Document:

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

 

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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

 

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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

 

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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.

 

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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

 

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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

 

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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.

 

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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

 

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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-1Exhibit 4 (i)

 

EXECUTION COPY

 

 

SECURITYHOLDERS AND REGISTRATION RIGHTS
AGREEMENT

 

by and among

 

DPL INC.,

 

DPL CAPITAL TRUST I,

 

DAYTON VENTURES LLC

 

and

 

DAYTON VENTURES, INC.,

 

dated as of March 13, 2000

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  RECITALS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS

  	
  2

  
	
  SECTION 1.1

  	
  Certain
  Defined Terms

  	
  2

  
	
  SECTION 1.2

  	
  Other
  Definitional Provisions

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CORPORATE GOVERNANCE OF THE COMPANY

  	
  8

  
	
  SECTION 2.1

  	
  Board
  Representation

  	
  8

  
	
  SECTION 2.2

  	
  Available
  Financial Information

  	
  8

  
	
  SECTION 2.3

  	
  Access

  	
  9

  
	
  SECTION 2.4

  	
  Consents
  Rights of the Equity Purchaser

  	
  10

  
	
  SECTION 2.5

  	
  Loss of
  Board and Consent Rights

  	
  11

  
	
  SECTION 2.6

  	
  Actions
  Affecting Certain Distributions

  	
  11

  
	
  SECTION 2.7

  	
  Issuances of
  Additional Securities

  	
  11

  
	
  SECTION 2.8

  	
  Pre-Approval
  of Certain Transactions

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TRANSFERS

  	
  12

  
	
  SECTION 3.1

  	
  Transferees

  	
  12

  
	
  SECTION 3.2

  	
  Transfer
  Restrictions

  	
  13

  
	
  SECTION 3.3

  	
  Transfer
  Restrictions

  	
  13

  
	
  SECTION 3.4

  	
  Redemption
  of the Voting Preferred Shares

  	
  13

  
	
  SECTION 3.5

  	
  Purchase of
  the Trust Preferred Securities

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  REGISTRATION RIGHTS WITH RESPECT TO THE
  WARRANTS AND THE WARRANT SHARES

  	
  14

  
	
  SECTION 4.1

  	
  Shelf
  Registration Statement

  	
  14

  
	
  SECTION 4.2

  	
  Registration
  on Request

  	
  16

  
	
  SECTION 4.3

  	
  Incidental
  Registrations

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  REGISTRATION RIGHTS WITH RESPECT TO THE
  TRUST PREFERRED SECURITIES

  	
  21

  
	
  SECTION 5.1

  	
  Registration
  on Request

  	
  21

  
	
  SECTION 5.2

  	
  Liquidation
  of the Trust

  	
  25

  

 

i

 

	
  ARTICLE VI

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  REGISTRATION PROCEDURES

  	
  25

  
	
  SECTION 6.1

  	
  Registration
  Procedures

  	
  25

  
	
  SECTION 6.2

  	
  Information
  Supplied

  	
  28

  
	
  SECTION 6.3

  	
  Restrictions
  on Disposition

  	
  28

  
	
  SECTION 6.4

  	
  Indemnification

  	
  28

  
	
  SECTION 6.5

  	
  Required
  Reports

  	
  31

  
	
  SECTION 6.6

  	
  Selection of
  Counsel

  	
  31

  
	
  SECTION 6.7

  	
  Holdback
  Agreement

  	
  31

  
	
  SECTION 6.8

  	
  No
  Inconsistent Agreement

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  STANDSTILL

  	
  32

  
	
  SECTION 7.1

  	
  Acquisition
  of Additional Voting Securities

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
  34

  
	
  SECTION 8.1

  	
  Indemnification;
  Reimbursement of Expenses

  	
  34

  
	
  SECTION 8.2

  	
  Termination

  	
  35

  
	
  SECTION 8.3

  	
  Amendments
  and Waivers

  	
  35

  
	
  SECTION 8.4

  	
  Successors,
  Assigns, Transferees and Third Party Beneficiaries

  	
  35

  
	
  SECTION 8.5

  	
  Notices

  	
  36

  
	
  SECTION 8.6

  	
  Further
  Assurances

  	
  36

  
	
  SECTION 8.7

  	
  Entire
  Agreement

  	
  36

  
	
  SECTION 8.8

  	
  Delays or
  Omissions

  	
  36

  
	
  SECTION 8.9

  	
  Governing
  Law; Jurisdiction; Waiver of Jury Trial

  	
  37

  
	
  SECTION 8.10

  	
  Severability

  	
  37

  
	
  SECTION 8.11

  	
  Effective Date

  	
  37

  
	
  SECTION 8.12

  	
  Enforcement

  	
  37

  
	
  SECTION 8.13

  	
  Titles and Subtitles

  	
  37

  
	
  SECTION 8.14

  	
  No Recourse

  	
  37

  
	
  SECTION 8.15

  	
  Counterparts; Facsimile Signatures

  	
  38

  

 

ii

 

SECURITYHOLDERS
AND REGISTRATION RIGHTS AGREEMENT

 

THIS SECURITYHOLDERS AND REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is entered into as of March 13, 2000, among DPL Inc., an Ohio corporation
(the “Company”), DPL Capital Trust I, a Delaware business trust (the “Trust),
Dayton Ventures LLC, a Delaware limited liability company, together with such
of its Affiliates (as defined in Section 10.1) as it shall designate as
provided for herein (the “Equity Purchaser”) and Dayton Ventures, Inc.,
a Cayman Islands corporation, together with such of its Affiliates as it shall
designate as provided for herein (the “Trust Preferred Purchaser” and,
together with the Equity Purchaser, the “Purchasers”).

 

RECITALS

 

WHEREAS, the Company, the Trust, the Equity Purchaser and the Trust
Preferred Purchaser have entered into a Securities Purchase Agreement, dated as
of February 1, 2000 (the “Securities Purchase Agreement”), pursuant
to which (i) the Company has agreed to sell to the Equity Purchaser and
the Equity Purchaser has agreed to purchase from the Company (A) up to
6,800,000 of its Series B Preferred Shares, no par value, liquidation
preference of $0.01 per share (the “Voting Preferred Shares”), having
the rights, preferences, privileges and restrictions set forth  in the Certificate of Amendment in the form
attached as Exhibit A to the Securities Purchase Agreement (the “Certificate
of Amendment”) and (B) 31,600,000 warrants to purchase 31,600,000 (the
“Warrant Shares”) of its Common Shares, at an exercise price of $21 per
share, as provided in the Securities Purchase Agreement and in the form of
warrant attached as Exhibit B to the Securities Purchase Agreement (the “Warrants”)
and (ii) the Company and the Trust have agreed to sell to the Trust
Preferred Purchaser, and the Trust Preferred Purchaser has agreed to purchase
from the Trust, an aggregate of $550 million liquidation preference of 8.5%
Capital Securities (liquidation amount $25 per capital security) (the “Trust
Preferred Securities”), representing undivided beneficial interests in the
assets of the Trust, guaranteed by the Company as to the payment of
distributions, and as to payments on liquidation or redemption, to the extent
set forth in a guarantee agreement to be substantially in the form attached as Exhibit C
to the Securities Purchase Agreement to be entered into between the Company and
The Bank of New York (Delaware), as trustee. The proceeds of the sale of the
Trust Preferred Securities and an aggregate of $17,010,325 liquidation amount
of its Common Securities (liquidation amount $25 per common security) by the
Trust are to be invested in Junior Subordinated Debentures, (the “Subordinated
Debentures”) of the Company to be substantially in the form attached as Exhibit D
to the Securities Purchase Agreement to be issued pursuant to an Indenture (the
“Indenture”) to be substantially in the form attached as Exhibit E
to the Securities Purchase Agreement to be  entered into between the Company and The Bank
of New York, as trustee; and

 

WHEREAS, the parties hereto desire to enter into certain arrangements
relating to the Company, the Trust, the Purchasers, the Voting Preferred
Shares, the Warrants, the Warrant Shares and the Trust Preferred Securities to
be effective as of the Closing (as defined below).

 

NOW, THEREFORE, in consideration of the foregoing recitals and of the
mutual promises hereinafter set forth, the parties hereto agree as follows:

 

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.1  Certain Defined Terms.  As used herein, the following terms shall
have the following meanings:

 

“Acquisition”
has the meaning assigned to such term in Section 7.1(a).

 

“Acquisition
Restrictions” has the meaning assigned to such term in Section 7.1(a).

 

“Acquisition
Effect” has the meaning ascribed to such term in Section 4.2(g).

 

“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.

 

“Applicable
Boards” has the meaning assigned to such term in Section 2.1(a).

 

“Articles” means the Amended Articles of Incorporation of the Company as in effect on the date hereof and as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof and the
terms of this Agreement.

 

“beneficial
owners” or “beneficially own” has the meaning given such term in Rule 13d-3 under the Exchange Act and a Person’s beneficial ownership of either
Common Stock or Preferred Stock or other voting securities of the Company or Trust Preferred Securities
shall be calculated in accordance with the provisions of such Rule; provided, however,
that for purposes of determining beneficial ownership, a Person shall be deemed
to be the beneficial owner of any security which may be acquired by
such Person whether within sixty (60) days or thereafter, upon the conversion, exchange or exercise of any warrants, options, rights or other
securities, including the Warrants.

 

“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.

 

“Capital
Stock” means, with respect to any Person at any time, any and all shares,
interests, participations or other equivalents (however designated, whether voting or non-voting) of capital stock, partnership interests (whether general or limited) or equivalent
ownership interests in or issued by such Person and, with respect to the Company, includes any and all shares of Common
Stock and Preferred Stock and, with respect to the Trust, includes the Trust
Preferred Securities.

 

“Certificate of Amendment” has the meaning assigned to such term in
the Recitals.

 

2

 

“Claims” has the meaning assigned to such term in Section 6.4(a).

 

“Closing” has the meaning assigned to such term in the
Securities Purchase Agreement.

 

“Closing Date” has the meaning assigned to such term in
the Securities Purchase Agreement.

 

“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.

 

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

 

“Company Offering” has the meaning assigned to such term in Section 4.2(h).

 

“Company Registrable Securities” means any Warrants or Common Stock (including the Warrant Shares) held by any Holder. As to any particular Company Registrable
Securities, once issued, such Company Registrable Securities shall cease to be Company Registrable Securities when (i) a registration statement with respect to the sale by the Holder of such securities shall have become
effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (ii) such securities
shall have been distributed to the public pursuant to Rule 144 or (iii) such securities shall have ceased to be outstanding. For purposes of this Agreement, any required calculation of the
amount of, or percentage of, Company Registrable Securities shall be based on
the number of shares of Common Stock which are Company Registrable Securities,
including shares issuable upon the conversion, exchange or exercise of any
security convertible, exchangeable or exercisable into Common Stock (including
the Warrants).

 

“Consent Rights” has the meaning assigned to such term in Section 2.5(b).

 

“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.

 

“Damages” has the meaning assigned to such term in Section 8.1.

 

“Demand Party” has the meaning assigned to such term in Section 4.2(a).

 

“Director” means any member of any of the Applicable Boards.

 

“DP&L” means The Dayton Power and Light Company, an Ohio
corporation.

 

3

 

“DP&L Board” means the Board of Directors of DP&L.

 

“Equity Securities” means (i) with
respect to the Company, any and all shares of Capital Stock of the Company,
securities of the Company convertible into, or exchangeable or exercisable for, such shares, and options, warrants
or other rights to acquire such shares (including the Warrants), and (ii) with
respect to the Trust, any and all shares of Capital Stock of the Trust,
securities of the Trust convertible into, or exchangeable or exercisable for, such shares, and
options, warrants or other rights to acquire such shares.

 

“Excess Warrants” has the meaning assigned to such term in Section 3.3.

 

“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

 

“Fully-Diluted Basis” with respect to Voting Securities means the number of shares of Voting
Securities which are issued and outstanding or owned or held, as applicable, at
the date of determination plus the number of shares of Voting Securities
issuable pursuant to any securities (other than Voting Securities), warrants,
rights or options then outstanding, convertible into or exchangeable or
exercisable for (whether or not subject to contingencies or passage of time or
otherwise), Voting Securities (including the Warrants).

 

“GAAP” means generally accepted accounting principles, as in effect in
the United States of America from time to time.

 

“Group” has the meaning assigned to such term in Section 13(d)(3) of the Exchange Act.

 

“Holder” means the Equity Purchaser, the Trust
Preferred Purchaser and any other holder of Registrable Securities (including Affiliates of the Equity Purchaser or the Trust Preferred
Purchaser) as well as any direct or indirect Transferees of the Equity Purchaser, the Trust Preferred Purchaser or any of
their respective Affiliates entitled to the rights, and bound by the
obligations, under this Agreement in accordance with Section 3.1 (b).

 

“Incur” or “Incurrence” means
to incur, create, assume, guarantee or otherwise become directly or indirectly
liable with respect to.

 

“Indebtedness” has the meaning assigned to such term in the
Indenture.

 

“Indebtedness Rating” has the meaning assigned to such term in Section 2.5(a)(vi).

 

“Indemnified Parties” has the meaning assigned to such term in Section 6.4(a).

 

“KKR Observer” has the meaning assigned to such term in Section 2.1
(a).

 

4

 

“KKR Representative” means any Director designated by the senior
member of the Equity Purchaser pursuant to Section 2.1 of this Agreement.

 

“Law” has the meaning assigned to such term in the Securities
Purchase Agreement.

 

“NASD” means the National Association of Securities Dealers, Inc.

 

“NYSE” means The New York Stock Exchange, Inc.

 

“Ownership Percentage” means, at any
time, the ratio, expressed as a percentage, (i) of the total shares of
Voting Securities of the Company beneficially owned by the Equity Purchaser
and its Affiliates to (ii) the total number of outstanding shares of Voting
Securities of the Company on a
Fully-Diluted Basis, in each case assuming exercise of the Warrants but
excluding the Voting Preferred Shares.

 

“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.

 

“Preferred Stock” means, collectively,
the Series A Preferred Shares (as defined in the Securities Purchase
Agreement) and the Voting Preferred Shares.

 

“PUHCA” means the Public Utility Holding Company Act of 1935, as amended, or any successor
thereto.

 

“Purchaser Indemnitee” has the meaning
assigned to such term in Section 8.1.

 

“Purchasers” has the meaning assigned to such term in the
introductory paragraph.

 

“Registering Party” has the meaning assigned to such term in Section 6.1.

 

“Registrable Securities” means the
Company Registrable Securities and the Trust Registrable Securities, as
appropriate.

 

“Registration Expenses” means
any and all expenses incident to performance of or compliance with Articles IV,
V and VI of this Agreement, including (i) all SEC and NYSE or other
securities exchange or NASD registration and filing fees, (ii) all fees
and expenses of complying with securities or blue sky laws (including the
reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities), (iii) all
printing, messenger and delivery expenses, (iv) all fees and expenses
incurred in connection with the listing of the Registrable Securities on the
NYSE or any other securities exchange or the NASD pursuant to this Agreement
and all rating agency fees, (v) the fees and disbursements of counsel for
the Company and/or the Trust and of their respective independent public
accountants, including the expenses of any special audits and/or “cold comfort”
letters required by or incident to such

 

5

 

performance
and compliance, (vi) the reasonable fees and disbursements of counsel
selected pursuant to Section 6.6, (vii) any reasonable fees and
disbursements of underwriters and their counsel customarily paid by the issuers or sellers of securities, and the reasonable fees and expenses of special experts retained in connection with the requested registration, but excluding
underwriting discounts and commissions and transfer taxes, if any, and (viii) half
of all expenses incurred in connection with any road shows (including the
reasonable out-of-pocket expenses of the Holder of the applicable Registrable
Securities).

 

“Regulations”  means the Regulations of the Company, as in effect on the date hereof and as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the terms
thereof, the terms of the Articles and the terms of this Agreement.

 

“Rights Agreement” means the Rights
Agreement, dated as of December 3, 1991, between the Company and the First
National Bank of Boston, as Rights Agent, as amended by the Rights Amendment (as defined in the Securities Purchase Agreement), and any successor agreement covering
substantially the same subject matter as the Rights Agreement.

 

“Rule 144” means Rule 144 (or any successor provision)
under the Securities Act.

 

“SEC” means the U.S. Securities and Exchange
Commission or any other federal agency then administering the Securities Act or the
Exchange Act and other federal securities laws.

 

“Securities Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder.

 

“Shelf Registration” has the meaning assigned to such term in Section 4.1.

 

“Standstill Period” means the period commencing on the Closing Date and continuing until the fifth
anniversary of such date.

 

“Subordinated Debentures” has the meaning given to such term in
the Recitals.

 

“Subsidiary” means (i) any
corporation of which a majority of the securities entitled to vote generally in
the election of directors thereof, at the time as of which any determination is
being made, are owned by another entity, either directly or indirectly, and (ii) any
joint venture, general or limited partnership, limited liability company or
other legal entity in which an entity is the record or beneficial owner,
directly or indirectly, of a majority of the voting interests or the general
partner and, with respect to the Company, includes the Trust. .

 

“Third Party” has the meaning assigned to such term in Section 7.1
(b).

 

“Transaction Agreements” has the
meaning assigned to such term in the Securities Purchase Agreement.

 

“Transaction Delay Notice” has the meaning assigned to such term
in Section 4.2(h).

 

6

 

“Transfer” means, “directly or indirectly, to sell, transfer, assign, pledge, encumber,
hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter
into any contract, option or other arrangement or understanding with respect to
the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar
disposition of, any shares of Equity Securities beneficially owned by a Person or any interest in any shares of
Equity Securities beneficially owned by a Person.

 

“Transferee” means any Person to whom
the Equity Purchaser and/or the Trust Preferred Purchaser or any of their respective Affiliates or any Transferee thereof
transfers Equity Securities of the Company and/or the Trust, as appropriate.

 

“Trust Preferred Securities” has the meaning assigned to such
term in the Recitals.

 

“Trust Registrable Securities” means any Trust Preferred Security and any
securities issued in respect thereof, or in substitution therefor, in connection with any stock split, divided, spin- off or combination, or any reclassification, recapitalization, merger, consolidation, exchange or other  similar reorganization or business combination, held by any Holder including, if the Trust is for any reason liquidated or otherwise dissolved,
whether voluntarily or involuntarily, the Subordinated Debentures). As to any particular Trust Registrable Securities, once issued,
such Trust Registrable Securities shall cease to be Trust Registrable Securities when (i) a registration statement with respect to the sale by the Holder of such securities shall have become effective under the Securities Act
and such securities shall have been disposed of in accordance with such registration statement, (ii) such securities shall have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, or (iii) such securities shall have
ceased to be outstanding.

 

“Voting Preferred Shares” has the meaning assigned to such term
in the Recitals.

 

“Voting Securities” means, at any time, shares of any class of Equity Securities which are then entitled to
vote generally in the election of Directors.

 

“Waiting Period” has the meaning assigned to such term in Section 3.5.

 

“Warrants” has the meaning assigned to such term in the
Recitals.

 

“Warrant Shares” has the meaning assigned to such term in the
Recitals.

 

SECTION 1.2 Other Definitional Provisions. (a) The
words “hereof’, “herein” and “hereunder”  and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article and
Section references are to this Agreement unless otherwise specified.

 

(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

 

7

 

ARTICLE II

 

CORPORATE GOVERNANCE OF THE COMPANY

 

SECTION 2.1 Board Representation. (a) Subject to Section 2.5,
the senior member of  the Equity Purchaser shall be entitled to designate one person for
election to, and the shareholder of the Trust Preferred Purchaser shall be
entitled to designate one person to attend as a non-voting observer at all
meetings of (and to receive all materials and information that voting Directors
receive) (the “KKR Observer”), (i) the Company Board, (ii) the
DP&L Board and (iii) the board of directors of any separate entity or entities formed to hold DP&L’s electricity
generation, transmission and/or distribution businesses or any material portion thereof (other than a wholly owned Subsidiary of the
Company or DP&L or any of their respective wholly owned Subsidiaries)
(collectively, the “Applicable Boards”), and the Company agrees, to the
extent permitted by Law to take such action as may be required under applicable Law (A) so that, effective as of the Closing, the Company Board and the DP&L Board
shall each consist of eleven members and shall include the KKR Representative, (B) to
include in any slate of nominees recommended by the Applicable Boards for
election by the shareholders the KKR Representative, (C) to take such
action as may be required under applicable Law to cause the initial KKR
Representative to be designated to be a member of the class of the Directors on
each Applicable Board which is a classified board having the longest remaining term (which in the case of the Company Board shall be the term
extending until the 2003 annual meeting of shareholders), (D) to use its
reasonable best efforts to cause the election of the KKR Representative to the
Applicable Boards, including
nominating such individual, or causing its Subsidiaries to nominate such
individual, as appropriate, to be elected as a Director of the Applicable
Boards and (E) not to take any action that would cause the number of
Directors constituting any Applicable Board to be less than eleven at anyone
time; provided that any KKR Representative or KKR Observer (other than those
initially designated hereunder) must be reasonably satisfactory to the Company at the time of their
designation hereunder; and, provided, further, that any Person
who shall have served as the KKR Observer shall be automatically deemed
satisfactory to the Company for designation as the KKR Representative. The KKR
Observer may be changed at any time by the shareholder of the Trust Preferred Purchaser. The initial KKR Representative shall
be one of George Roberts or Scott M. Stuart, and the initial KKR Observer shall
be the other.

 

(b) In the event that a vacancy is created on any Applicable Board at any time
by the death, disability, retirement, resignation or removal (with or without
cause) of any KKR Representative, the Company shall use its reasonable best
efforts to cause the remaining Directors on such Applicable Board to fill the
vacancy created thereby to be filled by a new designee of the senior member of
the Equity Purchaser as soon as possible, who is designated in the manner
specified in this Section 2.1, and the Company hereby agrees to take, or
cause to be taken, at any time and from time to time, all actions necessary to
accomplish the same. Neither the Company, DP&L nor any of the Company’s
other Subsidiaries or Affiliates shall take any action to cause the removal of
any KKR Representative without cause.

 

SECTION 2.2 Available Financial Information. The Company
will deliver, or will cause  to be delivered, to the Equity Purchaser, the senior
member of the Equity Purchaser, the Trust Preferred Purchaser and the
shareholder of the Trust Preferred Purchaser:

 

8

 

(i) as
soon as practicable after the end of each fiscal year of the Company, and in
any event within ninety (90) days thereafter, an unaudited unconsolidated
balance sheet of the Company as of the end of such fiscal year, and unaudited
unconsolidated statements of income and cash flows of the Company for such
year, prepared in accordance with GAAP and setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail and certified by the principal financial or accounting
officer of the Company, except that such financial statements need not contain
the notes required by GAAP; and

 

(ii) as
soon as practicable after the end of the first, second and third quarterly
accounting periods in each fiscal year of the Company, and in any event within forty-five
(45) days thereafter, an unaudited unconsolidated balance sheet of the Company as
of the end of each such quarterly period, and unaudited unconsolidated
statements of income and cash flows of the Company for such period and for the current fiscal year to date,
prepared in accordance with GAAP and setting forth in comparative form
the figures for the corresponding periods of the previous fiscal year, subject to changes resulting from
normal year-end audit adjustments, all in reasonable detail and certified by the principal financial or accounting
officer of the Company, except that such financial statements need not contain
the notes required by GAAP.

 

If the Company ceases to be a public
reporting company under the Exchange Act or shall fail to comply with its reporting obligations under Exchange Act, the Company will deliver, or will cause to be delivered, to the Equity Purchaser, the senior member of the Equity
Purchaser, the Trust Preferred Purchaser and the shareholder of the Trust
Preferred Purchaser:

 

(i) as soon as practicable after the end of
each fiscal year of the Company, and in any event within ninety (90) days
thereafter, a consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal
year, and consolidated statements of income and cash flows of the Company and its Subsidiaries
for such year, prepared in accordance with GAAP and setting forth in each case in comparative form the figures
for the previous fiscal year, all in
reasonable detail and followed promptly thereafter (to the extent not
available) by such financial statements accompanied by the report of independent
public accountants of recognized national standing selected by the Company; and

 

(ii) as
soon as practicable after the end of the first, second and third quarterly
accounting periods in each fiscal year of the Company, and in any event within forty-five (45) days thereafter, a consolidated
balance sheet of the Company and its Subsidiaries as of the end of each such
quarterly period, and consolidated statements of income and cash flows of the
Company and its Subsidiaries for such period and for the current fiscal year to
date, prepared in accordance with GAAP and setting forth in comparative form
the figures for the corresponding periods of the previous fiscal year, subject to changes resulting from normal year-end audit adjustments, all in reasonable detail and certified by the
principal financial or accounting officer of the Company, except that such
financial statements need not contain the notes required by GAAP.

 

9

 

SECTION 2.3 Access. The Company shall, and shall cause its
Subsidiaries, officers, directors, employees, auditors and other agents and
representatives to (i) afford the Purchasers, the senior member of the Equity Purchaser and the
shareholder of the Trust Preferred Purchaser, during normal business hours upon
reasonable advance notice reasonable access at all reasonable times to its
officers, employees, auditors, legal counsel, properties, offices, plants and
other facilities and to all books and records, (ii) furnish the Purchasers, the senior member of the
Equity Purchaser and the shareholder of the Trust Preferred Purchaser with all
financial, operating and other data and information as either of the Purchasers, the senior member of
the Equity Purchaser or the shareholder of the Trust Preferred Purchaser may
from time to time reasonably request and (iii) afford the Purchasers, the
senior member of the Equity Purchaser and the shareholder of the Trust
Preferred Purchaser the opportunity to discuss the Company’s affairs, finances
and accounts with the Company’s officers on a periodic basis; provided that the Purchasers, the senior member of the Equity
Purchaser and the shareholder of the Trust Preferred Purchaser shall not avail
themselves of this right to the extent that the KKR Representative, with
respect to the Equity Purchaser and the senior member of the Equity Purchaser,
and the KKR Observer, with respect to the Trust Preferred Purchaser and the shareholder of the Trust Preferred Purchaser, are able to obtain comparable access, information and
opportunities through their rights as a Director and observer, respectively, of
the Company Board and the DP&L Board. Notwithstanding the foregoing,
nothing in this section shall give the Purchasers or their Affiliates any
approval rights over the day-to-day activities of the Company.

 

SECTION 2.4 Consents Rights of the Equity Purchaser. (a) Subject
to Section 2.5, in addition to any vote or consent of the Company Board
and/or shareholders of the Company required by Law pr the Articles, the
approval of the Equity Purchaser, not to be unreasonably withheld, shall be
necessary for authorizing, effecting or validating the following actions by the
Company:

 

(i) any amendment, alteration or change
to the rights, preferences, privileges or powers of the Voting Preferred
Shares;

 

(ii) the issuance of any other preferred
stock of the Company (other than shares previously reserved in connection with
the Rights Agreement) (A) of the same class as the Voting Preferred Shares
or (B) ranking senior to the Voting Preferred Shares;

 

(iii) (A) any amendment, repeal or
alteration of the Company’s Articles in a manner that adversely affects the holders of the Voting Preferred Shares; provided, however,
that no increase in the number of authorized shares of Common Stock or
Preferred Stock shall in itself be deemed to adversely affect such holders or (B) any
amendment, repeal or alteration of the Company’s Regulations in a manner that
adversely affects the holders of the Voting Preferred Shares, except for any
such action taken solely by the shareholders of the Company;

 

(iv) any action by the Company that
would result in the Equity Purchaser, together with any of its Affiliates, or
any Transferee holding Voting Preferred Shares, holding in excess of 4.9% of
the Voting Securities or becoming subject to regulation as a “holding 

 

10

 

company” or a “subsidiary company” or an “affiliate”
of a “holding company” or a “public utility company” (as such terms are defined in PUHCA) (other than as a result of the exercise of the Warrants
whether before or after any such action by the Company);

 

(v) any
merger or consolidation with or into any other Person, or any acquisition of
another Person, or any sale or transfer of all or a material portion of the assets of, or
any other business combination transaction, in each case, involving
the Company, DP&L or any other “significant subsidiary” (as defined in SEC
Regulation S-X) of the Company whether in a single transaction or series of
related transactions (a “Business Combination Transaction”) or any
issuance of any Equity Securities of any of the Company’s Subsidiaries to any
Third Party (other than the Company or any wholly owned Subsidiary of the
Company) which would result (as determined pursuant to Section 2.4(b) below)
in (A) any downgrade of the rating of
any then existing Indebtedness of the Company or any its Subsidiaries or
the rating assigned to the Trust Preferred Securities below an investment grade
rating of Baa3 by Moody’s Investors Service or of BBB- by Standard &
Poor’s Rating Services (collectively, the “Indebtedness Rating”), or (B) any
new Indebtedness of the Company and/or its Subsidiaries to be Incurred in connection with any such transaction being
assigned an initial rating below the Indebtedness Rating;

 

(vi) any
spin-off or split-off, dividend or other distribution or any sale or other
disposition of all or a material portion of any of the Company’s electricity
generation, transmission or distribution businesses which would result (as
determined pursuant to Section 2.4(b) below) in (A) any
downgrade of the rating of any then existing Indebtedness of the Company or any
its Subsidiaries or the rating assigned to the Trust Preferred Securities,
below the Indebtedness Rating or (B) any new Indebtedness of the Company
and/or its Subsidiaries to be Incurred in connection with any such transaction being assigned an
initial rating below the Indebtedness Rating;

 

(vii) any Incurrence of Indebtedness which (A) would
result (as determined pursuant to Section 2.4(b) below) in any
downgrade of the rating of any then existing Indebtedness of the Company or any
its Subsidiaries or the rating assigned to the Trust Preferred Securities, below the Indebtedness Rating or (B) would
be assigned an initial rating below the Indebtedness Rating; or

 

(viii) any
arrangement or contract to do any of the foregoing.

 

(b)  
In connection with the exercise of the Equity Purchaser’s Consent Rights
set forth in clauses (v), (vi) or (vii) of Section 2.4(a), the Company agrees that, prior to
entering into or taking any of the transactions or actions specified in such
clauses, it will seek and receive a confirmation of the rating of any of its then existing Indebtedness and the Trust Preferred Securities, and/or, as applicable, an initial rating of any new Indebtedness to be Incurred from each of Moody’s
Investors Service and Standard & Poor’s Rating Service or any
successors thereof.

 

SECTION 2.5 Loss of Board and Consent
Rights. The board rights set forth in Section 2.1 and the consent
rights set forth in Section 2.4(a) (the “Consent Rights”)
shall continue

 

11

 

only for so long as the Equity Purchaser and its Affiliates continue to
beneficially own, in the aggregate, at least 12,640,000 shares of Common Stock
(including the shares of Common Stock issuable upon exercise of the Warrants); provided, however, that the Equity
Purchaser will be able to exercise the Consent Rights set forth in clause (iv) of
Section 2.4(a) for so long as the Equity Purchaser or any of its Affiliates beneficially own at least two percent of the total outstanding
shares of Capital Stock of the Company.

 

SECTION 2.6 Actions Affecting Certain Distributions. The
Company will not, without the prior written consent of the Equity Purchaser,
take any action which would reasonably be expected to directly restrict or
limit the payment of distributions on the Subordinated Debentures or the Trust
Preferred Securities.

 

SECTION 2.7 Issuances of Additional Securities. In connection with 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) to the extent that the Voting
Preferred Shares and the Warrants remain outstanding, additional shares of
voting preferred stock of such Subsidiary and additional warrants of such
Subsidiary with substantially similar terms as the Voting Preferred Shares and
the Warrants, respectively, to be issued to the Equity Purchaser or one or more of its nominees or its Transferees so that after giving effect to such transaction the Equity Purchaser and its nominees and
Transferees have the same interest in voting preferred stock (and voting securities) and warrants in each of the Company and such Subsidiary as they had in the Voting Preferred Shares and the Warrants immediately prior to such transaction
and (ii) any such Subsidiary to enter into a securityholders and
registration rights agreement with substantially similar terms, conditions, covenants and governance provisions as are provided for in this Agreement with the Equity
Purchaser and/or its nominees or any Transferees, as appropriate.

 

SECTION 2.8 Pre-Approval of Certain Transactions.
In the event that the Company takes or plans to take any action that would or
would reasonably be expected to cause it to lose its exemption from regulation as a “holding company” (as
defined in PUHCA) under PUHCA, including any merger or other business combination with a “public-utility company” or a “holding
company” thereof (as such terms are defined in PUHCA) if such combination results in the creation of
a “holding company” registered under PUHCA Section 5, the Company and, if
applicable, its successor shall use commercially reasonably efforts to
obtain all prior approvals or exemptions, if any, from the SEC under PUHCA necessary for the consummation of all
transactions contemplated by this Agreement and the other Transaction Agreements, including approval or exemption of (i) the
issuance of securities by the Company or its successor in connection with the
exercise of the Warrants, (ii) the capital structure of the Company or its successor both before and after the exercise of the Warrants, including approval or exemption of the continued existence of any minority interests in the Company or its successor and (iii) the
repurchase or redemption of the Voting Preferred Shares, the Subordinated
Debentures and the Trust Preferred Securities.

 

12

 

ARTICLE III

 

TRANSFERS

 

SECTION 3.1 Transferees. (a) Subject
to Section 3.1(b), no Transferee of the Equity Purchaser or the Trust
Preferred Purchaser shall be obligated by, or entitled to rights under, this
Agreement.

 

(b) No Transferee shall have any rights
or obligations under this Agreement, except that:

 

(i) in the sole discretion of the Equity
Purchaser, the Equity Purchaser may assign all or a portion of the rights and obligations of the Equity Purchaser under Sections 2.7 and 2.8 and Articles IV, VI and VIII (and such rights shall
be further transferable to any further Transferee subject to this Section 3.1(b)(i));

 

(ii) in the sole discretion of the Trust
Preferred Purchaser, the Trust Preferred Purchaser may assign all or a portion
of the rights and obligations of the Trust Preferred Purchaser under Articles V, VI and
VIII (and such rights shall be further transferable to any further Transferee
subject to this Section 3. 1 (b)(ii)); and

 

(iii) any Transferee of Voting Preferred
Shares and Warrants shall be obligated to comply with the provisions of
Sections 3.2 and 3.3.

 

(c) Prior to the consummation of a Transfer from the Equity
Purchaser or the Trust Preferred Purchaser, to the extent rights and
obligations are to be assigned, and as a condition thereto, the applicable
Transferee shall (i) agree in writing to be bound by the terms and
conditions of this Agreement to the extent described in Section 3.1 (b) and
(ii) provide the Company and the other parties to this Agreement at such
time complete information for notices under this Agreement.

 

SECTION 3.2 Transfer Restrictions of the Voting Preferred
Shares. Notwithstanding Section 3.1, the Equity Purchaser hereby
agrees, and any Transferee of Voting Preferred Shares agrees, that neither it
nor any of its Affiliates shall transfer any of their respective Voting
Preferred Shares without transferring to the same Transferee an equal number of
Warrants.

 

SECTION 3.3 Transfer Restrictions of the Warrants.  Notwithstanding Section 3.1, the Equity
Purchaser hereby agrees, and any Transferee of Voting Preferred Shares agrees,
that neither it nor any of its Affiliates shall transfer any of their
respective Warrants without transferring to the same Transferee an equal number
of Voting Preferred Shares; provided, however, to the extent that the Equity
Purchaser or any of its Affiliates or any such Transferee holds a greater
number of Warrants than Voting Preferred Shares (“Excess Warrants”), it may
transfer any Excess Warrants without transferring Voting Preferred Shares.

 

13

 

SECTION 3.4 Redemption of the Voting Preferred Shares. The
Company hereby agrees that it shall not redeem any of the Voting Preferred
Shares other than in accordance with the terms set forth in this Agreement and
in the Certificate of Amendment.

 

SECTION 3.5 Purchase of the Trust Preferred Securities. The
Company shall purchase, in each case on a
date no less than six (6) months (the “Waiting Period”) after the date of exercise of all or any portion of the Warrants then held by the Equity Purchaser and/or its
Affiliates (or by any Transferee of all or any portion of such Warrants if the
exercise of such Warrants is substantially contemporaneous with the transfer of such Warrants to such Transferee,
including, for example, a transfer to an underwriter in connection with its
exercise of Warrants and the sale of shares of Common Stock issued upon such exercise), at the option of the
Trust Preferred Purchaser, such option to be exercised
during the period beginning on the expiration of
the Waiting Period and ending on the date which is 60 days after
the expiration date of the Waiting Period, such number of Trust Preferred
Securities held by the Trust Preferred Purchaser for (i) a cash purchase
price equal to the liquidation preference of such Trust Preferred Securities in
an amount up to, at the election of the Trust Preferred Purchaser, the aggregate exercise
price paid in cash, if any, upon the exercise of any such Warrants or (ii) at
the Company’s option, a purchase price paid in cash or in shares of Common
Stock (with each such share equal in value to the Fair Market Value (as defined
in the Warrant) of one share of
Common Stock on the trading date immediately prior to the exercise date of the
applicable Warrants) in an amount up to, at the election of the Trust Preferred
Purchaser, the aggregate exercise price paid through the surrender of Warrants
pursuant to Section 2.3(b) of the Warrants, if any, upon the exercise
of any such Warrants; provided that, in any case, upon the announcement or
entering into of any agreement by the Company with respect to any Change of
Control of the Company (as
defined in the Securities Purchase Agreement), such right of the Trust Preferred
Purchaser to have the Company purchase the Trust Preferred Securities, if
exercised or entitled to be exercised, shall become effective immediately upon
the earlier of (A) the expiration of the Waiting Period, (B) 30 days
following any such announcement or entering into of any such agreement and (C) the consummation of any Change of
Control of the Company and, in the case of clauses (B) and (C), the Waiting Period or any portion thereof shall no longer apply. If the Company suffers any adverse financial
consequences by virtue of both the Equity Purchaser transferring Warrants which
are then exercised by the Transferee and the Trust Preferred Purchaser then exercising its option (the “TPS Option”) to cause the Company to purchase Trust Preferred Securities all as
contemplated above and such financial consequences are
more adverse (whether by reason of increased taxes, reduced earnings or
otherwise) to the Company than if both the Equity Purchaser had exercised
rather than transferred such Warrants and the Trust Preferred Purchaser had
then exercised the TPS Option, then the Equity Purchaser and the Trust
Preferred Purchaser shall hold the Company harmless against the effects of such more adverse consequences if and then only
to the extent such adverse consequences are more adverse than if both the Equity Purchaser had
exercised rather than transferred such Warrants and the Trust Preferred Purchaser had then
exercised the TPS Option.

 

14

 

ARTICLE IV

 

REGISTRATION RIGHTS WITH RESPECT TO

THE WARRANTS AND THE WARRANT SHARES

 

SECTION 4.1 Shelf Registration Statement.

 

(a)  Filing; Effectiveness; Expenses.
 Subject to Section 4.1(d), the
Company shall:

 

(i) file on or before the one-hundred-eightieth (180th)
day following the Closing Date an “evergreen” shelf registration statement on Form S-3 pursuant to Rule 415 under the Securities
Act(or any successor provisions), providing for an offering to be made on a
continuous basis of the Company Registrable Securities (the “Shelf
Registration”);

 

(ii) use commercially reasonable efforts
to cause the Shelf Registration to become effective as soon as practicable
after such filing;

 

(iii) use commercially reasonable
efforts to maintain in effect, supplement and amend, if necessary, the Shelf Registration, as required by the instructions applicable to such
registration form or by the Securities Act or as reasonably requested by the Holders of (or any underwriter for) more than 10% of the Warrants issued
as of the Closing or the Warrant Shares subject thereto;

 

(iv) furnish to the Holders of the
Company Registrable Securities to which the Shelf Registration relates copies
of any supplement or amendment to such Shelf Registration prior to such
supplement or amendment being used and/or filed with the SEC; and

 

(v) pay all Registration Expenses in
connection with the Shelf Registration, whether or not it becomes effective,
and whether all, some or none of the Company Registrable Securities to which it
relates are sold pursuant to it.

 

(b) Inclusion of Additional Securities. In no event shall
the Shelf Registration include securities other than the Company Registrable Securities set forth in Section 4.1(a)(i) unless
Holders of more than 662/3% of such Company Registrable
Securities consent to such inclusion.

 

(c) Effective Shelf Registration
Statement. (i) If at any time, the Shelf Registration ceases to be
effective, then the Company shall use its best efforts to file and use its
commercially reasonable efforts to cause to become effective a new “evergreen”
shelf registration statement providing for an offering to be made on a
continuous basis of the Warrants and the Warrant Shares.

 

(ii) If, after the Shelf Registration
has become effective, it is interfered with by any stop order, injunction or
other order or requirement of the SEC or other governmental agency or
authority, then
the Company shall use its commercially reasonable efforts to prevent the
issuance of any stop order suspending the effectiveness of the registration statement or of any order preventing

 

15

 

or suspending
the use of any preliminary prospectus and, if any such order is issued, to
obtain the withdrawal of any such order at the earliest possible moment.

 

(d) Notwithstanding Section 4.1
(a), at such time as the Equity Purchaser and its Affiliates are permitted to sell in a single
quarter pursuant to Rule 144 all Common Stock either held by or underlying
the Warrants held by the Equity Purchaser and its Affiliates, the obligations
of the Company set forth in this Section 4.1 shall terminate and be of no
further force and effect.

 

(e) (i) If the Company shall at any
time furnish to the Equity Purchaser and/or any of its Transferees, a
certificate signed by its chairman of the board, chief executive officer,
president or any other of its authorized officers stating that the Company has
pending or in process a material transaction, the disclosure of which would, in
the good faith judgment of the Company Board, after consultation with its
outside securities counsel, materially and adversely affect the Company, the
Company may postpone the filing (but not the preparation) of the Shelf
Registration for up to sixty (60) days; provided, however, that
the Company shall not be permitted to postpone registration pursuant to this Section 4.1(e)(i) more
than once. The Company shall promptly give the Equity Purchaser and/or its
Transferees, as appropriate, written notice of any postponement made in
accordance with the preceding sentence.

 

(ii) If the Company shall at any time
furnish to the Equity Purchaser and/or any of its Transferees, a certificate
signed by its chairman of the board, chief executive officer, president or any
other of its authorized officers (a “Suspension Notice”) stating that
the Company has been advised in writing by a nationally recognized investment banking firm selected by the Company that, in such
firm’s opinion, resales of the Company Registrable Securities pursuant to the
Shelf Registration would adversely affect any Company Offering (as defined in Section 4.2(h)(i))
with respect to which the Company has commenced preparations for a registration
prior to the receipt of a Confirmation Request (as defined in Section 4.1 (f), the Equity Purchaser or such
Transferees may not effect any such resales until the earliest of (A) 30
days after the completion of such Company Offering, (B) promptly after the
abandonment of such Company Offering or (C) 120 days after the delivery of
such Suspension Notice.

 

(iii) If upon receipt of a Confirmation
Request, the Company determines in its good faith judgment after consultation
with its securities counsel that the filing of an amendment or supplement to
the Shelf Registration is necessary in order to effect resales pursuant to the Shelf
Registration and such filing would require disclosure of material information
which the Company has a bona fide business purpose for preserving as
confidential and the Company provides the Holders a Suspension Notice within 48
hours of such receipt of a Confirmation Request, the Company shall not be required to comply with
its obligations under Section 4(a)(iii), and the Equity Purchaser and/or Transferee, as applicable, may not effect any resales, until the earlier of (A) the date
upon which such material information is disclosed to the public or ceases to be
material or (B) 90 days after such Confirmation Request was received by
the Company.

 

16

 

(iv) Notwithstanding the provisions of
Sections 4.1(e)(ii) and (iii), the Company shall be entitled to serve only
one Suspension Notice (A) within any period of 180 consecutive days or (B) with
respect to any two consecutive resales for which the Equity Purchaser or its
Transferees deliver Confirmation Requests.

 

(f) At least 48 hours prior to effecting
any sale of Company Registrable Securities pursuant to the Shelf Registration,
the Holder will request the Company to confirm whether the Company is then
exercising its rights pursuant to Section 4.1( e)(a “Confirmation
Request”).

 

(g)  Underwritten Offering.  At the election of any Holder or group of
Holders, in each case, holding in excess of 10% of the aggregate of the outstanding Warrants
and Warrant Shares then issued, any resale pursuant to the Shelf Registration
may involve an underwritten offering, and, in such case, the investment
banker(s), underwriter(s) and manager(s) for such registration shall be
selected  by the Holders of a majority of the
Company Registrable Securities which are the subject of any such request; provided,
however, that such investment banker(s), underwriter(s) and manager(s)
shall be reasonably satisfactory to the Company.

 

SECTION 4.2  Registration
on Request.

 

(a) Request. If, at any time
after the date hereof, the Shelf Registration is not then effective, the Equity
Purchaser or any other Holder or group of Holders, in each case, holding in
excess of 10% of the aggregate of the outstanding Warrants and Warrant Shares
then issued (provided that no Transferee of the Equity Purchaser or any of its Affiliates or of any
Transferee shall be permitted to request a registration pursuant to this Section 4.2
unless the right to make such a request was transferred to such Transferee pursuant to Section 3.1 (b )(i))
(individually or collectively, as the case may be, the “Demand Party”)
may request in writing that the Company effect the registration under the
Securities Act of all or part of such Demand Party’s Company Registrable
Securities. Any such request will specify (i) the number of Company
Registrable Securities proposed to be sold and (ii) the intended method of
disposition thereof. Subject to the other provisions of this Section 4.2,
the Company shall promptly give written notice of such requested registration
to all other Holders, and thereupon will, as expeditiously as possible, use its
commercially reasonable efforts to effect the registration under the Securities
Act of:

 

(i) the Company Registrable Securities
which the Company has been so requested to register by the Demand Party; and

 

(ii) all other Company Registrable
Securities of the same class(es) or series as are to be registered at the
request of a Demand Party and which the Company has been requested to register
by any other Holder thereof by written request given to the Company within thirty (30) days after the giving of such written notice by the Company
(which request shall specify the amount and intended method of disposition of
such Company Registrable Securities), all to the extent necessary to permit the
disposition (in accordance with the intended method thereof as aforesaid) of
the Company Registrable Securities so to be registered.

 

17

 

(b) Limits on Registration Requests.
Notwithstanding Section 4.2(a), (i) in no event shall the Company be
required to effect more than five registrations pursuant to this Section 4.2
and (ii) the Company shall not be obligated to file a registration
statement relating to any registration request under this Section 4.2
(other than a registration statement on Form S-3 or any successor or
similar short-form registration statement) within a
period of ninety (90) days after the effective date of any other registration statement
relating to any registration request under this Section 4.2
or to any registration effected under Section 4.3, in either case which
was not effected on Form S-3 (or any successor or similar short-form
registration statement). Nothing in this Section 4.2 shall operate to
limit the right of any Holder to (i) request the registration of Common
Stock issuable upon the exercise of any Warrants held by such Holder
notwithstanding the fact that at the time of request such Holder does not hold
the Common Stock underlying such Warrants, or (ii) request the
registration at one time of both Warrants exercisable into Common Stock and the
Common Stock underlying any such Warrants.

 

(c) Registration Statement Form. The
Company shall select the registration statement form for any registration
pursuant to this Section 4.2; provided, however, that if any
registration requested pursuant to this Section 4.2
which is proposed by the Company to be effected by the filing of a registration
statement on Form S-3 (or any successor or similar short-form registration
statement) shall be in connection with an underwritten public offering, and if
the managing underwriter shall advise the Company in writing that, in its
opinion, the use of another form of registration statement is of material
importance to the success of such proposed offering, then such registration
shall be effected on such other form.

 

(d) Expenses. The Company will
pay all Registration Expenses in connection with registrations pursuant to this
Section 4.2.

 

(e) Effective Registration Statement.
A registration requested pursuant to this Section 4.2 will not be deemed
to have been effected:

 

(i) unless a registration statement with
respect thereto has become effective and remained effective in compliance with
the provisions of the Securities Act with respect to the disposition of all Company Registrable Securities covered by such registration statement until
the earlier of (x) such time as all of such Company Registrable Securities have
been disposed of in accordance with the intended
methods of disposition thereof set forth in such registration statement or (y)
one-hundred-eighty (180) days after the effective date of such registration statement, except with respect to any registration statement filed pursuant to Rule 415 under the Securities Act, in which case the
Company shall use its commercially reasonable efforts to keep such registration
statement effective until the such time as all of the Company Registrable
Securities cease to be Company Registrable Securities; provided, that if the
failure of any such registration statement to become or remain effective in
compliance with this Section 4.2(e)(i) is due solely to acts or
omissions of the applicable Holders, such registration requested pursuant to this Section 4.2 will be deemed to have been effected;

 

18

 

(ii)  if after it has become effective,
the registration statement is interfered with by any stop order, injunction or
other order or requirement of the SEC or other governmental agency or authority
and does not thereafter become effective; or

 

(iii) if the conditions to closing
specified in the underwriting agreement, if any, entered into in connection
with such registration are not satisfied or waived, other than by reason of a
failure on the part of the Demand Party or other Holders.

 

(t) Underwritten Offering. At the
election of the Demand Party, a requested registration pursuant to this Section 4.2
may involve an underwritten offering, the investment banker(s), underwriter(s) and manager(s) for such
registration shall be selected by and, in such case, the Holders of a majority
of the Company Registrable Securities which the Company has been requested to
register; provided, however, that such investment banker(s),
underwriter(s) and manager(s) shall be reasonably satisfactory to the Company.

 

(g) Priority in Requested
Registrations. If a requested registration pursuant to this Section 4.2
involves an underwritten offering and the managing underwriter advises the
Company in writing that, in its opinion, the number of securities to be included
in such registration would be likely to have an adverse effect on the price,
timing or distribution of the securities to be offered in such offering as contemplated by the Holders (an “Adverse Effect”),
then the Company shall include in such registration Company Registrable
Securities requested to be included in such registration by the Demand Party
and all other Holders of Company Registrable Securities pursuant to this Section 4.2
on a pro rata basis to the extent that the managing underwriter believes that
such Company Registrable Securities can be sold in such offering without having
an Adverse Effect. If the managing underwriter of any underwritten offering
shall advise the Holders participating in a registration pursuant to this Section 4.2
that the Company Registrable Securities covered by the registration statement cannot be sold in such
offering within a price range acceptable to the Demand Party, then the Demand
Party shall have the right to notify the Company that it has determined that
the registration statement be abandoned or withdrawn, in which event the
Company shall abandon or withdraw such registration statement.

 

(h) Postponements in Requested
Registrations. (i) If, upon receipt of a registration request pursuant to Section 4.2(a),
the Company is advised in writing by a nationally recognized investment banking
firm selected by the Company that, in such firm’s opinion, a registration at
the time and on the terms requested would adversely affect any public offering
of securities of the Company by the Company (other than in connection with
employee benefit and similar plans) (a “Company Offering”) with respect to
which the Company has commenced preparations for a registration prior to the
receipt of a registration request pursuant to Section 4.2(a) and the
Company furnishes the Holders with a certificate signed by the Chief Executive
Officer or Chief Financial Officer of the Company to such effect (the “Transaction
Delay Notice”) promptly after such request, the Company shall not be
required to effect a registration pursuant to Section 4.2(a) until
the earliest of (A) 30 days
after the completion of such Company Offering, (B) promptly after the
abandonment of such Company Offering or (C) 120 days
after the date of the Transaction Delay Notice; provided, however, that in any
event the Company shall not be required to effect any registration prior to the

 

19

 

termination,
waiver or reduction of any “blackout period” required by the underwriters to be
applicable to the Holders or the Company, if any, in connection with any
Company Offering.

 

(ii) If upon receipt of a registration request pursuant to Section 4.2(a) or
while a registration request pursuant to Section 4.2(a) is pending,
the Company determines in its good faith judgment after consultation with its
securities counsel that the filing of a registration statement would require
disclosure of material information which the Company has a bona fide business
purpose for preserving as confidential and the Company provides the Holders
written notice (the “Information Delay Notice” and, together with the
Transaction Delay Notice, the “Delay Notice”) thereof promptly after the
Company makes such determination, which shall be made promptly after the receipt
of any request, the Company shall not be required to comply with its
obligations under Section 4.2(a) until the earlier of (A) the
date upon which such material information is disclosed to the public or ceases
to be material or (B) 90 days after the Holders’ receipt of such notice.

 

(iii) Notwithstanding the foregoing provisions of this Section 4.2(h),
the Company shall be entitled to serve only one Delay Notice (i) within
any period of 180 consecutive days or (ii) with respect to any two
consecutive registrations requested pursuant to Section 4.2(a).

 

(iv) At any time when a registration statement effected pursuant
to Section 4.2(a) hereunder relating to Company Registrable Securities is effective and a prospectus
relating thereto is required to be delivered under the Securities Act within
the appropriate period mentioned in Section 6.1 (b) hereunder, that
the Company becomes aware that the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing, to the extent that the amendment or supplement to such
prospectus necessary to correct such untrue statement of a material fact or
omission to state a material
fact would require disclosure of material information which the Company has a
bona fide business purpose for preserving as confidential and the Company
provides the Holders written notice thereof promptly after the Company makes
such determination, the Holders shall suspend sales of Company Registrable
Securities pursuant to such registration statement and the Company shall not be
required to comply with its obligations under Section 6.1 (f) ’until
the earlier of (A) the date upon which such material information is
disclosed to the public or ceases to be material or (B) 90 days after the
Holders’ receipt of such written notice. If the Holders’ disposition of Company
Registrable Securities is discontinued pursuant to the foregoing sentence, unless
the Company thereafter extends the effectiveness of the registration statement
to permit dispositions of Company Registrable Securities by the Holders for an
aggregate of 60 days, the registration statement shall not be counted for
purposes of determining the number of registrations permitted under Section 4.2(b) hereof.

 

(i) Additional Rights. If the
Company at any time grants to any other holders of Common Stock (or securities
that are convertible, exchangeable or exercisable into Common Stock) any rights
to request the Company to effect the registration under the Securities Act of
any such shares of Common Stock (or any such securities) on terms more
favorable to such holders than the terms set forth in this Section 4.2,
the terms of this Section 4.2 shall be deemed amended or supplemented to
the extent necessary to provide the Holders such more favorable rights and
benefits.

 

20

 

SECTION 4.3 Incidental Registrations. (a) If the
Company at any time after the date hereof proposes to register Equity
Securities under the Securities Act (other than a registration on Form S-4
or S-8, or any successor or other forms promulgated for similar purposes),
whether or not for sale for its own account, in a manner which would permit
registration of Company Registrable Securities for sale to the public under the
Securities Act, it will, at each such time, give prompt written notice to all Holders of its intention
to do so and of such Holders’ rights under this Agreement. Upon the written
request of any such Holder made within thirty (30) days after the receipt of
any such notice (which request shall specify the Registrable Securities
intended to be disposed of by such Holder), the Company will use its
commercially reasonable efforts to effect the registration under the Securities
Act of all Company Registrable Securities which the Company has been so
requested to register by the Holders thereof; provided, that (i) if,
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed in connection with
such registration, the Company shall determine for any reason not to proceed with
the proposed registration of the securities to be sold by it, the Company may,
at its election, give written notice of such determination to each Holder and,
thereupon, shall be relieved of its obligation to register any Company
Registrable Securities in connection with such registration (but not from its
obligation to pay the Registration Expenses in connection therewith), and (ii) if
such registration involves an underwritten offering, all Holders requesting to
be included in the Company’s registration must sell their Company Registrable
Securities to the underwriters selected by the Company
on the same terms and conditions as apply
to the Company, with such differences, including any with respect to
indemnification and liability insurance, as may be customary or appropriate in
combined primary and secondary offerings. If a registration requested pursuant
to this Section involves an underwritten public offering, any Holder
requesting to be included in such registration may elect, in writing prior to
the effective date of the registration statement filed in connection with such
registration, not to register all or any part of such securities in connection
with such registration. Nothing in this Section shall operate to limit the
right of any Holder to request the registration of Common Stock issuable upon
conversion, exchange or exercise of securities, including Warrants, held by
such Holder notwithstanding the fact that at the time of request such Holder
does not hold the Common Stock underlying such securities. The registrations
provided for in this Section 4.3 are in addition to, and not in lieu of,
registrations made upon the request of the Equity Purchaser and any other
Holder in accordance with Sections 4.1 and 4.2.

 

(b) Expenses. The Company will pay all Registration Expenses
in connection with each registration of Company Registrable Securities
requested pursuant to this Section 4.3.

 

(c) Priority in Incidental Registrations. If a registration
pursuant to this Section 4.3 involves an underwritten offering and the
managing underwriter advises the Company in writing that, in its opinion, the
number of Company Registrable Securities requested to be included in such
registration would be likely to have an adverse effect on the price, timing or
distribution of the securities to be offered in such offering as contemplated
by the Company (other than the Company Registrable Securities), then the
Company shall include in such registration (a) first, 100% of the
securities the Company proposes to sell and (b) second, to the
extent of the amount of Company Registrable Securities requested to be included
in such registration which, in the opinion of such managing underwriter, can be
sold without having the adverse effect referred to above, the amount

 

21

 

of Company
Registrable Securities which the Holders have requested to be included in such
registration, such amount to be allocated pro rata among all requesting Holders
on the basis of the relative amount of Company Registrable Securities then
held by each such Holder (provided, that any such amount thereby
allocated to any such Holder that exceeds such Holder’s request shall be
reallocated among the remaining requested Holders and Other Holders in like
manner).

 

ARTICLE V

 

REGISTRATION RIGHTS WITH RESPECT TO THE

TRUST PREFERRED SECURITIES

 

SECTION 5.1  Registration
on Request.

 

(a) Request. At any time after
the date hereof, the Trust Preferred Purchaser or any other Holder of Trust
Registrable Securities or group of Holders, in each case, holding in excess of
10% of the aggregate principal amount of the Trust Preferred Securities then
outstanding (provided that no Transferee of the Trust Preferred
Purchaser or any of its Affiliates or of any Transferee shall be permitted to
request a registration pursuant to this Section 5.1 unless the right to
make such a request was transferred to such Transferee pursuant to Section 3.1(b)(ii)),
individually or collectively, as the case may be (the “Trust Demand Party”),
may request in writing that the Company and the Trust effect the registration
under the Securities Act of all or part of such Trust Demand Party’s Trust
Registrable Securities. Any such request will specify (i) the number of
Trust Registrable Securities proposed to be sold and (ii) the intended
method of disposition thereof. Subject to the other provisions of this Section 5.1,
the Trust shall, and the Company shall cause the Trust to, promptly give
written notice of such requested registration to all other Holders of Trust
Registrable Securities, and thereupon will, as expeditiously as possible, use
its commercially reasonable efforts to effect the registration under the
Securities Act of:

 

(i) the Trust Registrable Securities
which the Company and the Trust have been so requested to register by the Trust
Demand Party; and

 

(ii) all other Trust Registrable
Securities of the same class(es) or series as are to be registered at the
request of a Trust Demand Party and which the Trust has been requested to
register by any other Holder of Trust Registrable Securities by written request
given to the Company and the Trust within thirty (30) days after the giving of
such written notice by the Trust (which request shall specify the amount and
intended method of disposition of such Trust Registrable Securities), all to
the extent necessary to permit the disposition (in accordance with the intended
method thereof as aforesaid) of the Trust Registrable Securities so to be
registered.

 

(b) Limits on Registration Requests.
Notwithstanding Section 5.1(a), (i) in no event shall the Company and
the Trust be required to effect more than five registrations pursuant to this Section 5.1
and (ii) the Company and the Trust shall not be obligated to file a
registration statement relating to any registration request under this Section 5.1 (other
than a registration statement on Form

 

22

 

S-3 or any successor or similar short-form registration statement)
within a period of ninety (90) days after the effective date of any other
registration statement relating to any registration request under this Section 5.1
which was not effected on Form S-3 (or any successor or similar short-form
registration statement).

 

(c) Registration Statement Form. The Company and the Trust
shall select the registration statement form for any registration pursuant to
this Section 5.1; provided, however, that if any
registration requested pursuant to this Section 5.1 which is proposed by
the Company and the Trust to be effected by
the filing of a registration statement on Form S-3 (or any successor or
similar short-form registration statement) shall be in connection, with an
underwritten public offering, and if the managing underwriter shall advise the
Company and the Trust in writing that, in its opinion, the use of another form
of registration statement is of material importance to the success of such
proposed offering, then such registration shall be effected on such other form.

 

(d) Expenses. The Company and the Trust will pay all
Registration Expenses in connection with registrations pursuant to this Section 5.1.

 

(e) Effective Registration Statement. A registration
requested pursuant to this Section 5.1 will not be deemed to have been
effected:

 

(i) unless a registration statement with
respect thereto has become effective and remained effective in compliance with
the provisions of the Securities Act with respect to the disposition of all Trust Registrable Securities
covered by such registration statement until the earlier of (x) such time as
all of such Trust Registrable Securities have been disposed of in accordance
with the intended methods of disposition thereof set forth in such registration
statement or (y) one-hundred-eighty (180) days after the effective date of such
registration statement, except with respect to any registration
statement filed pursuant to Rule 415 under the Securities Act, in which
case the Company and the Trust shall use its commercially reasonable efforts to
keep such registration statement effective until the such time as all of the Trust Registrable Securities
cease to be Trust Registrable Securities; provided, that if the failure of any
such registration statement to become or remain effective in compliance with
this Section 5.1(e)(i) is due solely to acts or omissions of the
applicable Holders, such registration requested pursuant to this Section 5.1
will be deemed to have been effected;

 

(ii) if after it has become effective,
the registration statement is interfered with by any stop order, injunction or
other order or requirement of the SEC or other governmental agency or authority
and does not thereafter become effective; or

 

(iii) if the conditions to closing
specified in the underwriting agreement, if any, entered into in connection
with such registration are not satisfied or waived, other than by reason of a
failure on the part of the Trust Demand Party or other Holders of Trust
Registrable Securities.

 

(f) Selection of Underwriters. At the election of the Trust
Demand Party, a requested registration pursuant to this Section 5.1 may
involve an underwritten offering, and, in such case, the

 

23

 

investment
banker(s), underwriter(s) and manager(s) for such registration shall be
selected by the Holders of a majority of the Trust Registrable Securities which the
Company and the Trust have been requested to register; provided, however,
that such investment banker(s), underwriter(s) and manager(s) shall be
reasonably satisfactory to the Company.

 

(g) Priority in Requested Registrations. If a requested
registration pursuant to this Section 5.1 involves an underwritten
offering and the managing underwriter advises the Company and the Trust in writing
that, in its opinion, the number of Trust Registrable Securities to be included
in such registration would be likely to have an Adverse Effect, then the
Company and the Trust shall include in such registration the Trust Registrable
Securities requested to be included in such registration by the Trust Demand Party and all other Holders of Trust Registrable
Securities pursuant to this Section 5.1 on a pro rata basis to the extent
that the managing underwriter believes that such Trust Registrable Securities
can be sold in such offering without having an Adverse Effect. If the managing
underwriter of any underwritten offering shall advise the Holders participating
in a registration pursuant to this Section 5.1 that the Trust Registrable
Securities covered by the registration statement cannot be sold in such
offering within a price range acceptable to the Trust Demand Party, then the Trust Demand Party shall have the right to notify the Company and the
Trust that it has determined that the registration statement be abandoned or
withdrawn, in which event the Company and the Trust shall abandon or withdraw
such registration statement.

 

(h) Postponements in Requested Registrations. (i) If,
upon receipt of a registration request pursuant to Section 5.1(a), the
Company is advised in writing by a nationally recognized investment banking
firm selected by the Company that, in such firm’s opinion, a registration at
the time and on the terms requested would adversely affect any
Company Offering with respect to which the Company has commenced preparations
for a registration prior to the receipt of a registration request pursuant to Section 5.1 (a) and
the Company furnishes the Holders with a Transaction Delay Notice promptly
after such request, the Company shall not be required to effect a registration
pursuant to Section 5.1 (a) until the earliest of (A) 30 days
after the completion of such Company offering, (B) promptly after the
abandonment of such Company Offering or (C) 120 days after the date of the
Transaction Delay Notice; provided, however, that in any event the Company
shall not be required to reflect any registration prior to the termination,
waiver or reduction of any “blackout period” required by the underwriters to be
applicable to the Holders or the Company, if any, in connection with any
Company Offering.

 

(ii) If upon receipt of a registration request pursuant to Section 4.2(a) or
while a registration request pursuant to Section 5.1(a) is pending, the Company determines in its
good faith judgment after consultation with its securities counsel that the
filing of a registration statement would require disclosure of material
information which the Company has a bona fide business purpose for preserving as confidential and the Company provides the Holders
an Information Delay Notice promptly after the Company makes such determination,
which shall be made promptly after the receipt of any request, the Company
shall not be required to comply with its obligations under Section 5.1 (a) until
the earlier of (A) the date upon which such material information is
disclosed to the public or ceases to be material or (B) 90 days after the
Holders’ receipt of such notice.

 

24

 

(iii) Notwithstanding the foregoing provisions of this Section 5.1
(h), the Company shall be entitled to
serve only one Delay Notice (i) within any period of 180 consecutive days
or (ii) with respect to any two consecutive registrations requested
pursuant to Section 5.1 (a).

 

(iv) At any time when a registration statement effected pursuant
to Section 5.l(a) hereunder relating to Trust Registrable Securities
is effective and a prospectus relating thereto is required to be delivered under the Securities Act within the
appropriate period mentioned in Section 6.1(b) hereunder, that the Company becomes aware that the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing, to the extent that the amendment
or supplement to such prospectus necessary to correct such untrue statement of
a material fact or omission to state a material fact would require disclosure
of material information which the Company has a bona fide business purpose for preserving as confidential and the Company provides
the Holders written notice thereof promptly after the Company makes such
determination, the Holders shall suspend sales of Trust Registrable Securities
pursuant to such registration statement and the Company shall not be required
to comply with its obligations under Section 6.1 (f) until the
earlier of (A) the date upon which such material information s disclosed to the public or ceases to be
material or (B) 90 days after the Holders’ receipt of such written
notice. If the Holders’ disposition of Trust Registrable Securities is
discontinued pursuant to the foregoing sentence, unless the Company thereafter
extends the effectiveness of the registration statement to permit dispositions
of Trust Registrable Securities by the Holders for an aggregate of 60 days, the
registration statement shall not be counted for purposes of determining the
number of registrations permitted under Section 5.1 (b) hereof.

 

(v) Additional Rights. If the Company or the Trust at any
time grants to any other holders of any of its Equity Securities any rights to
request the Company or the Trust to effect the registration under the
Securities Act of any such Equity Securities on terms more favorable to such holders
than the terms set forth in this Section 5.1, the terms of this Section 5.1
shall be deemed amended or supplemented to the extent necessary to provide the
Holders such more favorable rights and benefits.

 

SECTION 5.2 Liquidation of the Trust. The parties hereto
agree that if the Trust is for any reason liquidated or otherwise dissolved,
whether voluntarily or involuntarily, then the provisions of Section 5.1
shall apply in their entirety to the Subordinated Debentures.

 

ARTICLE VI

 

REGISTRATION PROCEDURES

 

SECTION 6.1 Registration Procedures. If and whenever the
Company or the Trust (the “Registering Party”) is required to use its
commercially reasonable efforts to effect or cause the registration of any
Registrable Securities under the Securities Act as provided in this Agreement,
such Registering Party will, as expeditiously as possible:

 

25

 

(a) prepare and, in any event within thirty (30) days after the
end of the period within which a request for registration may be given to such
Registering Party. file with the SEC a registration statement with respect to such Registrable
Securities and use its commercially reasonable efforts to cause such
registration statement to become effective within ninety (90) days of the
initial filing;

 

(b) prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for a period
not in excess of one-hundred-eighty (180) days (except in the case of a Shelf
Registration which the Company shall keep continuously effective subject to Section 4.1
(d) hereof) and to comply with the provisions of the Securities Act and
the Exchange Act with respect to the disposition of all securities covered by
such registration statement during such period in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement; provided, however, that before filing a
registration statement or prospectus, or any amendments or supplements thereto in
accordance with Sections 6.1 (a) or (b), such Registering Party will
furnish to counsel selected pursuant to Section 6.6 hereof copies of all
documents proposed to be filed, which documents will be subject to the review
of such counsel;

 

(c) furnish to each seller of
such Registrable Securities such number of copies of such registration
statement and of each amendment and supplement thereto (in each case including
all exhibits filed therewith, including any documents
incorporated by reference), such number of copies of the prospectus included in
such registration statement (including each preliminary prospectus and summary
prospectus), in conformity with the requirements of the Securities Act, and
such other documents as such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities by such seller;

 

(d) use its commercially reasonable efforts to register or qualify
such Registrable Securities covered by such registration in such jurisdictions
as each seller shall reasonably request, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such seller, except that such Registering Party shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction where, but for the requirements of this subsection (d),
it would not be obligated to be so qualified, to subject itself to taxation in
any such jurisdiction or to consent to general service of process in any such
jurisdiction;

 

(e) use its commercially reasonable efforts to cause such
Registrable Securities covered by such registration statement to be registered
with or approved bysuch other governmental authorities as may be necessary to
enable the seller or sellers thereof to consummate the disposition of such
Registrable Securities;

 

(f) notify each seller of any such Registrable Securities covered
by such registration statement, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of such Registering Party’s
becoming aware that the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to

 

26

 

state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and at
the request of any such seller, prepare and furnish to such seller a reasonable
number of copies of an amended or supplemental prospectus as may be necessary so
that, as thereafter delivered to the Sellers of such Registrable Securities, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing;

 

(g) otherwise use its commercially reasonable efforts to comply
with all applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably practicable (but not more than
eighteen (18) months) after the effective date of the registration statement, an earnings statement which shall satisfy the provisions of Section 11
(a) of the Securities Act;

 

(h) use its commercially reasonable efforts to list all
Registrable Securities covered by such registration statement on the NYSE or
any other national securities exchange on which Registrable Securities of the
same class covered by such registration statement are then listed and, if no
such Registrable Securities are so listed, on the NYSE or any national
securities exchange on which the Common Stock is then listed;

 

(h) enter into such customary agreements (including an
underwriting agreement in customary form), which may include indemnification
provisions in favor of underwriters and other Persons in addition to, or in substitution for
the provisions of Section 6.4 hereof, and take such other actions as
sellers of a majority of shares of such Registrable Securities or the
underwriters, if any, reasonably requested in order to expedite or facilitate
the disposition of such Registrable Securities;

 

(i) obtain a “cold comfort” letter or letters from such
Registering Party’s independent public accounts in customary form and covering
matters of the type customarily covered by “cold comfort” letters as the seller
or sellers of a majority of shares of such Registrable Securities shall
reasonably request;

 

(j) make available for inspection by any seller of such Registrable
Securities covered by such registration statement, by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
seller or any such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of such Registering Party, and
cause all of such Registering Party’s officers, directors and employees to
supply all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration statement;

 

(k) notify counsel (selected pursuant to Section 6.6 hereof) for
the Holders of Registrable Securities included in such registration
statement and the managing underwriter or agent, immediately, and confirm the
notice in writing (i) when the registration statement, or any post-effective
amendment to the registration statement, shall have become effective, or any
supplement to the prospectus or any amendment to the prospectus shall have been
filed, (ii) of the receipt of any comments from the SEC, (iii) of any request of the SEC to
amend the registration statement or

 

27

 

amend or
supplement the prospectus or for additional information, and (iv) of the
issuance by the SEC of any stop order suspending the effectiveness of the
registration statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
registration statement for offering or sale in any jurisdiction, or of the
institution or threatening of any proceedings for any of such purposes;

 

(l) make every reasonable effort to prevent the issuance of any stop
order suspending the effectiveness of the registration statement or of any order
preventing or suspending the use of any preliminary prospectus and, if any such order is issued, to obtain the withdrawal of any such
order at the earliest possible moment;

 

(m) if requested by the managing underwriter or agent or any Holder of
Registrable Securities covered by the registration statement, promptly incorporate in
a prospectus supplement or post-effective amendment such information as the
managing underwriter or agent or such Holder reasonably requests to be included
therein, including, with respect to the number of Registrable Securities being
sold by such Holder to such underwriter or agent, the purchase price being paid
therefor by such underwriter or agent and with respect to any other terms
of the underwritten offering of the Registrable Securities to be sold in such
offering; and make all required filings of such prospectus supplement or post-effective amendment
as soon as practicable after being notified
of the matters incorporated in such prospectus supplement or post-effective amendment;

 

(n) cooperate with the Holders of Registrable Securities covered by the
registration statement and the managing underwriter or agent, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing securities to be sold under the registration
statement, and enable such securities to be in such denominations and
registered in such names as the managing underwriter or agent, if any, or such
Holders may request;

 

(o) use its commercially reasonable efforts to obtain for delivery to
the Holders of Registrable Securities being registered and to the underwriter
or agent an opinion or opinions from counsel for such Registering Party in
customary form and in form, substance and scope reasonably satisfactory to such
Holders, underwriters or agents and their counsel;

 

(p) cooperate with each seller of Registrable Securities and each
underwriter or agent participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NYSE or any other securities exchange and/or the NASD; and

 

(q) use its commercially reasonable efforts (taking into account the
interests of the Company) to make available the executive officers of such
Registering Party to participate with the Holders of Registrable Securities and
any underwriters in any “road shows” or other selling efforts that may be
reasonably requested by the Holders in connection with the methods of
distribution for the Registrable Securities.

 

SECTION 6.2  Information
Supplied. The Registering Party may require each seller of Registrable
Securities as to which any registration is being effected to furnish such
Registering

 

28

 

Party with
such information regarding such seller and pertinent to the disclosure
requirements relating to the registration and the distribution of such
securities as such Registering Party may from time to time reasonably request
in writing.

 

SECTION 6.3  Restrictions
on Disposition.  Each Holder agrees
that, upon
receipt of any notice from the Registering Party of the happening of any event
of the kind described in Section 6.1(f), such Holder will forthwith
discontinue disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Holder’s receipt of
the copies of the supplemented or amended prospectus contemplated by Section 6.1(f),
and, if so directed by such Registering Party, such Holder will deliver to such
Registering Party (at the Registering Party’s expense) all copies, other than
permanent file copies then in such Holder’s possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice. In the event such Registering Party shall give any such notice, the
period mentioned in Section 6.1(b) shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to Section 6.1(f) and to and
including the date when each seller of Registrable Securities covered by such
registration statement shall have received
the copies of the supplemented or amended prospectus contemplated by Section 6.1(f).

 

SECTION 6.4  Indemnification.
(a) In the event of any registration of any securities of a Registering
Party under the Securities Act pursuant to Articles IV or V, such Registering
Party shall, and it hereby does, indemnify and hold harmless, to the extent permitted
by law, the seller of any Registrable Securities covered by such registration
statement, each Affiliate of such seller and their respective directors,
officers, employees and stockholders or members or general and limited partners (and any director, officer, Affiliate, employee, stockholder and
controlling Person of any of the foregoing), each Person who participates as an
underwriter in the offering or sale of such securities and each other Person,
if any, who controls such seller or any such underwriter within the meaning of
the Securities Act (collectively, the “Indemnified Parties”), against
any and all losses, claims, damages or liabilities, joint or several, actions
or proceedings (whether commenced or threatened) in respect thereof (“Claims”)
and expenses (including reasonable attorney’s fees and reasonable expenses of
investigation) to which such Indemnified Party may become subject under the
Securities Act, common law or otherwise, insofar as such Claims or expenses
arise out of, relate to or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such securities were registered under the Securities Act,
any preliminary, final or summary prospectus contained therein, or any
amendment or supplement thereto, or (ii) any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein (in the case of a prospectus, in light of the
circumstances under which they were made) not misleading; provided, that
such Registering Party shall not be liable to any Indemnified Party in any such
case to the extent that any such Claim or expense arises out of, relates to or
is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in such registration statement or amendment or supplement
thereto or in any such preliminary, final or summary prospectus in reliance
upon and in conformity with written information furnished to such Registering
Party through an instrument duly executed by or on behalf of such seller
specifically stating that it is for use in the preparation thereof; and, provided,
further, that such Registering Party will not be liable in any such case
to the extent, but only to the extent, that the foregoing indemnity with
respect to any untrue statement

 

29

 

contained in
or omitted from a registration statement or the prospectus shall not inure to
the benefit of any party (or any person controlling such party) who is
obligated to deliver a prospectus in transactions in a security as to which a
registration statement has been filed pursuant to the Securities Act and from
whom the person asserting any such Damages purchased any of the Registrable
Securities to the extent that it is finally judicially determined that such
Damages resulted solely from the fact that such party sold Registrable
Securities to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the registration statement or the
prospectus, as amended or supplemented, and (x) such Registering Party shall
have previously and timely furnished sufficient copies of the registration
statement or prospectus, as so amended or supplemented, to such party in accordance
with this Agreement and (y) the registration statement or prospectus, as so amended or supplemented, would
have corrected such untrue statement or omission of a material fact.  Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of any Indemnified Party and shall survive the transfer of
securities by any seller.

 

(b) A Registering Party may require, as
a condition to including any Registrable Securities in any registration
statement filed in accordance with Sections 4.2, 4.3 or 5.1 herein, that it
shall have received an undertaking reasonably satisfactory to it from the
prospective seller of such Registrable Securities or any underwriter to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 6.4(a)) such Registering Party and all other prospective
sellers or any underwriter, as the case may be, with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission from
such registration statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement thereto, if such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to such
Registering Party through an instrument duly executed by or on behalf of such
seller or underwriter specifically stating that it is for use in the
preparation of such registration
statement, preliminary, final or summary prospectus or amendment or supplement,
or a document incorporated by reference into any of the foregoing. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Registering Party or any of the prospective sellers, or any of
their respective Affiliates, directors, officers or controlling Persons
and shall survive the transfer
of securities by any seller. In no event shall the liability of any selling
Holder of Registrable Securities hereunder be greater in amount than the dollar
amount of the proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

 

(c) Promptly after receipt by an indemnified party hereunder of
written notice of the commencement of any action or proceeding with respect to
which a claim for indemnification may be made pursuant to this Section 6.4,
such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party, give written notice to the latter of the
commencement of such action or proceeding; provided, however,
that the failure of the indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligations under Section 6.4,
except to the extent that the indemnifying party is materially prejudiced by
such failure to give notice. In case any such action or proceeding is brought
against an indemnified party, unless in such indemnified party’s reasonable
judgment (after consultation with legal counsel) a conflict of interest between
such indemnified and indemnifying parties may exist in respect of such action
or

 

30

 

proceeding, the indemnifying party will be entitled to participate in and to assume
the defense thereof (at its expense), jointly with any other indemnifying party
similarly notified to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation; provided that, in the event, however, that the
indemnifying party declines or fails to assume the defense of the action or
proceeding or to employ counsel reasonably satisfactory to the indemnified
party, in either case within a 3D-day period, or if a court of competent
jurisdiction determines that the indemnifying party is not vigorously defending
such action or proceeding, then such indemnified party may employ counsel to
represent or defend it in any such action or proceeding and the indemnifying
party shall pay the reasonable fees and disbursements of such counsel or other
representative as incurred; provided, however, that the
indemnifying party shall not be required to pay the fees and disbursements of
more than one counsel for all
indemnified parties in any jurisdiction in any single action or proceeding. No
indemnifying party will settle any such action or proceeding or consent to the
entry of any judgment without the prior written consent of the indemnified
party, unless such settlement or judgment (i) includes as an unconditional
term thereof the giving by the claimant or plaintiff of a release to such
indemnified party from all liability in respect of such action or proceeding
and (ii) does not involve the imposition of equitable remedies or the imposition of any obligations
on such indemnified party and does not otherwise adversely affect such
indemnified party, other than as a result of the imposition of financial
obligations for which such indemnified party will be indemnified hereunder. No
indemnified party will settle any such action or proceeding or consent to the
entry of any judgment without the prior written consent of the indemnifying
party (such consent not to be unreasonably withheld).

 

(d) (i) If the indemnification
provided for in this Section 6.4 from the indemnifying party is
unavailable to an indemnified party hereunder in respect of any Claim or
expenses referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such Claim or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified party in connection with the actions which resulted in
such Claim or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material factor omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party under
this Section 6.4( d) as a result of the Claim and expenses referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any action or proceeding.

 

(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6.4(d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in Section 6.4(d)(i).
No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of

 

31

 

the Securities
Act) shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation.

 

(e) Indemnification similar to that specified in this Section 6.4
(with appropriate modifications) shall be given by the appropriate Registering
Party and each seller of Registrable Securities with respect to any required
registration or other qualification of securities under any Law or with any
governmental authority other than as required by the Securities Act.

 

(f) The obligations of the parties under this Section 6.4
shall be in addition to any liability which any party may otherwise have to any
other party.

 

SECTION 6.5 Required Reports. Each of the Registering Party
covenants that it will file the reports required to be filed by it under the
Securities Act and the Exchange Act (or, if such Registering Party is not
required to file such reports, it will, upon the request of any Holder, make
publicly available such information), and it will take such further action as
any Holder may reasonably request, all to the extent required from time to time
to enable such Holder to sell shares of Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the SEC. Upon the request of any Holder, appropriate
Registering party will deliver to such Holder a written statement as to whether
it has complied with such requirements.

 

SECTION 6.6 Selection of Counsel. In connection with any
registration of Registrable Securities pursuant to Articles IV or V hereof, the
Holders of a majority of the Registrable Securities covered by any such
registration may select one counsel to represent all Holders of Registrable
Securities covered by such registration; provided, however, that
in the event that the counsel selected as provided above is also acting as
counsel to either of the Registering Parties in connection with such
registration, the remaining Holders shall be entitled to select one additional
counsel to represent all such remaining Holders.

 

SECTION 6.7 Holdback Agreement. If any registration under
Sections 4.2 or 4.3 hereof or any sale of securities in connection with a
registration under Section 4.1 hereof shall be in connection with an
underwritten public offering, each Holder agrees not to effect any public sale
or distribution, including any sale pursuant to Rule 144 under the Securities
Act, of any Equity Securities of the appropriate Registering Party (in each
case, other than as part of such underwritten public offering), within seven (7) days
before, or ninety (90) days (or such lesser period as the managing underwriters
may permit) after, the effective date of any such registration pursuant to
Sections 4.2 or 4.3 or the closing of any sale of securities in connection with
a registration under Section 4.1 (except as part of any such registration
or sale), and each of the Registering Parties hereby also so agrees and agrees to cause
each other holder of any equity security of such Registering Party purchased from such Registering Party
(at any time other than in a public offering) to so agree.

 

SECTION 6.8  No
Inconsistent Agreement. Each of the Registering Parties represents and
warrants that it will not enter into, or cause or permit any of its
Subsidiaries to enter

 

32

 

into, any
agreement which conflicts with or limits or prohibits the exercise of the
rights granted to the Holders of Registrable Securities in this Agreement.

 

ARTICLE VII

 

STANDSTILL

 

SECTION 7.1 Acquisition of Additional Voting Securities. (a) Subject
to Section 7.1(b), during the Standstill Period, the Equity Purchaser
hereby agrees that it shall not, and that it shall cause each of its Affiliates
(including, without limitation, KKR) not to, without the prior approval of the
Board of Directors of the Company (excluding, for purposes of such approval,
the KKR Representative), directly or indirectly, (i) acquire, offer or
propose to acquire or agree to acquire (whether by purchase, tender or exchange
offer, through an acquisition of control of another Person (including by way of
merger or consolidation), by joining a partnership, syndicate or other Group,
or otherwise), the beneficial ownership of any additional Voting Securities of
the Company or any of its Subsidiaries (or any warrants, options or other
rights to purchase or acquire, or any securities convertible into, or
exchangeable for, any Voting Securities of the Company or any of its
Subsidiaries or any other Equity Securities of the Company or any of its
Subsidiaries); provided, however, that the foregoing restrictions shall not
apply to any acquisition or proposed acquisition (each, an “Acquisition”)
of beneficial ownership of any additional Voting Securities of the Company: (x)
if, after giving effect to such Acquisition, the aggregate number of Voting
Securities of the Company beneficially owned on a Fully Diluted Basis by the
Equity Purchaser (together with its Affiliates) would not exceed 25% of the
total Voting Securities of the Company, (y) which is by way of stock dividends,
stock reclassifications or other distributions
or offerings made available and, if applicable, exercised on a pro rata basis, to holders of Equity Securities of the Company generally or (z) involves Equity
Securities acquired from the Company (including the Warrant Shares) or
otherwise in accordance with the provisions of the Agreement and the other
Transaction Agreements; (ii) make any public announcement with respect to,
or submit any proposal for, any merger, consolidation, sale of substantial
assets or other business combination or extraordinary transaction involving the
Company or any of its Subsidiaries; (iii) make, or in any way participate
in, any “solicitation” of “proxies” (as such terms are defined or used In
Regulation 14A under the Exchange Act) to vote any Voting Securities of the
Company or any of its Subsidiaries or seek to advise or influence any Person
with respect to the voting of any Voting Securities of the Company or any of
its Subsidiaries, (iv) form, join or in any way participate in any Group
(other than with respect to its Affiliates) with respect to any of the Voting
Securities of the Company; (v) otherwise act, either alone or in concert
with others, to seek control of the Company or any of its Subsidiaries; (vi) disclose
any intention, proposal, plan or arrangement with respect to any of the
foregoing; or (vii) make any demand, request or proposal to amend, waive
or terminate any provision of this Section 7.1 (collectively, the “Acquisition Restrictions”).  Nothing contained in this Section 7.1
shall be construed to limit or restrict any action take in good faith by the
KKR Representative or KKR Observer in his or her capacity as a director or
observer at the Company Board, the DP&L Board or any other Applicable Board

 

(b) The foregoing Acquisition Restrictions will not apply if:

 

33

 

(i) a third party who is not an
Affiliate of the Equity Purchaser or any of its Affiliates (a “Third Party”,
which term shall include any Group, other than a Group which includes the
Equity Purchaser or any of its Affiliates as a member) commences or publicly
announces its intention to commence a bona fide tender or exchange offer for
more than 15% of the outstanding Voting Securities of the Company and the Company Board does not
recommend against the tender or exchange offer within ten (10) Business
Days after the commencement thereof (which, in the case of an exchange offer,
shall be deemed to be the effective date of the registration statement relating
to the securities offered in such exchange offer or, if permitted under the
Exchange Act, such earlier date selected by the offer or for commencement of the exchange offer) or such longer
period as shall then be permitted under SEC rules;

 

(ii) a Third Party acquires beneficial
ownership of 15% of the Company’s outstanding Voting Securities (other than as
a result of purchases of such securities from the Company made with the Equity
Purchaser’s prior written consent);

 

(iii) a Third Party makes a bona fide
proposal to acquire all or substantially all of the assets of the Company or
DP&L that the Company Board is actively negotiating and the consummation of
which would require approval of the shareholders of the Company pursuant to the
General Corporation Law of the State of Ohio;

 

(iv) a Third Party makes a bona fide
proposal to enter into any acquisition or other business combination
transaction with the Company or DP&L that the Company Board is actively negotiating;

 

(v) the Company enters into (or publicly
announces its intention to do so) a definitive agreement, or an agreement
contemplating a definitive agreement, for any of the foregoing transactions
described in clauses (i) to (iv) above; or

 

(vi) the Company or the Trust is in
material breach of its obligations under this Agreement.

 

(c)  Upon a repurchase or redemption of Equity Securities by the
Company or one or more of its Affiliates or any similar transaction that, by
reducing the number of outstanding Equity Securities of the Company, increases the Ownership Percentage to an amount in
excess 25%, neither the Equity Purchaser nor any of its Affiliates shall be
required to dispose of any Equity Securities beneficially owned by them; provided, however,
that in such event, neither the Equity Purchaser nor any of its Affiliates may
purchase additional Equity Securities until such time as the Ownership
Percentage is less than 25%.

 

(d)  Subject to Section 7.1(c), if at any time the Equity
Purchaser or any of its Affiliates become aware that the Equity Purchaser and its Affiliates
beneficially own in the aggregate more than 25% of the Voting Securities, then
the Equity Purchaser shall, as soon as is reasonably practicable (but in no manner that would require it or any such
Affiliate to incur liability under

 

34

 

Section 16(b) of
the Exchange Act) take all reasonable action to reduce the amount of Equity
Securities beneficially owned by it and its Affiliates to an amount not greater
than such percentage.

 

ARTICLE VIII

 

MISCELLANEOUS

 

SECTION 8.1 Indemnification: Reimbursement of Expenses. The
Company agrees to indemnity and hold harmless the Equity Purchaser, the Trust
Preferred Purchaser, their respective directors and officers and their respective
Affiliates (including Kohlberg Kravis Roberts & Co., L.P. (“KKR”))
(and the directors, officers, partners, Affiliates and controlling persons
thereof) (each, a “Purchaser Indemnitee”) from and against any and all
liability, including obligations, costs, fines, penalties, claims, actions,
injuries; demands, suits, judgments, proceedings, investigations, arbitrations (including stockholder claims,
actions, injuries, demands, suits, judgments, proceedings, investigations or
arbitrations) and expenses, including accountant’s and attorney’s fees and
expenses (collectively, the “Damages”), incurred by any Purchaser
Indemnitee before or after the date of this Agreement and arising out of,
resulting from, or relating to (i) any Purchaser Indemnitee’s purchase
and/or ownership of the Voting Preferred Shares, the Warrants, the Warrant
Shares and/or Trust Preferred Securities, (ii) the transactions
contemplated by the Transaction Agreements, or (iii) any litigation to which any Purchaser Indemnitee is made a party in its capacity as a
stockholder or owner of securities (or a partner, director, officer, Affiliate
or controlling person of the Equity Purchaser or the Trust Preferred Purchaser,
as appropriate) of the Company; provided that (A) the foregoing
indemnification rights in this Section 8.1 shall not be available to the
extent that any such Damages are incurred as a result. of the Purchaser
Indemnitee’s willful misconduct or gross negligence, (B) the
indemnification rights set forth in this Section 8.1 shall not be
available to the extent that any such Damages are included as a result of
non-compliance by the Purchaser Indemnitee with all laws and regulations
applicable to it and (C) the indemnification rights set forth in this Section 8.1
shall not be available to the extent any such Damages are incurred as a result
of non-compliance by the Purchaser with its obligations under Transaction
Documents. For purposes of this Section 8.1, each of the Purchasers and
its representatives shall be deemed to have complied with all laws and
regulations applicable to them and their obligations under the Transaction
Documents and each Purchaser Indemnitee shall be deemed not to have engaged in willful
misconduct or gross negligence absent a final non-appealable judgment
of a court of competent jurisdiction to the contrary or to such effect,
respectively. The Company also agrees to reimburse each Purchaser Indemnitee
for any expenses incurred by such Purchaser Indemnitee in connection with the maintenance of its books and records,
preparation of tax returns and delivery of tax information to its member or
shareholders in connection with the Equity Purchaser’s investment in the
Company and the Trust Preferred Purchaser’s investment in the Trust.

 

SECTION 8.2 Termination. Subject to Section 3.1(b),
the provisions of this Agreement shall terminate as follows:

 

(i)  Sections 2.1 and 2.4 shall terminate as provided in Section 2.5;

 

35

 

(ii) Articles IV, V and VI of this
Agreement (other than Section 6.4 thereof which shall not terminate) shall
terminate at such time as there shall be no Registrable Securities outstanding
or as otherwise provided therein;

 

(iii) Article VII shall terminate
at the end of the Standstill Period or as otherwise provided in Section 7.1;

 

(iv) Sections 3.2, 3.3 and 3.4 shall
terminate when no Voting Preferred Shares are outstanding;

 

(v) Section 8.1 of this Agreement
shall not terminate; and

 

(vi) the remaining provisions of this
Agreement shall terminate at such time as the Ownership Percentage of the
Equity Purchaser shall be less than 1 %.

 

Nothing herein shall relieve any party from any liability for the
breach of any of the agreements set forth in this Agreement.

 

SECTION 8.3 Amendments and Waivers.  Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective against
any party hereto unless such modification, amendment or waiver is approved in
writing by such party. The failure of any party to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms.

 

SECTION 8.4 Successors, Assigns. Transferees and Third Party
Beneficiaries. This Agreement shall bind and inure to the benefit of and be
enforceable by the parties hereto and their respective successors, permitted
assigns and Transferees. Except as expressly provided herein, this Agreement
may not be assigned without the prior written consent of the other party, except
that either of the Purchasers and the senior member of the Equity Purchaser and
the shareholder of the Trust Preferred Purchaser (to the extent third party
beneficiaries hereunder) may assign their respective rights and obligations
hereunder to any Affiliate or Affiliates. To the extent indicated herein,
certain Persons, including the senior member of the Equity Purchaser, the
shareholder of the Trust Preferred Purchaser and KKR are intended to be third
party beneficiaries hereof. The Equity Purchaser and the Trust Preferred
Purchaser shall inform the Company of, and the Company shall be entitled to
rely upon, the names, addresses and other contact details of the senior member
of the Equity Purchaser and the shareholder of the Trust Preferred Purchaser,
respectively. Upon notice given to the Company, such senior member or
shareholder may be replaced by one or more other members, partners or
shareholders.

 

SECTION 8.5 Notices. All notices required or permitted
hereunder shall be in writing and shall be deemed effectively given (i) upon
personal delivery to the party to be notified, (ii) when sent by confirmed
telex or facsimile if sent during normal business hours of the recipient or, if
not, then on the next Business Day, (iii) five (5) days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid or (iv) one (I) Business Day after deposit

 

36

 

with a nationally recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent as follows:

 

(i) to the Company, the Equity
Purchaser, the Trust and the Trust Preferred Purchaser, to their respective addresses specified in Section 10.8 of the Securities
Purchase Agreement;

 

(ii) to any Transferee, to the address
provided pursuant to Section 3.1 (c);

 

(iii) to any other Holder (if other than pursuant to clause (ii) above),
to the address of such Holder as shown in the stock record books of the Company
or the Trust, as appropriate; or

 

(iv) to such other address for any party
as it may specify by like notice.

 

SECTION 8.6  Further
Assurances. At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and
deliver any further instruments or documents and to take all such further action as the other party may
reasonably request in order to evidence or effectuate the consummation of the
transactions contemplated hereby and to otherwise carry out the intent of the
parties hereunder.

 

SECTION 8.7  Entire Agreement.
Except as otherwise expressly set forth herein, this document and the other Transaction Agreements embody the
complete agreement and understanding among the parties hereto with respect to
the subject matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the
parties, written or oral, that may have related to the subject matter hereof in
any way.

 

SECTION 8.8  Delays or
Omissions. It is agreed that no delay or omission to exercise any right,
power or remedy accruing to any party, upon any breach, default or
noncompliance by another party under this Agreement, shall
impair any such right, power or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of or in any similar breach, default or noncompliance thereafter
occurring.  t is further agreed that any
waiver, permit, consent or approval of any kind or character on the part of any
party hereto of any breach, default or noncompliance under this Agreement or
any waiver on such party’s part of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent specifically
set forth in such writing. All remedies, either under this Agreement, by law,
or otherwise afforded to any party, shall be cumulative and not alternative.

 

SECTION 8.9  Governing
Law: Jurisdiction; Waiver of Jury Trial.  This Agreement shall be governed in all
respects by the laws of the State of New York, except, in the case of the
Company and with respect to Section 2.1, to the extent that
the General Corporation Law of the State of Ohio is applicable.  Any
suit, action or proceeding with
respect to this Agreement may be brought in any court or before any similar
authority in a court of competent jurisdiction in the State of New York, and
the parties hereto hereby submit to the non-exclusive jurisdiction of such
courts for the purpose of such suit, proceeding or judgment.  Each of the parties hereto hereby irrevocably
and

 

37

 

unconditionally
waives trial by jury in any legal action or proceeding in relation to this
Agreement and for any counterclaim therein.

 

SECTION 8.10 Severability. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

 

SECTION 8.11  Effective
Date. This Agreement shall become effective immediately upon the Closing.

 

SECTION 8.12  Enforcement.
Each party hereto acknowledges that money damages would not be an adequate
remedy in the event that any of the covenants or agreements in this Agreement
are not performed in accordance with its terms, and it is therefore agreed that
in addition to and without limiting any other remedy or right it may have, the
non-breaching party will have the right  to an injunction,
temporary restraining order or other equitable relief in any court of competent
jurisdiction enjoining any such breach and enforcing specifically the terms and
provisions hereof.

 

SECTION 8.13 Titles and Subtitles. The titles of the
sections and subsections of this Agreement are for convenience of reference
only and are not to be considered in construing this Agreement.

 

SECTION 8.14 No Recourse. Notwithstanding any other
provision of this Agreement or any rights of the Company or the Trust at law or
in equity, in the event of any default by the Purchasers under this Agreement
or in the event of any claim in connection with the registration of Registrable
Securities, the Company’s and the Trust’s remedies shall be restricted to
enforcement of their respective rights against the property and assets of the
Purchasers (including the Voting Preferred Shares, the Warrants, the Warrant
Shares and the Trust Preferred Securities) and no resort shall be had to (i) any
of the members of the Equity Purchaser or any of the stockholders of the Trust
Preferred Purchaser personally, or (ii) any property or assets of the
members of the Equity Purchaser or the stockholders of the Trust Preferred
Purchaser (other than the property and assets of the Purchasers).

 

SECTION 8.15 Counterparts; Facsimile Signatures. This
Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. This Agreement may be executed by facsimile
signature(s).

 

38

 

IN
WITNESS WHEREOF, the parties hereto have executed the SECURITY- HOLDERS AND
REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first paragraph
hereof.

 

	
   

  	
  DPL INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
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  DPL CAPITAL
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  DAYTON
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