**Exhibit 10(a)**

 

**AMENDMENT NO. 1 TO CREDIT AGREEMENT**

 

ThisAmendment No. 1 to Credit Agreement (this “Amendment”) is dated asof April 9, 2009, by and among THE DAYTON POWER AND LIGHT COMPANY, an Ohiocorporation (the “Borrower”), the lending institutions party to theCredit Agreement, as hereinafter defined (the “Lenders”), and KEYBANKNATIONAL ASSOCIATION, a national banking association, as administrative agentfor the Lenders (the “Administrative Agent”).

 

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

 

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

 

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

 

# Section 1.  Definitions.  Each capitalized term used herein and nototherwise defined in this Amendment shall be defined in accordance with theCredit Agreement.

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# Section 2.  Amendments to Credit Agreement.

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## 2.1                               Amendments to Section 1.1.  Section 1.1 of the Credit Agreement ishereby amended to amend and restate the definitions of “Applicable FacilityFee Rate,” “Applicable Margin,” “Base Rate” and “UnfundedLiabilities” in their entirety as follows:

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

 
| **S&P  Rating** | ** ** | **Moody’s Rating** | ** ** | **Fitch Rating**  | ** ** | **Applicable Facility  Fee Rate** | ** ** |
|---------------------|------------|-------------------------|------------|-------------------|------------|-----------------------------------|------------|
| A– or higher   |       | A3 or higher            |       | A– or higher |       | 30.00 basis points                |       |
| BBB+                |       | Baa1                    |       | BBB+              |       | 35.00 basis points                |       |
| BBB                 |       | Baa2                    |       | BBB               |       | 40.00 basis points                |       |
| BBB–           |       | Baa3                    |       | BBB–         |       | 50.00 basis points                |       |
| Lower than BBB-     |       | Lower than Baa3         |       | Lower than BBB-   |       | 62.50 basis points                |       |

 

If at any time each Rating Agency issues adifferent rating, then the Applicable Facility Fee Rate shall be determinedbased on the intermediate rating at such time. If at any time two Rating Agencies issue the same rating, which isdifferent than the other Rating Agency, the rating issued by such other RatingAgency shall be disregarded, and the Applicable Facility Fee Rate shall bedetermined based on the two identical ratings at such time.  If there is no S&P Rating and FitchRating, then the Applicable Facility Fee 

 

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Rate shall be determinedbased on the Moody’s Rating.  If there isno Moody’s Rating and Fitch Rating, then the Applicable Facility Fee Rate shallbe determined based on the S&P Rating. If there is no Moody’s Rating and S&P Rating, then the ApplicableFacility Fee Rate shall be determined based on the Fitch Rating.  If at any time only two Rating Agencies issuea rating and there is a difference of two or more rating levels between suchRating Agencies, then the Applicable Facility Fee Rate****shallbe determined based on the intermediate rating levels at the midpoint betweenthe ratings issued by such Rating Agencies at such time or, if there is nomidpoint, based on the higher intermediate level.  If (i) there is no S&P Rating, Moody’sRating and Fitch Rating or (ii) an Event of Default has occurred and iscontinuing, the Applicable Facility Fee Rate shall be the highest rate perannum indicated therefor in the above table. The S&P Rating, Moody’s Rating and Fitch Rating in effect on anydate for purposes of determining the Applicable Facility Fee Rate shall be thatS&P Rating, Moody’s Rating and Fitch Rating in effect at the close ofbusiness on such date.  Each change inthe Applicable Facility Fee Rate resulting from a publicly announced change inthe S&P Rating, the Fitch Rating and/or the Moody’s Rating shall beeffective during the period commencing on the date of the public announcementthereof and ending on the date immediately preceding the effective date of thenext change.

 

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

 
| **S&P  Rating** | ** ** | **Moody’s Rating** | ** ** | **Fitch Rating**  | ** ** | **Applicable  Margin for  Eurodollar Loans** | ** ** | **Applicable  Margin for Base  Rate Loans** | ** ** |
|---------------------|------------|-------------------------|------------|-------------------|------------|----------------------------------------------|------------|---------------------------------------------|------------|
| A– or higher   |       | A3 or higher            |       | A– or higher |       | 200.00 basis points                          |       | 100.0 basis points                          |       |
| BBB+                |       | Baa1                    |       | BBB+              |       | 225.00 basis points                          |       | 125.0 basis points                          |       |
| BBB                 |       | Baa2                    |       | BBB               |       | 250.00 basis points                          |       | 150.0 basis points                          |       |
| BBB-                |       | Baa3                    |       | BBB-              |       | 275.00 basis points                          |       | 175.0 basis points                          |       |
| Lower than BBB-     |       | Lower than Baa3         |       | Lower than BBB-   |       | 300.00 basis points                          |       | 200.0 basis points                          |       |

 

If at any time each Rating Agency issues a differentrating, then the Applicable Margin shall be determined based on theintermediate rating at such time.  If atany time two Rating Agencies issue the same rating, which is different than theother Rating Agency, the rating issued by such other Rating Agency shall bedisregarded, and the Applicable Margin shall be determined based on the twoidentical ratings at such time.  If thereis no S&P Rating and Fitch Rating, then the Applicable Margin shall bedetermined based on the Moody’s Rating. If there is no Moody’s Rating and Fitch Rating, then the ApplicableMargin shall be determined based on the S&P Rating.  If there is no Moody’s Rating and S&PRating, then the Applicable Margin shall be determined based on the FitchRating.  If at any time only two RatingAgencies issue a rating and there is a difference of two or more rating levelsbetween such Rating Agencies, then the Applicable Margin shall be determinedbased on the intermediate rating levels at the midpoint between the ratingsissued by such Rating Agencies at such time or, if there is 

 

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no midpoint, based on thehigher intermediate level.  If (i) thereis no S&P Rating, Moody’s Rating and Fitch Rating or (ii) an Event ofDefault has occurred and is continuing, the Applicable Margin shall be thehighest rate per annum indicated therefor in the above table.  The S&P Rating, Moody’s Rating and FitchRating in effect on any date for purposes of determining the Applicable Marginshall be that S&P Rating, Moody’s Rating and Fitch Rating in effect at theclose of business on such date.  Eachchange in the Applicable Margin resulting from a publicly announced change inthe S&P Rating, the Fitch Rating and/or the Moody’s Rating shall beeffective during the period commencing on the date of the public announcementthereof and ending on the date immediately preceding the effective date of thenext change.

 

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

 

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

 

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

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### (i)            ERISA:  (i) anymember of the Borrower’s Controlled Group shall fail to pay when due an amountor amounts aggregating in excess of $30,000,000 which it shall have becomeliable to pay under Title IV of ERISA, or notice of intent to terminate a Planor Plans of such Borrower which in the aggregate have Unfunded Liabilities inexcess of $30,000,000 shall be filed under Title IV of ERISA by such Borroweror any member of the Controlled Group, any plan administrator of the Plan orPlans or any combination of the foregoing or any Reportable Event that wouldreasonably be expected to have a Material Adverse Effect shall occur inconnection with any Plan; (ii) the Borrower or any member of theControlled Group shall have been notified by the sponsor of a MultiemployerPlan that it has incurred withdrawal liability to such Multiemployer Plan in anamount that, when aggregated with all other amounts required to be paid toMultiemployer Plans by the Borrower or any other member of the Controlled Groupas withdrawal liability (determined as of the date of such notification),exceeds $10,000,000 or requires payment exceeding $10,000,000 per annum; or (iii) theBorrower or any other member of the Controlled Group shall have been notifiedby the sponsor of a Multiemployer Plan that such Multiemployer Plan is inreorganization or is being terminated, within the meaning of Title IV of ERISA,if as a result of such reorganization or termination the aggregate annualcontribution of the Borrower and the other members 

 

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### of the Controlled Group (taken as a whole) to all Multiemployer Plansthat are then in reorganization or being terminated have been or will beincreased over the amounts contributed to such Multiemployer Plans for therespective plan years of each such Multiemployer Plan immediately preceding theplan in year in which the reorganization or termination occurs by an amountexceeding $10,000,000; or

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# Section 3.  Effectiveness.

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## 3.1                               ConditionsPrecedent.  Theeffectiveness of this Amendment is subject to the satisfaction of the followingconditions precedent:

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### (i)            AmendmentExecuted.  This Amendment shall havebeen executed by the Borrower, the Administrative Agent and the RequiredLenders, and counterparts hereof as so executed shall have been delivered tothe Administrative Agent.

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### (ii)           Fees, etc.  The Borrower shall have paid (i) anamendment fee to the Administrative Agent, for the pro rata benefit of eachLender executing this Amendment based on the Commitment of such Lender, in anamount equal to 25 basis points times the amount of such Lender’sCommitment, (ii) to the Administrative Agent for its own account, the feesseparately agreed to between the Borrower and the Administrative Agent, and (iii) allreasonable out-of-pocket fees and expenses of the Administrative Agent and ofspecial counsel to the Administrative Agent in connection with the preparation,negotiation, execution and delivery of this Amendment.

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## 3.2                               Effective Date.  This Amendment shall be effective on the dateupon which the conditions precedent set forth in Section 3.1 above aresatisfied.  Unless otherwise specificallyset forth herein, each of the amendments and other modifications set forth inthis Amendment shall be effective on and after such date.

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# Section 4.  Representations and Warranties.  The Borrower hereby represents and warrantsto the Administrative Agent and the Lenders that (a) it has the legalpower and authority to execute and deliver this Amendment, (b) the officerexecuting this Amendment on its behalf has been duly authorized to execute anddeliver the same and bind it with respect to the provisions hereof, (c) noDefault or Event of Default exists under the Credit Agreement, nor will anyoccur immediately after the execution and delivery of this Amendment, and (d) asof the date hereof, such it has no claim or offset against, or defense orcounterclaim to, its obligations or liabilities under the Credit Agreement orany other Credit Document.

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# Section 5.  Miscellaneous.

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## 5.1           Credit Agreement Unaffected.  Each reference that is made in the CreditAgreement or any Credit Document to the Credit Agreement shall hereafter beconstrued as a reference to the Credit Agreement, as amended hereby.  Except as herein otherwise specificallyprovided, all provisions of the Credit Agreement shall remain in full force andeffect and be unaffected hereby.  ThisAmendment is a Credit Document.

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

 

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## 5.3           Expenses.  The Borrower agrees to pay on demand allcosts and expenses incurred by the Administrative Agent in connection with thepreparation, negotiation and execution of this Amendment, including withoutlimitation, the reasonable costs, fees, expenses and disbursements of theAdministrative Agent’s legal counsel.

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## 5.4           Severability.  Any term or provision of this Amendment heldby a court of competent jurisdiction to be invalid or unenforceable shall notimpair or invalidate the remainder of this Amendment, and the effect thereofshall be confined to the term or provision so held to be invalid orunenforceable.

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## 5.5           Entire Agreement.  This Amendment is specifically limited to thematters expressly set forth herein.  ThisAmendment and all other instruments, agreements and documents executed anddelivered in connection with this Amendment embody the final, entire agreementamong the parties hereto with respect to the subject matter hereof andsupersede any and all prior commitments, agreements, representations andunderstandings, whether written or oral, relating to the matters covered bythis Amendment, and may not be contradicted or varied by evidence of prior,contemporaneous or subsequent oral agreements or discussions of the partieshereto.  There are no oral agreementsamong the parties hereto relating to the subject matter hereof or any othersubject matter relating to the Credit Agreement.

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## 5.6           Governing Law.  The rights and obligations of all partieshereto shall be governed by the laws of the State of New York, without regardto principles of conflicts of laws.

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## 5.7           JURY TRIAL WAIVER.  THE BORROWER, THE ADMINISTRATIVE AGENT ANDEACH OF THE LENDERS HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE INRESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONGTHE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISINGOUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIPESTABLISHED AMONG THEM IN CONNECTION WITH THIS AMENDMENT OR ANY NOTE OR OTHERINSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITHOR THE TRANSACTIONS RELATED THERETO.

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[Signature Pages Follow.]

 

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|       | THE  DAYTON POWER AND LIGHT COMPANY                              |
|------------|------------------------------------------------------------------|
|       |                                                             |
|       | By:                                                              |   |
|       | Name:                                                            |   |
|       | Title:                                                           |   |
| ** ** | ** **                                                       |
|       | KEYBANK  NATIONAL ASSOCIATION,                                   |
|       | *  as a Lender, LC Issuer and as the  Administrative Agent* |
|       | * *                                                         |
|       | By:                                                              |   |
|       | Name:                                                            |   |
|       | Title:                                                           |   |
| ** ** | ** **                                                       |
|       | JPMORGAN  CHASE BANK, N.A.                                       |
|       |                                                             |
|       | By:                                                              |   |
|       | Name:                                                            |   |
|       | Title:                                                           |   |
|       |                                                             |
|       |                                                             |
|       | FIFTH  THIRD BANK                                                |
|       |                                                             |
|       | By:                                                              |   |
|       | Name:                                                            |   |
|       | Title:                                                           |   |

 

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