Document:

Exhibit 4.3

 

 

 

 

LOAN AGREEMENT

 

 

between

 

 

THE COUNTY OF BOONE, KENTUCKY

 

 

and

 

 

THE DAYTON POWER AND LIGHT COMPANY

 

 

 

$35,275,000

County of Boone, Kentucky

Collateralized Pollution Control

Revenue Refunding Bonds, 2005 Series A

(The Dayton Power and Light Company Project)

 

 

 

Dated

 

 

as of

 

 

August 1, 2005

 

 

 

 

INDEX

 

(This Index is not a part of the Agreement

but rather is for convenience of reference only.)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  
	
   

  	
  Section 1.1

  	
  Use of Defined Terms

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 1.2

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 1.3

  	
  Interpretation

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 1.4

  	
  Captions and Headings

  	
  6

  
	
   

  	
   

  
	
  ARTICLE II

  	
  REPRESENTATIONS

  	
  6

  
	
   

  	
   

  
	
   

  	
  Section 2.1

  	
  Representations of the Issuer

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.2

  	
  No Warranty
  by Issuer of Condition or Suitability of the Project

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 2.3

  	
  Representations and Covenants of the Company

  	
  6

  
	
   

  	
   

  
	
  ARTICLE III

  	
  COMPLETION OF THE PROJECT; ISSUANCE OF THE
  BONDS

  	
  9

  
	
   

  	
   

  
	
   

  	
  Section 3.1

  	
  Acquisition, Construction and Installation

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 3.2

  	
  Project Description

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 3.3

  	
  Issuance of the Bonds; Application of
  Proceeds

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 3.4

  	
  Investment
  of Fund Moneys

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 3.5

  	
  Rebate
  Fund

  	
  10

  
	
   

  	
   

  
	
  ARTICLE IV

  	
  LOAN BY ISSUER; LOAN PAYMENTS; ADDITIONAL PAYMENTS; AND FIRST
  MORTGAGE BONDS

  	
  10

  
	
   

  	
   

  
	
   

  	
  Section 4.1

  	
  Loan Repayment; Delivery of First Mortgage Bonds

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.2

  	
  Additional Payments

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.3

  	
  Place of Payments

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.4

  	
  Obligations Unconditional

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.5

  	
  Assignment of Revenues, Agreement and First Mortgage Bonds

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 4.6

  	
  First Mortgage Bonds

  	
  12

  
	
   

  	
   

  
	
  ARTICLE V

  	
  ADDITIONAL AGREEMENTS AND COVENANTS

  	
  12

  
	
   

  	
   

  
	
   

  	
  Section 5.1

  	
  Right of Access

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.2

  	
  Maintenance

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.3

  	
  Removal of Portions of the Project Facilities

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.4

  	
  Operation of Project Facilities

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.5

  	
  Insurance

  	
  13

  
					

 

i

 

	
   

  	
  Section 5.6

  	
  Workers’ Compensation Coverage

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.7

  	
  Damage; Destruction and Eminent Domain

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.8

  	
  Company to Maintain its Corporate Existence; Conditions Under Which
  Exceptions Permitted

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.9

  	
  Indemnification

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.10

  	
  Company Not to Adversely Affect Exclusion of Interest on Bonds From
  Gross Income For Federal Income Tax Purposes

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.11

  	
  Use of Project Facilities

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.12

  	
  Assignment by Company

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.13

  	
  Bond Insurance Policy

  	
  15

  
	
   

  	
   

  
	
  ARTICLE VI

  	
  REDEMPTION

  	
  16

  
	
   

  	
   

  
	
   

  	
  Section 6.1

  	
  Optional Redemption

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.2

  	
  Extraordinary Optional Redemption

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.3

  	
  Mandatory Redemption

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.4

  	
  Notice of Redemption

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.5

  	
  Actions by Issuer

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 6.6

  	
  Concurrent Discharging of First Mortgage Bonds

  	
  18

  
	
   

  	
   

  
	
  ARTICLE VII

  	
  EVENTS OF DEFAULT AND REMEDIES

  	
  18

  
	
   

  	
   

  
	
   

  	
  Section 7.1

  	
  Events of Default

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.2

  	
  Remedies on Default

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.3

  	
  No Remedy Exclusive

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.4

  	
  Agreement to Pay Attorneys’ Fees and Expenses

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.5

  	
  No
  Waiver

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.6

  	
  Notice of Default

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 7.7

  	
  Survival

  	
  20

  
	
   

  	
   

  
	
  ARTICLE VIII

  	
  MISCELLANEOUS

  	
  21

  
	
   

  	
   

  
	
   

  	
  Section 8.1

  	
  Term of Agreement

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.2

  	
  Amounts Remaining in Funds

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.3

  	
  Notices

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.4

  	
  Extent of Covenants of the Issuer; No Personal Liability

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.5

  	
  Binding Effect

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.6

  	
  Amendments
  and Supplements

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.7

  	
  Execution Counterparts

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.8

  	
  Severability

  	
  22

  
					

 

ii

 

	
   

  	
  Section 8.9

  	
  Governing
  Law

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.10

  	
  Continuing Disclosure

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.11

  	
  Third-Party Beneficiary

  	
  22

  
	
   

  	
   

  
	
  Exhibit A
  - Project Description

  	
   

  

 

iii

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT is made and entered into as of August 1,
2005 between the COUNTY OF BOONE, KENTUCKY, (the “Issuer”), a de jure county
and a political subdivision of the Commonwealth of Kentucky, and THE DAYTON POWER
AND LIGHT COMPANY (the “Company”), a public utility and corporation duly
organized and validly existing under the laws of the State of Ohio and duly
qualified to do business in Kentucky. Capitalized terms used in the following
recitals are used as defined in Article I of this Agreement.

 

Pursuant to the Act, the Issuer has determined to
issue, sell and deliver the Bonds and to lend the proceeds derived from the
sale thereof to the Company to assist in the refunding of the Refunded Bonds,
as defined below. The Refunded Bonds were originally issued to provide funds to
make a loan to the Company to assist in the refunding of the Series 1979
Bonds as defined below which were originally issued to provide funds to make a
loan to the Company to assist in the financing of its portion of the costs of
the Series 1979 Project as defined below.

 

The Company and the Issuer each have full right and
lawful authority to enter into this Agreement and to perform and observe the
provisions hereof on their respective parts to be performed and observed.

 

NOW THEREFORE, in consideration of the premises and
the mutual representations and agreements hereinafter contained, the Issuer and
the Company agree as follows (provided that any obligation of the Issuer
created by or arising out of this Agreement shall never constitute a general
debt of the Issuer or give rise to any pecuniary liability of the Issuer or a
charge upon its general credit or taxing powers but shall be payable solely and
only from and out of the Revenues, including Loan Payments made pursuant to the
First Mortgage Bonds):

 

ARTICLE I.

DEFINITIONS

 

Section 1.1                                      Use of Defined Terms.  In addition to the words and terms defined
elsewhere in this Agreement or by reference to another document, the words and
terms set forth in Section 1.2 hereof shall have the meanings set forth
therein unless the context or use clearly indicates another meaning or intent.
Such definitions shall be equally applicable to both the singular and plural
forms of any of the words and terms defined therein.

 

Section 1.2                                      Definitions
As used herein:

 

“Act” means Sections 103.200 to 103.285, inclusive, of
the Kentucky Revised Statutes.

 

“Additional Payments” means the amounts required to be
paid by the Company pursuant to the provisions of Section 4.2 hereof.

 

“Administration Expenses” means the compensation
(which compensation shall not be
greater than that typically charged in
similar circumstances); and which shall not be limited by any provision of law
in regard to the compensation of a trustee of any express trust) and
reimbursement of reasonable expenses, disbursements and advances incurred or
made by or on behalf of the Trustee, the Registrar, any Paying Agent and any
Authenticating Agent (including the reasonable compensation and the expenses
and disbursements of its counsel and of all other persons not regularly in its
employ), and shall also include all fees, charges, expenses, advances,
compensation and reimbursements and all other 

 

1

 

amounts due the Trustee,
the Registrar and any Paying Agent or Authenticating Agent under or pursuant to
Section 6.03 of the Indenture.

 

“Agreement” means this Loan Agreement, as amended or
supplemented from time to time.

 

“Authenticating Agent” means the Authenticating Agent
as defined in the Indenture.

 

“Bond Fund” means the Bond Fund created in the
Indenture.

 

“Bond Insurance Agreement” means the Insurance
Agreement entered into between the Company and the Bond Insurer in connection
with the issuance of the Bond Insurance Policy.

 

“Bond Insurance Policy” or “Policy” means the
municipal bond insurance policy issued by the Bond Insurer that guarantees
payment of principal of and interest on the Bonds.

 

“Bond Insurer” means Financial Guaranty Insurance
Company, a New York stock insurance company, or any successor thereto.

 

“Bond Ordinance” means the ordinance of the Issuer
adopted on June 21, 2005, providing for the issuance of the Bonds and
approving this Agreement, the Indenture and related matters, as amended or
supplemented from time to time.

 

“Bond Service Charges” means, for any period or time,
the principal of and interest due on the Bonds for that period or payable at
that time whether due at maturity or upon acceleration or redemption or
otherwise.

 

“Bonds” means the $35,275,000 Collateralized Pollution
Control Revenue Refunding Bonds, 2005 Series A (The Dayton Power and Light
Company Project), issued by the Issuer pursuant to the Bond Ordinance and the
Indenture.

 

“Bonds Outstanding” or “Outstanding Bonds” means
Outstanding Bonds as defined in the Indenture.

 

“Code” means the Internal Revenue Code of 1986, as
amended from time to time. References to the Code and Sections of the Code
include relevant applicable regulations and proposed regulations thereunder and
under the 1954 Code and any successor provisions to those Sections, regulations
or proposed regulations and, in addition, all applicable official rulings and
judicial determinations under the foregoing applicable to the Bonds.

 

“Company Mortgage” means the First and Refunding
Mortgage, dated as of October 1, 1935, between the Company and the Company
Mortgage Trustee, as amended, modified or supplemented from time to time.

 

“Company Mortgage Trustee” means The Bank of New York
(formerly Irving Trust Company) as trustee under the Company Mortgage, and its
successors and assigns.

 

“Continuing Disclosure Agreement” means that certain
Continuing Disclosure Agreement between the Company and the Trustee dated as of
July 1, 2005, as the same may be amended from time to time in accordance
with the terms thereof.

 

2

 

“Eligible Investments” means Eligible Investments as
defined in the Indenture.

 

“Engineer” means an engineer (who may be an employee
of the Company) or engineering firm qualified to practice the profession of
engineering under the laws of the State and who or which is acceptable to the
Trustee.

 

“Event of Default” means any of the events described
as an Event of Default in Section 7.1 hereof.

 

“First Mortgage Bonds” means the $35,275,000 aggregate
principal amount of First Mortgage Bonds, 4.70% Pollution Control Series 2005-C
Due 2028, issued under the Supplemental Mortgage Indenture.

 

“Force Majeure” means any of the causes, circumstances
or events described as constituting Force Majeure in Section 7.1 hereof.

 

“Government Obligations” means Government Obligations
as defined in the Indenture.

 

“Holder” or “Holder of a Bond” means the Person in
whose name a Bond is registered on the Register.

 

“Indenture” means the Trust Indenture, dated as of the
same date as this Agreement, between the Issuer and the Trustee, as amended or
supplemented from time to time.

 

“Interest Rate for Advances” means the interest rate
per year payable on the Bonds.

 

“Loan” means the loan by the Issuer to the Company of
the proceeds received from the sale of the Bonds.

 

“Loan Payment Date” means any date on which any Bond
Service Charges are due and payable.

 

“Loan Payments” means the amounts required to be paid
by the Company on the First Mortgage Bonds in repayment of the Loan pursuant to
Section 4.1 hereof.

 

“1954 Code” means the Internal Revenue Code of 1954,
as amended from time to time through the date of enactment of the Code.
References to the 1954 Code and Sections of the 1954 Code include relevant
applicable regulations (including temporary regulations) and proposed
regulations thereunder and any successor provisions to those Sections,
regulations or proposed regulations.

 

“Notice Address” means:

 

	
  (a)

  	
   

  	
  As to the Issuer: County
  of Boone, Kentucky

  
	
   

  	
   

  	
   

  	
  2950 Washington Street

  
	
   

  	
   

  	
   

  	
  Burlington, Kentucky
  41005

  
	
   

  	
   

  	
   

  	
  Attention: County
  Judge/Executive

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  As to the Company:

  	
  The Dayton Power and
  Light Company

  
	
   

  	
   

  	
   

  	
  1065 Woodman Drive

  
	
   

  	
   

  	
   

  	
  Dayton, Ohio 45432

  
	
   

  	
   

  	
   

  	
  Attention: Treasurer

  

 

3

 

	
  (c)

  	
   

  	
  As to the Trustee:

  	
  The Bank of New York

  
	
   

  	
   

  	
   

  	
  385 Rifle Camp Road,
  3rd Floor

  
	
   

  	
   

  	
   

  	
  West Paterson, New
  Jersey 07424

  
	
   

  	
   

  	
   

  	
  Attention: Corporate
  Trust Administration

  

 

or such additional or
different address, notice of which is given under Section 8.3 hereof.

 

“Opinion of Bond Counsel” means a written opinion of
nationally recognized bond counsel selected by the Company and acceptable to
the Trustee who is experienced in matters relating to the exclusion from gross
income for federal income tax purposes of interest on obligations issued by
states and their political subdivisions. Bond Counsel may be counsel to the
Trustee or the Company.

 

“Original Bonds” means the $48,000,000 principal
amount of “County of Boone, Kentucky, Pollution Control Revenue (The Dayton
Power and Light Company Project) 1979 Series A”, dated October 1,
1979.

 

“Original Bonds Indenture” means the Trust Indenture between the Issuer and Chemical Bank (successor
by merger to Manufacturers Hanover Trust Company), as trustee, dated as of October 1, 
1979.

 

“Original Bonds Loan Agreement” means the means the
Loan Agreement between the Issuer and the Company dated as of October 1,
1979.

 

“Original Purchaser” means the Original Purchaser of
the Bonds as defined in the Indenture.

 

“Paying Agent” means the Paying Agent as defined in
the Indenture.

 

“Person” or words importing persons mean firms,
associations, partnerships (including without limitation, general and limited
partnerships), societies, trusts, corporations, public or governmental bodies,
other legal entities and natural persons.

 

“Pollution Control Facilities” means pollution control
facilities as that term is defined in KRIS 103.246 and also refers to “air and
water pollution control facilities” and “solid waste disposal facilities”
within the meaning of Sections 103(b)(4)(E) and (F) of the Internal
Revenue Code of 1954, as amended.

 

“Prior Bonds” means collectively, the Original Bonds
and the Refunded Bonds.

 

“Project” or “Project Facilities” means the real,
personal or real and personal property, including undivided or other interests
therein, identified in the Project Description.

 

“Project Description” means the description of the
Project Facilities attached hereto as Exhibit A, as the same may be
amended in accordance with this Agreement.

 

“Project Purposes” means the purposes of Pollution
Control Facilities as described in the Act and as particularly described in Exhibit A
hereto.

 

“Project Site” means the East Bend Generating Station,
owned as tenants in common by the Company and The Cincinnati Gas &
Electric Company, located within the corporate boundaries of the Issuer, within
the State.

 

4

 

“Rebate Fund” means the Rebate Fund created in the
Indenture.

 

“Refunded Bonds” means $35,275,000 principal amount of
“County of Boone, Kentucky, Collateralized Pollution Control Revenue Refunding
Bonds, 1992 Series A (The Dayton Power and Light Company Project)”, dated November 15,
1992, being a portion of an issue now outstanding in the aggregate principal
amount of $48,000,000.

 

“Refunded Bonds Indenture” means the Indenture of
Trust dated as of November 15, 1992, by and between the Issuer and The
Bank of New York, in respect of the Refunded Bonds.

 

“Refunded Bonds Loan Agreement” means the Loan
Agreement in connection with Pollution Control Facilities dated as of November 15,
1992, by and between the Issuer and the Company, in respect of the Refunded
Bonds.

 

“Refunded Bonds Trustee” means The Bank of New York,
as Trustee under the Refunded Bonds Indenture.

 

“Refunding Fund” means the Refunding Fund created in
the Indenture.

 

“Register” means the books kept and maintained for the
registration and transfer of Bonds pursuant to Section 3.05 of the Indenture.

 

“Registrar” means the Registrar as defined in the
Indenture.

 

“Revenues” means (a) the Loan Payments, (b) all
other moneys received or to be received by the Issuer or the Trustee in respect
of repayment of the Loan, including without limitation, all moneys and
investments in the Bond Fund, (c) any moneys and investments in the
Refunding Fund, and (d) all income and profit from the investment of the
foregoing moneys. The term “Revenues” does not include any moneys or
investments in the Rebate Fund.

 

“State” means the Commonwealth of Kentucky.

 

“Station Unit” means the East Bend Generating Station
Unit 2.

 

“Supplemental Mortgage Indenture” means the
Forty-Third Supplemental Indenture, dated as of August 1, 2005, between
the Company and the Company Mortgage Trustee, as amended or supplemented from
time to time.

 

“Trustee” means The Bank of New York, New York, New
York, a corporation duly organized and validly existing under the laws of the
State of New York, as trustee under the Indenture, until a successor Trustee
shall have become such pursuant to the applicable provisions of the Indenture,
and thereafter “Trustee” shall mean the successor Trustee. “Principal Office”
of the Trustee shall mean the principal corporate trust office of the Trustee,
which office at the date of issuance of the Bonds is located at its Notice
Address.

 

“Unassigned Issuer’s Rights” means all of the rights
of the Issuer to receive Additional Payments under Section 4.2 hereof, to
access and inspection pursuant to Section 5.1 hereof, to be held harmless
and indemnified under Section 5.9 hereof, to be reimbursed for attorney’s
fees and expenses under Section 7.4 hereof and to give or withhold consent
to amendments, changes, modifications, alterations and termination of this
Agreement under Section 8.6 hereof and its right to enforce such rights.

 

5

 

Section 1.3                                      Interpretation
.. Any reference herein to the State, to the Issuer or to any member or officer
of either includes entities or officials succeeding to their respective
functions, duties or responsibilities pursuant to or by operation of law or
lawfully performing their functions.

 

Any reference to a section or provision of the
Constitution of the State or the Act, or to a section, provision or chapter of
the Kentucky Revised Statutes, or to any statute of the United States of
America, includes that section, provision or chapter as amended, modified,
revised, supplemented or superseded from time to time; provided, that no
amendment, modification, revision, supplement or superseding section, provision
or chapter shall be applicable solely by
reason of this provision, if it constitutes in any way an impairment of the
rights or obligations of the Issuer, the Holders, the Trustee, the Registrar,
an Authenticating Agent, a Paying Agent or the Company under this Agreement,
the Indenture, the Bonds, the Company Mortgage, the Supplemental Mortgage
Indenture or the First Mortgage Bonds.

 

Unless the context indicates otherwise, words
importing the singular number include the plural number, and vice versa; the
terms “hereof”, “hereby”, “herein”, “hereto”, “hereunder” and similar terms
refer to this Agreement; and the term “hereafter” means after, and the term “heretofore”
means before, the date of delivery of the Bonds. Words of any gender include
the correlative words of the other genders, unless the sense indicates
otherwise.

 

Section 1.4                                      Captions
and Headings. The captions and headings in this Agreement are used solely for
convenience of reference and in no way define, limit or describe the scope or
intent of any Articles, Sections, subsections, paragraphs or subparagraphs or
clauses hereof.

 

ARTICLE II.

REPRESENTATIONS

 

Section 2.1                                      Representations
of the Issuer. The Issuer represents that: (a) it is a de jure county and
a political subdivision of the State duly organized and validly existing under
the laws of the State; (b) it has duly accomplished all conditions
necessary to be accomplished by it prior to the issuance and delivery of the
Bonds and the execution and delivery of this Agreement and the Indenture; (c) it
is not in violation of or in conflict with any provisions of the laws of the
State which would impair its ability to carry out
its obligations contained in this Agreement or the Indenture; (d) it is
empowered to enter into the transactions contemplated by this Agreement and the
Indenture; (e) it has duly authorized the execution, delivery and
performance of this Agreement and the Indenture; and (f) it will do all
things in its power in order to maintain its existence or assure the assumption
of its obligations under this Agreement and the Indenture by any successor
public body.

 

Section 2.2                                      No
Warranty by Issuer of Condition or Suitability of the Project . The Issuer
makes no warranty, either express or implied, as to the suitability or
utilization of the Project for the Project Purposes, or as to the condition of
the Project Facilities or that the Project Facilities are or will be suitable
for the Company’s purposes or needs.

 

Section 2.3                                      Representations
and Covenants of the Company . The Company represents that:

 

(a)                                  The Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
State of Ohio, and is duly qualified to do business in the State, with power
and authority (corporate and other) to own its properties and conduct its
business, to execute and deliver this Agreement, the Supplemental Mortgage
Indenture, the First Mortgage Bonds and the Continuing Disclosure Agreement,
and to perform its obligations under 

 

6

 

this Agreement, the Company Mortgage, the Supplemental Mortgage
Indenture, the First Mortgage Bonds and the Continuing Disclosure Agreement.

 

(b)                                 This Agreement, the Supplemental Mortgage
Indenture, the Company Mortgage and the Continuing Disclosure Agreement have
been duly authorized, executed and delivered by the Company; the First Mortgage
Bonds have been duly authorized, executed, issued and delivered; and this
Agreement, the Supplemental Mortgage Indenture, the Company Mortgage, the First
Mortgage Bonds and the Continuing Disclosure Agreement constitute valid and
legally binding obligations of the Company, enforceable in accordance with
their respective terms, subject to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors’ rights,
to laws relating to or affecting the enforcement of the security provided by
the Company Mortgage and to general equity principles.

 

(c)                                  The execution, delivery and performance
by the Company of this Agreement, the Supplemental Mortgage Indenture and the
Continuing Disclosure Agreement and the consummation of the transactions
contemplated hereby and thereby will not violate any provision of law or
regulation applicable to the
Company, or of any writ or decree of any court or governmental instrumentality,
or of the Articles of Incorporation, as amended, or Code of Regulations, as
amended, of the Company, or of any mortgage, indenture, contract, agreement or
other undertaking to which the Company is a party or which purports to be
binding upon the Company or upon any of its assets.

 

(d)                                 Substantially all (at least 90%) of the
proceeds of the Original Bonds were used to provide air and water pollution
control facilities and solid waste disposal facilities within the meaning of
Sections 103(b)(4)(E) and (F) of the 1954 Code, the original use of
which facilities commenced with the Company and all of the proceeds of the
Original Bonds have been spent for the Project or to pay costs of issuance of
the Original Bonds. The proceeds of the Bonds (other than any accrued interest
thereon) will be used exclusively to refund the Refunded Bonds and none of the
proceeds of the Bonds will be used to pay for any costs of issuance of the
Bonds. The principal amount of the Bonds does not exceed the outstanding
principal amount of the Refunded Bonds. All of the proceeds of the Bonds will
be used to retire the Refunded Bonds not later than 90 days after the date of
issuance of the Bonds.  The proceeds of
the Refunded Bonds (other than any accrued interest thereon) were used
exclusively to refund the Original Bonds and none of the proceeds of the
Refunded Bonds was used to pay for any costs of issuance of the Refunded
Bonds.  The principal amount of the
Refunded Bonds did not exceed the outstanding principal amount of the Original
Bonds.  All of the proceeds of the
Refunded Bonds were used to retire the Original Bonds not later than 90 days
after the date of issuance of the Refunded Bonds.  The Original Bonds were issued prior to August 16,
1986. 

 

(e)                                  Either the acquisition and construction
of the Project financed with the Original Bonds was not commenced (within the
meaning of Treasury Regulations §1.103-8(a)(5)) prior to the adoption of the
resolution of the Issuer evidencing the intent of the Issuer to issue the
Original Bonds (being February 17, 1976), or, any proceeds of the
corresponding Refunded Bonds used to pay costs incurred prior to the adoption
of such corresponding resolution have been treated for purposes of this
Agreement as having been used to provide working capital (not land or
depreciable property) to the Company.

 

(f)                                    It has caused the Project to be
substantially completed. The Project constitutes Pollution Control Facilities
under the Act and is consistent with the purposes of the Act. The Project is
being, and the Company will cause the Project to be, operated and maintained in
such manner to conform with all applicable zoning, planning, building, environmental
and other 

 

7

 

applicable governmental regulations and all permits, variances and
orders issued or granted pursuant thereto, which permits, variances and orders
have not been withdrawn or otherwise suspended, and to be consistent with the
Act.

 

(g)                                 It has used or operated or has caused to
be used or operated, and presently intends to use or operate or cause to be
used or operated the Project Facilities in a manner consistent with the Project
Purposes until the date on which the Bonds have been fully paid and knows of no
reason why the Project Facilities will not be so operated. Except for the June 12,
1981 sale of a portion of the Company’s undivided interest in the Project to
The Cincinnati Gas and Electric Company, co-owner and operator of the Project,
which sale was not contemplated, expected or planned when the Refunded Bonds
were issued, the Company has not sold and does not intend to sell or otherwise
dispose of the Project or any portion thereof.

 

(h)                                 None of the proceeds of the Prior Bonds
were used and none of the proceeds of the Bonds will be used to provide any
airplane, skybox or other private luxury box, or health club facility; any
facility primarily used for gambling; any store the principal business of which
is the sale of alcoholic beverages for consumption off premises.

 

(i)                                     None of the proceeds of the Prior Bonds
have been used and none of the proceeds of the Bonds will be used directly or
indirectly to acquire land or any interest therein.

 

(j)                                     No portion of the proceeds of the Prior
Bonds has been used and no portion of the proceeds of the Bonds will be used to
acquire existing property or any interest therein unless the first use of such
property was by the Company and was pursuant to and followed such acquisition.

 

(k)                                  At no time will any funds constituting
gross proceeds of the Bonds be used in a manner as would constitute failure of
compliance with Section 148 of the Code.

 

(l)                                     The Prior Bonds were not, and the Bonds
will not be, “federally guaranteed” within the meaning of Section 149(b) of
the Code.

 

(m)                               It is not anticipated that as of the date
hereof, there will be created any “sinking fund”, within the meaning of Section 1.148-1(c)(2) of
the Treasury Regulations, with respect to the Bonds; however, in the event that
any such sinking fund is deemed to have been created, moneys therein will be
invested in compliance with Section 148 of the Code.

 

(n)                                 On the respective dates of issuance and
delivery of the Prior Bonds, the Company reasonably expected that all of the
proceeds thereof would be used to carry out the governmental purposes of each
such issue within the 3-year period beginning on the date each such issue was
issued and none of the proceeds of each such issue, if any, were invested in
nonpurpose investments having a substantially guaranteed yield for 3 years or
more.

 

(o)                                 The respective average maturities of the
Prior Bonds and the issue including the Bonds do not exceed 120% of the
respective average reasonably expected economic life of the facilities financed
by the proceeds thereof and the issue including the Bonds (determined under Section 147(b) of
the Code).

 

(p)                                 The information furnished by the Company
and used by the Issuer in preparing the certifications and statements pursuant
to Sections 148 and 149(e) of the Code or their statutory predecessors
with respect to the Prior Bonds was accurate and complete as of the 

 

8

 

respective dates of issuance thereof, and the information furnished by
the Company and used by the Issuer in preparing the certification pursuant to Section 148
of the Code and in preparing the information statement pursuant to Section 149(e) of
the Code, both referred to in the Bond Ordinance, will be accurate and complete
as of the date of issuance of the Bonds.

 

(q)                                 The Project Facilities do not include any
office except for offices (i) located on the Project Site and (ii) not
more than a de minimis amount of the functions to be performed at which is not
directly related to the day-to-day operations of the Project Facilities.

 

(r)                                    The Department of Natural Resources and
Environmental Protection of Kentucky (now the Natural Resources and
Environmental Protection Cabinet of Kentucky), having jurisdiction in the
premises, has previously certified that the Project, as designed, is in
furtherance of the purposes of abating and controlling atmospheric pollutants
and contaminants and water pollution.

 

ARTICLE III.

COMPLETION OF THE PROJECT; ISSUANCE OF THE BONDS

 

Section 3.1                                      Acquisition,
Construction and Installation. The Company represents that it and any other
public utility companies which own any undivided interests in the Project
Facilities with the Company as tenants-in-common have caused the Project Facilities
to be acquired, constructed and installed on the Project Site, substantially in
accordance with the Project Description and in conformance with all applicable
zoning, planning, building and other similar regulations of all governmental
authorities having jurisdiction over the Project and all permits, variances and
orders issued in respect of the Project by EPA, and that the proceeds derived
from the Original Bonds, including any investment thereof, were expended in
accordance with the Original Bonds Indenture and the Original Bonds Loan
Agreement.

 

Section 3.2                                      Project
Description.  The Project Description may
be changed from time to time by, or with the consent of, the Company provided
that any such change shall also be filed with the Issuer and provided further
that no change in the Project Description shall materially change the function
of the Project Facilities unless the Trustee shall have received (i) an
Engineer’s certificate that such changes will not impair the significance or
character of the Project Facilities as Pollution Control Facilities and (ii) an
Opinion of Bond Counsel or ruling of the Internal Revenue Service to the effect
that such amendment will not adversely affect the exclusion of interest on the
Bonds from gross income for federal income tax purposes.

 

Section 3.3                                      Issuance
of the Bonds; Application of Proceeds. To provide funds to make the Loan to the
Company to assist the Company in the refunding of the Refunded Bonds,
concurrently with the delivery to the Trustee of the First Mortgage Bonds as
provided in Section 4.1 hereof, the Issuer will issue, sell and deliver
the Bonds to the Original Purchaser. The Bonds will be issued pursuant to the
Indenture in the aggregate principal amount, will bear interest, will mature
and will be subject to redemption as set forth therein. The Company hereby
approves the terms and conditions of the Indenture and the Bonds, and the terms
and conditions under which the Bonds will be issued, sold and delivered.

 

The proceeds from the sale of the Bonds (other than
any accrued interest) shall be loaned to the Company to assist the Company in
refunding the Refunded Bonds in order to reduce the interest cost payable by
the Company and shall be deposited in the Refunding Fund. On or before September 1,
2005, all moneys on deposit in the Refunding Fund shall be deposited in the
Bond Fund created in the Refunded Bonds Indenture and applied by the Refunded
Bonds Trustee to the payment of principal of and interest on the Refunded Bonds
on September 16, 2005.

 

9

 

Pending disbursement pursuant to this Section, the
proceeds so deposited in the Refunding Fund, together with any investment
earnings thereon, shall constitute a part of the Revenues assigned by the
Issuer to the Trustee for the payment of Bond Service Charges. Any accrued
interest shall be deposited in the Bond Fund.

 

Section 3.4                                      Investment
of Fund Moneys. At the oral (confirmed promptly in writing) or written request
of the Company, any moneys held as part of the Bond Fund, the Refunding Fund or
the Rebate Fund shall be invested or reinvested by the Trustee in Eligible
Investments; provided, that such moneys shall be invested or reinvested by the
Trustee only in Eligible Investments which shall mature, or which shall be
subject to redemption by the holder thereof at the option of such holder, not
later than the date upon which the moneys so invested are needed to make
payments from those Funds. The Issuer (to the extent it retained or retains
direction or control) and the Company each hereby represents that the
investment and reinvestment and the use of the proceeds of the Refunded Bonds
were restricted in such manner and to such extent as was necessary so that the
Refunded Bonds would not constitute arbitrage bonds under the statutory
predecessor of the Code and each hereby covenants that it will restrict that
investment and reinvestment and the use of the proceeds of the Bonds in such
manner and to such extent, if any, as may be necessary so that the Bonds will
not constitute arbitrage bonds under Section 148 of the Code.

 

The Company shall provide the Issuer with, and the
Issuer may base its certificate and statement, each as authorized by the Bond
Ordinance, on a certificate of an appropriate officer, employee or agent of or
consultant to the Company for inclusion in the transcript of proceedings for
the Bonds, setting forth the reasonable expectations of the Company on the date
of delivery of and payment for the Bonds regarding the amount and use of the proceeds
of the Bonds and the facts, estimates and circumstances on which those
expectations are based.

 

Section 3.5                                      Rebate
Fund. To the extent required by Section 5.09 of the Indenture, within five
days after the end of the fifth Bond Year (as defined in the Indenture) and
every fifth Bond Year thereafter, and within five days after payment in full of
all outstanding Bonds, the Company shall calculate the amount of Excess
Earnings (as defined in the Indenture) as of the end of that Bond Year or the
date of such payment and shall notify the Trustee of that amount. If the amount
then on deposit in the Rebate Fund created under the Indenture is less than the
amount of Excess Earnings (computed by taking into account the amount or
amounts, if any, previously paid to the United States pursuant to Section 5.09
of the Indenture and this Section), the Company shall, within five days after
the date of the aforesaid calculation, pay to the Trustee for deposit in the
Rebate Fund an amount sufficient to cause the Rebate Fund to contain an amount
equal to the Excess Earnings. The obligation of the Company to make such
payments shall remain in effect and be binding upon the Company notwithstanding
the release and discharge of the Indenture. The Company shall obtain and keep such
records of the computations made pursuant to this Section as are required
under Section 148(f) of the Code.

 

ARTICLE IV.

LOAN BY ISSUER; LOAN PAYMENTS;

ADDITIONAL PAYMENTS; AND FIRST MORTGAGE BONDS

 

Section 4.1                                      Loan
Repayment; Delivery of First Mortgage Bonds. Upon the terms and conditions of
this Agreement, the Issuer agrees to make the Loan to the Company. The proceeds
of the Loan shall be deposited with the Trustee pursuant to Section 3.3
hereof. As evidence of its obligation hereunder to repay the Loan, the Company
agrees to execute and deliver the First Mortgage Bonds to the Issuer, in the
manner provided in Section 4.6 hereof. In consideration of and in
repayment of the Loan, the Company shall make, as Loan Payments, to the Trustee
for the account of the Issuer, payments on the 

 

10

 

First Mortgage Bonds
which correspond, as to time, and are equal in amount, to the Bond Service
Charges payable on the Bonds. All Loan Payments received by the Trustee shall
be held and disbursed in accordance with the provisions of the Indenture and
this Agreement for application to the payment of Bond Service Charges.

 

The Company shall be entitled to a credit against the
Loan Payments required to be made on any Loan Payment Date to the extent that
the balance of the Bond Fund is then in excess of amounts required (a) for
the payment of Bonds theretofore matured or theretofore called for redemption,
or to be called for redemption pursuant to Section 6.1 hereof, (b) for
the payment of interest for which checks or drafts have been drawn and mailed
by the Trustee or Paying Agent, and (c) to be deposited in the Bond Fund
by the Indenture for use other than for the payment of Bond Service Charges due
on that Loan Payment Date.

 

Except for such interest of the Company as may
hereafter arise pursuant to Section 8.2 hereof or Sections 5.07 or 5.08 of
the Indenture, the Company and the Issuer each acknowledge that neither the
Company, the State nor the Issuer has any interest in the Bond Fund, and any
moneys deposited therein shall be in the custody of and held by the Trustee in
trust for the benefit of the Holders.

 

Section 4.2                                      Additional
Payments. The Company shall pay to the Issuer, as Additional Payments
hereunder, any and all costs and expenses incurred or to be paid by the Issuer
in connection with the issuance and delivery of the Bonds or otherwise related
to actions taken by the Issuer under this Agreement or the Indenture.

 

The Company shall pay the Administration Expenses to
the Trustee, the Registrar, and any Paying Agent or Authenticating Agent, as
appropriate, as Additional Payments hereunder.

 

The Company may, without creating a default hereunder,
contest in good faith the reasonableness of any such cost or expense incurred
or to be paid by the Issuer and any Administration Expenses claimed to be due
to the Trustee, the Registrar, any Paying Agent or any Authenticating Agent.

 

In the event the Company should fail to pay any Loan
Payments, Additional Payments or Administration Expenses when due, the payment
in default shall continue as an obligation of the Company until the amount in
default shall have been fully paid together with interest thereon during the
default period at the Interest Rate for Advances.

 

Section 4.3                                      Place
of Payments. The Company shall make all Loan Payments directly to the Trustee
at its Principal Office. Additional Payments shall be made directly to the
person or entity to whom or to which they are due.

 

Section 4.4                                      Obligations
Unconditional. The obligations of the Company to make Loan Payments, Additional
Payments and any payments required of the Company under Section 5.09 of
the Indenture shall be absolute and unconditional, and the Company shall make
such payments without abatement, diminution or deduction regardless of any
cause or circumstances whatsoever including, without limitation, any defense,
set-off, recoupment or counterclaim which the Company may have or assert
against the Issuer, the Trustee, the Registrar or any other Person.

 

Section 4.5                                      Assignment
of Revenues, Agreement and First Mortgage Bonds. To secure the payment of Bond
Service Charges, the Issuer shall absolutely assign to the Trustee, its
successors in trust and its and their assigns forever, by the Indenture, all
right, title and interest of the Issuer in and to (a) the Revenues,
including, without limitation, all Loan Payments and other amounts receivable
by or on behalf of the Issuer under the Agreement in respect of repayment of
the Loan, (b) the Agreement except for the 

 

11

 

Unassigned Issuer’s
Rights, and (c) the First Mortgage Bonds. The Company hereby agrees and
consents to those assignments.

 

Section 4.6                                      First Mortgage Bonds. To evidence and secure the obligations of
the Company to make the Loan Payments and repay the Loan, the Company will,
concurrently with the issuance of the Bonds, execute and deliver First Mortgage
Bonds to the Issuer in an aggregate principal amount equal to the aggregate
principal amount of the Bonds. The Company agrees that First Mortgage Bonds
authorized pursuant to the Company Mortgage, will be issued containing the
terms and conditions and in substantially the form set forth in the
Supplemental Mortgage Indenture. The First Mortgage Bonds shall:

 

(a)                                  provide for payments of interest equal to
the payments of interest on the Bonds;

 

(b)                                 provide for payments of principal equal
to the payments of principal (whether at maturity or by call for mandatory or
optional redemption or pursuant to acceleration or otherwise) on the Bonds;

 

(c)                                  require all such payments on such First
Mortgage Bonds to be made on or prior to the due date for the corresponding
payments to be made on the Bonds; and

 

(d)                                 contain redemption provisions
corresponding with such provisions of the Bonds.

 

Unless the Company is
entitled to a credit under this Agreement or the Indenture, all payments on the
First Mortgage Bonds shall be in the full amount required thereunder. The First
Mortgage Bonds shall be registered in the name of the Trustee and shall not be
transferred by the Trustee, except to effect transfers to any successor trustee
under the Indenture.

 

ARTICLE V.

ADDITIONAL AGREEMENTS AND COVENANTS

 

Section 5.1                                      Right
of Access.  The Company agrees that,
subject to reasonable security and safety regulations and to reasonable
requirements as to notice, the Issuer and the Trustee and their or any of their
respective duly authorized agents shall have the right at all reasonable times
to enter upon the Project Site to examine and inspect the Projects.

 

Section 5.2                                      Maintenance.
The Company shall use its best efforts to keep and maintain the Project
Facilities, including all appurtenances thereto and any personal property
therein or thereon, in good repair and good operating condition so that the
Project Facilities will continue to constitute Pollution Control Facilities,
for the purposes of the operation thereof as required by Section 5.4
hereof.

 

So long as such shall not be in violation of the Act
or impair the character of the Project Facilities as Pollution Control
Facilities, and provided there is continued compliance with applicable laws and
regulations of governmental entities having jurisdiction thereof, the Company
shall have the right to remodel the Project Facilities or make additions,
modifications and improvements thereto, from time to time as it, in its
discretion, may deem to be desirable for its uses and purposes, the cost of
which remodeling, additions, modifications and improvements shall be paid by
the Company and the same shall, when made, become a part of the Project
Facilities.

 

Section 5.3                                      Removal
of Portions of the Project Facilities. The Company shall not be under any
obligation to renew, repair or replace any inadequate, obsolete, worn out,
unsuitable, undesirable or unnecessary portions of the Project Facilities,
except that, subject to Section 5.4 hereof, it will use its best 

 

12

 

efforts to ensure the
continued character of the Project Facilities as Pollution Control Facilities.
The Company shall have the right from time to time to substitute personal
property or fixtures for any portions of the Project Facilities, provided that
the personal property or fixtures so substituted shall not impair the character
of the Project Facilities as Pollution Control Facilities. Any such substituted
property or fixtures shall, when so substituted, become a part of the Project
Facilities. The Company shall also have the right to remove any portion of the
Project Facilities, without substitution therefor; provided, that the Company
shall deliver to the Trustee a certificate signed by an Engineer describing
said portion of the Project Facilities and stating that the removal of such
property or fixtures will not impair the character of the Project Facilities as
Pollution Control Facilities.

 

Section 5.4                                      Operation
of Project Facilities. The Company will, subject to its obligations and rights
to maintain, repair or remove portions of the Project Facilities, as provided
in Sections 5.2 and 5.3 hereof, use its best efforts to continue operation of
the Project Facilities so long as and to the extent that operation thereof is
required to comply with laws or regulations of governmental entities having
jurisdiction thereof or unless the Issuer shall have approved the
discontinuance of such operation (which approval shall not be unreasonably
withheld). The Company agrees that it will, within the design capacities
thereof, use its best efforts to operate and maintain the Project Facilities in
accordance with all applicable, valid and
enforceable rules and regulations of governmental entities having
jurisdiction thereof; provided, that the Company reserves the right to contest
in good faith any such laws or regulations. 
The Company agrees that sufficient qualified operating personnel will be
retained and operational tests and measurements necessary to determine
compliance with the preceding sentence will be performed to insure proper and
efficient operation and maintenance of the Project Facilities.

 

Nothing in this Agreement shall prevent or restrict
the Company, in its sole discretion, at any time, from discontinuing or
suspending either permanently or temporarily its use of any facility of the
Company served by the Project Facilities and in the event such discontinuance
or suspension shall render unnecessary the continued operation of the Project
Facilities, the Company shall have the right to discontinue the operation of
the Project Facilities during the period of any such discontinuance or
suspension.

 

Section 5.5                                      Insurance.
The Company agrees to insure its interest in the Project Facilities in the
amount and with the coverage required by the Company Mortgage.

 

Section 5.6                                      Workers’
Compensation Coverage.  Throughout the
term of this Agreement, the Company shall comply, or cause compliance, with
applicable workers’ compensation laws of the State.

 

Section 5.7                                      Damage;
Destruction and Eminent Domain. If, during the term of this Agreement, the
Project Facilities or any portion thereof is destroyed or damaged in whole or
in part by fire or other casualty, or title to, or the temporary use of, the
Project Facilities or any portion thereof shall have been taken by the exercise
of the power of eminent domain, and the Company or the Company Mortgage Trustee
receives net proceeds from insurance or any condemnation award in connection
therewith, the Company (unless it shall have exercised its option to prepay the
Loan Payments pursuant to provisions of Section 6.2 hereof), to the extent
required to comply with applicable laws and regulations with respect to the
operations of facilities of the Company served by the Project, shall promptly
cause such net proceeds or an amount equal thereto to be used to repair,
rebuild or restore the portion of the Project Facilities so damaged, destroyed
or taken with such changes, alterations and modifications (including the
substitution and addition of other property) as may be necessary or desirable
for the administration and operation of the Project Facilities as Pollution
Control Facilities and as shall not impair the character or significance of the
Project Facilities as furthering the purposes of the Act.  It is hereby acknowledged and agreed that any
net proceeds from insurance or any condemnation award relating to the Project
Facilities are subject to the lien of the Company Mortgage and shall be
disposed of 

 

13

 

in accordance with the
terms and provisions of the Company Mortgage and that any obligations of the
Company under this Section 5.7 not satisfied by application of such net
proceeds shall be limited to the general credit of the Company and does not
require disposition of such net proceeds contrary to the requirements of the
Company Mortgage.

 

Section 5.8                                      Company
to Maintain its Corporate Existence; Conditions Under Which Exceptions
Permitted. The Company agrees that during the term of this Agreement it will
maintain its corporate existence and, will not sell its electric properties as
an entirety or substantially as an entirety or consolidate with or merge into
another corporation or permit one or more other corporations to consolidate
with or merge into it, except to the extent permitted under the provisions of
the Company Mortgage, provided that any successor corporation resulting from
any such sale, consolidation or merger shall assume all obligations of the
Company arising under or contemplated by the provisions of this Agreement.

 

If consolidation, merger or sale or other transfer is
made as provided in this Section, the provisions of this Section shall
continue in full force and effect and no further consolidation, merger or sale
or other transfer shall be made except in compliance with the provisions of
this Section.

 

Section 5.9                                      Indemnification.
The Company releases the Issuer from, agrees that the Issuer shall not be
liable for, and indemnifies the Issuer against, all liabilities, claims, costs
and expenses imposed upon or asserted against the Issuer on account of: (a) any
loss or damage to property or injury to or death of or loss by any person that
may be occasioned by any cause whatsoever pertaining to the construction,
maintenance, operation and use of the Project Facilities; (b) any breach
or default on the part of the Company in the performance of any covenant or agreement
of the Company under this Agreement or any related document, or arising from
any act or failure to act by the Company, or any of its agents, contractors,
servants, employees or licensees; (c) the authorization, issuance and sale
of the Bonds, and the provision of any information furnished in connection
therewith concerning the Project Facilities or the Company (including, without
limitation, any information furnished by the Company for inclusion in any
certifications made by the Issuer under Section 3.4 hereof or for
inclusion in, or as a basis for
preparation of, the information statements filed by the Issuer pursuant to Section 8(a)(ii) of
the Bond Ordinance); and (d) any claim or action or proceeding with
respect to the matters set forth in (a), (b) and (c) above brought
thereon.

 

The Company agrees to indemnify the Trustee (including
any predecessor Trustee), the Paying Agent and the Registrar (each hereinafter
referred to in this section as an “indemnified party”) for and to hold
each of them harmless from and against all losses, liabilities, claims, costs
and expenses (including the compensation and expenses of their counsel)
incurred without negligence or willful misconduct on the part of the
indemnified party, arising out of, relating to or connected with the Indenture,
including, but not limited to, on account of the Trustee’s acceptance or
administration of the trusts created by, or the performance of its powers or
duties under the Indenture, or of any action taken or omitted to be taken by
the indemnified party in accordance with the terms of this Agreement, the Bonds
or the Indenture or any action taken at the request of or with the consent of
the Company, including the costs and expenses of the indemnified party in
defending itself against or investigating any claim, loss, liability, action or
proceeding brought in connection with the exercise or performance of any of its
powers or duties under this Agreement, the Bonds or the Indenture.

 

In case any action or
proceeding is brought against the Issuer or an indemnified party in respect of
which indemnity may be sought hereunder, the party seeking indemnity promptly
shall give notice of that action or proceeding to the Company, and the Company
upon receipt of that notice shall have the obligation and the right to assume
the defense of the action or proceeding; provided, that failure of a party to
give that notice shall not relieve the Company from any of its obligations
under this Section 

 

14

 

unless that failure
prejudices the defense of the action or proceeding by the Company. At its own
expense, an indemnified party may employ separate counsel and participate in
the defense; provided however, where it is ethically inappropriate for one firm
to represent the interests of the Issuer and any other indemnified party or
parties, the Company shall pay the Issuer’s legal expenses in connection with
the Issuer’s retention of separate counsel. The Company shall not be liable for
any settlement made without its consent.

 

The indemnification set forth above is intended to and
shall include the indemnification of all affected officials, directors,
officers and employees and agents of the Issuer, the Trustee, the Paying Agent
and the Registrar, respectively. That indemnification is intended to and shall
be enforceable by the Issuer, the Trustee, the Paying Agent and the Registrar,
respectively, to the full extent permitted by law.

 

Section 5.10                                Company
Not to Adversely Affect Exclusion of Interest on Bonds From Gross Income For
Federal Income Tax Purposes. The Company hereby covenants and represents that
it has taken and caused to be taken and shall take and cause to be taken all
actions that may be required of it for the interest on the Bonds to be and
remain excluded from the gross income of the Holders for federal income tax
purposes, and that it has not taken or permitted to be taken on its behalf, and
covenants that it will not take, or permit to be taken on its behalf, any
action which, if taken, would adversely affect that exclusion under the
provisions of the Code.

 

Section 5.11                                Use
of Project Facilities. The Issuer agrees that it will not take any action, or
cause any action to be taken on its behalf, to interfere with the Company’s
ownership interest in the Project or to prevent the Company from having
possession, custody, use and enjoyment of the Project other than pursuant to Article VII
of this Agreement or Article VII of the Indenture.

 

Section 5.12                                Assignment
by Company. This Agreement may be assigned in whole or in part by the Company
without the necessity of obtaining the consent of either the Issuer or the
Trustee, but only with the prior written consent of the Bond Insurer, subject,
however, to each of the following conditions:

 

(a)                                  No assignment (other than pursuant to Section 5.8
hereof) shall relieve the Company from primary liability for any of its
obligations hereunder, and in the event of any such assignment the Company
shall continue to remain primarily liable for the payment of the Loan Payments
and Additional Payments and for performance and observance of the agreements on
its part herein provided to be performed and observed by it.

 

(b)                                 Any assignment by the Company must retain
for the Company such rights and interests as will permit it to perform its
obligations under this Agreement, and any assignee from the Company shall
assume the obligations of the Company hereunder to the extent of the interest
assigned.

 

(c)                                  The Company shall, within 30 days after
execution thereof, furnish or cause to be furnished to the Issuer and the
Trustee a true and complete copy of each such assignment together with any
instrument of assumption.

 

(d)                                 Any assignment from the Company shall not
materially impair fulfillment of the Project Purposes to be accomplished by
operation of the Project as herein provided.

 

Section 5.13                                Bond
Insurance Policy.  In consideration of
the issuance by the Bond Insurer of the Bond Insurance Policy, the Company
hereby covenants that:

 

15

 

(a)                                  The Company shall pay or reimburse the
Bond  Insurer for any and all charges,
fees, costs, and expenses that the Bond Insurer may reasonably pay or incur in
connection with the following:  (i) the
administration, enforcement, defense, or preservation of any rights or security
hereunder or under any other transaction document; (ii) the pursuit of any
remedies hereunder, under any other transaction document, or otherwise afforded
by law or equity, (iii) any amendment, waiver, or other action with respect
to or related to this Agreement or any other transaction document whether or
not executed or completed; (iv) the violation by the Company of any law,
rule, or regulation or any judgment, order or decree applicable to it; (v) any
advances or payments made by the Bond Insurer to cure defaults of the Company
under the transaction documents; or (vi) any litigation or other dispute
in connection with the Agreement, any other transaction document, or the
transactions contemplated hereby or thereby, other than amounts resulting from
the failure of the Bond Insurer to honor its payment obligations under the Bond
Insurance Policy.  The Bond Insurer
reserves the right to charge a reasonable fee as a condition to executing any amendment,
waiver, or consent proposed in respect of this Agreement or any other
transaction document.  The obligations of
the Company to the Bond Insurer hereunder shall survive discharge and
termination of the Agreement.

 

(b)                                 The Company shall promptly provide
written notice to the Bond Insurer of the downgrading by any rating agency of
the Company’s underlying rating, or the underlying rating on the Bonds or any
parity obligations of the Company.

 

(c)                                  The Company shall promptly provide
written notice to the Bond Insurer of any material events related to the Bonds
pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934, as
amended; and the downgrading by any rating agency of the Company’s underlying
rating, or the underlying rating on the Bonds or any parity obligations of the
Company.

 

(d)                                 The Company shall provide such additional
information to the Bond Insurer as the Bond Insurer may reasonably request from
time to time.

 

ARTICLE VI.

REDEMPTION

 

Section 6.1                                      Optional
Redemption. Provided no Event of Default shall have occurred and be subsisting,
at any time and from time to time, the Company may deliver moneys to the
Trustee in addition to Loan Payments or Additional Payments required to be made
and direct the Trustee to use the moneys so delivered for the purpose of
calling Bonds for optional redemption in accordance with the applicable
provisions of the Indenture providing for optional redemption at the redemption
price stated in the Indenture. Pending application for those purposes, any
moneys so delivered shall be held by the Trustee in a special account in the
Bond Fund and delivery of those moneys shall not, except as set forth in Section 4.1
hereof, operate to abate or postpone Loan Payments or Additional Payments
otherwise becoming due or to alter or suspend any other obligations of the
Company under this Agreement.

 

Section 6.2                                      Extraordinary
Optional Redemption. The Company shall have, subject to the conditions
hereinafter imposed, the option to direct the redemption of the Bonds in whole
or in part in accordance with the applicable provisions of the Indenture upon
the occurrence of any of the following events:

 

(a)                                  The Project or a Station Unit shall have
been damaged or destroyed to such an extent that (1) it cannot reasonably
be expected to be restored, within a period of six consecutive months, to the
condition thereof immediately preceding such damage or destruction or (2) the

 

16

 

Company is reasonably expected to be prevented from carrying on its
normal operations in connection therewith for a period of six consecutive
months.

 

(b)                                 Title to, or the temporary use of, all or
a significant part of the Project or a Station Unit shall have been taken under
the exercise of the power of eminent domain (1) to such extent that it
cannot reasonably be expected to be restored within a period of six consecutive months to a condition of usefulness comparable
to that existing prior to the taking or (2) to such an extent that the
Company is reasonably expected to be prevented from carrying on its normal
operations in connection therewith for a period of six consecutive months.

 

(c)                                  As a result of any changes in the
Constitution of the State, the Constitution of the United States of America or
any state or federal laws or as a result of legislative or administrative
action (whether state or federal) or by final decree, judgment or order of any
court or administrative body (whether state or federal) entered after any
contest thereof by the Issuer or the Company in good faith, this Agreement shall
have become void or unenforceable or impossible of performance in accordance
with the intent and purpose of the parties
as expressed in this Agreement.

 

(d)                                 Unreasonable burdens or excessive
liabilities shall have been imposed upon the Issuer or the Company with respect
to the Project or a Station Unit or the operation thereof, including, without
limitation, the imposition of federal, state or other ad valorem, property,
income or other taxes other than ad valorem taxes at the rates presently levied
upon privately owned property used for the
same general purpose as the Project or a Station Unit.

 

(e)                                  Changes in the economic availability of
raw materials, operating supplies, energy sources or supplies or facilities
(including, but not limited to, facilities in connection with the disposal of
industrial wastes) necessary for the operation of the Project or a Station Unit
for the Project Purposes occur or technological or other changes occur which
the Company cannot reasonably overcome or control and which in the Company’s
reasonable judgment render the Project or a Station Unit uneconomic or obsolete
for the Project Purposes.

 

(f)                                    Any court or administrative body shall
enter a judgment, order or decree, or shall take administrative action,
requiring the Company to cease all or any substantial part of its operations
served by the Project or a Station Unit to such extent that the Company is or
will be prevented from carrying on its normal operations at the Project or a
Station Unit for a period of six consecutive months.

 

(g)                                 The termination by the Company of
operations at a Station Unit.

 

The amount payable by the Company in the event of its
exercise of the option granted in this Section shall be the sum of the
following:

 

(i)                                     An amount of money which, when added to
the moneys and investments held to the credit of the Bond Fund, will be
sufficient pursuant to the provisions of the Indenture to pay, at 100% of the
principal amount thereof plus accrued interest to the redemption date, and
discharge, all Outstanding Bonds on the earliest applicable redemption date,
that amount to be paid to the Trustee, plus

 

(ii)                                  An amount of money equal to the
Additional Payments relating to those Bonds accrued and to accrue until actual
final payment and redemption of those Bonds, that 

 

17

 

amount or applicable portions thereof to be paid to
the Trustee or to the Persons to whom those Additional Payments are or will be
due.

 

The requirement of (ii) above
with respect to Additional Payments to accrue may be met if provisions
satisfactory to the Trustee and the Issuer are made for paying those amounts as
they accrue.

 

The rights and options granted to the Company in this Section may
be exercised whether or not the Company is in default hereunder; provided, that
such default will not relieve the Company from performing those actions which
are necessary to exercise any such right or option granted hereunder.

 

Section 6.3                                      Mandatory
Redemption. The Company shall deliver to the Trustee the moneys needed to
redeem the Bonds in accordance with any mandatory redemption provisions
relating thereto as may be set forth in Section 4.01(b) of the
Indenture.

 

Section 6.4                                      Notice
of Redemption. In order to exercise an option granted in, or to consummate a
redemption required by, this Article VI, the Company shall, (i) within
180 days following the event authorizing the exercise of such option or at any
time during the continuation of the condition referred to in paragraphs (c), (d) or
(e) of Section 6.2 hereof or (ii) promptly upon the occurrence
of a Determination of Taxability (as defined in the Indenture), give written
notice to the Issuer, the Trustee and the Company Mortgage Trustee that it is
exercising its option to direct the redemption of Bonds, or that the redemption
thereof is required by Section 4.01(b) of the Indenture due to the
occurrence of a Determination of Taxability, as the case may be, in accordance
with the Agreement and the Indenture, and shall specify therein the date on
which such redemption is to be made, which date shall not be more than 180 days
from the date such notice is mailed. The Company shall make arrangements
satisfactory to the Trustee for the giving of the required notice of redemption
to the Holders of the Bonds, in which arrangements the Issuer shall cooperate.
The Company shall make arrangements satisfactory to the Company Mortgage
Trustee to effect a concurrent redemption of an equivalent principal amount of
corresponding First Mortgage Bonds under the Supplemental Mortgage Indenture.

 

Section 6.5                                      Actions
by Issuer. At the request of the Company or the Trustee, the Issuer shall take
all steps required of it under the applicable provisions of the Indenture or
the Bonds to effect the redemption of all or a portion of the Bonds pursuant to
this Article VI.

 

Section 6.6                                      Concurrent
Discharging of First Mortgage Bonds. In the event any of the Bonds shall be
paid and discharged, or deemed to be paid and discharged, pursuant to any
provisions of this Agreement and the Indenture, so that such Bonds are not
thereafter outstanding within the meaning of the Indenture, a like principal
amount of corresponding First Mortgage Bonds shall be deemed fully paid for
purposes of this Agreement and to such extent the obligations of the Company
hereunder shall be deemed terminated.

 

ARTICLE VII.

EVENTS OF DEFAULT AND REMEDIES

 

Section 7.1                                      Events
of Default. Each of the following shall be an Event of Default:

 

(a)                                  The occurrence of an event of default as
defined in Section 7.01 (a) or (b) of the Indenture;

 

(b)                                 The Company shall fail to observe and
perform any other agreement, term or condition contained in this Agreement,
other than such failure as will have resulted in an event of 

 

18

 

default described in (a) above and the continuation of that
failure for a period of 90 days after notice thereof shall have been given to
the Company by the Issuer or the Trustee, or for such longer period as the
Issuer and the Trustee may agree to in writing: provided, that failure shall
not constitute an Event of Default so long as the Company institutes curative
action within the applicable period and diligently pursues that action to
completion;

 

(c)                                  The occurrence of a “completed default”
as defined in Section 1 of Article Twelve of the Company Mortgage;
and

 

(d)                                 Written notice from the Bond Insurer to
the Trustee that an event of default has occurred and is continuing under the
Bond Insurance Agreement.

 

Notwithstanding the foregoing, if, by reason of Force
Majeure, the Company is unable to perform or observe any agreement, term or
condition hereof which would give rise to an Event of Default under subsection (b) hereof,
the Company shall not be deemed in default during the continuance of such
inability. However, the Company shall
promptly give notice to the Trustee and the Issuer of the existence of an event
of Force Majeure and shall use its best efforts to remove the effects thereof;
provided that the settlement of strikes or other industrial disturbances shall
be entirely within its discretion.

 

The term Force Majeure shall mean the following:

 

(i)                                     acts of God; strikes, lockouts or other
industrial disturbances; acts of public enemies; orders or restraints of any
kind of the government of the United States of America or of the State or any
of their departments, agencies, political subdivisions or officials, or any
civil or military authority; insurrections; civil disturbances; riots;
epidemics; landslides; lightning; earthquakes; fires; hurricanes; tornados; storms;
droughts; floods; arrests; restraint of government and people; explosions;
breakage, nuclear accidents or other malfunction or accident to facilities,
machinery, transmission pipes or canals; partial or entire failure of a utility
serving the Project; shortages of labor, materials, supplies or transportation;
or

 

(ii)                                  any cause, circumstance or event not
reasonably within the control of the Company.

 

The exercise of remedies hereunder shall be subject to
any applicable limitations of federal bankruptcy law affecting or precluding
that declaration or exercise during the pendency of or immediately following any bankruptcy, liquidation or
reorganization proceedings.

 

Section 7.2                                      Remedies
on Default. Whenever an Event of Default shall have happened and be subsisting,
either or both of the following remedial steps may be taken:

 

(a)                                  The Issuer or the Trustee may have access
to, inspect, examine and make copies of the books, records, accounts and
financial data of the Company, only, however, insofar as they pertain to the
Project; or

 

(b)                                 The Issuer or the Trustee may pursue all
remedies now or hereafter existing at law or in equity to recover all amounts,
including all Loan Payments and Additional Payments, then due and thereafter to
become due under this Agreement, or to enforce the performance and observance
of any other obligation or agreement of the Company under those instruments.

 

Notwithstanding the
foregoing, the Issuer shall not be obligated to take any step which in its
opinion will or might cause it to expend time or money or otherwise incur
liability unless and until a 

 

19

 

satisfactory
indemnity bond has been furnished to the Issuer at no cost or expense to the
Issuer. Any amounts collected as Loan Payments or applicable to Loan Payments
and any other amounts which would be
applicable to payment of Bond Service Charges collected pursuant to action
taken under this Section shall be paid into the Bond Fund and applied in
accordance with the provisions of the Indenture or, if the outstanding Bonds
have been paid and discharged in accordance with the provisions of the
Indenture, shall be paid as provided in Section 5.08 of the Indenture for
transfers of remaining amounts in the Bond Fund.

 

The provisions of this Section are subject to the
further limitation that the rescission and annulment by the Trustee of its
declaration that all of the Bonds are immediately due and payable also shall
constitute a rescission and annulment of any corresponding declaration made
pursuant to this Section and a rescission and annulment of the
consequences of that declaration and of the Event of Default with respect to
which that declaration has been made, provided that no such rescission and
annulment shall extend to or affect any subsequent or other default or impair
any right consequent thereon.

 

Section 7.3                                      No
Remedy Exclusive. No remedy conferred upon or reserved to the Issuer or the
Trustee by this Agreement is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Agreement, or now
or hereafter existing at law, in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair that right
or power or shall be construed to be a waiver thereof, but any such right or
power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Issuer or the Trustee to exercise any remedy
reserved to it in this Article, it shall not be necessary to give any notice,
other than any notice required by law or for which express provision is made
herein.

 

Section 7.4                                      Agreement
to Pay Attorneys’ Fees and Expenses. If an Event of Default should occur and
the Issuer or the Trustee should incur expenses, including attorneys’ fees and
expenses, in connection with the enforcement of this Agreement or the
collection of sums due hereunder, the Company shall be required, to the extent
permitted by law, to reimburse the Issuer and the Trustee, as applicable, for
the fees and expenses so incurred upon demand.

 

Section 7.5                                      No
Waiver. No failure by the Issuer or the Trustee to insist upon the strict
performance by the Company of any provision hereof shall constitute a waiver of
their right to strict performance and no express waiver shall be deemed to
apply to any other existing or subsequent right to remedy the failure by the
Company to observe or comply with any provision hereof.

 

Section 7.6                                      Notice
of Default. The Company shall notify the Trustee immediately if it becomes
aware of the occurrence of any Event of Default hereunder or of any fact,
condition or event which, with the giving of notice or passage of time or both,
would become an Event of Default.

 

Section 7.7                                      Survival.  The provisions of Sections 4.2, 5.9 and 7.4
of this Agreement shall survive the payment in full of the Bonds, the
satisfaction, discharge and termination of this Agreement or the Indenture, and
the resignation or removal of the Trustee, any Paying Agent, the Registrar and
any Authenticating Agent as the case may be.

 

20

 

ARTICLE VIII.

 

MISCELLANEOUS

 

Section 8.1                                      Term
of Agreement. This Agreement shall be and remain in full force and effect from
the date of delivery of the Bonds to or to the order of the Original Purchaser
until such time as all of the Bonds shall have been
fully paid (or provision made for such payment) pursuant to the Indenture and
all other sums payable by the Company under this Agreement shall have been
paid.

 

Section 8.2                                      Amounts
Remaining in Funds. Any amounts in the
Bond Fund remaining unclaimed by the Holders of Bonds for four years after the
due date thereof (whether at stated maturity, by redemption, upon acceleration
or otherwise), at the option of the Company, shall be deemed to belong to and
shall be paid, subject to Section 5.07 of the Indenture, at the written
request of the Company, to the Company by the Trustee. With respect to that
principal of and interest on the Bonds to be paid from moneys paid to the
Company pursuant to the preceding sentence, the Holders of the Bonds entitled
to those moneys shall look solely to the Company for the payment of those
moneys. Further, any amounts remaining in the Bond Fund and any other special
funds or accounts created under this Agreement or the Indenture, except the
Rebate Fund, after all of the Bonds shall be deemed to have been paid and
discharged under the provisions of the Indenture and all other amounts required
to be paid under this Agreement and the Indenture have been paid, shall be paid
to the Company to the extent that those moneys are in excess of the amounts
necessary to effect the payment and discharge of the Outstanding Bonds.

 

Section 8.3                                      Notices.
All notices, certificates, requests or other communications hereunder shall be
in writing, except as provided in Section 3.4 hereof, and shall be deemed
to be sufficiently given when mailed by registered or certified mail, postage
prepaid, and addressed to the appropriate Notice Address. A duplicate copy of
each notice, certificate, request or other communication given hereunder to the
Issuer, the Company or the Trustee shall also be given to the others. The
Company, the Issuer and the Trustee, by notice given hereunder, may designate
any further or different addresses to which subsequent notices, certificates,
requests or other communications shall be sent.

 

Section 8.4                                      Extent
of Covenants of the Issuer; No Personal Liability. All covenants, obligations
and agreements of the Issuer contained in this Agreement or the Indenture shall
be effective to the extent authorized and permitted by applicable law. No such
covenant, obligation or agreement shall be deemed to be a covenant, obligation
or agreement of any present or future officer, agent or employee of the Issuer
in other than his official capacity, and neither
the elected or appointed officers, agents and employees of the Issuer nor any
official executing the Bonds shall be liable personally on the Bonds or be
subject to any personal liability or accountability by reason of the issuance
thereof or by reason of the covenants, obligations or agreements of the Issuer
contained in this Agreement or in the Indenture.

 

Section 8.5                                      Binding
Effect. This Agreement shall inure to the benefit of and shall be binding in
accordance with its terms upon the Issuer, the Company and their respective
permitted successors and assigns provided that this Agreement may not be
assigned by the Company (except as permitted under Sections 5.8 or 5.12 hereof)
and may not be assigned by the Issuer except to (i) the Trustee pursuant
to the Indenture or as otherwise may be necessary to enforce or secure payment
of Bond Service Charges or (ii) any successor public body to the
Issuer.  Sections 4.2, 5.9, 7.4 and 7.7
of this Agreement shall inure to the benefit of the Trustee, the Registrar, any
Paying Agent and any Authenticating Agent and their respective successors and
assigns.

 

Section 8.6                                      Amendments
and Supplements. Except as otherwise expressly provided in this Agreement or
the Indenture, subsequent to the issuance of the Bonds and prior to all
conditions provided for in the Indenture for release of the Indenture having
been met, this Agreement may not be effectively amended, changed, modified,
altered or terminated by the parties hereto except with the consents required
by, and in accordance with, the provisions of Article XI of the Indenture,
as applicable.  In no event may 

 

21

 

the Agreement be amended
so as to affect the rights, privileges, duties or immunities of the Trustee,
the Registrar, any Paying Agent or any Authenticating Agent without its
consent.

 

Section 8.7                                      Execution
Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be regarded as an original and all of which shall
constitute but one and the same instrument.

 

Section 8.8                                      Severability.
If any provision of this Agreement, or any covenant, obligation or agreement
contained herein is determined by a judicial or administrative authority to be
invalid or unenforceable, that determination shall not affect any other
provision, covenant, obligation or agreement, each of which shall be construed
and enforced as if the invalid or unenforceable portion were not contained
herein. That invalidity or unenforceability shall not affect any valid and
enforceable application thereof, and each such provision, covenant, obligation
or agreement shall be deemed to be effective, operative, made, entered into or
taken in the manner and to the full extent permitted by law.

 

Section 8.9                                      Governing
Law. This Agreement shall be deemed to be a contract made under the laws of the
State and for all purposes shall be governed by and construed in accordance
with the laws of the State.

 

Section 8.10                                Continuing
Disclosure.  The Issuer hereby
acknowledges the entry by the Company into the Continuing Disclosure Agreement
under which the Company has assumed certain obligations for the benefit of the
holders and beneficial owners of the Bonds. 
The Company agrees to perform its obligations under the Continuing
Disclosure Agreement.  The Company
acknowledges and agrees that the Issuer is not an “obligated person” (as
defined in the Continuing Disclosure Agreement) with respect to the Bonds and
represents that the Company is the only obligated person with respect to the
Bonds.  Notwithstanding any other
provision of this Agreement, any failure by the Company to comply with any
provision of the Continuing Disclosure Agreement shall not be a failure or a
default, or an Event of Default, under this Agreement or the Indenture.

 

Section 8.11                                Third-Party
Beneficiary.  To the extent that this
Agreement confers upon or gives or grants to the Bond Insurer any right, remedy
or claim under or by reason of this Agreement, the Bond Insurer is hereby
explicitly recognized as being a third-party beneficiary hereunder and may
enforce any such right, remedy or claim conferred, given or granted hereunder.

 

22

 

IN WITNESS WHEREOF, the Issuer and the Company have
caused this Agreement to be duly executed in their respective names, all as of
the date hereinbefore written.

 

	
   

  	
  COUNTY OF BOONE,
  KENTUCKY

  
	
   

  	
   

  
	
   

  	
   

  
	
  (SEAL)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Gary W. Moore

  
	
   

  	
   

  	
  GARY W. MOORE

  
	
   

  	
   

  	
  County Judge/Executive

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Michele Roberts

  	
   

  	
   

  
	
  MICHELE ROBERTS

  	
   

  	
   

  
	
  Fiscal Court Clerk

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE DAYTON POWER
  AND LIGHT COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John J.
  Gillen

  
	
   

  	
  Name:

  	
  JOHN J. GILLEN

  
	
   

  	
  Title:

  	
  Senior Vice
  President and CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Miggie E.
  Cramblit

  	
   

  	
   

  
	
  Name:

  	
  Miggie E.
  Cramblit

  	
   

  	
   

  
	
  Title:

  	
  Vice President,
  General Counsel

  and Corporate Secretary

  	
   

  	
   

  
									

 

 

EXHIBIT A

 

TO

 

LOAN AGREEMENT

 

DATED AS OF OCTOBER 1,
1979

 

BETWEEN

 

THE COUNTY OF
BOONE, KENTUCKY, AND 

THE DAYTON POWER AND LIGHT COMPANY

 

 

PART I

 

 

THE PROJECT

 

 

Facilities to be
Acquired, Constructed and Installed at the East Bend Generating Station, Unit
2, and financed in part (49%) by Application of the Proceeds of the 1979 Series A
Bonds in Accordance with this Agreement and the Indenture

 

 

EAST BEND
GENERATING STATION

UNIT 2

 

 

ELECTROSTATIC
PRECIPITATORS

 

Electrostatic precipitators will be installed to serve
Unit 2 of the East Bend Generating Station. Unit 2 of the East Bend Generating
Station is a new coal-fired steam electric generating unit, and the
precipitators are and will be installed simultaneously with construction and
installation of the generating unit itself. The electrostatic precipitators,
together with functionally related and associated structural supports and
ductwork are solely designed and intended to reduce particulate loading of flue
gases by removal of flyash and particulates from flue gases exiting the Unit 2
steam boiler. The precipitators are designed to remove 99.6% of particulate emissions
and flyash when the steam boiler is being operated. The precipitators operate
upon the principle of creation of an electromagnetic field which attracts and
captures particulate matter (flyash) from the flue gases. The flyash is then
removed and conveyed to silos. Thereafter, the flyash is conveyed by pneumatic
systems to a sludge and flyash processing facility or to an ash pond for
ultimate disposal.

 

SULPHUR DIOXIDE
REMOVAL SYSTEM

 

A complete sulphur dioxide removal system (scrubber)
will be provided for the East Bend Generating Station, Unit 2. Following
electrostatic precipitation, flue gases will be transmitted from 

 

 

the precipitators to the
scrubber, where they will be reacted with a liquified calcium hydroxide
solution utilized in the scrubbing process as a reactive agent. Sulphur dioxide
contained in flue gases undergoes chemical reaction upon contact with calcium
hydroxide, with resultant formation of non-commercial calcium sulfite and
calcium sulfate sludges. The sulphur dioxide scrubber is designed to remove 87%
of airborne sulphur dioxide and will also remove a portion of any particulate
matter remaining after electrostatic precipitation, before emission of the
cleansed gases to the atmosphere. The sulphur dioxide scrubber system will be composed
of the scrubber itself, associated ductwork, structural supports and piping,
electric elements, reactive tanks for holding the reactive agents and recycling
and thickening tanks from which the resulting calcium sulfite and calcium
sulfate is withdrawn for final disposal. There will also be acquired and
installed certain functionally related facilities to prepare reactant materials
for use in scrubbers, together with pumps, mixers and holding tanks and
conveyors and other transport mechanisms situated at or near reactant reception
facilities in close proximity to the generating station for the receipt of
reactants and transmission thereof to storage facilities or directly to the
sulphur dioxide removal system.

 

SOLID WASTE
DISPOSAL FACILITIES

 

Sludge produced by the sulphur dioxide removal system
will be conveyed, together with flyash collected by the electrostatic
precipitators, to the sludge and flyash processing facility, where sludge and
flyash will be mixed with lime, dewatered and prepared for ultimate disposal.
The system consists of receptacles for the storage and handling of flyash, lime
and sludge, mixers, sludge pits, pumps, dewatering and solids-formation pads
for receipt of the final waste product together with functionally related and
subordinate facilities.

 

COOLING TOWER

 

A mechanical draft cooling tower with a closed-loop
water system will be provided for the East Bend Generating Station, Unit 2. The
purpose of the cooling tower is to transfer to the atmosphere the heat absorbed
by waters circulated through the condenser, which condenses low pressure steam
discharged from the steam driven electric turbine. The closed-loop system with
cooling tower is designed to minimize the release of heated water (thermal
pollution) to the Ohio River and is required in order to conform to applicable
water pollution control regulations. The described water pollution control and
abatement facility consists of a mechanical draft cooling tower, pumps,
circulating water pipes, structural supports and associated and related
equipment. Because a portion of the cost of the closed-loop cooling tower is
allocable to cost savings resulting because an alternate facility need not be
constructed which would, without any pollution control restrictions, be an
adequate facility to cycle water to and from the generating unit, only an
incremental portion of the closed-loop cooling tower is deemed to be a Project
facility.

 

WASTEWATER
DISPOSAL FACILITIES

 

Sumps, piping, a sewage treatment plant, a
neutralization basin and an ash pond will be acquired and constructed to
provide for the disposal of various liquid wastes, including oil, chemicals,
contaminated water and flow-off from coal piles.

 

ENGINEERING FEES,
RESIDENT INSPECTION, 

CAPITALIZED INTEREST AND TEST COSTS

 

Sargent & Lundy, Consulting Engineers of
Chicago, Illinois, and other firms have acted as Engineers to the Company in
designing the Project facilities and have performed and will perform resident
inspection services with respect thereto. Such costs, together with Company
costs directly 

 

 

attributable to design
and construction of the Project, capitalized interest and the testing of
Project facilities are a part of the Project.

 

 

PART II

 

ADDITIONAL
POLLUTION CONTROL FACILITIES

 

The pollution control facilities constituting the
Project as described in Part I of this Exhibit A represent a portion
of all of the pollution control facilities intended to be acquired, constructed
and installed at the East Bend Generating Station, Units 1 and 2, which
complete pollution control facilities are described in that certain Memorandum
of Agreement dated as of February 17, 1976, by and between the County of
Boone, Kentucky, The Cincinnati Gas & Electric Company and The Dayton
Power and Light Company, as follows:

 

DESCRIPTION OF POLLUTION
CONTROL FACILITIES

TO BE CONSTRUCTED IN CONNECTION WITH UNIT 1 AND

UNIT 2 OF TEE EAST BEND GENERATING STATION

(BOONE COUNTY, KENTUCKY)

 

THE CINCINNATI GAS &
ELECTRIC COMPANY 

AND 

THE DAYTON POWER AND LIGHT COMPANY

 

The Project will consist of air, solid waste and water
pollution control and abatement facilities and systems. The Project will be
installed in conjunction with the construction of Unit 1 and Unit 2 of an
electric generation facility now known as the East Bend Generating Station, being
constructed by The Cincinnati Gas & Electric Company and The Dayton
Power and Light Company, to be situated near the community of Rabbit Hash, in
Boone County, Kentucky, on the Ohio River.

 

The Project facilities and systems hereafter described
are designed and are to be installed and utilized solely and only for the
collection, removal, abatement, alteration, control, containment and
disposition of atmospheric, solid waste and water pollutants so that gaseous
and liquid emissions and sanitary effluent from Unit 1 and Unit 2 of the East
Bend Generating Station meet applicable governmental air and water quality
standards or limitations.

 

The following, together with necessary appurtenant and
incidental facilities, constitute the major components of the Project:

 

ELECTROSTATIC
PRECIPITATORS

 

Electrostatic precipitators or other comparable
particulate control devices will be constructed in connection with Unit 1 and
Unit 2, together with associated structural supports, power modules and
electrical substations, and necessary and incidental ductwork. The
electrostatic precipitators or other particulate control devices will be
designed and intended solely and only to remove flyash and particulate matter
from flue gases exiting the coal-fired steam boilers. Such air pollution
control devices will be designed to at least meet or exceed applicable
governmental air quality standards or limitations.

 

 

FLUE GAS DUCT
SYSTEMS

 

Proposed flue gas duct systems will be designed to
convey untreated boiler flue gases emitted from the steam boilers to the
electrostatic precipitators or comparable particulate control devices where
particulate emissions and flyash will be removed. Induced draft fans and
booster fans, as appropriate, will form an integral part of the flue gas duct systems.
The system will convey partially cleansed flue gases to the sulphur dioxide
removal systems following particulate removal.

 

FLYASH STORAGE
SILOS AND ASSOCIATES FACILITIES

 

Flyash and particulate loadings removed from boiler
flue gases by electrostatic precipitators or other particulate removal devices
and collected from economizer hoppers and air heater hoppers will be conveyed
either to storage silos for removal from the site in dry form or to proposed
waste retention basin or basins, or central storage and removal facilities.
Incorporated into all flyash storage silos will be bag-house filter systems for
the control of dust.

 

ASH HANDLING AND
TRANSPORT SYSTEMS

 

Proposed ash handling and transport systems will be
either air or water pressure motivated. If water pressure motivated, the
systems will utilize blowdown from proposed water cooling towers. If air
pressure motivated, the systems will utilize compressors, fans or hydraulic
facilities. In either case, the ash handling and transport systems will be
designed to convey ash from collection hoppers at various generating station
facilities to either (i) storage silos, (ii) ash retention basins, or
(iii) other ash disposal facilities. Certain roadways solely for
transportation of wastes will be constructed.

 

WASTE RETENTION
BASINS

 

Proposed waste retention basins, involving substantial
land, will be situated at the generating station and will serve no other
purpose but to receive, contain and neutralize (i) flyash and particulate
matter captured by operation. of the electrostatic precipitators or by the dust
control systems, (ii) bottom ash produced by operation of the coal-fired
steam generators, (iii) liquid wastes produced by coal pile runoffs,
chemical spills, oil spills and other causes (with exception of sanitary wastes
which are treated by a separate sanitary sewer facility), and (iv) acid
and caustic liquid wastes produced by boiler operations. The waste retention
basins will allow neutralization of wastes
collected therein, will function on the gravity-settling principle and will
incorporate barriers and skimmers as appropriate to prevent floating flyash and
floating liquid wastes, including waste oils, from being transmitted to the
water source (Ohio River).

 

OIL ELIMINATION
SYSTEM

 

An oil elimination and control system will be
incorporated in each generating unit, which will collect oil runoffs,
exudations and spills and convey them to a central oil waste receptacle for
skimming and separation of oils from watery effluent.

 

COAL DUST CONTROL
SYSTEM

 

The proposed coal dust control system will provide
facilities to prevent atmospheric pollution while coal is being conveyed from
the coal storage and/or coal unloading facilities to the boilers. Coal is
proposed to be transported from river barges by means of a mechanical unloader
and conveyed to transfer houses where it will be crushed and thence delivered
to coal storage bunkers by belt 

 

 

conveyors. The coal
conveyor systems will be covered as required, and additional coal dust control
devices will be employed at each transfer point and at the coal storage
bunkers.

 

WATER COOLING
TOWERS AND ASSOCIATED EQUIPMENT

 

Water cooling towers, complete with all necessary
associated equipment, will be provided to remove heat (thermal pollution) from
the steam turbine exhausts. The heat will be dissipated to the atmosphere and
cooling tower blowdown streams will be utilized as required, to provide motive
power for transporting bottom ash, flyash and other wastes to the waste
retention basins or other waste disposal facilities.

 

SANITARY SEWAGE
TREATMENT PLANT

 

A sanitary sewage treatment plant and necessary
appurtenances will be constructed upon the generating station site to meet
appropriate federal, state and local requirements. Such treatment plant will be
adequate to serve all personnel permanently assigned to the generating station
as well as all members of construction crews on the premises during
construction of the East Bend Generating Station.

 

SULPHUR DIOXIDE
REMOVAL SYSTEMS

 

Sulphur dioxide removal systems will be installed as
appropriate, dependent upon the sulphur content of coal utilized in the
generating process and regulatory requirements. Such facilities will be
designed to reduce sulphur dioxide emissions to such level as will meet or
exceed applicable governmental air quality standards or limitations. The
sulphur dioxide removal facilities may utilize either the “wet scrubber”
system, or such other system as at the time of design represents the most
appropriate technology for the site and will meet or exceed applicable
governmental air quality standards or limitations.

 

SLUDGE RETENTION
BASINS

 

Sulphur dioxide removal systems may produce
substantial solid or liquid waste byproducts. Dependent upon the sulphur
dioxide removal process used, sludge retention basins will be provided to
receive and hold such liquid and/or solid waste products for ultimate
disposition.

 

AUXILIARY
FACILITIES ASSOCIATED WITH 

SULPHUR DIOXIDE REMOVAL EQUIPMENT

 

Dependent upon the technology to be utilized, the
sulphur dioxide removal systems will require facilities for reception of
reactant material, together with holding vats or ponds, transmission lines,
reactant tanks, pumps, sprays, transmission facilities and other associated
structures and facilities.

 

ELEVATED FLUE GAS
DIFFUSER

 

Proposed elevated flue gas diffusers (chimneys) will
be constructed to maximize diffusion of stack gases produced by operation of
the generating station.

 

MONITORING
EQUIPMENT

 

Monitoring equipment, as required by appropriate laws
and regulations, will be installed to monitor liquid discharges, solid waste
discharges, stack gas discharges and ambient air quality.

 

 

ENGINEERING COSTS,
RESIDENT INSPECTIONS, 

TEST COSTS AND ISSUANCE COSTS

 

Amounts representing engineering costs, resident
inspection and testing of Project facilities, together with actual costs of
Project facilities and bond issuance costs, will form a part of the Project.Exhibit 4.4

 

 

 

 

THE DAYTON POWER AND LIGHT COMPANY

AND

THE BANK OF NEW YORK

(formerly Irving Trust Company)

Trustee

 

 

 

Forty-Third Supplemental Indenture

 

 

 

Dated as of August 1, 2005

 

 

 

 

THE DAYTON POWER AND LIGHT COMPANY

FORTY-THIRD SUPPLEMENTAL INDENTURE

DATED AS OF AUGUST 1, 2005

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
  Parties

  	
  1

  
	
  Recitals

  	
  1

  
	
  Granting Clauses

  	
  7

  
	
  First. Real
  Property and Interests in Real Property.

  	
  7

  
	
   

  	
   

  	
   

  
	
  Second. Electric
  Generating Plants.

  	
  7

  
	
   

  	
   

  	
   

  
	
  Third.
  Transmission Lines.

  	
  7

  
	
   

  	
   

  	
   

  
	
  Fourth. Substations
  and Substation Sites.

  	
  7

  
	
   

  	
   

  	
   

  
	
  Fifth. Electric
  Distribution Systems.

  	
  8

  
	
   

  	
   

  	
   

  
	
  Sixth. Liquefied
  Petroleum Gas Production and Storage Facilities.

  	
  8

  
	
   

  	
   

  	
   

  
	
  Seventh. Gas
  Distribution Systems.

  	
  8

  
	
   

  	
   

  	
   

  
	
  Eighth. Office
  and Departmental Buildings.

  	
  8

  
	
   

  	
   

  	
   

  
	
  Ninth. Telephone
  Lines.

  	
  9

  
	
   

  	
   

  	
   

  
	
  Tenth.
  Franchises.

  	
  9

  
	
   

  	
   

  	
   

  
	
  Eleventh. Other
  Real Estate and Appurtenances.

  	
  9

  
	
   

  	
   

  	
   

  
	
  Twelfth.
  Property Hereafter to Become Subject to the Lien of the First Mortgage as
  Amended.

  	
  10

  
	
   

  	
   

  	
   

  
	
  Habendum Clause

  	
  10

  
	
  Subject Clause

  	
  11

  
	
  Grant in Trust

  	
  11

  
	
  ARTICLE One. Bonds of the 4.80% pollution
  control Series 2005-A Due 2034 and Issue Thereof.

  	
  11

  
	
   

  	
   

  
	
  Sec. 1.

  	
  Series and Form of
  New Water Bonds

  	
  11

  
	
  Sec. 2.

  	
  Issue of New Water
  Bonds

  	
  11

  
	
  Sec. 3.

  	
  Dates, Interest, etc.,
  of New Water Bonds

  	
  11

  
	
  Sec. 4.

  	
  Denominations and
  Exchangeability of New Water Bonds; Temporary Bonds may be Authenticated and
  Delivered

  	
  12

  
	
  Sec. 5.

  	
  Mandatory Redemption of
  New Water Bonds and Redemption Price

  	
  13

  
	
  Sec. 6.

  	
  Extraordinary Optional
  Redemption of New Water Bonds and Redemption Price

  	
  13

  
	
  Sec. 7.

  	
  Optional Redemption of
  New Water Bonds and Redemption Price

  	
  13

  
	
  Sec. 8.

  	
  Notice of Redemption of
  New Water Bonds

  	
  14

  
	
  Sec. 9.

  	
  New Water Bonds Deemed
  Paid in Certain Circumstances

  	
  14

  
	
  Sec. 10.

  	
  New Water Bonds Deemed
  Paid in Additional Circumstances

  	
  14

  
	
  Sec. 11.

  	
  Surrender of New Water
  Bonds in Certain Circumstances

  	
  14

  
	
  Sec. 12.

  	
  Application of Article Ten
  of First Mortgage as Amended

  	
  14

  
	
  Sec. 13.

  	
  Form of New Water
  Bonds

  	
  15

  

 

i

 

	
  ARTICLE TWO. Bonds of the 4.80% pollution
  control Series 2005-B Due 2034 and Issue Thereof.

  	
  15

  
	
   

  	
   

  
	
  Sec. 1.

  	
  Series and Form of
  New Air Bonds

  	
  15

  
	
  Sec. 2.

  	
  Issue of New Air Bonds

  	
  15

  
	
  Sec. 3.

  	
  Dates, Interest, etc.,
  of New Air Bonds

  	
  15

  
	
  Sec. 4.

  	
  Denominations and
  Exchangeability of New Air Bonds; Temporary Bonds may be Authenticated and
  Delivered

  	
  16

  
	
  Sec. 5.

  	
  Mandatory Redemption of
  New Air Bonds and Redemption Price

  	
  16

  
	
  Sec. 6.

  	
  Extraordinary Optional
  Redemption of New Air Bonds and Redemption Price

  	
  17

  
	
  Sec. 7.

  	
  Optional Redemption of New
  Air Bonds and Redemption Price

  	
  17

  
	
  Sec. 8.

  	
  Notice of Redemption of
  New Air Bonds

  	
  17

  
	
  Sec. 9.

  	
  New Air Bonds Deemed
  Paid in Certain Circumstances

  	
  18

  
	
  Sec. 10.

  	
  New Air Bonds Deemed
  Paid in Additional Circumstances

  	
  18

  
	
  Sec. 11.

  	
  Surrender of New Air
  Bonds in Certain Circumstances

  	
  18

  
	
  Sec. 12.

  	
  Application of Article Ten
  of First Mortgage as Amended

  	
  18

  
	
  Sec. 13.

  	
  Form of New Air
  Bonds

  	
  18

  
	
  ARTICLE Three. Bonds of the 4.70% pollution
  control Series 2005-C Due 2028 and Issue Thereof.

  	
  18

  
	
   

  	
   

  	
   

  
	
  Sec. 1.

  	
  Series and Form of
  New Boone County Bonds

  	
  19

  
	
  Sec. 2.

  	
  Issue of New Boone
  County Bonds

  	
  19

  
	
  Sec. 3.

  	
  Dates, Interest, etc.,
  of New Boone County Bonds

  	
  19

  
	
  Sec. 4.

  	
  Denominations and
  Exchangeability of New Boone County Bonds; Temporary Bonds may be
  Authenticated and Delivered

  	
  19

  
	
  Sec. 5.

  	
  Mandatory Redemption of
  New Boone County Bonds and Redemption Price

  	
  20

  
	
  Sec. 6.

  	
  Extraordinary Optional
  Redemption of New Boone County Bonds and Redemption Price

  	
  20

  
	
  Sec. 7.

  	
  Optional Redemption of
  New Boone County Bonds and Redemption Price

  	
  21

  
	
  Sec. 8.

  	
  Notice of Redemption of
  New Boone County Bonds

  	
  21

  
	
  Sec. 9.

  	
  New Boone County Bonds
  Deemed Paid in Certain Circumstances

  	
  21

  
	
  Sec. 10.

  	
  New Boone County Bonds
  Deemed Paid in Additional Circumstances

  	
  22

  
	
  Sec. 11.

  	
  Surrender of New Boone
  County Bonds in Certain Circumstances

  	
  22

  
	
  Sec. 12.

  	
  Application of Article Ten
  of First Mortgage as Amended

  	
  22

  
	
  Sec. 13.

  	
  Form of New Boone
  County Bonds

  	
  22

  
	
  ARTICLE FOUR. amendments to first mortgage as
  amended to become effective at a later date or dates.

  	
  22

  
	
   

  	
   

  	
   

  
	
  Sec. 1.

  	
  Amendments to First
  Mortgage

  	
  22

  
	
  Sec. 2.

  	
  Amendment to Section 3
  of Article One of First Mortgage

  	
  23

  
	
  Sec. 3.

  	
  Amendment to Section 3
  of Article One of First Mortgage

  	
  23

  
	
  Sec. 4.

  	
  Amendment to Section 7
  of Article One of First Mortgage

  	
  23

  
	
  Sec. 5.

  	
  Amendment to Section 5
  of Article Five of First Mortgage

  	
  26

  
	
  Sec. 6.

  	
  Amendment to Article Six
  of First Mortgage

  	
  26

  
	
  Sec. 7.

  	
  Amendment to Section 2
  of Article Eight of First Mortgage

  	
  26

  
	
  Sec. 8.

  	
  Amendment to Article Ten
  of First Mortgage

  	
  26

  
	
  Sec. 9.

  	
  Amendment to Section 3
  of Article Fifteen of First Mortgage

  	
  28

  
	
  Sec. 10.

  	
  Amendment to Section 2
  of Article Sixteen of First Mortgage

  	
  28

  
	
  Sec. 11.

  	
  Amendment to Section 3
  of Article Sixteen of First Mortgage

  	
  30

  
	
  Sec. 12.

  	
  Amendment to Section 4
  of Article Sixteen of First Mortgage

  	
  30

  
	
  Sec. 13.

  	
  Amendment to Section 2
  of Article Eighteen of First Mortgage

  	
  31

  
	
  Sec. 14.

  	
  Amendment to Section 3
  of Article Twenty-One of First Mortgage

  	
  31

  
	
  Sec. 15.

  	
  General Provisions
  Regarding Supplemental Indentures Effecting Amendments to First Mortgage

  	
  32

  
	
  ARTICLE Five. Covenants Of The Company.

  	
  32

  
	
   

  	
   

  	
   

  
	
  Sec. 1.

  	
  Confirmation of
  Covenants by Company in First Mortgage

  	
  32

  
	
  Sec. 2.

  	
  Covenant of the Company
  and Legal Opinion as to Recording

  	
  32

  

 

ii

 

	
  ARTICLE SIX. Miscellaneous.

  	
  32

  
	
  Sec. 1.

  	
  Authentication and
  Delivery of New Bonds in Advance of the Recording of Forty-Third Supplemental
  Indenture

  	
  33

  
	
  Sec. 2.

  	
  Forty-Third
  Supplemental Indenture to Form Part of First Mortgage

  	
  33

  
	
  Sec. 3.

  	
  Definitions in First
  Mortgage Shall Apply to Forty-Third Supplemental Indenture

  	
  33

  
	
  Sec. 4.

  	
  Execution in
  Counterparts

  	
  33

  
	
  Testimonium

  	
  34

  
	
  Signatures

  	
  34

  
	
  Acknowledgments

  	
  35

  
	
  Exhibits

  	
   

  

 

iii

 

FORTY-THIRD SUPPLEMENTAL
INDENTURE, dated as of August 1, 2005, between THE DAYTON POWER AND LIGHT
COMPANY, a corporation of the State of Ohio (hereinafter sometimes called the
Company), party of the first part, and THE BANK OF NEW YORK (formerly Irving
Trust Company), a corporation of the State of New York (hereinafter sometimes
called the Trustee), as Trustee, party of the second part.

 

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

 

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

 

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

 

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

 

	
  Supplemental

  Indenture

  	
   

  	
  Dated As Of

  	
   

  	
  Series

  Provided For

  	
   

  	
  Principal

  Amount

  Outstanding

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  First

  	
   

  	
  March 1,
  1937

  	
   

  	
  31/4% Series Due 1962

  	
   

  	
  None

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Second

  	
   

  	
  January 1,
  1940

  	
   

  	
  3% Series Due 1970

  	
   

  	
  None

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Third

  	
   

  	
  October 1,
  1945

  	
   

  	
  23/4% Series Due 1975

  	
   

  	
  None

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fourth

  	
   

  	
  January 1,
  1948

  	
   

  	
  3% Series Due 1978

  	
   

  	
  None

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fifth

  	
   

  	
  December 1,
  1948

  	
   

  	
  3% Series A, Due 1978

  	
   

  	
  None

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sixth

  	
   

  	
  February 1,
  1952

  	
   

  	
  31/4% Series Due 1982

  	
   

  	
  None

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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

  	
   

  

 

1

 

	
  Supplemental

  Indenture

  	
   

  	
  Dated As Of

  	
   

  	
  Series

  Provided For

  	
   

  	
  Principal

  Amount

  Outstanding

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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

  	
   

  	
  $

  	
  9,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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

  	
   

  
									

 

2

 

	
  Supplemental

  Indenture

  	
   

  	
  Dated As Of

  	
   

  	
  Series

  Provided For

  	
   

  	
  Principal

  Amount

  Outstanding

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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

  	
   

  	
  $

  	
  32,300,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  6.40% Pollution Control Series 1992-B Due 2027

  	
   

  	
  $

  	
  27,800,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thirty-Seventh

  	
   

  	
  November 15,
  1992

  	
   

  	
  6.50% Pollution Control Series 1992-C Due 2022

  	
   

  	
  $

  	
  48,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thirty-Eighth

  	
   

  	
  November 15,
  1992

  	
   

  	
  8.40% Series Due 2022

  	
   

  	
  None

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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

  	
   

  

 

WHEREAS, said Eleventh Supplemental Indenture, which
created the 55/8% Series Due 1997, provided in its Article Three
for certain amendments to the First Mortgage, as theretofore amended, each such
amendment to become effective on the earliest date on which either (a) there
shall not be any Bonds outstanding of Series Due 1975, Series Due
1978, Series A, Due 1978, Series Due 1982, Series Due 1984, or Series Due
1993, or (b) there shall have been executed and delivered a supplemental
indenture or indentures embodying said amendment (either alone or with other
amendments) consented to by the holders of seventy-five per centum (75%) in
aggregate principal amount of the Bonds at the time outstanding of the series
enumerated in the foregoing clause (a), or of each said series of which Bonds
are then outstanding; and

 

3

 

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

 

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

 

WHEREAS, none of the Bonds of Series Due 1975, Series Due
1978, Series A, Due 1978, Series Due 1982, Series Due 1984, Series Due
1993, Series Due 1997, Series Due 1998, Series Due 1999, or Series Due
2000 remain outstanding and the amendments contained in said Fifteenth
Supplemental Indenture have become effective; and

 

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

 

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

 

WHEREAS, the Company, pursuant to resolutions duly
adopted by its Board of Directors at a meeting of said Board of Directors duly
called and held, has determined under and in accordance with the provisions of
the First Mortgage as amended and of this Forty-Third Supplemental Indenture to
create three new series of Bonds to be known as its (a) First Mortgage
Bonds, 4.80% Pollution Control Series 2005-A Due 2034 (hereinafter
sometimes called the New Water Bonds), which shall be limited to the aggregate
principal amount of $41,300,000; (b) First Mortgage Bonds, 4.80% Pollution
Control Series 2005-B Due 2034 (hereinafter sometimes called the New Air
Bonds), which shall be limited to the aggregate principal amount of
$137,800,000; and (c) First Mortgage Bonds, 4.70% Pollution Control Series 2005-C
Due 2028 (hereinafter sometimes called the New Boone County Bonds), which shall
be 

 

4

 

limited to the aggregate
principal amount of $35,275,000 ( such New Water Bonds, New Air Bonds and New
Boone County Bonds being hereinafter called collectively the New Bonds); and

 

WHEREAS,
the New Water Bonds are to be issued by the Company to the Ohio Water
Development Authority (hereinafter called the Water Authority) to evidence and
secure the obligations of the Company to repay the loan of the proceeds of the
sale of the Water Project Bonds (as hereinafter defined) made by the Water
Authority to the Company, pursuant to a certain Loan Agreement, dated as of August 1,
2005, between the Water Authority and the Company (hereinafter called the Water
Pollution Control Agreement), to assist in the refinancing of the Company’s
portion of the cost of acquisition, construction and installation of certain
waste water facilities and solid waste facilities (as such terms are defined
and used in Sections 6121.01 and 6123.01, respectively, of the Ohio Revised
Code) installed in connection with: Unit 2 of the Killen Generating Station
located in Adams County, Ohio as to which the Company at the date hereof owns
an undivided 67% interest as tenant in common with another public utility
company, the O. H. Hutchings Generating Station located in Montgomery County,
Ohio as to which the Company at the date hereof owns 100% of the station, and
the J. M. Stuart Generating Station located in Brown County, Ohio as to which
the Company at the date hereof owns an undivided 35% interest as a tenant in
common with two other public utility companies (such interests in said
facilities being hereinafter called the Water Project); and

 

WHEREAS,
the New Air Bonds are to be issued by the Company to the Ohio Air Quality
Development Authority (hereinafter called the Air Authority) to evidence and
secure the obligations of the Company to repay the loan of the proceeds of the
sale of the Air Project Bonds (as hereinafter defined) made by the Air
Authority to the Company, pursuant to a certain Loan Agreement, dated as of August 1,
2005, between the Air Authority and the Company (hereinafter called the Air
Pollution Control Agreement), to assist in the refinancing of the Company’s
portion of the cost of acquisition, construction and installation of certain
air quality facilities (as that term is defined and used in Section 3706.01
of the Ohio Revised Code) installed in connection with: Unit 2 of the Killen
Generating Station located in Adams County, Ohio as to which the Company at the
date hereof owns an undivided 67% interest as tenant in common with another
public utility company, the Walter C. Beckjord Generating Station Unit 6
located in Clermont County, Ohio as to which the Company at the date hereof
owns an undivided 50% interest as tenant in common with another public utility
company, and the William H. Zimmer Generating Station located in Clermont
County, Ohio as to which the Company at the date hereof owns an undivided 28.1%
interest as tenant in common with two other public utility companies (such
interests in said facilities being hereinafter called the Air Project); and

 

WHEREAS,
the New Boone County Bonds are to be issued by the Company to the Boone County
Board of Commissioners (hereinafter called Boone County) to evidence and secure
the obligations of the Company to repay the loan of the proceeds of the sale of
the Boone County Project Bonds (as hereinafter defined) made by Boone County to
the Company, pursuant to a certain Loan Agreement, dated as of August 1,
2005, between Boone County and the Company (hereinafter called the Boone County
Pollution Control Agreement), to assist in the refinancing of the Company’s
portion of the cost of acquisition, construction and installation of certain
solid waste facilities installed in connection with Unit 2 of the East Bend
Generating Station located in Boone County, Kentucky as to which the Company at
the date hereof owns an undivided 31% interest as tenant in common with another
public utility company (such interests in said facilities being hereinafter
called the Boone County Project); and

 

WHEREAS,
the loan by the Water Authority in respect of the Water Project is to be funded
by the proceeds derived from the sale by the Water Authority of State of Ohio
Collateralized Pollution Control Revenue Refunding Bonds, 2005 Series A
(The Dayton Power and Light Company Project), in the aggregate principal amount
of $41,300,000 (hereinafter called the Water Project Bonds); and

 

WHEREAS,
the loan by the Air Authority in respect of the Air Project is to be funded by
the proceeds derived from the sale by the Air Authority of State of Ohio
Collateralized Pollution Control Revenue Refunding Bonds, 2005 Series B
(The Dayton Power and Light Company Project), in the aggregate principal amount
of $137,800,000 (hereinafter called the Air Project Bonds); and

 

WHEREAS,
the loan by Boone County in respect of the Boone County Project is to be funded
by the proceeds derived from the sale by Boone County of County of Boone,
Kentucky Collateralized Pollution Control Revenue Refunding Bonds, 2005 Series A
(The Dayton Power and Light Company Project), in the aggregate principal amount
of $35,275,000 (hereinafter called the Boone County Project Bonds); and

 

5

 

WHEREAS,
the Water Project Bonds are to be issued under a certain Trust Indenture, dated
as of August 1, 2005 (hereinafter called the Water Pollution Control
Indenture), between the Water Authority and The Bank of New York, as Trustee
(hereinafter in such capacity called the Water Project Bond Trustee), and the
New Water Bonds are to be assigned by the Water Authority to the Water Project
Bond Trustee as security for the payment of the principal of and interest on
the Water Project Bonds and are to be delivered by the Company on behalf of the
Water Authority directly to the Water Project Bond Trustee; and

 

WHEREAS, the Air Project Bonds are to be issued under
a certain Trust Indenture, dated as of August 1, 2005 (hereinafter called
the Air Pollution Control Indenture), between the Air Authority and The Bank of
New York, as Trustee (hereinafter in such capacity called the Air Project Bond
Trustee), and the New Air Bonds are to be assigned by the Air Authority to the
Air Project Bond Trustee as security for the payment of the principal of and
interest on the Air Project Bonds and are to be delivered by the Company on
behalf of the Air Authority directly to the Air Project Bond Trustee; and

 

WHEREAS, the Boone County Project Bonds are to be
issued under a certain Trust Indenture, dated as of August 1, 2005
(hereinafter called the Boone County Pollution Control Indenture), between
Boone County and The Bank of New York, as Trustee (hereinafter in such capacity
called the Boone County Project Bond Trustee), and the New Boone County Bonds
are to be assigned by Boone County to the Boone County Project Bond Trustee as
security for the payment of the principal of and interest on the Boone County
Project Bonds and are to be delivered by the Company on behalf of Boone County
directly to the Boone County Project Bond Trustee; and

 

WHEREAS, the New Bonds and the Trustee’s certificate
to be endorsed on all the New Bonds are to be respectively and substantially in
the forms established hereby and approved by the aforesaid resolutions, which
are substantially in the forms of Exhibits A, B and C hereto, as applicable;
and

 

WHEREAS, at a meeting of the Board of Directors of the
Company, the Board of Directors adopted a resolution that authorized officers
of the Company to approve the form, terms and provisions of this Forty-Third
Supplemental Indenture (including the forms of the New Bonds), and the
execution by the Company of a supplemental indenture in such form and having
substantially the same form, terms and the provisions as said Thirty-Six
Supplemental Indenture; and

 

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

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH

 

that, in order further to
secure the payment of all the Bonds at any time issued and outstanding under
the First Mortgage as amended or this Forty-Third Supplemental Indenture
according to their tenor, purport and effect, as well the interest thereon as
the principal thereof, and further to secure the performance and observance of
all the covenants and conditions therein and in the First Mortgage as amended
and herein contained, and further to set forth the terms and conditions upon
which the New Bonds are to be issued, secured and held, and for and in
consideration of the premises and of the acceptance or purchase of the New
Bonds by the holders or registered owners thereof, and of the sum of one
dollar, lawful money of the United States of America, to the Company duly paid
by the Trustee at or before the ensealing and delivery of this Forty-Third
Supplemental Indenture, the receipt whereof is hereby acknowledged, the Company
has executed and delivered this Forty-Third Supplemental Indenture, and has
granted, bargained, sold, released, conveyed, assigned, transferred, pledged,
set over and 

 

6

 

confirmed, and by
these presents does grant, bargain, sell, release, convey, assign, transfer,
pledge, set over and confirm unto the Trustee, and to its successor or
successors in said trust, and to it and its and their assigns forever, and does
hereby subject to the lien of the First Mortgage as heretofore and hereby
amended all the following described properties (all of which properties are included
in and constitute a part of the “mortgaged property” and the “mortgaged and
pledged property” as such terms are used and defined in the First Mortgage as
heretofore and hereby amended and whenever used in the First Mortgage as
heretofore and hereby amended such terms include and refer to such properties),
to wit: 

 

ARTICLE IX.

REAL PROPERTY AND INTERESTS IN REAL PROPERTY.

 

All and singular, all real property and interests in
real property acquired by the Company between September 1, 2003, the date
of the Forty-Second Supplemental Indenture, and the date of this Forty-Third
Supplemental Indenture, and owned by the Company at the latter date.

 

ARTICLE X.

ELECTRIC GENERATING PLANTS.

 

All electric generating plants and stations of the
Company acquired by it between September 1, 2003, the date of the
Forty-Second Supplemental Indenture, and the date of this Forty-Third
Supplemental Indenture, and owned by it at the latter date, including all power
houses, buildings, structures and works, and the land on which the same are
situated, and all other lands and easements, rights-of-way, permits,
privileges, towers, poles, wires, machinery, equipment, appliances,
appurtenances and supplies forming a part of such plants and stations, or any
of them, or occupied, enjoyed or used in connection therewith.

 

ARTICLE XI.

TRANSMISSION LINES.

 

All electric overhead and underground transmission
lines of the Company acquired by it between September 1, 2003, the date of
the Forty-Second Supplemental Indenture, and the date of this Forty-Third
Supplemental Indenture, and owned by it at the latter date, including towers,
poles, pole lines, conduits, manholes, switching devices, insulators, and other
structures, appliances, devices and equipment, and all the property forming a part
thereof or appertaining thereto, and all service lines extending therefrom,
together with all real property, rights-of-way, easements, permits, privileges,
franchises, and rights for or relating to the construction, maintenance or
operation thereof, through, over, under or upon any private property or any
public way within as well as without the corporate limits of any municipal
corporation.

 

ARTICLE XII.

SUBSTATIONS AND SUBSTATION SITES.

 

All substations and switching stations of the Company
acquired by it between September 1, 2003, the date of the Forty-Second
Supplemental Indenture, and the date of this Forty-Third Supplemental
Indenture, and owned by it at the latter date, for transforming or otherwise
regulating electric current at any of its plants, together with all buildings,
transformers, wires, cables, insulators, structures, appliances, devices,
equipment and all other property, real or personal, forming a part of, or 

 

7

 

appertaining thereto, or
used, occupied or enjoyed in connection with any of such substations and
switching stations.

 

ARTICLE XIII.

ELECTRIC DISTRIBUTION SYSTEMS.

 

All electric distribution systems of the Company
acquired by it between September 1, 2003, the date of the Forty-Second
Supplemental Indenture, and the date of this Forty-Third Supplemental
Indenture, and owned by it at the latter date, including substations,
transformers, switchboards, towers, poles, wires, insulators, conduits, cables,
manholes, appliances, devices, equipment and all other property, real or
personal, forming a part of or appertaining thereto, or used, occupied or
enjoyed in connection with such distribution systems or any of them, together
with all rights-of-way, easements, permits, privileges, franchises, and rights
in or relating to the construction, maintenance or operation thereof, through,
over, under or upon any private property or public ways within as well as
without the corporate limits of any municipal corporation.

 

ARTICLE XIV.

LIQUEFIED PETROLEUM GAS PRODUCTION AND STORAGE FACILITIES.

 

All additions to liquefied petroleum gas production
plants and storage facilities of the Company acquired by it between September 1,
2003, the date of the Forty-Second Supplemental Indenture, and the date of this
Forty-Third Supplemental Indenture, and owned by it at the latter date,
including all buildings, structures, underground storage caverns, and works,
and the land on which the same are situated, and all other lands and easements,
rights-of-way, permits, privileges, pipe lines, machinery, equipment,
appliances, appurtenances and supplies forming a part of such plants and
stations, or any of them, or occupied, enjoyed or used in connection therewith.

 

ARTICLE XV.

GAS DISTRIBUTION SYSTEMS.

 

All gas distribution systems of the Company acquired
or constructed by it between September 1, 2003, the date of the
Forty-Second Supplemental Indenture, and the date of this Forty-Third
Supplemental Indenture, and owned by it at the latter date, for distribution of
gas, including pipes, mains, conduits, meters, appliances, equipment, and all
other property, real or personal, forming a part of or appertaining to or used,
occupied or enjoyed in connection with such distribution systems, or any of
them, together with all rights-of-way, easements, permits, privileges,
franchises and rights, for or relating to the construction, maintenance or
operation thereof, through, over, under or upon any private property or any
public streets or highways, within as well as without the corporate limits of
any municipal corporation.

 

ARTICLE XVI.

OFFICE AND DEPARTMENTAL BUILDINGS.

 

All office and departmental buildings of the Company,
including the real estate on which such structures stand, acquired by it
between September 1, 2003, the date of the Forty-Second Supplemental
Indenture, and the date of this Forty-Third Supplemental Indenture, and owned
by it at the latter date, appertaining to, used, occupied or enjoyed in
connection with the rendition of public utility service.

 

8

 

ARTICLE XVII.

TELEPHONE LINES.

 

All telephone lines of the Company acquired by it
between September 1, 2003, the date of the Forty-Second Supplemental
Indenture, and the date of this Forty-Third Supplemental Indenture, and owned
by it at the latter date, used or available for use in the operation of its
properties or otherwise.

 

ARTICLE XVIII.

FRANCHISES.

 

All and singular the franchises, grants, immunities,
privileges and rights of the Company granted to or acquired by it between September 1,
2003, the date of the Forty-Second Supplemental Indenture, and the date of this
Forty-Third Supplemental Indenture, and to which it was entitled at the latter
date, including all and singular the franchises, grants, immunities, privileges
and rights of the Company granted by all municipalities or political
subdivisions, and all right, title and interest therein owned by the Company on
the date of the execution of this Forty-Third Supplemental Indenture, and all
renewals, extensions and modifications of said franchises, grants, immunities,
privileges and rights, or any of them, and of all other franchises, grants,
immunities, privileges and rights now subject to the lien of the First Mortgage
as amended.

 

ARTICLE XIX.

OTHER REAL ESTATE AND APPURTENANCES.

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

ARTICLE XX.

 

PROPERTY HEREAFTER TO BECOME
SUBJECT TO THE LIEN OF

THE FIRST MORTGAGE AS AMENDED.

 

A.                                   Any and all property, real, personal and
mixed, including franchises, grants, immunities, privileges and rights, which
the Company may hereafter acquire or to which it may hereafter become entitled,
excepting, however, the following property which is not intended to be
subjected to the lien of the First Mortgage: 
(1) any revenues, earnings, rents, issues, income or profits of the
mortgaged property, or any cash (except cash deposited with the Trustee
pursuant to any of the provisions of the First Mortgage as heretofore and
hereby amended), or any bills, notes or accounts receivable, contracts or
choses in action, or any materials or supplies or construction equipment, or
any merchandise, equipment or apparatus manufactured or acquired for the
purpose of sale or resale in the usual course of business, except in case of
the happening of a completed default as defined in Section 1 of Article Twelve
of the First Mortgage as heretofore and hereby amended, and following such
completed default, in case the Trustee or a receiver or trustee shall enter
upon and take possession of the mortgaged property, or (2) in any case,
any cars, trucks or other vehicles of any nature for the transportation of
personnel, materials or equipment by any means, or any bonds, notes, evidences
of indebtedness, shares of stock or other securities, except such as may be specifically
subjected to the lien of the First Mortgage as amended.

 

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

 

10

 

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

 

SUBJECT, HOWEVER, as to property hereby conveyed, to
liens for taxes, assessments and other charges levied or to be levied by the
State of Ohio and any of the subdivisions thereof for the years 2004 and 2005
and thereafter and, as to any property hereafter acquired by the Company and
which may become subject to the lien of the First Mortgage as amended, to any
lien or charge thereon existing at the time of the acquisition thereof by the
Company;

 

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

 

Section 20.1

 

Bonds of the 4.80% Pollution Control Series 2005-A
Due 2034 and Issue Thereof.

 

(a)                                                                                         There shall be a series of Bonds
designated “4.80% Pollution Control Series 2005-A Due 2034”, each of which
shall bear the descriptive title First Mortgage Bond.  The aggregate principal amount of the New
Water Bonds which may be outstanding under the First Mortgage as amended and
this Forty-Third Supplemental Indenture shall be limited to $41,300,000, except
as provided in Section 9 of Article Two of the First Mortgage as
amended.

 

(b)                             Upon the execution
and delivery of this Forty-Third Supplemental Indenture and upon delivery of
$41,300,000 aggregate principal amount of the New Water Bonds, executed by the
Company, and upon compliance by the Company with the provisions of Article Five,
Article Six or Article Seven or any or all of said Articles, as the
case may be, of the First Mortgage as amended, the Trustee shall, without
awaiting the filing or recording of this Forty-Third Supplemental Indenture,
authenticate the New Water Bonds and deliver the New Water Bonds as provided in
said Article Five, Article Six or Article Seven.

 

(c)                              The New Water
Bonds shall be dated as provided in Section 3 of Article Two of the
First Mortgage as amended; shall mature on January 1, 2034; and shall bear
interest from August 17, 2005 as provided in said Section 3 of Article Two
at the rate of four and eighty hundredths per centum (4.80%) per annum until
paid or redeemed as hereinafter provided, payable on January 1, 2006 and
thereafter semi-annually on each January 1 and July 1, and on the
maturity date, to the Bondholders in whose names such New Water Bonds are
registered at the close of business on the Business Day immediately preceding
such January 1 or July 1, except that if the Company shall default in
the payment of any installment of interest on any New Water Bonds, such interest
in default shall be paid to the Bondholders in whose names the New Water Bonds
are registered at the close of business on a date established for the payment
of such defaulted interest by the Company in any lawful manner.  The New Water Bonds shall be payable as to
both principal and interest in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts, at the office or agency of the Company in the Borough of
Manhattan, The City of New York.  The
amount of 

 

11

 

interest payable for any period will be computed on the basis of a 360-day
year consisting of twelve 30-day months. 
In the event that any date on which principal or interest is payable on
the New Water Bonds is not a Business Day (as defined below), the payment of
the principal or interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), with the same force and effect as if
made on the date the payment was originally payable.  “Business Day” means any day, other than a
Saturday or Sunday, or a day on which banking institutions or trust companies
in The City of New York are generally authorized or required by law, regulation
or executive order to remain closed or a day on which the corporate trust
office of the Trustee is closed for business.

 

(d)                                                                                        The New Water Bonds shall be issued in
denominations of $5,000 and any integral multiple of $5,000.

 

Whenever any New Water Bond or New Water Bonds shall be surrendered at
the office or agency of the Company in said Borough of Manhattan for exchange
for a New Water Bond or New Water Bonds of other authorized denomination or
denominations, the Company shall execute, and the Trustee shall authenticate
and deliver, upon cancellation of the New Water Bond or New Water Bonds so
surrendered, a New Water Bond or New Water Bonds of such other authorized
denomination or denominations of like aggregate principal amount as the
Bondholder making the exchange shall have requested and shall be entitled to
receive.  On presentation of any New
Water Bond which is to be redeemed pursuant to the provisions of Section 5
of this Article One in part only, the Company shall execute, and the
Trustee shall authenticate and deliver, a New Water Bond or New Water Bonds in
principal amount equal to the unredeemed portion of the New Water Bond so
presented.

 

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

 

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

 

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

 

(e)                                                                                         The New Water Bonds shall be subject to
mandatory redemption by the Company prior to maturity at any time in whole or
in part at a redemption price of 100% of the principal amount to be redeemed,
plus accrued interest to the redemption date, upon receipt by the Trustee of
notice from the Water Project Bond Trustee to the effect that (a) the
Company is required to deliver moneys to the Water Project Bond Trustee for the
redemption of the Water 

 

12

 

Project Bonds in whole or in part, as the case may be, as provided in Section 6.3
of the Water Pollution Control Agreement and (b) an equivalent principal
amount of the Water Project Bonds are being concurrently called for
redemption.  Said notice shall specify
the redemption date of such New Water Bonds (which redemption date shall be the
same date as the redemption date specified in said notice for the Water Project
Bonds being currently redeemed).  Any
such redemption shall be made upon the notice and in the manner provided in
this Article One, subject to the provisions of the First Mortgage as
amended.

 

(f)                                                                                           The New Water Bonds shall be subject to
redemption, at the option of the Company, prior to maturity at any time, in
whole or in part, at a redemption price of 100% of the principal amount to be
redeemed, plus accrued interest to the redemption date, upon receipt by the
Trustee of an officers’ certificate to the effect that (a) the Company has
given notice to the Water Project Bond Trustee that the Company is exercising
its option to direct the redemption of Water Project Bonds in whole or in part,
as provided in Section 6.2 of the Water Pollution Control Agreement and (b) an
equivalent principal amount of New Water Project Bonds are being concurrently
called for redemption.  Such officers’
certificate shall have attached to it a copy of said notice to the Water
Project Bond Trustee and shall specify the redemption date of such New Water
Bonds (which redemption date shall be not less than 45 days (unless a shorter
period shall be acceptable to the Trustee) after the date of the mailing of
such certificate and shall be the same date as the redemption date specified in
said attached notice for the Water Project Bonds being concurrently
redeemed).  Any such redemption shall be
made upon the notice, which may be conditional as provided in Section 8 of
this Article One, and in the manner provided in this Article One,
subject to the provisions of the First Mortgage as amended.

 

(g)                             The New Water Bonds
shall also be subject to redemption prior to maturity, at the option of the
Company, in whole or in part, at anytime on or after July 1, 2015, at a
redemption price equal to 100% of the principal amount thereof, plus accrued
interest to the redemption date.

 

Prior to any such redemption, the Trustee shall have
received an officers’ certificate to the effect that (a) the Company has
given notice to the Water Project Bond Trustee that the Company is exercising
its option to deliver moneys to the Water Project Bond Trustee for the
redemption of Water Project Bonds in whole or in part, as the case may be, as
provided in Section 6.1 of the Water Pollution Control Agreement and (b) an
equivalent principal amount of Water Project Bonds are being concurrently
called for redemption.  Such officers’
certificate shall specify the principal amount of New Water Bonds to be
redeemed, shall have attached to it a copy of said notice to the Water Project
Bond Trustee and shall specify the redemption date of such New Water Bonds
(which redemption date shall be not less than 45 days (unless a shorter time
period shall be acceptable to the Trustee) after the date of the mailing of
such certificate and shall be the same date as the redemption date specified in
said attached notice for the Water Project Bonds being concurrently
redeemed).  Any such redemption shall be
made upon the notice, which may be conditional as provided in Section 8 of
this Article One, and in the manner provided in this Article One,
subject to the provisions of the First Mortgage as amended.

 

(h)                                                                                        Subject to the provisions of the First
Mortgage as amended, written notice of redemption of the New Water Bonds
pursuant to any of Sections 5, 6 or 7 of this Article One shall be given
by the Trustee by mailing, first class postage prepaid, or delivering by hand
to the registered owner of such New Water Bonds to be redeemed a notice of such
redemption at its last address as it shall appear upon the books of the Company
for the registration and transfer of such New Water Bonds.  Any notice of redemption pursuant to said
Sections 5, 6 or 7 shall be mailed or delivered by hand as least 30 days and
not earlier than 60 days before the redemption 

 

13

 

date; provided, however, that the registered owner or owners of all New
Water Bonds may consent in writing to a shorter notice period, and such
consent, if filed with the Trustee, shall be binding upon the Company and such
registered owners and their transferees. 
In the case of any notice of redemption of New Water Bonds pursuant to
said Sections 6 or 7, such notice shall state that such redemption is
conditional to the same extent and with the same effect, if any, as the notice
of redemption of the Water Project Bonds being concurrently redeemed.

 

(i)                                                                                            In the event any Water Project Bonds
shall be purchased by the Company and surrendered by the Company to the Water
Project Bond Trustee for cancellation or shall be otherwise surrendered to the
Water Project Bond Trustee for cancellation pursuant to the Water Pollution
Control Indenture (except upon exchange for other Water Project Bonds), New
Water Bonds equivalent in principal amount to the Water Project Bonds so
surrendered shall be deemed to have been paid, but only when and to the extent
that (a) such payment of the principal amount of such New Water Bonds
shall be noted by an agency of the Company on the schedule of payments on
such New Water Bonds and (if such agency is not the Trustee) written notice by
such agency of such notation shall have been received by the Trustee or (b) such
New Water Bonds shall have been surrendered to and cancelled by the Trustee as
provided in Section 11 of this Article One.

 

(j)                               In the event and
to the extent the principal of or interest on any Water Project Bonds shall be
paid out of funds held by the Water Project Bond Trustee or out of any other
funds or shall otherwise be deemed to be paid, an equal amount of principal or
interest, as the case may be, payable with respect to an aggregate principal
amount of New Water Bonds equal to an aggregate principal amount of such Water
Project Bonds shall be deemed to have been paid, but, in the case of such
payment of principal of such New Water Bonds, only when and to the extent that (a) such
payment of the principal amount thereof shall be noted by any agency of the
Company on the schedule of payments on such New Water Bonds and (if such
agency is not the Trustee) written notice by such agency of such notation shall
have been received by the Trustee or (b) such New Water Bonds shall have
been surrendered to and cancelled by the Trustee as provided in Section 11
of this Article One.

 

(k)                                                                                         When payment of any principal amount of a
New Water Bond is made as provided in Section 9 or 10 of this Article One,
the registered owner thereof shall surrender it to an agency of the Company for
notation and notification or to the Trustee for cancellation as provided in
such Section.  All New Water Bonds deemed
to have been paid in full as provided in Section 9 or 10 of this Article One
shall be surrendered to the Trustee for cancellation and the Trustee shall
forthwith cancel the same.  In the event
that part of a New Water Bond shall be deemed to have been paid as provided in
said Section 9 or 10, the registered owner may at its option surrender
such New Water Bond to the Trustee for cancellation, in which event the Trustee
shall cancel such New Water Bond and the Company shall execute and the Trustee
shall authenticate and deliver, without charge to the registered owner, New
Water Bonds in such authorized denominations as shall be specified by the
registered owner in an aggregate principal amount equal to  the unpaid balance of the principal amount of
such surrendered New Water Bond.

 

(l)                               Except as in this
Forty-Third Supplemental Indenture otherwise provided with respect to any
matter or question, the provisions of Article Ten of the First Mortgage as
amended shall be applicable in the case of the redemption of all or any part of
the New Water Bonds at any time outstanding. 
The term “officers’ certificate as used in this Article One shall
mean a certificate signed by the President or a Vice President and any other
Vice 

 

14

 

President, the Treasurer, Assistant Treasurer, the Secretary or
Assistant Secretary or any other officer of the Company.

 

SECTION 13.                          The New Water Bonds shall be in fully
registered form only.  The form of the
New Water Bonds, and of the Trustee’s certificate of authentication thereon,
shall be substantially as set forth in Exhibit A.

 

Section 20.2

 

Bonds of the 4.80% pollution control Series 2005-B
Due 2034 and Issue Thereof.

 

(a)                                                                                         There shall be a series of Bonds
designated “4.80% Pollution Control Series 2005-B Due 2034”, each of which
shall bear the descriptive title First Mortgage Bond.  The aggregate principal amount of New Air
Bonds which may be outstanding under the First Mortgage as amended and this
Forty-Third Supplemental Indenture shall be limited to $137,800,000, except as
provided in Section 9 of Article Two of the First Mortgage as
amended.

 

(b)                                                                                        Upon the execution and delivery of this
Forty-Third Supplemental Indenture and upon delivery of $137,800,000 aggregate
principal amount of the New Air Bonds, executed by the Company, and upon
compliance by the Company with the provisions of Article Five, Article Six
or Article Seven or any or all of said Articles, as the case may be, of
the First Mortgage as amended, the Trustee shall, without awaiting the filing
or recording of this Forty-Third Supplemental Indenture, authenticate the New
Air Bonds and deliver the New Air Bonds as provided in said Article Five, Article Six
or Article Seven.

 

(c)                                                                                         The New Air Bonds shall be dated as
provided in Section 3 of Article Two of the First Mortgage as
amended; shall mature on January 1, 2034,; and shall bear interest from August 17,
2005 as provided in said Section 3 of Article Two at the rate of four
and eighty hundredths per centum (4.80%) per annum until paid or redeemed as
hereinafter provided, payable on January 1, 2006 and thereafter
semi-annually on each January 1 and July 1, and on the maturity date,
to the Bondholders in whose names such New Air Bonds are registered at the
close of business on the Business Day immediately preceding such January 1
or July 1, except that if the Company shall default in the payment of any
installment of interest on any New Air Bonds, such interest in default shall be
paid to the Bondholders in whose names the New Air Bonds are registered at the
close of business on a date established for the payment of such defaulted
interest by the Company in any lawful manner. 
The New Air Bonds shall be payable as to both principal and interest in
such coin or currency of the United States of America as at the time of payment
is legal tender for the payment of public and private debts, at the office or
agency of the Company in the Borough of Manhattan, The City of New York.  The amount of interest payable for any period
will be computed on the basis of a 360-day year consisting of twelve 30-day
months.  In the event that any date on
which principal or interest is payable on the New Air Bonds is not a Business
Day (as defined below), the payment of the principal or interest payable on
such date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), with the
same force and effect as if made on the date the payment was originally
payable.  “Business Day” means any day,
other than a Saturday or Sunday, or a day on which banking institutions or
trust companies in The City of New York are 

 

15

 

generally authorized or required by law, regulation or executive order
to remain closed or a day on which the corporate trust office of the Trustee is
closed for business.

 

(d)                                                                                        The New Air Bonds shall be issued in
denominations of $5,000 and any integral multiple of $5,000.

 

Whenever any New Air Bond or New Air Bonds shall be surrendered at the
office or agency of the Company in said Borough of Manhattan for exchange for a
New Air Bond or New Air Bonds of other authorized denomination or
denominations, the Company shall execute, and the Trustee shall authenticate
and deliver, upon cancellation of the New Air Bond or New Air Bonds so
surrendered, a New Air Bond or New Air Bonds of such other authorized
denomination or denominations of like aggregate principal amount as the
Bondholder making the exchange shall have requested and shall be entitled to
receive.  On presentation of any New Air
Bond which is to be redeemed pursuant to the provisions of Section 5 of
this Article Two in part only, the Company shall execute, and the Trustee
shall authenticate and deliver, a New Air Bond or New Air Bonds in principal
amount equal to the unredeemed portion of the New Air Bond so presented.

 

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

 

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

 

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

 

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

 

16

 

(f)                                                                                           The New Air Bonds shall be subject to
redemption, at the option of the Company, prior to maturity at any time, in
whole or in part, at a redemption price of 100% of the principal amount to be redeemed,
plus accrued interest to the redemption date, upon receipt by the Trustee of an
officers’ certificate to the effect that (a) the Company has given notice
to the Air Project Trustee that the Company is exercising its option to direct
the redemption of Air Project Bonds in whole or in part, as provided in Section 6.2
of the Air Pollution Control Agreement and (b) an equivalent principal
amount of New Air Project Bonds are being concurrently called for
redemption.  Such officers’ certificate
shall have attached to it a copy of said notice to the Air Project Bond Trustee
and shall specify the redemption date of such New Air Bonds (which redemption
date shall be not less than 45 days (unless a shorter period shall be
acceptable to the Trustee) after the date of the mailing of such certificate
and shall be the same date as the redemption date specified in said attached
notice for the Air Project Bonds being concurrently redeemed).  Any such redemption shall be made upon the
notice, which may be conditional as provided in Section 8 of this Article Two,
and in the manner provided in this Article Two, subject to the provisions
of the First Mortgage as amended.

 

(g)                                                                                        The New Air Bonds shall also be subject
to redemption prior to maturity, at the option of the Company, in whole or in
part, at anytime on or after July 1, 2015, at a redemption price equal to
100% of the principal amount thereof, plus accrued interest to the redemption
date.

 

Prior to any such redemption, the Trustee shall have
received an officers’ certificate to the effect that (a) the Company has
given notice to the Trustee that the Company is exercising its option to
deliver moneys to the Air Project Bond Trustee for the redemption of Air
Project Bonds in whole or in part, as the case may be, as provided in Section 6.1
of the Air Pollution Control Agreement and (b) an equivalent principal
amount of Air Project Bonds are being concurrently called for redemption.  Such officers’ certificate shall specify the
principal amount of the New Air Bonds to be redeemed, shall have attached to it
a copy of said notice to the Air Project Bond Trustee and shall specify the
redemption date of such New Air Bonds (which redemption date shall be not less
than 45 days (unless a shorter period shall be acceptable to the Trustee) after
the date of the mailing of such certificate and shall be the same date as the
redemption date specified in said attached notice for the Air Project Bonds
being concurrently redeemed).  Any such
redemption shall be made upon the notice, which may be conditional as provided
in Section 8 of this Article Two, and in the manner provided in this Article Two,
subject to the provisions of the First Mortgage as amended.

 

(h)                                                                                        Subject to the provisions of the First
Mortgage as amended, written notice of redemption of the New Air Bonds pursuant
to any of Sections 5, 6 or 7 of this Article Two shall be given by the
Trustee by mailing, first class postage prepaid, or delivering by hand to the
registered owner of such New Air Bonds to be redeemed a notice of such
redemption at its last address as it shall appear upon the books of the Company
for the registration and transfer of such New Air Bonds.  Any notice of redemption pursuant to said
Sections 5, 6 or 7 shall be mailed or delivered by hand as least 30 days and
not earlier than 60 days before the redemption date; provided, however, that
the registered owner or owners of all New Air Bonds may consent in writing to a
shorter notice period, and such consent, if filed with the Trustee, shall be
binding upon the Company and such registered owners and their transferees.  In the case of any notice of redemption of
New Air Bonds pursuant to said Sections 6 or 7, such notice shall state that
such redemption is conditional to the same extent and with the same effect, if
any, as the notice of redemption of the Air Project Bonds being concurrently
redeemed.

 

17

 

(i)                                                                                            In the event any Air Project Bonds shall
be purchased by the Company and surrendered by the Company to the Air Project
Bond Trustee for cancellation or shall be otherwise surrendered to the Air
Project Bond Trustee for cancellation pursuant to the Air Pollution Control
Indenture (except upon exchange for other Air Project Bonds), New Air Bonds
equivalent in principal amount to the Air Project Bonds so surrendered shall be
deemed to have been paid, but only when and to the extent that (a) such
payment of the principal amount of such New Air Bonds shall be noted by an
agency of the Company on the schedule of payments on such New Air Bonds
and (if such agency is not the Trustee) written notice by such agency of such
notation shall have been received by the Trustee or (b) such New Air Bonds
shall have been surrendered to and cancelled by the Trustee as provided in Section 11
of this Article Two.

 

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

 

(k)                                                                                         When payment of any principal amount of a
New Air Bond is made as provided in Section 9 or 10 of this Article Two,
the registered owner thereof shall surrender it to an agency of the Company for
notation and notification or to the Trustee for cancellation as provided in
such Section.  All New Air Bonds deemed
to have been paid in full as provided in Section 9 or 10 of this Article Two
shall be surrendered to the Trustee for cancellation and the Trustee shall
forthwith cancel the same.  In the event
that part of a New Air Bond shall be deemed to have been paid as provided in
said Section 9 or 10, the registered owner may at its option surrender
such New Air Bond to the Trustee for cancellation, in which event the Trustee
shall cancel such New Air Bond and the Company shall execute and the Trustee
shall authenticate and deliver, without charge to the registered owner, New Air
Bonds in such authorized denominations as shall be specified by the registered
owner in an aggregate principal amount equal to 
the unpaid balance of the principal amount of such surrendered New Air
Bond.

 

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

 

SECTION 13.                          The New Air Bonds shall be in fully
registered form only.  The form of the
New Air Bonds, and of the Trustee’s certificate of authentication thereon, shall
be substantially as set forth in Exhibit B.

 

Section 20.3

 

Bonds of the 4.70% pollution control Series 2005-C
Due 2028 and Issue Thereof.

 

18

 

(a)                                                                                         There shall be a series of Bonds
designated “4.70% Pollution Control Series 2005-C Due 2028”, each of which
shall bear the descriptive title First Mortgage Bond.  The aggregate principal amount of the New
Boone County Bonds which may outstanding under the First Mortgage as amended
and this Forty-Third Supplemental Indenture shall be limited to $35,275,000,
except as provided in Section 9 of Article Two of the First Mortgage
as amended.

 

(b)                                                                                        Upon the execution and delivery of this
Forty-Third Supplemental Indenture and upon delivery of $35,275,000 aggregate
principal amount of the New Boone County Bonds, executed by the Company, and
upon compliance by the Company with the provisions of Article Five, Article Six
or Article Seven or any or all of said Articles, as the case may be, of
the First Mortgage as amended, the Trustee shall, without awaiting the filing
or recording of this Forty-Third Supplemental Indenture, authenticate the New
Boone County Bonds and deliver the New Boone County Bonds as provided in said Article Five,
Article Six or Article Seven.

 

(c)                                                                                         The New Boone County Bonds shall be dated
as provided in Section 3 of Article Two of the First Mortgage as
amended; shall mature on January 1, 2028; and shall bear interest from August 17,
2005 as provided in said Section 3 of Article Two at the rate of four
and seventy hundredths per centum (4.70%) per annum until paid or redeemed as
hereinafter provided, payable on January 1, 2006 and thereafter
semi-annually on each January 1 and July 1, and on the maturity date,
to the Bondholders in whose names such New Boone County Bonds are registered at
the close of business on the Business Day immediately preceding such January 1
or July 1, except that if the Company shall default in the payment of any
installment of interest on any New Boone County Bonds, such interest in default
shall be paid to the Bondholders in whose names the New Boone County Bonds are
registered at the close of business on a date established for the payment of
such defaulted interest by the Company in any lawful manner.  The New Boone County Bonds shall be payable
as to both principal and interest in such coin or currency of the United States
of America as at the time of payment is legal tender for the payment of public
and private debts, at the office or agency of the Company in the Borough of Manhattan,
The City of New York.  The amount of
interest payable for any period will be computed on the basis of a 360-day year
consisting of twelve 30-day months.  In
the event that any date on which principal or interest is payable on the New
Boone County Bonds is not a Business Day (as defined below), the payment of the
principal or interest payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), with the same force and effect as if made on the
date the payment was originally payable. 
“Business Day” means any day, other than a Saturday or Sunday, or a day
on which banking institutions or trust companies in The City of New York are
generally authorized or required by law, regulation or executive order to
remain closed or a day on which the corporate trust office of the Trustee is
closed for business.

 

(d)                                                                                        The New Boone County Bonds shall be
issued in denominations of $5,000 and any integral multiple of $5,000.

 

Whenever any New Boone County Bond or New Boone County Bonds shall be
surrendered at the office or agency of the Company in said Borough of Manhattan
for exchange for a New Boone County Bond or New Boone County Bonds of other
authorized denomination or denominations, the Company shall execute, and the
Trustee shall authenticate and deliver, upon cancellation of the New Boone
County Bond or New Boone County Bonds so surrendered, a New Boone County Bond
or New Boone County Bonds of such other authorized denomination or 

 

19

 

denominations of like aggregate principal amount as
the Bondholder making the exchange shall have requested and shall be entitled
to receive.  On presentation of any New
Boone County Bond which is to be redeemed pursuant to the provisions of Section 5
of this Article Three in part only, the Company shall execute, and the
Trustee shall authenticate and deliver, a New Boone County Bond or New Boone
County Bonds in principal amount equal to the unredeemed portion of the New
Boone County Bond so presented.

 

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

 

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

 

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

 

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

 

(f)                                                                                           The New Boone County Bonds shall be
subject to redemption, at the option of the Company, prior to maturity at any
time, in whole or in part, at a redemption price of 100% of the principal
amount to be redeemed, plus accrued interest to the redemption date, upon
receipt by the Trustee of an officers’ certificate to the effect that (a) the
Company has given notice to the Boone County Project Bond Trustee that the
Company is exercising its option to direct the redemption of Boone County
Project Bonds in whole or in part, as provided in Section 6.2 of the Boone
County Pollution Control Agreement and (b) an equivalent principal amount
of New Boone County Project Bonds are being concurrently called for
redemption.  Such officers’ certificate
shall have attached to it a copy of said notice to the Boone County Project
Bond Trustee and shall specify the redemption date of such applicable New Boone
County Bonds

 

20

 

(which redemption date shall be not less than 45 days (unless a shorter
period shall be acceptable to the Trustee) after the date of the mailing of
such certificate and shall be the same date as the redemption date specified in
said attached notice for the Boone County Project Bonds being concurrently
redeemed).  Any such redemption shall be
made upon the notice, which may be conditional as provided in Section 8 of
this Article Three, and in the manner provided in this Article Three,
subject to the provisions of the First Mortgage as amended.

 

(g)                                                                                        The New Boone County Bonds shall also be
subject to redemption prior to maturity, at the option of the Company, in whole
or in part, at anytime on or after July 1, 2015, at a redemption price
equal to 100% of the principal amount thereof, plus accrued interest to the
redemption date.

 

Prior to any such redemption, the Trustee shall have
received an officers’ certificate to the effect that (a) the Company has
given notice to the Boone County Bond Trustee that the Company is exercising
its option to deliver moneys to the Boone County Bond Trustee for the
redemption of Boone County Project Bonds in whole or in part, as the case may
be, as provided in Section 6.1 of the Boone County Pollution Control
Agreement and (b) an equivalent principal amount of Boone County Project
Bonds are being concurrently called for redemption.  Such officers’ certificate shall specify the
principal amount of the New Boone County Bonds to be redeemed, shall have
attached to it a copy of said notice to the applicable Boone County Project
Bond Trustee and shall specify the redemption date of such New Boone County
Bonds (which redemption date shall be not less than 45 days (unless a shorter period
shall be acceptable to the Trustee) after the date of the mailing of such
certificate and shall be the same date as the redemption date specified in said
attached notice for the Boone County Project Bonds being concurrently
redeemed).  Any such redemption shall be
made upon the notice, which may be conditional as provided in Section 8 of
this Article Three, and in the manner provided in this Article Three,
subject to the provisions of the First Mortgage as amended.

 

(h)                                                                                        Subject to the provisions of the First
Mortgage as amended, written notice of redemption of the New Boone County Bonds
pursuant to any of Sections 5, 6 or 7 of this Article Three shall be given
by the Trustee by mailing, first class postage prepaid, or delivering by hand
to the registered owner of such New Boone County Bonds to be redeemed a notice
of such redemption at its last address as it shall appear upon the books of the
Company for the registration and transfer of such New Boone County Bonds.  Any notice of redemption pursuant to said
Sections 5, 6 or 7 shall be mailed or delivered by hand as least 30 days and
not earlier than 60 days before the redemption date; provided, however, that
the registered owner or owners of all New Boone County Bonds may consent in
writing to a shorter notice period, and such consent, if filed with the
Trustee, shall be binding upon the Company and such registered owners and their
transferees.  In the case of any notice
of redemption of New Boone County Bonds pursuant to said Sections 6 or 7, such
notice shall state that such redemption is conditional to the same extent and
with the same effect, if any, as the notice of redemption of the Boone County
Project Bonds being concurrently redeemed.

 

(i)                                                                                            In the event any Boone County Project
Bonds shall be purchased by the Company and surrendered by the Company to the
Boone County Project Bond Trustee for cancellation or shall be otherwise
surrendered to the Boone County Project Bond Trustee for cancellation pursuant
to the Boone County Pollution Control Indenture (except upon exchange for other
Boone County Project Bonds), New Boone County Bonds equivalent in principal
amount to the Boone County Bonds so surrendered shall be deemed to have been
paid, but only when and to the extent that (a) such payment of the principal
amount of such New Boone County Bonds shall be noted by an agency of the
Company on the schedule of payments on such New Boone County 

 

21

 

Bonds and (if such agency is not the Trustee) written notice by such
agency of such notation shall have been received by the Trustee or (b) such
New Boone County Bonds shall have been surrendered to and cancelled by the
Trustee as provided in Section 11 of this Article Three.

 

(j)                                                                                            In the event and to the extent the
principal of or interest on any Boone County Project Bonds shall be paid out of
funds held by the Boone County Project Bond Trustee or out of any other funds
or shall otherwise be deemed to be paid, an equal amount of principal or
interest, as the case may be, payable with respect to an aggregate principal
amount of New Boone County Bonds equal to an aggregate principal amount of such
Boone County Project Bonds shall be deemed to have been paid, but, in the case
of such payment of principal of such New Boone County Bonds, only when and to
the extent that (a) such payment of the principal amount thereof shall be
noted by any agency of the Company on the schedule of payments on such New
Boone County Bonds and (if such agency is not the Trustee) written notice by
such agency of such notation shall have been received by the Trustee or (b) such
New Boone County Bonds shall have been surrendered to and cancelled by the
Trustee as provided in Section 11 of this Article Three.

 

(k)                                                                                         When payment of any principal amount of a
New Boone County Bond is made as provided in Section 9 or 10 of this Article Three,
the registered owner thereof shall surrender it to an agency of the Company for
notation and notification or to the Trustee for cancellation as provided in
such Section.  All New Boone County Bonds
deemed to have been paid in full as provided in Section 9 or 10 of this Article Three
shall be surrendered to the Trustee for cancellation and the Trustee shall
forthwith cancel the same.  In the event
that part of a New Boone County Bond shall be deemed to have been paid as
provided in said Section 9 or 10, the registered owner may at its option
surrender such New Boone County Bond to the Trustee for cancellation, in which
event the Trustee shall cancel such New Boone County Bond and the Company shall
execute and the Trustee shall authenticate and deliver, without charge to the
registered owner, New Boone County Bonds in such authorized denominations as
shall be specified by the registered owner in an aggregate principal amount
equal to  the unpaid balance of the
principal amount of the such surrendered New Boone County Bond.

 

(l)                                                                                            Except as in this Forty-Third
Supplemental Indenture otherwise provided with respect to any matter or
question, the provisions of Article Ten of the First Mortgage as amended
shall be applicable in the case of the redemption of all or any part of the New
Boone County Bonds at any time outstanding. 
The term officers’ certificate as used in this Article Three shall
mean a certificate signed by the President or a Vice President and any other
Vice President, the Treasurer, Assistant Treasurer, the Secretary or Assistant
Secretary or any other officer of the Company.

 

SECTION 13.                          The New Boone County Bonds shall be in
fully registered form only.  The form of
the New Boone County Bonds, and of the Trustee’s certificate of authentication
thereon, shall be substantially as set forth in Exhibit C.

 

Section 20.4

 

amendments to first mortgage as amended  to become effective at a later date or dates.

 

(a)                                                                                         The Company, and the holders of any New
Bonds by their acceptance and holding thereof, hereby consent and agree that
each of the amendments provided for by the following Sections 2, 3, 4, 5, 6, 7,
8, 9, 10, 11, 12, 13 and 14 of this Article Four shall become effective on
the earliest date on which either (a) there shall not be any Bonds
outstanding of 

 

22

 

6.35% Series Due 2007, Pollution Control Series 1992-A Due
2027, Pollution Control Series 1992-B Due 2027, Pollution Control Series 1992-C
Due 2022 and 5.125% Series Due 2013 or (b) there shall have been
executed and delivered a supplemental indenture or indentures embodying said
amendment (either alone or with other amendments) consented to by the holders
of seventy-five per centum (75%) in aggregate principal amount of the Bonds at
the time outstanding of the series enumerated in the foregoing clause (a), all
in conformity with the provisions of Article Eighteen of the First
Mortgage as amended.

 

(b)                                                                                        Effective on a date fixed as provided in Section 1
of this Article Four, the following definition shall be added to Section 3
of Article One of the First Mortgage as amended after the definition of
the term “resolution” reading as follows:

 

“The term “Board of Directors” shall mean the board of directors of the
Company or any committee thereof duly authorized by resolution duly adopted by
said board of directors to act in respect of matters relating to this
Indenture.”

 

(c)                                                                                         Effective on a date fixed as provided in Section 1
of this Article Four, the phrase “Board of Directors or the Executive
Committee” shall be replaced by the phrase “Board of Directors” in each and
every place where such phrase appears in the First Mortgage as amended.

 

(d)                                                                                        Effective on a date fixed as provided in Section 1
of this Article Four, Section 7 of Article One of the First
Mortgage as amended shall be restated in its entirety to read as follows:

 

“The
term “net earnings certificate”, shall mean a certificate signed by the
Chairman of the Board or Chief Executive Officer or President or a Vice
President of the Company and an accountant, who unless, required to be
independent, may be an officer or employee of the Company, stating:

 

(A)                              the adjusted
net earnings of the Company for a period of twelve (12) consecutive calendar
months within the eighteen (18) calendar months immediately preceding the first
day of the month in which the application for the authentication and delivery
under this Indenture of Bonds then applied for is made, being and specifying:

 

(1)                                  its operating
revenues, which may include revenues collected by the Company subject to
possible refund at a future date, with the principal divisions thereof;

 

(2)                                  its operating
expenses, with the principal divisions thereof, including, without limitation,
all expenses and accruals for repairs and maintenance and all appropriations
out of income for property retirement in respect of all property owned by the
Company;

 

(3)                                  the amount
remaining after deducting the amount required to be stated in such certificate
by clause (2) of this Section from the amount required to be stated
therein by clause (1) of this Section;

 

(4)                                  its rental
revenues (net) not otherwise included in such certificate;

 

23

 

(5)                                  the sum of the
amounts required to be stated in such certificate by clauses (3) and (4) of
this Section;

 

(6)                                  its other
income or loss (net);

 

(7)                                  the amount, if
any, by which the amount of other income or loss (net) required to be stated in
such certificate by clause (6) of this Section exceeds, without
regard to whether such net amount constitutes income or loss, ten per centum
(10%) of the amount required to be stated in such certificate by clause (5) of
this Section;

 

(8)                                  the amount
remaining after reducing the amount required to be stated in such certificate
by clause (6) of this Section by the amount required to be stated
therein by clause (7) of this Section; and

 

(9)                                  the adjusted
net earnings of the Company for such period of twelve (12) consecutive calendar
months (being the sum of the amounts required to be stated in such certificate
by clauses (5) and (8) of this Section);

 

(B)                                the annual
interest requirements, being the interest requirements, if any, for twelve (12)
months upon:

 

(1)                                  all Bonds outstanding
hereunder at the date of such certificate, except any for the payment of which
the Bonds applied for are to be issued; provided that, if any such series of
outstanding Bonds bears interest at a variable rate, then the interest on such
series of Bonds shall be computed at the average annual rate in effect for such
series during the period of twelve (12) consecutive calendar months (or any
portion thereof in which Bonds of such series are outstanding) being used for
the calculation of adjusted net earnings; and if such outstanding Bonds have
been issued after the end of such twelve (12) consecutive calendar months, then
computed at the initial rate upon issuance;

 

(2)                                  all Bonds then
applied for in pending applications, including the application in connection
with which such certificate is made, computed at the initial rate upon
issuance;

 

(3)                                  the principal
amount of all other indebtedness (except indebtedness for the payment of which
the Bonds applied for are to be issued and indebtedness for the purchase,
payment or redemption of which moneys in the necessary amount shall have been
deposited with or be held by the Trustee or the trustee or other holder of a
lien prior to the lien of this Indenture upon property subject to the lien of
this Indenture with irrevocable direction so to apply the same; provided that,
in the case of redemption, the notice required therefor shall have been given
or have been provided for to the satisfaction of the Trustee), outstanding in
the hands of the public on the date of such certificate and secured by a lien
prior to the lien of this Indenture upon property subject to the lien of this
Indenture, if said indebtedness has been assumed by the Company or if the
Company customarily pays the interest upon the principal thereof.

 

24

 

In calculating such adjusted net earnings, all the Company’s expenses
for taxes (other than income, profits and other taxes measured by, or dependent
on, net income), assessments, rentals and insurance shall be included in its
operating expenses, or otherwise deducted from its revenues and income;
provided, however, that no expenses or provisions for interest on any of its
indebtedness or for the amortization of debt discount, premium and expense, or
loss on reacquired debt, amortization of property (other than depreciation or
other similar provisions for property retirement), or for other amortization,
or for any other extraordinary charge to income of whatever kind or nature, or
for refunds of revenues previously collected by the Company subject to possible
refund, or for any improvement or sinking fund or other device for the
retirement of any indebtedness, shall be required to be included in operating
expenses to be deducted from, or shall be otherwise required to be deducted
from, its revenues or its other income and no extraordinary items of any kind
or nature shall be included in calculating such adjusted net earnings.

 

If any of the property of the Company owned by it at the time of the
making of any net earnings certificate shall have been acquired during or after
any period for which adjusted net earnings of the Company are to be computed,
the adjusted net earnings of such property (computed in the manner in this Section provided
for the computation of the adjusted net earnings of the Company) during such
period or such part of such period as shall have preceded the acquisition
thereof, to the extent that the same have not otherwise been included and
unless such property shall have been acquired in exchange or substitution for
property the earnings of which have been included, may, at the option of the
Company, be included in the adjusted net earnings of the Company for all
purposes of this Indenture, and shall be included if such property has been
operated as a separate unit or if the earnings therefrom are readily
ascertainable.

 

In any case where a net earnings certificate is required as a condition
precedent to the authentication and delivery of Bonds, such certificate shall
also be made and signed by an independent public accountant, if the aggregate
principal amount of Bonds then applied for plus the aggregate principal amount
of Bonds authenticated and delivered hereunder since the commencement of the
then current calendar year (other than those with respect to which a net
earnings certificate is not required, or with respect to which a net earnings
certificate made and signed by an independent public accountant has previously
been furnished to the Trustee) is ten per centum (10%) or more of the aggregate
principal amount of the Bonds at the time outstanding hereunder; but no net
earnings certificate need be made and signed by any person other than the
Chairman of the Board or Chief Executive Officer or President or a Vice
President and an accountant, as to dates or periods not covered by annual
reports required to be filed by the Company, in the case of conditions
precedent which depend upon a state of facts as of a date or dates or for a
period or periods different from that required to be covered by such annual
reports.

 

Each such certificate shall include the statements required by Section 1
of Article Twenty hereof.

 

The phrase “appropriations out of income for property retirement”, and
other phrases, of similar import shall be deemed to include not only charges
made upon a retirement accounting theory but also charges made on any
depreciation or other accounting theory intended to provide for retirement of
property.

 

Unless otherwise specifically provided with respect to a series of
Bonds, if interest on any Bonds outstanding hereunder is payable solely in the
coin or currency of a foreign nation, then the annual interest requirements for
such Bonds shall be based upon the estimated value (on a date within 10 days
prior to the date of the application for the authentication and 

 

25

 

delivery under this Indenture of Bonds in connection
with which such net earnings certificate is delivered) of such foreign coin or
currency in The City of New York, New York, in the written opinion of an
independent appraiser or other expert delivered to the Trustee.”

 

(e)                                                                                         Effective on a date fixed as provided in Section 1
of this Article Four, Section 5 of Article Five of the First
Mortgage as amended shall be restated in its entirety to read as follows:

 

“No Bonds shall be authenticated and delivered upon
the basis of property additions unless, as shown by a net earnings certificate,
the adjusted net earnings of the Company for the twelve consecutive calendar
months’ period therein referred to shall have been in the aggregate at least
equivalent to twice the annual interest requirements as shall be specified,
pursuant to the provisions of subdivision (B) of Section 7 of Article One
hereof, in such net earnings certificate.”

 

(f)                                                                                           Effective on a date fixed as provided in Section 1
of this Article Four, Article Six of the First Mortgage as amended
shall be amended by deleting a parenthetical appearing after the phrase “sinking
fund provisions of any indenture supplemental hereto” and before the phrase “,
the Trustee shall authenticate and deliver additional Bonds.”

 

(g)                                                                                        Effective on a date fixed as provided in Section 1
of this Article Four, Section 2 of Article Eight of the First
Mortgage as amended shall be amended to delete the second paragraph of such Section 2.

 

(h)                                                                                        Effective on a date fixed as provided in Section 1
of this Article Four, Article Ten of the First Mortgage as amended
shall be amended as follows:

 

(a)  Section 2
of Article Ten shall be amended by deleting the second, third and fourth
sentences thereof and inserting in lieu thereof the following:

 

“Notice of redemption shall be mailed to each holder
of the Bonds to be redeemed, at the address of such holder as it appears in the
registry books, not less than 30 nor more than 60 days prior to the date of
redemption.  Failure duly to mail such
notice to the owner or holder of any Bond designated for redemption in whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Bond.

 

With respect to any notice of redemption of the Bonds
at the election of the Company such notice may state that such redemption shall
be conditional upon the receipt by the paying agent or agents for such Bonds,
on or prior to the date fixed for such redemption, of money sufficient to pay
the principal of and premium, if any, and interest, if any, on such Bonds and
that if such money shall not have been so received such notice shall be of no
force or effect and the Company shall not be required to redeem such
Bonds.  In the event that such notice of
redemption contains such a condition and such money is not so received, the
redemption shall not be made and within a reasonable time thereafter notice
shall be given, in the manner in which the notice of redemption was given, that
such money was not so received and such redemption was not required to be made,
and the paying agent or agents for the Bonds otherwise to have been redeemed
shall promptly return to the holders thereof any of such Bonds which had been
surrendered for payment upon such redemption.

 

26

 

Notice of redemption of the Bonds to be redeemed at
the election of the Company, and any notice of non-satisfaction of a condition
for redemption as aforesaid, shall be given by the Company or, at the Company’s
request, by the Trustee in the name and at the expense of the Company.  Notice of any mandatory redemption of the
Bonds shall be given by the Trustee in the name and at the expense of the
Company.”

 

(b)  The first
paragraph of Section 3 of Article Ten shall be restated in its
entirety to read as follows:

 

“Notice of redemption having been given as aforesaid,
and the conditions, if any, set forth in such notice having been satisfied, the
Bonds or portions thereof so to be redeemed shall, on the date of redemption,
become due and payable at the redemption price therein specified, and from and
after such date (unless, in the case of an unconditional notice of redemption,
the Company shall default in the payment of the redemption price and accrued
interest, if any) such Bonds or portions thereof, if interest-bearing, shall
cease to bear interest.  Upon surrender
of any such Bond for redemption in accordance with such notice, such Bond or
portion thereof shall be paid by the Company at the redemption price, together
with accrued interest, if any, to the date of redemption; provided, however,
that no such surrender shall be a condition to such payment if so specified
with respect to such Bond in a supplemental indenture establishing the terms of
such Bond.”

 

(c)  Clause (b) of
the second paragraph of Section 3 of Article Ten shall be restated in
its entirety to read as follows:

 

“(b) furnish to the Trustee a Treasurer’s
Certificate stating that notice of redemption of such Bonds on a specified date
has been given as heretofore provided, or that arrangements have been made
insuring to the satisfaction of the Trustee that the notice will be given or,
in lieu of such arrangements, shall deliver to the Trustee a written instrument
executed by the Company and expressed to be irrevocable, authorizing the
Trustee to cause the mailing of such notice for and on behalf of the Company,
and”

 

(d)  Clause (c) of
Section 3 of Article Ten shall be amended by deleting the word “publications”
in the fourth line thereof and inserting the phrase “mailing of notice of
redemption.”

 

(e)  Section 5
of Article Ten shall be amended in its entirety to read as follows:

 

“SECTION 5.                          Except as may be otherwise provided in any indenture
supplemental hereto, at any time, upon the written request of the Company,
expressed by a Treasurer’s Certificate, the Trustee shall, to the extent that
such Bonds are available for such purchase, apply all or any part of the cash
held by it under any provision of this Indenture (except moneys deposited for
the payment or redemption of a particular series of Bonds) to the purchase of
Bonds then outstanding hereunder of such series as the Company may
designate.  Before making any such
purchase the Trustee may, and upon request of the Company shall, by notice
published once in one daily newspaper of general circulation in the Borough of
Manhattan, The City of New York, customarily published on each Business Day,
whether or not published on Saturdays, Sundays or holidays, advertise for
written proposals (to be received by it on or before a specified date) to sell
to it on or before a subsequent specified date Bonds of the series 

 

27

 

designated by the Company then outstanding hereunder,
and the Trustee, to the extent, as nearly as is possible, of such funds then in
its hands and requested by the Company to be so applied, shall purchase the
Bonds so offered at the price or prices most favorable to the Company, and
reasonable notice shall be mailed by the Trustee to the holder or holders of
the Bonds whose proposals shall have been accepted.  The Trustee shall, upon request of the
Company, invite offers of Bonds for sale to it in any other usual manner.  The Trustee, upon request of the Company,
shall reject any or all proposals in whole or in part if on the same day after
opening said proposals the Company has notified the Trustee that the Trustee
can purchase the requisite amount of such Bonds or any part thereof at a price
more favorable to the Company than it could by accepting said proposals. All
offers by holders shall be subject to acceptance of a proposal thereof unless
otherwise expressed in the offers and all advertisements for written proposals
shall so state.”

 

(i)                                                                                            Effective on a date fixed as provided in Section 1
of this Article Four, Section 3 of Article Fifteen of the First
Mortgage as amended shall be restated its entirety to read as follows:

 

“SECTION 3.                          Unless, in the case of a consolidation, merger,
conveyance or other transfer contemplated by Section 1 of this Article Fifteen,
the indenture or instrument of assumption that may be executed by the successor
corporation as in Sections 1 and 2 of this Article Fifteen provided, or in
Article Eighteen expressly provided otherwise, neither this Indenture nor
such indenture or instrument of assumption shall become or be, or be required
to become or be, a lien upon any of the properties:

 

(a)                                  owned by the successor corporation or any
other party to such transaction (other than the Company) immediately prior to
the time of effectiveness of such transaction or

 

(b)                                 acquired
by the successor corporation at or after the time of effectiveness of such
transaction, except, in either case, properties acquired from the Company in or
as a result of such transaction and improvements, extensions and additions to
such properties and renewals, replacements and substitutions of or for any part
or parts thereof.”

 

(j)                                                                                            Effective on a date fixed as provided in Section 1
of this Article Four, Section 2 of Article Sixteen of the First
Mortgage as amended shall be restated in its entirety to read as follows:

 

“SECTION 2.                          (a)                                  No resignation or removal of the Trustee
and no appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Trustee
in accordance with the applicable requirements of Section 4 of this Article Sixteen.

 

(b)                                 The Trustee may resign at any time by
giving written notice thereof to the Company. 
If the instrument of acceptance by a successor Trustee required by Section 4
of this Article Sixteen shall not have been delivered to the Trustee
within 30 days after the giving of such notice of 

 

28

 

resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.

 

(c)                                  The Trustee may be removed at any time by
an instrument in writing filed with the Trustee and signed by the holders of a
majority in principal amount of the Bonds then outstanding, and a copy of such
instrument shall be delivered to the Company.

 

(d)                                 If at any time:

 

(A)                              the Trustee shall fail to comply with Section 7
of this Article Sixteen after written request therefor by the Company or
by any holder who has been a bona fide holder for at least six months, or

 

(B)                                the Trustee shall cease to be eligible
under Section 5 of this Article Sixteen or Section 310(a) of
the Trust Indenture Act and shall fail to resign after written request therefor
by the Company or by any such holder, or

 

(C)                                the Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation,

 

then, in any such case, (x) the Company by a
resolution of its Board of Directors may remove the Trustee with respect to all
Bonds or (y), any holder who has been a bona fide holder for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with respect
to all Bonds and the appointment of a successor Trustee or Trustees.

 

If an instrument of acceptance by a successor Trustee
required by Section 4 of this Article Sixteen shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
removal, the Trustee being removed may petition any court of competent
jurisdiction for the appointment of a successor Trustee.

 

(e)                                  If the Trustee shall resign, be removed
or become incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause (other than as contemplated by clause (y) in subsection (d) or
this Section), the Company, by resolution of its Board of Directors, shall
promptly appoint a successor Trustee or Trustees and shall comply with the
applicable requirements of Section 4 of this Article Sixteen.  If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
shall be appointed by an instrument in writing filed with the retiring Trustee
and signed by the holders of a majority in principal amount of the Bonds then
outstanding, and a copy of such instrument shall be delivered to the Company,
the successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section 4 of
this Article Sixteen, become the successor Trustee and to that extent
supersede the 

 

29

 

successor Trustee appointed by the Company.  If no successor Trustee shall have been so
appointed by the Company or the holders and accepted appointment in the manner
required by Section 4 of this Article Sixteen, any holder who has
been a bona fide holder of a Bond for at least six months may, on behalf of
itself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.

 

(f)                                    So long as no event which is, or after
notice or lapse of time, or both, would become, a completed default shall have
occurred and be continuing, and except with respect to a Trustee appointed by
the holders of a majority in principal amount of the Bonds then outstanding
pursuant to subsection (e) of this Section, if the Company shall have
delivered to the Trustee (i) resolutions of its Board of Directors
appointing a successor Trustee, effective as of a date specified therein, and (ii) an
instrument of acceptance of such appointment, effective as of such date, by
such successor Trustee in accordance with Section 4 of this Article Sixteen,
the Trustee shall be deemed to have resigned as contemplated in subsection (b) of
this Section, the successor Trustee shall be deemed to have been appointed by
the Company pursuant to subsection (e) of this Section and such
appointment shall be deemed to have been accepted as contemplated in Section 4
of this Article Sixteen, all as of such date, and all other provisions of
this Section and Section 4 of this Article Sixteen shall be
applicable to such resignation, appointment and acceptance except to the extent
inconsistent with this subsection (f).

 

(g)                                 The Company shall mail notice of each
resignation and each removal of the Trustee and each appointment of a successor
Trustee to all holders of Bonds at the address of such holder as it appears in
the registry books.  Each notice shall
include the name of the successor Trustee and the address of its corporate
trust office.”

 

(k)                                                                                         Effective on a date fixed as provided in Section 1
of this Article Four, Section 3 of Article Sixteen of the First
Mortgage as amended shall be restated in its entirety to read as follows:

 

“SECTION 3.                          Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.  In
case any Bonds shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Bonds so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Bonds.”

 

(l)                                                                                            Effective on a date fixed as provided in Section 1
of this Article Four, Section 4 of Article Sixteen of the First
Mortgage as amended shall be restated in its entirety to read as follows:

 

30

 

“SECTION 4.                          (a) In case of the appointment hereunder of a
successor Trustee, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of all sums owed to it, execute and deliver an instrument transferring
to such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder, subject
nevertheless to its lien to secure the amounts due to such retiring Trustee
provided for in Section 1 of this Article Sixteen.

 

(b)                                 Upon request of any such successor
Trustee, the Company shall execute any instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in subsection (a) of this Section.

 

(c)                                  No successor Trustee shall accept its
appointment unless at the time of such acceptance such successor Trustee shall
be qualified and eligible under this Article.”

 

(m)                                                                                      Effective on a date fixed as provided in Section 1
of this Article Four, Section 2 of Article Eighteen of the First
Mortgage as amended shall be amended to (i) replace the phrase “at least
seventy-five per centum (75%)” with the phrase “a majority” in all places where
such phrase appears therein, (ii) delete the first sentence of the second
paragraph thereof and replace it with the sentence reading as follows:

 

“If at any time the Company shall request the Trustee to enter into any
supplemental indenture pursuant to the provisions of this Section, the Company
shall cause notice of the proposed execution of such supplemental indenture to
be mailed to the registered owners of any Bonds entitled to approve or consent
thereto at their addresses appearing on the bond registry books.”;

 

and (iii) delete the words “first publication” from the second
line of the third paragraph thereof and replace it with the words “the mailing”.

 

(n)                                                                                        Effective on a date fixed as provided in Section 1
of this Article Four, Section 3 of Article Twenty-One of the First
Mortgage as amended shall be restated in its entirety to read as follows:

 

“SECTION 3.                          Any money deposited with the Trustee or any paying
agent, or then held by the Company, in trust for the payment of the principal
of and premium, if any, or interest, if any, on any Bond and remaining
unclaimed for two years after such principal and premium, if any, or interest,
if any, has become due and payable shall to the extent permitted by law be paid
to the Company upon a written request of the Company, or, if then held by the
Company, shall be discharged from such trust; and, upon such payment or
discharge, the holder of such Bond shall, as an unsecured general creditor and
not as the holder of an outstanding Bond, look only to the Company for payment
of the amount so due 

 

31

 

and payable and remaining unpaid unless the applicable
law provides otherwise, and all liability of the Trustee or such paying agent
with respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
paying agent, before being required to make any such payment to the Company,
may at the expense of the Company cause to be mailed, on one occasion only,
notice to such holder that such money remains unclaimed and that, after a date
specified therein, which shall not be less than thirty (30) days from the date
of such mailing, any unclaimed balance of such money then remaining will be
paid to the Company.”

 

(o)                                                                                        Any supplemental indentures may contain
such other provisions as may be necessary or appropriate to carry into effect
the purposes of the amendments provided for by this Article Four or as may
be otherwise appropriate and permissible under the provisions of Article Eighteen
of the First Mortgage as amended to accomplish the purposes of said
amendments.  To the extent permitted by Article Eighteen
of the First Mortgage as amended, any supplemental indenture may terminate or
modify specified obligations of the Company to the holders of the Bonds of a
particular series and such amendment will only require the consent by holders
of seventy-five per centum (75%) in aggregate principal amount of the Bonds
outstanding of said series.  Said
amendments may effect the purposes herein contemplated either by adding
provisions to, or eliminating provisions from, the First Mortgage as amended,
or by both adding and eliminating provisions, or may accomplish said purposes
in any other appropriate manner.

 

No further consent of the holders of New Bonds shall be required to
effect any of the amendments provided for in, or permitted by, this Article Four.

 

Section 20.5

 

Covenants Of The Company.

 

(a)                                                                      All covenants and agreements by the
Company in the First Mortgage as heretofore and hereby amended are hereby
confirmed.

 

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

 

Section 20.6

 

Miscellaneous.

 

32

 

(a)                                                                                         The New Bonds may be authenticated and
delivered by the Trustee and issued by the Company in advance of the recording
or filing of this Forty-Third Supplemental Indenture.

 

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

 

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

 

(d)                                                                                        This Forty-Third Supplemental Indenture
may be simultaneously executed in several counterparts and each counterpart
shall be an original instrument.

 

33

 

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

 

 

	
   

  	
   

  	
  THE DAYTON POWER AND LIGHT COMPANY

  
	
   

  	
  By

  	
  /s/ John J. Gillen

  	
   

  
	
   

  	
   

  	
  John J. Gillen

  
	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  	
  and Chief Financial Officer

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Miggie E.
  Cramblit

  	
   

  	
   

  
	
  Miggie E.
  Cramblit

  	
   

  
	
  Vice President,
  General Counsel

  	
   

  
	
  and Corporate
  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signed and
  acknowledged in our presence by

  	
   

  
	
  The Dayton Power
  and Light Company.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
							

 

34

 

	
   

  	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
   

  	
  as Trustee

  
	
   

  	
  By

  	
  /s/ Patricia Gallagher

  	
   

  
	
   

  	
   

  	
  Patricia Gallagher

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  
	
  [SEAL]

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Mary
  LaGumina

  	
   

  	
   

  
	
  Name: Mary
  LaGumina

  	
   

  
	
  Title: Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signed and
  acknowledged in our presence by

  	
   

  
	
  The Bank of New
  York.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
							

 

35

 

	
  STATE OF OHIO,

  	
  )

  	
  ss.:

  
	
  COUNTY OF
  MONTGOMERY,

  	
  )

  	
   

  

 

On this 17th day of August, 2005, personally appeared
before me, a Notary Public within and for said County in the State aforesaid,
John J. Gillen, and Miggie E. Cramblit, to me known and known to me to be,
respectively, the Senior Vice President and Chief Financial Officer and the
Vice President, General Counsel and Corporate Secretary of THE DAYTON POWER AND
LIGHT COMPANY, one of the corporations which executed the foregoing instrument,
who severally acknowledged that they did sign and seal said instrument as such
Senior Vice President and Chief Financial Officer and Vice President, General Counsel
and Corporate Secretary for and on behalf of said corporation and that the same
is their free act and deed as such Senior Vice President and Chief Financial
Officer and Vice President, General Counsel and Corporate Secretary,
respectively, and the free and corporate act and deed of said corporation; and
said John J. Gillen, being by me duly sworn, did depose and say: that he
resides in Delaware County, Pennsylvania; that he is the Senior Vice President
and Chief Financial Officer of THE DAYTON POWER AND LIGHT COMPANY, one of the
corporations described in and which executed the above instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors
of said corporation; and that he signed his name thereto by like order.

 

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

 

	
  [SEAL]

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TIMOTHY G. RICE, Attorney at Law

  
	
   

  	
  Notary Public, State of Ohio

  
	
   

  	
  My Commission has no expiration date,

  
	
   

  	
  Section 147.03 O.R.C.

  

 

36

 

	
  STATE OF NEW
  YORK,

  	
  )

  	
  ss.:

  
	
  COUNTY OF NEW
  YORK,

  	
   

  	
  )

  

 

On this 17th day of August, 2005, personally appeared
before me, a Notary Public within and for said County in the State aforesaid,
Patricia Gallagher and Mary LaGumina, to me known and known to me to be,
respectively, a Vice President and a Vice President of THE BANK OF NEW YORK,
one of the corporations which executed the foregoing instrument, who severally
acknowledged that they did sign and seal said instrument as such Vice President
and Vice President for and on behalf of said corporation and that the same is
their free act and deed as such Vice President and Vice President,
respectively, and the free and corporate act and deed of said corporation; and
said Patricia Gallagher being by me duly sworn, did depose and say: that she
resides in                              ;
that she is a Vice President of THE BANK OF NEW YORK, one of the corporations
described in and which executed the above instrument; that she knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of such
corporation; and that she signed his name thereto by like order.

 

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

 

	
  [SEAL]

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Notary Public, State of New York

  
	
   

  	
  No.

  	
   

  	
   

  
	
   

  	
  Qualified in Bronx County

  
	
   

  	
  Certificate filed in New York County

  
	
   

  	
  Commission Expires 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  This instrument prepared by

  
	
   

  	
   

  	
   

  
	
   

  	
  Timothy G. Rice, Esq.

  
	
   

  	
  Attorney at Law

  
	
   

  	
  The Dayton Power and Light Company

  
	
   

  	
  1065 Woodman Drive

  
	
   

  	
  Dayton, Ohio 45432

  
							

 

37

 

EXHIBIT A

 

[FORM OF NEW
WATER BOND]

 

	
  No.

  	
   

  	
  $

  	
   

  	
   

  

 

THE DAYTON POWER AND LIGHT COMPANY

(Incorporated under the laws of the State of Ohio)

 

First Mortgage Bond,

4.80%  Pollution Control Series 2005-A
Due 2034

Due January 1, 2034

 

THE DAYTON POWER AND
LIGHT COMPANY, a corporation of the State of Ohio (hereinafter called the
Company), for value received, hereby promises to pay to                                               
or registered assigns, on January 1, 2034, at the office or agency of the
Company in the Borough of Manhattan, The City of New York,                                                             
Dollars in such coin or currency of the United States of America as at the time
of payment is legal tender for the payment of public and private debts, and to
pay to the registered owner hereof interest thereon from the interest payment
date to which interest has been paid last preceding the date hereof (unless the
date hereof is an interest payment date to which interest has been paid, in
which case from the date hereof, or unless the date hereof is prior to January 1,
2006, in which case from August 17, 2005), at the rate of Four and Eighty
Hundredths per centum (4.80%) per annum in like coin or currency, payable at
said office or agency semiannually on January 1 and July 1 in each
year, and at maturity, until the Company’s obligation with respect to the
payment of such principal shall have been discharged, such interest to be paid
to the person who shall have been the registered owner hereof at the close of
business on the Business Day (as defined in Section 3 of Article One
of the Forty-Third Supplemental Indenture referred to below) immediately
preceding such January 1 or July 1, as the case may be (subject to
certain exceptions provided in the Forty-Third Supplemental Indenture referred
to herein).  The amount of interest
payable for any period will be computed on the basis of a 360-day year
consisting of twelve 30-day months.  In
the event that any date on which principal or interest is payable on this Bond
is not a Business Day, the payment of the principal or interest payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), with the
same force and effect as if made on the date the payment was originally payable.

 

This Bond is one of an
issue of First Mortgage Bonds (hereinafter called the Bonds) of the Company
issued and to be issued in series under and pursuant to and equally secured by
an indenture of mortgage and deed of trust dated as of October 1, 1935, executed
by the Company to Irving Trust Company, as Trustee (now The Bank of New York),
as said indenture has been amended and supplemented as hereinafter stated, and
is one of a series of said First Mortgage 

 

38

 

Bonds, which series is
designated as the First Mortgage Bonds, 4.80% Pollution Control Series 2005-A
Due 2034, of the Company (hereinafter called the New Water Bonds) created and
described in a Forty-Third Supplemental Indenture dated as of August 1, 2005,
executed by the Company to The Bank of New York, as Trustee.  Subsequent to the execution and delivery of
said indenture of mortgage and deed of trust there have been executed and
delivered forty-three indentures supplemental thereto, including said Forty-Third
Supplemental Indenture dated as of August 1, 2005, supplementing and
amending as therein set forth certain provisions thereof.  Said indenture of mortgage and deed of trust
and such supplemental indentures collectively are hereinafter sometimes called
the “Indenture”.

 

For a description of the
property mortgaged and pledged, the nature and extent of the security, the
rights of the holders of the Bonds and of the Trustee therein and thereto, the
duties and immunities of the Trustee, and the terms and conditions upon which
the Bonds are issued and secured, reference is hereby made to the
Indenture.  The rights and obligations of
the Company and of the holders and registered owners of the Bonds of this issue
may be modified or amended at the request of the Company by an indenture or
indentures supplemental to the Indenture, executed pursuant to the consent in
writing of the holders or registered owners of at least 75% in principal amount
of the Bonds then outstanding affected by such modification or amendment, all
in the manner and subject to the limitations set forth in the Indenture, any
consent by the holder or registered owner of any Bond being conclusive and
binding upon such holder or registered owner and upon all future holders and
owners of such Bond, irrespective of whether or not any notation of such
consent is made upon such Bond; provided that no such modification or amendment
by such supplemental indenture shall extend the maturity of, or reduce the rate
of interest on, or otherwise modify the terms of payment of the principal or
interest of, this Bond, which obligations are absolute and unconditional, nor
permit the creation of any lien ranking prior to or equal with the lien of the
Indenture on any of the mortgaged property. 
The New Water Bonds are to be issued by the Company to the Ohio Water
Development Authority (hereinafter called the Water Authority) to evidence and
secure the obligations of the Company to repay the loan of the proceeds of the
sale of the Water Project Bonds (as hereinafter defined) made by the Water
Authority to the Company, pursuant to a certain Loan Agreement, dated as of August 1,
2005, between the Water Authority and the Company, to assist in the refinancing
of the Company’s portion of the cost of acquisition, construction and
installation of certain waste water facilities and solid waste facilities (as
such terms are defined and used in Sections 6121.01 and 6123.01, respectively,
of the Ohio Revised Code) installed in connection with Unit 2 of the Killen
Generating Station located in Adams County, Ohio as to which the Company at the
date of the Forty-Third Supplemental Indenture owned an undivided 67% interest
as tenant in common with another public utility company, the O. H. Hutchings
Generating Station located in Montgomery County, Ohio as to which the Company
at the date hereof owns 100% of the station, and the J. M. Stuart Generating
Station located in Brown County, Ohio as to which the Company at the date
hereof owns an undivided 35% interest as a tenant in common with two other
public utilities (such interests in said facilities being hereinafter called
the Water Project).  The loan by the
Water Authority in respect of the Water Project is to be funded by the proceeds
derived from the sale by the Water Authority of State of Ohio Collateralized
Water Development Revenue Refunding Bonds, 2005 Series A (The Dayton Power
and Light Company Project) in the aggregate principal amount of $41,300,000
(hereinafter called the Water Project Bonds). 
The Water Project Bonds are to be issued under a certain Trust
Indenture, dated as of August 1, 2005 (hereinafter called the Water
Pollution Control Indenture), between the Water Authority and The 

 

39

 

Bank of New York, as
Trustee (hereinafter in such capacity called the Water Project Bond Trustee)
and the New Water Bonds are to be assigned by the Water Authority to the Water
Project Bond Trustee as security for the payment of the principal of and
interest on the Water Project Bonds and are to be delivered by the Company on
behalf of the Water Authority directly to the Water Project Bond Trustee.

 

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

 

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

 

The New Water Bonds are
subject to mandatory redemption by the Company prior to maturity at any time in
whole or in part as provided in Section 5 of Article One of the
Forty-Third Supplemental Indenture at a redemption price of 100% of the principal
amount to be redeemed, plus accrued interest to the redemption date.

 

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

 

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

 

40

 

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

 

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

 

This Bond may be
exchanged for a like principal amount of other New Water Bonds, or transferred
as prescribed in the Indenture by the registered owner hereof in person, or by
his duly authorized attorney, at the office or agency of the Company in the
Borough of Manhattan, The City of New York, upon surrender and cancellation of
this Bond and thereupon a new registered New Water Bond or New Water Bonds
without coupons for a like principal amount and of authorized denominations
will be issued in exchange therefore as provided in the Indenture.  The Company and the Trustee may deem and
treat the person in whose name this Bond is registered as the absolute owner
hereof for the purpose of receiving payment of or on account of the principal
and interest due hereon and for all other purposes.

 

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

 

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

 

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

 

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

 

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

 

41

 

attested by the manual or
facsimile signature of its Corporate Secretary or an Assistant Corporate
Secretary.

 

	
  Dated:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE DAYTON POWER AND LIGHT

  COMPANY,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Senior Vice
  President

  
	
   

  	
  and Chief
  Financial Officer

  
	
   

  
	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
  Vice President,
  General Counsel

  	
   

  
	
   

  	
  and Corporate
  Secretary

  	
   

  
						

 

TRUSTEE’S CERTIFICATE

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

 

 

	
   

  	
  THE BANK OF NEW YORK, as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  

 

42

 

SCHEDULE OF PAYMENTS

 

	
   

  	
   

  	
  Unpaid

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal

  	
   

  	
  Principal

  	
   

  	
  Interest

  	
   

  	
  Agency of the Company

  	
   

  	
  Authorized

  	
   

  
	
  Payment Amount

  	
   

  	
  Payment

  	
   

  	
  Making Notation

  	
   

  	
  Officer

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

43

 

EXHIBIT B

 

[FORM OF NEW
AIR BOND]

 

 

	
  No.

  	
   

  	
  $

  	
   

  	
   

  

 

 

THE DAYTON POWER AND LIGHT COMPANY

(Incorporated under the laws of the State of Ohio)

 

First Mortgage Bond,

4.80%  Pollution Control Series 2005-B
Due 2034

Due January 1, 2034

 

THE DAYTON POWER AND LIGHT
COMPANY, a corporation of the State of Ohio (hereinafter called the Company),
for value received, hereby promises to pay to                                               
or registered assigns, on January 1, 2034, at the office or agency of the
Company in the Borough of Manhattan, The City of New York,
                                                                  
Thousand Dollars in such coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private
debts, and to pay to the registered owner hereof interest thereon from the
interest payment date to which interest has been paid last preceding the date
hereof (unless the date hereof is an interest payment date to which interest
has been paid, in which case from the date hereof, or unless the date hereof is
prior to January 1, 2006, in which case from August 17, 2005), at the
rate of Four and Eighty Hundredths per centum (4.80%) per annum in like coin or
currency, payable at said office or agency semiannually on January 1 and July 1
in each year, and at maturity, until the Company’s obligation with respect to
the payment of such principal shall have been discharged, such interest to be
paid to the person who shall have been the registered owner hereof at the close
of business on the Business Day (as defined in Section 3 of Article Two
of the Forty-Third Supplemental Indenture referred to below) immediately
preceding such January 1 or July 1, as the case may be (subject to
certain exceptions provided in the Forty-Third Supplemental Indenture referred
to herein).  The amount of interest
payable for any period will be computed on the basis of a 360-day year
consisting of twelve 30-day months.  In
the event that any date on which principal or interest is payable on this Bond
is not a Business Day, the payment of the principal or interest payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), with the
same force and effect as if made on the date the payment was originally
payable.

 

This Bond is one of an
issue of First Mortgage Bonds (hereinafter called the Bonds) of the Company
issued and to be issued in series under and pursuant to and equally secured by
an indenture of mortgage and deed of trust dated as of October 1, 1935,
executed by the Company to Irving Trust Company, as Trustee (now The Bank of
New York), as said indenture has been amended and supplemented as hereinafter
stated, and is one of a series of said First Mortgage 

 

44

 

Bonds, which series is
designated as the First Mortgage Bonds, 4.80% Pollution Control Series 2005-B
Due 2034, of the Company (hereinafter called the New Air Bonds) created and
described in a Forty-Third Supplemental Indenture dated as of August 1,
2005, executed by the Company to The Bank of New York, as Trustee.  Subsequent to the execution and delivery of
said indenture of mortgage and deed of trust there have been executed and
delivered forty-three indentures supplemental thereto, including said
Forty-Third Supplemental Indenture dated as of August 1, 2005,
supplementing and amending as therein set forth certain provisions
thereof.  Said indenture of mortgage and
deed of trust and such supplemental indentures collectively are hereinafter
sometimes called the “Indenture”.

 

For a description of the
property mortgaged and pledged, the nature and extent of the security, the
rights of the holders of the Bonds and of the Trustee therein and thereto, the
duties and immunities of the Trustee, and the terms and conditions upon which
the Bonds are issued and secured, reference is hereby made to the
Indenture.  The rights and obligations of
the Company and of the holders and registered owners of the Bonds of this issue
may be modified or amended at the request of the Company by an indenture or
indentures supplemental to the Indenture, executed pursuant to the consent in
writing of the holders or registered owners of at least 75% in principal amount
of the Bonds then outstanding affected by such modification or amendment, all
in the manner and subject to the limitations set forth in the Indenture, any
consent by the holder or registered owner of any Bond being conclusive and binding
upon such holder or registered owner and upon all future holders and owners of
such Bond, irrespective of whether or not any notation of such consent is made
upon such Bond; provided that no such modification or amendment by such
supplemental indenture shall extend the maturity of, or reduce the rate of
interest on, or otherwise modify the terms of payment of the principal or
interest of, this Bond, which obligations are absolute and unconditional, nor
permit the creation of any lien ranking prior to or equal with the lien of the
Indenture on any of the mortgaged property. 
The New Air Bonds are to be issued by the Company to the Ohio Air
Quality Development Authority (hereinafter called the Air Authority) to evidence
and secure the obligations of the Company to repay the loan of the proceeds of
the sale of the Air Project Bonds (as hereinafter defined) made by the Air
Authority to the Company, pursuant to a certain Loan Agreement, dated as of August 1,
2005, between the Air Authority and the Company, to assist in the refinancing
of the Company’s portion of the cost of refinancing of the Company’s portion of
the cost of acquisition, construction and installation of certain air quality
facilities (as that term is defined and used in Section 3706.01 of the Ohio
Revised Code) installed in connection with: Unit 2 of the Killen Generating
Station located in Adams County, Ohio as to which the Company at the date
hereof owns an undivided 67% interest as tenant in common with another public
utility company, the Walter C. Beckjord Generating Station Unit 6 located in
Clermont County, Ohio as to which the Company at the date hereof owns an
undivided 50% interest as tenant in common with another public utility company,
and the William H. Zimmer Generating Station located in Clermont County, Ohio
as to which the Company at the date hereof owns an undivided 28.1% interest as
tenant in common with two other public utility companies (such interests in
said facilities being hereinafter called the Air Project).  The loan by the Air Authority in respect of
the Air Project is to be funded by the proceeds derived from the sale by the
Air Authority of State of Ohio Collateralized Air Quality Development Revenue
Refunding Bonds, 2005 Series B (The Dayton Power and Light Company Project)
in the aggregate principal amount of $137,800,000 (hereinafter called the Air
Project Bonds).  The Air Project Bonds
are to be issued under a certain Trust Indenture, dated as of August 1,
2005 (hereinafter called the Air Pollution Control 

 

45

 

Indenture), between the
Air Authority and The Bank of New York, as Trustee (hereinafter in such
capacity called the Air Project Bond Trustee) and the New Air Bonds are to be
assigned by the Air Authority to the Air Project Bond Trustee as security for
the payment of the principal of and interest on the Air Project Bonds and are
to be delivered by the Company on behalf of the Air Authority directly to the
Air Project Bond Trustee.

 

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

 

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

 

The New Air Bonds are
subject to mandatory redemption by the Company prior to maturity at any time in
whole or in part as provided in Section 5 of Article Two of the Forty-Third
Supplemental Indenture at a redemption price of 100% of the principal amount to
be redeemed, plus accrued interest to the redemption date.

 

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

 

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

 

46

 

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

 

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

 

This Bond may be
exchanged for a like principal amount of other New Air Bonds, or transferred as
prescribed in the Indenture by the registered owner hereof in person, or by his
duly authorized attorney, at the office or agency of the Company in the Borough
of Manhattan, The City of New York, upon surrender and cancellation of this
Bond and thereupon a new registered New Air Bond or New Air Bonds without coupons
for a like principal amount and of authorized denominations will be issued in
exchange therefore as provided in the Indenture.  The Company and the Trustee may deem and
treat the person in whose name this Bond is registered as the absolute owner
hereof for the purpose of receiving payment of or on account of the principal
and interest due hereon and for all other purposes.

 

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

 

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

 

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

 

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

 

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

 

47

 

attested by the manual or
facsimile signature of its Corporate Secretary or an Assistant Corporate
Secretary.

 

	
  Dated:

  
	
   

  
	
   

  
	
   

  	
  THE DAYTON POWER AND LIGHT

  COMPANY,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Senior Vice
  President

  
	
   

  	
  and Chief
  Financial Officer

  
	
   

  
	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
  Vice President,
  General Counsel

  	
   

  
	
   

  	
  and Corporate
  Secretary

  	
   

  
						

 

TRUSTEE’S CERTIFICATE

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

 

 

	
   

  	
  THE BANK OF NEW YORK, as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  

 

48

 

SCHEDULE OF PAYMENTS

 

	
   

  	
   

  	
  Unpaid

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal

  	
   

  	
  Principal

  	
   

  	
  Interest

  	
   

  	
  Agency of the Company

  	
   

  	
  Authorized

  	
   

  
	
  Payment Amount

  	
   

  	
  Payment

  	
   

  	
  Making Notation

  	
   

  	
  Officer

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

49

 

EXHIBIT C

 

[FORM OF NEW
BOONE COUNTY BOND]

 

 

	
  No.

  	
   

  	
  $

  	
   

  	
   

  

 

 

THE DAYTON POWER AND LIGHT COMPANY

(Incorporated under the laws of the State of Ohio)

 

First Mortgage Bond,

4.70%  Pollution Control Series 2005-C
Due 2028

Due January 1, 2028

 

THE DAYTON POWER AND
LIGHT COMPANY, a corporation of the State of Ohio (hereinafter called the
Company), for value received, hereby promises to pay to                                               
or registered assigns, on January 1, 2028, at the office or agency of the
Company in the Borough of Manhattan, The City of New York,                                                                   
Dollars in such coin or currency of the United States of America as at the time
of payment is legal tender for the payment of public and private debts, and to
pay to the registered owner hereof interest thereon from the interest payment
date to which interest has been paid last preceding the date hereof (unless the
date hereof is an interest payment date to which interest has been paid, in
which case from the date hereof, or unless the date hereof is prior to January 1,
2006, in which case from August 17, 2005), at the rate of Four and Seventy
Hundredths per centum (4.70%) per annum in like coin or currency, payable at
said office or agency semiannually on January 1 and July 1 in each
year, and at maturity, until the Company’s obligation with respect to the
payment of such principal shall have been discharged, such interest to be paid
to the person who shall have been the registered owner hereof at the close of
business on the Business Day (as defined in Section 3 of Article Three
of the Forty-Third Supplemental Indenture referred to below) immediately
preceding such January 1 or July 1, as the case may be (subject to
certain exceptions provided in the Forty-Third Supplemental Indenture referred
to herein).  The amount of interest
payable for any period will be computed on the basis of a 360-day year
consisting of twelve 30-day months.  In
the event that any date on which principal or interest is payable on this Bond
is not a Business Day, the payment of the principal or interest payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), with the
same force and effect as if made on the date the payment was originally
payable.

 

This Bond is one of an
issue of First Mortgage Bonds (hereinafter called the Bonds) of the Company
issued and to be issued in series under and pursuant to and equally secured by
an indenture of mortgage and deed of trust dated as of October 1, 1935,
executed by the Company to Irving Trust Company, as Trustee (now The Bank of
New York), as said indenture has been amended and supplemented as hereinafter
stated, and is one of a series of said First Mortgage 

 

50

 

Bonds, which series is
designated as the First Mortgage Bonds, 4.70% Pollution Control Series 2005-C
Due 2028, of the Company (hereinafter called the New Boone County Bonds)
created and described in a Forty-Third Supplemental Indenture dated as of August 1,
2005, executed by the Company to The Bank of New York, as Trustee.  Subsequent to the execution and delivery of
said indenture of mortgage and deed of trust there have been executed and
delivered forty-three indentures supplemental thereto, including said
Forty-Third Supplemental Indenture dated as of August 1, 2005,
supplementing and amending as therein set forth certain provisions
thereof.  Said indenture of mortgage and
deed of trust and such supplemental indentures collectively are hereinafter
sometimes called the “Indenture”.

 

For a description of the
property mortgaged and pledged, the nature and extent of the security, the
rights of the holders of the Bonds and of the Trustee therein and thereto, the
duties and immunities of the Trustee, and the terms and conditions upon which
the Bonds are issued and secured, reference is hereby made to the Indenture.  The rights and obligations of the Company and
of the holders and registered owners of the Bonds of this issue may be modified
or amended at the request of the Company by an indenture or indentures
supplemental to the Indenture, executed pursuant to the consent in writing of
the holders or registered owners of at least 75% in principal amount of the
Bonds then outstanding affected by such modification or amendment, all in the
manner and subject to the limitations set forth in the Indenture, any consent
by the holder or registered owner of any Bond being conclusive and binding upon
such holder or registered owner and upon all future holders and owners of such
Bond, irrespective of whether or not any notation of such consent is made upon
such Bond; provided that no such modification or amendment by such supplemental
indenture shall extend the maturity of, or reduce the rate of interest on, or
otherwise modify the terms of payment of the principal or interest of, this
Bond, which obligations are absolute and unconditional, nor permit the creation
of any lien ranking prior to or equal with the lien of the Indenture on any of
the mortgaged property.  The New Boone
County Bonds are to be issued by the Company to Boone County, Kentucky
(hereinafter called Boone County) to evidence and secure the obligations of the
Company to repay the loan of the proceeds of the sale of the Boone County
Project Bonds (as hereinafter defined) made by Boone County to the Company,
pursuant to a certain Loan Agreement, dated as of August 1, 2005, between
Boone County and the Company, to assist in the refinancing of the Company’s
portion of the cost of refinancing of the Company’s portion of the cost of
acquisition, construction and installation of certain solid waste facilities
installed in connection with Unit 2 of the East Bend Generating Station located
in Boone County, Kentucky as to which the Company at the date hereof owns an
undivided 31% interest as tenant in common with another public utility company
(such interest in said facilities being hereinafter called the Boone County
Project).  The loan by Boone County in
respect of the Boone County Project is to be funded by the proceeds derived
from the sale by the County of Boone, Kentucky Collateralized Pollution Control
Revenue Refunding Bonds, 2005 Series A (The Dayton Power and Light Company
Project) in the aggregate principal amount of $35,275,000 (hereinafter called
the Boone County Project Bonds).  The
Boone County Project Bonds are to be issued under a certain Trust Indenture,
dated as of August 1, 2005 (hereinafter called the Boone County Pollution
Control Indenture), between Boone County and The Bank of New York, as Trustee
(hereinafter in such capacity called the Boone County Project Bond Trustee) and
the New Boone County Bonds are to be assigned by Boone County to the Boone
County Project Bond Trustee as security for the payment of the principal of and
interest on the Boone County Project Bonds and are to be 

 

51

 

delivered by the Company
on behalf of Boone County directly to the Boone County Project Bond Trustee.

 

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

 

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

 

The New Boone County
Bonds are subject to mandatory redemption by the Company prior to maturity at
any time in whole or in part as provided in Section 5 of Article Three
of the Forty-Third Supplemental Indenture at a redemption price of 100% of the
principal amount to be redeemed, plus accrued interest to the redemption date.

 

The New Boone County
Bonds are subject to optional redemption by the Company prior to maturity at
any time in whole or in part as provided in Section 6 of Article Three
of the Forty-Third Supplemental Indenture at a redemption price equal to 100%
of the principal amount to be redeemed, plus accrued interest to the redemption
date.

 

The New Boone County
Bonds are subject to optional redemption by the Company prior to maturity in
whole or in part by lot as provided in Section 7 of Article Three of
the Forty-Third Supplemental Indenture, at a redemption price equal to 100% of
the principal amount to be redeemed, plus accrued interest to the redemption
date.

 

52

 

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

 

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

 

This Bond may be
exchanged for a like principal amount of other New Boone County Bonds, or
transferred as prescribed in the Indenture by the registered owner hereof in
person, or by his duly authorized attorney, at the office or agency of the
Company in the Borough of Manhattan, The City of New York, upon surrender and
cancellation of this Bond and thereupon a new registered New Boone County Bond
or New Boone County Bonds without coupons for a like principal amount and of
authorized denominations will be issued in exchange therefore as provided in
the Indenture.  The Company and the
Trustee may deem and treat the person in whose name this Bond is registered as
the absolute owner hereof for the purpose of receiving payment of or on account
of the principal and interest due hereon and for all other purposes.

 

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

 

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

 

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

 

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

 

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

 

53

 

attested by the manual or
facsimile signature of its Corporate Secretary or an Assistant Corporate
Secretary.

 

 

	
  Dated:

  
	
   

  
	
   

  
	
   

  	
  THE DAYTON POWER AND LIGHT

  COMPANY,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Senior Vice
  President

  
	
   

  	
  and Chief
  Financial Officer

  
	
   

  
	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
  Vice President,
  General Counsel

  	
   

  
	
   

  	
  and Corporate
  Secretary

  	
   

  
						

 

TRUSTEE’S CERTIFICATE

 

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

 

	
   

  	
  THE BANK OF NEW YORK, as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  

 

54

 

SCHEDULE OF PAYMENTS

 

	
   

  	
   

  	
  Unpaid

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal

  	
   

  	
  Principal

  	
   

  	
  Interest

  	
   

  	
  Agency of the Company

  	
   

  	
  Authorized

  	
   

  
	
  Payment Amount

  	
   

  	
  Payment

  	
   

  	
  Making Notation

  	
   

  	
  Officer

  	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

55

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]