND STORAGE FACILITIES.


 


All additions to
liquefied petroleum gas production plants and storage facilities of the Company
acquired by it between November 1, 2007, the date of the Forty-Fifth
Supplemental Indenture, and the date of this Forty-Sixth Supplemental
Indenture, and owned by it at the latter date, including all buildings,
structures, underground storage caverns, and works, and the land on which the
same are situated, and all other lands and easements, rights-of-way, permits,
privileges, pipe lines, machinery, equipment, appliances, appurtenances and
supplies forming a part of such plants and stations, or any of them, or
occupied, enjoyed or used in connection therewith.


 


SEVENTH.


 


GAS DISTRIBUTION SYSTEMS.


 


All gas
distribution systems of the Company acquired or constructed by it between November 1,
2007, the date of the Forty-Fifth Supplemental Indenture, and the date of this
Forty-Sixth Supplemental Indenture, and owned by it at the latter date, for
distribution of gas, including pipes, mains, conduits, meters, appliances,
equipment, and all other property, real or personal, forming a part of or
appertaining to or used, occupied or enjoyed in connection with such
distribution systems, or any of them, together with all rights-of-way,
easements, permits, privileges, franchises and rights, for or relating to the
construction, maintenance or operation thereof, through, over, under or upon
any private property or any public streets or highways, within as well as
without the corporate limits of any municipal corporation.


 


10

















 


EIGHTH.


 


OFFICE AND DEPARTMENTAL BUILDINGS.


 


All office and
departmental buildings of the Company, including the real estate on which such
structures stand, acquired by it between November 1, 2007, the date of the
Forty-Fifth Supplemental Indenture, and the date of this Forty-Sixth
Supplemental Indenture, and owned by it at the latter date, appertaining to,
used, occupied or enjoyed in connection with the rendition of public utility
service.


 


NINTH.


 


TELEPHONE LINES.


 


All telephone
lines of the Company acquired by it between November 1, 2007, the date of
the Forty-Fifth Supplemental Indenture, and the date of this Forty-Sixth
Supplemental Indenture, and owned by it at the latter date, used or available
for use in the operation of its properties or otherwise.


 


TENTH.


 


FRANCHISES.


 


All and singular
the franchises, grants, immunities, privileges and rights of the Company
granted to or acquired by it between November 1, 2007, the date of the
Forty-Fifth Supplemental Indenture, and the date of this Forty-Sixth
Supplemental Indenture, and to which it was entitled at the latter date,
including all and singular the franchises, grants, immunities, privileges and
rights of the Company granted by all municipalities or political subdivisions,
and all right, title and interest therein owned by the Company on the date of
the execution of this Forty-Sixth Supplemental Indenture, and all renewals,
extensions and modifications of said franchises, grants, immunities, privileges
and rights, or any of them, and of all other franchises, grants, immunities,
privileges and rights now subject to the lien of the First Mortgage as amended.


 


ELEVENTH.


 


OTHER REAL ESTATE AND
APPURTENANCES.


 


A.                                   All
other real estate and interests in real estate and all other physical electric
power and light, gas and other property owned by the Company at the date of
execution of this Forty-Sixth Supplemental Indenture.


 


B.                                     All
other real estate and interests in real estate and all other physical electric
power and light, gas and other property which the Company may hereafter acquire
or construct.


 


C.                                     All
present and future appurtenances of the real estate and interests in real
estate which now are, or hereafter shall be, subject to the lien of the First
Mortgage as amended, and all


 


11

















 


plants,
works, buildings, structures, fixtures, improvements, betterments and additions
now owned, or hereafter acquired or constructed by the Company, upon any of the
real estate which, or interests in which, now are or hereafter shall be subject
to the lien of the First Mortgage as amended.


 


D.                                    All
corporate rights, privileges, immunities and franchises, powers, licenses,
easements, leases, contracts and other rights and all renewals and extensions
thereof held or acquired for use or used upon, or in connection with or
appertaining to, any of the properties which now are or hereafter shall be
subject to the lien of the First Mortgage as amended, or which the Company has
or may have the right to exercise in respect of any of said properties.


 


E.                                      All
machinery, tools and equipment now owned or hereafter acquired by the Company,
which now or hereafter belong or appertain to or are used in connection with
the plants, works, transmission lines, distribution systems, buildings,
structures and fixtures which now are or hereafter shall be subject to the lien
of the First Mortgage as amended.


 


Together with all
and singular the tenements, hereditaments and appurtenances belonging or in any
way appertaining to the aforesaid property or any part thereof, with the
reversion and reversions, remainder and remainders, rents, issues, income and
profits thereof, and all the estate, right, title, interest and claim
whatsoever at law or in equity, which the Company now has or which it may
hereafter acquire in and to the aforesaid property and every part and parcel
thereof.


 


It is not intended
to include in the lien of the First Mortgage as amended and this grant shall
not be deemed to apply (1) to any revenues, earnings, rents, issues,
income or profits of the mortgaged property, or any cash (except cash deposited
with the Trustee pursuant to any of the provisions of the First Mortgage as
heretofore and hereby amended), or any bills, notes or accounts receivable,
contracts or choses in action, or any materials or supplies or construction
equipment, or any merchandise, equipment or apparatus manufactured or acquired
for the purpose of sale or resale in the usual course of business, except in
case of the happening of a completed default as defined in Section 1 of Article Twelve
of the First Mortgage as heretofore and hereby amended, and following such
completed default, in case the Trustee or a receiver or trustee shall enter
upon and take possession of the mortgaged property, or (2) in any case, to
any cars, trucks or other vehicles of any nature for the transportation of
personnel, materials or equipment by any means which may have been acquired
after the effective date of the amendment to this Clause made by or pursuant to
the provisions of the Eleventh Supplemental Indenture, or to any bonds, notes,
evidences of indebtedness, shares of stock or other securities, except such as
may be specifically subjected to the lien of the First Mortgage as amended.


 


TWELFTH.


 


PROPERTY HEREAFTER TO BECOME
SUBJECT TO THE LIEN OF THE FIRST MORTGAGE AS AMENDED.


 


A.                                   Any
and all property, real, personal and mixed, including franchises, grants,
immunities, privileges and rights, which the Company may hereafter acquire or
to which it may hereafter become entitled, excepting, however, the following
property which is not intended to be subjected to the lien of the First
Mortgage:  (1) any revenues,
earnings, rents, issues, income


 


12

















 


or
profits of the mortgaged property, or any cash (except cash deposited with the
Trustee pursuant to any of the provisions of the First Mortgage as heretofore
and hereby amended), or any bills, notes or accounts receivable, contracts or
choses in action, or any materials or supplies or construction equipment, or any
merchandise, equipment or apparatus manufactured or acquired for the purpose of
sale or resale in the usual course of business, except in case of the happening
of a completed default as defined in Section 1 of Article Twelve of
the First Mortgage as heretofore and hereby amended, and following such
completed default, in case the Trustee or a receiver or trustee shall enter
upon and take possession of the mortgaged property, or (2) in any case,
any cars, trucks or other vehicles of any nature for the transportation of
personnel, materials or equipment by any means, or any bonds, notes, evidences
of indebtedness, shares of stock or other securities, except such as may be
specifically subjected to the lien of the First Mortgage as amended.


 


B.                                     Any
and all property of every name and nature, including shares of stock, bonds,
other securities or obligations and cars, trucks or other vehicles for the
transportation of personnel, materials or equipment by any means, which, from
time to time after the execution of this Forty-Sixth Supplemental Indenture, by
delivery or by writing of any kind for the purposes hereof, shall have been
conveyed, mortgaged, pledged, assigned or transferred by, or by anyone on
behalf of, the Company to the Trustee, which is hereby authorized to receive
any property at any and all times, as and for additional security, and also,
when and as provided in the First Mortgage as amended as and for substituted
security, for the payment of the Bonds to be issued under the First Mortgage as
amended, and to hold and apply any and all such property subject to the terms
hereof and of the First Mortgage as amended.


 


TO HAVE AND TO
HOLD all such properties, real, personal and mixed, mortgaged, pledged or
conveyed by the Company as aforesaid, or intended so to be, unto the Trustee
and its successors and assigns forever.


 


SUBJECT, HOWEVER,
as to property hereby conveyed, to liens for taxes, assessments and other
charges levied or to be levied by the State of Ohio and any of the subdivisions
thereof for the years 2007 and 2008 and thereafter and, as to any property
hereafter acquired by the Company and which may become subject to the lien of
the First Mortgage as amended, to any lien or charge thereon existing at the
time of the acquisition thereof by the Company;


 


IN TRUST
NEVERTHELESS, upon and subject to the terms, conditions and stipulations
hereinafter and in the First Mortgage as amended set forth, for the equal and
proportionate benefit and security of the holders from time to time of the
Bonds and interest coupons issued and to be issued under the First Mortgage as
amended and this and other indentures supplemental thereto, without preference,
priority or distinction as to lien or otherwise of any of the Bonds and coupons
over any others by reason of priority in time of issue, sale or negotiation
thereof or otherwise howsoever, and for the uses and purposes and upon and
subject to the terms, conditions, provisions and agreements in the Bonds and
hereinafter and in the First Mortgage as amended expressed and declared.


 


13

















 


ARTICLE ONE.


 


BONDS OF THE
VARIABLE RATE POLLUTION CONTROL

SERIES 2008-A DUE 2040 AND ISSUE THEREOF.


 


SECTION 1.                                Series and
Form of Series A New Bonds. 
There shall be a series of Bonds designated “Variable Rate Pollution
Control Series 2008-A Due 2040,” each of which shall bear the descriptive
title First Mortgage Bond.  The aggregate
principal amount of Series A New Bonds which may be outstanding under the
First Mortgage as amended and this Forty-Sixth Supplemental Indenture shall be
limited to $50,000,000, except as provided in Section 9 of Article Two
of the First Mortgage as amended.


 


SECTION 2.                                Issue
of Series A New Bonds.  Upon the
execution and delivery of this Forty-Sixth Supplemental Indenture and upon
delivery of $50,000,000 aggregate principal amount of the Series A New
Bonds, executed by the Company, and upon compliance by the Company with the
provisions of Article Five, Article Six or Article Seven or any
or all of said Articles, as the case may be, of the First Mortgage as amended,
the Trustee shall, without awaiting the filing or recording of this Forty-Sixth
Supplemental Indenture, authenticate the Series A New Bonds and deliver
the Series A New Bonds as provided in said Article Five, Article Six
or Article Seven.


 


SECTION 3.                                Dates,
Interest, Etc. of Series A New Bonds. 
The Series A New Bonds shall be dated as provided in Section 3
of Article Two of the First Mortgage as amended; shall mature on November 1,
2040; and shall bear interest from December 4, 2008, as provided in said Section 3
of Article Two, at such rate or rates per annum as shall cause the amount
of interest payable on each interest payment date (as hereinafter defined) on
the Series A New Bonds to equal the amount of interest payable on such
interest payment date on the corresponding Series A Project Bonds, such
interest to be payable on the same date as interest is payable on said Series A
Project Bonds (each such date relating to the Series A New Bonds herein
called an “interest payment date”), until the maturity of the Series A New
Bonds, or, in the case of any such Series A New Bonds duly called for
redemption, until the redemption date, or in the case of any default by the
Company in the payment of the principal due on any such Series A New
Bonds, until the Company’s obligation with respect to the payment of the
principal shall be discharged as provided in the First Mortgage, as
amended.  The amount of interest payable
on each interest payment date shall be computed on the same basis as the amount
of interest is computed on the corresponding Series A Project Bonds; provided,
however, that the aggregate amount of interest payable on any interest
payment date shall not exceed an amount which results in an interest rate of
more than the Series A Maximum Interest Rate per annum on the aggregate
principal amount of the Series A New Bonds outstanding on that interest
payment date.


 


The Trustee shall
be entitled to request, receive and conclusively rely upon the certification of
the Series A Project Bond Trustee of the interest rate of, interest
payment date of, Record Date of and basis on which interest is computed for,
each Series A Project Bond, from time to time as necessary to enable the
Trustee to determine for the Series A New Bonds their corresponding
interest rate, interest payment date, Record Date and basis on which interest
shall be computed.


 


14

















 


The interest
payable on the Series A New Bonds on any interest payment date shall be
paid to the holders in whose names such Series A New Bonds are registered
on the Record Date, except that if the Company shall default in the payment of
any installment of interest on any Series A New Bonds, such interest in
default shall be paid to the holders in whose names the Series A New Bonds
are registered at the close of business on a date established for the payment
of such defaulted interest by the Company in any lawful manner.  The Series A New Bonds shall be payable
as to both principal and interest in such coin or currency of the United States
of America as at the time of payment is legal tender for the payment of public
and private debts, at the office or agency of the Company in the Borough of
Manhattan, The City of New York.


 


SECTION 4.                                Definitions.  In addition to the
words and terms defined in the First Mortgage as amended, unless the context or
use clearly indicates another meaning or intent, the following terms shall have
the following meanings for purposes of this Article One of this
Forty-Sixth Supplemental Indenture:


 


“Series A Maximum Interest Rate” means the rate which would be the
“Maximum Interest Rate” as defined in the Series A Project Bonds
Indenture.


 


“Record Date” means the date which would be a “Regular Record Date” as
defined in the Series A Project Bonds Indenture.


 


SECTION 5.                                Denominations
and Exchangeability of Series A New Bonds; Temporary Bonds May Be
Authenticated and Delivered.  The Series A
New Bonds shall be issued in denominations of $5,000 and any integral multiple
of $5,000.


 


Whenever any Series A
New Bond or Series A New Bonds shall be surrendered at the office or
agency of the Company in said Borough of Manhattan for exchange for a Series A
New Bond or Series A New Bonds of other authorized denomination or
denominations, the Company shall execute, and the Trustee shall authenticate
and deliver, upon cancellation of the Series A New Bond or Series A
New Bonds so surrendered, a Series A New Bond or Series A New Bonds
of such other authorized denomination or denominations of like aggregate
principal amount as the holder making the exchange shall have requested and
shall be entitled to receive.  On
presentation of any Series A New Bond which is to be redeemed pursuant to
the provisions of this Forty-Sixth Supplemental Indenture in part only, the
Company shall execute, and the Trustee shall authenticate and deliver, a Series A
New Bond or Series A New Bonds in principal amount equal to the unredeemed
portion of the Series A New Bond so presented.


 


The Company shall
not be required to (a) register a transfer of, or exchange, any Series A
New Bond during a period of fifteen (15) days next preceding any selection
of Series A New Bonds to be redeemed or (b) register a transfer of,
or exchange, any Series A New Bond which shall have been selected for
redemption in whole or in part.


 


A service charge
will not be made for any registration of transfer or exchange of Series A
New Bonds, but the Company may require payment of a sum sufficient to cover any
stamp tax or other governmental charge payable in connection therewith.


 


Until definitive Series A
New Bonds shall be ready for delivery, the Company may execute and, upon
request of the Company, the Trustee shall authenticate and deliver, in lieu of


 


15

















 


such
definitive Series A New Bonds but subject to the same provisions,
limitations and conditions except as to the denominations thereof, temporary
printed or lithographed Series A New Bonds as provided in Section 8
of Article One of the First Mortgage as amended.  Such temporary Series A New Bonds shall
be exchangeable for definitive Series A New Bonds, when ready for
delivery, in the manner provided in the First Mortgage as amended, and shall in
all other respects be subject to and entitled to the benefits of the terms and
provisions and lien of this Forty-Sixth Supplemental Indenture, and the terms
and provisions and lien of the First Mortgage as amended as therein provided.


 


SECTION 6.                                Mandatory
Redemption.  The Series A New
Bonds shall be subject to mandatory redemption by the Company prior to maturity
at any time, in whole or in part, at a redemption price of 100% of the
principal amount to be redeemed, plus accrued and unpaid interest, if any, to
the redemption date, upon receipt by the Trustee of notice from the Series A
Project Bond Trustee to the effect that (a) the Company is required to
deliver moneys to the Series A Project Bond Trustee for the redemption of
the corresponding Series A Project Bonds in whole or in part, as the case
may be, as provided in Section 6.3 of the Series A Loan Agreement and
(b) an equivalent principal amount of such Series A Project Bonds are
being concurrently called for redemption. 
Said notice shall specify the redemption date of such Series A New
Bonds (which redemption date shall be the same date as the redemption date
specified in said notice for the Series A Project Bonds being currently
redeemed).  Any such redemption shall be
made upon the notice and in the manner provided in this Article One,
subject to the provisions of the First Mortgage as amended.


 


SECTION 7.                                Extraordinary
Optional Redemption.  The Series A
New Bonds shall be subject to redemption, at the option of the Company, prior
to maturity at any time, in whole or in part, at a redemption price of 100% of
the principal amount to be redeemed, plus accrued and unpaid interest, if any,
to the redemption date, upon receipt by the Trustee of an officers’ certificate
to the effect that (a) the Company has given notice to the Series A
Project Bond Trustee that the Company is exercising its option to direct the
redemption of corresponding Series A Project Bonds in whole or in part, as
provided in Section 6.2 of the Series A Loan Agreement, and (b) an
equivalent principal amount of such Series A Project Bonds are being
concurrently called for redemption.  Such
officers’ certificate shall have attached to it a copy of said notice to the Series A
Project Bond Trustee and shall specify the redemption date of such Series A
New Bonds (which redemption date shall be not less than 45 days (unless a
shorter period shall be acceptable to the Trustee) after the date of the
mailing of such certificate and shall be the same date as the redemption date
specified in said attached notice for the Series A Project Bonds being
concurrently redeemed).  Any such
redemption shall be made upon the notice, which may be conditional as provided
in Section 9 of this Article One, and in the manner provided in this Article One,
subject to the provisions of the First Mortgage as amended.


 


SECTION 8.                                Optional
Redemption.  The Series A New
Bonds shall also be subject to redemption prior to maturity, at the option of
the Company, in whole or in part, at any time, at the same redemption price,
plus accrued and unpaid interest, if any, to the redemption date, as shall be
payable on the Series A Project Bonds to be redeemed concurrently
therewith, upon receipt by the Trustee of an officers’ certificate to the
effect that (a) the Company has given notice to the Series A Project
Bond Trustee that the Company is exercising its option to deliver moneys to the
Series A Project Bond Trustee for the redemption of corresponding Series A


 


16

















 


Project
Bonds in whole or in part, as the case may be, as provided in Section 6.1
of the Series A Loan Agreement and (b) an equivalent principal amount
of such Series A Project Bonds are being concurrently called for
redemption.  Such officers’ certificate
shall specify the principal amount of the New Series A Bonds to be
redeemed and the redemption price thereof, shall have attached to it a copy of
said notice to the Series A Project Bond Trustee and shall specify the
redemption date of such Series A New Bonds (which redemption date shall be
not less than 45 days (unless a shorter period shall be acceptable to the
Trustee) after the date of the mailing of such certificate and shall be the
same date as the redemption date specified in said attached notice for the Series A
Project Bonds being concurrently redeemed). 
Any such redemption shall be made upon the notice, which may be
conditional as provided in Section 9 of this Article One, and in the
manner provided in this Article One, subject to the provisions of the
First Mortgage as amended.


 


SECTION 9.                                Notice
of Redemption.  Subject to the
provisions of the First Mortgage as amended, written notice of redemption of
the Series A New Bonds pursuant to any of Sections 6, 7 or 8  of this Article One shall be given by
the Trustee by mailing, first class postage prepaid, or delivering by hand to
the registered owner of such Series A New Bonds to be redeemed a notice of
such redemption at its last address as it shall appear upon the books of the
Company for the registration of transfer of such Series A New Bonds.  Any notice of redemption pursuant to said
Sections 6, 7 or 8 shall be mailed or delivered by hand as least 30 days and
not earlier than 60 days before the redemption date; provided, however, that
the registered owner or owners of all Series A New Bonds may consent in
writing to a shorter notice period, and such consent, if filed with the
Trustee, shall be binding upon the Company and such registered owners and their
transferees.  In the case of any notice
of redemption of Series A New Bonds pursuant to said Sections 7 or 8, such
notice shall state that such redemption is conditional to the same extent and
with the same effect, if any, as the notice of redemption of the Series A
Project Bonds being concurrently redeemed.


 


SECTION 10.                          Cancellation.  In the event any Series A Project Bonds
shall be purchased by the Company and surrendered by the Company to the Series A
Project Bond Trustee for cancellation or shall be otherwise surrendered to the Series A
Project Bond Trustee for cancellation pursuant to the Series A Project
Bonds Indenture (except upon exchange for other Series A Project Bonds),
corresponding Series A New Bonds equivalent in principal amount to the Series A
Project Bonds so surrendered shall be deemed to have been paid, but only when and
to the extent that (a) such payment of the principal amount of such Series A
New Bonds shall be noted by an agency of the Company on the schedule of
payments on such Series A New Bonds and (if such agency is not the
Trustee) written notice by such agency of such notation shall have been
received by the Trustee or (b) such Series A New Bonds shall have
been surrendered to and cancelled by the Trustee as provided in Section 12
of this Article One.


 


SECTION 11.                          Series A
New Bonds Deemed Paid in Additional Circumstances.  In the event and to the extent the principal
of, or premium, if any, or interest on any Series A Project Bonds shall be
paid, whether at maturity, upon redemption or otherwise, out of funds held by
the Series A Project Bond Trustee or out of any other funds or shall
otherwise be deemed to be paid, an equal amount of principal or premium, if
any, or interest, as the case may be, payable with respect to an aggregate
principal amount of corresponding Series A New Bonds equal to an aggregate
principal amount of such Series A Project Bonds shall be deemed to have
been paid, 


 


17

















 


but, in
the case of such payment of principal of such Series A New Bonds, only
when and to the extent that (a) such payment of the principal amount
thereof shall be noted by an agency of the Company on the schedule of payments
on such Series A New Bonds and (if such agency is not the Trustee) written
notice by such agency of such notation shall have been received by the Trustee
or (b) such Series A New Bonds shall have been surrendered to and
cancelled by the Trustee as provided in Section 12 of this Article One.


 


SECTION 12.                          Surrender
of Series A New Bonds in Certain Circumstances.  When payment of any principal amount of a Series A
New Bond is made as provided in Section 10 or 11 of this Article One,
the registered owner thereof shall surrender it to an agency of the Company for
notation and notification or to the Trustee for cancellation as provided in
such Section.  All Series A New
Bonds deemed to have been paid in full as provided in Section 10 or 11 of
this Article One shall be surrendered to the Trustee for cancellation and
the Trustee shall forthwith cancel the same. 
In the event that part of a Series A New Bond shall be deemed to
have been paid as provided in said Section 10 or 11, the registered owner
may at its option surrender such Series A New Bond to the Trustee for
cancellation, in which event the Trustee shall cancel such Series A New
Bond and the Company shall execute and the Trustee shall authenticate and
deliver, without charge to the registered owner, Series A New Bonds in
such authorized denominations as shall be specified by the registered owner in
an aggregate principal amount equal to the unpaid balance of the principal
amount of such surrendered Series A New Bond.


 


SECTION 13.                          Application
of Article Ten of First Mortgage as Amended.  Except as in this Forty-Sixth Supplemental
Indenture otherwise provided with respect to any matter or question, the
provisions of Article Ten of the First Mortgage as amended shall be
applicable in the case of the redemption of all or any part of the Series A
New Bonds at any time outstanding.  The
term “officers’ certificate” as used in this Article One shall mean a
certificate signed by the President or a Vice President and any other Vice
President, the Treasurer, Assistant Treasurer, the Secretary or Assistant
Secretary or any other officer of the Company.


 


SECTION 14.                          Form of
Series A New Bonds.  The Series A
New Bonds shall be in fully registered form only.  The form of the Series A New Bonds, and
of the Trustee’s certificate of authentication thereon, shall be substantially
as set forth in Exhibit A.


 


ARTICLE TWO.


 


BONDS OF THE
VARIABLE RATE POLLUTION CONTROL

SERIES 2008-B DUE 2040 AND ISSUE THEREOF.


 


SECTION 1.                                Series and
Form of Series B New Bonds. 
There shall be a series of Bonds designated “Variable Rate Pollution
Control Series 2008-B Due 2040,” each of which shall bear the descriptive
title First Mortgage Bond.  The aggregate
principal amount of Series B New Bonds which may be outstanding under the
First Mortgage as amended and this Forty-Sixth Supplemental Indenture shall be
limited to $50,000,000, except as provided in Section 9 of Article Two
of the First Mortgage as amended.


 


18

















 


SECTION 2.                                Issue
of Series B New Bonds.  Upon the
execution and delivery of this Forty-Sixth Supplemental Indenture and upon
delivery of $50,000,000 aggregate principal amount of the Series B New
Bonds, executed by the Company, and upon compliance by the Company with the
provisions of Article Five, Article Six or Article Seven or any
or all of said Articles, as the case may be, of the First Mortgage as amended,
the Trustee shall, without awaiting the filing or recording of this Forty-Sixth
Supplemental Indenture, authenticate the Series B New Bonds and deliver
the Series B New Bonds as provided in said Article Five, Article Six
or Article Seven.


 


SECTION 3.                                Dates,
Interest, Etc. of Series B New Bonds. 
The Series B New Bonds shall be dated as provided in Section 3
of Article Two of the First Mortgage as amended; shall mature on November 1,
2040; and shall bear interest from December 4, 2008, as provided in said Section 3
of Article Two, at such rate or rates per annum as shall cause the amount
of interest payable on each interest payment date (as hereinafter defined) on
the Series B New Bonds to equal the amount of interest payable on such
interest payment date on the corresponding Series B Project Bonds, such
interest to be payable on the same date as interest is payable on said Series B
Project Bonds (each such date relating to the Series B New Bonds herein
called an “interest payment date”), until the maturity of the Series B New
Bonds, or, in the case of any such Series B New Bonds duly called for
redemption, until the redemption date, or in the case of any default by the
Company in the payment of the principal due on any such Series B New
Bonds, until the Company’s obligation with respect to the payment of the
principal shall be discharged as provided in the First Mortgage, as
amended.  The amount of interest payable
on each interest payment date shall be computed on the same basis as the amount
of interest is computed on the corresponding Series B Project Bonds; provided,
however, that the aggregate amount of interest payable on any interest
payment date shall not exceed an amount which results in an interest rate of
more than the Series B Maximum Interest Rate per annum on the aggregate
principal amount of the Series B New Bonds outstanding on that interest
payment date.


 


The Trustee shall
be entitled to request, receive and conclusively rely upon the certification of
the Series B Project Bond Trustee of the interest rate of, interest
payment date of, Record Date of and basis on which interest is computed for,
each Series B Project Bond, from time to time as necessary to enable the
Trustee to determine for the Series B New Bonds their corresponding
interest rate, interest payment date, Record Date and basis on which interest
shall be computed.


 


The interest
payable on the Series B New Bonds on any interest payment date shall be
paid to the holders in whose names such Series B New Bonds are registered
on the Record Date, except that if the Company shall default in the payment of
any installment of interest on any Series B New Bonds, such interest in
default shall be paid to the holders in whose names the Series B New Bonds
are registered at the close of business on a date established for the payment
of such defaulted interest by the Company in any lawful manner.  The Series B New Bonds shall be payable
as to both principal and interest in such coin or currency of the United States
of America as at the time of payment is legal tender for the payment of public
and private debts, at the office or agency of the Company in the Borough of
Manhattan, The City of New York.


 


SECTION 4.                                Definitions.  In addition to the
words and terms defined in the First Mortgage as amended, unless the context or
use clearly indicates another meaning or intent, the 


 


19

















 


following
terms shall have the following meanings for purposes of this Article Two
of this Forty-Sixth Supplemental Indenture:


 


“Series B Maximum Interest Rate” means the rate which would be the
“Maximum Interest Rate” as defined in the Series B Project Bonds
Indenture.


 


“Record Date” means the date which would be a “Regular Record Date” as
defined in the Series B Project Bonds Indenture.


 


SECTION 5.                                Denominations
and Exchangeability of Series B New Bonds; Temporary Bonds May Be
Authenticated and Delivered.  The Series B
New Bonds shall be issued in denominations of $5,000 and any integral multiple
of $5,000.


 


Whenever any Series B
New Bond or Series B New Bonds shall be surrendered at the office or
agency of the Company in said Borough of Manhattan for exchange for a Series B
New Bond or Series B New Bonds of other authorized denomination or
denominations, the Company shall execute, and the Trustee shall authenticate
and deliver, upon cancellation of the Series B New Bond or Series B
New Bonds so surrendered, a Series B New Bond or Series B New Bonds
of such other authorized denomination or denominations of like aggregate
principal amount as the holder making the exchange shall have requested and
shall be entitled to receive.  On
presentation of any Series B New Bond which is to be redeemed pursuant to
the provisions of this Forty-Sixth Supplemental Indenture in part only, the
Company shall execute, and the Trustee shall authenticate and deliver, a Series B
New Bond or Series B New Bonds in principal amount equal to the unredeemed
portion of the Series B New Bond so presented.


 


The Company shall
not be required to (a) register a transfer of, or exchange, any Series B
New Bond during a period of fifteen (15) days next preceding any selection
of Series B New Bonds to be redeemed or (b) register a transfer of,
or exchange, any Series B New Bond which shall have been selected for
redemption in whole or in part.


 


A service charge
will not be made for any registration of transfer or exchange of Series B
New Bonds, but the Company may require payment of a sum sufficient to cover any
stamp tax or other governmental charge payable in connection therewith.


 


Until definitive Series B
New Bonds shall be ready for delivery, the Company may execute and, upon
request of the Company, the Trustee shall authenticate and deliver, in lieu of
such definitive Series B New Bonds but subject to the same provisions,
limitations and conditions except as to the denominations thereof, temporary
printed or lithographed Series B New Bonds as provided in Section 8
of Article One of the First Mortgage as amended.  Such temporary Series B New Bonds shall
be exchangeable for definitive Series B New Bonds, when ready for
delivery, in the manner provided in the First Mortgage as amended, and shall in
all other respects be subject to and entitled to the benefits of the terms and
provisions and lien of this Forty-Sixth Supplemental Indenture, and the terms
and provisions and lien of the First Mortgage as amended as therein provided.


 


SECTION 6.                                Mandatory
Redemption.  The Series B New
Bonds shall be subject to mandatory redemption by the Company prior to maturity
at any time, in whole or in part, at a redemption price of 100% of the
principal amount to be redeemed, plus accrued and unpaid 


 


20

















 


interest,
if any, to the redemption date, upon receipt by the Trustee of notice from the Series B
Project Bond Trustee to the effect that (a) the Company is required to
deliver moneys to the Series B Project Bond Trustee for the redemption of
the corresponding Series B Project Bonds in whole or in part, as the case
may be, as provided in Section 6.3 of the Series B Loan Agreement and
(b) an equivalent principal amount of such Series B Project Bonds are
being concurrently called for redemption. 
Said notice shall specify the redemption date of such Series B New
Bonds (which redemption date shall be the same date as the redemption date
specified in said notice for the Series B Project Bonds being currently
redeemed).  Any such redemption shall be
made upon the notice and in the manner provided in this Article Two,
subject to the provisions of the First Mortgage as amended.


 


SECTION 7.                                Extraordinary
Optional Redemption.  The Series B
New Bonds shall be subject to redemption, at the option of the Company, prior
to maturity at any time, in whole or in part, at a redemption price of 100% of
the principal amount to be redeemed, plus accrued and unpaid interest, if any,
to the redemption date, upon receipt by the Trustee of an officers’ certificate
to the effect that (a) the Company has given notice to the Series B
Project Bond Trustee that the Company is exercising its option to direct the
redemption of corresponding Series B Project Bonds in whole or in part, as
provided in Section 6.2 of the Series B Loan Agreement, and (b) an
equivalent principal amount of such Series B Project Bonds are being
concurrently called for redemption.  Such
officers’ certificate shall have attached to it a copy of said notice to the Series B
Project Bond Trustee and shall specify the redemption date of such Series B
New Bonds (which redemption date shall be not less than 45 days (unless a
shorter period shall be acceptable to the Trustee) after the date of the
mailing of such certificate and shall be the same date as the redemption date
specified in said attached notice for the Series B Project Bonds being
concurrently redeemed).  Any such
redemption shall be made upon the notice, which may be conditional as provided
in Section 9 of this Article Two, and in the manner provided in this Article Two,
subject to the provisions of the First Mortgage as amended.


 


SECTION 8.                                Optional
Redemption.  The Series B New
Bonds shall also be subject to redemption prior to maturity, at the option of
the Company, in whole or in part, at any time, at the same redemption price,
plus accrued and unpaid interest, if any, to the redemption date, as shall be
payable on the Series B Project Bonds to be redeemed concurrently
therewith, upon receipt by the Trustee of an officers’ certificate to the
effect that (a) the Company has given notice to the Series B Project
Bond Trustee that the Company is exercising its option to deliver moneys to the
Series B Project Bond Trustee for the redemption of corresponding Series B
Project Bonds in whole or in part, as the case may be, as provided in Section 6.1
of the Series B Loan Agreement and (b) an equivalent principal amount
of such Series B Project Bonds are being concurrently called for
redemption.  Such officers’ certificate
shall specify the principal amount of the New Series B Bonds to be
redeemed and the redemption price thereof, shall have attached to it a copy of
said notice to the Series B Project Bond Trustee and shall specify the
redemption date of such Series B New Bonds (which redemption date shall be
not less than 45 days (unless a shorter period shall be acceptable to the
Trustee) after the date of the mailing of such certificate and shall be the
same date as the redemption date specified in said attached notice for the Series B
Project Bonds being concurrently redeemed). 
Any such redemption shall be made upon the notice, which may be
conditional as provided in Section 9 of this Article Two, and in the
manner provided in this Article Two, subject to the provisions of the
First Mortgage as amended.


 


21
















 


SECTION 9.                                Notice
of Redemption.  Subject to the
provisions of the First Mortgage as amended, written notice of redemption of
the Series B New Bonds pursuant to any of Sections 6, 7 or 8  of this Article Two shall be given by the
Trustee by mailing, first class postage prepaid, or delivering by hand to the
registered owner of such Series B New Bonds to be redeemed a notice of such
redemption at its last address as it shall appear upon the books of the Company
for the registration of transfer of such Series B New Bonds.  Any notice of redemption pursuant to said
Sections 6, 7 or 8 shall be mailed or delivered by hand as least 30 days and
not earlier than 60 days before the redemption date; provided, however, that
the registered owner or owners of all Series B New Bonds may consent in writing
to a shorter notice period, and such consent, if filed with the Trustee, shall
be binding upon the Company and such registered owners and their
transferees.  In the case of any notice
of redemption of Series B New Bonds pursuant to said Sections 7 or 8, such
notice shall state that such redemption is conditional to the same extent and
with the same effect, if any, as the notice of redemption of the Series B
Project Bonds being concurrently redeemed.


 


SECTION 10.                          Cancellation.  In the event any Series B Project Bonds shall
be purchased by the Company and surrendered by the Company to the Series B
Project Bond Trustee for cancellation or shall be otherwise surrendered to the
Series B Project Bond Trustee for cancellation pursuant to the Series B Project
Bonds Indenture (except upon exchange for other Series B Project Bonds),
corresponding Series B New Bonds equivalent in principal amount to the Series B
Project Bonds so surrendered shall be deemed to have been paid, but only when
and to the extent that (a) such payment of the principal amount of such Series
B New Bonds shall be noted by an agency of the Company on the schedule of
payments on such Series B New Bonds and (if such agency is not the Trustee)
written notice by such agency of such notation shall have been received by the
Trustee or (b) such Series B New Bonds shall have been surrendered to and
cancelled by the Trustee as provided in Section 12 of this Article Two.


 


SECTION 11.                          Series B
New Bonds Deemed Paid in Additional Circumstances.  In the event and to the extent the principal
of, or premium, if any, or interest on any Series B Project Bonds shall be
paid, whether at maturity, upon redemption or otherwise, out of funds held by
the Series B Project Bond Trustee or out of any other funds or shall otherwise
be deemed to be paid, an equal amount of principal or premium, if any, or
interest, as the case may be, payable with respect to an aggregate principal
amount of corresponding Series B New Bonds equal to an aggregate principal
amount of such Series B Project Bonds shall be deemed to have been paid, but,
in the case of such payment of principal of such Series B New Bonds, only when
and to the extent that (a) such payment of the principal amount thereof shall
be noted by an agency of the Company on the schedule of payments on such Series
B New Bonds and (if such agency is not the Trustee) written notice by such
agency of such notation shall have been received by the Trustee or (b) such
Series B New Bonds shall have been surrendered to and cancelled by the Trustee
as provided in Section 12 of this Article Two.


 


SECTION 12.                          Surrender
of Series B New Bonds in Certain Circumstances.  When payment of any principal amount of a
Series B New Bond is made as provided in Section 10 or 11 of this Article Two,
the registered owner thereof shall surrender it to an agency of the Company for
notation and notification or to the Trustee for cancellation as provided in
such Section.  All Series B New Bonds
deemed to have been paid in full as provided in Section 10 or 11 of this
Article Two shall be surrendered to the Trustee for cancellation and the
Trustee shall 


 


22

















 


forthwith cancel the same.  In
the event that part of a Series B New Bond shall be deemed to have been paid as
provided in said Section 10 or 11, the registered owner may at its option
surrender such Series B New Bond to the Trustee for cancellation, in which
event the Trustee shall cancel such Series B New Bond and the Company shall
execute and the Trustee shall authenticate and deliver, without charge to the
registered owner, Series B New Bonds in such authorized denominations as shall
be specified by the registered owner in an aggregate principal amount equal to
the unpaid balance of the principal amount of such surrendered Series B New
Bond.


 


SECTION 13.                          Application
of Article Ten of First Mortgage as Amended.  Except as in this Forty-Sixth Supplemental
Indenture otherwise provided with respect to any matter or question, the
provisions of Article Ten of the First Mortgage as amended shall be
applicable in the case of the redemption of all or any part of the Series B
New Bonds at any time outstanding.  The
term “officers’ certificate” as used in this Article Two shall mean a certificate
signed by the President or a Vice President and any other Vice President, the
Treasurer, Assistant Treasurer, the Secretary or Assistant Secretary or any
other officer of the Company.


 


SECTION 14.                          Form of
Series B New Bonds.  The Series B
New Bonds shall be in fully registered form only.  The form of the Series B New Bonds, and
of the Trustee’s certificate of authentication thereon, shall be substantially
as set forth in Exhibit B.


 


ARTICLE THREE.


 


COVENANTS OF THE
COMPANY.


 


SECTION 1.                                All
covenants and agreements by the Company in the First Mortgage as heretofore and
hereby amended are hereby confirmed.


 


SECTION 2.                                Promptly
after the execution and delivery of this Forty-Sixth Supplemental Indenture,
the Company will take such action with respect to the recording, filing,
re-recording and refiling of the First Mortgage as amended and this Forty-Sixth
Supplemental Indenture as may be necessary to make effective the lien intended
to be created hereby, and will furnish to the Trustee an opinion of counsel
selected by the Company and satisfactory to the Trustee (who may be of counsel
to the Company) either (a) stating that in the opinion of such counsel
such action has been taken with respect to the recording, filing, re-recording
and refiling of the First Mortgage as amended and this Forty-Sixth Supplemental
Indenture as to make effective the lien intended to be created thereby, and
reciting the details of such action, or (b) stating that in the opinion of
such counsel no such action is necessary to make such lien effective.


 


ARTICLE FOUR.


 


MISCELLANEOUS.


 


SECTION 1.                                The
New Bonds may be authenticated and delivered by the Trustee and issued by the
Company in advance of the recording or filing of this Forty-Sixth Supplemental
Indenture.


 


23

















 


SECTION 2.                                The
provisions of this Forty-Sixth Supplemental Indenture shall become effective
immediately upon the execution and delivery hereof.  From and after the initial issue of the New
Bonds, this Forty-Sixth Supplemental Indenture shall form a part of the First
Mortgage and all the terms and conditions herein contained shall be deemed to
be part of the terms of the First Mortgage, as fully and with the same effect
as if all the terms and provisions of this Forty-Sixth Supplemental Indenture
had been set forth in the First Mortgage as originally executed.  Except as modified or amended by this
Forty-Sixth Supplemental Indenture, the First Mortgage as amended shall remain
and continue in full force and effect in accordance with the terms and
provisions thereof, and all the covenants, conditions, terms and provisions of
the First Mortgage, as heretofore modified and amended and as further modified
and amended by this Forty-Sixth Supplemental Indenture, shall be applicable with
respect to the New Bonds, except insofar as such covenants, conditions, terms
and provisions are limited and applicable only to the Bonds of another or other
series, or are expressed to continue only so long as Bonds of another or other
series are outstanding, and all the covenants, conditions, terms and provisions
of the First Mortgage as amended with respect to the Trustee shall remain in
full force and effect and be applicable to the Trustee under this Forty-Sixth
Supplemental Indenture in the same manner as though set out herein at
length.  All representations and recitals
contained in this Forty-Sixth Supplemental Indenture and in the New Bonds (save
only the Trustee’s certificates upon said New Bonds) are made by and on behalf
of the Company, and the Trustee is in no way responsible therefor or for any
statement therein contained.


 


SECTION 3.                                The
terms defined in Article One of the First Mortgage as heretofore and
hereby amended, when used in this Forty-Sixth Supplemental Indenture, shall,
respectively, have the meanings set forth in said Article One.


 


SECTION 4.                                This
Forty-Sixth Supplemental Indenture may be simultaneously executed in several
counterparts and each counterpart shall be an original instrument.


 


24

















 


IN WITNESS
WHEREOF, THE DAYTON POWER AND LIGHT COMPANY has caused this instrument to be
signed on its behalf by its President or a Vice President and its corporate
seal to be hereunto affixed and attested by its Corporate Secretary or an Assistant
Corporate Secretary, in the City of Dayton, Ohio, and THE BANK OF NEW YORK
MELLON has caused this instrument to be signed on its behalf by a Vice
President or an Assistant Vice President and its corporate seal to be hereunto
affixed and attested by a Vice President, Assistant Vice President or an
Assistant Treasurer, in The City of New York, New York, as of the day and year
first above written.


 


 


	
   

  	
  THE DAYTON POWER AND
  LIGHT COMPANY

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Frederick J. Boyle,
  Senior Vice President,

  Chief Financial Officer, Treasurer and

  Controller

  



 


[SEAL]


 


	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Timothy G. Rice

  	
   

  
	
  Vice President,
  Assistant General Counsel

  	
   

  
	
  and Corporate Secretary

  	
   

  
	
   

  	
   

  
	
  Signed and acknowledged
  in our presence by

  	
   

  
	
  The Dayton Power and
  Light Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


S-1

















 


[Forty-Sixth
Supplemental Indenture, dated as of December 1, 2008, to Indenture dated
as of October 1, 1935, executed by The Dayton Power and Light Company to
Irving Trust Company (now The Bank of New York Mellon), as Trustee]


 


 


	
   

  	
  THE BANK OF NEW YORK
  MELLON,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
        Cheryl
  Clarke, Vice President

  



 


[SEAL]


 


Attest:


 


 


	
   

  	
   

  
	
  Mary Miselis

  	
   

  
	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signed and acknowledged
  in our presence by

  	
   

  
	
  The Bank of New York
  Mellon

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


S-2

















 


	
  STATE OF OHIO,

  	
  )

  	
  ss.:

  
	
  COUNTY OF MONTGOMERY

  	
  )

  	
   

  



 


On this
         day of December, 2008,
personally appeared before me, a Notary Public within and for said County in
the State aforesaid, Frederick J. Boyle, and Timothy G. Rice, to me known and
known to me to be, respectively, the Senior Vice President, Chief Financial
Officer, Treasurer and Controller and the Vice President, Assistant General
Counsel and Corporate Secretary of THE DAYTON POWER AND LIGHT COMPANY, one of
the corporations which executed the foregoing instrument, who severally
acknowledged that they did sign and seal said instrument as such Senior Vice
President, Chief Financial Officer, Treasurer and Controller and Vice President,
Assistant General Counsel and Corporate Secretary for and on behalf of said
corporation and that the same is their free act and deed as such Senior Vice
President, Chief Financial Officer, Treasurer and Controller and Vice
President, Assistant General Counsel and Corporate Secretary, respectively, and
the free and corporate act and deed of said corporation; and said Frederick J.
Boyle, being by me duly sworn, did depose and say: that he resides in Franklin
County, Ohio; that he is the Senior Vice President, Chief Financial Officer,
Treasurer and Controller of THE DAYTON POWER AND LIGHT COMPANY, one of the
corporations described in and which executed the above instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation; and that he signed his name thereto by like order.


 


IN WITNESS WHEREOF
I have hereunto set my hand and official seal.


 


[SEAL]


 


 


	
   

  	
   

  



 


S-3

















 


	
  STATE OF NEW YORK,

  	
  )

  	
  ss.:

  
	
  COUNTY OF NEW YORK

  	
  )

  	
   

  



 


On this
         day of December, 2008,
personally appeared before me, a Notary Public within and for said County in
the State aforesaid, Cheryl Clarke and Mary Miselis, to me known and known to
me to be, respectively, a Vice President and a Vice President of THE BANK OF
NEW YORK MELLON, one of the corporations which executed the foregoing
instrument, who severally acknowledged that they did sign and seal said
instrument as such Vice President and Vice President for and on behalf of said
corporation and that the same is their free act and deed as such Vice President
and Vice President, respectively, and the free and corporate act and deed of
said corporation; and said Cheryl Clarke being by me duly sworn, did depose and
say: that she resides in New York County, New York; that she is a Vice
President of THE BANK OF NEW YORK MELLON, one of the corporations described in
and which executed the above instrument; that she knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of such corporation;
and that she signed her name thereto by like order.


 


IN WITNESS WHEREOF
I have hereunto set my hand and official seal.


 


[SEAL]


 


 


	
   

  	
   

  
	
   

  	
  Carlos R. Luciano

  
	
   

  	
  Notary Public, State of
  New York

  
	
   

  	
  No. 41-4765897

  
	
   

  	
  Qualified in Queens
  County

  
	
   

  	
  Commission Expires
  April 30, 2010

  



 


 


	
   

  	
  This instrument prepared by

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Timothy G. Rice, Esq.

  
	
   

  	
  Attorney at Law

  
	
   

  	
  The Dayton Power and Light Company

  
	
   

  	
  1065 Woodman Drive

  
	
   

  	
  Dayton, Ohio 45432

  



 


S-4

















 


EXHIBIT A


 


[FORM OF SERIES A NEW BOND]


 


This bond is not transferable except to a successor
trustee under the Trust Indenture, dated as of December 1, 2008, between
Ohio Air Quality Development Authority relating to its Collateralized Air
Quality Development Revenue Refunding Bonds, 2008 Series A (The Dayton
Power and Light Company Project) and The Bank of New York Mellon, as trustee.


 


	
  No.

  	
   

  	
  $[  ]

  



 


THE DAYTON POWER AND LIGHT COMPANY

(Incorporated under the laws of the State of Ohio)


 


First Mortgage Bond,

Variable Rate Pollution Control Series 2008-A Due 2040 

Due November 1, 2040


 


THE DAYTON POWER
AND LIGHT COMPANY, a corporation of the State of Ohio (hereinafter called the
Company), for value received, hereby promises to pay to
[                      ],
as Series A Project Bond Trustee (as hereinafter defined) or registered
assigns, on November 1, 2040, at the office or agency of the Company in
the Borough of Manhattan, The City of New York, [  ] Dollars in such
coin or currency of the United States of America as at the time of payment is
legal tender for the payment of public and private debts, and to pay to the registered
owner hereof interest thereon from the interest payment date to which interest
has been paid or duly provided for last preceding the date hereof (unless the
date hereof is an interest payment date to which interest has been paid or duly
provided for, in which case from the date hereof, or, if no interest has been
paid or duly provided for, from December 4, 2008), at such rate or rates
per annum on each interest payment date (as hereinafter defined) as shall cause
the amount of interest payable on such interest payment date on this Bond to
equal the amount of interest payable on such interest payment date on the
corresponding Series A Project Bonds (as hereinafter defined), such
interest to be payable on the same dates as interest is payable on said Series A
Project Bonds (each such date herein called “an interest payment date”) until
the maturity of this Bond, or if this Bond shall be duly called for redemption,
until the redemption date, or if the Company shall default in the payment of
the principal amount of this Bond, until the Company’s obligation with respect
to the payment of such principal shall be discharged as provided in the
Indenture (as hereinafter defined).  The
amount of interest payable on each interest payment date shall be computed on
the same basis as the amount of interest is computed on the corresponding said Series A
Project Bonds; provided, however, that the aggregate amount of interest payable
on any interest payment date shall not exceed an amount which results in an
interest rate of more than the Series A Maximum Interest Rate (as such
term is defined in the Forty-Sixth Supplemental Indenture referred to herein)
per annum on the aggregate principal amount of the Series A New Bonds (as
hereinafter defined) outstanding on that interest payment date.


 


Exh. A-1

















 


The interest
payable on any interest payment date shall be paid to the holder in whose name
this Bond is registered on the Record Date (as such term is defined in Article One
of the Forty-Sixth Supplemental Indenture referred to above), except that if
the Company shall default in the payment of any installment of interest on this
Bond, such interest in default shall be paid to the holder in whose name this
Bond is registered at the close of business on a date established for the
payment of such defaulted interest by the Trustee in any lawful manner.  This Bond shall be payable as to principal,
premium, if any, and interest in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts, at the office or agency of the Company in the Borough of
Manhattan, The City of New York.


 


This Bond is one
of an issue of First Mortgage Bonds (hereinafter called the Bonds) of the
Company issued and to be issued in series under and pursuant to and equally
secured by an indenture of mortgage and deed of trust dated as of October 1,
1935, executed by the Company to Irving Trust Company (now The Bank of New York
Mellon), as Trustee, as said indenture has been amended and supplemented as
hereinafter stated, and is one of a series of said First Mortgage Bonds, which
series is designated as the First Mortgage Bonds, Variable Rate Pollution
Control Series 2008-A Due 2040, of the Company (hereinafter called the Series A
New Bonds) created and described in a Forty-Sixth Supplemental Indenture dated
as of December 1, 2008, executed by the Company to The Bank of New York
Mellon, as Trustee.  Subsequent to the
execution and delivery of said indenture of mortgage and deed of trust there
have been executed and delivered forty-six indentures supplemental thereto,
including said Forty-Sixth Supplemental Indenture dated as of December 1,
2008, supplementing and amending as therein set forth certain provisions
thereof.  Said indenture of mortgage and
deed of trust and such supplemental indentures collectively are hereinafter
sometimes called the “Indenture.”


 


For a description
of the property mortgaged and pledged, the nature and extent of the security,
the rights of the holders of the Bonds and of the Trustee therein and thereto,
the duties and immunities of the Trustee, and the terms and conditions upon
which the Bonds are issued and secured, reference is hereby made to the
Indenture.  The rights and obligations of
the Company and of the holders and registered owners of the Bonds of this issue
may be modified or amended at the request of the Company by an indenture or
indentures supplemental to the Indenture, executed pursuant to the consent in
writing of the holders or registered owners of a majority in principal amount
of the Bonds then outstanding affected by such modification or amendment, all
in the manner and subject to the limitations set forth in the Indenture, any
consent by the holder or registered owner of any Bond being conclusive and
binding upon such holder or registered owner and upon all future holders and
owners of such Bond, irrespective of whether or not any notation of such
consent is made upon such Bond; provided that no such modification or amendment
by such supplemental indenture shall extend the maturity of, or reduce the rate
of interest on, or otherwise modify the terms of payment of the principal or
interest of, this Bond, which obligations are absolute and unconditional, nor
permit the creation of any lien ranking prior to or equal with the lien of the
Indenture on any of the mortgaged property. 
The Series A New Bonds are to be issued by the Company to the Ohio
Air Quality Development Authority (hereinafter called the Authority), or its
assignee, to evidence and secure the obligations of the Company to repay the
loan of the proceeds of the sale of the Series A Project Bonds (as
hereinafter defined) made by the Authority to the Company, pursuant to a
certain Loan Agreement, dated as of December 1, 2008, between the
Authority and the 


 


Exh. A-2

















 


Company,
to assist in the refunding of the Refunded Bonds (as such term is defined in
the Forty-Sixth Supplemental Indenture referred to above) and the financing of
the Company’s portion of additional costs of acquisition, construction and
installation of certain air quality facilities (as that term is defined and
used in Section 3706.01 of the Ohio Revised Code) installed in connection
with: Units 7 and 8 at the Miami Fort Generating Station located in Hamilton
County, Ohio as to which the Company at the date hereof owns an undivided 36%
interest as tenant in common with another public utility company; Unit 2 at the
Killen Generating Station located in Adams County, Ohio as to which the Company
at the date hereof owns an undivided 67% interest as tenant in common with
another public utility company; Units 1-4 at the J. M. Stuart Generating
Station located in Brown and Adams Counties, Ohio as to which the Company at
the date hereof owns an undivided 35% interest as tenant in common with two
other public utility companies; and Unit 4 at the Conesville Generating Station
in Coshocton County, Ohio as to which the Company at the date hereof owns an
undivided 16.5% interest as tenant in common with two other public utility
companies (such interests in said facilities being hereinafter called the
Project).  The loan by the Authority in
respect of the Refunded Bonds and the Project is to be funded by the proceeds
derived from the sale by the Authority of State of Ohio Collateralized Air
Quality Development Revenue Refunding Bonds, 2008 Series A (The Dayton
Power and Light Company Project) in the aggregate principal amount of
$50,000,000 (hereinafter called the Series A Project Bonds).  The Series A Project Bonds are to be
issued under a certain Trust Indenture, dated as of December 1, 2008
(hereinafter called the Series A Project Bonds Indenture), between the
Authority and The Bank of New York Mellon, as Trustee (hereinafter in such
capacity called the Series A Project Bond Trustee) and the Series A
New Bonds are to be assigned by the Authority to the Series A Project Bond
Trustee as security for the payment of the principal of, and premium, if any,
and interest on, the Series A Project Bonds and are to be delivered by the
Company on behalf of the Authority directly to the Series A Project Bond
Trustee. The Series A New Bonds shall not be assignable or transferable
except as may be required to effect a transfer to any successor trustee under
the Series A Project Bond Indenture, or, subject to compliance with
applicable law, as may be involved in the course of the exercise of rights and
remedies consequent upon an Event of Default under the Series A Project
Bond Indenture.


 


In the event any Series A
Project Bonds shall be surrendered to the Series A Project Bond Trustee
for cancellation pursuant to the Series A Project Bonds Indenture (except
upon exchange for other Series A Project Bonds), Series A New Bonds
equivalent in principal amount to such Series A Project Bonds shall be
deemed to have been paid, but only when and to the extent (a) so noted on
the schedule of payments hereon by an agency of the Company and (if such agency
is not the Trustee) written notice by such agency of such notation has been
received by the Trustee or (b) such Series A New Bond is surrendered
to and canceled by the Trustee as provided in the next paragraph; and in the
event and to the extent the principal of, or premium, if any, or interest on,
any Series A Project Bonds shall be paid or deemed to be paid, an equal
amount of principal or premium, if any, or interest, as the case may be,
payable with respect to an aggregate principal amount of corresponding Series A
New Bonds equal to the aggregate principal amount of such Series A Project
Bonds shall be deemed to have been paid, but, in the case of such payment of
principal, only when and to the extent (i) so noted on the schedule of
payments hereon by an agency of the Company and (if such agency is not the
Trustee) written notice by such agency of such notation has been received by
the Trustee or (ii) such Series A New Bond is surrendered to and
canceled by the Trustee as provided in the next paragraph.  When any such payment of 


 


Exh. A-3

















 


principal
of this Bond is made, it shall be surrendered by the registered owner hereof to
an agency of the Company for such notation and notification or to the Trustee
for cancellation.


 


In the event that
this Bond shall be deemed to have been paid in full, this Bond shall be
surrendered to the Trustee for cancellation. 
In the event that this Bond shall be deemed to have been paid in part,
this Bond may, at the option of the registered owner, be surrendered to the
Trustee for cancellation, in which event the Trustee shall cancel this Bond and
the Company shall execute and the Trustee shall authenticate and deliver Series A
New Bonds in authorized denominations in aggregate principal amount equal to
the unpaid balance of the principal amount of this Bond.


 


The Series A
New Bonds are subject to mandatory redemption by the Company prior to maturity
at any time in whole or in part as provided in Section 6 of Article One
of the Forty-Sixth Supplemental Indenture at a redemption price of 100% of the
principal amount to be redeemed, plus accrued interest, if any, to the
redemption date.


 


The Series A
New Bonds are subject to optional redemption by the Company prior to maturity
at any time in whole or in part as provided in Section 7 of Article One
of the Forty-Sixth Supplemental Indenture at a redemption price equal to 100%
of the principal amount to be redeemed, plus accrued interest, if any, to the
redemption date.


 


The Series A
New Bonds are subject to optional redemption by the Company prior to maturity
at any time in whole or in part as provided in Section 8 of Article One
of the Forty-Sixth Supplemental Indenture at the same redemption price, plus
accrued interest, if any, to the redemption date, as shall be payable on the Series A
Project Bonds to be redeemed concurrently therewith.


 


Any redemption of
the Series A New Bonds shall be made after written notice to the
registered owner of such Series A New Bonds, sent by the Trustee by mail,
first class postage prepaid, or hand delivered at least 30 days and not earlier
than 60 days before the redemption date, unless a shorter notice period is
consented to in writing by the registered owner or owners of all Series A
New Bonds and such consent is filed with the Trustee, and shall be made in the
manner provided in Section 9 of Article One of the Forty-Sixth
Supplemental Indenture, subject to the provisions of the First Mortgage as
amended.


 


The principal
hereof may be declared or may become due on the conditions, in the manner and
at the time set forth in the Indenture, upon the happening of a completed
default as provided in the Indenture.


 


This Bond may be
exchanged for a like principal amount of other Series A New Bonds, or
transferred as prescribed in the Indenture by the registered owner hereof in
person, or by his duly authorized attorney, at the office or agency of the
Company in the Borough of Manhattan, The City of New York, upon surrender and
cancellation of this Bond and thereupon a new registered Series A New Bond
or Series A New Bonds without coupons for a like principal amount and of
authorized denominations will be issued in exchange therefor as provided in the
Indenture.  The Company and the Trustee
may deem and treat the person in whose name this 


 


Exh. A-4

















 


Bond is
registered as the absolute owner hereof for the purpose of receiving payment of
or on account of the principal and premium, if any, and interest due hereon and
for all other purposes.


 


No service charge
will be made for any such exchange or transfer of Series A New Bonds, but
the Company may require payment of a sum sufficient to cover any stamp tax or
other governmental charge payable in connection therewith.


 


The Series A
New Bonds are issuable as registered Bonds without coupons in denominations of
$5,000 and any integral multiple of $5,000.


 


No recourse shall
be had for the payment of the principal of, or premium, if any, or interest on,
this Bond, or under or upon any obligation, covenant or agreement contained in
the Indenture, against any incorporator, or any past, present, or future
subscriber to capital stock, shareholder, officer or director, as such, of the
Company or of any predecessor or successor corporation, either directly or
through the Company or any predecessor or successor corporation, under any
present or future rule of law, statute or constitution or by the
enforcement of any assessment or otherwise, all such liability of
incorporators, subscribers, shareholders, officers and directors being released
by the registered owner hereof by the acceptance of this Bond and being
likewise waived and released by the terms of the Indenture.


 


This Bond shall
not become valid or obligatory for any purpose until The Bank of New York
Mellon, the Trustee under the Indenture, or its successor thereunder, shall
have signed the form of certificate endorsed hereon.


 


IN WITNESS
WHEREOF, The Dayton Power and Light Company has caused this Bond to be executed
in its name by the manual or facsimile signature of its President or any Vice
President and its corporate seal to be hereunto affixed or a facsimile thereof
reproduced hereon and attested by the manual or facsimile signature of its
Corporate Secretary or an Assistant Corporate Secretary.


 


Dated:


 


 


	
   

  	
  THE DAYTON POWER AND
  LIGHT COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  [President] [Vice
  President]

  



 


 


	
  Attest:

  	
   

  	
   

  
	
   

  	
  [Corporate Secretary]

  	
   

  
	
   

  	
  [Assistant Corporate
  Secretary]

  	
   

  
				



 


Exh. A-5
















 


TRUSTEE’S CERTIFICATE


 


This Bond is one
of the Bonds of the Series designated therein, described in the
within-mentioned Indenture.


 


 


	
   

  	
  THE BANK OF NEW YORK
  MELLON, as

  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  



 


Exh. A-6

















 


Bonds of the Variable Rate Pollution Control Series 2008-A
Due 2040


SCHEDULE OF PAYMENTS


 


	
  Principal

  Payment

  	
   

  	
  Unpaid Principal

  Amount

  	
   

  	
  Redemption

  Premium

  	
   

  	
  Interest

  Payment

  	
   

  	
  Agency of the Company

  Making Notation

  	
   

  	
  Authorized

  Officer

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Exh. A-7

















 


EXHIBIT B


 


[FORM OF SERIES B NEW BOND]


 


This bond is not transferable except to a successor
trustee under the Trust Indenture, dated as of December 1, 2008, between
Ohio Air Quality Development Authority relating to its Collateralized Air
Quality Development Revenue Refunding Bonds, 2008 Series B (The Dayton
Power and Light Company Project) and The Bank of New York Mellon, as trustee.


 


	
  No.

  	
  $[  ]

  



 


THE DAYTON POWER AND LIGHT COMPANY

(Incorporated under the laws of the State of Ohio)


 


First Mortgage Bond,

Variable Rate Pollution Control Series 2008-B Due 2040

Due November 1, 2040


 


THE DAYTON POWER
AND LIGHT COMPANY, a corporation of the State of Ohio (hereinafter called the
Company), for value received, hereby promises to pay to
[                      ],
as Series B Project Bond Trustee (as hereinafter defined) or registered assigns,
on November 1, 2040, at the office or agency of the Company in the Borough
of Manhattan, The City of New York, [  ] Dollars in such coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts, and to pay to the
registered owner hereof interest thereon from the interest payment date to
which interest has been paid or duly provided for last preceding the date
hereof (unless the date hereof is an interest payment date to which interest
has been paid or duly provided for, in which case from the date hereof, or, if
no interest has been paid or duly provided for, from December 4, 2008), at
such rate or rates per annum on each interest payment date (as hereinafter
defined) as shall cause the amount of interest payable on such interest payment
date on this Bond to equal the amount of interest payable on such interest
payment date on the corresponding Series B Project Bonds (as hereinafter
defined), such interest to be payable on the same dates as interest is payable
on said Series B Project Bonds (each such date herein called “an interest
payment date”) until the maturity of this Bond, or if this Bond shall be duly
called for redemption, until the redemption date, or if the Company shall
default in the payment of the principal amount of this Bond, until the
Company’s obligation with respect to the payment of such principal shall be
discharged as provided in the Indenture (as hereinafter defined).  The amount of interest payable on each interest
payment date shall be computed on the same basis as the amount of interest is
computed on the corresponding said Series B Project Bonds; provided,
however, that the aggregate amount of interest payable on any interest payment
date shall not exceed an amount which results in an interest rate of more than
the Series B Maximum Interest Rate (as such term is defined in the
Forty-Sixth Supplemental Indenture referred to herein) per annum on the
aggregate principal amount of the Series B New Bonds (as hereinafter
defined) outstanding on that interest payment date.


 


Exh. B-1

















 


The interest
payable on any interest payment date shall be paid to the holder in whose name
this Bond is registered on the Record Date (as such term is defined in Article Two
of the Forty-Sixth Supplemental Indenture referred to above), except that if
the Company shall default in the payment of any installment of interest on this
Bond, such interest in default shall be paid to the holder in whose name this
Bond is registered at the close of business on a date established for the
payment of such defaulted interest by the Trustee in any lawful manner.  This Bond shall be payable as to principal,
premium, if any, and interest in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts, at the office or agency of the Company in the Borough of
Manhattan, The City of New York.


 


This Bond is one
of an issue of First Mortgage Bonds (hereinafter called the Bonds) of the
Company issued and to be issued in series under and pursuant to and equally
secured by an indenture of mortgage and deed of trust dated as of October 1,
1935, executed by the Company to Irving Trust Company (now The Bank of New York
Mellon), as Trustee, as said indenture has been amended and supplemented as
hereinafter stated, and is one of a series of said First Mortgage Bonds, which
series is designated as the First Mortgage Bonds, Variable Rate Pollution
Control Series 2008-B Due 2040, of the Company (hereinafter called the Series B
New Bonds) created and described in a Forty-Sixth Supplemental Indenture dated
as of December 1, 2008, executed by the Company to The Bank of New York
Mellon, as Trustee.  Subsequent to the
execution and delivery of said indenture of mortgage and deed of trust there
have been executed and delivered forty-six indentures supplemental thereto,
including said Forty-Sixth Supplemental Indenture dated as of December 1,
2008, supplementing and amending as therein set forth certain provisions
thereof.  Said indenture of mortgage and
deed of trust and such supplemental indentures collectively are hereinafter
sometimes called the “Indenture.”


 


For a description
of the property mortgaged and pledged, the nature and extent of the security,
the rights of the holders of the Bonds and of the Trustee therein and thereto,
the duties and immunities of the Trustee, and the terms and conditions upon
which the Bonds are issued and secured, reference is hereby made to the
Indenture.  The rights and obligations of
the Company and of the holders and registered owners of the Bonds of this issue
may be modified or amended at the request of the Company by an indenture or
indentures supplemental to the Indenture, executed pursuant to the consent in
writing of the holders or registered owners of a majority in principal amount
of the Bonds then outstanding affected by such modification or amendment, all
in the manner and subject to the limitations set forth in the Indenture, any
consent by the holder or registered owner of any Bond being conclusive and
binding upon such holder or registered owner and upon all future holders and
owners of such Bond, irrespective of whether or not any notation of such consent
is made upon such Bond; provided that no such modification or amendment by such
supplemental indenture shall extend the maturity of, or reduce the rate of
interest on, or otherwise modify the terms of payment of the principal or
interest of, this Bond, which obligations are absolute and unconditional, nor
permit the creation of any lien ranking prior to or equal with the lien of the
Indenture on any of the mortgaged property. 
The Series B New Bonds are to be issued by the Company to the Ohio
Air Quality Development Authority (hereinafter called the Authority), or its
assignee, to evidence and secure the obligations of the Company to repay the
loan of the proceeds of the sale of the Series B Project Bonds (as
hereinafter defined) made by the Authority to the Company, pursuant to a
certain Loan Agreement, dated as of December 1, 2008, between the
Authority and the 


 


Exh. B-2

















 


Company,
to assist in the refunding of the Refunded Bonds (as such term is defined in the
Forty-Sixth Supplemental Indenture referred to above) and the financing of the
Company’s portion of additional costs of acquisition, construction and
installation of certain air quality facilities (as that term is defined and
used in Section 3706.01 of the Ohio Revised Code) installed in connection
with: Units 7 and 8 at the Miami Fort Generating Station located in Hamilton
County, Ohio as to which the Company at the date hereof owns an undivided 36%
interest as tenant in common with another public utility company; Unit 2 at the
Killen Generating Station located in Adams County, Ohio as to which the Company
at the date hereof owns an undivided 67% interest as tenant in common with
another public utility company; Units 1-4 at the J. M. Stuart Generating Station
located in Brown and Adams Counties, Ohio as to which the Company at the date
hereof owns an undivided 35% interest as tenant in common with two other public
utility companies; and Unit 4 at the Conesville Generating Station in Coshocton
County, Ohio as to which the Company at the date hereof owns an undivided 16.5%
interest as tenant in common with two other public utility companies (such
interests in said facilities being hereinafter called the Project).  The loan by the Authority in respect of the Refunded
Bonds and the Project is to be funded by the proceeds derived from the sale by
the Authority of State of Ohio Collateralized Air Quality Development Revenue
Refunding Bonds, 2008 Series B (The Dayton Power and Light Company
Project) in the aggregate principal amount of $50,000,000 (hereinafter called
the Series B Project Bonds).  The Series B
Project Bonds are to be issued under a certain Trust Indenture, dated as of December 1,
2008 (hereinafter called the Series B Project Bonds Indenture), between
the Authority and The Bank of New York Mellon, as Trustee (hereinafter in such
capacity called the Series B Project Bond Trustee) and the Series B
New Bonds are to be assigned by the Authority to the Series B Project Bond
Trustee as security for the payment of the principal of, and premium, if any,
and interest on, the Series B Project Bonds and are to be delivered by the
Company on behalf of the Authority directly to the Series B Project Bond
Trustee. The Series B New Bonds shall not be assignable or transferable
except as may be required to effect a transfer to any successor trustee under
the Series B Project Bond Indenture, or, subject to compliance with
applicable law, as may be involved in the course of the exercise of rights and
remedies consequent upon an Event of Default under the Series B Project
Bond Indenture.


 


In the event any Series B
Project Bonds shall be surrendered to the Series B Project Bond Trustee
for cancellation pursuant to the Series B Project Bonds Indenture (except
upon exchange for other Series B Project Bonds), Series B New Bonds
equivalent in principal amount to such Series B Project Bonds shall be
deemed to have been paid, but only when and to the extent (a) so noted on
the schedule of payments hereon by an agency of the Company and (if such agency
is not the Trustee) written notice by such agency of such notation has been
received by the Trustee or (b) such Series B New Bond is surrendered
to and canceled by the Trustee as provided in the next paragraph; and in the
event and to the extent the principal of, or premium, if any, or interest on,
any Series B Project Bonds shall be paid or deemed to be paid, an equal
amount of principal or premium, if any, or interest, as the case may be,
payable with respect to an aggregate principal amount of corresponding Series B
New Bonds equal to the aggregate principal amount of such Series B Project
Bonds shall be deemed to have been paid, but, in the case of such payment of
principal, only when and to the extent (i) so noted on the schedule of payments
hereon by an agency of the Company and (if such agency is not the Trustee)
written notice by such agency of such notation has been received by the Trustee
or (ii) such Series B New Bond is surrendered to and canceled by the
Trustee as provided in the next paragraph. 
When any such payment of 


 


Exh. B-3

















 


principal
of this Bond is made, it shall be surrendered by the registered owner hereof to
an agency of the Company for such notation and notification or to the Trustee
for cancellation.


 


In the event that
this Bond shall be deemed to have been paid in full, this Bond shall be
surrendered to the Trustee for cancellation. 
In the event that this Bond shall be deemed to have been paid in part,
this Bond may, at the option of the registered owner, be surrendered to the
Trustee for cancellation, in which event the Trustee shall cancel this Bond and
the Company shall execute and the Trustee shall authenticate and deliver Series B
New Bonds in authorized denominations in aggregate principal amount equal to
the unpaid balance of the principal amount of this Bond.


 


The Series B
New Bonds are subject to mandatory redemption by the Company prior to maturity
at any time in whole or in part as provided in Section 6 of Article Two
of the Forty-Sixth Supplemental Indenture at a redemption price of 100% of the
principal amount to be redeemed, plus accrued interest, if any, to the
redemption date.


 


The Series B
New Bonds are subject to optional redemption by the Company prior to maturity
at any time in whole or in part as provided in Section 7 of Article Two
of the Forty-Sixth Supplemental Indenture at a redemption price equal to 100%
of the principal amount to be redeemed, plus accrued interest, if any, to the
redemption date.


 


The Series B
New Bonds are subject to optional redemption by the Company prior to maturity
at any time in whole or in part as provided in Section 8 of Article Two
of the Forty-Sixth Supplemental Indenture at the same redemption price, plus
accrued interest, if any, to the redemption date, as shall be payable on the Series B
Project Bonds to be redeemed concurrently therewith.


 


Any redemption of
the Series B New Bonds shall be made after written notice to the
registered owner of such Series B New Bonds, sent by the Trustee by mail,
first class postage prepaid, or hand delivered at least 30 days and not earlier
than 60 days before the redemption date, unless a shorter notice period is
consented to in writing by the registered owner or owners of all Series B
New Bonds and such consent is filed with the Trustee, and shall be made in the
manner provided in Section 9 of Article Two of the Forty-Sixth
Supplemental Indenture, subject to the provisions of the First Mortgage as
amended.


 


The principal
hereof may be declared or may become due on the conditions, in the manner and
at the time set forth in the Indenture, upon the happening of a completed
default as provided in the Indenture.


 


This Bond may be
exchanged for a like principal amount of other Series B New Bonds, or
transferred as prescribed in the Indenture by the registered owner hereof in
person, or by his duly authorized attorney, at the office or agency of the
Company in the Borough of Manhattan, The City of New York, upon surrender and
cancellation of this Bond and thereupon a new registered Series B New Bond
or Series B New Bonds without coupons for a like principal amount and of
authorized denominations will be issued in exchange therefor as provided in the
Indenture.  The Company and the Trustee
may deem and treat the person in whose name this 


 


Exh. B-4

















 


Bond is
registered as the absolute owner hereof for the purpose of receiving payment of
or on account of the principal and premium, if any, and interest due hereon and
for all other purposes.


 


No service charge
will be made for any such exchange or transfer of Series B New Bonds, but
the Company may require payment of a sum sufficient to cover any stamp tax or
other governmental charge payable in connection therewith.


 


The Series B
New Bonds are issuable as registered Bonds without coupons in denominations of
$5,000 and any integral multiple of $5,000.


 


No recourse shall
be had for the payment of the principal of, or premium, if any, or interest on,
this Bond, or under or upon any obligation, covenant or agreement contained in
the Indenture, against any incorporator, or any past, present, or future
subscriber to capital stock, shareholder, officer or director, as such, of the
Company or of any predecessor or successor corporation, either directly or
through the Company or any predecessor or successor corporation, under any
present or future rule of law, statute or constitution or by the
enforcement of any assessment or otherwise, all such liability of incorporators,
subscribers, shareholders, officers and directors being released by the
registered owner hereof by the acceptance of this Bond and being likewise
waived and released by the terms of the Indenture.


 


This Bond shall
not become valid or obligatory for any purpose until The Bank of New York
Mellon, the Trustee under the Indenture, or its successor thereunder, shall
have signed the form of certificate endorsed hereon.


 


IN WITNESS
WHEREOF, The Dayton Power and Light Company has caused this Bond to be executed
in its name by the manual or facsimile signature of its President or any Vice
President and its corporate seal to be hereunto affixed or a facsimile thereof
reproduced hereon and attested by the manual or facsimile signature of its
Corporate Secretary or an Assistant Corporate Secretary.


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE DAYTON POWER AND
  LIGHT COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  [President] [Vice
  President]

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
  [Corporate Secretary]

  	
   

  
	
   

  	
  [Assistant Corporate
  Secretary]

  	
   

  



 


Exh. B-5

















 


TRUSTEE’S CERTIFICATE


 


This Bond is one
of the Bonds of the Series designated therein, described in the
within-mentioned Indenture.


 


 


	
   

  	
  THE BANK OF NEW YORK
  MELLON, as

  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  



 


Exh. B-6

















 


Bonds of the Variable Rate Pollution Control Series 2008-B
Due 2040


SCHEDULE OF PAYMENTS


 


	
  Principal

  Payment

  	
   

  	
  Unpaid Principal

  Amount

  	
   

  	
  Redemption

  Premium

  	
   

  	
  Interest

  Payment

  	
   

  	
  Agency of the Company

  Making Notation

  	
   

  	
  Authorized

  Officer

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Exh. B-7