Exhibit 4(h)


 


NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS AND THEY MAY NOT BE TRANSFERRED IN
VIOLATION OF SUCH ACT OR LAWS, THE RULES AND REGULATIONS THEREUNDER OR THE
PROVISIONS OF THIS WARRANT.


 


THIS WARRANT IS SUBJECT TO SECTION 3.3 OF A
SECURITYHOLDERS AND REGISTRATION RIGHTS AGREEMENT (A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY).  NO
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS
WARRANT MAY BE MADE EXCEPT IN ACCORDANCE WITH SECTION 3.3 OF SUCH
SECURITYHOLDERS AGREEMENT.  THE HOLDER OF
THIS WARRANT AGREES TO BE BOUND BY SECTION 3.3 OF SUCH SECURITYHOLDERS
AGREEMENT.


 


No. of Common Shares: __________


 


WARRANT


 


To Purchase Common Shares of


 


DPL INC.


 


THIS IS TO CERTIFY THAT __________, or its registered
assigns, is entitled at any time prior to the Expiration Date (as hereinafter
defined), to purchase from DPL INC., an Ohio corporation (the “Company”), _____
shares of Common Stock (as hereinafter defined and subject to adjustment as
provided herein), in whole or in part, including fractional parts, at a
purchase price of $21.00 per share (subject to adjustment as set forth herein),
all on the terms and conditions and pursuant to the provisions hereinafter set
forth.


 


ARTICLE 1.


 


Defined Terms


 


SECTION
1.1  Definitions.  Capitalized terms used and not defined herein
shall have the meanings assigned to them in the Securities Purchase Agreement
As used herein, the following terms shall have the following meanings:


 


“Affiliate”
means, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries, controls, is controlled by or is under
common


 

















 


control with, such
specified Person, for so long as such Person remains so associated to the
specified Person.


 


“Board”
means the Board of Directors of the Company.


 


“Business
Day” means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in the City
of New York or Dayton, Ohio.


 


“Cashless
Exercise Ratio” means a fraction, the numerator of which is
the excess of the Market Value per share of Common Stock on the date of
exercise over the Exercise Price per share as of the date of exercise and the
denominator of which is the Market Value per share of the Common Stock on the
date of exercise.


 


“Common
Stock” means the common shares, par value $0.01 per share, of
the Company and any securities issued in respect thereof, or in substitution
therefor, in connection with any stock split, dividend, spin-off or
combination, or any reclassification, recapitalization, merger, consolidation,
exchange or other similar reorganization or business combination.


 


“control”
(including the terms “controlled
by” and “under
common control with”), with respect to the relationship
between or among two or more Persons, means the possession, directly or
indirectly, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or otherwise.


 


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


 


“Exercise
Price” means, at any date herein, the price at which a share
of Common Stock may be purchased pursuant to this Warrant.  On the date of the original issuance of this
Warrant, the Exercise Price is $21.00 per share of Common Stock.


 


“Expiration
Date” means the twelfth anniversary of the Closing Date.


 


“Group”
shall have the meaning assigned to it in Section 13(d)(3) of the
Exchange Act.


 


“Holder”
means the duly registered holder of this Warrant under the terms hereof,
including assignees thereof.


 


“Independent
Investment Banking Firm” means an investment banking firm of
nationally recognized standing that is, in the reasonable judgment of the
Person engaging such firm, qualified to perform the task for which it has been
engaged.


 


“Market
Value” means, as of any determination date, with respect to
capital stock or other equity securities, the last reported sales price on the
date of determination or, in case no such sale takes place on such day, the
average of the closing bid and asked prices regular way for such day, in each
case (i) on the principal national securities exchange on which the shares
of such capital stock or other equity interest are listed or to which such
shares are admitted for


 


2

















 


trading, (ii) if
such capital stock or other equity interest is not listed or admitted for
trading on a national securities exchange, in the over-the-counter market as
reported by the National Association of Securities Dealers, Inc. National
Market System (“NASDAQ”)
or any comparable system or (iii) if such capital stock or other equity
interest is not listed on NASDAQ or a comparable system, as furnished by two
members of the National Association of Securities Dealers, Inc. (“NASD”) selected from
time to time in good faith by the Board for that purpose.  In the absence of all of the foregoing, or if
for any other reason the Market Value per share cannot be determined pursuant
to the foregoing provisions or if the consideration to be received by the
holders of Common Stock consists of evidences of indebtedness, other property,
warrants, options or subscription of purchase rights, the Market Value shall be
the fair market value thereof as determined by an Independent Investment
Banking Firm selected by the Company and reasonably acceptable to the Holder.  Subject to Section 3.10, the Company
shall bear the fees and expenses of any Independent Investment Banking Firm
involved in the determination of Market Value.


 


“Person”
means any individual, corporation, limited liability company, limited or
general partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivisions
thereof or any Group comprised of two or more of the foregoing.


 


“SEC”
means the U.S. Securities and Exchange Commission.


 


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


 


“Securities
Purchase Agreement” means the Securities Purchase Agreement,
dated as of February 1, 2000, among the Company, DPL Capital
Trust I, Dayton Ventures LLC, and Dayton Ventures, Inc.


 


“Securityholders
Agreement” means the Securityholders and Registration Rights
Agreement, dated as of March 13, 2000, by and among the Company,
DPL Capital Trust I, Dayton Ventures LLC, and Dayton Ventures, Inc.


 


“Warrant
Shares” means the shares of Common Stock of the Company
received, or issued, as the case may be, upon exercise of the Warrants.


 


“Warrants”
means this Warrant and all warrants issued upon transfer, division or
combination of, or in substitution for, any thereof.  All Warrants shall at all times be identical
as to terms and conditions and date, except as to the number of shares of
Common Stock for which they may be exercised.


 


ARTICLE 2.


 


Exercise Terms


 


SECTION
2.1  Exercise Periods.  At any time from and after the date of this
Warrant and until 5:00 p.m., New York City time, on the Expiration Date, the
Holder may exercise this Warrant, subject to required regulatory approval
(other than in connection with any


 


3

















 


such exercise and
contemporaneous sale by the Holder of the applicable shares of Common Stock
issued upon exercise of the Warrant), if any, on any Business Day, for all or
any part of the number of shares of Common Stock purchasable hereunder.


 


SECTION 2.2  Expiration.  This Warrant shall terminate and become void
as of the earlier of (i) 5:00 p.m., New York City time, on the
Expiration Date and (ii) the time and date this Warrant is exercised.


 


SECTION 2.3  Manner of Exercise.  (a)  In order to exercise this Warrant,
in whole or in part, Holder shall deliver to the Company at its principal
office at MacGregor Park, 1065 Woodman Drive, Dayton, Ohio 45432 or at the
office or agency designated by the Company pursuant to Article 6 (i) a
written notice of Holder’s election to exercise this Warrant, which notice
shall specify the number of Warrant Shares to be purchased and shall be
substantially in the form of the subscription form appearing at the end of this
Warrant as Exhibit A, (ii) subject to the succeeding paragraph,
payment of the Exercise Price for the number of Warrant Shares in respect of
which such Warrant is then exercised and (iii) this Warrant.  Payment of the Exercise Price may be made (i) in
cash or by certified or official bank check payable to the order of the Company
or by wire transfer of funds to an account designated by the Company for such
purpose, (ii) by surrender of Warrants as set forth in subsection (b) below
or (iii) by any combination of the methods specified in clauses (i) or
(ii) above.  The rights represented
by this Warrant shall be exercisable at the election of the Holder hereof
either in full at any time or in part from time to time and, in the event that
this Warrant is surrendered for exercise in respect of less than all the
Warrant Shares purchasable on such exercise at any time prior to the Expiration
Date, the Company shall, at the time of delivery of the certificate or
certificates representing the Warrant Shares, deliver to the Holder a new
Warrant evidencing the rights of the Holder to purchase the unpurchased shares
of Common Stock called for by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant.


 


(b)                                 In
lieu of payment of the Exercise Price in cash, at the option of the Holder, as
indicated on the subscription form appearing at the end of this Warrant as Exhibit A,
the Holder may demand that the Company reduce the number of shares of common
Stock to be delivered to such Holder upon exercise of the Warrants then being
exercised so that the Holder receives a number of shares of Common Stock equal
to the product of (i) the number of shares of Common Stock for which such
Warrant would otherwise then be nominally exercised if payment of the Exercise
Price as of the date of exercise were being made in cash and (ii) the Cashless
Exercise Ratio.  An exercise of a Warrant
in accordance with this clause (b) is herein called a “Cashless
Exercise.”  The Holder may use the
Cashless Exercise option whether or not this Warrant is being exercised in full
or in part and whether or not the Holder elects to pay any portion of the
aggregate Exercise Price in cash.


 


SECTION 2.4  Issuance of Warrant Shares.  Subject to Section 2.5, upon the
surrender of this Warrant and payment of the per share Exercise Price (or in
accordance with Section 2.3(b)), as set forth in Section 2.3, the
Company shall, as promptly as practicable, and in any event within five (5) Business
Days thereafter, issue or cause there to be issued and deliver or cause to be
delivered to or upon the written order of the Holder and in such name or names
as the Holder may designate in the notice provided pursuant to Section 2.3,
a certificate or certificates for the number of full Warrant Shares so
purchased upon the exercise of such


 


4

















 


Warrants or other
securities or property to which it is entitled, registered or otherwise to the
Person or Persons entitled to receive the same, together with cash as provided
in Section 2.5 in respect of any fractional Warrant Shares otherwise
issuable upon such exercise.  Such
certificate or certificates shall be deemed to have been issued and any Person
so designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the delivery of the notice
provided pursuant to Section 2.3, the surrender of this Warrant and,
subject to Section 2.3(b), payment of the per share Exercise Price.


 


SECTION 2.5  Fractional Warrant Shares.  The Company shall not be required to issue
fractional Warrant Shares on the exercise of Warrants.  If any fraction of a Warrant Share would,
except for the provisions of this Section 2.5, be issuable on the exercise
of this Warrant (or specified portion thereof), the Company shall pay an amount
in cash equal to the Market Value for one Warrant Share on the Business Day
immediately preceding the date the Warrant is exercised, multiplied by such
fraction, computed to the nearest whole cent. 
For purposes of determining the Market Value, is in accordance with such
term, an Independent Investment Banking Firm would be required to be hired to
determine the Market Value and but for this Section 2.5, an Independent
Investment Banking Firm is not otherwise required to be retained to determine
Market Value at such time, then Market Value shall be determined in good faith
by the Board.


 


SECTION 2.6  Reservation of Warrant Shares.  (a) The Company shall at all times on
and following the Closing Date keep reserved out of its authorized shares of
Common Stock a number of shares of Common Stock sufficient to provide for the
exercise in full of all outstanding Warrants. 
The registrar for the Common Stock shall at all times on and following
the Closing Date and until the Expiration Date, or the time at which all
Warrants have been exercised or canceled, reserve such number of authorized
shares of Common Stock as shall be required for such purpose.  All Warrant Shares which may be issued upon
exercise of this Warrant shall be duly and validly authorized, validly issued,
fully paid, nonassessable, free of preemptive rights and free from all
Encumbrances (as defined in the Securities Purchase Agreement), other than
Encumbrances created pursuant to the Transaction Agreements or created by the
Holder.


 


(b)                                 Before
taking any action which would cause an adjustment pursuant to Article 3 to
reduce the Exercise Price below the then par value (if any) of the Common
Stock, the Company shall take any and all corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock at the
Exercise Price as so adjusted.


 


SECTION 2.7  Compliance with Law.  If any shares of Common Stock required to be
reserved for purposes of exercise of Warrants would require, under any other
federal or state law or applicable governing rule or regulation of any
national securities exchange, registration with or approval of any governmental
authority, or listing on any such national securities exchange before such
shares may be issued upon exercise, the Company will cause such shares to be
duly registered or approved by such governmental authority or listed on the
relevant national securities exchange, at its expense.


 


5

















 


SECTION 2.8  Payment of Taxes.  The Company shall pay all expenses in
connection with, and all documentary, stamp or similar issue or transfer taxes,
if any, and all other taxes and other governmental charges that may be imposed
with respect to the issue or delivery of this Warrant and all shares of Common
Stock issuable upon the exercise of this Warrant, and shall indemnify and hold
the Holder and its Affiliates and the Company’s directors harmless from any
taxes, interest and penalties which may become payable by the Holder or its
Affiliates or any such directors as a result of the failure or delay by the
Company to pay such taxes.  The Company
shall not be required, however, to pay any tax or other charge imposed in connection
with any transfer involved in (a) the transfer of the Warrant or (b) the
issue of any certificate for shares of Common Stock issuable upon exercise of
this Warrant in any name other than that of the Holder or its Affiliates, and
in such case the Company shall not be required to issue or deliver any stock
certificate until such tax or other charge has been paid or it has been
established to the satisfaction of the Company that no such tax or other charge
is due.


 


ARTICLE 3.


 


Adjustment Provisions


 


SECTION 3.1  Changes in Common Stock.  In the event that at any time or from time to
time after the date hereof, the Company shall (i) pay a dividend or make a
distribution on its Common Stock in shares of its Common Stock, (ii) subdivide
its outstanding shares of Common Stock into a larger number of shares of Common
Stock, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock or (iv) increase or decrease the number
of shares of Common Stock outstanding by reclassification of its Common Stock
(in each case, other than a transaction to which Section 3.4 is
applicable), then the number of shares of Common Stock purchasable upon
exercise of this Warrant immediately after the happening of such event shall be
adjusted so that, after giving effect to such adjustment, the Holder of this
Warrant shall be entitled to receive the number of shares of Common Stock upon
exercise that such Holder would have owned or have been entitled to receive had
this Warrant been exercised immediately prior to the happening of the events
described above (or, in the case of a dividend or distribution of Common Stock,
immediately prior to the record date therefor), and the Exercise Price shall be
adjusted in inverse proportion.  An
adjustment made pursuant to this Section 3.1 shall become effective
immediately after the effective date, retroactive to the record date therefor
in the case of a dividend or distribution in shares of Common Stock, and shall
become effective immediately after the effective date in the case of a
subdivision, combination or reclassification.


 


SECTION 3.2  Cash Dividends and Other Distributions.  In case at any time or from time to time
after the date hereof, the Company shall distribute to all holders of Common
Stock (i) any dividend or other distribution of cash (other than the
regular quarterly cash dividend of the Company), evidences of its indebtedness,
shares of its capital stock or any other properties or securities, or (ii) any
options, warrants or other rights to subscribe for or purchase any of the foregoing
(other than, in each case set forth in (i) and (ii), (x) any dividend
or distribution described in Section 3.1, (y) any rights, options,
warrants or securities described in Section 3.3 or (z) in connection
with any transaction resulting in the issuance of additional warrants pursuant
to Section 3.13), then (1) the number of shares of Common Stock
purchasable


 


6

















 


upon the exercise of this Warrant shall be
increased to a number determined by multiplying the number of shares of Common
Stock purchasable upon the exercise of this Warrant immediately prior to the
record date for any such dividend or distribution by a fraction, (A) the
numerator of which shall be the Market Value per share of Common Stock on the
record date for such distribution, and (B) the denominator of which shall
be such Market Value per share of Common Stock less the sum of (x) any
cash distributed per share of Common Stock and (y) the fair value (the “Fair
Value”) (as determined in good faith by the Board, whose determination
shall be evidenced by a board resolution, a certified copy of which will be
sent to Holders) of the portion, if any, of the distribution applicable to one
share of Common Stock consisting of evidences of indebtedness, shames of stock,
securities, other property, options, warrants or subscription or purchase
rights and (2) the Exercise Price shall be adjusted to a number determined
by dividing the Exercise Price immediately prior to such record date by the
above fraction.  Such adjustments shall
be made whenever any distribution is made and shall become effective as of the
date of distribution, retroactive to the record date for any such distribution;
provided, however, that the Company is not required to make an
adjustment pursuant to this Section 3.2 if at the time of such
distribution the Company makes the same distribution to Holders of Warrants as
it makes to holders of Common Stock pro rata based on the number of shares of
Common Stock for which such Warrants are then exercisable.  No adjustment shall be made pursuant to this Section 3.2
which shall have the effect of decreasing the number of shares of Common Stock
purchasable upon exercise of each Warrant or increasing the Exercise Price.


 


SECTION 3.3  Rights Issue.  In the event that at any time or from time to
time after the date hereof, the Company shall issue, sell, distribute or
otherwise grant any rights to subscribe for or to purchase, or any options or
warrants for the purchase of, or any securities convertible or exchangeable
into, Common Stock to all holders of Common Stock, entitling such holders to
subscribe for or purchase shares of Common Stock or stock or securities
convertible into Common Stock, whether or not immediately exercisable,
convertible or exchangeable, as the case may be, and the subscription or
purchase price per share of Common Stock or the price per share of Common Stock
issuable upon exercise, conversion or exchange thereof is lower at the record
date for such issuance than the then Market Value per share of Common Stock,
the number of shares of Common Stock thereafter purchasable upon the exercise
of this Warrant shall be determined by multiplying the number of shares of
Common Stock purchasable upon the exercise of this Warrant prior to the record
date by a fraction, (A) the numerator of which shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights,
options, warrants or securities plus the number of additional shares of Common
Stock offered for subscription or purchase or into or for which such securities
are convertible or exchangeable, and (B) the denominator of which shall be
the number of shares of Common Stock outstanding on the date of issuance of
such rights, options, warrants or securities plus the total number of shares of
Common Stock which could be purchased at the Market Value with the aggregate
consideration received through the issuance of such rights, warrants, options,
or convertible securities; provided, however, that to the extent
any such issuance, sale, distribution or other grant is made to the holders of
the Warrants, such holders shall not be entitled to the benefit of the
adjustment provided for in this Section 3.3.  In the event of any such adjustment, the
Exercise Price shall be adjusted to a number determined by dividing the
Exercise Price immediately prior to such date of issuance by the above
fraction.  Such adjustment shall be made
whenever such rights, options or warrants are issued and shall become effective
retroactively immediately after


 


7

















 


the record date for the determination of
stockholders entitled to receive such rights, options, warrants or securities.


 


If the Company at any time shall issue two or more
securities as a unit and one or more of such securities shall be rights,
options or warrants for or securities convertible or exchangeable into, Common
Stock subject to this Section 3.3, the consideration allocated to each
such security shall be determined in good faith by a Board resolution, a
certified copy of which shall be delivered to the Holder.


 


SECTION 3.4  Reorganization, Reclassification, Merger,
Consolidation or Disposition of Assets. 
(a) In case the Company shall reorganize its capital or reclassify
its capital stock (in each case, other than pursuant to a transaction to which Section 3.1
is applicable), consolidate or merge with or into another Person (where the
Company is not the surviving entity or where there is a change in or
distribution with respect to the Common Stock of the Company), or sell,
transfer or otherwise dispose of all or substantially all its property, assets
or business to another Person and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring Person, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring Person (“Other
Property”), are to be received by or distributed to the holders of Common
Stock of the Company, then, each Holder shall have the right thereafter to
receive, upon exercise of such Warrant, the number of shares of common stock of
the successor or acquiring Person or of the Company, if it is the surviving
entity, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of
assets by a holder of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such event , except in the event
that a Section 3.4(a) Required Regulatory Approval (as defined below)
has not been obtained.


 


A “Section 3.4(a) Required
Regulatory Approval” shall mean any approval of the Securities and Exchange
Commission required under the Public Utility Holding Company Act of 1935, as
amended (“PUHCA”), with respect to the exercise of the rights of the
Holder under this Section 3.4(a) which is required as a result of the
Holder or any of its affiliates being subject to regulation as a “holding
company” or a “subsidiary company” or an “affiliate” of a holding company or a “public
utility company” (as such terms are defined under PUHCA) owing to the ownership
by the Holder and its affiliates of any securities other than the Warrants or
Common Stock.


 


(b)                                 In
case of any such reorganization, reclassification, merger, consolidation or
disposition of assets, the successor or acquiring Person (if other than the
Company) shall expressly assume the due and punctual observance and performance
of each and every covenant and condition of this Warrant to be performed and
observed by the Company and all the obligations and liabilities hereunder, subject
to such modifications as may be deemed appropriate (as determined by resolution
of the Board) in order to provide for adjustments of shares of the Common Stock
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Article 3.


 


8

















 


For purposes of this Section 3.4
“common stock of the successor or acquiring Person” shall include stock of such
Person of any class which is not preferred as to dividends or assets over any
other class of stock of such Person and which is not subject to redemption and
shall also include any evidences of indebtedness, shares of stock or other
securities which are convertible into or exchangeable for any such stock,
either immediately or upon the arrival of a specified date or the happening of
a specified event and any warrants or other rights to subscribe for or purchase
any such stock.  The foregoing provisions
of this Section 3.4 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or dispositions of assets.


 


SECTION 3.5  Issuance of Additional Shares of Common
Stock.  If at any time the Company
shall issue or sell any additional shares of Common Stock for gross consideration
in an amount per additional share of Common Stock less than the Market Value
(other than shares issued in respect of stock options granted pursuant to a
plan approved by the shareholders of the Company), then (i) the number of
shares of Common Stock for which this Warrant is exercisable shall be adjusted
to equal the product obtained by multiplying the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to such issue or
sale by a fraction, (A) the numerator of which shall be the number of
shares of Common Stock outstanding immediately after such issue or sale, and (B) the
denominator of which shall be the sum of (1) the number of shares of
Common Stock outstanding immediately prior to such issue or sale, and (2) the
number of shares of Common Stock which could be purchased at such Market Value
with the aggregate consideration received from the issuance or sale of the
additional shares of Common Stock, and (ii) the Exercise Price shall be
adjusted to equal (A) the Exercise Price immediately prior to such issue
or sale multiplied by the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such issue or sale divided by (B) the
number of shares for which this Warrant is exercisable immediately after such
adjustment.  For the purposes of this Section 3.5,
the date as of which the Market Value per share of Common Stock shall be
computed shall be the earlier of (i) the date immediately prior to the
date on which the Company shall enter into a firm contract for the issuance of
such additional shares of Common Stock or (ii) the date immediately prior
to the date of actual issuance of such additional shares of Common Stock.  In the event the Company enters into a
contract to acquire another Person in which transaction Common Stock is to be
issued in exchange for such Person’s securities based upon a floating exchange
ratio, then the Common Stock to be so issued shall be deemed to have been
issued on the date immediately before the date such contract is entered into
and the consideration to be received therefor shall be deemed to be the value
for such Common Stock derived from such ratio on such date.


 


SECTION 3.6  Other Events.  If any event occurs as to which the foregoing
provisions of this Article 3 are not strictly applicable or, if strictly
applicable, would not, in the good faith judgment of the Board, fairly and
adequately protect the purchase rights of the Warrants in accordance with the
essential intent and principles of such provisions, then the Board shall make
such adjustments in the application of such provisions, in accordance with such
essential intent and principles, as shall be reasonably necessary, in the good
faith opinion of the Board, to protect such purchase rights as aforesaid.


 


SECTION 3.7  Superseding Adjustment.  Upon the expiration of any rights, options,
warrants or conversion or exchange privileges which resulted in the adjustments
pursuant to this Article 3, if any thereof shall not have been exercised,
the number of Warrant


 


9

















 


Shares purchasable upon the exercise of each
Warrant shall be readjusted as if (i) the only shares of Common Stock
issuable upon exercise of such rights, options, warrants, conversion or exchange
privileges were the shares of Common Stock, if any, actually issued upon the
exercise of such rights, options, warrants or conversion or exchange privileges
and (ii) shares of Common Stock actually issued, if any, were issuable for
the consideration actually received by the Company upon such exercise plus the
aggregate consideration, if any, actually received by the Company for the
issuance, sale or grant of all such rights, options, warrants or conversion or
exchange privileges whether or not exercised and the Exercise Price shall be
readjusted inversely; provided, however, that no such
readjustment shall (except by reason of an intervening adjustment under Section 3.1
or, if applicable, Section 3.6) have the effect of decreasing the number
of Warrant Shares purchasable upon the exercise of each Warrant or increasing
the Exercise Price by an amount in excess of the amount of the adjustments to
the number of Warrant Shares purchasable and the Exercise Price initially made
in respect of the issuance, sale or grant of such rights, options, warrants or
conversion or exchange privileges.


 


SECTION 3.8  Minimum Adjustment.  The adjustments required by the preceding
Sections of this Article 3 shall be made whenever and as often as any
specified event requiring an adjustment shall occur, except that no adjustment
of the Exercise Price or the number of shares of Common Stock purchasable upon
exercise of the Warrants that would otherwise be required shall be made (except
in the case of a subdivision or combination of shares of Common Stock, as
provided for in Section 3.1) unless and until such adjustment either by
itself or with other adjustments not previously made increases or decreases by
at least 1% the Exercise Price or the number of shares of Common Stock purchasable
upon exercise of the Warrants immediately prior to the making of such
adjustment.  Any adjustment representing
a change of less than such minimum amount shall be carried forward and made as
soon as such adjustment, together with other adjustments required by this Article 3
and not previously made, would result in a minimum adjustment.  For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of business on
the date of its occurrence.  In computing
adjustments under this Article 3, fractional interests in Common Stock
shall be taken into account to the nearest one-hundredth of a share.


 


SECTION 3.9  Other Provisions Regarding Adjustments.  In the event that at any time, as a result of
an adjustment made pursuant to Section 3.l hereof, the holder of this
Warrant shall become entitled to receive any shares of capital stock of the
Company other than shares of Common Stock, thereafter the number of such other
shares of capital stock so receivable upon exercise of this Warrant shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common Stock
contained in Article 3 and the provisions contained elsewhere herein with
respect to Common Stock shall apply on like terms to any such other shares.


 


SECTION 3.10  Challenge to Good Faith Determination.  Whenever the Board shall be required to make
a determination in good faith of the Fair Value of any item under this Article 3
or any determination is provided for in the last paragraph of Section 3.3,
such determination may be challenged in good faith by the Holder, and any
dispute shall be resolved by an independent Investment Banking Firm selected by
the Company and reasonably acceptable to the Holder.  The expenses of any challenge made by the
Holder hereunder shall be borne by


 


10

















 


the Company only if challenge is successful,
otherwise such expenses shall be borne by the Holder.


 


SECTION 3.11  Notice of Adjustment.  Whenever the Exercise Price or the number of
shares of Common Stock and other property, if any, purchasable upon exercise of
Warrants is adjusted, as herein provided, the Company shall deliver to the
Holder a certificate of a firm of independent accountants (who may be the
regular accountants employed by the Company) or the Chief Financial Officer of
the Company setting forth, in reasonable detail, the event requiring the
adjustment and the method by which such adjustment was calculated (including a
description of the basis on which the Board determined the Fair Value of any
evidences of indebtedness, other securities or property or warrants or other
subscription or purchase rights), and specifying the Exercise Price and the number
of shares of Common Stock or other securities or property purchasable upon
exercise of Warrants after giving effect to such adjustment.


 


SECTION 3.12  Notice of Certain Transactions.  In the event that the Company shall resolve
or agree (i) to pay any dividend payable in securities of any class to the
holders of its Common Stock or to make any other distribution to the holders of
its Common Stock, (ii) to offer the holders of its Common Stock rights to
subscribe for or to purchase any securities convertible into shares of Common
Stock or shares of Common Stock or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Common Stock, capital reorganization, merger, consolidation or disposition of
all or substantially all of its assets, or (iv) to take any other action
requiring any adjustment of the number of Warrant Shares subject to this
Warrantor the Exercise Price, the Company shall within five (5) business
days send to the Holder, a notice of such proposed action or offer, such notice
to be mailed to the Holder, which shall specify the record date for the
purposes of such dividend, distribution or rights, or the date such issuance or
event is to take place and the date of participation therein by the holders of
Common Stock, if any such date is to be fixed, and shall briefly indicate the
effect of such action on the Common Stock and on the number and kind of any
other shares of stock and on other property, if any, and the number of shares of
Common Stock and other securities or property, if any, purchasable upon
exercise of each Warrant and the Exercise Price after giving effect to any
adjustment which will be required as a result of such action.


 


SECTION 3.13  Issuance of Additional Warrants.  Prior to the declaration, issuance or
consummation of any dividend, spin-off or other distribution or similar
transaction by the Company of the capital stock of any of its Subsidiaries, the
Company shall cause (i) additional warrants of such Subsidiary with,
subject to clause (iii) below, substantially similar terms as the
Warrants to be issued to the Holder or one or more of its nominees so that
after giving effect to such transaction the Warrants and such warrants of such
Subsidiary each represent the same percentage interest in the fully diluted
number of common shares of such entity as the Warrants represented in the
Company immediately prior to such transaction, (ii) any such Subsidiary to
enter into a securityholders and registration rights agreement with similar
terms, conditions, covenants and governance provisions as are provided for in
the Securityholders Agreement with the Holder and/or its nominees, as
appropriate and (iii) (A) the exercise price of the Warrants to be
reduced by an amount reasonably acceptable to the Holder to reflect the value
of the capital stock of the Subsidiary to be dividended, spun-off or otherwise
distributed and (B) the exercise price of the additional warrants of such
Subsidiary to be fixed in


 


11

















 


a manner reasonably acceptable to such Holder
to reflect the amount by which the exercise price of the Warrants was reduced
pursuant to clause (iii)(A) above, as adjusted to reflect any
differences in the fully-diluted number of the shares of common stock of the
Company and such Subsidiary


 


ARTICLE 4.


 


Transfer, Division and
Combination


 


SECTION 4.1  Transfer.  Subject to compliance with Section 4.5,
transfer of this Warrant and all rights hereunder, in whole or in part, shall
be registered on the books of the Company to be maintained for such purpose,
upon surrender of this Warrant at the principal office of the Company referred
to in Section 2.3(a) or the office or agency designated by the
Company pursuant to Article 4, together with a written assignment of this
Warrant substantially in the form of Exhibit B hereto duly executed by the
Holder or its agent or attorney and, if required, funds sufficient to pay any
transfer taxes payable upon the making of such transfer.  Upon such surrender and, if required, such
payment, the Company shall, subject to Section 4.5, execute and deliver a
new Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be cancelled.  A Warrant, if properly assigned in compliance
with Section 4.5, maybe exercised by a new Holder for the purchase of
shares of Common Stock without having a new Warrant issued.  If requested by the Company, a new Holder
shall acknowledge in writing, in form reasonably satisfactory to the Company,
such Holder’s continuing obligations under Section 4.5 and Article 8.


 


SECTION 4.2  Division and Combination.  Subject to Section 4.5, this Warrant may
be divided or combined with other Warrants upon presentation hereof at the
aforesaid office or agency of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. 
Subject to compliance with Section 4.1 and with Section 4.5,
as to any transfer which may be involved in such division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with such notice.


 


SECTION 4.3  Expenses.  The Company shall prepare, issue and deliver
at its own expense (other than transfer taxes) the new Warrant or Warrants
under this Article 4.


 


SECTION 4.4  Maintenance of Books.  The Company agrees to maintain, at its
aforesaid office or agency, books for the registration or transfer of the
Warrants.


 


SECTION 4.5  Restriction on Transfer.  (a)  This Warrant is subject to Section 3.3
of the Securityholders and Registration Rights Agreement and, to the extent
provided for pursuant to Section 3.1 of the Securityholders Agreement, to
the other terms and conditions of the Securityholders Agreement.  No transfer, sale, assignment, hypothecation
or other disposition of this Warrant maybe made except in accordance with the
provisions of Section 3.3 of the Securityholders Agreement.  To the extent provided for pursuant to Section 3.1
of the


 


12

















 


Securityholders Agreement and, in any case,
with respect to Section 3.3, the Holder, by acceptance of this Warrant,
agrees to be bound by the applicable provisions of the Securityholders
Agreement and all applicable benefits of the Securityholders Agreement shall
inure to such Holder.


 


(b)  (i) Except as otherwise provided in
this Section 4.5, each certificate for Warrant Shares initially issued
upon the exercise of this Warrant, and each certificate for Warrant Shares
issued to any transferee of any such certificate, shall be stamped or otherwise
imprinted with a legend in substantially the following form:


 


“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT OR
LAWS OR THE RULES AND REGULATIONS THEREUNDER.”


 


(ii) Except as otherwise provided in this Section 4.5,
each Warrant shall be stamped or otherwise imprinted with a legend in
substantially the following form:


 


“NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED IN
VIOLATION OF SUCH ACT OR LAWS, THE RULES AND REGULATIONS THEREUNDER OR THE
PROVISIONS OF THIS WARRANT.”


 


“THIS WARRANT IS SUBJECT TO SECTION 3.3 AND, IF
APPLICABLE, SECTION 3.1 OF A SECURITYHOLDERS AND REGISTRATION RIGHTS
AGREEMENT (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY). NO
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THIS
WARRANT MAY BE MADE EXCEPT IN COMPLIANCE WITH SECTION 3.3 OF SUCH
SECURITYHOLDERS AGREEMENT.  THE HOLDER OF
THIS WARRANT AGREES TO BE BOUND BY SECTION 3.3 OF SUCH SECURITYHOLDERS
AGREEMENT.”


 


(c)                                  Notwithstanding
the provisions of Section 4.5(b), (i) the Company shall deliver
Warrants or certificates for Warrant Shares without the legend set forth in any
such clause if the securities referred to in such clause shall have
been registered under the Securities Act or if such legend is otherwise not
required under the Securities Act, and if such legend has been set forth on any
previously delivered certificates, such legend shall be removed from any certificates
at the request of the Holder if the securities referred to in such
clause have been registered under the Securities Act, or if such legend is
not otherwise required under the Securities Act.


 


13

















 


ARTICLE 5.


 


Loss or Mutilation


 


Upon
receipt by the Company from any Holder of evidence reasonably satisfactory to
it of the ownership of and the loss, theft, destruction or mutilation of this
Warrant and indemnity reasonably satisfactory to it (it being understood that
the written agreement of the Holder shall be sufficient indemnity in the case
of the initial Holder of this Warrant) and in case of mutilation upon surrender
and cancellation hereof, the Company will execute and deliver in lieu hereof a
new Warrant of like tenor to such Holder (without expense to the Holder); provided,
in the case of mutilation, no indemnity shall be required if this Warrant in
identifiable form is surrendered to the Company for cancellation.


 


ARTICLE 6.


 


Office of the Company


 


As long
as any of the Warrants remain outstanding, the Company shall maintain an office
or agency (which may be the principal executive offices of the Company) where
the Warrants may be presented for exercise, registration of transfer, division
or combination as provided in this Warrant.


 


ARTICLE 7.


 


Limitation of Liability


 


No
provision hereof, in the absence of affirmative action by the Holder hereof to
purchase shares of Common Stock, and no enumeration herein of the rights or
privileges of the Holder hereof, shall give rise to any liability of such
Holder for the Exercise Price or purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.


 


ARTICLE 8.


 


Miscellaneous


 


SECTION 8.1  Nonwaiver and Expenses.  No course of dealing or any delay or failure
to exercise any right hereunder on the part of the Holder hereof shall operate
as a waiver of such right or otherwise prejudice such Holder’s rights, powers
or remedies.  If the Company fails to
make, when due, any payments provided for hereunder, or fails to comply with
any other provision of this Warrant, the Company shall pay to the Holder hereof
such amounts as shall be sufficient to cover any reasonable costs and expenses,
including reasonable attorneys’ fees, including those of appellate proceedings,
incurred by such Holder in collecting any amounts due pursuant hereto or in
otherwise enforcing any of its rights, powers or remedies hereunder.


 


14

















 


SECTION 8.2  Financial Information.  The Company will file on or before the
required date (including any permitted extensions) all required regular or
periodic reports (pursuant to the Exchange Act) with the SEC and the Company will
deliver to each Holder of a Warrant promptly upon their becoming available one
copy of each report, notice or proxy statement sent by the Company to its
stockholders generally.


 


SECTION 8.3  Entire Agreement; No Third-Party
Beneficiaries.  This Warrant and the
agreements referred to herein constitute the entire agreement, and supersede
all prior agreements and understandings, both written and oral, between the
Holder and the Company with respect to the subject matter of this Warrant.  This Warrant is not intended to confer upon
any Person other than the Holder and the Company any rights or remedies.


 


SECTION 8.4  Amendment.  This Warrant and all other Warrants may be
amended with the written consent of the holders of 50% of the outstanding
Warrants.


 


SECTION 8.5  Notices.  Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail to the addresses
set forth in the Securities Purchase Agreement with respect to the Company and,
if applicable, the Holder or to the Holder at its last known address appearing
on the books of the Company maintained for such purposes.


 


The
Company and any Holder by notice to the other may designate additional or
different addresses for subsequent notices or communications.


 


SECTION 8.6  Remedies.  The Company and the Holder hereof each
stipulates that the remedies at law of each party hereto in the event of any
default or threatened default by the other party in the performance or
compliance with any of the terms of this Warrant are not and will not be
adequate and that, to the fullest extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.


 


SECTION 8.7  Governing Law.  The laws of the State of New York shall
govern this Warrant, except to the extent that the General Corporation Law of
the State of Ohio is applicable.


 


SECTION 8.8  Successors.  Subject to Section 4.5 hereof, this
Warrant and the rights evidenced hereby shall inure to the benefit of and be
binding upon the successors and assigns of the Company and the Holder hereof,
and shall be enforceable by any such successors and assigns.


 


SECTION 8.9  Headings.  The headings of the Articles and Sections of
this Warrant have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.


 


SECTION 8.10  Severability.  The provisions of this Warrant are severable,
and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or provision,
or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of
this Warrant in any jurisdiction.


 


15

















 


SECTION 8.11  Government Approval Necessary.  In order to comply with the provisions of Section 3.4(a),
the Company shall use commercially reasonably efforts to obtain any
authorization, consent or approval of any governmental or regulatory authority,
including a Section 3.4(a) Required Regulatory Approval, necessary in
order for the provisions of Section 3.4(a) to be effected.  The Company agrees to comply with Section 2.8
of the Securityholders Agreement as if such provision was set forth herein.


 


16

















 


IN WITNESS WHEREOF, the Company has caused this
Warrant to be duly executed and its corporate seal to be impressed hereon and
attested by its Secretary or an Assistant Secretary.


 


 


	
   

  	
  DPL INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  John J. Gillen

  
	
   

  	
  Title:

  	
  Senior Vice
  President

  
	
   

  	
   

  	
  and Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Miggie E.
  Cramblit

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President,
  General Counsel

  	
   

  	
   

  	
   

  
	
   

  	
  and Corporate
  Secretary

  	
   

  	
   

  	
   

  
								



 


17

















 


EXHIBIT A


 


SUBSCRIPTION FORM


 


[To be executed only upon exercise of Warrant]


 


The undersigned registered owner of this Warrant
irrevocably exercises this Warrant for the purchase of [up to] __________
Common Shares of DPL Inc., and [herewith makes payment therefor] [requests
that the Company withhold the number of shares from the Common Shares
receivable by the undersigned in accordance with the Cashless Exercise option
specified in Section 2.3 of this Warrant](1), all at the price and on the
terms and conditions specified in this Warrant and requests that certificates
for the Common Shares hereby purchased (and any securities or other property
issuable upon such exercise) be issued in the name of and delivered to
_______________ whose address is ______________________________ and, if such
Common Shares shall not include all of the Common Shares issuable as provided
in this Warrant, that a new Warrant of like tenor and date for the balance of
the Common Shares issuable hereunder be delivered to the undersigned.


 


 


	
   

  	
   

  	
   

  
	
  (Name of
  Registered Owner)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature of
  Registered Owner)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Street Address)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (City)

  	
  (State)

  	
  (Zip Code)

  	
   

  	
   

  
					



 


NOTICE:                                    The signature on
this subscription must correspond with the name as written upon the face of the
within Warrant in every particular, without alteration or enlargement or any
change whatsoever.


 






1                                          To
be inserted if Cashless Exercise is requested.


 


A-1

















 


EXHIBIT B


 


ASSIGNMENT FORM


 


FOR VALUE RECEIVED the undersigned registered owner of
this Warrant hereby sells, assigns and transfers unto the Assignee named below
all of the rights of the undersigned under this Warrant, with respect to the
number of Common Shares set forth below:


 


	
   

  	
   

  	
  No. of

  
	
  Name and Address of Assignee

  	
   

  	
  Common Shares

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


and does hereby irrevocably constitute and appoint
________________________ attorney-in-fact to register such transfer on the
books of DPL Inc. maintained for the purpose, with full power of
substitution in the premises.


 


 


	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
  (Print)

  	
   

  
	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
   

  	
   

  
					



 


NOTICE:                                    The signature on
this subscription must correspond with the name as written upon the face of the
within Warrant in every particular, without alteration or enlargement or any
change whatsoever.


 


B-1