**Exhibit 4(x)**

 

 

 

 

**THE DAYTON POWER AND LIGHTCOMPANY**

 

**AND**

 

**THE BANK OF NEW YORK MELLON(formerly The Bank of New York**

**(formerly Irving Trust Company))                                         *Trustee***

 

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**Forty-Sixth SupplementalIndenture**

 

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**Dated as of December 1, 2008**

 

 

 

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THE DAYTON POWER AND LIGHT COMPANY

 

FORTY-SIXTH SUPPLEMENTAL INDENTUREDATED AS OF DECEMBER 1, 2008

 

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**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                                                                                 |
|                  |                                                                                    |          |  |

 

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| 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     |

 

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| 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

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FORTY-SIXTHSUPPLEMENTAL INDENTURE, dated as of December 1, 2008, between THE DAYTONPOWER AND LIGHT COMPANY, a corporation of the State of Ohio (hereinaftersometimes called the Company), party of the first part, and THE BANK OF NEWYORK MELLON (formerly The Bank of New York (formerly Irving Trust Company)), acorporation of the State of New York (hereinafter sometimes called theTrustee), as Trustee, party of the second part.

 

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

 

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

 

WHEREAS,in Article Two of the First Mortgage it is provided in substance, amongother things, that the Bonds may be issued in series, the Bonds of each seriesmaturing on such dates and bearing interest at such rates, respectively, as theBoard of Directors of the Company may determine prior to the authenticationthereof; and

 

WHEREAS,the Company has heretofore executed and delivered to the Trustee forty-fivesupplemental Indentures numbered, dated and, except as set forth below,providing for their respective series of First Mortgage Bonds, all as set forthin 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                               |

 

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| **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

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| **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

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| **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 Threefor certain amendments to the First Mortgage, as theretofore amended, each suchamendment to become effective on the earliest date on which either (a) thereshall not be any Bonds outstanding of Series Due 1975, Series Due1978, Series A, Due 1978, Series Due 1982, Series Due 1984, or Series Due1993, or (b) there shall have been executed and delivered a supplementalindenture or indentures embodying said amendment (either alone or

 

4

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with other amendments) consented to by the holders ofseventy-five per centum (75%) in aggregate principal amount of the Bondsat the time outstanding of the series enumerated in the foregoingclause (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) inits Article Four for an amendment to the First Mortgage, as theretoforeamended, to become effective on the date on which the amendments provided forby Section 3 of Article Three of said Eleventh Supplemental Indentureshall become effective and (b) in its Article Five for certainadditional amendments to the First Mortgage, as theretofore amended, to becomeeffective on the earliest date on which either (i) there shall not be anyBonds outstanding of Series Due 1975, Series Due 1978, Series A,Due 1978, Series Due 1982, Series Due 1984, Series Due 1993, Series Due1997, Series Due 1998, Series Due 1999, or Series Due 2000, or (ii) thereshall have been executed and delivered a supplemental indenture or indenturesembodying said amendments (either alone or with other amendments) consented toby the holders of seventy-five per centum (75%) in aggregate principalamount of the Bonds at the time outstanding of the series enumerated in theforegoing clause (i), or of each said series of which Bonds are thenoutstanding; and

 

WHEREAS,the Company has heretofore executed and delivered to the Trustee a SixteenthSupplemental Indenture dated as of October 3, 1972, which provided in its Article Onefor an amendment of Article Five of the First Mortgage, as theretoforeamended, altering the requirements for the opinion of counsel to be deliveredto the Trustee as a condition precedent to the authentication and delivery ofadditional Bonds under Article Five or the withdrawal of cash under Article Sevenof 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 1993remain outstanding and the amendments contained in said Eleventh SupplementalIndenture 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 Due1997, Series Due 1998, Series Due 1999, or Series Due 2000remain outstanding and the amendments contained in said Fifteenth SupplementalIndenture that did not theretofore become effective by virtue of the SixteenthSupplemental Indenture have become effective; and

 

WHEREAS,said Forty-Second Supplemental Indenture, which created the 51/8% Series Due 2013, provided in its Article Twofor certain amendments to the First Mortgage, as theretofore amended, to becomeeffective on the earliest date on which either (i) there shall not be anyBonds outstanding of 6.35% Series Due 2007, Pollution Control Series 1992-ADue 2027, Pollution Control Series 1992-B Due 2027, Pollution Control Series 1992-CDue 2022, Series Due 2026 and Series Due 2024, or (ii) thereshall have been executed and delivered a supplemental indenture or indenturesembodying said amendment (either alone or with other amendments) consented toby the holders of seventy-five per centum (75%) in aggregate principalamount of the Bonds at the time outstanding of the series enumerated in theforegoing clause (i); and

 

5

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

 

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

 

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

 

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

 

WHEREAS,the Series A New Bonds are to be issued by the Company to the Ohio AirQuality Development Authority (hereinafter called the Authority), or itsassignee, to evidence and secure the obligations of the Company to repay theloan of the proceeds of the sale of the Series A Project Bonds (ashereinafter defined) made by the Authority to the Company, pursuant to acertain Loan Agreement, dated as of December 1, 2008, between theAuthority and the Company (hereinafter called the Series A LoanAgreement), to assist in the refunding of the Authority’s State of OhioCollateralized Air Quality Development Revenue Bonds, 2007 Series A (TheDayton Power and Light Company Project) (hereinafter called the Refunded Bonds)and

 

6

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the financing of the Company’s portion of additionalcosts of acquisition, construction and installation of certain “air qualityfacilities” (as that term is defined and used in Section 3706.01, of theOhio Revised Code) installed in connection with: Units 7 and 8 at the MiamiFort Generating Station located in Hamilton County, Ohio as to which theCompany at the date hereof owns an undivided 36% interest as tenant in commonwith another public utility company, Unit 2 at the Killen Generating Stationlocated in Adams County, Ohio as to which the Company at the date hereof ownsan undivided 67% interest as tenant in common with another public utilitycompany, Units 1-4 at the J. M. Stuart Generating Station located in Brown andAdams Counties, Ohio as to which the Company at the date hereof owns anundivided 35% interest as tenant in common with two other public utilitycompanies, 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 (suchinterests 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 repaythe loan of the proceeds of the sale of the Series B Project Bonds (ashereinafter defined) made by the Authority to the Company, pursuant to acertain Loan Agreement, dated as of December 1, 2008, between theAuthority and the Company (hereinafter called the Series B LoanAgreement), to assist in the refunding of the Refunded Bonds and the financingof the Company’s portion of additional costs of acquisition, construction andinstallation of the Project; and

 

WHEREAS,the loans by the Authority in respect of the refunding of the Refunded Bondsand of the Project are to be funded by the proceeds derived from the sale bythe Authority of (a) State of Ohio Collateralized Air Quality DevelopmentRevenue Refunding Bonds, 2008 Series A (The Dayton Power and Light CompanyProject), in the aggregate principal amount of $50,000,000 (hereinafter calledthe Series A Project Bonds); and (b) State of Ohio Collateralized AirQuality Development Revenue Refunding Bonds, 2008 Series B (The DaytonPower 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 TrustIndenture, dated as of December 1, 2008 (hereinafter called the Series AProject Bonds Indenture), between the Authority and The Bank of New YorkMellon, as Trustee (hereinafter in such capacity called the Series AProject Bond Trustee), and the Series A New Bonds are to be assigned bythe Authority to the Series A Project Bond Trustee as security for thepayment of the principal of, and premium, if any, and interest on the Series AProject Bonds and are to be delivered by the Company on behalf of the Authoritydirectly to the Series A Project Bond Trustee; and

 

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

 

7

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

 

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

 

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

 

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

 

NOW,THEREFORE, THIS INDENTURE WITNESSETH

 

that,in order further to secure the payment of all the Bonds at any time issued andoutstanding under the First Mortgage as amended or this Forty-SixthSupplemental Indenture according to their tenor, purport and effect, as wellthe interest thereon as the principal thereof, and further to secure theperformance and observance of all the covenants and conditions therein and inthe First Mortgage as amended and herein contained, and further to set forththe terms and conditions upon which the New Bonds are to be issued, secured andheld, and for and in consideration of the premises and of the acceptance orpurchase of the New Bonds by the holders or registered owners thereof, and ofthe sum of one dollar, lawful money of the United States of America, to theCompany duly paid by the Trustee at or before the ensealing and delivery ofthis Forty-Sixth Supplemental Indenture, the receipt whereof is herebyacknowledged, the Company has executed and delivered this Forty-Sixth SupplementalIndenture, 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 confirmunto the Trustee, and to its successor or successors in said trust, and to itand its and their assigns forever, and does hereby subject to the lien of theFirst Mortgage as heretofore and hereby amended all the following describedproperties (all of which properties are included in and constitute a part ofthe “mortgaged property” and the “mortgaged and pledged property” as such termsare used and defined in the First Mortgage as heretofore and hereby amended andwhenever used in the First Mortgage as heretofore and hereby amended such termsinclude and refer to such properties), to wit:

 

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# **FIRST.**

# ** **

# **REALPROPERTY AND INTERESTS IN REAL PROPERTY.**

# ** **

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

 

# **SECOND.**

# ** **

# **ELECTRICGENERATING PLANTS.**

# ** **

Allelectric 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 thisForty-Sixth Supplemental Indenture, and owned by it at the latter date,including all power houses, buildings, structures and works, and the land onwhich 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 anyof them, or occupied, enjoyed or used in connection therewith.

 

# **THIRD.**

# ** **

# **TRANSMISSIONLINES.**

# ** **

Allelectric overhead and underground transmission lines of the Company acquired byit between November 1, 2007, the date of the Forty-Fifth SupplementalIndenture, and the date of this Forty-Sixth Supplemental Indenture, and ownedby 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 orappertaining thereto, and all service lines extending therefrom, together withall real property, rights-of-way, easements, permits, privileges, franchises,and rights for or relating to the construction, maintenance or operationthereof, through, over, under or upon any private property or any public waywithin as well as without the corporate limits of any municipal corporation.

 

# **FOURTH.**

# ** **

# **SUBSTATIONSAND SUBSTATION SITES.**

# ** **

Allsubstations 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 thisForty-Sixth Supplemental Indenture, and owned by it at the latter date, fortransforming 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 orpersonal, forming a part of, or appertaining thereto, or used, occupied or enjoyedin connection with any of such substations and switching stations.

 

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**FIFTH.**

 

**ELECTRIC DISTRIBUTION SYSTEMS.**

 

All electricdistribution systems of the Company acquired by it between November 1,2007, the date of the Forty-Fifth Supplemental Indenture, and the date of thisForty-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 allother property, real or personal, forming a part of or appertaining thereto, orused, occupied or enjoyed in connection with such distribution systems or anyof them, together with all rights-of-way, easements, permits, privileges,franchises, and rights in or relating to the construction, maintenance oroperation thereof, through, over, under or upon any private property or publicways within as well as without the corporate limits of any municipalcorporation.

 

# **SIXTH.**

 

# **LIQUEFIED PETROLEUM GAS PRODUCTIONAND STORAGE FACILITIES.**

 

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

 

# **SEVENTH.**

 

# **GAS DISTRIBUTION SYSTEMS.**

 

All gasdistribution 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 thisForty-Sixth Supplemental Indenture, and owned by it at the latter date, fordistribution of gas, including pipes, mains, conduits, meters, appliances,equipment, and all other property, real or personal, forming a part of orappertaining to or used, occupied or enjoyed in connection with suchdistribution systems, or any of them, together with all rights-of-way,easements, permits, privileges, franchises and rights, for or relating to theconstruction, maintenance or operation thereof, through, over, under or uponany private property or any public streets or highways, within as well aswithout the corporate limits of any municipal corporation.

 

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# **EIGHTH.**

 

# **OFFICE AND DEPARTMENTAL BUILDINGS.**

 

All office anddepartmental buildings of the Company, including the real estate on which suchstructures stand, acquired by it between November 1, 2007, the date of theForty-Fifth Supplemental Indenture, and the date of this Forty-SixthSupplemental Indenture, and owned by it at the latter date, appertaining to,used, occupied or enjoyed in connection with the rendition of public utilityservice.

 

# **NINTH.**

 

# **TELEPHONE LINES.**

 

All telephonelines of the Company acquired by it between November 1, 2007, the date ofthe Forty-Fifth Supplemental Indenture, and the date of this Forty-SixthSupplemental Indenture, and owned by it at the latter date, used or availablefor use in the operation of its properties or otherwise.

 

# **TENTH.**

 

# **FRANCHISES.**

 

All and singularthe franchises, grants, immunities, privileges and rights of the Companygranted to or acquired by it between November 1, 2007, the date of theForty-Fifth Supplemental Indenture, and the date of this Forty-SixthSupplemental Indenture, and to which it was entitled at the latter date,including all and singular the franchises, grants, immunities, privileges andrights of the Company granted by all municipalities or political subdivisions,and all right, title and interest therein owned by the Company on the date ofthe execution of this Forty-Sixth Supplemental Indenture, and all renewals,extensions and modifications of said franchises, grants, immunities, privilegesand 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 ANDAPPURTENANCES.**

 

A.                                   Allother real estate and interests in real estate and all other physical electricpower and light, gas and other property owned by the Company at the date ofexecution of this Forty-Sixth Supplemental Indenture.

 

B.                                     Allother real estate and interests in real estate and all other physical electricpower and light, gas and other property which the Company may hereafter acquireor construct.

 

C.                                     Allpresent and future appurtenances of the real estate and interests in realestate which now are, or hereafter shall be, subject to the lien of the FirstMortgage as amended, and all

 

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

 

D.                                    Allcorporate rights, privileges, immunities and franchises, powers, licenses,easements, leases, contracts and other rights and all renewals and extensionsthereof held or acquired for use or used upon, or in connection with orappertaining to, any of the properties which now are or hereafter shall besubject to the lien of the First Mortgage as amended, or which the Company hasor may have the right to exercise in respect of any of said properties.

 

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

 

Together with alland singular the tenements, hereditaments and appurtenances belonging or in anyway appertaining to the aforesaid property or any part thereof, with thereversion and reversions, remainder and remainders, rents, issues, income andprofits thereof, and all the estate, right, title, interest and claimwhatsoever at law or in equity, which the Company now has or which it mayhereafter acquire in and to the aforesaid property and every part and parcelthereof.

 

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

 

# **TWELFTH.**

 

# **PROPERTY HEREAFTER TO BECOMESUBJECT TO THE LIEN OF THE FIRST MORTGAGE AS AMENDED.**

 

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

 

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orprofits of the mortgaged property, or any cash (except cash deposited with theTrustee pursuant to any of the provisions of the First Mortgage as heretoforeand hereby amended), or any bills, notes or accounts receivable, contracts orchoses in action, or any materials or supplies or construction equipment, or anymerchandise, equipment or apparatus manufactured or acquired for the purpose ofsale or resale in the usual course of business, except in case of the happeningof a completed default as defined in Section 1 of Article Twelve ofthe First Mortgage as heretofore and hereby amended, and following suchcompleted default, in case the Trustee or a receiver or trustee shall enterupon and take possession of the mortgaged property, or (2) in any case,any cars, trucks or other vehicles of any nature for the transportation ofpersonnel, materials or equipment by any means, or any bonds, notes, evidencesof indebtedness, shares of stock or other securities, except such as may bespecifically subjected to the lien of the First Mortgage as amended.

 

B.                                     Anyand all property of every name and nature, including shares of stock, bonds,other securities or obligations and cars, trucks or other vehicles for thetransportation of personnel, materials or equipment by any means, which, fromtime to time after the execution of this Forty-Sixth Supplemental Indenture, bydelivery or by writing of any kind for the purposes hereof, shall have beenconveyed, mortgaged, pledged, assigned or transferred by, or by anyone onbehalf of, the Company to the Trustee, which is hereby authorized to receiveany 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 substitutedsecurity, for the payment of the Bonds to be issued under the First Mortgage asamended, and to hold and apply any and all such property subject to the termshereof and of the First Mortgage as amended.

 

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

 

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

 

IN TRUSTNEVERTHELESS, upon and subject to the terms, conditions and stipulationshereinafter and in the First Mortgage as amended set forth, for the equal andproportionate benefit and security of the holders from time to time of theBonds and interest coupons issued and to be issued under the First Mortgage asamended and this and other indentures supplemental thereto, without preference,priority or distinction as to lien or otherwise of any of the Bonds and couponsover any others by reason of priority in time of issue, sale or negotiationthereof or otherwise howsoever, and for the uses and purposes and upon andsubject to the terms, conditions, provisions and agreements in the Bonds andhereinafter and in the First Mortgage as amended expressed and declared.

 

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## **ARTICLE ONE.**

 

## **BONDS OF THEVARIABLE RATE POLLUTION CONTROLSERIES 2008-A DUE 2040 AND ISSUE THEREOF.**

 

SECTION 1.                                Series andForm of Series A New Bonds. There shall be a series of Bonds designated “Variable Rate PollutionControl Series 2008-A Due 2040,” each of which shall bear the descriptivetitle First Mortgage Bond.  The aggregateprincipal amount of Series A New Bonds which may be outstanding under theFirst Mortgage as amended and this Forty-Sixth Supplemental Indenture shall belimited to $50,000,000, except as provided in Section 9 of Article Twoof the First Mortgage as amended.

 

SECTION 2.                                Issueof Series A New Bonds.  Upon theexecution and delivery of this Forty-Sixth Supplemental Indenture and upondelivery of $50,000,000 aggregate principal amount of the Series A NewBonds, executed by the Company, and upon compliance by the Company with theprovisions of Article Five, Article Six or Article Seven or anyor 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-SixthSupplemental Indenture, authenticate the Series A New Bonds and deliverthe Series A New Bonds as provided in said Article Five, Article Sixor Article Seven.

 

SECTION 3.                                Dates,Interest, Etc. of Series A New Bonds. The Series A New Bonds shall be dated as provided in Section 3of 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 3of Article Two, at such rate or rates per annum as shall cause the amountof interest payable on each interest payment date (as hereinafter defined) onthe Series A New Bonds to equal the amount of interest payable on suchinterest payment date on the corresponding Series A Project Bonds, suchinterest to be payable on the same date as interest is payable on said Series AProject Bonds (each such date relating to the Series A New Bonds hereincalled an “interest payment date”), until the maturity of the Series A NewBonds, or, in the case of any such Series A New Bonds duly called forredemption, until the redemption date, or in the case of any default by theCompany in the payment of the principal due on any such Series A NewBonds, until the Company’s obligation with respect to the payment of theprincipal shall be discharged as provided in the First Mortgage, asamended.  The amount of interest payableon each interest payment date shall be computed on the same basis as the amountof interest is computed on the corresponding Series A Project Bonds; provided,however, that the aggregate amount of interest payable on any interestpayment date shall not exceed an amount which results in an interest rate ofmore than the Series A Maximum Interest Rate per annum on the aggregateprincipal amount of the Series A New Bonds outstanding on that interestpayment date.

 

The Trustee shallbe entitled to request, receive and conclusively rely upon the certification ofthe Series A Project Bond Trustee of the interest rate of, interestpayment 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 theTrustee to determine for the Series A New Bonds their correspondinginterest rate, interest payment date, Record Date and basis on which interestshall be computed.

 

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

 

SECTION 4.                                Definitions.  In addition to thewords and terms defined in the First Mortgage as amended, unless the context oruse clearly indicates another meaning or intent, the following terms shall havethe following meanings for purposes of this Article One of thisForty-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 BondsIndenture.

 

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

 

SECTION 5.                                Denominationsand Exchangeability of Series A New Bonds; Temporary Bonds May BeAuthenticated and Delivered.  The Series ANew Bonds shall be issued in denominations of $5,000 and any integral multipleof $5,000.

 

Whenever any Series ANew Bond or Series A New Bonds shall be surrendered at the office oragency of the Company in said Borough of Manhattan for exchange for a Series ANew Bond or Series A New Bonds of other authorized denomination ordenominations, the Company shall execute, and the Trustee shall authenticateand deliver, upon cancellation of the Series A New Bond or Series ANew Bonds so surrendered, a Series A New Bond or Series A New Bondsof such other authorized denomination or denominations of like aggregateprincipal amount as the holder making the exchange shall have requested andshall be entitled to receive.  Onpresentation of any Series A New Bond which is to be redeemed pursuant tothe provisions of this Forty-Sixth Supplemental Indenture in part only, theCompany shall execute, and the Trustee shall authenticate and deliver, a Series ANew Bond or Series A New Bonds in principal amount equal to the unredeemedportion of the Series A New Bond so presented.

 

The Company shallnot be required to (a) register a transfer of, or exchange, any Series ANew Bond during a period of fifteen (15) days next preceding any selectionof 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 forredemption in whole or in part.

 

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

 

Until definitive Series ANew Bonds shall be ready for delivery, the Company may execute and, uponrequest of the Company, the Trustee shall authenticate and deliver, in lieu of

 

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

 

SECTION 6.                                MandatoryRedemption.  The Series A NewBonds shall be subject to mandatory redemption by the Company prior to maturityat any time, in whole or in part, at a redemption price of 100% of theprincipal amount to be redeemed, plus accrued and unpaid interest, if any, tothe redemption date, upon receipt by the Trustee of notice from the Series AProject Bond Trustee to the effect that (a) the Company is required todeliver moneys to the Series A Project Bond Trustee for the redemption ofthe corresponding Series A Project Bonds in whole or in part, as the casemay 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 arebeing concurrently called for redemption. Said notice shall specify the redemption date of such Series A NewBonds (which redemption date shall be the same date as the redemption datespecified in said notice for the Series A Project Bonds being currentlyredeemed).  Any such redemption shall bemade upon the notice and in the manner provided in this Article One,subject to the provisions of the First Mortgage as amended.

 

SECTION 7.                                ExtraordinaryOptional Redemption.  The Series ANew Bonds shall be subject to redemption, at the option of the Company, priorto maturity at any time, in whole or in part, at a redemption price of 100% ofthe principal amount to be redeemed, plus accrued and unpaid interest, if any,to the redemption date, upon receipt by the Trustee of an officers’ certificateto the effect that (a) the Company has given notice to the Series AProject Bond Trustee that the Company is exercising its option to direct theredemption of corresponding Series A Project Bonds in whole or in part, asprovided in Section 6.2 of the Series A Loan Agreement, and (b) anequivalent principal amount of such Series A Project Bonds are beingconcurrently called for redemption.  Suchofficers’ certificate shall have attached to it a copy of said notice to the Series AProject Bond Trustee and shall specify the redemption date of such Series ANew Bonds (which redemption date shall be not less than 45 days (unless ashorter period shall be acceptable to the Trustee) after the date of themailing of such certificate and shall be the same date as the redemption datespecified in said attached notice for the Series A Project Bonds beingconcurrently redeemed).  Any suchredemption shall be made upon the notice, which may be conditional as providedin 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.                                OptionalRedemption.  The Series A NewBonds shall also be subject to redemption prior to maturity, at the option ofthe 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 bepayable on the Series A Project Bonds to be redeemed concurrentlytherewith, upon receipt by the Trustee of an officers’ certificate to theeffect that (a) the Company has given notice to the Series A ProjectBond Trustee that the Company is exercising its option to deliver moneys to theSeries A Project Bond Trustee for the redemption of corresponding Series A

 

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ProjectBonds in whole or in part, as the case may be, as provided in Section 6.1of the Series A Loan Agreement and (b) an equivalent principal amountof such Series A Project Bonds are being concurrently called forredemption.  Such officers’ certificateshall specify the principal amount of the New Series A Bonds to beredeemed and the redemption price thereof, shall have attached to it a copy ofsaid notice to the Series A Project Bond Trustee and shall specify theredemption date of such Series A New Bonds (which redemption date shall benot less than 45 days (unless a shorter period shall be acceptable to theTrustee) after the date of the mailing of such certificate and shall be thesame date as the redemption date specified in said attached notice for the Series AProject Bonds being concurrently redeemed). Any such redemption shall be made upon the notice, which may beconditional as provided in Section 9 of this Article One, and in themanner provided in this Article One, subject to the provisions of theFirst Mortgage as amended.

 

SECTION 9.                                Noticeof Redemption.  Subject to theprovisions of the First Mortgage as amended, written notice of redemption ofthe Series A New Bonds pursuant to any of Sections 6, 7 or 8  of this Article One shall be given bythe Trustee by mailing, first class postage prepaid, or delivering by hand tothe registered owner of such Series A New Bonds to be redeemed a notice ofsuch redemption at its last address as it shall appear upon the books of theCompany for the registration of transfer of such Series A New Bonds.  Any notice of redemption pursuant to saidSections 6, 7 or 8 shall be mailed or delivered by hand as least 30 days andnot earlier than 60 days before the redemption date; provided, however, thatthe registered owner or owners of all Series A New Bonds may consent inwriting to a shorter notice period, and such consent, if filed with theTrustee, shall be binding upon the Company and such registered owners and theirtransferees.  In the case of any noticeof redemption of Series A New Bonds pursuant to said Sections 7 or 8, suchnotice shall state that such redemption is conditional to the same extent andwith the same effect, if any, as the notice of redemption of the Series AProject Bonds being concurrently redeemed.

 

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

 

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

 

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but, inthe case of such payment of principal of such Series A New Bonds, onlywhen and to the extent that (a) such payment of the principal amountthereof shall be noted by an agency of the Company on the schedule of paymentson such Series A New Bonds and (if such agency is not the Trustee) writtennotice by such agency of such notation shall have been received by the Trusteeor (b) such Series A New Bonds shall have been surrendered to andcancelled by the Trustee as provided in Section 12 of this Article One.

 

SECTION 12.                          Surrenderof Series A New Bonds in Certain Circumstances.  When payment of any principal amount of a Series ANew 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 fornotation and notification or to the Trustee for cancellation as provided insuch Section.  All Series A NewBonds deemed to have been paid in full as provided in Section 10 or 11 ofthis Article One shall be surrendered to the Trustee for cancellation andthe Trustee shall forthwith cancel the same. In the event that part of a Series A New Bond shall be deemed tohave been paid as provided in said Section 10 or 11, the registered ownermay at its option surrender such Series A New Bond to the Trustee forcancellation, in which event the Trustee shall cancel such Series A NewBond and the Company shall execute and the Trustee shall authenticate anddeliver, without charge to the registered owner, Series A New Bonds insuch authorized denominations as shall be specified by the registered owner inan aggregate principal amount equal to the unpaid balance of the principalamount of such surrendered Series A New Bond.

 

SECTION 13.                          Applicationof Article Ten of First Mortgage as Amended.  Except as in this Forty-Sixth SupplementalIndenture otherwise provided with respect to any matter or question, theprovisions of Article Ten of the First Mortgage as amended shall beapplicable in the case of the redemption of all or any part of the Series ANew Bonds at any time outstanding.  Theterm “officers’ certificate” as used in this Article One shall mean acertificate signed by the President or a Vice President and any other VicePresident, the Treasurer, Assistant Treasurer, the Secretary or AssistantSecretary or any other officer of the Company.

 

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

 

## **ARTICLE TWO.**

 

## **BONDS OF THEVARIABLE RATE POLLUTION CONTROLSERIES 2008-B DUE 2040 AND ISSUE THEREOF.**

 

SECTION 1.                                Series andForm of Series B New Bonds. There shall be a series of Bonds designated “Variable Rate PollutionControl Series 2008-B Due 2040,” each of which shall bear the descriptivetitle First Mortgage Bond.  The aggregateprincipal amount of Series B New Bonds which may be outstanding under theFirst Mortgage as amended and this Forty-Sixth Supplemental Indenture shall belimited to $50,000,000, except as provided in Section 9 of Article Twoof the First Mortgage as amended.

 

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SECTION 2.                                Issueof Series B New Bonds.  Upon theexecution and delivery of this Forty-Sixth Supplemental Indenture and upondelivery of $50,000,000 aggregate principal amount of the Series B NewBonds, executed by the Company, and upon compliance by the Company with theprovisions of Article Five, Article Six or Article Seven or anyor 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-SixthSupplemental Indenture, authenticate the Series B New Bonds and deliverthe Series B New Bonds as provided in said Article Five, Article Sixor Article Seven.

 

SECTION 3.                                Dates,Interest, Etc. of Series B New Bonds. The Series B New Bonds shall be dated as provided in Section 3of 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 3of Article Two, at such rate or rates per annum as shall cause the amountof interest payable on each interest payment date (as hereinafter defined) onthe Series B New Bonds to equal the amount of interest payable on suchinterest payment date on the corresponding Series B Project Bonds, suchinterest to be payable on the same date as interest is payable on said Series BProject Bonds (each such date relating to the Series B New Bonds hereincalled an “interest payment date”), until the maturity of the Series B NewBonds, or, in the case of any such Series B New Bonds duly called forredemption, until the redemption date, or in the case of any default by theCompany in the payment of the principal due on any such Series B NewBonds, until the Company’s obligation with respect to the payment of theprincipal shall be discharged as provided in the First Mortgage, asamended.  The amount of interest payableon each interest payment date shall be computed on the same basis as the amountof interest is computed on the corresponding Series B Project Bonds; provided,however, that the aggregate amount of interest payable on any interestpayment date shall not exceed an amount which results in an interest rate ofmore than the Series B Maximum Interest Rate per annum on the aggregateprincipal amount of the Series B New Bonds outstanding on that interestpayment date.

 

The Trustee shallbe entitled to request, receive and conclusively rely upon the certification ofthe Series B Project Bond Trustee of the interest rate of, interestpayment 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 theTrustee to determine for the Series B New Bonds their correspondinginterest rate, interest payment date, Record Date and basis on which interestshall be computed.

 

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

 

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

 

19

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followingterms shall have the following meanings for purposes of this Article Twoof 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 BondsIndenture.

 

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

 

SECTION 5.                                Denominationsand Exchangeability of Series B New Bonds; Temporary Bonds May BeAuthenticated and Delivered.  The Series BNew Bonds shall be issued in denominations of $5,000 and any integral multipleof $5,000.

 

Whenever any Series BNew Bond or Series B New Bonds shall be surrendered at the office oragency of the Company in said Borough of Manhattan for exchange for a Series BNew Bond or Series B New Bonds of other authorized denomination ordenominations, the Company shall execute, and the Trustee shall authenticateand deliver, upon cancellation of the Series B New Bond or Series BNew Bonds so surrendered, a Series B New Bond or Series B New Bondsof such other authorized denomination or denominations of like aggregateprincipal amount as the holder making the exchange shall have requested andshall be entitled to receive.  Onpresentation of any Series B New Bond which is to be redeemed pursuant tothe provisions of this Forty-Sixth Supplemental Indenture in part only, theCompany shall execute, and the Trustee shall authenticate and deliver, a Series BNew Bond or Series B New Bonds in principal amount equal to the unredeemedportion of the Series B New Bond so presented.

 

The Company shallnot be required to (a) register a transfer of, or exchange, any Series BNew Bond during a period of fifteen (15) days next preceding any selectionof 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 forredemption in whole or in part.

 

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

 

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

 

SECTION 6.                                MandatoryRedemption.  The Series B NewBonds shall be subject to mandatory redemption by the Company prior to maturityat any time, in whole or in part, at a redemption price of 100% of theprincipal amount to be redeemed, plus accrued and unpaid 

 

20

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interest,if any, to the redemption date, upon receipt by the Trustee of notice from the Series BProject Bond Trustee to the effect that (a) the Company is required todeliver moneys to the Series B Project Bond Trustee for the redemption ofthe corresponding Series B Project Bonds in whole or in part, as the casemay 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 arebeing concurrently called for redemption. Said notice shall specify the redemption date of such Series B NewBonds (which redemption date shall be the same date as the redemption datespecified in said notice for the Series B Project Bonds being currentlyredeemed).  Any such redemption shall bemade upon the notice and in the manner provided in this Article Two,subject to the provisions of the First Mortgage as amended.

 

SECTION 7.                                ExtraordinaryOptional Redemption.  The Series BNew Bonds shall be subject to redemption, at the option of the Company, priorto maturity at any time, in whole or in part, at a redemption price of 100% ofthe principal amount to be redeemed, plus accrued and unpaid interest, if any,to the redemption date, upon receipt by the Trustee of an officers’ certificateto the effect that (a) the Company has given notice to the Series BProject Bond Trustee that the Company is exercising its option to direct theredemption of corresponding Series B Project Bonds in whole or in part, asprovided in Section 6.2 of the Series B Loan Agreement, and (b) anequivalent principal amount of such Series B Project Bonds are beingconcurrently called for redemption.  Suchofficers’ certificate shall have attached to it a copy of said notice to the Series BProject Bond Trustee and shall specify the redemption date of such Series BNew Bonds (which redemption date shall be not less than 45 days (unless ashorter period shall be acceptable to the Trustee) after the date of themailing of such certificate and shall be the same date as the redemption datespecified in said attached notice for the Series B Project Bonds beingconcurrently redeemed).  Any suchredemption shall be made upon the notice, which may be conditional as providedin 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.                                OptionalRedemption.  The Series B NewBonds shall also be subject to redemption prior to maturity, at the option ofthe 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 bepayable on the Series B Project Bonds to be redeemed concurrentlytherewith, upon receipt by the Trustee of an officers’ certificate to theeffect that (a) the Company has given notice to the Series B ProjectBond Trustee that the Company is exercising its option to deliver moneys to theSeries B Project Bond Trustee for the redemption of corresponding Series BProject Bonds in whole or in part, as the case may be, as provided in Section 6.1of the Series B Loan Agreement and (b) an equivalent principal amountof such Series B Project Bonds are being concurrently called forredemption.  Such officers’ certificateshall specify the principal amount of the New Series B Bonds to beredeemed and the redemption price thereof, shall have attached to it a copy ofsaid notice to the Series B Project Bond Trustee and shall specify theredemption date of such Series B New Bonds (which redemption date shall benot less than 45 days (unless a shorter period shall be acceptable to theTrustee) after the date of the mailing of such certificate and shall be thesame date as the redemption date specified in said attached notice for the Series BProject Bonds being concurrently redeemed). Any such redemption shall be made upon the notice, which may beconditional as provided in Section 9 of this Article Two, and in themanner provided in this Article Two, subject to the provisions of theFirst Mortgage as amended.

 

21

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SECTION 9.                                Noticeof Redemption.  Subject to theprovisions of the First Mortgage as amended, written notice of redemption ofthe Series B New Bonds pursuant to any of Sections 6, 7 or 8  of this Article Two shall be given by theTrustee by mailing, first class postage prepaid, or delivering by hand to theregistered owner of such Series B New Bonds to be redeemed a notice of suchredemption at its last address as it shall appear upon the books of the Companyfor the registration of transfer of such Series B New Bonds.  Any notice of redemption pursuant to saidSections 6, 7 or 8 shall be mailed or delivered by hand as least 30 days andnot earlier than 60 days before the redemption date; provided, however, thatthe registered owner or owners of all Series B New Bonds may consent in writingto a shorter notice period, and such consent, if filed with the Trustee, shallbe binding upon the Company and such registered owners and theirtransferees.  In the case of any noticeof redemption of Series B New Bonds pursuant to said Sections 7 or 8, suchnotice shall state that such redemption is conditional to the same extent andwith the same effect, if any, as the notice of redemption of the Series BProject Bonds being concurrently redeemed.

 

SECTION 10.                          Cancellation.  In the event any Series B Project Bonds shallbe purchased by the Company and surrendered by the Company to the Series BProject Bond Trustee for cancellation or shall be otherwise surrendered to theSeries B Project Bond Trustee for cancellation pursuant to the Series B ProjectBonds Indenture (except upon exchange for other Series B Project Bonds),corresponding Series B New Bonds equivalent in principal amount to the Series BProject Bonds so surrendered shall be deemed to have been paid, but only whenand to the extent that (a) such payment of the principal amount of such SeriesB New Bonds shall be noted by an agency of the Company on the schedule ofpayments 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 theTrustee or (b) such Series B New Bonds shall have been surrendered to andcancelled by the Trustee as provided in Section 12 of this Article Two.

 

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

 

SECTION 12.                          Surrenderof Series B New Bonds in Certain Circumstances.  When payment of any principal amount of aSeries 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 fornotation and notification or to the Trustee for cancellation as provided insuch Section.  All Series B New Bondsdeemed to have been paid in full as provided in Section 10 or 11 of thisArticle Two shall be surrendered to the Trustee for cancellation and theTrustee shall 

 

22

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forthwith cancel the same.  Inthe event that part of a Series B New Bond shall be deemed to have been paid asprovided in said Section 10 or 11, the registered owner may at its optionsurrender such Series B New Bond to the Trustee for cancellation, in whichevent the Trustee shall cancel such Series B New Bond and the Company shallexecute and the Trustee shall authenticate and deliver, without charge to theregistered owner, Series B New Bonds in such authorized denominations as shallbe specified by the registered owner in an aggregate principal amount equal tothe unpaid balance of the principal amount of such surrendered Series B NewBond.

 

SECTION 13.                          Applicationof Article Ten of First Mortgage as Amended.  Except as in this Forty-Sixth SupplementalIndenture otherwise provided with respect to any matter or question, theprovisions of Article Ten of the First Mortgage as amended shall beapplicable in the case of the redemption of all or any part of the Series BNew Bonds at any time outstanding.  Theterm “officers’ certificate” as used in this Article Two shall mean a certificatesigned by the President or a Vice President and any other Vice President, theTreasurer, Assistant Treasurer, the Secretary or Assistant Secretary or anyother officer of the Company.

 

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

 

## **ARTICLE THREE.**

##  

## **COVENANTS OF THECOMPANY.**

##  

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

 

SECTION 2.                                Promptlyafter 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-SixthSupplemental Indenture as may be necessary to make effective the lien intendedto be created hereby, and will furnish to the Trustee an opinion of counselselected by the Company and satisfactory to the Trustee (who may be of counselto the Company) either (a) stating that in the opinion of such counselsuch action has been taken with respect to the recording, filing, re-recordingand refiling of the First Mortgage as amended and this Forty-Sixth SupplementalIndenture as to make effective the lien intended to be created thereby, andreciting the details of such action, or (b) stating that in the opinion ofsuch counsel no such action is necessary to make such lien effective.

 

## **ARTICLE FOUR.**

##  

## **MISCELLANEOUS.**

##  

SECTION 1.                                TheNew Bonds may be authenticated and delivered by the Trustee and issued by theCompany in advance of the recording or filing of this Forty-Sixth SupplementalIndenture.

 

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SECTION 2.                                Theprovisions of this Forty-Sixth Supplemental Indenture shall become effectiveimmediately upon the execution and delivery hereof.  From and after the initial issue of the NewBonds, this Forty-Sixth Supplemental Indenture shall form a part of the FirstMortgage and all the terms and conditions herein contained shall be deemed tobe part of the terms of the First Mortgage, as fully and with the same effectas if all the terms and provisions of this Forty-Sixth Supplemental Indenturehad been set forth in the First Mortgage as originally executed.  Except as modified or amended by thisForty-Sixth Supplemental Indenture, the First Mortgage as amended shall remainand continue in full force and effect in accordance with the terms andprovisions thereof, and all the covenants, conditions, terms and provisions ofthe First Mortgage, as heretofore modified and amended and as further modifiedand amended by this Forty-Sixth Supplemental Indenture, shall be applicable withrespect to the New Bonds, except insofar as such covenants, conditions, termsand provisions are limited and applicable only to the Bonds of another or otherseries, or are expressed to continue only so long as Bonds of another or otherseries are outstanding, and all the covenants, conditions, terms and provisionsof the First Mortgage as amended with respect to the Trustee shall remain infull force and effect and be applicable to the Trustee under this Forty-SixthSupplemental Indenture in the same manner as though set out herein atlength.  All representations and recitalscontained in this Forty-Sixth Supplemental Indenture and in the New Bonds (saveonly the Trustee’s certificates upon said New Bonds) are made by and on behalfof the Company, and the Trustee is in no way responsible therefor or for anystatement therein contained.

 

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

 

SECTION 4.                                ThisForty-Sixth Supplemental Indenture may be simultaneously executed in severalcounterparts and each counterpart shall be an original instrument.

 

24

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IN WITNESSWHEREOF, THE DAYTON POWER AND LIGHT COMPANY has caused this instrument to besigned on its behalf by its President or a Vice President and its corporateseal to be hereunto affixed and attested by its Corporate Secretary or an AssistantCorporate Secretary, in the City of Dayton, Ohio, and THE BANK OF NEW YORKMELLON has caused this instrument to be signed on its behalf by a VicePresident or an Assistant Vice President and its corporate seal to be hereuntoaffixed and attested by a Vice President, Assistant Vice President or anAssistant Treasurer, in The City of New York, New York, as of the day and yearfirst 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

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[Forty-SixthSupplemental Indenture, dated as of December 1, 2008, to Indenture datedas of October 1, 1935, executed by The Dayton Power and Light Company toIrving 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

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| 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 inthe State aforesaid, Frederick J. Boyle, and Timothy G. Rice, to me known andknown to me to be, respectively, the Senior Vice President, Chief FinancialOfficer, Treasurer and Controller and the Vice President, Assistant GeneralCounsel and Corporate Secretary of THE DAYTON POWER AND LIGHT COMPANY, one ofthe corporations which executed the foregoing instrument, who severallyacknowledged that they did sign and seal said instrument as such Senior VicePresident, Chief Financial Officer, Treasurer and Controller and Vice President,Assistant General Counsel and Corporate Secretary for and on behalf of saidcorporation and that the same is their free act and deed as such Senior VicePresident, Chief Financial Officer, Treasurer and Controller and VicePresident, Assistant General Counsel and Corporate Secretary, respectively, andthe 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 FranklinCounty, Ohio; that he is the Senior Vice President, Chief Financial Officer,Treasurer and Controller of THE DAYTON POWER AND LIGHT COMPANY, one of thecorporations described in and which executed the above instrument; that heknows the seal of said corporation; that the seal affixed to said instrument issuch corporate seal; that it was so affixed by order of the Board of Directorsof said corporation; and that he signed his name thereto by like order.

 

IN WITNESS WHEREOFI 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 inthe State aforesaid, Cheryl Clarke and Mary Miselis, to me known and known tome to be, respectively, a Vice President and a Vice President of THE BANK OFNEW YORK MELLON, one of the corporations which executed the foregoinginstrument, who severally acknowledged that they did sign and seal saidinstrument as such Vice President and Vice President for and on behalf of saidcorporation and that the same is their free act and deed as such Vice Presidentand Vice President, respectively, and the free and corporate act and deed ofsaid corporation; and said Cheryl Clarke being by me duly sworn, did depose andsay: that she resides in New York County, New York; that she is a VicePresident of THE BANK OF NEW YORK MELLON, one of the corporations described inand which executed the above instrument; that she knows the seal of saidcorporation; 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 WHEREOFI 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

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EXHIBIT A

 

[FORM OF SERIES A NEW BOND]

 

This bond is not transferable except to a successortrustee under the Trust Indenture, dated as of December 1, 2008, betweenOhio Air Quality Development Authority relating to its Collateralized AirQuality Development Revenue Refunding Bonds, 2008 Series A (The DaytonPower 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 POWERAND LIGHT COMPANY, a corporation of the State of Ohio (hereinafter called theCompany), for value received, hereby promises to pay to[                      ],as Series A Project Bond Trustee (as hereinafter defined) or registeredassigns, on November 1, 2040, at the office or agency of the Company inthe Borough of Manhattan, The City of New York, [  ] Dollars in suchcoin or currency of the United States of America as at the time of payment islegal tender for the payment of public and private debts, and to pay to the registeredowner hereof interest thereon from the interest payment date to which interesthas been paid or duly provided for last preceding the date hereof (unless thedate hereof is an interest payment date to which interest has been paid or dulyprovided for, in which case from the date hereof, or, if no interest has beenpaid or duly provided for, from December 4, 2008), at such rate or ratesper annum on each interest payment date (as hereinafter defined) as shall causethe amount of interest payable on such interest payment date on this Bond toequal the amount of interest payable on such interest payment date on thecorresponding Series A Project Bonds (as hereinafter defined), suchinterest to be payable on the same dates as interest is payable on said Series AProject Bonds (each such date herein called “an interest payment date”) untilthe 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 ofthe principal amount of this Bond, until the Company’s obligation with respectto the payment of such principal shall be discharged as provided in theIndenture (as hereinafter defined).  Theamount of interest payable on each interest payment date shall be computed onthe same basis as the amount of interest is computed on the corresponding said Series AProject Bonds; provided, however, that the aggregate amount of interest payableon any interest payment date shall not exceed an amount which results in aninterest rate of more than the Series A Maximum Interest Rate (as suchterm is defined in the Forty-Sixth Supplemental Indenture referred to herein)per annum on the aggregate principal amount of the Series A New Bonds (ashereinafter defined) outstanding on that interest payment date.

 

Exh. A-1

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The interestpayable on any interest payment date shall be paid to the holder in whose namethis Bond is registered on the Record Date (as such term is defined in Article Oneof the Forty-Sixth Supplemental Indenture referred to above), except that ifthe Company shall default in the payment of any installment of interest on thisBond, such interest in default shall be paid to the holder in whose name thisBond is registered at the close of business on a date established for thepayment 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 ofAmerica as at the time of payment is legal tender for the payment of public andprivate debts, at the office or agency of the Company in the Borough ofManhattan, The City of New York.

 

This Bond is oneof an issue of First Mortgage Bonds (hereinafter called the Bonds) of theCompany issued and to be issued in series under and pursuant to and equallysecured 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 YorkMellon), as Trustee, as said indenture has been amended and supplemented ashereinafter stated, and is one of a series of said First Mortgage Bonds, whichseries is designated as the First Mortgage Bonds, Variable Rate PollutionControl Series 2008-A Due 2040, of the Company (hereinafter called the Series ANew Bonds) created and described in a Forty-Sixth Supplemental Indenture datedas of December 1, 2008, executed by the Company to The Bank of New YorkMellon, as Trustee.  Subsequent to theexecution and delivery of said indenture of mortgage and deed of trust therehave 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 provisionsthereof.  Said indenture of mortgage anddeed of trust and such supplemental indentures collectively are hereinaftersometimes called the “Indenture.”

 

For a descriptionof 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 uponwhich the Bonds are issued and secured, reference is hereby made to theIndenture.  The rights and obligations ofthe Company and of the holders and registered owners of the Bonds of this issuemay be modified or amended at the request of the Company by an indenture orindentures supplemental to the Indenture, executed pursuant to the consent inwriting of the holders or registered owners of a majority in principal amountof the Bonds then outstanding affected by such modification or amendment, allin the manner and subject to the limitations set forth in the Indenture, anyconsent by the holder or registered owner of any Bond being conclusive andbinding upon such holder or registered owner and upon all future holders andowners of such Bond, irrespective of whether or not any notation of suchconsent is made upon such Bond; provided that no such modification or amendmentby such supplemental indenture shall extend the maturity of, or reduce the rateof interest on, or otherwise modify the terms of payment of the principal orinterest of, this Bond, which obligations are absolute and unconditional, norpermit the creation of any lien ranking prior to or equal with the lien of theIndenture on any of the mortgaged property. The Series A New Bonds are to be issued by the Company to the OhioAir Quality Development Authority (hereinafter called the Authority), or itsassignee, to evidence and secure the obligations of the Company to repay theloan of the proceeds of the sale of the Series A Project Bonds (ashereinafter defined) made by the Authority to the Company, pursuant to acertain Loan Agreement, dated as of December 1, 2008, between theAuthority and the 

 

Exh. A-2

----

 

Company,to assist in the refunding of the Refunded Bonds (as such term is defined inthe Forty-Sixth Supplemental Indenture referred to above) and the financing ofthe Company’s portion of additional costs of acquisition, construction andinstallation of certain air quality facilities (as that term is defined andused in Section 3706.01 of the Ohio Revised Code) installed in connectionwith: Units 7 and 8 at the Miami Fort Generating Station located in HamiltonCounty, 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 theKillen Generating Station located in Adams County, Ohio as to which the Companyat the date hereof owns an undivided 67% interest as tenant in common withanother public utility company; Units 1-4 at the J. M. Stuart GeneratingStation located in Brown and Adams Counties, Ohio as to which the Company atthe date hereof owns an undivided 35% interest as tenant in common with twoother public utility companies; and Unit 4 at the Conesville Generating Stationin Coshocton County, Ohio as to which the Company at the date hereof owns anundivided 16.5% interest as tenant in common with two other public utilitycompanies (such interests in said facilities being hereinafter called theProject).  The loan by the Authority inrespect of the Refunded Bonds and the Project is to be funded by the proceedsderived from the sale by the Authority of State of Ohio Collateralized AirQuality Development Revenue Refunding Bonds, 2008 Series A (The DaytonPower 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 beissued under a certain Trust Indenture, dated as of December 1, 2008(hereinafter called the Series A Project Bonds Indenture), between theAuthority and The Bank of New York Mellon, as Trustee (hereinafter in suchcapacity called the Series A Project Bond Trustee) and the Series ANew Bonds are to be assigned by the Authority to the Series A Project BondTrustee 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 theCompany on behalf of the Authority directly to the Series A Project BondTrustee. The Series A New Bonds shall not be assignable or transferableexcept as may be required to effect a transfer to any successor trustee underthe Series A Project Bond Indenture, or, subject to compliance withapplicable law, as may be involved in the course of the exercise of rights andremedies consequent upon an Event of Default under the Series A ProjectBond Indenture.

 

In the event any Series AProject Bonds shall be surrendered to the Series A Project Bond Trusteefor cancellation pursuant to the Series A Project Bonds Indenture (exceptupon exchange for other Series A Project Bonds), Series A New Bondsequivalent in principal amount to such Series A Project Bonds shall bedeemed to have been paid, but only when and to the extent (a) so noted onthe schedule of payments hereon by an agency of the Company and (if such agencyis not the Trustee) written notice by such agency of such notation has beenreceived by the Trustee or (b) such Series A New Bond is surrenderedto and canceled by the Trustee as provided in the next paragraph; and in theevent 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 equalamount of principal or premium, if any, or interest, as the case may be,payable with respect to an aggregate principal amount of corresponding Series ANew Bonds equal to the aggregate principal amount of such Series A ProjectBonds shall be deemed to have been paid, but, in the case of such payment ofprincipal, only when and to the extent (i) so noted on the schedule ofpayments hereon by an agency of the Company and (if such agency is not theTrustee) written notice by such agency of such notation has been received bythe Trustee or (ii) such Series A New Bond is surrendered to andcanceled by the Trustee as provided in the next paragraph.  When any such payment of 

 

Exh. A-3

----

 

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

 

In the event thatthis Bond shall be deemed to have been paid in full, this Bond shall besurrendered 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 theTrustee for cancellation, in which event the Trustee shall cancel this Bond andthe Company shall execute and the Trustee shall authenticate and deliver Series ANew Bonds in authorized denominations in aggregate principal amount equal tothe unpaid balance of the principal amount of this Bond.

 

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

 

The Series ANew Bonds are subject to optional redemption by the Company prior to maturityat any time in whole or in part as provided in Section 7 of Article Oneof 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 theredemption date.

 

The Series ANew Bonds are subject to optional redemption by the Company prior to maturityat any time in whole or in part as provided in Section 8 of Article Oneof the Forty-Sixth Supplemental Indenture at the same redemption price, plusaccrued interest, if any, to the redemption date, as shall be payable on the Series AProject Bonds to be redeemed concurrently therewith.

 

Any redemption ofthe Series A New Bonds shall be made after written notice to theregistered 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 earlierthan 60 days before the redemption date, unless a shorter notice period isconsented to in writing by the registered owner or owners of all Series ANew Bonds and such consent is filed with the Trustee, and shall be made in themanner provided in Section 9 of Article One of the Forty-SixthSupplemental Indenture, subject to the provisions of the First Mortgage asamended.

 

The principalhereof may be declared or may become due on the conditions, in the manner andat the time set forth in the Indenture, upon the happening of a completeddefault as provided in the Indenture.

 

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

 

Exh. A-4

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

 

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

 

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

 

No recourse shallbe 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 inthe Indenture, against any incorporator, or any past, present, or futuresubscriber to capital stock, shareholder, officer or director, as such, of theCompany or of any predecessor or successor corporation, either directly orthrough the Company or any predecessor or successor corporation, under anypresent or future rule of law, statute or constitution or by theenforcement of any assessment or otherwise, all such liability ofincorporators, subscribers, shareholders, officers and directors being releasedby the registered owner hereof by the acceptance of this Bond and beinglikewise waived and released by the terms of the Indenture.

 

This Bond shallnot become valid or obligatory for any purpose until The Bank of New YorkMellon, the Trustee under the Indenture, or its successor thereunder, shallhave signed the form of certificate endorsed hereon.

 

IN WITNESSWHEREOF, The Dayton Power and Light Company has caused this Bond to be executedin its name by the manual or facsimile signature of its President or any VicePresident and its corporate seal to be hereunto affixed or a facsimile thereofreproduced hereon and attested by the manual or facsimile signature of itsCorporate 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

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**TRUSTEE’S CERTIFICATE**

 

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

 

 
|   | THE BANK OF NEW YORK  MELLON, as  Trustee |
|--------|-------------------------------------------|
|   |                                      |
|   |                                      |
|   | By:                                       |   |
|   |                                      | Authorized Signatory |

 

Exh. A-6

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Bonds of the Variable Rate Pollution Control Series 2008-ADue 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 successortrustee under the Trust Indenture, dated as of December 1, 2008, betweenOhio Air Quality Development Authority relating to its Collateralized AirQuality Development Revenue Refunding Bonds, 2008 Series B (The DaytonPower 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 2040Due November 1, 2040

 

THE DAYTON POWERAND LIGHT COMPANY, a corporation of the State of Ohio (hereinafter called theCompany), 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 Boroughof Manhattan, The City of New York, [  ] Dollars in such coin orcurrency of the United States of America as at the time of payment is legaltender for the payment of public and private debts, and to pay to theregistered owner hereof interest thereon from the interest payment date towhich interest has been paid or duly provided for last preceding the datehereof (unless the date hereof is an interest payment date to which interesthas been paid or duly provided for, in which case from the date hereof, or, ifno interest has been paid or duly provided for, from December 4, 2008), atsuch rate or rates per annum on each interest payment date (as hereinafterdefined) as shall cause the amount of interest payable on such interest paymentdate on this Bond to equal the amount of interest payable on such interestpayment date on the corresponding Series B Project Bonds (as hereinafterdefined), such interest to be payable on the same dates as interest is payableon said Series B Project Bonds (each such date herein called “an interestpayment date”) until the maturity of this Bond, or if this Bond shall be dulycalled for redemption, until the redemption date, or if the Company shalldefault in the payment of the principal amount of this Bond, until theCompany’s obligation with respect to the payment of such principal shall bedischarged as provided in the Indenture (as hereinafter defined).  The amount of interest payable on each interestpayment date shall be computed on the same basis as the amount of interest iscomputed on the corresponding said Series B Project Bonds; provided,however, that the aggregate amount of interest payable on any interest paymentdate shall not exceed an amount which results in an interest rate of more thanthe Series B Maximum Interest Rate (as such term is defined in theForty-Sixth Supplemental Indenture referred to herein) per annum on theaggregate principal amount of the Series B New Bonds (as hereinafterdefined) outstanding on that interest payment date.

 

Exh. B-1

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The interestpayable on any interest payment date shall be paid to the holder in whose namethis Bond is registered on the Record Date (as such term is defined in Article Twoof the Forty-Sixth Supplemental Indenture referred to above), except that ifthe Company shall default in the payment of any installment of interest on thisBond, such interest in default shall be paid to the holder in whose name thisBond is registered at the close of business on a date established for thepayment 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 ofAmerica as at the time of payment is legal tender for the payment of public andprivate debts, at the office or agency of the Company in the Borough ofManhattan, The City of New York.

 

This Bond is oneof an issue of First Mortgage Bonds (hereinafter called the Bonds) of theCompany issued and to be issued in series under and pursuant to and equallysecured 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 YorkMellon), as Trustee, as said indenture has been amended and supplemented ashereinafter stated, and is one of a series of said First Mortgage Bonds, whichseries is designated as the First Mortgage Bonds, Variable Rate PollutionControl Series 2008-B Due 2040, of the Company (hereinafter called the Series BNew Bonds) created and described in a Forty-Sixth Supplemental Indenture datedas of December 1, 2008, executed by the Company to The Bank of New YorkMellon, as Trustee.  Subsequent to theexecution and delivery of said indenture of mortgage and deed of trust therehave 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 provisionsthereof.  Said indenture of mortgage anddeed of trust and such supplemental indentures collectively are hereinaftersometimes called the “Indenture.”

 

For a descriptionof 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 uponwhich the Bonds are issued and secured, reference is hereby made to theIndenture.  The rights and obligations ofthe Company and of the holders and registered owners of the Bonds of this issuemay be modified or amended at the request of the Company by an indenture orindentures supplemental to the Indenture, executed pursuant to the consent inwriting of the holders or registered owners of a majority in principal amountof the Bonds then outstanding affected by such modification or amendment, allin the manner and subject to the limitations set forth in the Indenture, anyconsent by the holder or registered owner of any Bond being conclusive andbinding upon such holder or registered owner and upon all future holders andowners of such Bond, irrespective of whether or not any notation of such consentis made upon such Bond; provided that no such modification or amendment by suchsupplemental indenture shall extend the maturity of, or reduce the rate ofinterest on, or otherwise modify the terms of payment of the principal orinterest of, this Bond, which obligations are absolute and unconditional, norpermit the creation of any lien ranking prior to or equal with the lien of theIndenture on any of the mortgaged property. The Series B New Bonds are to be issued by the Company to the OhioAir Quality Development Authority (hereinafter called the Authority), or itsassignee, to evidence and secure the obligations of the Company to repay theloan of the proceeds of the sale of the Series B Project Bonds (ashereinafter defined) made by the Authority to the Company, pursuant to acertain Loan Agreement, dated as of December 1, 2008, between theAuthority and the 

 

Exh. B-2

----

 

Company,to assist in the refunding of the Refunded Bonds (as such term is defined in theForty-Sixth Supplemental Indenture referred to above) and the financing of theCompany’s portion of additional costs of acquisition, construction andinstallation of certain air quality facilities (as that term is defined andused in Section 3706.01 of the Ohio Revised Code) installed in connectionwith: Units 7 and 8 at the Miami Fort Generating Station located in HamiltonCounty, 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 theKillen Generating Station located in Adams County, Ohio as to which the Companyat the date hereof owns an undivided 67% interest as tenant in common withanother public utility company; Units 1-4 at the J. M. Stuart Generating Stationlocated in Brown and Adams Counties, Ohio as to which the Company at the datehereof owns an undivided 35% interest as tenant in common with two other publicutility companies; and Unit 4 at the Conesville Generating Station in CoshoctonCounty, 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 (suchinterests in said facilities being hereinafter called the Project).  The loan by the Authority in respect of the RefundedBonds and the Project is to be funded by the proceeds derived from the sale bythe Authority of State of Ohio Collateralized Air Quality Development RevenueRefunding Bonds, 2008 Series B (The Dayton Power and Light CompanyProject) in the aggregate principal amount of $50,000,000 (hereinafter calledthe Series B Project Bonds).  The Series BProject Bonds are to be issued under a certain Trust Indenture, dated as of December 1,2008 (hereinafter called the Series B Project Bonds Indenture), betweenthe Authority and The Bank of New York Mellon, as Trustee (hereinafter in suchcapacity called the Series B Project Bond Trustee) and the Series BNew Bonds are to be assigned by the Authority to the Series B Project BondTrustee 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 theCompany on behalf of the Authority directly to the Series B Project BondTrustee. The Series B New Bonds shall not be assignable or transferableexcept as may be required to effect a transfer to any successor trustee underthe Series B Project Bond Indenture, or, subject to compliance withapplicable law, as may be involved in the course of the exercise of rights andremedies consequent upon an Event of Default under the Series B ProjectBond Indenture.

 

In the event any Series BProject Bonds shall be surrendered to the Series B Project Bond Trusteefor cancellation pursuant to the Series B Project Bonds Indenture (exceptupon exchange for other Series B Project Bonds), Series B New Bondsequivalent in principal amount to such Series B Project Bonds shall bedeemed to have been paid, but only when and to the extent (a) so noted onthe schedule of payments hereon by an agency of the Company and (if such agencyis not the Trustee) written notice by such agency of such notation has beenreceived by the Trustee or (b) such Series B New Bond is surrenderedto and canceled by the Trustee as provided in the next paragraph; and in theevent 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 equalamount of principal or premium, if any, or interest, as the case may be,payable with respect to an aggregate principal amount of corresponding Series BNew Bonds equal to the aggregate principal amount of such Series B ProjectBonds shall be deemed to have been paid, but, in the case of such payment ofprincipal, only when and to the extent (i) so noted on the schedule of paymentshereon 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 Trusteeor (ii) such Series B New Bond is surrendered to and canceled by theTrustee as provided in the next paragraph. When any such payment of 

 

Exh. B-3

----

 

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

 

In the event thatthis Bond shall be deemed to have been paid in full, this Bond shall besurrendered 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 theTrustee for cancellation, in which event the Trustee shall cancel this Bond andthe Company shall execute and the Trustee shall authenticate and deliver Series BNew Bonds in authorized denominations in aggregate principal amount equal tothe unpaid balance of the principal amount of this Bond.

 

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

 

The Series BNew Bonds are subject to optional redemption by the Company prior to maturityat any time in whole or in part as provided in Section 7 of Article Twoof 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 theredemption date.

 

The Series BNew Bonds are subject to optional redemption by the Company prior to maturityat any time in whole or in part as provided in Section 8 of Article Twoof the Forty-Sixth Supplemental Indenture at the same redemption price, plusaccrued interest, if any, to the redemption date, as shall be payable on the Series BProject Bonds to be redeemed concurrently therewith.

 

Any redemption ofthe Series B New Bonds shall be made after written notice to theregistered 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 earlierthan 60 days before the redemption date, unless a shorter notice period isconsented to in writing by the registered owner or owners of all Series BNew Bonds and such consent is filed with the Trustee, and shall be made in themanner provided in Section 9 of Article Two of the Forty-SixthSupplemental Indenture, subject to the provisions of the First Mortgage asamended.

 

The principalhereof may be declared or may become due on the conditions, in the manner andat the time set forth in the Indenture, upon the happening of a completeddefault as provided in the Indenture.

 

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

 

Exh. B-4

----

 

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

 

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

 

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

 

No recourse shallbe 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 inthe Indenture, against any incorporator, or any past, present, or futuresubscriber to capital stock, shareholder, officer or director, as such, of theCompany or of any predecessor or successor corporation, either directly orthrough the Company or any predecessor or successor corporation, under anypresent or future rule of law, statute or constitution or by theenforcement of any assessment or otherwise, all such liability of incorporators,subscribers, shareholders, officers and directors being released by theregistered owner hereof by the acceptance of this Bond and being likewisewaived and released by the terms of the Indenture.

 

This Bond shallnot become valid or obligatory for any purpose until The Bank of New YorkMellon, the Trustee under the Indenture, or its successor thereunder, shallhave signed the form of certificate endorsed hereon.

 

IN WITNESSWHEREOF, The Dayton Power and Light Company has caused this Bond to be executedin its name by the manual or facsimile signature of its President or any VicePresident and its corporate seal to be hereunto affixed or a facsimile thereofreproduced hereon and attested by the manual or facsimile signature of itsCorporate 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 oneof the Bonds of the Series designated therein, described in thewithin-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-BDue 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

----